UMB SCOUT FUNDS
MONEY MARKET FUND
ANNUAL REPORT
JUNE 30, 1999
A no-load mutual fund with primary emphasis
on maximum income consistent with safety
of principal and maintenance of liquidity.
TO THE SHAREHOLDERS
The past 12 months have been especially noteworthy for the
global economy and financial markets. Attention was fixed
last fall on the financial contagion spreading from
Southeast Asia to Russia and elsewhere. Interest rates in
the developing world were rising or local currencies were
collapsing. There was widespread fear of an economic
slowdown because of slower demand and a flood of industrial
capacity.
In the U.S., the Federal Reserve lowered interest rates
three times in a relatively short period and long-term
interest rates moved to less than 5%. All but the "bluest"
of blue chip stocks declined sharply.
For the time being, the concerns of late 1998 no longer are
on investors' minds. Most indicators show the world's
economies are regaining their footing and many are growing
strongly. Interest rates have increased again, but
apparently not enough to stop this growth. The U.S. is
enjoying the lowest unemployment in decades with very low
inflation - a scenario the textbooks say cannot happen.
Our economic environment has been called a "virtuous cycle,"
but some investors are wondering whether it will become a
"vicious cycle." We do not see such a change now, although
we continue to watch the economic indicators very closely.
There are few signs that the economy is entering a long-term
slowdown caused by economic excess. Some market watchers
point to the high valuation of U.S. stocks as one such
excess, but valuation alone usually is not enough to make
stock prices decline. We see no other catalyst at this point
that would cause a major stock price correction.
In this annual report, you will find more details about the
activity and holdings in the UMB Scout Money Market Fund
during the period. I recently joined the UMB team, and I
want to thank each of you for your confidence in UMB
Investment Advisors and the UMB Scout Funds. We look forward
to helping you reach your financial goals.
Sincerely,
/s/William B. Greiner, CFA
William B. Greiner, CFA
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"). These shares
involve investment risks, including the possible loss of the
principal invested.
TO THE SHAREHOLDERS
The UMB Scout Money Market Fund's Federal Portfolio earned
1.08% for the quarter and 4.69% for the year ended June 30,
1999. The Prime Portfolio earned 1.10% and 4.80% for the
same periods. The 7-day current yield on June 30 was 4.43%
for the Federal Portfolio and 4.47% 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.
The Federal Reserve announced in May that its interest rate
position had changed to a bias toward tighter credit, based
on concerns about an increase in inflation. The Federal
Reserve followed through on that change by increasing the
important Fed Funds Rate on June 30 to 5.00% from 4.75%.
However, it also announced a return to a "neutral" bias
toward interest rates, cheering the market participants who
had expected a more aggressive position.
This will not preclude a continued debate in the markets
about whether another rate increase will take place. The
Federal Reserve has often returned to a neutral stance after
raising interest rates. We think the message from the
Federal Reserve on this occasion is that rates could be
increased again if the economy remains strong, but that
decision will not be made until the underlying economic data
clearly support it.
Money market investors can look forward to higher yields in
the coming quarter as a result of the Federal Reserve's
action. As old investments are replaced by higher yielding
new investments, the aggregate yield of the Fund will
increase. A look at the comparative 7-day yields of the
portfolios on March 30 and July 6, the first reporting date
after the rate increase, readily illustrates this point. On
March 30, the Federal Portfolio 7-day yield was 4.35% and
the Prime Portfolio was 4.42%; by July 6, the Federal
Portfolio yield had increased to 4.47% and the Prime
Portfolio to 4.53%.
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
CHART -FUND DIVERSIFICATION
Federal Portfolio (UMFXX)
CHART - FUND DIVERSIFICATION
Prime Portfolio (UMPXX)
FINANCIAL STATEMENTS
JUNE 30, 1999
STATEMENT OF NET ASSETS
FACE MARKET
AMOUNT DESCRIPTION VALUE
PRIME PORTFOLIO
SHORT-TERM CORPORATE NOTES - 92.84%
$ 25,000,000 Air Products & Chemicals,
4.85%, due July 6, 1999 $ 24,983,160
7,500,000 Air Products & Chemicals,
4.96%, due July 23, 1999 7,477,267
14,000,000 Amgen, Inc.,
5.00%, due July 13, 1999 13,977,167
21,000,000 Amgen, Inc.,
5.00%, due July 27, 1999 20,924,167
15,000,000 Ameritech Corp.,
4.84%, due July 6, 1999 14,989,917
10,000,000 Ameritech Corp.,
4.93%, due July 21, 1999 9,972,611
15,000,000 Anheuser-Busch Cos., Inc.,
4.93%, due July 21, 1999 14,958,917
15,000,000 Archer-Daniels-Midland Co.,
4.81%, due July 6, 1999 14,989,979
10,000,000 Avery Dennison Corp.,
5.75%, due July 1, 1999 10,000,000
12,800,000 Becton Dickinson & Co.,
5.30%, due July 1, 1999 12,800,000
5,000,000 Becton Dickinson & Co.,
4.83%, due July 19, 1999 4,987,925
10,000,000 Becton Dickinson & Co.,
5.00%, due July 26, 1999 9,965,278
20,000,000 BellSouth Telecommunications,
4.83%, due July 9, 1999 19,978,533
2,250,000 BellSouth Telecommunications,
5.00%, due July 20, 1999 2,244,062
17,500,000 BP America,
4.81%, due July 12, 1999 17,474,280
15,100,000 California Pollution Control Rev.,
4.90%, due July 1, 1999 15,100,000
9,000,000 California Pollution Control Rev.,
4.89%, due July 7, 1999 9,000,000
10,000,000 Chevron USA, Inc.,
5.06%, due July 12, 1999 9,984,539
20,000,000 Coca-Cola Co.,
4.80%, due July 2, 1999 19,997,333
10,000,000 Coca-Cola Co.,
4.96%, due July 30, 1999 9,960,044
6,500,000 Dean Foods, Inc.,
5.16%, due July 27, 1999 6,475,777
15,943,000 Deere and Co.,
4.84%, due July 9, 1999 15,925,852
15,000,000 Deere and Co.,
4.94%, due July 23, 1999 14,954,717
10,000,000 Dover Corp.,
4.93%, due July 14, 1999 9,982,197
10,000,000 Dover Corp.,
4.95%, due July 21, 1999 9,972,500
5,000,000 Dover Corp.,
5.06%, due July 22, 1999 4,985,242
15,000,000 Duke Energy Co.,
4.83%, due July 7, 1999 14,987,925
10,000,000 Duke Energy Co.,
4.92%, due July 22, 1999 9,971,300
7,500,000 Dun & Bradstreet,
5.75%, due July 1, 1999 7,500,000
10,000,000 Dun & Bradstreet,
5.27%, due July 8, 1999 9,989,753
20,000,000 duPont (E.I.) deNemours & Co.,
4.86%, due July 20, 1999 19,948,700
10,000,000 duPont (E.I.) deNemours & Co.,
4.94%, due July 22, 1999 9,971,183
8,554,000 Eastman Kodak Co.,
4.78%, due July 19, 1999 8,533,556
5,267,000 Eastman Kodak Co.,
4.98%, due July 23, 1999 5,250,971
10,000,000 Emerson Electric Co.,
5.00%, due July 7, 1999 9,991,667
2,234,000 General Mills, Inc.,
4.85%, due July 6, 1999 2,232,495
1,600,000 General Mills, Inc.,
4.84%, due July 7, 1999 1,598,709
5,480,000 Gulf Coast,
5.00%, due July 26, 1999 5,480,000
10,000,000 Gulf Coast Waste Disp. Auth.,
4.90%, due July 1, 1999 10,000,000
10,000,000 Halliburton Co.,
4.80%, due July 8, 1999 9,990,667
5,000,000 Heinz H. J. Co.,
4.80%, due July 16, 1999 4,990,000
4,700,000 Heinz H. J. Co.,
4.81%, due July 16, 1999 4,690,580
3,500,000 Johnson & Johnson Co.,
4.85%, due July 6, 1999 3,497,642
7,000,000 Laclede Gas Co.,
4.91%, due July 8, 1999 6,993,317
4,000,000 Laclede Gas Co.,
5.15%, due July 19, 1999 3,989,700
3,000,000 Lucent Technologies, Inc.,
4.82%, due July 6, 1999 2,997,992
3,500,000 Lucent Technologies, Inc.,
4.95%, due August 2, 1999 3,484,600
953,000 Monsanto Co.,
4.85%, due July 1, 1999 953,000
13,000,000 Monsanto Co.,
4.88%, due July 8, 1999 12,987,664
23,000,000 Motorola, Inc.,
4.80%, due July 2, 1999 22,996,933
7,000,000 Motorola, Inc.,
4.98%, due July 30, 1999 6,971,918
10,000,000 Progress Capital Holdings, Inc.,
4.86%, due July 9, 1999 9,989,200
7,500,000 Progress Capital Holdings, Inc.,
4.92%, due July 15, 1999 7,485,650
12,500,000 Progress Capital Holdings, Inc.,
4.96%, due July 23, 1999 12,462,111
SHORT-TERM CORPORATE NOTES (Continued)
$ 3,418,000 Sara Lee Corp.,
4.80%, due July 1, 1999 $ 3,418,000
1,700,000 South Carolina Electric Gas,
5.00%, due July 30, 1999 1,693,153
2,500,000 South Carolina Electric Gas,
5.20%, due August 4, 1999 2,487,722
9,000,000 Times Mirror Co.,
4.81%, due July 19, 1999 8,978,355
13,000,000 Times Mirror Co.,
4.82%, due July 26, 1999 12,956,486
8,000,000 Times Mirror Co.,
5.00%, due August 5, 1999 7,961,111
3,500,000 Wisconsin Electric Power Co.,
4.83%, due July 1, 1999 3,500,000
4,000,000 Wisconsin Electric Power Co.,
4.83%, due July 8, 1999 3,996,243
15,000,000 Xerox Capital Europe PLC,
5.65%, due July 1, 1999 15,000,000
11,000,000 Xerox Capital Europe PLC,
4.83%, due July 8, 1999 10,989,669
2,500,000 Xerox Corp.,
4.83%, due July 13, 1999 2,495,975
SHORT-TERM CORPORATE NOTES (Cost $629,475,411) - 92.84% 629,475,411
GOVERNMENT SPONSORED ENTERPRISES - 7.52%
3,000,000 Federal Home Loan Banks Discount Notes,
4.78%, due July 2, 1999 2,999,602
4,500,000 Federal Home Loan Banks Discount Notes,
5.05%, due March 3, 2000 4,500,000
2,500,000 Federal Home Loan Mortgage Corp. Discount
Notes, 4.78%, due July 2, 1999 2,499,668
13,000,000 Federal Home Loan Mortgage Corp.
Discount Notes, 4.78%, due July 14, 1999 12,977,561
8,030,000 Federal Home Loan Mortgage Corp. Discount
Notes, 4.80%, due July 16, 1999 8,013,940
2,800,000 Federal Home Loan Mortgage Corp. Discount
Notes, 4.73%, due August 2, 1999 2,788,228
1,000,000 Federal Home Loan Mortgage Corp. Discount
Notes, 4.83%, due August 9, 1999 994,767
6,250,000 Federal Home Loan Mortgage Corp. Discount
Notes, 4.86%, due August 12, 1999 6,214,562
5,000,000 Federal National Mortgage Association
Discount Notes, 5.10%, due May 19, 2000 4,999,560
5,000,000 Federal National Mortgage Association
Discount Notes, 5.54%, due July 16, 1999 4,999,928
GOVERNMENT SPONSORED ENTERPRISES (Cost $50,987,816) - 7.52% 50,987,816
TOTAL INVESTMENTS (Cost $680,463,227) - 100.36% 680,463,227
Other assets less liabilities - (0.36%) (2,447,750)
TOTAL NET ASSETS - 100.00%
(equivalent to $1.00 per share; 750,000,000 shares of
$0.01 par value capital shares authorized; 678,044,890
shares outstanding) $ 678,015,477
Valuation of securities is on the basis of amortized cost,
which approximates market value.
See accompanying Notes to Financial Statements.
FINANCIAL STATEMENTS
JUNE 30, 1999
STATEMENT OF NET ASSETS
FACE MARKET
AMOUNT DESCRIPTION VALUE
FEDERAL PORTFOLIO
GOVERNMENT SPONSORED ENTERPRISES - 99.94%
$ 12,000,000 Federal Agricultural Mortgage Corp.,
5.02%, due July 14, 1999 $ 11,978,247
1,895,000 Federal Agricultural Mortgage Corp.,
4.80%, due July 12, 1999 1,892,221
7,000,000 Federal Home Loan Banks Discount Note,
4.78%, due July 2, 1999 6,999,071
2,000,000 Federal Home Loan Banks Discount Note,
4.82%, due July 2, 1999 1,999,732
2,030,000 Federal Home Loan Banks Discount Note,
5.04%, due July 15, 1999 2,026,021
2,500,000 Federal Home Loan Banks Discount Note,
4.78%, due July 16, 1999 2,495,021
7,500,000 Federal Home Loan Banks Discount Note,
5.02%, due July 21, 1999 7,479,083
1,811,000 Federal Home Loan Banks Discount Note,
5.03%, due July 21, 1999 1,805,939
5,000,000 Federal Home Loan Banks Discount Note,
5.04%, due July 23, 1999 4,984,600
7,500,000 Federal Home Loan Banks Discount Note,
5.05%, due July 23, 1999 7,477,060
2,706,000 Federal Home Loan Banks Discount Note,
4.92%, due August 4, 1999 2,693,426
3,000,000 Federal Home Loan Banks Discount Note,
5.05%, due March 3, 2000 3,000,000
6,000,000 Federal Home Loan Mortgage Corporation
Discount Notes, 4.50%, due July 1, 1999 6,000,000
10,000,000 Federal Home Loan Mortgage Corporation
Discount Notes, 4.72%, due July 1, 1999 10,000,000
5,000,000 Federal Home Loan Mortgage Corporation
Discount Notes, 4.78%, due July 1, 1999 5,000,000
1,500,000 Federal Home Loan Mortgage Corporation
Discount Notes, 4.74%, due July 2, 1999 1,499,802
1,796,000 Federal Home Loan Mortgage Corporation
Discount Notes, 4.85%, due July 6, 1999 1,794,790
1,200,000 Federal Home Loan Mortgage Corporation
Discount Notes, 4.84%, due July 8, 1999 1,198,871
1,500,000 Federal Home Loan Mortgage Corporation
Discount Notes, 4.85%, due July 8, 1999 1,498,585
8,700,000 Federal Home Loan Mortgage Corporation
Discount Notes, 4.86%, due July 8, 1999 8,691,778
8,000,000 Federal Home Loan Mortgage Corporation
Discount Notes, 4.76%, due July 9, 1999 7,991,538
2,000,000 Federal Home Loan Mortgage Corporation
Discount Notes, 4.79%, due July 9, 1999 1,997,871
8,700,000 Federal Home Loan Mortgage Corporation
Discount Notes, 4.81%, due July 9, 1999 8,690,701
2,655,000 Federal Home Loan Mortgage Corporation
Discount Notes, 5.04%, due July 12, 1999 2,650,911
1,160,000 Federal Home Loan Mortgage Corporation
Discount Notes, 4.85%, due July 14, 1999 1,157,968
6,340,000 Federal Home Loan Mortgage Corporation
Discount Notes, 4.88%, due July 14, 1999 6,328,828
17,500,000 Federal Home Loan Mortgage Corporation
Discount Notes, 4.86%, due July 15, 1999 17,466,925
1,500,000 Federal Home Loan Mortgage Corporation
Discount Notes, 4.88%, due July 15, 1999 1,497,153
5,600,000 Federal Home Loan Mortgage Corporation
Discount Notes, 4.80%, due July 16, 1999 5,588,800
7,000,000 Federal Home Loan Mortgage Corporation
Discount Notes, 4.81%, due July 16, 1999 6,985,971
10,000,000 Federal Home Loan Mortgage Corporation
Discount Notes, 4.80%, due July 19, 1999 9,976,000
10,000,000 Federal Home Loan Mortgage Corporation
Discount Notes, 4.86%, due July 19, 1999 9,975,700
7,500,000 Federal Home Loan Mortgage Corporation
Discount Notes, 4.87%, due July 23, 1999 7,477,679
7,500,000 Federal Home Loan Mortgage Corporation
Discount Notes, 4.86%, due July 22, 1999 7,478,738
3,506,000 Federal Home Loan Mortgage Corporation
Discount Notes, 4.88%, due July 22, 1999 3,496,020
3,400,000 Federal Home Loan Mortgage Corporation
Discount Notes, 4.89%, due August 6, 1999 3,383,374
11,000,000 Federal National Mortgage Association
Discount Notes, 4.77%, due July 2, 1999 10,998,542
1,000,000 Federal National Mortgage Association
Discount Notes, 4.86%, due July 6, 1999 999,325
1,500,000 Federal National Mortgage Association
Discount Notes, 4.79%, due July 7, 1999 1,498,803
2,100,000 Federal National Mortgage Association
Discount Notes, 4.84%, due July 7, 1999 2,098,306
1,175,000 Federal National Mortgage Association
Discount Notes, 4.85%, due July 7, 1999 1,174,050
1,000,000 Federal National Mortgage Association
Discount Notes, 4.86%, due July 7, 1999 999,190
6,430,000 Federal National Mortgage Association
Discount Notes, 4.88%, due July 7, 1999 6,424,770
GOVERNMENT SPONSORED ENTERPRISES (Continued)
$ 2,025,000 Federal National Mortgage Association
Discount Notes, 4.79%, due July 9, 1999 $ 2,022,845
15,000,000 Federal National Mortgage Association
Discount Notes, 4.83%, due July 13, 1999 14,975,850
1,000,000 Federal National Mortgage Association
Discount Notes, 4.79%, due July 12, 1999 998,536
10,000,000 Federal National Mortgage Association
Discount Notes, 4.85%, due July 12, 1999 9,985,181
12,500,000 Federal National Mortgage Association
Discount Notes, 4.83%, due July 15, 1999 12,476,521
1,015,000 Federal National Mortgage Association
Discount Notes, 4.87%, due July 15, 1999 1,013,078
1,300,000 Federal National Mortgage Association
Discount Notes, 5.04%, due July 15, 1999 1,297,452
15,000,000 Federal National Mortgage Association
Discount Notes, 5.05%, due July 20, 1999 14,960,377
4,000,000 Federal National Mortgage Association Medium
Term Note, 5.54%, due July 16, 1999 3,999,943
7,500,000 Federal National Mortgage Association Medium
Term Note, 5.10%, due May 19, 2000 7,499,338
12,204,000 Student Loan Marketing Association
Discount Notes, 4.77%, due July 6, 1999 12,195,915
TOTAL INVESTMENTS (Cost $298,276,446) - 99.94% 298,276,446
Other assets less liabilities - 0.06% 165,217
TOTAL NET ASSETS - 100.00%
(equivalent of $1.00 per share; 750,000,000 shares of
$0.01 par value capital shares authorized; 298,489,788
shares outstanding) $ 298,441,663
Valuation of securities is on the basis of amortized cost, which approximates
market value.
See accompanying Notes to Financial Statements.
FINANCIAL STATEMENTS
JUNE 30, 1999
STATEMENTS OF ASSETS AND LIABILITIES
PRIME FEDERAL
PORTFOLIO PORTFOLIO
ASSETS:
Investment securities, at market value $ 680,463,227 $ 298,276,446
Interest receivable 343,258 195,714
Total assets 680,806,485 298,472,160
LIABILITIES:
Disbursements in excess of demand deposit cash 2,791,008 30,497
Total liabilities 2,791,008 30,497
NET ASSETS $ 678,015,477 $ 298,441,663
NET ASSETS CONSIST OF:
Capital (capital stock and paid-in capital) $ 678,048,524 $ 298,490,448
Accumulated net realized loss on
investment transactions (33,047) (48,785)
NET ASSETS APPLICABLE TO OUTSTANDING SHARES $ 678,015,477 $ 298,441,663
Capital shares, $0.01 par value
Authorized 750,000,000 750,000,000
Outstanding 678,044,890 298,489,788
NET ASSET VALUE PER SHARE $ 1.00 $ 1.00
See accompanying Notes to Financial Statements.
FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 1999
Statements of operations
PRIME FEDERAL
PORTFOLIO PORTFOLIO
INVESTMENT INCOME:
Income:
Interest $ 34,269,999 $ 16,444,932
Expenses:
Management fees 3,296,404 1,610,825
Government fees 38,581 22,345
3,334,985 1,633,170
Net investment income 30,935,014 14,811,762
Net increase in net assets resulting
from operations $ 30,935,014 $ 14,811,762
See accompanying Notes to Financial Statements.
FINANCIAL STATEMENTS
for the years ended June 30, 1999 and 1998
STATEMENTS OF CHANGES IN NET ASSETS
PRIME FEDERAL
PORTFOLIO PORTFOLIO
1998 1998
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income $ 27,866,875 $ 15,357,281
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (27,866,875) (15,357,281)
INCREASE FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold ($1.00 per share) 928,253,918 688,025,800
Net asset value of shares issued for reinvestment
of distributions ($1.00 per share) 5,260,269 2,568,617
933,514,187 690,594,417
Cost of shares redeemed ($1.00 per share) (822,862,867) (625,946,162)
Net increase in net assets from capital
share transactions 110,651,320 64,648,255
Net increase in net assets 110,651,320 64,648,255
NET ASSETS - June 30, 1997 445,095,495 238,300,734
NET ASSETS - June 30, 1998 $ 555,746,815 $ 302,948,989
PRIME FEDERAL
PORTFOLIO PORTFOLIO
1999 1999
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income $ 30,935,014 $ 14,811,762
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (30,935,014) (14,811,762)
INCREASE (DECREASE) FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold ($1.00 per share) 1,281,907,452 647,138,544
Net asset value of shares issued for reinvestment
of distributions ($1.00 per share) 6,772,270 3,578,135
1,288,679,722 650,716,679
Cost of shares redeemed ($1.00 per share) (1,166,411,060) (655,224,005)
Net increase (decrease) in net assets
from capital share transactions 122,268,662 (4,507,326)
Net increase (decrease) in net assets 122,268,662 (4,507,326)
NET ASSETS - June 30, 1998 555,746,815 302,948,989
NET ASSETS - June 30, 1999 $ 678,015,477 $ 298,441,663
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. Its shares are currently
issued in two series (Prime and Federal) with each series,
in effect, representing a separate fund. The following is a
summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial
statements. The policies are in conformity with generally
accepted accounting principles.
Investments - Valuation of securities is on the basis of
amortized cost which approximates market value. Investment
transactions are recorded on the trade date. Investment
income and dividends to shareholders are recorded daily and
dividends are distributed monthly. Realized gains and losses
from investment transactions are reported on the amortized
cost basis, which is also used for federal income tax
purposes.
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, 1999, the Fund has accumulated net realized losses
on sales of investments for federal income tax purposes of
$33,047 (Prime Portfolio) and $48,785 (Federal Portfolio),
which are available to offset future taxable gains.
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 year ended June 30, 1999
(excluding repurchase agreements), were as follows:
Other than
U.S. Government U.S. Government
Prime Portfolio Securities Securities
Purchases $ 10,907,618,202 $ 8,000,000
Proceeds from sales 10,815,610,364 8,000,000
Federal Portfolio
Purchases $ - $ 5,750,291,384
Proceeds from sales - $ 5,738,707,137
3. MANAGEMENT FEES - UMB Bank, n.a. is the Fund's manager
and investment adviser 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 .50 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.
FINANCIAL HIGHLIGHTS
Per share income and capital changes for a share
outstanding throughout the period.
<TABLE>
<CAPTION>
1999 1998 1997 1996 1995
</CAPTION>
<S> <C> <C> <C> <C> <C>
PRIME PORTFOLIO
Net asset value, beginning of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations:
Net investment income 0.05 0.05 0.05 0.05 0.05
Distributions from:
Net investment income (0.05) (0.05) (0.05) (0.05) (0.05)
Net asset value, end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Total return 5% 5% 5% 5% 5%
Ratios/Supplemental Data
Net assets, end of year (in millions) $ 678 $ 556 $ 445 $ 330 $ 245
Ratio of expenses to average
net assets 0.51% 0.51% 0.51% 0.51% 0.51%
Ratio of net investment income to
average net assets 4.72% 5.14% 4.97% 5.16% 5.10%
FEDERAL PORTFOLIO
Net asset value, beginning of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations:
Net investment income 0.05 0.05 0.05 0.05 0.05
Distributions from:
Net investment income (0.05) (0.05) (0.05) (0.05) (0.05)
Net asset value, end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Total return 5% 5% 5% 5% 5%
Ratios/Supplemental Data
Net assets, end of year (in millions) $ 298 $ 303 $ 238 $ 228 $ 183
Ratio of expenses to average
net assets 0.51% 0.51% 0.52% 0.51% 0.51%
Ratio of net investment income to
average net assets 4.58% 5.03% 4.92% 5.09% 4.97%
</TABLE>
See accompanying Notes to Financial Statements.
INDEPENDENT ACCOUNTANTS' REPORT
To the Shareholders and Board of Directors
of UMB Scout Money Market Fund, Inc.:
We have audited the accompanying statements of assets and
liabilities of UMB Scout Money Market Fund, Inc., including
the statements of net assets, as of June 30, 1999, and the
related statements of operations, changes in net assets and
the financial highlights for the periods indicated thereon
(periods presented prior to June 30, 1997 were audited by
other independent accountants whose reports thereon
expressed unqualified opinions). 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, 1999, 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 Money Market
Fund, Inc., as of June 30, 1999, the results of its
operations, the changes in its net assets and the financial
highlights for the periods indicated in the first paragraph,
in conformity with generally accepted accounting principles.
BAIRD KURTZ & DOBSON
Kansas City, Missouri
July 24, 1999
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
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
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 219757
Kansas City, MO 64121-9757
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.
JB24B(8/99) 508760
