UMB SCOUT MONEY MARKET FUND INC, 497, 1999-11-04

UMB SCOUT MONEY MARKET FUND INC
497, 1999-11-04

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UMB SCOUT FUNDS

PROSPECTUS
October 31, 1999

Stock Fund
Stock Select Fund
Regional Fund
WorldWide Fund
WorldWide Select Fund
Capital Preservation Fund
Balanced Fund
Bond Fund
Kansas Tax-Exempt Bond Fund
Money Market Fund
Federal Portfolio
Prime Portfolio
Tax-Free Money Market Fund

OPPORTUNITY
BEYOND
TOMORROW

Shares of the Funds have not been approved or disapproved by the
Securities and Exchange Commission nor has the Commission passed on
the adequacy of this Prospectus. Any representation to the contrary is
a criminal offense.

<PAGE>
PROSPECTUS
October 31, 1999

Toll-Free 1-800-996-2862

UMB Scout Stock Fund
UMB Scout Stock Select Fund
UMB Scout Regional Fund
UMB Scout WorldWide Fund
UMB Scout WorldWide Select Fund
UMB Scout Capital Preservation Fund
UMB Scout Balanced Fund
UMB Scout Bond Fund
UMB Scout Kansas Tax-Exempt Bond Fund*
UMB Scout Money Market Fund
Federal Portfolio
Prime Portfolio
UMB Scout Tax-Free Money Market Fund

Investment Adviser and Manager: Distributor:
UMB BANK, N.A. JONES & BABSON, INC.
Kansas City, Missouri Kansas City, Missouri

TABLE OF CONTENTS

Page
Information About the Funds
Investment Objectives and Principal
Investment Strategies 2
Principal Risk Factors 7
Past Performance 9
Fees and Expenses 12
Investment Adviser and Manager 14
Financial Highlights 15

Information About Investing
How to Purchase Shares 26
How to Redeem Shares 26
Additional Policies about Transactions 26
Shareholder Services 28
How Share Price is Determined 28
Dividends, Distributions and their Taxation 28
Conducting Business with the UMB Scout Funds 30

INVESTMENT OBJECTIVES AND PRINCIPAL INVESTMENT STRATEGIES

UMB SCOUT FUND:
UMB Scout Stock Fund
UMB Scout Stock Select Fund
UMB Scout Regional Fund
UMB Scout WorldWide Fund
UMB Scout WorldWide Select Fund

INVESTMENT OBJECTIVE:
Long-term growth of capital and income.

UMB SCOUT FUND:
UMB Scout Capital Preservation Fund

INVESTMENT OBJECTIVE:
Long-term growth of capital.

UMB SCOUT FUND:
UMB Scout Balanced Fund

INVESTMENT OBJECTIVE:
Long-term growth of capital and high current income.

UMB SCOUT FUND:
UMB Scout Bond Fund

INVESTMENT OBJECTIVE:
Maximum current income consistent with quality and maturity standards.

UMB SCOUT FUND:
UMB Scout Kansas Tax-Exempt Bond Fund

INVESTMENT OBJECTIVE:
Current income exempt from regular federal income tax and Kansas state
personal income tax.

UMB SCOUT FUND:
UMB Scout Money Market Fund
Federal Portfolio
UMB Scout money market Fund
Prime Portfolio

INVESTMENT OBJECTIVE:
Maximum income consistent with safety of principal and liquidity.

UMB SCOUT FUND:
UMB Scout Tax-Free Money Market Fund

INVESTMENT OBJECTIVE:
Highest level of income exempt from federal income tax consistent with
quality and maturity standards.

The shares offered by this prospectus are not deposits or obligations
of, nor guaranteed by, UMB Bank, n.a., or any other banking
institution. They are not federally insured by the Federal Deposit
Insurance Corporation (F.D.I.C.). These shares involve investment
risks, including the possible loss of the principal invested.

PRINCIPAL INVESTMENT STRATEGIES:

Each Fund intends to pursue its objective by investing as described
below and will dispose of portfolio holdings any time that the Adviser
believes that they are no longer suitable for achieving the Fund's
objective. The Investment Adviser and Manager for each Fund and
Portfolio is UMB Bank, n.a. The principal risk factors associated with
each Fund and Portfolio are noted in each case and are fully described
in the Principal Risk Factors section.

UMB SCOUT STOCK FUND AND UMB SCOUT STOCK SELECT FUND

Objective: Long-term growth of capital and income.

Principal Risks: Market Risks.

To pursue its objective, each Fund invests in a diversified portfolio
of common stocks. UMB Scout Stock Fund normally invests at least 80%
of its assets in common stocks and UMB Scout Stock Select Fund
normally invests substantially all (at least 90%) of its assets in
common stocks. Current yield is a secondary consideration for each
Fund.

How do the Funds choose securities in which to invest? Each Fund buys
stock of companies it believes to be valuable based on the above-
average ability of the company to increase its earnings and dividends.
The Funds believe the true value of a company's stock is determined
by:

The company's earnings power
The company's ability to pay dividends
The value of the company's assets

The Funds favor a `buy and hold' approach to common stock investing,
and therefore the Funds tend to hold individual common stocks for
longer-term periods. The Adviser believes that the intrinsic worth and
fundamental value of most well-managed companies do not change
rapidly, although there may be wide variations in a company's stock
price. A `buy and hold' approach also reduces portfolio turnover,
which can lower transaction fees and may result in lower taxes for
investors.

Although the Funds normally invest primarily in common stocks as
described above, there may be times when they will use a higher
percentage of other investments. If the Adviser believes that negative
economic or market conditions make it more difficult to achieve growth
of capital through investment in common stocks, the Funds may seek
their objective by investing a higher percentage of their assets in
preferred stocks, fixed-income securities convertible into common
stocks, high-grade bonds or other investments that may provide income.
In such cases, the Funds will resume investing primarily in commons
stocks when conditions warrant.

The Funds intend to hold some cash, short-term debt obligations,
government securities or other high-quality investments for reserves
to cover redemptions and unanticipated expenses. There may be times,
however, when the Funds attempt to respond to adverse market,
economic, political or other conditions by investing up to 100% of
their assets in those types of investments for temporary, defensive
purposes. During those times, the Funds will not be able to pursue
their investment objective and, instead, will focus on preserving your
investment.

How do UMB Scout Stock Fund and UMB Scout Stock Select Fund differ?
The relevant difference between the two Funds is that UMB Scout Stock
Fund generally maintains a larger cash reserve than UMB Scout Stock
Select Fund. Since the two Funds share the same investment style,
their share price will tend to move in the same direction. However,
the larger cash reserve of UMB Scout Stock Fund will tend to make its
share price less volatile. This means it is likely the UMB Scout Stock
Fund will not gain as much as the UMB Scout Stock Select Fund when
investments increase in value and its share price will not decline as
much as the UMB Scout Stock Select Fund when the investments lose
value.

UMB Scout Stock Fund commenced operations in November 1982 and UMB
Scout Stock Select Fund commenced operations in May 1999.

UMB SCOUT REGIONAL FUND

Objective: Long-term growth of capital and income.
Principal Risks: Market Risks, Small Company Risks, Geographic Risks.

The Fund normally invests at least 80% of its assets in common stocks
issued by smaller companies either located in or doing a substantial
portion of their business in Arkansas, Colorado, Illinois, Iowa,
Kansas, Missouri, Nebraska or Oklahoma. Current yield is a secondary
consideration.

How does UMB Scout Regional Fund choose securities in which to invest?
The Fund normally will invest in a diversified portfolio of stocks of
smaller regional companies having market capitalizations of $1 billion
or less. Stocks will be selected based upon the Adviser's perception
of their above-average potential for long-term growth of capital and
dividend income.

Should the Adviser believe that negative economic or market conditions
make it more difficult to achieve growth of capital through investment
in common stocks, the Fund may seek its objective by investing a
higher percentage of its assets in preferred stocks, fixed-income
securities convertible into common stocks, high-grade bonds or other
defensive investments that may provide income. In such cases, the Fund
will resume investing primarily in common stocks when conditions
warrant.

The Fund intends to hold some cash, short-term debt obligations,
government securities or other high-quality investments for reserves
to cover redemptions and unanticipated expenses. There may be times,
however, when the Fund attempts to respond to adverse market,
economic, political or other conditions by investing up to 100% of its
assets in those types of investments for temporary, defensive
purposes. During those times, the Fund will not be able to pursue its
investment objective and, instead, will focus on preserving your
investment.

UMB SCOUT WORLDWIDE FUND AND UMB SCOUT WORLDWIDE SELECT FUND

Objective: Long-term growth of capital and income.
Principal Risks: Market Risks, International Risks.

Each Fund normally pursues its objective by investing in a diversified
portfolio of equity securities of established companies either located
outside the U.S. or whose primary business is carried on outside the
U.S. Equity securities include common stocks and depository receipts
(receipts typically issued by banks or trust companies representing
ownership interests of securities issued by foreign companies). UMB
Scout WorldWide Fund normally invests at least 80% of its assets in
equity securities as described above and the UMB Scout WorldWide
Select Fund normally invests substantially all (at least 90%) of its
assets in such securities.

How do the Funds choose securities in which to invest? The Funds
primarily invest in securities of seasoned companies that are known
for the quality and acceptance of their products or services and for
their ability to generate profits and/or dividends. Seasoned companies
are considered to be companies that have been in existence for at
least three years. Generally, the Funds will invest no more than 25%
of their assets in any one country and intend to diversify investments
among countries and industries. The Funds will invest no more than 20%
of their respective assets in investments in developing countries.

If the Adviser believes negative economic or market conditions make it
more difficult to achieve growth of capital through investment in
equity securities, the Funds may pursue their objective by investing a
higher percentage of their assets in dividend-paying stocks, preferred
stocks, high-grade bonds or fixed-income securities convertible into
common stocks, or other investments that may provide income. In such
cases, the Funds will resume investing primarily in equity securities
when conditions warrant.

The Funds intend to hold some cash, short-term debt obligations,
government securities or other high-quality investments for reserves
to cover redemptions and unanticipated expenses. There may be times,
however, when the Funds attempt to respond to adverse market,
economic, political or other conditions by investing up to 100% of
their assets in those types of investments for temporary defensive
purposes. During those times, the Funds will not be able to pursue
their investment objective and, instead, will focus on preserving your
investment. The Funds also may use currency forwards to hedge against
possible currency price changes.

How do UMB Scout WorldWide Fund and UMB Scout WorldWide Select Fund
differ? The relevant difference between the two Funds is that UMB
Scout WorldWide Fund generally maintains a larger cash position than
UMB Scout WorldWide Select Fund. Since the two Funds generally invest
in the same kinds of equity securities, their share price will tend to
move in the same direction. However, the larger cash position of UMB
Scout WorldWide Fund will tend to make its share price less volatile.
This means it is likely the UMB Scout WorldWide Fund will not gain as
much as the UMB Scout WorldWide Select Fund when investments increase
in value and its share price will not decline as much as the UMB Scout
WorldWide Select Fund when the investments lose value.

UMB Scout WorldWide Fund commenced operations in September 1993 and
UMB Scout WorldWide Select Fund commenced operations in May 1999.

UMB SCOUT CAPITAL PRESERVATION FUND

Objective: Long-term growth of capital.
Principal Risks: Market Risks.

The Fund normally pursues its objective by investing at least 65% of
its assets in a diversified portfolio of equity securities (common
stocks and securities convertible into common stocks).

How does UMB Scout Capital Preservation Fund choose securities in
which to invest? Normally, the Fund invests in equity securities of
companies:

whose earnings or tangible assets are expected to outpace inflation
with a significant potential for earnings growth or revaluation of assets

The Fund has the flexibility to pursue its objective through any type
of domestic or foreign security, listed or over-the-counter, without
restriction as to market capitalization.

In selecting investments, the Adviser will consider economic and
monetary conditions and projected inflation rates over time and will
shift its investments based on its interpretation of economic
conditions and underlying security valuations.

The Fund intends to hold some cash, short-term debt obligations,
government securities or other high-quality investments for reserves
to cover redemptions and unanticipated expenses. There may be times,
however, when the Fund attempts to respond to adverse market,
economic, political or other conditions by investing up to 100% of its
assets in those types of investments for temporary defensive purposes.
During those times, the Fund will not be able to pursue its investment
objective and, instead, will focus on preserving your investment.

UMB SCOUT BALANCED FUND

Objective: Long-term growth of capital and high current income.
Principal Risks: Market Risks, Fixed Income Risks.

The Fund seeks long-term growth of capital by investing in equity
securities (common stocks, securities convertible into common stocks,
preferred stocks and warrants), and seeks high current income by
investing in fixed-income securities.

How does UMB Scout Balanced Fund choose securities in which to invest?
The Fund has the flexibility to pursue its objective through any type
or quality of domestic or foreign security regardless of market
capitalization. Normally, the Fund will invest a minimum of 25% of its
assets in equity securities and a minimum of 25% of its assets in
fixed-income securities and will maintain a diversified portfolio of
investments. Generally, the average maturity of the fixed-income
securities in the portfolio will be between three and seven years. The
Adviser will shift the proportions of each type of investment based on
its interpretation of economic conditions and underlying security
valuations.

The Fund intends to hold some cash, short-term debt obligations,
government securities or other high-quality investments for reserves
to cover redemptions and unanticipated expenses. There may be times,
however, when the Fund attempts to respond to adverse market,
economic, political or other conditions by investing up to 100% of its
assets in those types of investments for temporary defensive purposes.
During those times, the Fund will not be able to pursue its investment
objective and, instead, will focus on preserving your investment.

UMB SCOUT BOND FUND

Objective: Maximum current income consistent with quality and maturity
standards.
Principal Risks: Fixed Income Risks.

Generally, the Fund will pursue its objective by investing in a
diversified portfolio of fixed-income obligations.

How does UMB Scout Bond Fund choose securities in which to invest? The
Fund normally invests at least 80% of its assets in fixed-income
instruments issued by the U.S. Government and its agencies, or
corporations or other business organizations. The Fund's investments
in securities issued by corporations or other business entities will
be rated at the time of purchase within the top three classifications
of Moody's Investor Service, Inc. (Aaa, Aa and A) or Standard & Poor's
Corporation (AAA, AA, A).

The Fund may maintain a portion of its assets in reserves to cover
redemptions, unexpected expenses and to provide portfolio flexibility.
These reserves will be held in cash or short-term debt obligations.

The overall weighted average maturity of the Fund normally will be
three to seven years, although the Fund may purchase individual
obligations of 20 years or longer to maturity. The Adviser may adjust
the overall weighted average maturity when economic or market
conditions make it desirable and in the best interest of shareholders.

UMB SCOUT KANSAS TAX-EXEMPT BOND FUND

Objective: Current income exempt from regular federal income tax and
Kansas state personal income tax.
Principal Risks: Fixed Income Risks, Geographic Risks.

This Fund is only available to shareholders located in Kansas and
Missouri. The Fund pursues its objective by investing at least 80% of
its net assets in municipal bonds or debt instruments, the interest on
which is tax-exempt as described above.

How does UMB Scout Kansas Tax-Exempt Fund choose securities in which
to invest? The Fund generally will invest in securities that, at the
time of purchase, are within the top three classifications of Moody's
Investors Service, Inc. (Aaa, Aa, A), Standard & Poor's Corporation
(AAA, AA, A) or Fitch Investor's Services (AAA, AA, A). In addition,
the credit quality of unrated securities at the time of purchase
generally will be, in the opinion of the Adviser, at least equivalent
to an A rating by Moody's, Standard & Poor's or Fitch. Securities that
are subsequently downgraded to non-investment grade may continue to be
held by the Fund until they can be disposed of in a reasonable manner.

Non-fundamental policies of UMB Scout Kansas Tax-Exempt Bond Fund -
The following policies of the Fund can be changed by its Board of
Directors without the approval of shareholders:

Under normal conditions, the Fund will invest at least 80% of its
assets in obligations issued by the State of Kansas or its political
subdivisions. These obligations may include municipal bonds, notes and
commercial paper of varying maturities issued by a municipality for a
wide variety of both public and private purposes. These instruments
can be classified as general obligation or revenue bonds, or bond
anticipation, tax anticipation and revenue anticipation notes.
The Fund is classified as a "non-diversified" investment company.
This means the Fund is likely to invest a greater percentage of its
assets in a single issuer than a diversified investment company.
The overall weighted average maturity of the Fund normally will be
between five to ten years, although the Fund may purchase individual
obligations of 20 years or longer to maturity. The Adviser may adjust
the overall weighted average maturity when economic or market
conditions make it desirable and in the best interest of shareholders.
Normally, the Fund will invest up to 20% of its net assets in short-
term municipal securities, although the Fund may invest up to 100% as
a temporary defensive measure in response to adverse market
conditions.

UMB SCOUT MONEY MARKET FUND - FEDERAL PORTFOLIO AND PRIME PORTFOLIO

Objective: Maximum income consistent with safety of principal and
liquidity.
Principal Risks: Fixed Income Risks.

UMB Scout Money Market Fund offers shares of two separate portfolios.
The Federal Portfolio only invests in U.S. Government Securities,
while the Prime Portfolio may also invest in other money market
securities. Each Portfolio seeks to maintain a constant net asset
value of $1.00 per share. The Portfolios pursue their objective by
investing in high-quality, short-term debt instruments. Each Portfolio
will maintain a weighted average maturity of 90 days or less.

How do the Portfolios of UMB Scout Money Market Fund choose securities
in which to invest? As money market funds, the Portfolios select only
high-quality, short-term obligations in which to invest. Examples of
these securities follow.

Federal Portfolio - only invests in the following U.S. Government
securities:

Direct obligations of the U.S. Government, such as Treasury bills,
notes and bonds.
Obligations of U.S. government agencies and instrumentalities which
are secured by the full faith and credit of the U.S. Treasury; or
which are secured by the right of the issuer to borrow from the
Treasury; or are supported by the credit of the government agency or
instrumentality itself.
The Federal Portfolio may also invest in these types of securities
subject to repurchase agreements entered into with the seller of the
issues.

Prime Portfolio - In addition to the securities eligible for purchase
by the Federal Portfolio, the Prime Portfolio may also invest in:

Domestic short-term obligations issued by larger U.S. commercial
banks and Savings and Loan Associations which are members of the
Federal Deposit Insurance Corporation, or holding companies of such
banks.
Short-term obligations issued by companies that meet the high credit-
quality standards of the Portfolio.

You may request from us a free copy of the Statement of Additional
Information for details about the credit standards to which the Fund's
investments must adhere.

UMB SCOUT TAX-FREE MONEY MARKET FUND

Objective: Highest level of income exempt from federal income tax
consistent with quality and maturity standards.
Principal Risks: Fixed Income Risks.

The Fund further seeks to maintain a stable net asset value of $1.00
per share.

How does UMB Scout Tax-Free Money Market Fund choose securities in
which to invest? As a tax-free money market fund, the Fund selects
only high-quality, short-term obligations in which to invest.
Normally, the Fund will invest at least 80% of its assets in such
securities issued by municipalities. The Fund may invest any remaining
balance in taxable money market instruments, on a temporary basis,
when the Adviser believes it is in the best interest of shareholders.
However, the Fund has the ability to invest a higher percentage in
taxable obligations when, in the opinion of the Adviser, extraordinary
market conditions dictate such a defensive posture is in the best
interest of shareholders. Such taxable instruments include:
obligations of the U.S. government, its agencies and
instrumentalities; certain certificates of deposit and bankers
acceptances; or certain commercial paper.

You may request from us a free copy of the Statement of Additional
Information for details about the credit standards to which the Fund's
investments must adhere.

Shareholder approval is required to change the preceding objectives
and policies except for the following:

UMB Scout Stock Select Fund
UMB Scout WorldWide Select Fund
UMB Scout Kansas Tax-Exempt Bond Fund (as noted)

PRINCIPAL RISK FACTORS

As with any mutual fund, there is a risk that you could lose money by
investing in the Funds.

MARKET RISKS

Equity securities are subject to market, economic and business risks
that will cause their prices to fluctuate over time. Since UMB Scout
Stock, Stock Select, Regional, WorldWide, WorldWide Select, Capital
Preservation and Balanced Funds are normally invested in equity
securities, the value of these Funds may go down. Different types of
investments shift in and out of favor depending on market and economic
conditions. At various times stocks will be more or less favorable
than bonds, and small company stocks will be more or less favorable
than large company stocks. Because of this, the Funds will perform
better or worse than other types of funds depending on what is in
favor.

SMALL COMPANY RISKS

UMB Scout Regional Fund invests primarily in small companies.
Generally, smaller and less seasoned companies have more potential for
rapid growth. However, they often involve greater risk than larger
companies and these risks are passed on to Funds that invest in them.
These companies may not have the management experience, financial
resources, product diversification and competitive strengths of larger
companies. Therefore, the securities of smaller companies are
generally more volatile than the securities of larger, more
established companies. An investment in UMB Scout Regional Fund may be
more suitable for long-term investors who can bear the risk of these
fluctuations. While the Fund cannot eliminate these risks, the Funds'
Adviser tries to minimize risk by diversifying its investments across
different companies and economic sectors.

Smaller company stocks tend to be bought and sold less often and in
smaller amounts than larger company stocks. Because of this, if the
Fund wants to sell a large quantity of a small company stock it may
have to sell at a lower price than its Investment Adviser might
prefer, or it may have to sell in small quantities over a period of
time. The Fund tries to minimize this risk by investing in stocks that
are readily bought and sold.

FIXED INCOME RISKS

While each UMB Scout Money Market Fund seeks to preserve the value of
your investment at $1.00 per share, the yields earned by the UMB Scout
Money Market Funds will fluctuate. Investments in UMB Scout Money
Market Funds are not insured or guaranteed by the F.D.I.C. or any
government agency.

Yields and principal values of debt securities (bonds) will fluctuate.
Generally, values of debt securities change inversely with interest
rates. As interest rates go up, the value of debt securities tend to
go down. As a result, the value of the UMB Scout Balanced Fund, Bond
Fund and Kansas Tax-Exempt Bond Fund may go down. Furthermore, these
fluctuations tend to increase as a bond's time to maturity increases,
so a longer-term bond will decrease more for a given increase in
interest rates than a shorter-term bond.

The amount of dividends paid by Fixed Income Funds to you will vary
depending on the amount of income they earn on their investments. It
is possible an issuer of a debt security owned by one of the Funds
could default on interest and/or principal payments that are payable
to a Fund.

INTERNATIONAL RISKS

International investing by the UMB Scout WorldWide and WorldWide
Select Funds pose additional risks such as currency fluctuations. If a
security owned by a Fund is denominated in a foreign currency, the
price of that security may go up in the local currency but cause a
loss to the Fund when priced in U.S. dollars. International markets,
especially in developing countries, are subject to political
instability and are not always as liquid as in the U.S., sometimes
making it harder to sell a security. In addition, foreign companies
may not be subject to comparable accounting, auditing and financial
reporting standards as U.S. companies. These risks are inherently
passed on to the company's shareholders, including the Funds, and in
turn, to the Funds' shareholders.

Geographic Risks

UMB Scout Regional Fund and UMB Scout Kansas Tax-Exempt Bond Fund
invest in issuers connected with relatively limited geographic areas.
These issuers are more susceptible to specific adverse economic or
political occurrences or developments than are more geographically
dispersed issuers. The Kansas economy is primarily centered on trade,
services, government and manufacturing, with agriculture remaining as
an important component. A slowdown in one or more of these sectors in
the Kansas economy could hamper municipalities' ability to meet debt
obligations and therefore cause losses to the Kansas Tax-Exempt Bond
Fund.

YEAR 2000 RISKS

Computer systems that cannot process and calculate date-related
information as of and after January 1, 2000 are a concern for
financial and business organizations around the world, including all
the Funds. The Funds are taking steps to address the Year 2000 issue
with respect to the computer systems they employ, and have asked that
their major service providers take comparable steps. Also, the Funds'
Adviser is using its best efforts to evaluate any potential adverse
effects from the Year 2000 issue on companies whose securities may be
purchased by the Funds. However, there is no assurance that these
steps will be completely effective.

The following tables provide an indication of the risks of investing
in the Funds. The bar charts show how each Funds' returns have changed
from year to year. The tables on the right show how each Fund's
average annual returns for certain periods compare with those of one
or more broad market benchmarks. The tables include all expenses of
the Funds and assume that all dividends and capital gains
distributions have been reinvested in new shares. Keep in mind that
past performance is not necessarily an indication of how a Fund will
perform in the future.

Information is not included for UMB Scout Stock Select Fund, UMB Scout
WorldWide Select Fund, UMB Scout Capital Preservation Fund and UMB
Scout Kansas Tax-Exempt Bond Fund because these Funds did not have a
full calendar year of operations as of December 31, 1998.

UMB SCOUT STOCK FUND - CHART

UMB SCOUT REGIONAL FUND - CHART

UMB SCOUT WORLDWIDE FUND - CHART

UMB SCOUT BALANCED FUND - CHART

UMB SCOUT BOND FUND - CHART

UMB SCOUT MONEY MARKET FUND - PRIME PORTFOLIO - CHART

UMB SCOUT MONEY MARKET FUND - FEDERAL PORTFOLIO - CHART

UMB SCOUT TAX-FREE MONEY MARKET FUND - CHART

FEES AND EXPENSES

The following tables describe the fees and expenses that you may pay
if you buy and hold shares of the different Funds. UMB Scout Stock
Select Fund and UMB Scout WorldWide Select Fund are new Funds as of
May 1999, so the amounts of "Other Expenses," "Total Annual Fund
Expenses" and the "Example" are based on estimates for the first year
of operation.

<TABLE>
<CAPTION>
UMB SCOUT UMB SCOUT UMB SCOUT UMB SCOUT UMB SCOUT
STOCK STOCK SELECTREGIONAL WORLDWIDE WORLDWIDE SELECT
FUND FUND FUND FUND FUND
</CAPTION>
<S> <C> <C> <C> <C> <C>
Shareholder Fees
(fees paid directly from your investment)
Maximum Sales Charge (Load)
Imposed on Purchases None None None None None
Maximum Deferred Sales Charge (Load) None None None None None
Maximum Sales Charge (Load) Imposed
on Reinvested Dividends None None None None None
Redemption Fee None None None None None
Exchange Fee None None None None None
Annual Fund Operating Expenses
(expenses deducted from Fund assets)
Management Fees .85% .85% .85% .85% .85%
Distribution (12b-1) Fees None None None None None
Other Expenses .02% None .04% .01% None
Total Annual Fund Operating Expenses .87% .85% .89% .86% .85%
</TABLE>

<TABLE>
<CAPTION>
UMB SCOUT UMB SCOUT
CAPITAL UMB SCOUT UMB SCOUTKANSAS TAX-
PRESERVATIONBALANCED BOND EXEMPT BOND
FUND FUND FUND FUND
</CAPTION>
<S> <C> <C> <C> <C> <C>
Shareholder Fees
(fees paid directly from your investment)
Maximum Sales Charge (Load)
Imposed on Purchases None None None None
Maximum Deferred Sales Charge (Load) None None None None
Maximum Sales Charge (Load) Imposed
on Reinvested Dividends None None None None
Redemption Fee None None None None
Exchange Fee None None None None
Annual Fund Operating Expenses
(expenses deducted from Fund assets)
Management Fees .85% .85% .85% .50%
Distribution (12b-1) Fees None None None None
Other Expenses None .02% .02% None
Total Annual Fund Operating Expenses .85% .87% .87% .50%
</TABLE>

<TABLE>
<CAPTION>
UMB SCOUT
UMB SCOUT MONEY MARKET FUNDTAX-FREE
FEDERAL PRIME MONEY MARKET
FUND FUND FUND
</CAPTION>
<S> <C> <C> <C>
Shareholder Fees
(fees paid directly from your investment)
Maximum Sales Charge (Load)
Imposed on Purchases None None None
Maximum Deferred Sales Charge (Load) None None None
Maximum Sales Charge (Load) Imposed
on Reinvested Dividends None None None
Redemption Fee None None None
Exchange Fee None None None
Annual Fund Operating Expenses
(expenses deducted from Fund assets)
Management Fees .50% .50% .50%
Distribution (12b-1) Fees None None None
Other Expenses .01% .01% .02%
Total Annual Fund Operating Expenses .51% .51% .52%
</TABLE>

EXAMPLES

The following examples are intended to help you compare the cost of
investing in the Funds with the cost of investing in other mutual
funds. The examples assume that you invest $10,000 in the Fund for the
time periods indicated and then redeem all your shares at the end of
those periods. The examples also assume that your investment has a 5%
return each year and that the Fund's operating expenses remain the
same. Although your actual costs may be higher or lower, based on
these assumptions your costs would be:

UMB SCOUT UMB SCOUT UMB SCOUT UMB SCOUT UMB SCOUT
STOCK STOCK SELECT REGIONAL WORLDWIDE WORLDWIDE SELECT
FUND FUND FUND FUND FUND

1 Year $ 89 $ 87 $ 91 $ 88 $ 87
3 Year $ 278 $ 271 $ 284 $ 274 $ 271
5 Years $ 482 - $ 493 $ 477 -
10 Years $ 1,073 - $ 1,096 $ 1,061 -

UMB SCOUT UMB SCOUT
CAPITAL UMB SCOUT UMB SCOUT KANSAS TAX-
PRESERVATION BALANCED BOND EXEMPT BOND
FUND FUND FUND FUND
1 Year $ 87 $ 89 $ 89 $ 51
3 Years $ 271 $ 278 $ 278 $ 160
5 Years $ 471 $ 482 $ 482 $ 280
10 Years $ 1,049 $ 1,073 $ 1,073 $ 628

UMB SCOUT
UMB SCOUT MONEY MARKET FUND TAX-FREE
FEDERAL PRIME MONEY MARKET
PORTFOLIO PORTFOLIO FUND
1 Year $ 52 $ 52 $ 53
3 Years $ 164 $ 164 $ 167
5 Years $ 285 $ 285 $ 291
10 Years $ 640 $ 640 $ 653

INVESTMENT ADVISER AND MANAGER

UMB Bank, n.a., is each Fund's Manager and Investment Adviser and is
located at 1010 Grand, Kansas City, Missouri. UMB Bank, n.a.,
maintains an experienced investment analysis and research staff that
serves a broad variety of individual, corporate and institutional
clients.

James L. Moffett has been portfolio manager of UMB Scout Stock Fund
and UMB Scout Stock Select Fund since May 1999. In addition, he has
managed UMB Scout WorldWide Fund and UMB Scout WorldWide Select Fund
since 1993 and May 1999, respectively. He is a Chartered Financial
Analyst and has over 31 years of investment management experience. He
joined UMB Bank, n.a., (previously Commercial National Bank) in 1979.
David B. Anderson has been portfolio manager of UMB Scout Regional
Fund since the Fund's change in investment objective in 1991. He
joined UMB Bank, n.a., in 1979 and has 26 years of investment
management experience. David R. Bagby has been portfolio manager of
UMB Scout Capital Preservation Fund since 1998. Mr. Bagby assumed
portfolio management responsibility for UMB Scout Balanced Fund in
1998. He joined UMB Bank, n.a, in 1993 and is a Chartered Financial
Analyst with over 25 years of investment management experience. George
W. Root has been portfolio manager of UMB Scout Bond Fund since 1982.
He joined UMB Bank, n.a, in 1978 and has over 23 years of investment
management experience. M. Kathryn Gellings and Rex Matlack have been
portfolio managers of UMB Scout Kansas Tax-Exempt Bond Fund since
1998. Ms. Gellings joined UMB Bank, n.a., in 1986 and has 12 years of
investment experience. Mr. Matlack has 17 years of investment
experience and joined UMB Bank, n.a., in 1993. He is a Chartered
Financial Analyst. William A. Faust has been portfolio manager of both
the Federal and Prime Portfolios of UMB Scout Money Market Fund since
1995. He joined UMB Bank, n.a., in 1983 and has over 28 years of
investment management experience. J. Eric Kelley has been portfolio
manager of UMB Scout Tax-Free Money Market Fund since 1996. He joined
UMB Bank, n.a., in 1995 and has over eight years of investment
experience.

As Manager, UMB Bank, n.a., provides or pays the cost of all
management, supervisory and administrative services required in the
normal operation of the Funds. This includes investment management and
supervision; fees of the custodian, independent auditors and legal
counsel; officers, directors and other personnel; rent; shareholder
services; and other items incidental to corporate administration.
Operating expenses not required in the normal operation of a Fund are
payable by the Fund. These expenses include taxes, interest,
governmental charges and fees, including registration of the Funds'
shares with the Securities and Exchange Commission and fees payable to
various states. Each Fund also pays its own brokerage costs, dues, and
all extraordinary costs including expenses arising out of anticipated
or actual litigation or administrative proceedings.

UMB Bank, n.a., employs Jones & Babson, Inc. at its own expense to
provide shareholder accounting system and transfer agency services.
Jones & Babson also acts as the Funds' principal underwriter and
distributor. Jones & Babson is a mutual fund servicing organization
that was founded in 1959.

For its services, UMB Scout Stock Fund, UMB Scout Stock Select Fund,
UMB Scout Regional Fund, UMB Scout WorldWide Fund, UMB Scout WorldWide
Select Fund, UMB Scout Capital Preservation Fund, UMB Scout Balanced
Fund and UMB Scout Bond Fund each pay UMB Bank, n.a., a fee at the
annual rate of 85/100 of one percent (0.85%) of their average daily
net assets. Likewise, UMB Scout Kansas Tax-Exempt Bond Fund, UMB Scout
Money Market Fund and UMB Scout Tax-Free Money Market Fund pay UMB
Bank, n.a., a fee at the annual rate of 50/100 of one percent (0.50%)
of average daily net assets. These fees are computed daily and paid
semi-monthly.

UMB Bank, n.a., from its own resources, may compensate its affiliates
for marketing, shareholder servicing, recordkeeping and/or other
services performed with respect to the Fund's shares. This includes a
fee paid by UMB Bank, n.a. to UMB Scout Brokerage Services, Inc. on
UMB Scout Fund shares held in customer accounts at UMB Scout Brokerage
Services, Inc.

FINANCIAL HIGHLIGHTS

UMB Scout Stock Fund
The financial highlights table is intended to help you understand the
Fund's financial performance for the past 5 years pertaining to its
UMB Scout Stock Fund series. Certain information reflects financial
results for a single share. The
total returns in the table represent the rate that an investor would
have earned (or lost) on an investment in the Fund (assuming
reinvestment of all dividends and distributions). This information has
been audited by Baird, Kurtz & Dobson, whose report, along with the
Fund's financial statements, are included in the Annual Report, which
is available upon request. The information for the fiscal year ending
on June 30, 1995, is covered by the report of other auditors.

<TABLE>
<CAPTION>
YEARS ENDED JUNE 30,
1999 1998 1997 1996 1995
</CAPTION>
<S> <C> <C> <C> <C> <C>
Net assets, beginning of year $ 19.63 $ 18.33 $ 16.69 $ 16.36 $ 15.42

Income from investment operations:
Net investment income 0.37 0.41 0.43 0.48 0.48
Net realized and unrealized
gains on securities 2.18 2.33 2.23 1.36 2.06
Total from investment operations 2.55 2.74 2.66 1.84 2.54

Distributions from:
Net investment income (0.41) (0.40) (0.42) (0.47) (0.47)
Net realized gain
on investment transactions (1.24) (1.04) (0.60) (1.04) (1.13)
Total distributions (1.65) (1.44) (1.02) (1.51) (1.60)

Net asset value, end of year $ 20.53 $ 19.63 $ 18.33 $ 16.69 $ 16.36

Total return 14% 15% 16% 12% 17%

Ratios/Supplemental Data
Net assets, end of year (in millions) $ 182 $ 195 $ 193 $ 171 $ 1372
Ratio of expenses to average net assets 0.87% 0.86% 0.86% 0.85% 0.86%
Ratio of net investment income
to average net assets 1.93% 2.07% 2.48% 2.81% 3.01%
Portfolio turnover rate 14% 10% 16% 28% 52%
</TABLE>

UMB SCOUT STOCK SELECT FUND

The financial highlights table is intended to help you understand the
Fund's financial performance since inception pertaining to its UMB
Scout Stock Select Fund series. Certain information reflects financial
results for a single share. The
total returns in the table represent the rate that an investor would
have earned (or lost) on an investment in the Fund (assuming
reinvestment of all dividends and distributions). This information has
been audited by Baird, Kurtz & Dobson, whose report, along with the
Fund's financial statements, are included in the Annual Report, which
is available upon request.

MAY 17, 1999
TO JUNE 30, 1999*

Net assets, beginning of year $ 10.00

Income from investment operations:
Net investment income 0.01
Net realized and unrealized gains
on securities 0.07
Total from investment operations 0.08

Distributions from:
Net investment income -
Net realized gain on investment
transactions -
Total distributions -

Net asset value, end of year $ 10.08

Total return 6%

Ratios/Supplemental Data
Net assets, end of year (in millions) $ 2
Ratio of expenses to average net assets 0.85%
Ratio of net investment income
to average net assets 2.35%
Portfolio turnover rate 7%

*The Fund was capitalized on March 17, 1999, with $100,000,
representing 10,000 shares at a net asset value of $10.00 per share.
Initial public offering was made on May 17, 1999, at which time net
asset value was $10.00 per share. Ratios for this initial period of
operation are annualized.

UMB SCOUT REGIONAL FUND

The financial highlights table is intended to help you understand the
Fund's financial performance for the past 5 years. Certain information
reflects financial results for a single share. The total returns in
the table represent the rate that
an investor would have earned (or lost) on an investment in the Fund
(assuming reinvestment of all dividends and distributions). This
information has been audited by Baird, Kurtz & Dobson, whose report,
along with the Fund's financial statements, are included in the Annual
Report, which is available upon request.

<TABLE>
<CAPTION>
JANUARY 1, 1996 YEARS ENDED
YEARS ENDED JUNE 30, TO DECEMBER 31,
1999 1998 1997 JUNE 30, 1996* 1995 1994
</CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 11.76 $ 11.21 $ 10.38 $ 10.11 $ 9.20 $ 9.49

Income from investment operations:
Net investment income 0.19 0.20 0.22 0.10 0.19 0.18
Net realized and unrealized gains
or (losses) on securities 0.18 1.38 1.32 0.67 1.62 (0.12)
Total from investment operations 0.37 1.58 1.54 0.77 1.81 0.06

Distributions from:
Net investment income (0.22) (0.22) (0.18) (0.10) (0.19) (0.18)
Net realized gain
on investment transactions (0.52) (0.81) (0.53) (0.40) (0.71) (0.17)
Total distributions (0.74) (1.03) (0.71) (0.50) (0.90) (0.35)

Net asset value, end of period $ 11.39 $ 11.76 $ 11.21 $ 10.38 $ 10.11 $ 9.20

Total return 4% 14% 15% 15% 20% 1%

Ratios/Supplemental Data
Net assets, end of period (in millions) $ 44 $ 50 $ 49 $ 42 $ 36 $ 28
Ratio of expenses to average net assets 0.89% 0.85% 0.87% 0.86% 0.89% 0.91%
Ratio of net investment income
to average net assets 1.76% 1.54% 2.09% 1.94% 1.95% 1.95%
Portfolio turnover rate 13% 13% 20% 29% 37% 27%
</TABLE>

*Ratios for this period of operation are annualized.

UMB SCOUT WORLDWIDE FUND

The financial highlights table is intended to help you understand the
Fund's financial performance for the past 5 years pertaining to its
UMB Scout WorldWide Fund series. Certain information reflects
financial results for a single share. The
total returns in the table represent the rate that an investor would
have earned (or lost) on an investment in the Fund (assuming
reinvestment of all dividends and distributions). This information has
been audited by Baird, Kurtz & Dobson, whose report, along with the
Fund's financial statements, are included in the Annual Report, which
is available upon request. The information for the fiscal year ending
on June 30, 1995, is covered by the report of other auditors.

<TABLE>
<CAPTION>
JANUARY 1, 1996 YEAR ENDED
YEARS ENDED JUNE 30, TO DECEMBER 31,
1999 1998 1997 JUNE 30, 1996 1995
</CAPTION>
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 18.62 $ 16.00 $ 12.90 $ 12.08 $ 10.84

Income from investment operations:
Net investment income 0.26 0.29 0.26 0.14 0.22
Net realized and unrealized gains
on securities 1.75 2.87 3.12 0.86 1.36
Total from investment operations 2.01 3.16 3.38 1.00 1.58

Distributions from:
Net investment income (0.23) (0.32) (0.21) (0.14) (0.22)
Net realized gain on
investment transactions (0.02) (0.22) (0.07) (0.04) (0.12)
Total distributions (0.25) (0.54) (0.28) (0.18) (0.34)

Net asset value, end of period $ 20.38 $ 18.62 $ 16.00 $ 12.90 $ 12.08

Total return 11% 20% 26% 17% 15%

Ratios/Supplemental Data
Net assets, end of year (in millions) $ 181 $ 83 $ 48 $ 31 $ 24
Ratio of expenses to average net assets 0.86% 0.87% 0.86% 0.85% 0.85%
Ratio of net investment income
to average net assets 1.69% 2.01% 1.93% 2.40% 1.97%
Portfolio turnover rate 8% 3% 18% 5% 27%
</TABLE>

*Ratios for this initial period of operation are annualized.

UMB SCOUT WORLDWIDE SELECT FUND

The financial highlights table is intended to help you understand the
Fund's financial performance since inception pertaining to its UMB
Scout WorldWide Select Fund series. Certain information reflects
financial results for a single share. The total returns in the table
represent the rate that an investor would have earned (or lost) on an
investment in the Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by Baird, Kurtz &
Dobson, whose report, along with the Fund's financial statements, are
included in the Annual Report, which is available upon request.

MAY 17, 1999
TO JUNE 30, 1999*

Net asset value, beginning of period $ 10.00

Income from investment operations:
Net investment income 0.01
Net realized and unrealized gains
on securities 0.19
Total from investment operations 0.20

Distributions from:
Net investment income -
Net realized gain on investment
transactions -
Total distributions -

Net asset value, end of period $ 10.20

Total return 16%

Ratios/Supplemental Data
Net assets, end of year (in millions) $ 3
Ratio of expenses to average net assets 0.85%
Ratio of net investment income to
average net assets 1.90%
Portfolio turnover rate 6%

UMB SCOUT CAPITAL PRESERVATION FUND

The financial highlights table is intended to help you understand the
Fund's financial performance since inception. Certain information
reflects financial results for a single share. The total returns in
the table represent the rate that an investor would have earned (or
lost) on an investment in the Fund (assuming reinvestment of all
dividends and distributions). This information has been audited by
Baird, Kurtz & Dobson, whose report, along with the Fund's financial
statements, are included in the Annual Report, which is available upon
request.

FEBRUARY 23, 1998
YEAR ENDED TO
JUNE 30, 1999 JUNE 30, 1998*

Net asset value, beginning of period $ 9.74 $ 10.00

Income (loss) from investment operations:
Net investment income 0.17 0.07
Net realized and unrealized gain (loss)
on securities 0.08 (0.33)
Total from investment operations 0.25 (0.26)

Distributions from:
Net investment income (0.21) -
Net realized gain on investment
transactions (0.02) -
Total distributions (0.23) -
Net asset value, end of period $ 9.76 $ 9.74

Total return 3% (7%)

Ratios/Supplemental Data
Net assets, end of year (in thousands) $ 922 $ 549
Ratio of expenses to average net assets 0.85% 0.85%
Ratio of net investment income to average
net assets 2.44% 3.26%
Portfolio turnover rate 95% 7%

*The Fund was capitalized on January 13, 1998 with $100,000,
representing 10,000 shares at a net asset value of $10.00 per share.
Initial public offering was made on February 23, 1998, at which time
net asset value was $10.00 per share.
Ratios for this initial period of operation are annualized.

UMB SCOUT BALANCED FUND

<TABLE>
<CAPTION>
DECEMBER 6,
YEARS ENDED JUNE 30, 1995 TO
1999 1998 1997 JUNE 30, 1996*
</CAPTION>
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 10.91 $ 10.72 $ 10.18 $ 10.09

Income from investment operations:
Net investment income 0.38 0.43 0.35 0.27
Net realized and unrealized gain (loss)
on securities (0.21) 0.54 0.52 0.06
Total from investment operations 0.17 0.97 0.87 0.33

Distributions from:
Net investment income (0.41) (0.45) (0.32) (0.24)
Net realized gain on investment
transactions (0.50) (0.33) (0.01) -
Total distributions (0.91) (0.78) (0.33) (0.24)

Net asset value, end of period $ 10.17 $ 10.91 $ 10.72 $ 10.18

Total return 2% 9% 9% 6%

Ratios/Supplemental Data
Net assets, end of year (in millions) $ 5 $ 8 $ 8 $ 3
Ratio of expenses to average net assets 0.87% 0.85% 0.83% 0.85%
Ratio of net investment income to
average net assets 3.48% 3.78% 3.85% 3.71%
Portfolio turnover rate 95% 15% 14% 5%
</TABLE>

*The Fund was capitalized on October 2, 1995 with $100,000,
representing 10,000 shares at a net asset value of $10.00 per share.
Initial public offering was made on December 6, 1995, at which time
net asset value was $10.09 per share.
Ratios for this initial period of operation are annualized.

UMB SCOUT BOND FUND

The financial highlights table is intended to help you understand the
Fund's financial performance for the past five years. Certain
information reflects financial results for a single share. The total
returns in the table represent the rate that an investor would have
earned (or lost) on an investment in the Fund (assuming reinvestment
of all dividends and distributions). This information has been audited
by Baird, Kurtz & Dobson, whose report, along with the Fund's
financial statements, are included in the Annual Report, which is
available upon request. The information for the fiscal year ending on
June 30, 1995, is covered by the report of other auditors.

<TABLE>
<CAPTION>
YEARS ENDED JUNE 30,
1999 1998 1997 1996 1995
</CAPTION>
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 11.21 $ 10.98 $ 10.93 $ 11.10 $ 10.75

Income from investment operations:
Net investment income 0.62 0.62 0.62 0.62 0.63
Net realized and unrealized
gain (loss) on securities (0.26) 0.23 0.05 (0.16) 0.35
Total from investment operations 0.36 0.85 0.67 0.46 0.98

Distributions from:
Net investment income (0.62) (0.62) (0.62) (0.62) (0.63)
Net realized gain on investment
transactions - - - (0.01) -*
Total distributions (0.62) (0.62) (0.62) (0.63) (0.63)

Net asset value, end of year $ 10.95 $ 11.21 $ 10.98 $ 10.93 $ 11.10

Total return 3% 8% 6% 4% 10%

Ratios/Supplemental Data
Net assets, end of year (in millions) $ 72 $ 78 $ 79 $ 81 $ 77
Ratio of expenses to average net assets 0.87% 0.87% 0.87% 0.86% 0.86%
Ratio of net investment income to
average net assets 5.48% 5.61% 5.69% 5.63% 5.91%
Portfolio turnover rate 23% 12% 19% 12% 2%
</TABLE>

*Capital gain distribution of .003 not significant for per share
table.

UMB SCOUT KANSAS TAX-EXEMPT BOND FUND

FEBRUARY 23, 1998
YEAR ENDED TO
JUNE 30, 1999 JUNE 30, 1998*

Net asset value, beginning of period $ 9.94 $ 10.00

Income from investment operations:
Net investment income 0.40 0.13
Net realized and unrealized loss
on securities (0.14) (0.06)
Total from investment operations 0.26 0.07

Distributions from:
Net investment income (0.40) (0.13)

Net asset value, end of period $ 9.80 $ 9.94

Total return 3% 2%

Ratios/Supplemental Data
Net assets, end of year (in millions) $ 8 $ 6
Ratio of expenses to average net assets 0.50% 0.50%
Ratio of net investment income to
average net assets 4.01% 4.33%
Portfolio turnover rate 12% 4%

UMB SCOUT MONEY MARKET FUND

The financial highlights table is intended to help you understand the
Fund's financial performance for the past five years pertaining to its
Federal Portfolio and its Prime Portfolio. Certain information
reflects financial results for a single share. The total returns in
the table represent the rate that an investor would have earned (or
lost) on an investment in the Fund (assuming reinvestment of all
dividends and distributions). This information has been audited by
Baird, Kurtz & Dobson, whose report, along with the Fund's financial
statements, are included in the Annual Report, which is available upon
request. The information for each of the fiscal years prior to and
ending on June 30, 1996, is covered by the report of other auditors.

<TABLE>
<CAPTION>
YEARS ENDED JUNE 30,
1999 1998 1997 1996 1995
</CAPTION>
<S> <C> <C> <C> <C> <C>
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%

PRIME PORTFOLIO
Net asset value, beginning 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%
</TABLE>

UMB SCOUT TAX-FREE MONEY MARKET FUND

<TABLE>
<CAPTION>
YEARS ENDED JUNE 30,
1999 1998 1997 1996 1995
</CAPTION>
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00

Income from investment operations:
Net investment income 0.03 0.03 0.03 0.03 0.03

Distributions from:
Net investment income (0.03) (0.03) (0.03) (0.03) (0.03)
Net asset value, end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00

Total return 3% 3% 3% 3% 3%

Ratios/Supplemental Data
Net assets, end of year (in millions) $ 126 $ 123 $ 162 $ 128 $ 78
Ratio of expenses to average net assets 0.52% 0.54% 0.55% 0.52% 0.54%
Ratio of net investment income
to average net assets 2.66% 3.21% 3.16% 3.13% 3.20%
</TABLE>

HOW TO PURCHASE SHARES

No-Load Funds
There are no sales commissions, redemption fees or Rule 12b-1
distribution fees

How to Buy Shares (see chart on page 30 for details)
By phone, mail or wire
Through Automatic Monthly Investments
Through exchanges from other UMB Scout Funds

Minimum Initial Investment
$1,000 for most accounts
$250 for IRA and Uniform Transfer (Gift) to Minors accounts
$100 with Automatic Monthly Investments
$1,000 for exchanges from another UMB Scout Fund

Minimum Additional Investments
$100 for purchases by phone or mail ($500 for wire purchases)
$50 for Automatic Monthly Investments
$1,000 for exchanges from another UMB Scout Fund

Minimum Account Size
You must maintain a minimum account size equal to the current minimum
initial investment (usually $1,000). If your account falls below this
amount due to redemptions (not market action) we may notify you and
ask you to increase the account to the minimum. We will close the
account and send your money if you do not bring the account up to the
minimum within 60 days after we mail you the notice.

HOW TO REDEEM SHARES

You may withdraw from your Fund account at any time in the following
amounts:

any amount for redemptions requested by mail or phone
$500 or more for redemptions wired to your account (there may be a
fee)
$50 or more for redemptions by a systematic redemption plan (there
may be a fee)
$1,000 or more for exchanges to another Fund
$100 or more for redemptions by automatic monthly exchange to
another Fund

ADDITIONAL POLICIES ABOUT TRANSACTIONS

We cannot process transaction requests that are not complete and in
good order as described in this section. We may cancel or change our
transaction policies without notice. To avoid delays, please call us
if you have any questions about these policies.

If you wish to purchase (or redeem) shares of a UMB Scout Fund through
a broker, a fee may be charged by that broker. In addition, you may be
subject to other policies or restrictions of the broker such as higher
minimum account value, etc.

Purchases - We may reject orders when not accompanied by payment or
when in the best interest of a Fund and its shareholders.

Redemptions - We try to send proceeds as soon as practical. In any
event, we send proceeds by the third business day after we receive a
request in good order. We cannot accept requests that contain special
conditions or effective dates. We may request additional
documentation to ensure that a request is genuine. Under certain
circumstances, we may pay you proceeds in the form of portfolio
securities owned by the Fund. If you receive securities instead of
cash, you may incur brokerage costs when converting them into cash.

The Funds' Manager believes that certain investors who try to "time
the market" by purchasing and redeeming shares from the Funds on a
regular basis may disrupt the investment process and pose additional
transaction costs to the Funds. Therefore in those cases the Fund
Manager may delay redemption proceeds up to seven days or take other
actions it deems necessary to discourage such activity.

If you request a redemption within 15 days of purchase, we will delay
sending your proceeds until we have collected unconditional payment,
which may take up to 15 days from the date of purchase. For your
protection, if your account address has been changed within the last
30 days, your redemption request must be in writing and signed by each
account owner, with signature guarantees. The right to redeem shares
may be temporarily suspended in emergency situations, only as
permitted under federal law.

Withdrawal by Draft ("check") is limited to open account shares of UMB
Scout Money Market Fund - Federal Portfolio and Prime Portfolio - and
Tax-Free Money Market Fund. You may elect this method of redemption on
your initial application, or on a form which will be sent to you upon
request. All signatures must be guaranteed unless this method of
redemption is elected on your initial application. Draft amounts may
range from $500 to $100,000.

Signature Guarantees - You can get a signature guarantee from most
banks or securities dealers and certain other financial institutions,
but not a notary public. For your protection, we require a guaranteed
signature if you request:

A redemption check sent to a different payee, bank or address than
we have on file.
A redemption check mailed to an address that has been changed within
the last 30 days.
A redemption for $50,000 or more in writing.
A change in account registration or redemption instructions.

Corporations, Trusts and Other Entities - Additional documentation is
normally required for corporations, fiduciaries and others who hold
shares in a representative or nominee capacity. We cannot process your
request until we have all documents in the form required. Please call
us first to avoid delays.

Exchanges to Another Fund - You must meet the minimum investment
requirement of the Fund into which you are exchanging. The names and
registrations on the two accounts must be identical. Your shares must
have been held in an open account for 15 days or more and we must have
received good payment before we will exchange shares. You should
review the Prospectus of the Fund being purchased. Call us for a free
copy.

Telephone Services - During periods of increased market activity, you
may have difficulty reaching us by telephone. If this happens,
contact us by mail. We may refuse a telephone request, including a
telephone redemption request. We will use reasonable procedures to
confirm that telephone instructions are genuine. If such procedures
are followed, the Fund will not be liable for losses due to
unauthorized or fraudulent instructions. At our option, we may limit
the frequency or the amount of telephone redemption requests. Neither
the Fund nor Jones & Babson, Inc., assumes responsibility for the
authenticity of telephone redemption requests.

SHAREHOLDER SERVICES

The following services are also available to shareholders. Please call
800-996-2862 for more information:

Traditional IRA accounts
Roth IRA accounts
Education IRA accounts
Simplified Employee Pensions (SEPs)
Uniform Transfers (Gifts) to Minors accounts
Accounts for corporations or partnerships
Sub-Accounting Services for Keogh, tax qualified retirement plans,
and others
Prototype Retirement Plans for the self-employed, partnerships and
corporations.

HOW SHARE PRICE IS DETERMINED

Shares of the Funds are purchased or redeemed at the net asset value
per share next calculated after your purchase order and payment or
redemption order is received by us in good order. In the case of
certain institutions which have made satisfactory payment or
redemption arrangements with the Funds and have received your purchase
order and payment or redemption order, we may process the order at the
net asset value per share next effective after receipt of the order by
the institution.

The per share calculation is made by subtracting from a Fund's total
assets any liabilities and then dividing into this amount the Fund's
total outstanding shares as of the date of the calculation. The net
asset value per share is computed once daily for each Fund, Monday
through Friday, at 4:00 p.m. (Eastern Time) on days when the Funds are
open for business. These generally are the same days that the New York
Stock Exchange is open for trading. The New York Stock Exchange is
closed on weekends, national holidays and Good Friday. The net asset
value per share for UMB Scout Money Market Fund and Tax-Free Money
Market Fund are computed at 1:00 p.m. (Eastern Standard Time).

Each security owned by a Fund that is listed on an Exchange is valued
at its last sale price on that Exchange on the date when assets are
valued. Where the security is listed on more than one Exchange, the
Funds will use the price of that Exchange which it generally considers
to be the principal Exchange on which the stock is traded. Lacking
sales, the security is valued at the mean between the last current
closing bid and asked prices. An unlisted security for which over-the-
counter market quotations are readily available is valued at the mean
between the last current bid and asked prices. When market quotations
are not readily available, any security or other asset is valued at
its fair value as determined in good faith by the Fund's Board of
Directors.

Short-term instruments maturing within 60 days may be valued at
amortized cost. The Portfolios of UMB Scout Money Market Fund and UMB
Scout Tax-Free Money Market Fund value assets on the basis of
amortized cost.

DIVIDENDS, DISTRIBUTIONS AND THEIR TAXATION

Distributions - Your distributions will be reinvested automatically in
additional shares of the Fund unless you have elected on your original
application, or by written instructions filed with the Fund, to have
them paid in cash ($10 minimum check amount). There are no fees or
sales charges on reinvestments.

UMB Scout Stock Fund, UMB Scout Stock Select Fund, UMB Scout Regional
Fund, UMB Scout WorldWide Fund, UMB Scout WorldWide Select Fund, UMB
Scout Capital Preservation Fund and UMB Scout Balanced Fund will pay
substantially all of their net investment income semiannually, usually
in June and December. It is contemplated that substantially all of any
net capital gains realized during a fiscal year will be distributed
with the fiscal year-end dividend, with any remaining balance paid in
December.

UMB Scout Bond Fund will declare a dividend every business day, equal
to substantially all of the Fund's undistributed net investment
income which is pro-rated daily among the shares eligible to receive
it. Daily dividends are accumulated and paid monthly. Substantially
all of any net capital gains realized during a fiscal year will be
distributed with the fiscal year-end dividend, with any remaining
balance paid in December.

UMB Scout Kansas Tax-Exempt Bond Fund will declare a dividend every
business day, equal to substantially all of the Fund's undistributed
net investment income which is pro-rated daily among the shares
eligible to receive it. Daily dividends are accumulated and paid
monthly. Substantially all of any net capital gains realized will be
distributed annually by December 31.

UMB Scout Tax-Free Money Market Fund and each Portfolio of UMB Scout
Money Market Fund will declare a dividend every business day, equal to
substantially all of their undistributed net investment income which
is pro-rated daily among the shares eligible to receive it. Daily
dividends are accumulated and paid monthly. These Funds' policies
relating to maturities make it unlikely that they will have capital
gains or losses.

If you buy shares of any equity or bond Fund shortly before the record
date, please keep in mind that any distribution will lower the value
of the Fund's shares by the amount of the distribution and you will
then receive a portion of the price back in the form of a taxable
distribution.

Tax Considerations - In general, Fund distributions are taxable to you
as either ordinary income or capital gains. This is true whether you
reinvest your distributions in additional Fund shares or receive them
in cash. Any capital gains a Fund distributes are taxable to you as
long-term capital gains no matter how long you have owned your shares.

Distributions from the UMB Scout Kansas Tax-Exempt Bond Fund and the
UMB Scout Tax-Free Money Market Fund will consist primarily of exempt-
interest dividends from interest earned on municipal securities. In
general, exempt-interest dividends are exempt from federal income tax.
These Funds, however, may invest a portion of their assets in
securities that pay income that is not tax exempt.

By law, a Fund must withhold 31% of your taxable distributions and
proceeds if you do not provide your correct Social Security or
Taxpayer Identification Number, or if the IRS instructs the Fund to do
so.

Every January, you will receive a statement that shows the tax status
of distributions you received for the previous year. Distributions
declared in December but paid in January are taxable as if they were
paid in December.

In general, when you sell your shares of a Fund, you may have a
capital gain or loss. For tax purposes, an exchange of your Fund
shares for shares of a different UMB Scout Fund is the same as a sale.
The individual tax rate on any gain from the sale or exchange of your
Fund shares depends on your marginal tax bracket and on how long the
shares have been held. However, because the UMB Scout Money Market
Fund (Federal and Prime Portfolios) and the UMB Scout Tax-Free Money
Market Fund expect to maintain a $1.00 net asset value per share,
investors in these Funds should not have any gain or loss on the sale
of such shares.

Exempt-interest dividends paid by the UMB Scout Kansas Tax-Exempt Bond
Fund and the UMB Scout Tax-Free Money Market Fund are taken into
account when determining the taxable portion of an investor's Social
Security or railroad retirement benefits. These Funds may invest a
portion of their assets in private activity bonds. The income from
these bonds will be a preference item when determining an investor's
Alternative Minimum Tax.

Many states grant tax-free status to dividends paid from interest
earned on direct obligations of the U.S. government, subject to
certain restrictions.

Exempt-interest dividends from interest earned on municipal securities
of a state, or of its political subdivisions, generally will be exempt
from that state's personal income taxes. Most states, however, do not
grant tax-free treatment to interest on investments in municipal
securities of other states.

Fund distributions and gains from the sale or exchange of your Fund
shares generally will be subject to state and local income tax. Any
foreign taxes paid by the UMB Scout WorldWide Fund and the UMB Scout
WorldWide Select Fund on their investments may be passed through to
you as a foreign tax credit. Non-U.S. investors may be subject to U.S.
withholding and estate tax. You should consult your tax advisor about
the federal, state, local or foreign tax consequences of your
investment in a Fund.

CONDUCTING BUSINESS WITH THE UMB SCOUT FUNDS

BY PHONE

800-996-2862,
in the Kansas City area 816-751-5900

You must authorize each type of
telephone transaction on your account application or the appropriate
form, available from us. All account owners must sign. When you call,
we may request personal identification and tape record the call.

HOW TO OPEN AN ACCOUNT BY PHONE

If you already have an account with us and you have authorized
telephone exchanges, you may call to open an account in another UMB
Scout Fund by exchange ($1,000 minimum). The names and registrations
on the accounts must be identical.

HOW TO ADD TO AN ACCOUNT BY PHONE
You may invest by telephone ($100 minimum). After we receive your
telephone call, we will deduct from your checking account the cost of
the shares.

Availability of this service is subject to approval by the Fund and
participating banks.

HOW TO SELL SHARES BY PHONE

You may withdraw any amount by telephone ($500 minimum if wired). We
will send funds only to the address or bank account on file with us.
Provide the Fund's name, your account number, the names of each
account owner (exactly as registered), and the number of shares or
dollar amount to be redeemed. For wires, also provide the bank name
and bank account number.

HOW TO EXCHANGE SHARES BY PHONE

You may exchange shares ($1,000 minimum or the initial minimum fund
requirement) for shares in another UMB Scout Fund. The shares being
exchanged must have been held in open account for 15 days or more.

BY MAIL

UMB Scout Funds
P.O. Box 219757
Kansas City, MO 64121-9757

HOW TO OPEN AN ACCOUNT BY MAIL

Complete and sign the application included with this Prospectus. Your
initial investment must meet the minimum amount and you must specify
which Fund (or Portfolio) in which you want to invest. Make your check
payable to UMB Bank, n.a.

HOW TO ADD TO AN ACCOUNT BY MAIL

Make your check ($100 minimum) payable to UMB Bank, n.a., and mail it
to us. Always identify your account number or include the detachable
coupon (from your
confirmation statement).

HOW TO SELL SHARES BY MAIL
In a letter, include the genuine signature of each registered owner
(exactly as registered), the name of each account owner, the account
number and the number of shares or the dollar amount to be redeemed.
We will send funds only to the address of record.

HOW TO EXCHANGE SHARES BY MAIL

In a letter, include the genuine signature of each registered owner,
the Fund name and your account number, the number of shares or dollar
amount to be exchanged ($1,000 minimum) and the UMB Scout Fund into
which the amount is being transferred.

BY WIRE

UMB Bank, n.a.,
Kansas City, Missouri,
ABA #101000695
For UMB Scout Funds/
AC=98 01186957

Please provide your fund number, account number and name on account

HOW TO OPEN AN ACCOUNT BY WIRE

Call us first to get an account number. We will require information
such as your Social Security or Taxpayer Identification Number, the
amount being wired ($1,000 minimum), and the name and telephone number
of the wiring bank. Then tell your bank to wire the amount. You must
send us a completed application as soon as possible or payment of your
redemption proceeds may be delayed.

HOW TO ADD TO AN ACCOUNT BY WIRE

Wire share purchases ($500 minimum) should include the names of each
account owner, your account number and the UMB Scout Fund in which you
are purchasing shares. You should notify us by telephone that you have
sent a wire purchase order to UMB Bank, n.a.

HOW TO SELL SHARES BY WIRE

Redemption proceeds ($500 minimum) may be wired to your pre-identified
bank account. A minimal fee may be deducted. If we receive your
request before
4:00 p.m. (Eastern Time) we will normally wire funds the following
business day. If we receive your request later in the day, we will
normally wire funds on the
second business day. Contact your bank about the time of receipt and
availability.

HOW TO EXCHANGE SHARES BY WIRE

Not applicable.

THROUGH AUTOMATIC TRANSACTIONS PLANS

You must authorize each type of automatic transaction on your account
application or complete an authorization form, available from us upon
request. All registered
owners must sign.

HOW TO OPEN AN ACCOUNT THROUGH AUTOMATIC TRANSACTIONS PLANS

Not applicable.

HOW TO ADD TO AN ACCOUNT THROUGH AUTOMATIC TRANSACTIONS PLANS

Automatic Monthly Investment:You may authorize automatic monthly
investments in a constant dollar amount ($50 minimum) from your
checking account. We will draft your checking account on the same day
each month in the amount you authorize.

HOW TO SELL SHARES THROUGH AUTOMATIC TRANSACTIONS PLANS

Systematic Redemption Plan: You may specify a dollar amount ($50
minimum) to be withdrawn monthly or quarterly or have your shares
redeemed at a rate calculated to exhaust the account at the end of a
specified period. A fee of $1.50 or less may be charged for each
withdrawal. You must own shares in an open account valued at $10,000
when you first authorize the systematic redemption plan. You may
cancel or change your plan or redeem all your shares at any time. We
will continue withdrawals until your shares are gone or until the Fund
or you cancel
the plan.

HOW TO EXCHANGE SHARES THROUGH AUTOMATIC TRANSACTIONS PLANS

Monthly Exchanges: You may authorize monthly exchanges from your
account ($100 minimum) to another UMB Scout Fund. Exchanges will be
continued until all shares have been exchanged or until you terminate
the service. You must own shares in an open account valued at $2,500
or more when you first authorize monthly exchanges.

ADDITIONAL INFORMATION

The Statement of Additional Information (SAI)
contains additional information about the
Funds and is incorporated by reference into
this Prospectus. The Funds' annual and semi-
annual reports to shareholders contain
additional information about each Funds'
investments. In the Funds' annual report, you
will find a discussion of the market
conditions and investment strategies that
significantly affected each Fund's
performance during the last fiscal year.

You may obtain a free copy of these documents
by calling, writing or e-mailing the Funds as
shown below. You also may call the toll free
number given below to request other
information about the Funds and to make
shareholder inquiries.

You may review and copy the SAI and other
information about the Funds by visiting the
Securities and Exchange Commission's Public
Reference Room in Washington, DC (1-800-SEC-
0330) or by visiting the Commission's
Internet site at http://www.sec.gov. Copies
of this information also may be obtained,
upon payment of a duplicating fee, by writing
to the Public Reference Section of the
Commission, Washington, DC 20549-6009.

811-3557 Stock Fund
811-3557 Stock Select Fund
811-4860 Regional Fund
811-7472 WorldWide Fund
811-7472 WorldWide Select Fund
811-05811 Capital Preservation Fund
811-7323 Balanced Fund
811-3558 Bond Fund
811-08513 Kansas Tax-Exempt Bond Income Fund
811-3528 Money Market Fund
811-3556 Tax-Free Money Market Fund

UMB SCOUT FUNDS
PO BOX 219757
KANSAS CITY, MO 64121-9757

TOLL FREE 800-996-2862

www.umb.com

"UMB" and "Scout" are registered marks of UMB Financial Corporaiton.
UMB Financial Corporaiton also claims service mark rights to the Scout design.

JB29A 10/99

<PAGE>
PART B

UMB SCOUT STOCK FUND
UMB SCOUT REGIONAL FUND
UMB SCOUT WORLDWIDE FUND
UMB SCOUT CAPITAL PRESERVATION FUND
UMB SCOUT BALANCED FUND
UMB SCOUT BOND FUND
UMB SCOUT KANSAS TAX-EXEMPT BOND FUND
UMB SCOUT MONEY MARKET FUND
UMB SCOUT TAX-FREE MONEY MARKET FUND
UMB SCOUT STOCK SELECT FUND
UMB SCOUT WORLDWIDE SELECT FUND

STATEMENT OF ADDITIONAL INFORMATION

October 31, 1999

This Statement of Additional Information is not a Prospectus but should be
read in conjunction with the current Funds' Prospectus dated October 31, 1999.
To obtain the Prospectus or any Annual or Semi-Annual Report to shareholders,
please call the Fund toll-free at 1-800-996-2862, or in the Kansas City area
751-5900.

JB61

TABLE OF CONTENTS
Page
Introduction 3
Investment Objective, Strategies and Risks 3
UMB Scout Stock Fund 3
UMB Scout Regional Fund 3
UMB Scout WorldWide Fund 4
UMB Scout Capital Preservation Fund 5
UMB Scout Balanced Fund 6
UMB Scout Bond Fund 7
UMB Scout Kansas Tax-Exempt Bond Fund 7
UMB Scout Money Market Fund 14
UMB Scout Tax-Free Money Market Fund 15
UMB Scout WorldWide Select Fund 16
UMB Scout Stock Select Fund 17
Investment Policy Related to All Funds 17
Repurchase Agreements 17
Risk Factors 18
Risk Factors Applicable to Foreign Investments 18
Risk Factors Applicable to Repurchase Agreements 18
Risk Factors Applicable to Money Market Instruments 18
Risk Factors Applicable to Inverse Floaters 19
Risk Factors Applicable to Futures Transactions 19
Investment Restrictions 19
Portfolio Transactions 24
Performance Measures 25
Yield of UMB Scout Money Market Fund and UMB Scout Tax-Free
Money Market Fund 25
Tax Equivalent Yield of UMB Scout Kansas Tax-Exempt Bond Fund 26
Total Return 26
Performance Comparisons 27
How the Funds' Shares are Distributed 28
How Share Purchases are Handled 28
Redemption of Shares 29
Signature Guarantees 30
Additional Purchase and Redemption Policies 30
Holidays 31
Dividends, Distributions and Taxes 31
Management and Investment Counsel 34
Officers and Directors 35
Compensation Table 36
Underwriter and Distributor 36
Transfer Agent 36
Custodian 37
Independent Auditors 37
General Information and History 37
Fixed Income Securities Ratings 38
Description of Taxable Commercial Paper Ratings 40
Municipal Securities Ratings 42
Financial Statements 43

"UMB" and "Scout" are registered service marks of UMB Financial Corporation.

INTRODUCTION

The UMB Scout Funds (except for the UMB Scout Kansas Tax-Exempt Bond Fund) are
classified as open-end, diversified management investment companies under the
Investment Company Act of 1940, as amended (the "1940 Act"). This
classification means that the assets of the Funds are invested in a
diversified portfolio of securities and that the Funds operate as mutual funds,
allowing shareholders to buy and sell shares at any time (as described in the
Prospectus).

The UMB Scout Kansas Tax-Exempt Bond Fund is a non-diversified management
investment company under the 1940 Act. As a non-diversified investment
company, the Fund may invest, with respect to 50% of its total assets, more
than 5% (but not more than 25%) of its total assets in the securities of any
issuer. The Fund is likely to invest a greater percentage of its assets in
the securities of a single issuer than would a diversified Fund. In
particular, the Fund is more susceptible to any single adverse economic or
political occurrence or development affecting issuers of Kansas municipal
obligations.

This Statement of Additional Information (SAI) supplements the information
contained in the combined Prospectus for the Funds. The Prospectus outlines
the principal investment strategies and risks of the Funds, and this SAI
contains some of the same information, as well as information about additional
strategies and risks.

INVESTMENT OBJECTIVE, STRATEGIES AND RISKS

UMB Scout Stock Fund
The Fund will normally invest at least 80% of its total assets (exclusive of
cash) in common stocks. The Fund does not intend to concentrate its investments
in any particular industry. Without the approval of shareholders it will not
purchase a security if as a result of such purchase more than 25% of its assets
will be invested in a particular industry.

The Fund intends to hold some cash, short-term debt obligations, government
securities or other high-quality investments for reserves to cover redemptions
and unanticipated expenses. There may be times, however, when the Funds
attempt to respond to adverse market, economic, political or other conditions
by investing up to 100% of its assets in those types of investments for
temporary, defensive purposes. During those times, the Fund will not be able
to pursue its investment objective and, instead, will focus on preserving your
investment.

UMB Scout Regional Fund
The Fund will seek to achieve its objective by normally investing at least 80%
of its total assets (exclusive of cash) in a diversified portfolio of common
stocks of smaller companies either located in or having a substantial portion
of their business in Missouri, Kansas, Iowa, Nebraska, Arkansas, Oklahoma,
Illinois and Colorado. While the Fund's investments will be concentrated in
the eight-state region previously described, it does not intend to concentrate
its investments in any particular industry. Without the approval of
shareholders, it will not purchase a security if as a result of such purchase
more than 25% of its assets will be invested in a particular industry.
Although there is no intention to concentrate Fund investments in one or more
of the states mentioned above, there is no limitation upon investments in any
particular state.

The Fund will normally invest at least 75% of its assets in investment-grade
common stocks, but reserves the right to temporarily invest for defensive
purposes less than 75% of its assets in common stocks if, in the opinion of
the Fund's manager prevailing market conditions warrant. The Fund may invest
the balance, up to 100% of its assets, in preferred stocks or defensive issues
such as short-term money market instruments, commercial paper, bankers'
acceptances, certificates of deposit and other debt securities such as
corporate bonds rated A or better by Moody's Investors Service, Inc.
("Moody's") or Standard & Poor's Corporation ("S&P"), or U.S. government
issues such as treasury bills, treasury notes and treasury bonds.

Necessary reserves will be held in cash or short-term debt obligations,
including repurchase agreements (see below), readily changeable to cash.
The manager believes, however, that there may be times when the shareholders'
interests are best served and the Fund's investment objectives are most
likely to be achieved, by investing in securities convertible into common
stocks, or defensive issues such as high-grade bonds or other defensive
issues. It retains the freedom to administer the portfolio of the fund
accordingly when, in its judgment, economic and market conditions make such a
course desirable.

The Fund also may invest in issues of the United States Treasury and United
States government agencies subject to repurchase agreements entered into with
the seller of the issue. The use of repurchase agreements by the Fund
involves certain risks. For a discussion of repurchase agreements and their
risks see "Risk Factors Applicable to Repurchase Agreements."

UMB Scout WorldWide Fund
UMB Scout WorldWide Fund intends to invest at least 80% of its assets in a
diversified portfolio of equity securities (common stocks and securities
convertible into common stocks) of established companies either located
outside the United States or whose primary business is carried on outside the
country. However, the Fund reserves the right to invest directly in foreign
securities or to purchase American Depository Receipts (ADR's), European
Deposit Receipts (EDR's) and International Depository Receipts (IDR's), in
bearer form, which are designed for use in European and other securities
markets.

In pursuing its investment objective, the Fund will look at such factors as the
company's assets, personnel, sales, earnings and location of its corporate
headquarters to determine whether more than 50% of such assets, personnel,
sales or earnings are located outside the United States and therefore the
company's primary business is carried on outside the United States.

The Fund may invest in fixed-income securities of foreign governments or
companies when the manager believes that prevailing market, economic,
political or currency conditions warrant such investments. While most foreign
securities are not subject to standard credit ratings, the investment adviser
intends to select "investment grade" issues of foreign debt securities which
are comparable to a Baa or higher rating by Moody's or a BBB or higher rating
by S&P, based on available information, and taking into account liquidity and
quality issues. Securities rated BBB or Baa are considered to be medium grade
and have speculative characteristics. Equity securities of non-United States
companies will be selected on the same criteria as securities of United States
domestic companies. The Fund may invest in securities that are not listed on
an exchange. Generally, the volume of trading in an unlisted common stock is
less than the volume of trading in a listed stock. This means that the degree
of market liquidity of some stocks in which the Fund invests may be relatively
limited. When the Fund disposes of such a stock it may have to offer the shares
at a discount from recent prices or sell the shares in small lots over an
extended period of time. The Fund does not intend to hold more than 5% of its
portfolio in securities whose ratings have dropped below investment grade.
The manager will review such securities and determine appropriate action to
take with respect to such securities.

In order to expedite settlement of portfolio transactions and to minimize
currency value fluctuations, the Fund may purchase foreign currencies and/or
engage in forward foreign currency transactions. The Fund will not engage in
forward foreign currency exchange contracts for speculative purposes. A
forward foreign currency exchange contract involves an obligation to purchase
or sell a specific currency at a future date, which may be any fixed number of
days from the date of the contract agreed upon by the parties, at a price set
at the time of the contract. These contracts may be bought or sold to protect
the Fund, to some degree, against a possible loss resulting from an adverse
change in the relationship between foreign currencies and the U.S. dollar.
This method of protecting the value of the Fund's investment securities
against a decline in the value of a currency does not eliminate fluctuations
in the underlying prices of the securities. It establishes a rate of exchange
that one can achieve at some future point in time. Although such contracts
tend to minimize the risk of loss due to a decline in the value of the hedged
currency, at the same time, they tend to limit any potential gain which might
result should the value of such currency increase.

The Fund's dealings in forward foreign currency transactions will be limited
to hedging involving either specific transactions or portfolio positions.
Transaction hedging is the purchase or sale of forward foreign currency with
respect to specific receivables or payables of the Fund accruing in connection
with the purchase and sale of its portfolio securities, the sale and redemption
of shares of the Fund or the payment of dividends and distributions by the
Fund. Position hedging is the sale of forward foreign currency with respect
to portfolio security positions denominated or quoted in such foreign currency.
The Fund will not speculate in foreign forward exchange. Moreover, it may not
be possible for the Fund to hedge against a devaluation that is so generally
anticipated that the Fund is not able to contract to sell the currency at a
price above its anticipated devaluation level.

The Fund intends to diversify investments broadly among countries and normally
to have represented in the portfolio business activities of not less than
three foreign countries. Generally, the Fund does not intend to invest more
than 25% of its total assets in any one particular country or securities issued
by a foreign government, its agencies or instrumentalities in the foreseeable
future. However, the Fund may, at times, temporarily invest a substantial
portion of its assets in one or more of such countries if economic and
business conditions warrant such investments.

The Fund intends to hold some cash, short-term debt obligations, government
securities or other high-quality investments for reserves to cover redemptions
and unanticipated expenses. There may be times, however, when the Fund
attempts to respond to adverse market, economic, political or other conditions,
by investing up to 100% of its assets in those types of investments for
temporary defensive purposes.

UMB Scout Capital Preservation Fund
The Fund will invest in equity securities of companies with a significant
potential for earnings growth or revaluation of assets. Normally the Fund
will invest at least 65% of its total assets in equity securities. The Fund
will normally invest in the following equity or convertible securities:

1. Domestic companies of any size listed on an exchange or over-the-counter.

2. Foreign companies of any size with shares listed on a U.S. exchange or
over-the-counter or foreign companies with American Depository Receipts
(ADRs) which represent foreign securities and are traded on U.S. exchanges
or over-the-counter. The Fund may also invest directly in foreign
securities. See Risk Factors Applicable to Foreign Investments, page 18.

The Fund will not be restricted as to market capitalization. However, under
normal circumstances, the Fund will not invest more than 25% or more of its
total assets in a single industry. Also, the Fund may not own more than 10%
of the outstanding voting securities of a single issuer. The Fund may not
invest more than 5% of its equity assets in any one issuer.

When, in the manager's judgment, market conditions warrant substantial
temporary investments in high-quality money market securities, the Fund may
invest up to 100% of its assets in those types of investments. Investments in
money market securities shall include government securities, government
agency securities, commercial paper, banker's acceptances, bank certificates of
deposit and repurchase agreements. Investment in commercial paper is
restricted to companies rated P2 or higher by Moody's or A-2 or higher by S&P.

The Fund may also invest in the following fixed income securities.

1. Direct obligations of the U.S. Government, such as bills, notes, bonds and
other debt securities issued by the U.S. Treasury.

2. Obligations of U.S. government agencies and instrumentalities which are
secured by the full faith and credit of the U.S. Treasury, such as
securities of the Government National Mortgage Association, the
Export-Import Bank or the Student Loan Marketing Association; or which are
secured by the right of the issuer to borrow from the Treasury, such as
securities issued by the Federal Financing Bank or the U.S. Postal Service;
or are supported by the credit of the government agency or instrumentality
itself, such as securities of Federal Home Loan Banks,Federal Farm Credit
Banks or the Federal National Mortgage Association.

3. Securities issued by corporations or other business organizations.

The Fund's investments in fixed income securities issued by corporations or
other business organizations will be classified, at the time of purchase, as
investment grade securities, which means that they will be rated Baa or higher
by Moody's or BBB or higher by S&P. In addition, the credit quality of
unrated securities purchased by the Fund must be, in the opinion of the fund's
adviser, at least equivalent to a Baa rating by Moody's or a BBB rating by S&P.
Although securities rated Baa by Moody's and BBB by S&P are considered to be
investment grade, they have speculative characteristics. Such securities carry
a lower degree of risk than lower rated securities. Securities that are
subsequently downgraded in quality below Baa by Moody's or BBB by S&P may
continue to be held by the Fund until such time as they can be disposed of in
a reasonably practical manner.

UMB Scout Balanced Fund
Normally the Fund will invest at least 25% of its total assets in equity
securities and a minimum of 25% of its total assets in fixed income senior
obligations. The Fund intends to hold some cash, short-term debt obligations,
government securities or other high-quality investments for reserves to cover
redemptions and other unanticipated expenses. When, in the manager's judgment,
market conditions warrant, the Fund may invest up to 100% of its assets in
those types of investments for temporary defensive purposes.

The Fund will normally invest in the following fixed income securities.

1. Direct obligations of the U.S. Government, such as bills, notes, bonds
and other debt securities issued by the U.S. Treasury.

2. Obligations of U.S. government agencies and instrumentalities which are
secured by the full faith and credit of the U.S. Treasury, such as
securities of the GovernmentNational Mortgage Association; or which are
secured by the right of the issuer to borrow from the Treasury, such as
securities issued by the Federal Financing Bank or the U.S. Postal Services;
or are supported by the credit of the government agency or instrumentality
itself, such as securities of Federal Home Loan Banks, Federal Farm Credit
Banks, or the Federal National Mortgage Association.

3. Securities issued by corporations or other business organizations. The
Fund will generally invest in securities that, at the time of purchase,
are classified as investment grade by Moody's or by S&P. Securities that
are subsequently downgraded to non-investment grade may continue to be
held by the Fund, as long as such securities do not exceed 5% of the
portfolio, and will be sold only if the manager believes it would be
advantageous to do so. In addition, the credit quality of unrated
securities purchased by the Fund must be, in the opinion of the Fund's
adviser, at least equivalent to a Baa rating by Moody's or a BBB rating
by Standard & Poor's.

The Fund will not be restricted as to market capitalization. However, under
normal circumstances, the Fund will not invest more than 25% of its assets in
a single industry. Also the Fund may not own more than 10% of the outstanding
voting securities of a single issuer. The Fund may not invest more than 5% of
its equity assets in any one issuer.

Investments in money market securities shall include government securities,
government agency securities, commercial paper, bankers' acceptances, bank
certificates of deposit and repurchase agreements. Investment in commercial
paper is restricted for companies rated P-2 or higher by Moody's or A-2 or
higher by S&P.

Securities rated Baa or higher by Moody's or BBB by S&P or higher are
classified as investment grade securities. Although securities rated Baa by
Moody's and BBB by S&P have speculative characteristics, they are considered
to be investment grade. Such securities carry a lower degree or risk than
lower rated securities.

UMB Scout Bond Fund
The Fund will normally invest at least 80% of its assets in bonds such as:
(1) direct or guaranteed obligations of the U.S. Government and its agencies,
and (2) high-quality debt securities including notes and bonds issued by
corporations or other business organizations.

The Fund will invest only in the following "U.S. Government Securities."

1. Direct obligations of the U.S. Government, such as bills, notes, bonds
and other debt securities issued by the U.S. Treasury.

2. Obligations of U.S. government agencies and instrumentalities which are
secured by the full faith and credit of the U.S. Treasury, such as
securities of the Government National Mortgage Association, the
Export-Import Bank, or the Student Loan Marketing Association; or which
are secured by the right of the issuer to borrow from the Treasury, such
as securities issued by the Federal Financing Bank or the U.S. Postal
Service, or are supported by the credit of the government agency or
instrumentality itself, such as securities of Federal Home Loan Banks,
Federal Farm Credit Banks, or the Federal National Mortgage Association.

The Fund's investments in securities issued by corporations or other business
organizations will be rated at the time of purchase within the top three
classifications of Moody's (Aaa, Aa, and A) or S&P (AAA, AA and A). The Fund
will use obligations secured by specific assets of the issuing corporation as
well as unsecured debentures which represent claims on the general credit of
the issuer.

The Fund may invest in commercial paper, including variable rate master demand
notes, of companies whose commercial paper is rated P-1 by Moody's or A-1 by
S&P. If not rated by either Moody's or S&P, a company's commercial paper,
including variable rate master demand notes, may be purchased by the Fund if
the company has an outstanding bond issue rated Aa or higher by Moody's or AA
or higher by S&P.

Variable rate master demand notes represent a borrowing arrangement under a
letter of agreement between a commercial paper issuer and an institutional
lender. Applicable interest rates are determined on a formula basis and are
adjusted on a monthly, quarterly, or other term as set out in the agreement.
They vary as to the right of the lender to demand payment. It is not generally
contemplated that such instruments will be traded, and there is no secondary
market for these notes, although they are redeemable (and thus immediately
repayable by the borrower) at face value, plus accrued interest, at any time.
In connection with the Fund's investment in variable rate master demand
notes, the Fund's manager will monitor on an ongoing basis the earning power,
cash flow and other liquidity ratios of the issuer, and the borrower's ability
to pay principal and interest on demand.

The Fund may invest in certificates of deposit, bankers' acceptances, and other
commercial bank short-term obligations issued domestically by United States
banks having assets of at least $1 billion and which are members of the
Federal Deposit Insurance Corporation, or such securities which may be issued
by holding companies of such banks.

The Fund may also invest in issues of the United States Treasury or United
States government agencies subject to repurchase agreements entered into with
the seller of the issues.

UMB Scout Kansas Tax-Exempt Bond Fund
The following policies supplement the UMB Scout Kansas Tax-Exempt Bond Fund's
investment objective and policies set forth in the Prospectus.

Municipal Bonds and Debt Instruments.
Municipal bonds and debt instruments include bonds, notes and commercial paper
of varying maturities issued by a municipality for a wide variety of both
public and private purposes, the interest on which is, in the opinion of bond
counsel, exempt from regular federal income tax. Public purpose municipal
bonds include general obligation and revenue bonds. General obligation bonds
are backed by the taxing power of the issuing municipality. Revenue bonds are
backed by the revenues of a project or facility or from the proceeds of a
specific revenue source. Some revenue bonds are payable solely or partly
from funds which are subject to annual appropriations by a state's legislature
and the availability of monies for such payments. Municipal notes include
bond anticipation, tax anticipation and revenue anticipation notes. Bond, tax
and revenue anticipation notes are short term obligations that will be
retired with the proceeds of an anticipated bond issue, tax revenue or
facility revenue respectively.

The Fund will concentrate its investments in municipal obligations issued by
Kansas and its political subdivisions. The Fund is, therefore, more
susceptible to factors adversely affecting issuers in Kansas than mutual funds
which do not concentrate in a specific state. Municipal obligations of issuers
in a single state may be adversely affected by economic developments
(including insolvency of an issuer) and by legislation and other governmental
activities in that state. Municipal obligations that rely on an annual
appropriation of funds by a state's legislature for payment are also subject
to the risk that the legislature will not appropriate the necessary amounts or
take other action needed to permit the issuer of such obligations to make
required payments. To the extent that the Fund's assets are concentrated in
municipal obligations of issuers of a single state, the Fund may be subject
to an increased risk of loss. The Fund may also invest in obligations issued
by the governments of Puerto Rico, the U.S. Virgin Islands and Guam.

The Fund may invest up to 20% of its net assets in municipal obligations issued
by the same or similar types of issuers, including, without limitation, the
following: lease rental obligations of state and local authorities;
obligations dependent on annual appropriations by a state's legislature for
payment; obligations of state and local housing finance authorities, municipal
utilities systems or public housing authorities; obligations of hospitals or
life care facilities; or industrial development or pollution control bonds
issued for electric utility systems, steel companies, paper companies or other
purposes. This may make the Fund more susceptible to adverse economic,
political or regulatory occurrences affecting a particular category of issuer.
For example, health care-related issuers are susceptible to fluctuations in
Medicare and Medicaid reimbursements, and national and state health care
legislation. As the Fund's concentration increases, so does the potential for
fluctuation in the value of the Fund's shares.

The secondary market for some municipal obligations issued within Kansas
(including issues which are privately placed) is less liquid than that for
taxable debt obligations or other more widely traded municipal obligations.
The Fund will not invest in illiquid securities if more than 15% of its net
assets would be invested in securities that are not readily marketable. No
established resale market exists for certain of the municipal obligations in
which the Fund may invest. The market for obligations rated below investment
grade is also likely to be less liquid than the market for higher rated
obligations. As a result, the Fund may be unable to dispose of these
municipal obligations at times when it would otherwise wish to do so at the
prices at which they are valued.

Certain securities held by the Fund may permit the issuer at its option to
"call" or redeem its securities. If an issuer redeems securities held by the
Fund during a time of declining interest rates, the Fund may not be able to
reinvest the proceeds in securities providing the same investment return as
the securities redeemed.

Some of the securities in which the Fund invests may include so-called
"zero-coupon" bonds, whose values are subject to greater fluctuation in
response to changes in market interest rates than bonds which pay interest
currently. Zero-coupon bonds are issued at a significant discount from price
value and pay interest only at maturity rather than at intervals during the
life of the security. The Fund is required to accrue income from zero-coupon
bonds on a current basis, even though it does not receive that income
currently in cash and the Fund is required to distribute its share of the
Fund's income for each taxable year. Thus, the Fund may have to sell other
investments to obtain cash needed to make income distributions.

The Fund may invest in municipal leases and participations in municipal leases.
The obligation of the issuer to meet its obligations under such leases is often
subject to the appropriation by the appropriate legislative body, on an
annual or other basis, of funds for the payment of the obligations.
Investments in municipal leases are thus subject to the risk that the
legislative body will not make the necessary appropriation and the issuer will
not otherwise be willing or able to meet its obligation.

In pursuit of its investment objective, the Fund assumes investment risk,
chiefly in the form of interest rate and credit risk. Interest rate risk is
the risk that changes in market interest rates will affect the value of the
Fund's investment portfolio. In general, the value of a municipal bond falls
when interest rates rise, and increases when interest rates fall. Credit risk
is the risk that an issuer of a municipal bond is unable to meet its
obligation to make interest and principal payments. Municipal bonds with
longer maturities (durations) or lower ratings generally provide higher
current income, but are subject to greater price fluctuation due to changes
in market conditions than bonds with shorter maturities or higher ratings,
respectively. In addition, the values of municipal bonds are affected by
changes in general economic conditions and business conditions affecting the
specific industries or their issuers. Changes by recognized rating services
in their ratings of a security and in the ability of the issuer to make
payments of principal and interest may also affect the value of the Fund's
investments. The amount of information about the financial conditions of an
issuer of municipal obligations may not be as extensive as that made available
by corporations whose securities are publicly traded.

Any recognized gain or income attributable to market discount on long-term
tax-exempt municipal obligations (i.e., obligations with a term of more than
one year) purchased after April 30, 1993 other than, in general, at their
original issue, is taxable as ordinary income. A long-term debt obligation
is generally treated as acquired at a market discount if purchased after its
original issue at a price less than (i) the stated principal amount payable at
maturity, in the case of an obligation that does not have original issue
discount; or (ii) in the case of an obligation that does have original issue
discount, the sum of the issue price and any original issue discount that
accrued before the obligation was purchased, subject to a de minimis exclusion.

The principal security for a revenue bond is generally the net revenues
derived from a particular facility or group of facilities or, in some cases,
from the proceeds of a special excise or other specific revenue sources.
Revenue bonds have been issued to fund a wide variety of capital projects,
including electric, gas, water, sewer and solid waste disposal systems;
highways, bridges and tunnels; port, airport and parking facilities;
transportation systems; housing facilities, colleges and universities and
hospitals. Although the principal security behind these bonds varies widely,
many provide additional security in the form of a debt service reserve fund
whose monies may be used to make principal and interest payments on the
issuer's obligations. Housing finance authorities have a wide range of
security including partially or fully insured, rent subsidized and/or
collateralized mortgages and/or the net revenues from housing or other public
projects. In addition to a debt service reserve fund, some authorities
provide further security in the form of a state's ability (without legal
obligation) to make up deficiencies in the debt service reserve fund. Lease
rental revenue bonds issued by a state or local authority for capital projects
are normally secured by annual lease rental payments from the state or
locality to the authority sufficient to cover debt service on the authority's
obligations. Such payments are usually subject to annual appropriations by
the state or locality.

Industrial development and pollution control bonds, although nominally issued
by municipal authorities, are in most cases revenue bonds and are generally
not secured by the taxing power of the municipality, but are usually secured
by the revenues derived by the authority from payments of the industrial user
or users.

The Fund may on occasion acquire revenue bonds that carry warrants or similar
rights covering equity securities. Such warrants or rights may be held
indefinitely, but if exercised, the Fund anticipates that it would, under
normal circumstances, dispose of any equity securities so acquired within a
reasonable period of time.

While most municipal bonds pay a fixed rate of interest semiannually in cash,
there are exceptions. Some bonds pay no periodic cash interest, but rather
make a single payment at maturity representing both principal and interest.
Bonds may be issued or subsequently offered with interest coupons materially
greater or less than those then prevailing, with price adjustments reflecting
such deviation.

The obligations of any person or entity to pay the principal of and interest
on a municipal obligation are subject to the provisions of bankruptcy,
insolvency and other laws affecting the rights and remedies of creditors, such
as the Federal Bankruptcy Act, and laws, if any, which may be enacted by
Congress or state legislatures extending the time for payment of principal or
interest, or both, or imposing other constraints upon enforcement of such
obligations. There is also the possibility that as a result of litigation or
other conditions the power or ability of any person or entity to pay when
due principal of and interest on a municipal obligation may be materially
affected. There have been recent instances of defaults and bankruptcies
involving municipal obligations that were not foreseen by the financial and
investment communities. The Fund will take whatever action it considers
appropriate in the event of anticipated financial difficulties, default or
bankruptcy of either the issuer of any municipal obligation or of the
underlying source of funds for debt service. Such action may include
retaining the services of various persons or firms (including affiliates of
the investment adviser) to evaluate or protect any real estate, facilities or
other assets securing any such obligation or acquired for the portfolio as a
result of any such event and the Fund may also manage (or engage other persons
to manage) or otherwise deal with any real estate, facilities or other assets
so acquired. The Fund anticipates that real estate consulting and management
services may be required with respect to properties securing various municipal
obligations in its portfolio or subsequently acquired by the Fund. The Fund
will incur additional expenditures in taking protective action with respect to
portfolio obligations in default and assets securing such obligations.

The yields on municipal obligations will be dependent on a variety of factors,
including purposes of issue and source of funds for repayment, general money
market conditions, general conditions of the municipal bond market, size of a
particular offering, maturity of the obligation and rating of the issue. The
ratings of Moody's, S&P and Fitch represent their opinions as to the quality
of the municipal obligations that they undertake to rate. It should be
emphasized, however, that ratings are based on judgment and are not absolute
standards of quality. Consequently, municipal obligations with the same
maturity, coupon and rating may have different yields while obligations of the
same maturity and coupon with different ratings may have the same yield. In
addition, the market price of municipal obligations will normally fluctuate
with changes in interest rates; therefore, the net asset value of the Fund
will be affected by such changes.

Obligations of Particular Types of Issuers. Hospital bond ratings are often
based on feasibility studies which contain projection of expenses, revenues
and occupancy levels. Among the influences affecting a hospital's gross
receipts and net income available to service its debt are demand for hospital
services, the ability of the hospital to provide the services required,
management capabilities, economic developments in the service area, efforts by
insurers and government agencies to limit rates and expenses, confidence in
the hospital, service area economic developments, competition, availability
and expense of malpractice insurance, Medicaid and Medicare funding and
possible federal legislation limiting the rates of increase of hospital
charges.

Electric utilities face various problems such as financing large construction
programs in an inflationary period; cost increases and delay occasioned by
safety and environmental considerations (particularly with respect to nuclear
facilities); difficulty in obtaining fuel at reasonable prices; achieving
timely and adequate rate relief from regulatory commissions; and, effects of
energy conservation and limitations on the capacity of the capital market to
absorb utility debt.

Life care facilities are an alternative form of long-term housing for the
elderly which offer residents the independence of a condominium life style and,
if needed, the comprehensive care of nursing home services. Bonds to finance
these facilities have been issued by various state and local authorities.
Since the bonds are normally secured only by the revenues of each facility and
not by state or local government tax payments, they are subject to a wide
variety of risks. Primarily, the projects must maintain adequate occupancy
levels to be able to provide revenues sufficient to meet debt service
payments. Moreover, since a portion of housing, medical care and other
services may be financed by an initial deposit, it is important that the
facility maintain adequate financial reserves to secure estimated actuarial
liabilities. The ability of management to accurately forecast inflationary
cost pressures is an important factor in this process. The facilities may
also be affected adversely by regulatory cost restrictions applied to health
care delivery in general, particularly state regulations or changes in
Medicare and Medicaid payments or qualifications, or restrictions imposed by
medical insurance companies. They may also face competition from alternative
health care or conventional housing facilities in the private or public sector.

Municipal Leases. The Fund may invest in municipal leases and participations
therein, which arrangements frequently involve special risks. Municipal
leases are obligations in the form of a lease or installment purchase
arrangement that is issued by state or local governments to acquire equipment
and facilities. Interest income from such obligations is generally exempt
from local and state taxes in the state of issuance. "Participations" in such
leases are undivided interests in a portion of the total obligation.
Participations entitle their holders to receive a pro rata share of all
payments under the lease. A trustee is usually responsible for administering
the terms of the participation and enforcing the participants' rights in the
underlying lease. Leases and installment purchase or conditional sale
contracts (which normally provide for title to the leased assets to pass
eventually to the government issuer) have evolved as a means of government
issuers to acquire property and equipment without meeting the constitutional
and statutory requirements for the issuance of debt. State debt-issuance
limitations are deemed to be inapplicable to these arrangements because of the
inclusion in many leases or contracts of "non-appropriation" clauses that
provide that the governmental issuer has no obligation to make future payments
under the lease or contract unless money is appropriated for such purpose by
the appropriate legislative body on a yearly or other periodic basis. Such
arrangements are, therefore, subject to the risk that the governmental issuer
will not appropriate funds for lease payments.

Certain municipal lease obligations owned by the Fund may be deemed illiquid
for the purpose of the Fund's 10% limitation on investments in illiquid
securities, unless determined by the investment adviser, pursuant to guidelines
adopted by the Directors of the Fund, to be liquid securities for the purpose
of such limitation. In determining the liquidity of municipal lease
obligations, the investment adviser will consider a variety of factors
including: (1) the willingness of dealers to bid for the security; (2) the
number of dealers willing to purchase or sell the obligation and the number of
other potential buyers; (3) the frequency of trades and quotes for the
obligation; and (4) the nature of the marketplace trades. In addition, the
investment adviser will consider factors unique to particular lease obligations
affecting the marketability thereof. These include the general
creditworthiness of the municipality, and the likelihood that the
marketability of the obligation will be maintained throughout the time the
obligation is held by the Fund. In the event the Fund acquires an unrated
municipal lease obligation, the investment adviser will be responsible for
determining the credit quality of such obligation on an on-going basis,
including an assessment of the likelihood that the lease may or may not be
canceled.

Zero-Coupon Bonds. Zero-coupon bonds are debt obligations which do not require
the periodic payment of interest and are issued at a significant discount from
face value. The discount approximates the total amount of interest the bonds
will accrue and compound over the period until maturity at a rate of interest
reflecting the market rate of the security at the time of issuance.
Zero-coupon bonds benefit the issuer by mitigating its need for cash to meet
debt service, but also require a higher rate of return to attract investors
who are willing to defer receipt of such cash.

Credit Quality. The Fund is dependent on the investment adviser's judgment,
analysis and experience in evaluating the quality of municipal obligations.
In evaluating the credit quality of a particular issue, whether rated or
unrated, the investment adviser will normally take into consideration, among
other things, the financial resources of the issuer (or, as appropriate, of
the underlying source of funds for debt service), its sensitivity to economic
conditions and trends, any operating history of and the community support for
the facility financed by the issue, the ability of the issuer's management and
regulatory matters.

When-Issued Securities. New issues of municipal obligations are sometimes
offered on a "when-issued" basis, that is, delivery and payment for the
securities normally take place within a specified number of days after the
date of the Fund's commitment and are subject to certain conditions such as
the issuance of satisfactory legal opinions. The price and yield of such
securities are generally fixed on the date of commitment to purchase.
However, the market value of the securities may fluctuate prior to delivery
and upon delivery the securities may be more or less than the Fund agreed to
pay for them. The Fund may also purchase securities on a when-issued basis
pursuant to refunding contracts in connection with the refinancing of an
issuer's outstanding indebtedness. Refunding contracts generally require the
issuer to sell and the Fund to buy such securities on a settlement date that
could be several months or several years in the future. Additionally, the
Fund may purchase instruments that give it the option to purchase a municipal
obligation when and if issued.

The Fund will make commitments to purchase when-issued securities only with
the intention of actually acquiring the securities, but may sell such
securities before the settlement date if it is deemed advisable as a matter of
investment strategy. The payment obligation and the interest rate that will
be received on the securities are fixed at the time the Fund enters into the
purchase commitment. When the Fund commits to purchase securities on a
when-issued basis it records the transaction and reflects the value of the
security in determining its net asset value. Securities purchased on a
when-issued basis and the securities held by the Fund are subject to changes
in value based upon the perception of the creditworthiness of the issuer and
changes in the level of interest rates (i.e. appreciation when interest rates
decline and depreciation when interest rates rise). Therefore, to the extent
that the Fund remains substantially fully invested at the same time that it
has purchased securities on a when-issued basis, there will be greater
fluctuations in the Fund's net asset value than if it solely set aside cash
to pay for when-issued securities.

Variable Rate Obligations. The Fund may purchase variable rate obligations.
Variable rate instruments provide for adjustments in the interest rate at
specified intervals (weekly, monthly, semiannually, etc.). Rate revisions may
alternatively be determined by formula or in some other contractual fashion.
Variable rate obligations normally provide that the holder can demand payment
of the obligation on short notice at par with accrued interest and are
frequently secured by letters of credit or other credit support arrangements
provided by banks. To the extent that such letters of credit or other
arrangements constitute an unconditional guarantee of the issuer's obligations,
a bank may be treated as the issuer of a security for the purpose of complying
with the diversification requirements set forth in Section 5(b) of the 1940 Act
and Rule 5b-2 thereunder. The Fund would anticipate using these obligations
as cash equivalents pending longer-term investment of its funds.

Redemption, Demand and Put Features. Most municipal bonds have a fixed final
maturity date. However, it is commonplace for the issuer to reserve the right
to call the bond earlier. Also, some bonds may have "put" or "demand"
features that allow early redemption by the bondholder. Longer-term fixed-
rate bonds may give the holder a right to request redemption at certain times
(often annually after the lapse of an intermediate term). These bonds are
more defensive than conventional long-term bonds (protecting to some degree
against a rise in interest rates) while providing greater opportunity than
comparable intermediate term bonds, because the Fund may retain the bond if
interest rates decline. By acquiring these kinds of obligations the Fund
obtains the contractual right to require the issuer of the security or some
other person (other than a broker or dealer) to purchase the security at an
agreed upon price, which right is contained in the obligation itself rather
than in a separate agreement with the seller or some other person. Because
this right is assignable with the security, which is readily marketable and
valued in the customary manner, the Fund will not assign any separate value
to such right.

Futures Contracts and Options on Futures Contracts. A change in the level of
interest rates may affect the value of the securities held by the Fund (or of
securities that the Fund expects to purchase). To hedge against changes in
rates, the Fund may enter into: (i) futures contracts for the purchase or
sale of debt securities; and (ii) futures contracts on securities indices.
All futures contracts entered into by the Fund are traded on exchanges or
boards of trade that are licensed and regulated by the Commodity Futures
Trading Commission ("CFTC") and must be executed through a futures commission
merchant or brokerage firm which is a member of the relevant exchange. The
Fund may purchase and write call and put options on futures contracts that are
traded on a United States or foreign exchange or board of trade. The Fund
will be required, in connection with transactions in futures contracts and the
writing of options on futures, to make margin deposits, which will be held by
the Fund's custodian for the benefit of the futures commission merchant through
whom the Fund engages in such futures and options transactions.

Some futures contracts and options thereon may become illiquid under adverse
market conditions. In addition, during periods of market volatility, a
commodity exchange may suspend or limit transactions in an exchange-traded
instrument, which may make the instrument temporarily illiquid and difficult
to price.

Commodity exchanges may also establish daily limits on the amount that the
price of a futures contract or futures option can vary from the previous day's
settlement price. Once the daily limit is reached, no trades may be made that
day at a price beyond the limit. This may prevent the Fund from closing out
positions and limiting its losses.

The Fund will engage in futures and related options transactions only for bona
fide hedging purposes as defined in or permitted by CFTC regulations. The
Fund will determine that the price fluctuations in the futures contracts and
options on futures are substantially related to price fluctuations in
securities held by the Fund or which it expects to purchase. The Fund's
futures transactions will be entered into for traditional hedging purposes --
that is, futures contracts will be sold to protect against a decline in the
price of securities that the Fund owns, or futures contracts will be purchased
to protect the Fund against an increase in the price of securities it intends
to purchase. However, in particular cases, when it is economically
advantageous for the Fund to do so, a long futures position may be terminated
(or an option may expire) without the corresponding purchase of securities.
The Fund will engage in transactions in futures and related options contracts
only to the extent such transactions are consistent with the requirements of
the Code for maintaining qualification of the Fund as a regulated investment
company for federal income tax purposes (see "Dividends, Distributions and
Taxes").

Asset Coverage Requirements. Transactions involving when-issued securities,
the lending of securities or futures contracts and options (other than options
that the Fund has purchased) expose the Fund to an obligation to another party.
The Fund will not enter into any such transactions unless it owns either:
(1) an offsetting ("covered") position in securities or other options or
futures contracts; or (2) cash or liquid securities (such as readily
marketable obligations and money market instruments) with a value sufficient
at all times to cover its potential obligations not covered as provided in
(1) above. The Fund will comply with Securities and Exchange Commission
guidelines regarding cover for these instruments and, if the guidelines so
require, set aside cash or liquid securities in a segregated account
maintained by its custodian in the prescribed amount. The securities in the
segregated account will be marked to market daily.

Assets used to cover or held in a segregated account maintained by the
custodian cannot be sold while the position requiring coverage or segregation
is outstanding unless they are replaced with other appropriate assets. As a
result, the commitment of a large portion of the Fund's assets to segregated
accounts or to cover could impede fund management or the Fund's ability to
meet redemption requests or other current obligations.

Non-Diversified Status. As a "non-diversified" investment company, the Fund
may invest, with respect to 50% of its total assets, more than 5% (but not
more than 25%) of its total assets in the securities of any issuer. The Fund
is likely to invest a greater percentage of its assets in the securities of a
single issuer than would a diversified fund. Therefore, the Fund is more
susceptible to any single adverse economic or political occurrence or
development affecting issuers of Kansas municipal obligations. For purposes
of this restriction, each Kansas political subdivision is considered to be the
ultimate issuer, rather than the Kansas Development Finance Authority, under
whose authority Kansas bonds are issued.

Portfolio Maturity. The Fund purchases municipal bonds with different
maturities in pursuit of its investment objective, but maintains under normal
market conditions an investment portfolio with an overall weighted average
portfolio maturity of 5 to 10 years. The Fund may, however, purchase
individual municipal bonds with maturities of 20 years or greater.

Other Investment Information. When, in the manager's judgment, market
conditions warrant substantial temporary investments in high-quality
securities, the Fund may do so. The Fund may invest in high-quality
short-term municipal securities in order to reduce risk and preserve capital.
Under normal market conditions, the Fund may invest only up to 20% of net
assets in short-term municipal securities that are exempt from regular federal
income tax, although the Fund may invest up to 100% as a temporary defensive
measure in response to adverse market conditions.

If suitable short-term municipal investments are not reasonably available, the
Fund may invest in short-term taxable securities that are rated Aa or AA by
Moody's and S&P, respectively, or issued by the U.S. Government, and that have
a maturity of one year or less or have a variable interest rate.

Investments in money market securities shall include government securities,
government agency securities, commercial paper, municipal notes, banker's
acceptances, bank certificates of deposit and repurchase agreements.
Investment in commercial paper is restricted to companies rated P2 or higher
by Moody's, A-2 or higher by S&P, or F2 or higher by Fitch's, with comparable
rating restrictions for municipal notes.

Kansas. The Kansas economy continued to expand in 1998, although the
expansion slowed somewhat from 1997. No industries in Kansas experienced
extraordinary employment growth in 1998. However, the major areas of
manufacturing, services and trade exhibited stable, modest employment growth.
The Gross State Product grew 4.3%. Unemployment rates dropped from 4.2% to
3.6%. Personal income grew 4.7%. Although both the agricultural and oil
sectors experienced problems stemming from low prices, overall economic growth
pushed up State General Fund tax revenues.

The State Consensus Revenue Estimating Group which met in November 1998
forecasted continued growth for 1999 but at a slower rate than previous years.
Their 1999 state revenue forecast represents a 1.3% increase over 1998,
although that growth would have been 6.8% without the enactment of significant
tax cuts during 1998. For 2000, their forecast for overall state revenue
growth is a more moderate 3.8%.

Kansas has no general obligation debt, and relatively few bonds that are
issued and rated. The most significant debt is that of the Department of
Transportation for highway purposes. Other debt is issued under the authority
of the Kansas Development Finance Authority. Because the State has no general
obligation debt, there is no rating for Kansas general obligation bonds.

Kansas Taxes. Individuals, trusts, estates and corporations will not be
subject to the Kansas income tax on the portion of exempt-interest dividends
derived from interest on obligations of Kansas and its political subdivisions
issued after December 31, 1987, and interest on obligations issued before
January 1, 1988 where the laws of the State of Kansas authorizing the issuance
of such obligations specifically exempt the interest on such obligations from
income tax under the laws of the State of Kansas. All remaining dividends
(except for dividends, if any, derived from qualifying debt obligations issued
by the governments of Puerto Rico, the U.S. Virgin Islands and Guam and which
are exempt from federal and state income taxes pursuant to federal laws),
including dividends derived from capital gains, will be includable in the
Kansas taxable income of individuals, trusts, estates and corporations.
Distributions treated as long-term capital gains for federal income tax
purposes will generally receive the same characterization under Kansas law.
Capital gains or losses realized from a redemption, sale or exchange of shares
of the Fund by a Kansas taxpayer will be taken into account for Kansas income
tax purposes.

The above exemptions do not apply to the privilege tax imposed on banks,
banking associations, trust companies, savings and loan associations and
insurance companies, or the franchise tax imposed on corporations. Banks,
banking associations, trust companies, savings and loan associations,
insurance companies and corporations are urged to consult their own tax
advisors regarding the effects of these taxes before investing in the Fund.

The tax discussion set forth above is for general information only.
The foregoing relates to Kansas income taxation in effect as of the date of
this Statement of Additional Information; investors in other states may be
subject to state income taxation. Investors should consult their own tax
advisors regarding the state, local and other tax consequences of an
investment in the Fund, including any proposed change in the tax laws.

UMB Scout Money Market Fund
UMB Scout Money Market Fund offers two separate Portfolios, Federal and Prime,
each of which invest in high quality short-term money market instruments for
the purpose of maximizing income consistent with safety of principal and
liquidity. Money market instruments are generally described as short-term
debt obligations issued by governments, corporations and financial
institutions. Usually maturities are one year or less. The yield from this
type of instrument is very sensitive to short-term lending conditions. Thus,
the income of money market funds will follow closely the trend of short-term
interest rates, rising when those rates increase and declining when they fall.
Each Portfolio also seeks to maintain a constant price of $1.00 per share.
Neither Portfolio's objective can be changed without the approval of a
majority of its outstanding shares.

Because of the short maturities, fluctuation in the principal value of money
market-type securities resulting from changes in short-term interest rates
normally will not be sufficient to change the net asset value (price) per
share. Although the Fund's shareholders can anticipate that this principal
value stability will be reflected in the price of the Fund's shares, it cannot
be guaranteed.

Pursuant to Rule 2a-7 of the 1940 Act, the Fund will price its shares
according to a procedure known as amortized cost, and will maintain 100% of
its assets in securities with remaining maturities of 397 days or less, and
limit its investments to those instruments which the Directors of the Fund
determine present minimal credit risks, and which are eligible investments
under the rule. Each Portfolio will maintain a weighted average maturity of
90 days or less.

UMB Scout Tax-Free Money Market Fund
During periods of normal market conditions, the Fund will invest at least 80%
of its total assets (exclusive of cash) in short-term municipal securities.
This fundamental policy will not be changed without shareholder approval,
except that the Fund reserves the right to deviate temporarily from this
policy during extraordinary circumstances when, in the opinion of management,
it is advisable to do so in the best interest of shareholders, such as when
market conditions dictate a defensive posture in taxable obligations.

Municipal securities include bonds and other debt obligations issued by or on
behalf of states, territories and possessions of the United States of America
and the District of Columbia including their political subdivisions or their
duly constituted authorities, agencies and instrumentalities, the interest on
which is exempt from federal income tax.

UMB Scout Tax-Free Money Market Fund may invest in industrial development
bonds, the interest from which is exempt from federal income tax. Under
certain circumstances, "substantial users" of the facilities financed `with
such obligations, or persons related to "substantial users," may be required
to pay federal income tax on this otherwise exempted interest. Such persons
should consult the Internal Revenue Code and their financial adviser to
determine whether or not this Fund is an appropriate investment for them.

Municipal notes include tax, revenue and bond anticipation notes of short
maturity, generally less than three years, which are issued to obtain
temporary funds for various public purposes. Also included in this category
are Construction Loan Notes, Short-Term Discount Notes and Project Notes
issued by a state or local housing agency but secured by the full faith and
credit of the United States.

Prices of and yields on municipal securities depend on a variety of factors,
such as changes in interest rates, the size of a particular offering, the
maturity and the rating of the obligation, economic and monetary conditions,
and conditions of the municipal securities market, including the volume of
municipal securities available. Market values of municipal securities will
vary according to the relation of their yields available. Consequently, the
income of UMB Scout Tax-Free Money Market Fund and the yield on its shares
can be expected to change as the level of interest rates fluctuates.

Investments in short-term municipal obligations and notes are limited to those
obligations which at the time of purchase: (1) are backed by the full faith
and credit of the United States; (2) are rated MIG-1 or MIG-2 by Moody's; or
(3) if the obligations or notes are not rated, of comparable quality as
determined by the Board of Directors. Short-term discount notes are limited
to those obligations rated A-1 by S&P, or Prime-1 by Moody's or their
equivalents as determined by the Board of Directors. If the short-term
discount notes are not rated, they must be of comparable quality as determined
by the Board of Directors.

While the Fund normally maintains at least 80% of the portfolio in municipal
securities, it may invest any remaining balance in taxable money market
instruments on a temporary basis, if management believes this action would be
in the best interest of shareholders. Included in this category are:
obligations of the U.S. Government, its agencies or instrumentalities;
certificates of deposit; bankers' acceptances and other short-term debt
obligations of United States banks with total assets of $1 billion or more;
and commercial paper rated A-2 or better by S&P or Prime-2 or better by
Moody's, or certain rights to acquire these securities. The Fund reserves the
right to hold cash reserves as management deems necessary for defensive or
emergency purposes. It is the policy of the Fund not to invest more than 25%
of its assets in any one classification of municipal securities, except
project notes or other tax-exempt obligations that are backed by the U.S.
Government.

Should the rating organizations used by the Fund cease to exist or change
their systems, the Fund will attempt to use other comparable ratings as
standards for its investments in municipal securities in accordance with its
investment policies.

To achieve its objectives the Fund may engage in trading activity in order to
take advantage of opportunities to enhance yield, protect principal or
improve liquidity. This trading activity should not increase the Fund's
expenses since there are normally no brokers' commissions paid by the Fund for
the purchase or sale of money market instruments. However, a markup or spread
may be paid to a dealer from which the Fund purchases a security.

UMB Scout Tax-Free Money Market Fund may invest in issues of the U.S. Treasury
or U.S. Government agencies subject to repurchase agreements entered into with
the seller of the issue.

UMB Scout WorldWide Select Fund
In addition to the Fund's principal investment strategy as described in the
prospectus, the Fund may also seek income by investing in fixed-income
securities of foreign governments or companies if the investment adviser
believes that market or economic conditions make those investments more
attractive than investments in equity securities. The Fund will generally
select fixed-income securities which have credit ratings or characteristics
that are comparable to "investment grade" ratings, defined as Baa or higher by
Moody's or BBB or higher by S&P. Without the approval of shareholders, it will
not purchase a security if as a result of such purchase more than 25% of its
assets will be invested in a particular industry.

The Fund's investment management policies will attempt to generate a favorable
total return consisting of interest, dividend and other income, if any, and
appreciation in the value of the Fund's securities by investing in equity
securities which in the opinion of the manager, offer good growth potential
and in many cases pay dividends. The Fund will look at such factors as the
company's assets, personnel, sales, earnings and location of its corporate
headquarters to determine the value of the company as well as whether more
than 50% of such assets, personnel, sales or earnings are located outside the
United States and therefore the company's primary business is carried on
outside the United States. The Fund diversifies its investments among various
countries and a number of different industries. The Fund believes the
intrinsic worth and consequent value of the stock of most well managed and
successful companies usually do not change rapidly, even though wide variations
in the price may occur. So normally, long-term positions in stocks will be
taken and maintained while the company's record and prospects continue to meet
with management's approval. The Fund does not intend to hold fixed income
assets in excess of 5% of the total assets in securities whose ratings have
dropped below investment grade. The manager will review such securities and
determine appropriate action to take with respect to such securities.

For purposes including but not limited to meeting redemptions and
unanticipated expenses, the Fund may invest a portion of its assets in cash or
high-quality, short-term debt obligations readily changeable into cash such as:

(1) certificates of deposit, bankers' acceptances and other short-term
obligations issued domestically by United States commercial banks having assets
of at least $1 billion and which are members of the Federal Deposit Insurance
Corporation or holding companies of such banks;

(2) commercial paper of companies rated P-2 or higher by Moody's or A-2 or
higher by S&P, or if not rated by either Moody's or S&P, a company's
commercial paper may be purchased by the Fund if the company has an
outstanding bond issue rated Aa or higher by Moody's or AA or higher by S&P;

(3) short-term debt securities which are non-convertible and which have
one year or less remaining to maturity at the date of purchase and which are
rated Aa or higher by Moody's or AA or higher by S&P; and

(4) negotiable certificates of deposit and other short-term debt
obligations of savings and loan associations having assets of at least $1
billion and which are members of the Federal Home Loan Banks Association and
insured by the Federal Savings and Loan Insurance Corporation.

There may be times, however, when the Fund attempts to respond to adverse
market, economic, political or other conditions, by investing up to 100% of
its assets in those types of investments for temporary defensive purposes.

UMB Scout Stock Select Fund
The Fund's principal investment strategy is to purchase common stocks with
above average potential for growth and income. The Fund may, however, change
its investment when, in management's judgment, economic and market conditions
make such a course desirable. But such changes will be no more than is
necessary to carry out the Fund's objectives. The Fund does not intend to
concentrate its investments in any particular industry. Without the approval
of shareholders, it will not purchase a security if as a result of such
purchase more than 25% of its assets will be invested in a particular industry.

For purposes including but not limited to meeting redemptions and unanticipated
expenses, the Fund may invest a portion of its assets in cash or high-quality,
short-term debt obligations readily changeable into cash such as:

There may be times, however, when the Funds attempt to respond to adverse
market, economic, political or other conditions by investing up to 100% of its
assets in those types of investments for temporary, defensive purposes.

INVESTMENT POLICY RELATED TO ALL FUNDS

Repurchase Agreements. The Funds may invest in issues of the United States
Treasury or a United States government agency subject to repurchase agreements.
A repurchase agreement involves the sale of securities to the Fund with the
concurrent agreement by the seller to repurchase the securities at the Funds'
cost plus interest at an agreed rate upon demand or within a specified time,
thereby determining the yield during the Funds' period of ownership. The
result is a fixed rate of return insulated from market fluctuations during
such period. Under the 1940 Act, repurchase agreements are considered loans by
the Funds.

The Funds will enter into repurchase agreements only with United States banks
having assets in excess of $1 billion which are members of the Federal Deposit
Insurance Corporation, and with certain securities dealers who meet the
qualifications set from time to time by the Board of Directors of the Company.
The term to maturity of a repurchase agreement normally will be no longer than
a few days. Repurchase agreements maturing in more than seven days will not
exceed 10% of the net assets of any Fund. With respect to the UMB Scout Stock
Select Fund and the UMB Scout WorldWide Select Fund, repurchase agreements
maturing in more than seven days and other illiquid securities will not exceed
15% of each Fund's net assets.

RISK FACTORS

Risk Factors Applicable to Foreign Investments. From time to time, the UMB
Scout WorldWide Fund and the UMB Scout WorldWide Select Fund may invest in
companies located in developing countries. A developing country is generally
considered to be a country that is in the initial stages of its
industrialization cycle with a low per capita gross national product.
Compared to investment in the United States and other developed countries,
investing in the equity and fixed income markets of developing countries
involves exposure to relatively unstable governments, economic structures that
are generally less mature and based on only a few industries and securities
markets which trade a small number of securities. Prices on securities
exchanges in developing countries generally will be more volatile than those
in developed countries. Neither the UMB Scout WorldWide Fund nor the UMB
Scout WorldWide Select Fund will invest more than 20% of its total assets in
companies located in developing countries.

The risks to which the UMB Scout WorldWide Fund, UMB Scout WorldWide Select
Fund, UMB Scout Stock Fund, UMB Scout Stock Select Fund and UMB Scout Capital
Preservation Fund are exposed, as a result of investing in companies located
outside the United States include: currency risks such as fluctuations in the
value of foreign currencies and the performance of foreign currencies relative
to the U.S. dollar; exchange control regulations; and costs incurred in
connection with conversions between various currencies (fees may also be
incurred when converting foreign investments to U.S. dollars). As a result,
the relative strength of the U.S. dollar may be an important factor in the
performance of the Funds.

As non-U.S. companies are not generally subject to uniform accounting, auditing
and financial reporting standards and practices comparable to those applicable
to U.S. companies, comparable information may not be readily available about
certain foreign companies. Securities of some non-U.S. companies may be less
liquid and more volatile than securities of comparable U.S. companies. In
addition, in certain foreign countries, there is the possibility of
expropriation or confiscatory taxation, political or social instability or
diplomatic developments which could affect U.S. investments in those countries.

Under normal circumstances the UMB Scout WorldWide Fund will invest at least
80%, and the UMB Scout WorldWide Select Fund will invest at least 90%, of its
assets in equity securities of foreign issuers. However, to meet the
liquidity needs of the Funds or when the Funds believe that investments should
be deployed in a temporary defensive posture because of economic or market
conditions, the Funds may invest all or a major portion of their assets in
short-term debt securities denominated in U.S. dollars, including U.S.
Treasury bills and other securities of the U.S. government and its agencies,
bankers' acceptances and certificates of deposit rated "A" or better by S&P
or Moody's as well as enter into repurchase agreements maturing in seven days
or less with U.S. banks and broker-dealers which are collateralized by such
securities. The Funds may also hold cash and time deposits in foreign banks,
denominated in any major foreign currency.

Risk Factors Applicable to Repurchase Agreements. The use of repurchase
agreements involves certain risks. For example, if the seller of the agreement
defaults on its obligation to repurchase the underlying securities at a time
when the value of these securities has declined, the Funds may incur a loss
upon disposition of them. If the seller of the agreement becomes insolvent and
subject to liquidation or reorganization under the Bankruptcy Code or other
laws, disposition of the underlying securities may be delayed pending court
proceedings. Finally, it is possible that the Funds may not be able to
perfect their interest in the underlying securities. While the Funds'
management acknowledges these risks, it is expected that they can be
controlled through stringent security selection criteria and careful
monitoring procedures.

Risk Factors Applicable to Money Market Instruments. The yield and principal
value of money market instruments are sensitive to short-term lending
conditions, and it is possible that an issuer may default. The UMB Scout
Money Market Fund and UMB Scout Tax-Free Money Market Fund will seek to
minimize these risks through portfolio diversification, careful portfolio
selection among securities considered to be high quality and by maintaining
short average maturities.

Risk Factors Applicable to Inverse Floaters. The UMB Scout Kansas Tax-Exempt
Bond Fund may invest in municipal securities whose interest rates bear an
inverse relationship to the interest rate on another security or the value of
an index ("inverse floaters"). An investment in inverse floaters may involve
greater risk than an investment in a fixed rate bond. Because changes in the
interest rate on the other security or index inversely affect the residual
interest paid on the inverse floater, the value of an inverse floater is
generally more volatile than that of a fixed rate bond. Inverse floaters
have interest rate adjustment formulae which generally reduce or, in the
extreme, eliminate the interest paid to the UMB Scout Kansas Tax-Exempt Bond
Fund when short-term interest rates rise, and increase the interest paid to
the UMB Scout Kansas Tax-Exempt Bond Fund when short-term interest rates fall.
Inverse floaters have varying degrees of liquidity, and the market for these
securities is new and relatively volatile. These securities tend to
underperform the market for fixed rate bonds in a rising interest rate
environment, but tend to outperform the market for fixed rate bonds when
interest rates decline. Shifts in long-term interest rates may, however,
alter this tendency. Although volatile, inverse floaters typically offer the
potential for yields exceeding the yields available on fixed rate bonds with
comparable credit quality and maturity. These securities usually permit the
investor to convert the floating rate to a fixed rate (normally adjusted
downward) and this optional conversion feature may provide a partial hedge
against rising rates if exercised at an opportune time. Inverse floaters are
leveraged because they provide two or more dollars of bond market exposure for
every dollar invested.

Risk Factors Applicable to Futures Transactions. The UMB Scout Kansas
Tax-Exempt Bond Fund may purchase and sell various kinds of financial futures
contracts and options thereon to hedge against changes in interest rates.
Futures contracts may be based on various debt securities (such as U.S.
government securities and municipal obligations) and securities indices (such
as the Municipal Bond Index traded on the Chicago Board of Trade). Such
transactions involve a risk of loss or depreciation due to unanticipated
adverse changes in securities prices, which may exceed the UMB Scout Kansas
Tax-Exempt Bond Fund's initial investment in these contracts. The UMB Scout
Kansas Tax-Exempt Bond Fund may not purchase or sell futures contracts or
related options, except for closing purchase or sale transactions, if
immediately thereafter the sum of the amount of margin deposits and premiums
paid on the UMB Scout Kansas Tax-Exempt Bond Fund's outstanding positions
would exceed 5% of the market costs.

INVESTMENT RESTRICTIONS

The Funds have adopted the following fundamental investment policies and
restrictions that cannot be changed without the approval of a "majority of
the outstanding voting securities" of the Fund. Under the 1940 Act, a
"majority of the outstanding voting securities" of a Fund means the vote of:
(i) more than 50% of the outstanding voting securities of the Fund; or (ii)
67% or more of the voting securities of the Fund present at a meeting, if the
holders of more than 50% of the outstanding voting securities are present or
represented by proxy, whichever is less. In cases where the current legal or
regulatory limitations are explained, such explanations are not part of the
fundamental restriction and may be modified without shareholder approval to
reflect changes in the legal and regulatory requirements.

UMB Scout Stock Fund, UMB Scout Regional Fund, UMB Scout Balanced Fund,
UMB Scout WorldWide Fund and UMB Scout Bond Fund will not:

(1) purchase the securities of any one issuer, except the United States
Government, if immediately after and as a result of such purchase (a) the
value of the holdings of the Fund in the securities of such issuer exceeds 5%
of the value of the Fund's total assets, or (b) the Fund owns more than 10%
of the outstanding voting securities, or any other class of securities, of
such issuers; (2) engage in the purchase or sale of real estate or
commodities (with respect to WorldWide Fund and Balanced Fund, includes
futures contracts); (3) underwrite the securities of other issuers; (4) make
loans to any of its officers, directors, or employees, or to its manager, or
general distributor, or officers or directors thereof; (5) regarding Stock
Fund, Regional Fund , WorldWide Fund and Bond Fund, make loans to other
persons, except the purchase of debt obligations which are permitted under
its investment policy and with regard to the Balanced Fund, make any loan
(purchase of a security subject to a repurchase agreement or the purchase of
a portion of an issue of publicly distributed debt securities is not
considered the making of a loan); (6) invest in companies for the purpose of
exercising control of management; (7) purchase securities on margin, or sell
securities short; (8) purchase shares of other investment companies except in
the open market at ordinary broker's commission or pursuant to a plan of
merger or consolidation; (9) invest in the aggregate more than 5% of the
value of its gross assets in the securities of issuers (other than federal,
state, territorial, or local governments, or corporations, or authorities
established thereby), which, including predecessors, have not had at least
three years' continuous operations; (10) enter into dealings with its officers
or directors, its manager or underwriter, or their officers or directors, or
any organization in which such persons have a financial interest, except for
transactions in the Fund's own shares or other securities through brokerage
practices which are considered normal and generally accepted under the
circumstances existing at the time; (11) purchase or retain securities of any
company in which any Fund officers or directors, or Fund manager, or any of
its partners, officers, or directors beneficially own more than 1/2 of 1% of
said company's securities, if all such persons owning more than 1/2 of 1% of
said company's securities own in the aggregate more than 5% of the
outstanding securities of such company; (12) borrow or pledge its credit
under normal circumstances, except up to 10% of its gross assets (computed at
the lower of fair market value or cost) for temporary or emergency purposes,
and not for the purpose of leveraging its investments, and provided further
that any borrowing in excess of 5% of the total assets of the Fund shall have
asset coverage of at least 3 to 1 and provided further that WorldWide Fund
will not purchase securities when borrowings exceed 5% of its total assets;
(13) make itself or its assets liable for the indebtedness of others; (14)
invest in securities which are assessable or involve unlimited liability; (15)
invest in securities issued by UMB Financial Corporation or affiliate banks
of UMB Financial Corporation; or (16) issue senior securities, with regard to
Stock Fund, Regional Fund and Bond Fund, except for those investment
procedures permissible under the Fund's other restrictions and with respect
to Balanced Fund and WorldWide Fund, that borrowings from banks are permitted
so long as the requisite asset coverage under restriction (12) above has been
provided.

The Funds also have an additional restriction to not purchase any securities
which would cause 25% or more of a Fund's total assets at the time of such
purchase to be invested in any one industry.

UMB Scout Capital Preservation Fund will not: (1) as to 75% of its total
assets, purchase the securities of any one issuer, except the United States
Government, if immediately after and as a result of such purchase (a) the
value of the holdings of the Fund in the securities of such issuer exceeds 5%
of the value of the Fund's total assets, or (b) the Fund owns more than 10%
of the outstanding voting securities, or any other class of securities, of
such issuer; (2) engage in the purchase or sale of real estate or commodities;
(3) underwrite the securities of other issuers; (4) make loans to other
persons, except by the purchase of debt obligations which are permitted under
its policy (the purchase of a security subject to a repurchase agreement or
the purchase of a portion of publicly distributed debt securities is not
considered a loan); (5) purchase securities on margin, or sell securities
short; (6) borrow or pledge its credit under normal circumstances, except up
to 10% of its gross assets (computed at the lower of fair market value or
cost) for temporary or emergency purposes, and not for the purpose of
leveraging its investments, and provided further that any borrowing in excess
of 5% of the total assets of the Fund shall have asset coverage of at least 3
to 1; or (7) issue senior securities except for those investment procedures
permissible under the Fund's other restrictions.

The following are "non-fundamental" restrictions, which may be changed by the
Board of Directors of the Fund without shareholder approval:

The Fund will not: (1) invest in companies for the purpose of exercising
control of management; (2) purchase shares of other investment companies
except as permitted under the Investment Company Act of 1940, as amended from
time to time, or pursuant to a plan of merger or consolidation; (3) invest in
the aggregate more than 5% of the value of its gross assets in the securities
of issuers (other than federal, state, territorial, or local governments, or
corporations, or authorities established thereby), which, including
predecessors, have not had at least three years' continuous operations; (4)
enter into dealings with its officers or directors, its manager or
underwriter, or their officers or directors, or any organization in which
such persons have a financial interest except for transactions in the Fund's
own shares or other securities through brokerage practices which are
considered normal and generally accepted under the circumstances existing at
the time; or (5) invest in securities issued by UMB Financial Corporation or
affiliate banks of UMB Financial Corporation.

UMB Scout Kansas Tax-Exempt Bond Fund will not: (1) engage in the purchase or
sale of real estate or commodities; (2) underwrite the securities of other
issuers; (3) make loans to other persons, except by the purchase of debt
obligations which are permitted under its policy (the purchase of a security
subject to a repurchase agreement or the purchase of a portion of publicly
distributed debt securities is the making of a loan); (4) purchase securities
on margin, or sell securities short; (5) borrow or pledge its credit under
normal circumstances, except up to 10% of its gross assets (computed at the
lower of fair market value or cost) for temporary or emergency purposes, and
not for the purpose of leveraging its investments, and provided further that
any borrowing in excess of 5% of the total assets of the Fund shall have asset
coverage of at least 3 to 1; (6) invest more than 25% of its total assets
(taken at market value at the time of each investment) in the securities of
issuers in any particular industry, except for temporary defensive purposes.
(This limitation shall not apply to obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities; investments in
certificates of deposit and banker's acceptances will not be considered
investments in the banking industry; utility companies will be divided
according to their services; financial service companies will be classified
according to the end users of their services; and asset-backed securities
will be classified according to the underlying assets securing such
securities.); or (7) issue senior securities except for those investment
procedures permissible under the Fund's other restrictions.

The following are "non-fundamental" restrictions, which can be changed by the
Board of Directors of the Fund without shareholder approval:

The Fund may not: (1) invest in companies for the purpose of exercising
control of management; (2) purchase shares of other investment companies
except as permitted under the Investment Company Act of 1940, as amended from
time to time, or pursuant to a plan of merger or consolidation; (3) invest in
the aggregate more than 5% of the value of its gross assets in the securities
of issuers (other than federal, state, territorial, or local governments, or
corporations, or authorities established thereby), which, including
predecessors, have not had at least three years' continuous operations; (4)
enter into dealings with its officers or directors, its manager or underwriter,
or their officers or directors, or any organization in which such persons
have a financial interest, except for transactions in the Fund's own shares
or other securities through brokerage practices which are considered normal
and generally accepted under the circumstances existing at the time; (5)
invest in securities issued by UMB Financial Corporation or affiliate banks
of UMB Financial Corporation; (6) invest more than 20% of its assets in other
municipal obligations such as lease rental obligations; obligations dependent
on annual state appropriations; obligations of housing and finance
authorities, municipal utilities systems, or public housing authorities; or
obligations of hospitals or life care centers, or industrial development or
pollution control bonds; or (7) invest in illiquid securities if more than 15%
of its net assets would be invested in securities that are not readily
marketable.

For purposes of the Fund's investment restrictions, the determination of the
"issuer" of a municipal obligation which is not a general obligation bond will
be made by the investment adviser on the basis of the characteristics of the
obligation and other relevant factors, the most significant of which is the
source of funds committed to meeting interest and principal payments of such
obligations.

UMB Scout Money Market Fund will not: (1) invest in equity securities or
securities convertible into equities; (2) purchase the securities of any
issuer (other than obligations issued or guaranteed as to principal and
interest by the government of the United States, its agencies or
instrumentalities) if, as a result, (a) more than 5% of either Portfolio's
total assets (taken at current value) would be invested in the securities of
such issuer, or (b) either Portfolio would hold more than 10% of any class of
securities of such issuer (for this purpose, all debts and obligations of an
issuer maturing in less than one year are treated as a single class of
securities); (3) borrow money in excess of 10% of either Portfolio's total
assets taken at market value, and then only from banks as a temporary measure
for extraordinary or emergency purposes; the Fund will not borrow to increase
income (leveraging) but only to facilitate redemption requests which might
otherwise require untimely dispositions of Portfolio securities; the Fund
will repay all borrowings before making additional investments, and interest
paid on such borrowings will reduce net income; (4) mortgage, pledge or
hypothecate its assets except in an amount up to 15% (10% as long as the
Fund's shares are registered for sale in certain states) of the value of its
total assets but only to secure borrowings for temporary or emergency
purposes; (5) issue senior securities, as defined in the Investment Company
Act of 1940, as amended; (6) underwrite securities issued by other persons;
(7) purchase or sell real estate, but this shall not prevent investment in
obligations secured by real estate; (8) make loans to other persons, except
by the purchase of debt obligations which are permitted under its investment
policy; the purchase of a security subject to a repurchase agreement is not
considered making a loan; (9) purchase securities on margin or sell short;
(10) purchase or retain securities of an issuer if to the knowledge of the
Fund's management and directors of the Fund, each of whom owns more than one-
half of one percent (.5%) of such securities, together own more than five
percent (5%) of the securities of such issuer; (11) purchase or sell
commodities or commodity contracts; (12) write, or invest in, put, call,
straddle or spread options or invest in interests in oil, gas or other
mineral exploration or development programs; (13) invest in companies for the
purpose of exercising control; (14) invest in securities of other investment
companies, except as they may be acquired as part of a merger, consolidation
or acquisition of assets; (15) invest more than 5% of the value of either
Portfolio's total assets at the time of investment in the securities of any
issuer or issuers which have records of less than three years continuous
operation, including the operation of any predecessor, but this limitation
does not apply to securities issued or guaranteed as to interest and principal
by the United States Government or its agencies or instrumentalities; or (16)
purchase any securities which would cause more than 25% of the value of a
Portfolio's total net assets at the time of such purchase to be invested in
any one industry; provided, however, that the Prime Portfolio does not
consider assets in certificates of deposit or bankers' acceptances ofdomestic
branches of U.S. banks to be investments in a single industry.

There is no limitation with respect to investments in U.S. Treasury bills, or
other obligations issued or guaranteed by the federal government, its agencies
and instrumentalities.

UMB Scout Tax-Free Money Market Fund will not: (1) invest in equity
securities or securities convertible into equities; (2) purchase more than
ten percent (10%) of the outstanding publicly issued debt obligations of any
issuer; (3) borrow or pledge its credit under normal circumstances, except up
to 10% of its gross assets (computed at the lower of fair market value or cost)
for temporary or emergency purposes (and not for the purpose of leveraging
its investments), and provided further that any borrowing in excess of 5% of
the total assets of the Fund shall have asset coverage of at least 3 to 1;
the Fund will repay all borrowings before making additional investments; (4)
pledge, mortgage or hypothecate its assets to an extent greater than ten
percent (10%) of the value of its net assets; (5) issue senior securities, as
defined in the Investment Company Act of 1940, as amended; (6) underwrite
any issue of securities; (7) purchase or sell real estate, but this shall not
prevent investment in municipal bonds secured by a real estate interest
therein; (8) make loans to other persons, except by the purchase of bonds,
debentures or similar obligations which are publicly distributed; the
purchase of a security subject to a repurchase agreement is not considered
making a loan; (9) purchase securities on margin or sell short; (10) purchase
or retain securities of an issuer if those directors of the Fund, each of
whom owns more than one-half of one percent (.5%) of such securities, together
own more than five percent (5%) of the securities of such issuer; (11)
purchase or sell commodities or commodity contracts; (12) invest in, put,
call, straddle or spread options; (13) purchase securities of any issuer
(except the United States Government, its agencies and instrumentalities, and
any municipal bond guaranteed by the United States Government) if, as a
result, more than 5% of the total assets would be invested in the securities
of such issuer; for purposes of this limitation, identification of the
"issuer" will be based on a determination of the source of assets and
revenues committed to meeting interest and principal payments of each
security, and a government entity which guarantees the securities issued by
another entity is also considered an issuer of that security; (14) invest in
companies for the purpose of exercising control; (15) invest in securities of
other investment companies, except as they may be acquired as part of a merger,
consolidation or acquisition of assets; or (16) invest more than 5% of the
value of its total assets at the time of investment in the securities of any
issuer or issuers which have records of less than three years continuous
operation, including the operation of any predecessor, but this limitation
does not apply to securities issued or guaranteed as to interest and principal
by the United States Government or its agencies or instrumentalities.

UMB Scout WorldWide Select Fund and UMB Scout Stock Select Fund will not: (1)
make investments that will result in the concentration (as that term may be
defined in the 1940 Act, any rule or order thereunder, or U.S. Securities and
Exchange Commission ("SEC") staff interpretation thereof) of its investments
in the securities of issuers primarily engaged in the same industry, provided
that this restriction does not limit the Fund from investing in obligations
issued or guaranteed by the U.S. government, or its agencies or
instrumentalities. The SEC staff currently takes the position that a mutual
fund concentrates its investments in a particular industry if 25% or more of
its total assets are invested in issuers within the industry. In applying
the Fund's fundamental policy concerning concentration, it is a matter of
non-fundamental policy that investments in certain categories of companies
will not be considered to be investments in a particular industry. For
example: (i) financial service companies will be classified according to the
end users of their services, for example, automobile finance, bank finance
and diversified finance will each be considered a separate industry; (ii)
technology companies will be divided according to their products and services,
for example, hardware, software, information services and outsourcing, or
telecommunications will each be a separate industry; (iii) asset-backed
securities will be classified according to the underlying assets securing
such securities; and (iv) utility companies will be divided according to
their services, for example, gas, gas transmission, electric and telephone
will each be considered a separate industry; (2) borrow money or issue senior
securities, except as the 1940 Act, any rule thereunder, or SEC staff
interpretation thereof, may permit. The following information is intended to
describe the current regulatory limits relating to senior securities and
borrowing activities that apply to mutual funds. This description may be
changed without shareholder approval to reflect legal or regulatory changes.
A fund may borrow up to 5% of its total assets for temporary purposes and may
also borrow from banks, provided that if borrowings exceed 5%, the fund must
have assets totaling at least 300% of the borrowing when the amount of the
borrowing is added to the fund's other assets. The effect of this provision
is to allow a fund to borrow from banks amounts up to one-third (33 1/3%) of
its total assets (including those assets represented by the borrowing); (3)
underwrite the securities of other issuers, except that the Fund may engage
in transactions involving the acquisition, disposition or resale of its
portfolio securities, under circumstances where it may be considered to be an
underwriter under the Securities Act of 1933; (4) may not purchase or sell
real estate, unless acquired as a result of ownership of securities or other
instruments and provided that this restriction does not prevent the Fund from
investing in issuers which invest, deal or otherwise engage in transactions
in real estate or interests therein, or investing in securities that are
secured by real estate or interests therein; (5) purchase or sell physical
commodities, unless acquired as a result of ownership of securities or other
instruments and provided that this restriction does not prevent the Fund from
engaging in transactions involving futures contracts and options thereon or
investing in securities that are secured by physical commodities; (6) make
loans, provided that this restriction does not prevent the Fund from
purchasing debt obligations, entering into repurchase agreements, loaning its
assets to broker/dealers or institutional investors and investing in loans,
including assignments and participation interests.

In addition to the fundamental policies and investment restrictions described
above, and the various general investment policies described in the Prospectus,
the UMB Scout WorldWide Select Fund and the UMB Scout Stock Select Fund will
be subject to the following investment restrictions, which are considered
non-fundamental and may be changed by the Board of Directors without
shareholder approval.

(1) each Fund may not, with respect to 75% of its total assets, invest more
than 5% of its total assets in securities of any one issuer (except
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities), or purchase more than 10% of the voting securities of any
one issuer. The Funds may not change their classification from diversified to
non-diversified without shareholder approval; (2) each Fund is permitted to
invest in other investment companies, including open-end, closed-end or
unregistered investment companies, either within the percentage limits set
forth in the 1940 Act, any rule or order thereunder, or SEC staff
interpretation thereof, or without regard to percentage limits in connection
with a merger, reorganization, consolidation or other similar transaction.
However, neither Fund may operate as a fund of funds which invests primarily
in the shares of other investment companies as permitted by Section
12(d)(1)(F) or (G) of the 1940 Act, if its own shares are utilized as
investments by such a fund of funds. Under current legal and regulatory
requirements, each Fund may invest up to 5% of its total assets in the
securities of any one investment company, but may not own more than 3% of any
investment company or invest more than 10% of its total assets in the
securities of other investment companies; (3) with respect to the UMB Scout
WorldWide Select Fund, it may invest in American Depository Receipts (ADR's),
which represent foreign securities and are traded on U.S. Exchanges or in the
over-the-counter market. However, the Fund reserves the right to invest
directly in foreign securities or to purchase European Deposit Receipts
(EDR's) and International Depository Receipts (IDR's), in bearer form, which
are designed for use in European and other securities markets; (4) the UMB
Scout WorldWide Select Fund may purchase foreign currencies and/or forward
foreign currency transactions, however, it may not engage in forward foreign
currency exchange contracts for speculative purposes; (5) each Fund may not
invest more than 15% of its net assets in securities which they can not sell
or dispose of in the ordinary course of business within seven days at
approximately the value at which the Fund has valued the investment.

PORTFOLIO TRANSACTIONS

Decisions to buy and sell securities for the Funds are made by UMB Bank, n.a.
for all the UMB Scout Funds. Officers of the Funds and Jones & Babson, Inc.
are generally responsible for implementing or supervising these decisions,
including allocation of portfolio brokerage and principal business and the
negotiation of commissions and/or the price of the securities.

The Funds, in purchasing and selling portfolio securities, will seek the best
available combination of execution and overall price (which shall include the
cost of the transaction) consistent with the circumstances which exist at the
time. The Fund does not intend to solicit competitive bids on each
transaction.

UMB Scout Money Market Fund and UMB Scout Tax-Free Money Market Fund expect
that purchases and sales of portfolio securities usually will be principal
transactions. Portfolio securities normally will be purchased directly from
the issuer or in the over-the-counter market from a principal market maker for
the securities, unless it appears that a better combination of price and
execution may be obtained elsewhere. Usually there will be no brokerage
commission paid by these Funds for such purchases. Purchases from underwriters
of portfolio securities will include a commission or concession paid by
the issuer to the underwriter, and purchases from dealers serving as market
makers will include the spread between the bid and asked price. In instances
where securities are purchased on a commission basis, the Funds will seek
competitive and reasonable commission rates based on the circumstances of the
trade involved and to the extent that they do not detract from the quality of
the execution.

The Funds believe it is in their best interest and that of their shareholders
to have a stable and continuous relationship with a diverse group of
financially strong and technically qualified broker-dealers who will provide
quality executions at competitive rates. Broker-dealers meeting these
qualifications also will be selected for their demonstrated loyalty to the
Funds, when acting on their behalf, as well as for any research or other
services provided to the Funds. The Funds normally will not pay a higher
commission rate to broker-dealers providing benefits or services to them than
they would pay to broker-dealers who do not provide such benefits or services.
However, the Funds reserve the right to do so within the principles set out
in Section 28(e) of the Securities Exchange Act of 1934 when it appears that
this would be in the best interests of the shareholders.

No commitment is made to any broker or dealer with regard to placing of orders
for the purchase or sale of Fund portfolio securities, and no specific
formula is used in placing such business. Allocation is reviewed regularly
by both the Boards of Directors of the Funds and by UMB Bank, n.a.

Since the Funds do not currently market their shares through intermediary
brokers or dealers, it is not their practice to allocate brokerage or
principal business on the basis of sales of their shares which may be made
through such firms. However, they may place portfolio orders with qualified
broker-dealers who recommend a Fund to other clients, or who act as agent in
the purchase of Fund shares for their clients.

Research services furnished by broker-dealers may be useful to the Fund
manager in serving other clients, as well as a Fund. Conversely, a Fund may
benefit from research services obtained by the manager from the placement of
portfolio brokerage of other clients.

When the manager in its fiduciary duty believes it to be in the best interests
of its shareholders, a Fund may join with other clients of the manager in
acquiring or disposing of a portfolio holding. Securities acquired or proceeds
obtained will be equitably distributed between the Fund and other clients
participating in the transaction. In some instances, this investment
procedure may affect the price paid or received by the Fund or the size of
the position obtained by the Fund.

The following Funds paid brokerage commissions for the past three fiscal
years ended June 30, 1997, 1998 and 1999:

1999 1998 1997

UMB Scout Stock Fund $76,992 $40,384 $57,961
UMB Scout Regional Fund $16,271 $13,318 $20,355
UMB Scout WorldWide Fund $95,255 $15,840 $30,885
UMB Scout Capital Preservation Fund $ 2,540 $ 839 --
UMB Scout Balanced Fund $12,558 $3,617 $5,924
UMB Scout Stock Select Fund $ 3,595 -- --
UMB Scout WorldWide Select Fund $5,025 -- --

Portfolio Turnover. The Funds do not intend to purchase securities solely
for short-term trading; nor will securities be sold for the sole purpose of
realizing gains. However, a security may be sold and another of comparable
quality purchased at approximately the same time to take advantage of what
the Funds' manager believes to be a disparity in the normal yield
relationship between the two securities. In addition, a security may be sold
and another purchased when, in the opinion of management, a favorable yield
spread exists between specific issues or different market sectors. Short-term
debt instruments with maturities of less than one year are excluded from the
calculation of portfolio turnover.

There are no fixed limitations regarding portfolio turnover for either the
equity or fixed income portions of UMB Scout Balanced Fund's portfolio.
Although the Fund does not trade for short-term profits, securities may be
sold without regard to the time they have been held in the Fund when, in the
opinion of the Fund's management, investment considerations warrant such
action. As a result, while it is anticipated that the turnover rates for the
equity and fixed income portions of the Fund's portfolio generally will not
exceed 100%, under certain market conditions, these portfolio turnover rates
may exceed 100%. Increased portfolio turnover rates would cause the Fund to
incur greater brokerage costs than would otherwise be the case and may result
in the acceleration of capital gains which are taxable when distributed to
shareholders.

PERFORMANCE MEASURES

From time to time, each of the Funds may advertise its performance in various
ways, as summarized below.

Yield of UMB Scout Money Market Fund and UMB Scout Tax-Free Money Market Fund

Each Portfolio of the UMB Scout Money Market Fund and the UMB Scout Tax-Free
Money Market Fund may quote their yields in advertisements, shareholder reports
or other communications to shareholders. Yield information is generally
available by calling the Funds toll free 1-800-996-2862.

The current annualized yield for each Portfolio of the UMB Scout Money Market
Fund and the UMB Scout Tax-Free Money Market Fund is computed by:
(a) determining the net change in the value of a hypothetical pre-existing
account in a Fund having a balance of one share at the beginning of a seven
calendar-day period for which yield is to be quoted, (b) dividing the net
change by the value of the account at the beginning of the period to obtain
the base period return, and (c) annualizing the results (i.e., multiplying
the base period return by 365/7). The net change in value of the account
reflects the value of additional shares purchased with dividends declared on
the original share and any such additional shares, but does not include
realized gains and losses or unrealized appreciation and depreciation. In
addition, each Fund may calculate a compound effective yield by adding 1 to
the base period return (calculated as described above, raising the sum to a
power equal to 365/7 and subtracting 1).

For the seven-day period ended June 30, 1999:

Current Compound Average Portfolio
Annualized Yield Effective Yield Maturity

UMB Scout Money
Market Fund -
Federal Portfolio 4.43% 4.69% 45 days

UMB Scout Money
Market Fund - Prime
Portfolio 4.47% 4.80% 48 days

UMB Scout Tax-Free
Money Market Fund 2.82% 2.65% 32 days

Tax Equivalent Yield of UMB Scout Kansas Tax-Exempt Bond Fund

For the UMB Scout Kansas Tax-Exempt Bond Fund, the tax-equivalent yield is
based on the current double tax-exempt yield and your combined federal and
state marginal tax rate. Assuming that all of UMB Scout Kansas Tax-Exempt
Bond Fund's dividends are tax-exempt in Kansas (which may not always be the
case) and that your Kansas taxes are fully deductible for federal income tax
purposes, you can calculate your tax-equivalent yield for UMB Scout Kansas
Tax-Exempt Bond Fund using the following equation:

Fund's Double Tax-Free Yield
_________________________________________________________________
(100% - Federal Tax Rate)(100% - Kansas Tax Rate) = Your Tax-Equivalent Yield

Total Return

The UMB Scout Stock Fund, UMB Scout Regional Fund, UMB Scout Bond Fund, UMB
Scout WorldWide Fund, UMB Scout Balanced Fund, UMB Scout Capital
Preservation Fund, UMB Scout Kansas Tax-Exempt Bond Fund, UMB Scout WorldWide
Select Fund and UMB Scout Stock Select Fund may advertise "average annual
total return" over various periods of time. Such total return figures show
the average percentage change in value of an investment in a Fund from the
beginning date of the measuring period to the end of the measuring period.
These figures reflect changes in the price of the Fund's shares and assume
that any income dividends and/or capital gains distributions made by the Funds
during the period were reinvested in shares of the Fund. Figures will be
given for recent one-, five- and ten-year periods (if applicable), and may be
given for other periods as well (such as from commencement of a Fund's
operations, or on a year-by-year basis).

The Funds' "average annual total return" figures described and shown below are
computed according to a formula prescribed by the Securities and Exchange
Commission. The formula can be expressed as follows:

P(1+T)n = ERV

Where: P = a hypothetical initial payment of $1000
T = average annual total return
n = number of years
ERV = Ending Redeemable Value of a hypothetical $1000 payment made at the
beginning of the 1, 5 or 10 years (or other) periods at the end of the 1, 5
or 10 years (or other) periods (or fractional portions thereof).

The table below shows the average annual total return for each of the Funds for
the specified periods.

<TABLE>
<CAPTION>
Kansas
Tax-
Capital Exempt
Stock Regional WorldWide Preservation Balanced Bond Bond WorldWide Stock
Fund Fund Fund Fund Fund Fund Fund Select Fund Select Fund

<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
For the
one year
7/1/98-
6/30/99 13.92 4.00 10.90 2.70 1.89 3.13 2.62 N/A N/A

For the
five years
7/1/94-
6/30/99 14.88 12.56 16.74 N/A N/A 6.21 N/A N/A N/A

For the
ten years
7/1/89-
6/30/99 11.87 9.39 N/A N/A N/A 6.78 N/A N/A N/A

From
commencement
of operations
to 6/30/99* 12.77 7.36 15.44 0.02 6.50 7.85 2.41 2.00 0.80
</TABLE>

* UMB Scout Stock Fund and UMB Scout Bond Fund commenced operation on
November 18, 1982; UMB Scout Regional Fund commenced operation on December
18, 1986; UMB Scout WorldWide Fund commenced operation on September 14, 1993;
UMB Scout Balanced Fund commenced operation on December 6, 1995; UMB Scout
Capital Preservation Fund and UMB Scout Kansas Tax-Exempt Bond Fund commenced
operation on February 23, 1998; UMB Scout WorldWide Select Fund commenced
operations on May 17, 1999; and UMB Scout Stock Select Fund commenced
operations on May 17, 1999.

Performance Comparisons. In advertisements or in reports to shareholders,
the Funds may compare their performance to that of other mutual funds with
similar investment objectives and to stock or other relevant indices. For
example, UMB Scout Stock Fund, UMB Scout Regional Fund, UMB Scout WorldWide
Fund, UMB Scout Capital Preservation Fund, UMB Scout Bond Fund, UMB Scout
Balanced Fund, UMB Scout Kansas Tax-Exempt Bond Fund, UMB Scout WorldWide
Select Fund and UMB Scout Stock Select Fund may compare their performance to
rankings prepared by Lipper Analytical Services, Inc. (Lipper), a widely
recognized independent service which monitors the performance of mutual funds.
UMB Scout Stock Fund, UMB Scout WorldWide Fund, UMB Scout Capital
Preservation Fund, UMB Scout Balanced Fund, UMB Scout WorldWide Select Fund,
UMB Scout Stock Select Fund, and UMB Scout Regional Fund may also compare its
performance to the Standard & Poor's 500 Stock Index (S&P 500), an index of
unmanaged groups of common stocks, the Dow Jones Industrial Average, a
recognized unmanaged index of common stocks of 30 industrial companies listed
on the NYSE, or the Consumer Price Index. UMB Scout Bond Fund may compare its
performance to the Shearson/Lehman Government/Corporate Index, an unmanaged
index of government and corporate bonds.

Performance information, rankings, ratings, published editorial comments and
listings as reported in national financial publications such as Kiplinger's
Personal Finance Magazine, Business Week, Morningstar Mutual Funds,
Investor's Business Daily, Institutional Investor, The Wall Street Journal,
Mutual Fund Forecaster, No-Load Investor, Money, Forbes, Fortune, Barron's
Financial World, U.S. News & World Report, USA Today, Bloomberg's Personal
Finance, Income & Safety, The Mutual Fund Letter, United Mutual Fund Selector,
No-Load Fund Analyst, No-Load Fund X, Louis Rukeyser's Wall Street newsletter,
Donoghue's Money Letter, CDA Investment Technologies, Inc., Wiesenberger
Investment Companies Service, Donoghue's Mutual Fund Almanac, Bank Rate
Monitor and Donoghue's Money Fund Report may also be used in comparing
performance of the Funds. Performance comparisons should not be considered as
representative of the future performance of the Funds.

HOW THE FUNDS' SHARES ARE DISTRIBUTED

Jones & Babson, Inc., as agent of the UMB Scout Funds, agrees to supply its
best efforts as sole distributor of the Funds' shares and, at its own expense,
pay all sales and distribution expenses in connection with their offering
other than registration fees and other government charges. Jones & Babson,
Inc. can be reached by calling 800-996-2862 and is located at BMA Tower, 700
Karnes Blvd., Kansas City, MO 64108-3306.

Jones & Babson, Inc. does not receive any fee or other compensation under its
distribution agreements with the Funds which continue in effect until October
31, 1999, and which will continue automatically for successive annual periods
ending each October 31, if continued at least annually by the Funds' Boards of
Directors, including a majority of those Directors who are not parties to such
Agreements or interested persons of any such party. They terminate
automatically if assigned by either party or upon 60 days written notice by
either party to the other.

HOW SHARE PURCHASES ARE HANDLED

We will not be responsible for the consequences of delays, including delays
in the banking or Federal Reserve wire systems. We cannot process
transaction requests that are not complete and in good order as described in
the prospectus. If you use the services of any other broker to purchase or
redeem shares of the Funds, that broker may charge you a fee. Each order
accepted will be fully invested in whole and fractional shares, unless the
purchase of a certain number of whole shares is specified, at the net asset
value per share next effective after the order is accepted by the Funds.

Each investment is confirmed by a year-to-date statement which provides the
details of the immediate transaction, plus all prior transactions in your
account during the current year. This includes the dollar amount invested,
the number of shares purchased or redeemed, the price per share, and the
aggregate shares owned. A transcript of all activity in your account during
the previous year will be furnished each January. By retaining each annual
summary and the last year-to-date statement, you have a complete detailed
history of your account which provides necessary tax information. A duplicate
copy of a past annual statement is available from Jones & Babson, Inc. at its
cost, subject to a minimum charge of $5 per account, per year requested.

Each statement and transaction confirmation will request that you inform the
Fund in writing of any questions about the information presented. If you do
not notify the Fund in writing of any questions within the specified time
period, it will indicate that you have approved the information.

The shares you purchase are held by the Funds in an open account, thereby
relieving you of the responsibility of providing for the safekeeping of a
negotiable share certificate. Jones & Babson does not intend to issue new
certificated shares for any accounts.

If an order to purchase shares must be canceled due to non-payment, the
purchaser will be responsible for any loss incurred by the Funds arising out
of such cancellation. To recover any such loss, the Funds reserve the right
to redeem shares owned by any purchaser whose order is canceled, and such
purchaser may be prohibited or restricted in the manner of placing further
orders.

The Funds reserve the right in their sole discretion to withdraw all or any
part of the offering made by the prospectus or to reject purchase orders
when, in the judgment of management, such withdrawal or rejection is in the
best interest of the Funds and its shareholders. The Funds also reserve the
right at any time to waive or increase the minimum requirements applicable to
initial or subsequent investments with respect to any person or class of
persons, which includes shareholders of the Funds' special investment programs.

The Funds reserve the right to refuse to accept orders for Fund shares unless
accompanied by payment, except when a responsible person has indemnified the
Fund against losses resulting from the failure of investors to make payment.
In the event that the Funds sustains a loss as the result of failure by a
purchaser to make payment, the Funds' underwriter, Jones & Babson, Inc., will
cover the loss.

REDEMPTION OF SHARES

The Funds will transmit redemption proceeds to the proper party, as instructed,
as soon as practicable after a redemption request has been received in "good
order" and accepted, but in no event later than the third business day
thereafter. Transmissions are made by mail unless an expedited method has
been authorized and specified in the redemption request. The Funds will not
be responsible for the consequences of delays including delays in the banking
or Federal Reserve wire systems. In the case of redemption requests made
within 15 days of the date of purchase, the Funds may delay transmission of
proceeds until such time as it is certain that unconditional payment in
federal funds has been collected for the purchase of shares being redeemed or
15 days from the date of purchase, whichever occurs first.

With respect to UMB Scout Money Market and UMB Scout Tax-Free Money Market
Funds, shares redeemed will be entitled to receive all dividends declared
through the day preceding the date of redemption. If you redeem all of the
shares in your account, in addition to the share redemption check, a separate
check representing all dividends declared but unpaid on the shares redeemed
will be distributed on the next dividend payment date. Any amount due you in
your declared but unpaid dividend account cannot be redeemed by draft.

Due to the high cost of maintaining smaller accounts, the Directors have
authorized the Funds to close shareholder accounts where their value falls
below the current minimum initial investment requirement at the time of
initial purchase as a result of redemptions and not as the result of market
action, and remains below this level for 60 days after each such shareholder
account is mailed a notice of: (1) the Fund's intention to close the account,
(2) the minimum account size requirement, and (3) the date on which the
account will be closed if the minimum size requirement is not met. Since the
minimum investment amount and the minimum account size are the same, any
redemption from an account containing only the minimum investment amount may
result in redemption of that account.

The right of redemption may be suspended, or the date of payment postponed
beyond the normal three-day period by the Board of Directors under the
following conditions authorized by the 1940 Act: (1) for any period (a)
during which the New York Stock Exchange is closed, other than customary
weekend and holiday closing, or (b) during which trading on the New York
Stock Exchange is restricted; (2) for any period during which an emergency
exists as a result of which (a) disposal by the Funds of securities owned by
it is not reasonably practicable, or (b) it is not reasonably practicable for
the Funds to determine the fair value of its net assets; or (3) for such other
periods as the Securities and Exchange Commission may by order permit for the
protection of the Funds' shareholders.

UMB Scout Stock Fund, UMB Scout Regional Fund, UMB Scout Bond Fund, UMB Scout
Money Market Fund, UMB Scout Tax-Free Money Market Fund, UMB Scout WorldWide
Fund, UMB Scout Balanced Fund, UMB Scout WorldWide Select Fund and UMB Scout
Stock Select Fund have elected to be governed by Rule 18f-1 under the 1940 Act,
pursuant to which these Funds are obligated to redeem shares solely in cash
up to the lesser of $250,000 or 1% of a Fund's net asset value during any
90-day period for any one shareholder. Should redemptions by any shareholder
exceed such limitation, a Fund may redeem the excess in kind. If shares are
redeemed in kind, the redeeming shareholder may incur brokerage costs in
converting the assets to cash. The method of valuing securities used to make
redemptions in kind will be the same as the method of valuing portfolio
securities described under "How Share Price is Determined" in the Prospectus,
and such valuation will be made as of the same time the redemption price is
determined.

UMB Scout Capital Preservation Fund and UMB Scout Kansas Tax-Exempt Bond Fund
may satisfy redemption requests by distributing securities in kind. If
shares are redeemed in kind, the redeeming shareholder may incur brokerage
costs in converting the assets to cash. The method of valuing securities
used to make redemptions in kind will be the same as the method of valuing
portfolio securities described under "How Share Price is Determined" in the
prospectus and such valuation will be made as of the same time the redemption
price is determined.

SIGNATURE GUARANTEES
Signature guarantees normally reduce the possibility of forgery and are
required in connection with certain redemptions. Signature guarantees are
required in connection with all redemptions of $50,000 or more by mail, or
changes in share registration, except as hereinafter provided. These
requirements may be waived by the Fund in certain instances where it appears
reasonable to do so and will not unduly affect the interest of other
shareholders. Signature(s) must be guaranteed by an "eligible guarantor
institution" as defined in Rule 17Ad-15 under the Securities Exchange Act of
1934. Eligible guarantor institutions include: (1) national or state banks,
savings associations, savings and loan associations, trust companies, savings
banks, industrial loan companies and credit unions; (2) national securities
exchanges, registered securities associations and clearing agencies; or (3)
securities broker/dealers which are members of a national securities exchange
or clearing agency or which have a minimum net capital of $100,000. A
notarized signature will not be sufficient for the request to be in proper
form.

Signature guarantees will be waived for mail redemptions of $50,000 or less,
but they will be required regardless of the size of the redemption if the
checks are to be payable to someone other than the registered owner(s), or
are to be mailed to an address different from the registered address of the
shareholder(s). Signatures guarantees are also required for a change in
account registration or redemption instructions.

Signature guarantees must appear together with the signature(s) of the
registered owner(s) on: (1) a separate instrument of assignment, which should
specify the total number of shares to be redeemed (this "stock power" may be
obtained from the Fund or from most banks or stock brokers); or (2) all stock
certificates tendered for redemption.

ADDITIONAL PURCHASE AND REDEMPTION POLICIES

We reserve the right to:

Waive or increase the minimum investment requirements with respect to any
person or class of persons, which include shareholders of the Funds'
special investment programs.

Cancel or change the telephone investment service, the telephone exchange
service and the automatic monthly investment plan without prior notice to
you where in the best interest of the Funds and their investors.

Cancel or change the telephone redemption service at any time without
notice.

Begin charging a fee for the telephone investment service or the automatic
monthly investment plan and to cancel or change these services upon 15 days
written notice to you.

Begin charging a fee for the systematic redemption plan upon 30 days
written notice to you.

Waive signature guarantee requirements in certain instances where it
appears reasonable to do so and will not unduly affect the interests of
other shareholders. We may waive the signature guarantee requirement if
you authorize the telephone redemption method at the same time you submit
the initial application to purchase shares.

Require signature guarantees if there appears to be a pattern of
redemptions designed to avoid the signature guarantee requirement, or if
we have other reason to believe that this requirement would be in the best
interests of the Funds and their shareholders.

HOLIDAYS

The net asset value per share of each Fund's portfolio is computed once daily,
as described in the prospectus, Monday through Friday, at the specific time
during the day that the Board of Directors of each Fund sets at least
annually, except on days on which changes in the value of a Fund's portfolio
securities will not materially affect the net asset value, or days during
which no security is tendered for redemption and no order to purchase or sell
such security is received by the Fund, or the following holidays:

New Year's Day January 1
Martin Luther King, Jr. Day Third Monday in January
Presidents' Holiday Third Monday in February
Good Friday Friday before Easter
Memorial Day Last Monday in May
Independence Day July 4
Labor Day First Monday in September
Columbus Day* Second Monday in October
Veterans' Day* November 11
Thanksgiving Day Fourth Thursday in November
Christmas Day December 25

* Money Market and Tax-Free Money Market Funds only.

DIVIDENDS, DISTRIBUTIONS AND TAXES

Distributions and Taxes

Distributions of net investment income In general, the funds receive income
in the form of dividends or interest on their investments. This income, less
expenses incurred in the operation of a fund, constitutes a fund's net
investment income from which dividends may be paid to investors. Any
distributions by a fund from such income will be taxable to investors as
ordinary income, whether the investors take them in cash or in additional
shares.

By meeting certain requirements of the Internal Revenue Code, the UMB Scout
Kansas Tax-Exempt Bond Fund and the UMB Scout Tax-Free Money Market Fund have
qualified and continue to qualify to pay exempt-interest dividends. These
dividends are derived from interest income exempt from regular federal income
tax, and are not subject to regular federal income tax when they are
distributed. In addition, to the extent that exempt-interest dividends are
derived from interest on obligations of a state or its political subdivisions,
or from interest on qualifying U.S. territorial obligations (including
qualifying obligations of Puerto Rico, the U.S. Virgin Islands or Guam), they
also will be exempt from such state's personal income taxes. A state
generally does not grant tax-free treatment to interest on state and
municipal securities of other states.

The UMB Scout Kansas Tax-Exempt Bond Fund and the UMB Scout Tax-Free Money
Market Fund may earn taxable income on any temporary investments, on the
discount from stripped obligations or their coupons, on income from securities
loans or other taxable transactions, or on ordinary income derived from the
sale of market discount bonds. Any fund distributions from such income will
be taxable as ordinary income, whether received by investors in cash or in
additional shares.

The UMB Scout Money Market Fund (Federal and Prime Portfolios) and the UMB
Scout Tax-Free Money Market Fund declare dividends for each day that their
net asset value is calculated. These dividends will equal all of the daily
net income payable to shareholders of record as of the close of business the
preceding day. The daily net income includes accrued interest and any
original issue or acquisition discount, plus or minus any gain or loss on the
sale of portfolio securities and changes in unrealized appreciation or
depreciation in portfolio securities (to the extent required to maintain a
constant net asset value per share), less the estimated expenses of the funds.

Distributions of capital gains In general, the funds may derive capital
gains and losses in connection with sales or other dispositions of their
portfolio securities. Distributions from net short-term capital gains will be
distributed and taxed as ordinary income. Distributions from net long-term
capital gains will be taxable as long-term capital gain, regardless of how
long the fund shares have been held. Any net capital gains realized by a
fund generally will be distributed once each year, and may be distributed more
frequently, if necessary, in order to reduce or eliminate excise or income
taxes on the fund. Because the UMB Scout Money Market Fund (Federal and Prime
Portfolios) and the UMB Scout Tax-Free Money Market Fund are money market
funds, they do not anticipate realizing any long-term capital gains.

Effect of foreign investments on distributions Most foreign exchange gains
realized on the sale of debt securities are treated as ordinary income by a
fund. Similarly, foreign exchange losses realized by a fund on the sale of
debt securities are generally treated as ordinary losses by the fund. These
gains when distributed will be taxable as ordinary dividends, and any losses
will reduce a fund's ordinary income otherwise available for distribution.
This treatment could increase or reduce a fund's ordinary income distributions,
and may cause some or all of a fund's previously distributed income to be
classified as a return of capital.

The funds may be subject to foreign withholding taxes on income from certain
of their foreign securities. If more than 50% of a fund's total assets at
the end of the fiscal year are invested in securities of foreign corporations,
the fund may elect to pass-through each investor's pro rata share of foreign
taxes paid by the fund. If this election is made, the year-end statement
investors receive from the fund will show more taxable income than was
actually distributed. However, investors will be entitled to either deduct
their share of such taxes in computing their taxable income or (subject to
limitations) claim a foreign tax credit for such taxes against their U.S.
federal income tax. The fund will provide investors with the information
necessary to complete their individual income tax returns if it makes this
election.

Information on the tax character of distributions The funds will
inform you of the amount of your ordinary income dividends and
capital gains distributions at the time they are paid, and will
advise you of their tax status for federal income tax purposes
shortly after the close of each calendar year. If you have not
held fund shares for a full year, a fund may designate and
distribute to you, as ordinary income or capital gain, a
percentage of income that is not equal to the actual amount of
such income earned during the period of your investment in the
fund.

Election to be taxed as a regulated investment company Each fund
has elected to be treated as a regulated investment company under
Subchapter M of the Internal Revenue Code, has qualified as such
for its most recent fiscal year, and intends to so qualify during
the current fiscal year. As regulated investment companies, the
funds generally pay no federal income tax on the income and gains
they distribute to you. The board reserves the right not to
maintain the qualification of a fund as a regulated investment
company if it determines such course of action to be beneficial
to shareholders. In such case, a fund will be subject to
federal, and possibly state, corporate taxes on its taxable
income and gains, and distributions to you will be taxed as
ordinary dividend income to the extent of such fund's earnings
and profits.

Excise tax distribution requirements To avoid federal excise
taxes, the Internal Revenue Code requires a fund to distribute to
you by December 31 of each year, at a minimum, the following
amounts: 98% of its taxable ordinary income earned during the
calendar year; 98% of its capital gain net income earned during
the twelve month period ending October 31; and 100% of any
undistributed amounts from the prior year. Each fund intends to
declare and pay these amounts in December (or in January that are
treated by you as received in December) to avoid these excise
taxes, but can give no assurances that its distributions will be
sufficient to eliminate all taxes.

Redemption of fund shares Redemptions and exchanges of fund
shares are taxable transactions for federal and state income tax
purposes. If you redeem your fund shares, or exchange your fund
shares for shares of a different UMB Scout Fund, the IRS will
require that you report a gain or loss on your redemption or
exchange. If you hold your shares as a capital asset, the gain
or loss that you realize will be capital gain or loss and will be
long-term or short-term, generally depending on how long you hold
your shares. Any loss incurred on the redemption or exchange of
shares held for six months or less will be treated as a long-term
capital loss to the extent of any long-term capital gains
distributed to you by the fund on those shares.

All or a portion of any loss that you realize upon the redemption
of your fund shares will be disallowed to the extent that you buy
other shares in such fund (through reinvestment of dividends or
otherwise) within 30 days before or after your share redemption.
Any loss disallowed under these rules will be added to your tax
basis in the new shares you buy.

As to the UMB Scout Kansas Tax-Exempt Bond Fund and the UMB Scout
Tax-Free Money Market Fund, any loss incurred on the redemption
or exchange of shares held for six months or less will be
disallowed to the extent of any exempt-interest dividends
distributed to investors with respect to his or her fund shares
and any remaining loss will be treated as a long-term capital
loss to the extent of any long-term capital gains distributed to
the investor by the fund on those shares.

As to the UMB Scout Money Market Fund (Federal and Prime
Portfolios) and the UMB Scout Tax-Free Money Market Fund, because
the funds seek to maintain a constant $1.00 per share net asset
value, investors should not expect to realize a capital gain or
loss upon redemption or exchange of fund shares.

U.S. government obligations Many states grant tax-free status to
dividends paid to you from interest earned on direct obligations
of the U.S. government, subject in some states to minimum
investment requirements that must be met by a fund. Investments
in Government National Mortgage Association or Federal National
Mortgage Association securities, bankers' acceptances, commercial
paper and repurchase agreements collateralized by U.S. government
securities do not generally qualify for tax-free treatment. The
rules on exclusion of this income are different for corporations.

Dividends-received deduction for corporations If you are a
corporate shareholder, you should note that dividends paid by the
following funds for the most recent fiscal year qualified for the
dividends-received deduction as set forth below:

UMB Scout Stock Fund 38.54%
UMB Scout Stock Select Fund 0.00%
UMB Scout WorldWide Fund 0.0013%
UMB Scout WorldWide Select Fund 0.00%
UMB Scout Regional Fund 47.65%
UMB Scout Capital Preservation Fund 23.74%
UMB Scout Balanced Fund 7.01%

In some circumstances, you will be allowed to deduct these
qualified dividends, thereby reducing the tax that you would
otherwise be required to pay on these dividends. The dividends-
received deduction will be available only with respect to
dividends designated by such fund as eligible for such treatment.
All dividends (including the deducted portion) must be included
in your alternative minimum taxable income calculation.

Because the income of the UMB Scout WorldWide Fund and the
WorldWide Select Fund is derived primarily from investments in
foreign rather than domestic U.S securities, no portion of their
distributions will generally be eligible for the dividends-
received deduction. None of the dividends paid by the funds for
the most recent calendar year qualified for such deduction, and
it is anticipated that none of the current year's dividends will
so qualify.

Because the income of the UMB Scout Bond Fund, the UMB Scout
Kansas Tax-Exempt Bond Fund, the UMB Scout Money Market Fund
(Federal and Prime Portfolios) and the UMB Scout Tax-Free Money
Market Fund consists of interest rather than dividends, no
portion of their distributions will generally be eligible for the
dividends-received deduction. None of the dividends paid by the
funds for the most recent calendar year qualified for such
deduction, and it is anticipated that none of the current year's
dividends will so qualify.

Investment in complex securities The funds may invest in complex
securities. These investments may be subject to numerous special
and complex tax rules. These rules could affect whether gains
and losses recognized by a fund are treated as ordinary income or
capital gain, accelerate the recognition of income to a fund
and/or defer a fund's ability to recognize losses, and, in
limited cases, subject a fund to U.S. federal income tax on
income from certain of its foreign securities. In turn, these
rules may affect the amount, timing or character of the income
distributed to you by a fund.

MANAGEMENT AND INVESTMENT COUNSEL

Pursuant to Management Agreements, each Fund employs at its own
expense UMB Bank, n.a. as its manager and investment counsel. As
investment counsel and manager, UMB Bank, n.a. provides
professional portfolio managers who make all decisions concerning
the investment and reinvestment of the assets of the Funds in
accordance with the Funds' stated investment objective and
policies. As investment counsel, UMB Bank, n.a. either provides
or pays the cost of all management, supervisory and
administrative services required in the normal operations of the
Funds.
The annual fee charged by UMB Bank, n.a. covers all normal
operating costs of the Funds. The annual fee is equal to the
following percentage of each Fund's average net assets:

Average Net Assets

UMB Scout Stock Fund .85%
UMB Scout Regional Fund .85%
UMB Scout WorldWide Fund .85%
UMB Scout Capital Preservation Fund .85%
UMB Scout Balanced Fund .85%
UMB Scout Bond Fund .85%
UMB Scout Kansas Tax-Exempt Bond Fund .50%
UMB Scout Money Market Fund .50%
UMB Scout Tax-Free Money Market Fund .50%
UMB Scout Stock Select Fund .85%
UMB Scout WorldWide Select Fund .85%

The aggregate management fees paid to UMB Bank, n.a. by the Funds
during the three most recent fiscal years ended June 30 were:

1999 1998 1997

UMB Scout Stock Fund $1,553,871 $1,677,799 $1,317,938
UMB Scout Regional Fund $ 374,733 $ 426,268 $ 388,605
UMB Scout WorldWide Fund $ 991,992 $ 520,094 $ 336,708
UMB Scout Capital
Preservation Fund $ 6,331 $ 1,011 --
UMB Scout Balanced Fund $ 56,502 $ 74,597 $ 57,679
UMB Scout Bond Fund $ 660,955 $ 675,457 $ 697,849
UMB Scout Kansas Tax-
Exempt Bond Fund $ 37,146 $ 7,129 --
UMB Scout Money Market Fund $4,907,229 $4,239,563 $3,326,933
UMB Scout Tax-Free
Money Market Fund $ 783, 821 $ 833,818 $ 643,126
UMB Scout Stock
Select Fund (5/17/99) $ 981 -- --
UMB Scout WorldWide
Select Fund (5/17/99) $ 1,504 -- --

OFFICERS AND DIRECTORS

The officers of the Funds manage their day-to-day operations.
The Fund's officers, as well as the Fund's investment counsel and
manager are subject to the direct supervision and control of the
Board of Directors. Under Maryland corporate law, all of the
Directors owe a fiduciary duty to the shareholders of the Fund.

The following is a list of the senior officers and directors of
the Fund and their ages and business experience for the past five
years. Unless noted otherwise, the address of each officer and
director is BMA Tower, 700 Karnes Blvd., Kansas City, Missouri
64108-3306. An asterisk (*) by a director's name denotes a
director who is an interested person as that term is defined in
the 1940 Act.

*Larry D. Armel (58), President and Director. President and
Director, Jones & Babson, Inc. and each of the Babson Funds, UMB
Scout Funds, Buffalo Funds and the Investors Mark Series Fund,
Inc.; President and Trustee, D.L. Babson Bond Trust; Director,
AFBA Five Star Fund, Inc.

William E. Hoffman, D.D.S. (61), Director. Director of each of
the investment companies within the UMB Scout Funds group;
Orthodontist, 3700 West 83rd Street, Suite 206, Prairie Village,
Kansas 66208.

Eric T. Jager (56), Director. Director of each of the investment
companies within the UMB Scout Funds group; President, Windcrest
Investment Management, Inc.; Director, Bartlett Futures, Inc.,
Nygaard Corporation, 4800 Main Street, Suite 600, Kansas City,
Missouri 64112.

Stephen F. Rose (51), Director. Director of each of the
investment companies within the UMB Scout Funds group; President,
Sun Publications, Inc., 7373 W. 107th Street, Overland Park,
Kansas 66212.

Stuart Wien (76), Director. Director of each of the investment
companies within the UMB Scout Funds group; Retired, 4589 West
124th Place, Leawood, Kansas 66209, formerly Chairman of the
Board, Milgram Food Stores, Inc.

P. Bradley Adams (39), Vice President and Treasurer. Vice
President and Treasurer, Jones & Babson, Inc. and each of the
Babson Funds, UMB Scout Funds and Buffalo Funds; Vice President
and Chief Financial Officer, AFBA Five Star Fund, Inc.; Principal
Financial Officer, Investors Mark Series Fund, Inc.

W. Guy Cooke (38), Vice President. Chief Compliance Officer,
Jones & Babson, Inc.; Vice President and Chief Compliance Officer
of each of the Babson Funds, UMB Scout Funds, Buffalo Funds and
AFBA Five Star Fund, Inc. Cooke joined Jones & Babson in March
1998 and previously was Director of Compliance at American
Century Companies.

Martin A. Cramer (49), Vice President and Secretary. Vice
President and Secretary, Jones & Babson, Inc. and each of the
Babson Funds, UMB Scout Funds and Buffalo Funds; Secretary and
Assistant Vice President, AFBA Five Star Fund, Inc.; Secretary,
Investors Mark Series Fund, Inc.

Rhonda L. Grimes (39), Vice President. Control and Technology
Integration, Vice President and Director, Jones & Babson, Inc.
Vice President of each of the Babson Funds, UMB Scout Funds,
Buffalo Funds and AFBA Five Star Fund, Inc. She joined Jones &
Babson in December 1998 and previously was Client Services
Manager at DST Systems.

Constance E. Martin (38), Vice President. Shareholder Operations
Vice President and Director, Jones & Babson, Inc.; Vice President
of each of the Babson Funds, UMB Scout Funds, Buffalo Funds and
AFBA Five Star Fund, Inc.

Compensation of Officers, Directors and Trustees. None of the
officers or directors will be compensated by the Funds for their
normal duties and services. Their compensation and expenses
arising out of normal operations will be paid by UMB Bank, n.a.
under the provisions of the Management Agreement. As an
"interested" Director, Mr. Armel receives no compensation for
his service as a Director.

Messrs. Hoffman, Jager, Rose and Wien have no financial interest
in, nor are they affiliated with, either UMB Bank, n.a. or Jones
& Babson, Inc. The Audit Committee of the Board of Directors for
all of the UMB Scout Funds is composed of Messrs. Hoffman, Jager,
Rose and Wien.

The officers and directors of the Company as a group own less
than 1% of the Funds.

Compensation Table

<TABLE>
<CAPTION>
Name of Director Aggregate Pension or Estimated Annual Total Compensation
Compensation From Retirement Benefits Benefits Upon From All UMB
Each Fund Accrued As Part of Retirement Scout Fund Paid to
Fund Expenses Directors**
- --------------------------------------------------------------------------------------------------------------
</CAPTION>
<S> <C> <C> <C> <C>
Larry D. Armel* -- -- -- --
William E. Hoffman $6,375 -- -- $6,375
Eric T. Jager $7,500 -- -- $7,500
Stephen F. Rose $7,500 -- -- $7,500
Stuart Wien $7,500 -- -- $7,500
</TABLE>

* As an "interested director," Mr. Armel received no
compensation for his services as a director.
** The amounts reported in this column reflect the total
compensation paid to each director for his services as a
director of each of the UMB Scout Funds during the fiscal
year ended June 30, 1999. Directors' fees are paid by the
Funds' manager and not by the Funds themselves.

UNDERWRITER AND DISTRIBUTOR

Jones and Babson, Inc., BMA Tower, 700 Karnes Boulevard, Kansas
City, Missouri 64108-3306, serves as the principal underwriter
and distributor of the Funds' shares. The shares are
continuously offered by Jones & Babson, who has agreed, as agent
of the Funds, to use its best efforts to distribute shares of the
Funds. Jones and Babson pays all sales and distribution
expenses, other than registration fees and other governmental
charges.

Jones and Babson does not receive compensation or reimbursement
for its distribution and underwriting activities from the Funds.
Instead, it is compensated by UMB Bank, n.a. for other services
provided to the company and Fund. As indicated in the
"Directors and Officers" section of this Statement of
Additional Information, the following officers of Jones and
Babson are directors or officers of the Company: Larry D. Armel,
P. Bradley Adams, Martin A. Cramer and Constance E. Martin.

TRANSFER AGENT

As manager, UMB Bank, n.a. employs Jones and Babson, Inc. at its
own expense to provide services to the funds, including the
maintenance of a shareholder accounting and transfer agency
system, and such other items as are incidental to corporate
administration. Jones and Babson, Inc. is located at BMA Tower,
700 Karnes Boulevard, Kansas City, Missouri 64108-3306.

CUSTODIAN

The Fund's assets are held for safekeeping by an independent
custodian, UMB Bank, n.a. This means the bank, rather than the
Funds, has possession of the Funds' cash and securities. As
directed by the Funds' officers and portfolio managers, the bank
delivers cash to those who have sold securities to the Funds in
return for such securities, and to those who have purchased
portfolio securities from the Funds, it delivers such securities
in return for their cash purchase price. It also collects income
directly from issuers of securities owned by the Funds and holds
this for payment to shareholders after deduction of the Funds'
expenses. UMB Bank, n.a. also serves as investment adviser and
manager, and receives compensation for all of its services
through receipt of management fees. UMB Bank, n.a. is located at
1010 Grand Boulevard, Kansas City, Missouri, 64141.

INDEPENDENT AUDITORS

The Funds' financial statements are audited annually by
independent auditors approved by the directors each year, and in
years in which an annual meeting is held the directors may submit
their selection of independent auditors to the shareholders for
ratification. Baird, Kurtz & Dobson, City Center Square, Suite
2700, 1100 Main Street, Kansas City, Missouri 64105, is the
Funds' present independent auditor.

GENERAL INFORMATION AND HISTORY

UMB Scout Stock Fund, Inc. which consists of two separate series
- -- the UMB Scout Stock Fund series and the UMB Scout Stock Select
Fund series -- was incorporated in Maryland on July 29, 1982 and
has a present authorized capitalization of 30,000,000 shares of
common stock, par value $1.00 per share. The UMB Scout Bond
Fund, Inc. was incorporated in Maryland on July 29, 1982, and has
a present authorized capitalization of 20,000,000 shares of $1
par value common stock. UMB Scout Regional Fund, Inc., which was
incorporated in Maryland on July 11, 1986 as UMB Qualified
Dividend Fund, Inc. and changed its name to UMB Heartland Fund,
Inc. on July 30, 1991; UMB Scout Balanced Fund, Inc., which was
incorporated in Maryland on July 13, 1995; and UMB Scout Capital
Preservation Fund, Inc. and UMB Scout Kansas Tax-Exempt Bond
Fund, Inc., both of which were incorporated in Maryland on
October 16, 1997, each have a present authorized capitalization
of 10,000,000 shares of $1 par value common stock. UMB Scout
Tax-Free Money Market Fund, Inc., which was incorporated in
Maryland on July 29, 1982, has a present authorized
capitalization of 1,000,000,000 shares of $.01 par value common
stock. UMB Scout WorldWide Fund, Inc., which consists of two
separate series - the UMB Scout WorldWide Fund series and the UMB
Scout WorldWide Select Fund series -- was incorporated in the
State of Maryland on January 7, 1993 and has a present authorized
capitalization of 30,000,000 shares of common stock, par value
$1.00 per share.

All of the above Funds issue a single class of shares which all
have like rights and privileges. Each full and fractional share,
when issued and outstanding, has: (1) equal voting rights with
respect to matters which affect the Fund, and (2) equal dividend,
distribution and redemption rights to the assets of the Fund.
Shares when issued are fully paid and non-assessable. The Funds
will not issue any senior securities. Shareholders do not have
pre-emptive or conversion rights. The Funds may issue additional
series of stock with the approval of the Fund's Board of
Directors.

UMB Scout Money Market Fund, Inc., which was incorporated in
Maryland on June 23, 1982, has a present authorized
capitalization of 1,500,000,000 shares of $.01 par value common
stock. One-half of the shares are presently reserved for
issuance to shareholders invested in the Federal Portfolio and
one-half is reserved for the Prime Portfolio shareholders. Each
full and fractional share, when issued and outstanding; has: (1)
equal voting rights with respect to matters which affect the Fund
in general and with respect to matters relating solely to the
interests of the Portfolio for which issued, and (2) equal
dividend, distribution and redemption rights to the assets of the
Portfolio for which issued and to general assets, if any, of the
Fund which are not specifically allocated to a particular
Portfolio. Shares when issued are fully paid and non-assessable.
Except for the priority of each share in the assets of its
Portfolio, the Fund will not issue any class of securities senior
to any other class. Shareholders do not have pre-emptive or
conversion rights. The Fund may issue additional series of stock
with the approval of the Fund's Board of Directors.

The Maryland General Corporation Law permits registered
investment companies, such as the Funds, to operate without an
annual meeting of shareholders under specified circumstances if
an annual meeting is not required by the 1940 Act. As a result
the Funds do not intend to hold annual meetings. The Funds have
adopted the appropriate provisions in their By-Laws and will not
hold annual meetings of shareholders for the following purposes
unless required to do so: (1) election of directors; (2)
approval of any investment advisory agreement; (3) ratification
of the selection of independent public accountants; and (4)
approval of a distribution plan. Under Maryland law, a special
meeting of stockholders of the Funds must be held if the Fund
receives the written request for a meeting from the stockholders
entitled to cast at least 25% of all the votes entitled to be
cast at the meeting.

Non-Cumulative Voting. All of the Funds' shares have non-
cumulative voting rights, which means that the holders of more
than 50% of the shares voting for the election of directors can
elect 100% of the directors, if they choose to do so, and in such
event, the holders of the remaining less than 50% of the shares
voting will not be able to elect any directors.

Federal Banking Laws. The Glass-Steagall Act is a federal law
that prohibits national banks from sponsoring, distributing or
controlling a registered open-end investment company. It is
possible that certain activities of UMB Bank, n.a. relating to
the Funds may be claimed to be comparable to the matters covered
by such provisions. It is not expected that any conclusions
regarding such activities of UMB Bank, n.a. would have any
material effect on the assets of the Funds or their shareholders,
because the Fund's distribution is under the control of Jones &
Babson, Inc., the Funds' distributor, which is not subject to the
Glass-Steagall Act. Although it is not anticipated that
decisions under the Glass-Steagall Act adverse to UMB Bank, n.a.
would have any material effect on the conduct of the Funds'
operations, if any unanticipated changes affecting the Funds'
operations were deemed appropriate, the Board of Directors would
promptly consider suitable adjustments.

Each of the Funds has agreed that it may use the words "UMB"
and "Scout" in its name, and may use the Scout design, so long
as UMB Bank, n.a. is continued as its manager.

FIXED INCOME SECURITIES RATINGS

Standard & Poor's Corporation (S&P):

AAA - Highest Grade. These securities possess the ultimate
degree of protection as to principal and interest.
Marketwise, they move with interest rates, and hence provide
the maximum safety on all counts.

AA - High Grade. Generally, these bonds differ from AAA
issues only in a small degree. Here too, prices move with
the long-term money market.

A - Upper-medium Grade. They have considerable investment
strength, but are not entirely free from adverse effects of
changes in economic and trade conditions. Interest and
principal are regarded as safe. They predominantly reflect
money rates in their market behavior but, to some extent,
also economic conditions.

BBB - Bonds rated BBB are regarded as having an adequate
capacity to pay principal and interest. Whereas they
normally exhibit protection parameters, adverse economic
conditions or changing circumstances are more likely to lead
to a weakened capacity to pay principal and interest for
bonds in this category than for bonds in the A category.

BB, B, CCC, CC - Bonds rated BB, B, CCC and CC are regarded,
on balance, as predominantly speculative with respect to the
issuer's capacity to pay interest and repay principal in
accordance with the terms of the obligations. BB indicates
the lowest degree of speculation and CC the highest degree
of speculation. While such bonds will likely have some
quality and protective characteristics, these are outweighed
by large uncertainties or major risk exposures to adverse
conditions.

Moody's Investors Service, Inc. (Moody's):

Aaa - Best Quality. These securities carry the smallest
degree of investment risk and are generally referred to as
"gilt-edge." Interest payments are protected by a large,
or by an exceptionally stable margin, and principal is
secure. While the various protective elements are likely to
change, such changes as can be visualized are most unlikely
to impair the fundamentally strong position of such issues.

A2 - High Quality by All Standards. They are rated lower
than the best bonds because margins of protection may not be
as large as in Aaa securities, fluctuation of protective
elements may be of greater amplitude, or there may be other
elements present which make the long-term risks appear
somewhat greater.

A - Upper-medium Grade. Factors giving security to
principal and interest are considered adequate, but elements
may be present which suggest a susceptibility to impairment
sometime in the future.

Baa - Bonds which are rated Baa are considered as medium
grade obligations, i.e., they are neither highly protected
nor poorly secured. Interest payments and principal
security appear adequate for the present but certain
protective elements may be lacking or may be
characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and
in fact have speculative characteristics as well.

Ba - Bonds which are rated Ba are judged to have
predominantly speculative elements; their future cannot be
considered as well assured. Often the protection of
interest and principal payments may be very moderate and
thereby not well safeguarded during both good and bad times
over the future. Uncertainty of position characterizes
bonds in this class.

B - Bonds which are rated B generally lack characteristics
of the desirable investment. Assurance of interest and
principal payments or maintenance of other terms of the
contract over any long period of time may be small.

Caa - Bonds which are rated Caa are of poor standing. Such
issues may be in default or there may be present elements of
danger with respect to principal or interest.

Ca - Bonds which are rated Ca represent obligations which
are speculative in a high degree. Such issues are often in
default or have other marked shortcomings.

Note: Moody's applies numerical modifiers 1, 2 and 3 in
each generic rating classification from Aa to B. The
modifier I indicates that the issue ranks in the higher
end of its generic rating category; the modifier 2
indicates a mid-range rating; and the modifier 3
indicates that the issue ranks in the lower end of its
generic category.

Fitch Investors Service:

Debt instruments rated "AAA," "AA," "A," "BBB" are
considered to be investment grade.

AAA Highest credit quality. The obligor has an
exceptionally strong ability to pay interest and repay
principal, which is unlikely to be affected by reasonably
foreseeable events.

AA+, AA or AA- Investment grade and of very high credit
quality. The obligor's ability to pay interest and repay
principal is very strong, although not quite as strong as
bonds rated "AAA".

A+, A or A- Investment grade and of high credit quality.
The obligor's ability to pay interest and repay principal is
considered to be strong, but may be more vulnerable to
adverse changes in economic conditions and circumstances
than bonds with higher ratings.

BBB+, BBB or BBB- Investment grade and of satisfactory
credit quality. The obligor's ability to pay interest and
repay principal is considered to be adequate. Adverse
changes in economic conditions and circumstances, however,
are more likely to have adverse impact on these bonds, and
therefore impair timely payment. The likelihood that the
ratings of these bonds will fall below investment grade is
higher than for bonds with higher ratings.

BB+, BB or BB- Bonds are considered speculative. The
obligor's ability to pay interest and repay principal may be
affected over time by adverse economic changes. However
business and financial alternatives can be identified which
could assist the obligor in satisfying its debt service
requirements.

B+, B or B- Bonds are considered highly speculative. While
bonds in this class are currently meeting debt service
requirements, the probability of continued timely payment of
principal and interest reflects the obligor's limited margin
of safety and the need for reasonable business and economic
activity throughout the life of the issue.

CCC+, CCC or CCC- Bonds have certain identifiable
characteristics which if not remedied may lead to default.
The ability to meet obligations requires an advantageous
business and economic environment.

CC Bonds are minimally protected. Default in payment of
interest and/or principal seems probable over time. C Bonds
are in imminent default of payment of interest or principal.

DDD, DD or D Bonds are in default of interest and/or
principal payments. Such bonds are extremely speculative
and should be valued on the basis of their ultimate recovery
value in liquidation or reorganization of the obligor.
"DDD" represents the highest potential for recovery on
these bonds. "D" represents the lowest potential for
recovery.

NR Indicated that Fitch does not rate the specific issue.

Description of Taxable Commercial Paper Ratings

Moody's - Moody's commercial paper rating is an opinion of the
ability of an issuer to repay punctually promissory obligations
not having an original maturity in excess of nine months.
Moody's has one rating - prime. Every such prime rating means
Moody's believes that the commercial paper note will be redeemed
as agreed. Within this single rating category are the following
classifications:

Prime - 1 Highest Quality
Prime - 2 Higher Quality
Prime - 3 High Quality

The criteria used by Moody's for rating a commercial paper issuer
under this graded system include, but are not limited to the
following factors:

(1) evaluation of the management of the issuer;
(2) economic evaluation of the issuer's industry or industries
and an appraisal of speculative type risks which may be
inherent in certain areas;
(3) evaluation of the issuer's products in relation to
competition and customer acceptance;
(4) liquidity;
(5) amount and quality of long-term debt;
(6) trend of earnings over a period of ten years;
(7) financial strength of a parent company and relationships
which exist with the issuer; and
(8) recognition by the management of obligations which may be
present or may arise as a result of public interest
questions and preparations to meet such obligations.

S&P - Standard & Poor's commercial paper rating is a current
assessment of the likelihood of timely repayment of debt having
an original maturity of no more than 270 days. Ratings are
graded into four categories, ranging from "A" for the highest
quality obligations to "D" for the lowest. The four categories
are as follows:

"A" - Issues assigned this highest rating are regarded
as having the greatest capacity for timely payment.
Issues in this category are further refined with the
designations 1, 2, and 3 to indicate the relative
degree of safety.

"A-1" - This designation indicates that the degree of
safety regarding timely payment is very strong.

"A-2" - Capacity for timely payment on issues with this
designation is strong. However, the relative degree
of safety is not as overwhelming.

"A-3" - Issues carrying this designation have a
satisfactory capacity for timely payment. They are,
however, somewhat more vulnerable to the adverse
effects of changes in circumstances than obligations
carrying the higher designations.

"B" - Issues rated `B" are regarded as having only an
adequate capacity for timely payment. Furthermore,
such capacity may be damaged by changing conditions
or short-term adversities.

"C" - This rating is assigned to short-term debt
obligations with a doubtful capacity for payment.

"D" - This rating indicates that the issuer is either in
default or is expected to be in default upon
maturity.

Fitch:

F1+ Exceptionally Strong Credit Quality. Issues assigned
this rating are regarded as having the strongest
degree of assurance for payment.

Fl Very Strong Credit Quality. Issues assigned this
rating reflect an assurance of timely payment only
slightly less in degree than "F1+."

F2 Good Credit Quality. Issues assigned this rating
have a satisfactory degree of assurance for timely
payment, but the margin of safety is not as great as
for issues assigned "F I +" and "F I".

F3 Fair Credit Quality. Issues assigned this rating
have characteristics suggesting that the degree of
assurance of timely payment is adequate; however,
near-term adverse changes could cause these
securities to be rated below investment grade.

FS Weak Credit Quality. Issues assigned this rating
have characteristics suggesting a minimal degree of
assurance of timely payment and are vulnerable to
near-term adverse changes in financial and economic
conditions.

D Default. Issues assigned this rating have
characteristics suggesting a minimal degree of
assurance of timely payment and are vulnerable to
near-term adverse changes in financial and economic
conditions.

LOC The symbol LOC indicated that the rating is based
upon a letter of credit default issued by a
commercial bank.

MUNICIPAL SECURITIES RATINGS

The ratings of bonds by Moody's and Standard and Poor's
Corporation represent their opinions of quality of the municipal
bonds they undertake to rate. These ratings are general and are
not absolute standards. Consequently, municipal bonds with the
same maturity, coupon and rating may have different yields, while
municipal bonds of the same maturity and coupon with different
ratings may have the same yield.

Both Moody's and S&P's Municipal Bond Ratings cover obligations
of states and political subdivisions. Ratings are assigned to
general obligation and revenue bonds. General obligation bonds
are usually secured by all resources available to the
municipality and the factors outlined in the rating definitions
below are weighted in determining the rating. Because revenue
bonds in general are payable from specifically pledged revenues,
the essential element in the security for a revenue bond is the
quantity and quality of the pledged revenues available to pay
debt service.

Although an appraisal of most of the same factors that bear on
the quality of general obligation bond credit is usually
appropriate in the rating analysis of a revenue bond, other
factors are important, including particularly the competitive
position of the municipal enterprise under review and the basic
security covenants. Although a rating reflects S&P's judgment as
to the issuer's capacity for the timely payment of debt service,
in certain instances it may also reflect a mechanism or procedure
for an assured and prompt cure of a default, should one occur,
i.e., an insurance program, federal or state guaranty, or the
automatic withholding and use of state aid to pay the defaulted
debt service.

S&P Ratings:

AAA Prime - These are obligations of the highest quality. They
have the strongest capacity for timely payment of debt service.

General Obligation Bonds - In a period of economic stress,
the issuers will suffer the smallest declines in income and
will be least susceptible to autonomous decline. Debt
burden is moderate. A strong revenue structure appears more
than adequate to meet future expenditure requirements.
Quality of management appears superior.

Revenue Bonds - Debt service coverage has been, and is
expected to remain, substantial. Stability of the pledged
revenues is also exceptionally strong, due to the
competitive position of the municipal enterprise or to the
nature of the revenues. Basic security provisions
(including rate covenant, earnings test for issuance of
additional bonds, debt service, reserve requirements) are
rigorous. There is evidence of superior management.

AA - High Grade - The investment characteristics of general
obligation and revenue bonds in this group are only slightly less
marked than those of the prime quality issues. Bonds rated
"AA" have the second strongest capacity for payment of debt
service.

A - Good Grade - Principal and interest payments on bonds in this
category are regarded as safe. This rating describes the third
strongest capacity for payment of debt service. It differs from
the two higher ratings because:

General Obligation Bonds - There is some weakness, either in
the local economic base, in debt burden, in the balance
between revenues and expenditures, or in quality of
management. Under certain adverse circumstances, any one
such weakness might impair the ability of the issuer to meet
debt obligations at some future date.

Revenue Bonds - Debt service coverage is good, but not
exceptional. Stability of the pledged revenues could show
some variations because of increased competition or economic
influences on revenues. Basic security provisions, while
satisfactory, are less stringent. Management performance
appears adequate.

Moody's Ratings of Municipal Bonds:

Aaa - Bonds which are rated Aaa are judged to be of the best
quality. These securities carry the smallest degree of
investment risk and are generally referred to as "gilt-
edge." Interest payments are protected by a large, or by an
exceptionally stable margin, and principal is secure. While
the various protective elements are likely to change, such
changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.

Aa - Bonds which are rated Aa are judged to be of high
quality by all standards. They are rated lower than the
best bonds because margins of protection may not be as large
as in Aaa securities, fluctuation of protective elements may
be of greater amplitude, or there may be other elements
present which make the long-term risks appear somewhat
greater.

A - Bonds which are rated A possess many favorable
investment attributes and are to be considered as upper
medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements
may be present which suggest a susceptibility to impairment
sometime in the future.

Moody's Ratings of Municipal Notes:

MIG 1: The best quality, enjoying strong protection from
established cash flows of funds for their servicing or from
established and broad based access to the market for
refinancing, or both.

MIG 2: High quality, with margins of protection ample,
although not so large as in the preceding group.

MIG 3: Favorable quality, with all security elements
accounted for, but lacking the undeniable strength of the
preceding grades. Market access for refinancing, in
particular, is likely to be less well established.

FINANCIAL STATEMENTS

The audited financial statements of the Funds which are contained
in the June 30, 1999 Annual Reports to Shareholders are
incorporated herein by reference.