TO THE SHAREHOLDERS
For the third quarter ended September 30, 1995, Scout Bond Fund earned a
total return (price change and reinvested distributions) of 1.33%, and
10.70% for year to date. In comparison, the Lipper Analytical Services fixed
funds average (1505 funds), which invests in longer term securities of lower
quality, earned 1.83% for the quarter and 11.17% for year to date.
Average annual compounded total returns for one, five and ten year periods
ended September 30, 1995, were 10.42%, 7.61% and 8.07%, respectively.
Performance data contained in this report is for past periods only. Past
performance is not predictive of future performance. Investment return and
share value will fluctuate, and redemption value may be more or less than
original cost.
For the quarter ended September 30, 1995, Scout Bond Fund was invested 40%
in high-grade corporate bonds, 55% in U.S. Government and federal agency
issues, and 4% in cash equivalent reserves. The average maturity was 4.7
years, the average yield to maturity was 6.33%, and the credit rating of the
portfolio was AA or better. The net assets were $77.6 million.
Bond yields on September 30, 1995 were similar to those seen on June 30, 1995
with only a slight drop in yield on the 30-year. Although interest rates
fluctuated throughout the quarter, the highest treasury yields occurred in
mid-August with a 40 basis point increase to 6.36% on the 5-year, a 37 basis
point increase to 6.56% on the 10-year and a plus 29 basis points to 6.90% on
the 30-year. This slight shift in the yield curve was due mostly to
inflationary fears although overall inflation has remained relatively low for
the year and rates have returned approximately to June 30 levels. Scout Bond
Fund performed well for the quarter and year to date because of lowering bond
yields since the beginning of the year which resulted in higher bond
valuations. The Fund has taken advantage of bond buying opportunities
throughout the year which should well-position the Fund for fourth quarter
in a low interest rate environment. As a defensive move against an interest
rate increase, Scout Bond Fund will continue to remain somewhat shorter in
its average maturity and take advantage of bond buying opportunities as more
attractive yields become available.
Your continued participation with Scout Bond Fund as part of your investment
portfolio is appreciated.
Sincerely,
Larry D. Armel
President
Shares of the Scout Funds are not deposits or obligations of, nor guaranteed
by, UMB Bank, n.a. or any other banking institution, nor are they federally
insured by the Federal Deposit Insurance Corporation or any other
federal agency. These shares involve investment risks, including the possible
loss of the principal amount invested.
FINANCIAL STATEMENTS
Statement of Net Assets
September 30, 1995
Principal Market
Amount Description Value
CORPORATE BONDS _ 40.27%
$ 500,000 Albertson's, Incorporated Medium Term Notes,
5.71%, due March 23, 1998 $ 493,365
500,000 Albertson's, Incorporated Medium Term Notes,
6.18%, due March 22, 2000 494,110
500,000 Albertson's, Incorporated Notes,
6.375%, due June 1, 2000 499,020
500,000 Amoco Canada Petroleum Company Notes,
7.25%, due December 1, 2002 522,345
500,000 Avery/Dennison Incorporated Medium Term Notes,
8.22%, due August 15, 1996 509,200
500,000 Baltimore Gas & Electric Company 1st & Refunding
Mortgage, 6.50%, due February 15, 2003 496,140
500,000 BellSouth Telecommunications Incorporated Notes,
6.25%, due May 15, 2003 491,565
500,000 British Petroleum America, Incorporated Notes,
8.875%, due December 1, 1997 526,705
500,000 Carolina Power & Light Company Secured Medium
Term Notes, 5.00%, due September 15, 1998 482,000
500,000 Carolina Power & Light Company 1st Mortgage,
5.875%, due January 15, 2004 474,860
500,000 Central Power & Light Company 1st Mortgage,
Series BB, 6.00%, due October 1, 1997 496,675
500,000 Chevron Canada Financial Limited Guaranteed Notes,
5.60%, due April 1, 1998 492,090
500,000 Consolidated Edison Company New York, Incorporated
Debentures, 6.625%, due February 1, 2002 498,625
500,000 Delmarva Power & Light Company Medium Term Notes,
7.50%, due May 1, 1999 516,125
500,000 Duke Power Company Medium Term Notes, 5.17%,
due September 1, 1998 485,095
500,000 Duke Power Company 1st & Refunding Mortgage,
5.625%, due August 12, 1997 495,365
500,000 Duke Power Company 1st & Refunding Mortgage,
7.00%, due June 1, 2000 508,980
500,000 Duke Power Company 1st & Refunding Mortgage,
5.875%, due June 1, 2001 484,720
500,000 Exxon Capital Corporation Notes, 8.00%,
due December 1, 1995 501,360
500,000 Florida Power & Light Company Secured Medium Term
Notes, 6.20%, due February 2, 1998 498,550
500,000 Florida Power & Light Company Secured Medium Term
Notes, 5.70%, due March 5, 1998 492,880
750,000 Florida Power & Light Company 1st Mortgage,
5.50%, due July 1, 1999 726,697
500,000 General Mills Incorporated Medium Term Notes,
7.50%, due June 5, 2000 519,830
500,000 General Mills Incorporated Medium Term Notes,
5.98%, due July 9, 2001 486,630
500,000 GTE California Incorporated Debentures, Series A,
5.625%, due February 1, 2001 478,370
500,000 Houston Light & Power Company 1st Mortgage,
7.625%, due March 1, 1997 509,050
1,000,000 International Business Machines Corporation Notes,
6.375%, due November 1, 1997 1,001,640
500,000 International Business Machines Corporation Notes,
6.375%, due June 15, 2000 500,345
500,000 International Business Machines Corporation Notes,
7.25%, due November 1, 2002 520,885
500,000 International Paper Company Medium Term Notes,
8.05%, due March 25, 1999 521,225
500,000 Kansas City Power & Light Company Medium Term Notes,
6.50%, due February 14, 2000 499,035
500,000 Kansas City Power & Light Company Medium Term Notes,
6.50%, due January 2, 2001 497,530
500,000 Kmart Corporation Medium Term Notes, 8.00%,
due December 13, 2001 518,260
250,000 McDonald's Corporation Medium Term Notes,
8.75%, due November 15, 2000 274,488
500,000 McDonald's Corporation Notes, 7.375%,
due July 15, 2002 512,760
500,000 Minnesota Mining & Manufacturing Company Medium
Term Notes, 6.25%, due March 29, 1999 498,725
500,000 Monongahela Power Company 1st Mortgage, 5.625%,
due April 1, 2000 483,615
500,000 Monongahela Power Company 1st Mortgage, 7.375%,
due July 1, 2002 520,260
1,000,000 New York Telephone Company Notes, 5.875%,
due September 1, 2003 950,900
500,000 Newell Company Medium Term Notes, 6.18%,
due July 11, 2000 490,360
500,000 Northern Illinois Gas Company 1st Mortgage,
5.50%, due February 1, 1997 495,900
500,000 Northwest Natural Gas Company Secured Medium
Term Notes, 5.98%, due December 15, 2000 487,285
500,000 Pacific Bell Telephone Company Notes, 7.25%,
due July 1, 2002 520,535
500,000 Pacific Gas & Electric Company 1st Mortgage,
6.25%, due March 1, 2004 482,180
500,000 PepsiCo, Incorporated Notes, 7.625%,
due November 1, 1998 519,925
13,348 Sears Mortgage Securities Corporation Mortgage
Pass Through Certificates, Series 86 C,
9.00%, due July 25, 2001 13,615
500,000 Sears Roebuck & Company Senior Medium Term
Notes, 7.17%, due January 15, 1997 506,165
500,000 Southern California Gas Company 1st Mortgage,
Series AA, 6.50%, due December 15, 1997 501,640
500,000 Southwestern Bell Capital Corporation Medium Term
Notes, 7.80%, due November 5, 1998 522,455
500,000 Southwestern Bell Telephone Company Medium Term
Notes, 6.125%, due March 12, 2001 493,450
500,000 Southwestern Bell Telephone Company Medium Term Notes,
5.77%, due October 14, 2003 476,665
500,000 Texaco Capital Incorporated Medium Term Notes,
8.24%, due October 15, 2001 542,410
500,000 Tribune Company Medium Term Notes, 5.30%,
due April 17, 2000 476,895
500,000 Tribune Company Medium Term Notes, 5.75%,
due September 15, 2003 473,390
500,000 Union Electric Company 1st Mortgage, 6.75%,
due October 15, 1999 503,875
CORPORATE BONDS (Continued)
500,000 Union Pacific Corporation Notes, 6.25%,
due March 15, 1999 495,270
500,000 Union Pacific Corporation Notes, 7.875%,
due February 15, 2002 527,685
250,000 Virginia Electric & Power Company Medium
Term Notes, 9.00%, due February 28, 1996 252,658
500,000 Wal-Mart Stores, Incorporated Notes, 5.50%,
due September 15, 1997 493,775
500,000 Wal-Mart Stores, Incorporated Notes, 6.125%,
due October 1, 1999 497,000
500,000 Waste Management, Incorporated Notes, 6.25%,
due December 15, 1995 500,015
500,000 Weyerhaeuser Company Medium Term Notes, 8.53%,
due April 21, 1997 517,235
31,263,348 31,270,403
U.S. GOVERNMENTAL AGENCIES _ 4.12%
117,827 Government National Mortgage Association,
9.00%, due July 15, 2001 123,933
118,313 Government National Mortgage Association,
8.00%, due February 20, 2002 121,489
210,360 Government National Mortgage Association,
8.50%, due February 20, 2002 216,593
57,124 Government National Mortgage Association,
8.00%, due January 15, 2004 59,291
236,660 Government National Mortgage Association,
9.50%, due April 15, 2005 246,484
241,884 Government National Mortgage Association,
9.75%, due May 15, 2005 251,925
121,134 Government National Mortgage Association,
9.00%, due October 20, 2005 125,594
194,747 Government National Mortgage Association,
7.50%, due February 15, 2006 199,695
152,838 Government National Mortgage Association,
7.50%, due March 15, 2006 156,782
38,304 Government National Mortgage Association,
8.00%, due April 20, 2006 39,333
196,118 Government National Mortgage Association,
8.00%, due June 20, 2006 201,383
223,176 Government National Mortgage Association,
8.50%, due July 15, 2006 233,136
311,736 Government National Mortgage Association,
8.00%, due August 15, 2006 324,418
333,931 Government National Mortgage Association,
7.50%, due August 20, 2006 336,479
197,242 Government National Mortgage Association,
7.50%, due September 15, 2006 202,331
105,252 Government National Mortgage Association,
7.50%, due April 15, 2007 107,967
247,428 Government National Mortgage Association,
7.50%, due March 20, 2009 249,316
3,104,074 3,196,149
U.S. GOVERNMENT SECURITIES _ 23.06%
500,000 U.S. Treasury Notes, 5.125%, due November 15, 1995 499,685
500,000 U.S. Treasury Notes, 8.50%, due November 15, 1995 501,560
500,000 U.S. Treasury Notes, 7.75%, due March 31, 1996 505,000
1,000,000 U.S. Treasury Notes, 4.25%, due May 15, 1996 991,250
1,000,000 U.S. Treasury Notes, 6.125%, due December 31, 1996 1,003,280
1,000,000 U.S. Treasury Notes, 8.00%, due January 15, 1997 1,026,720
500,000 U.S. Treasury Notes, 8.50%, due July 15, 1997 521,955
500,000 U.S. Treasury Notes, 5.50%, due July 31, 1997 497,030
1,000,000 U.S. Treasury Notes, 5.50%, due September 30, 1997 993,910
500,000 U.S. Treasury Notes, 7.875%, due January 15, 1998 521,095
1,000,000 U.S. Treasury Notes, 5.125%, due March 31, 1998 982,500
1,000,000 U.S. Treasury Notes, 5.125%, due April 30, 1998 981,720
1,500,000 U.S. Treasury Notes, 7.125%, due October 15, 1998 1,549,215
1,500,000 U.S. Treasury Notes, 6.375%, due January 15, 1999 1,517,805
500,000 U.S. Treasury Notes, 5.875%, due March 31, 1999 498,670
1,000,000 U.S. Treasury Notes, 6.00%, due October 15, 1999 1,000,930
1,500,000 U.S. Treasury Notes, 5.50%, due April 15, 2000 1,470,705
1,000,000 U.S. Treasury Notes, 7.50%, due November 15, 2001 1,070,940
1,000,000 U.S. Treasury Notes, 6.375%, due August 15, 2002 1,014,840
750,000 U.S. Treasury Notes, 6.25%, due February 15, 2003 754,215
17,750,000 17,903,025
GOVERNMENT SPONSORED ENTERPRISES _ 27.95%
500,000 Federal Home Loan Banks, 4.73%,
due December 23, 1996 493,515
500,000 Federal Home Loan Banks, 7.00%,
due September 26, 2000 501,075
1,000,000 Federal Home Loan Mortgage Corporation, 6.13%,
due August 19, 1999 998,440
500,000 Federal National Mortgage Association, 7.00%,
due February 10, 1996 502,185
500,000 Federal National Mortgage Association, 9.35%,
due February 12, 1996 506,330
1,500,000 Federal National Mortgage Association, 8.00%,
due July 10, 1996 1,524,840
1,000,000 Federal National Mortgage Association, 7.05%,
due October 10, 1996 1,010,620
500,000 Federal National Mortgage Association, 8.20%,
due December 23, 1996 513,045
1,000,000 Federal National Mortgage Association, 5.70%,
due September 11, 1997 992,970
1,000,000 Federal National Mortgage Association, 6.05%,
due November 10, 1997 1,000,470
1,000,000 Federal National Mortgage Association, 8.20%,
due March 10, 1998 1,048,280
1,000,000 Federal National Mortgage Association, 8.15%,
due May 11, 1998 1,050,160
1,000,000 Federal National Mortgage Association, 7.85%,
due September 10, 1998 1,046,870
500,000 Federal National Mortgage Association, 5.05%,
due November 10, 1998 484,920
GOVERNMENT SPONSORED ENTERPRISES (Continued)
1,500,000 Federal National Mortgage Association, 7.05%,
due December 10, 1998 1,539,135
1,000,000 Federal National Mortgage Association, 6.35%,
due August 10, 1999 1,005,940
1,500,000 Federal National Mortgage Association, 6.10%,
due February 10, 2000 1,493,670
1,000,000 Federal National Mortgage Association, 8.25%,
due December 18, 2000 1,088,440
1,250,000 Federal National Mortgage Association, 7.50%,
due February 11, 2002 1,325,200
1,000,000 Federal National Mortgage Association, 7.55%,
due April 22, 2002 1,066,410
500,000 Federal National Mortgage Association, 7.05%,
due November 12, 2002 520,310
1,000,000 Federal National Mortgage Association Medium
Term Notes, 6.38%, due April 29, 2003 988,560
1,000,000 Federal National Mortgage Association Medium
Term Notes (Callable 6/24/96 @ 100),
6.38%, due June 25, 2003 1,000,780
21,250,000 21,702,165
SHORT-TERM CORPORATE NOTES _ 3.21%
500,000 AT&T Corp., 5.69%, due October 11, 1995 499,052
500,000 Chevron Corp., 5.72%, due October 26, 1995 497,855
500,000 Raytheon Co., 5.73%, due October 10, 1995 499,125
500,000 Texaco, Inc., 5.75%, due October 6, 1995 499,441
500,000 Wal-Mart Stores, Inc., 5.70%, due October 27, 1995 497,783
2,500,000 2,493,256
REPURCHASE AGREEMENT _ 0.06%
45,000 Northern Trust Company, 6.00%, due October 2, 1995
(Collateralized by U.S. Treasury Notes,
4.00%, due January 31, 1996) 45,000
TOTAL INVESTMENTS _ 98.67% $ 76,609,998
Other assets less liabilities _ 1.33% 1,035,397
TOTAL NET ASSETS _ 100.00%
(equivalent to $11.09 per share; 10,000,000 shares
of $1.00 par value capital shares authorized;
6,998,254 shares outstanding) $ 77,645,395
BASIS OF DETERMINING MARKET VALUE. Debt securities (other than short-term
obligations), including listed issues, are valued on the basis of valuations
furnished by a pricing service which utilizes both dealer-supplied valuations
and electronic data processing techniques. Short-term obligations are valued
at amortized cost.
This report has been prepared for the information of the Shareholders of
Scout Bond Fund, Inc.,
and is not to be construed as an offering of the shares of the Fund. Shares
of this Fund and of the other
Scout Funds are offered only by the Prospectus, a copy of which may be
obtained from Jones & Babson, Inc.
