Scout Bond Fund
Annual Report
June 30, 1995
TO THE SHAREHOLDERS
For the fiscal year ended June 30, 1995, Scout Bond Fund's total return
(price change and reinvested distributions) was 9.56%. The Fund's return was
4.84% for the second calendar quarter of 1995, and 9.24% for the year to date.
In comparison, the Lipper Analytical Services fixed income funds average
(1512 funds), was 9.30% for the twelve months ended June 30, 4.93% for the
quarter and 9.11% for year to date.
For the quarter ended June 30, 1995, Scout Bond Fund was invested 41% in
high-grade corporate bonds, 55% in U.S. Government and federal agency issues,
and 3% in cash equivalent reserves. The average maturity was 4.1 years, the
average yield to maturity was 6.43% and the credit rating of the portfolio
was AA or better. The total net assets as of June 30, 1995, were $77 million.
The drop in interest rates in the first half of the year affected both
longer-term and shorter-term bond maturities, causing the yield curve to
flatten. Overall, yields dropped an average of .75% on shorter maturities,
1.10% on the 5-year, 1.00% on the 10-year and .80% on the 30-year bond. Scout
Bond Fund has performed well throughout the second quarter due to lower
interest rates and higher bond price valuations. On July 6, 1995, the Federal
Reserve reduced the federal funds rate again from 6.00% to 5.75% (25 basis
points). As we enter the third quarter, the Fund will maintain its
well-balanced bond portfolio, remain slightly 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
<PAGE>
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.
Scout Bond Fund versus Lehman Brothers Intermediate Government/Corporate Bond
Index
Scout Bond Fund's average annual compounded total returns for one, five and
ten year periods as of June 30, 1995, were 9.56%, 7.65% 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.
<PAGE>
FINANCIAL STATEMENTS
Statement of Net Assets
June 30, 1995
Principal Market
Amount Description Cost Value
CORPORATE BONDS - 40.62%
$ 500,000 Albertson's, Incorporated
Medium Term Notes,
5.71%, due March 23, 1998 $ 500,000 $ 492,850
500,000 Albertson's, Incorporated
Medium Term Notes,
6.18%, due March 22, 2000 500,000 494,125
500,000 Albertson's, Incorporated Notes,
6.375%, due June 1, 2000 500,000 497,920
500,000 Amoco Canada Petroleum Company Notes,
7.25%, due December 1, 2002 498,230 521,130
500,000 Anheuser-Busch Companies, Incorporated
Medium Term Notes,
4.66%, due September 18, 1995 500,000 498,395
500,000 Avery/Dennison Incorporated Medium
Term Notes,
8.22%, due August 15, 1996 499,885 511,335
500,000 Baltimore Gas & Electric Company 1st
& Refunding Mortgage,
6.50%, due February 15, 2003 494,225 496,255
500,000 BellSouth Telecommunications
Incorporated Notes,
6.25%, due May 15, 2003 498,104 489,900
500,000 British Petroleum America,
Incorporated Notes,
8.875%, due December 1, 1997 497,800 529,570
500,000 Carolina Power & Light Company
Secured Medium Term Notes,
5.00%, due September 15, 1998 499,445 480,835
500,000 Carolina Power & Light Company
1st Mortgage,
5.875%, due January 15, 2004 490,537 472,920
500,000 Central Power & Light Company
1st Mortgage, Series BB,
6.00%, due October 1, 1997 497,340 496,145
500,000 Chevron Canada Financial Limited
Guaranteed Notes,
5.60%, due April 1, 1998 499,625 491,645
500,000 Consolidated Edison Company New York,
Incorporated Debentures,
6.625%, due February 1, 2002 494,905 498,510
500,000 Delmarva Power & Light Company
Medium Term Notes,
7.50%, due May 1, 1999 497,570 517,065
500,000 Duke Power Company Medium Term Notes,
5.17%, due September 1, 1998 500,000 484,145
500,000 Duke Power Company 1st & Refunding
Mortgage,
5.625%, due August 12, 1997 494,050 494,440
500,000 Duke Power Company 1st & Refunding
Mortgage,
7.00%, due June 1, 2000 485,165 509,490
500,000 Duke Power Company 1st & Refunding
Mortgage,
5.875%, due June 1, 2001 495,728 484,575
500,000 Exxon Capital Corporation Notes,
8.00%, due December 1, 1995 500,000 503,765
500,000 Florida Power & Light Company
Secured Medium Term Notes,
6.20%, due February 2, 1998 500,000 498,540
500,000 Florida Power & Light Company
Secured Medium Term Notes,
5.70%, due March 5, 1998 500,000 492,380
750,000 Florida Power & Light Company
1st Mortgage,
5.50%, due July 1, 1999 739,822 724,710
500,000 General Mills Incorporated
Medium Term Notes,
7.50%, due June 5, 2000 500,000 520,970
500,000 General Mills Incorporated
Medium Term Notes,
5.98%, due July 9, 2001 500,000 486,855
500,000 GTE California Incorporated
Debentures, Series A,
5.625%, due February 1, 2001 495,239 478,200
500,000 Houston Lighting & Power Company
1st Mortgage,
7.625%, due March 1, 1997 499,755 509,460
1,000,000 International Business Machines
Corporation Notes,
6.375%, due November 1, 1997 984,971 1,001,520
500,000 International Business Machines
Corporation Notes,
6.375%, due June 15, 2000 498,825 498,515
500,000 International Business Machines
Corporation Notes,
7.25%, due November 1, 2002 496,185 514,890
500,000 International Paper Company
Medium Term Notes,
8.05%, due March 25, 1999 500,500 522,660
500,000 Kansas City Power & Light Company
Medium Term Notes,
6.50%, due February 14, 2000 500,000 499,050
500,000 Kansas City Power & Light Company
Medium Term Notes,
6.50%, due January 2, 2001 500,000 498,015
500,000 Kmart Corporation Medium Term Notes,
8.00%, due December 13, 2001 500,000 526,615
250,000 McDonald's Corporation Medium Term Notes,
8.75%, due November 15, 2000 249,590 275,877
500,000 McDonald's Corporation Notes,
7.375%, due July 15, 2002 499,470 520,270
500,000 Minnesota Mining & Manufacturing
Company Medium Term Notes,
6.25%, due March 29, 1999 500,000 498,860
500,000 Monongahela Power Company 1st Mortgage,
5.625%, due April 1, 2000 489,495 487,000
500,000 Monongahela Power Company 1st Mortgage,
7.375%, due July 1, 2002 499,500 519,660
1,000,000 New York Telephone Company Notes,
5.875%, due September 1, 2003 988,358 942,630
500,000 Northern Illinois Gas Company
1st Mortgage,
5.50%, due February 1, 1997 498,553 494,995
500,000 Northwest Natural Gas Company
Secured Medium Term Notes,
5.98%, due December 15, 2000 500,000 487,505
500,000 Pacific Bell Telephone Company Notes,
7.25%, due July 1, 2002 497,975 519,200
500,000 Pacific Gas & Electric Company
1st Mortgage,
6.25%, due March 1, 2004 500,000 480,010
500,000 PepsiCo, Incorporated Notes,
7.625%, due November 1, 1998 498,790 519,365
15,391 Sears Mortgage Securities Corporation
Mortgage Pass Through Certificates,
Series 86 C,
9.00%, due July 25, 2001 15,006 15,699
500,000 Sears Roebuck & Company Senior
Medium Term Notes,
7.17%, due January 15, 1997 500,335 507,400
500,000 Southern California Gas Company
1st Mortgage, Series AA,
6.50%, due December 15, 1997 499,700 501,980
500,000 Southwestern Bell Capital Corporation
Medium Term Notes,
7.80%, due November 5, 1998 500,000 523,715
500,000 Southwestern Bell Telephone Company
Medium Term Notes,
6.125%, due March 12, 2001 500,000 493,820
500,000 Southwestern Bell Telephone Company
Medium Term Notes,
5.77%, due October 14, 2003 500,000 475,175
500,000 Texaco Capital Incorporated
Medium Term Notes,
8.24%, due October 15, 2001 500,500 544,240
500,000 Tribune Company Medium Term Notes,
5.30%, due April 17, 2000 500,000 476,210
500,000 Tribune Company Medium Term Notes,
5.75%, due September 15, 2003 500,000 472,475
500,000 Union Electric Company 1st Mortgage,
6.75%, due October 15, 1999 497,740 504,250
500,000 Union Pacific Corporation Notes,
6.25%, due March 15, 1999 500,000 495,410
500,000 Union Pacific Corporation Notes,
7.875%, due February 15, 2002 500,000 526,025
250,000 Virginia Electric & Power Company
Medium Term Notes,
9.00%, due February 28, 1996 250,000 254,448
500,000 Wal-Mart Stores, Incorporated Notes,
5.50%, due September 15, 1997 499,675 492,585
500,000 Wal-Mart Stores, Incorporated Notes,
6.125%, due October 1, 1999 489,610 496,650
500,000 Waste Management, Incorporated Notes,
6.25%, due December 15, 1995 499,125 499,975
500,000 Weyerhaeuser Company Medium Term Notes,
8.53%, due April 21, 1997 500,000 519,710
31,265,391 31,131,328 31,282,534
SHORT-TERM CORPORATE NOTES - 1.94%
500,000 Chevron Corporation,
5.93%, due July 12, 1995 498,765 498,765
500,000 Deere & Company,
5.95%, due July 18, 1995 498,512 498,512
500,000 Wal-Mart Stores, Incorporated,
5.975%, due July 6, 1995 498,922 498,922
1,500,000 1,496,199 1,496,199
U.S. GOVERNMENTAL AGENCIES - 4.37%
125,023 Government National Mortgage Association,
9.00%, due July 15, 2001 124,593 131,093
127,334 Government National Mortgage Association,
8.00%, due January 20, 2002 126,776 130,712
228,864 Government National Mortgage Association,
8.50%, due February 20, 2002 233,155 234,899
60,455 Government National Mortgage Association,
8.00%, due January 15, 2004 60,455 62,224
250,262 Government National Mortgage Association,
9.50%, due April 15, 2005 250,829 259,990
264,537 Government National Mortgage Association,
9.75%, due May 15, 2005 264,537 274,820
123,409 Government National Mortgage Association
Midget II,
9.00%, due October 20, 2005 122,175 127,549
198,882 Government National Mortgage Association,
7.50%, due February 15, 2006 195,402 201,392
168,532 Government National Mortgage Association,
7.50%, due March 15, 2006 165,583 170,674
38,858 Government National Mortgage Association
Midget II,
8.00%, due April 20, 2006 38,129 39,888
205,835 Government National Mortgage Association,
8.00%, due June 20, 2006 204,292 211,296
258,374 Government National Mortgage Association,
8.50%, due July 15, 2006 257,001 269,063
316,762 Government National Mortgage Association,
8.00%, due August 15, 2006 316,762 326,591
344,122 Government National Mortgage Association,
7.50%, due August 20, 2006 344,122 345,777
200,572 Government National Mortgage Association,
7.50%, due September 15, 2006 197,061 203,121
111,799 Government National Mortgage Association,
7.50%, due April 15, 2007 106,099 113,220
259,234 Government National Mortgage Association,
7.50%, due March 20, 2009 257,776 260,481
3,282,854 3,264,747 3,362,790
U.S. GOVERNMENT SECURITIES - 23.58%
1,000,000 U.S. Treasury Notes,
3.875%, due September 30, 1995 1,000,156 995,620
500,000 U.S. Treasury Notes,
5.125%, due November 15, 1995 498,594 498,905
500,000 U.S. Treasury Notes,
8.50%, due November 15, 1995 497,031 504,845
500,000 U.S. Treasury Notes,
7.75%, due March 31, 1996 499,453 506,955
1,000,000 U.S. Treasury Notes,
4.25%, due May 15, 1996 999,429 987,030
1,000,000 U.S. Treasury Notes,
6.125%, due December 31, 1996 996,328 1,004,690
1,000,000 U.S. Treasury Notes,
8.00%, due January 15, 1997 998,516 1,031,250
500,000 U.S. Treasury Notes,
8.50%, due July 15, 1997 495,391 525,000
500,000 U.S. Treasury Notes,
5.50%, due July 31, 1997 494,297 496,640
1,000,000 U.S. Treasury Notes,
5.50%, due September 30, 1997 1,028,359 992,340
500,000 U.S. Treasury Notes,
7.875%, due January 15, 1998 496,406 523,125
1,000,000 U.S. Treasury Notes,
5.125%, due March 31, 1998 996,719 980,780
1,000,000 U.S. Treasury Notes,
5.125%, due April 30, 1998 994,271 980,160
1,500,000 U.S. Treasury Notes,
7.125%, due October 15, 1998 1,526,719 1,554,135
1,500,000 U.S. Treasury Notes,
6.375%, due January 15, 1999 1,483,750 1,519,455
500,000 U.S. Treasury Notes,
5.875%, due March 31, 1999 495,085 498,360
1,000,000 U.S. Treasury Notes,
6.00%, due October 15, 1999 1,005,195 1,000,780
1,500,000 U.S. Treasury Notes,
5.50%, due April 15, 2000 1,497,478 1,470,930
1,000,000 U.S. Treasury Notes,
7.50%, due November 15, 2001 1,053,516 1,073,440
1,000,000 U.S. Treasury Notes,
6.375%, due August 15, 2002 1,028,906 1,011,870
18,000,000 18,085,599 18,156,310
GOVERNMENT SPONSORED ENTERPRISES - 27.56%
500,000 Federal Home Loan Banks,
4.73%, due December 23, 1996 500,000 491,245
1,000,000 Federal Home Loan Mortgage Corporation,
6.13%, due August 19, 1999 996,797 999,370
500,000 Federal National Mortgage Association,
7.00%, due February 10, 1996 497,187 503,435
500,000 Federal National Mortgage Association,
9.35%, due February 12, 1996 500,000 511,015
1,500,000 Federal National Mortgage Association,
8.00%, due July 10, 1996 1,491,797 1,530,930
1,000,000 Federal National Mortgage Association,
7.05%, due October 10, 1996 1,015,469 1,013,120
500,000 Federal National Mortgage Association,
8.20%, due December 23, 1996 499,375 515,000
1,000,000 Federal National Mortgage Association
(Callable 9/11/95 @ 100),
5.70%, due September 11, 1997 998,125 989,690
1,000,000 Federal National Mortgage Association,
6.05%, due November 10, 1997 995,391 1,000,620
1,000,000 Federal National Mortgage Association,
8.20%, due March 10, 1998 996,562 1,052,660
1,000,000 Federal National Mortgage Association,
8.15%, due May 11, 1998 994,375 1,056,410
1,000,000 Federal National Mortgage Association,
7.85%, due September 10, 1998 1,016,875 1,050,470
500,000 Federal National Mortgage Association,
5.05%, due November 10, 1998 496,167 483,280
1,500,000 Federal National Mortgage Association,
7.05%, due December 10, 1998 1,494,687 1,540,785
1,000,000 Federal National Mortgage Association,
6.35%, due August 10, 1999 998,750 1,004,840
1,500,000 Federal National Mortgage Association,
6.10%, due February 10, 2000 1,545,469 1,492,965
1,000,000 Federal National Mortgage Association,
8.25%, due December 18, 2000 1,018,672 1,093,440
1,250,000 Federal National Mortgage Association,
7.50%, due February 11, 2002 1,238,516 1,325,200
1,000,000 Federal National Mortgage Association,
7.55%, due April 22, 2002 993,437 1,066,720
500,000 Federal National Mortgage Association,
7.05%, due November 12, 2002 499,063 518,905
1,000,000 Federal National Mortgage Association
Medium Term Notes,
6.38%, due April 29, 2003 1,000,000 985,070
1,000,000 Federal National Mortgage Association
Medium Term Notes
(Callable 6/24/96 @ 100),
6.38%, due June 25, 2003 999,731 1,000,510
20,750,000 20,786,445 21,225,680
REPURCHASE AGREEMENT - 0.88%
675,000 Northern Trust Company, 5.75%,
due July 3, 1995
(Collateralized by U.S.
Treasury Notes,
8.625%, due October 15, 1995) 675,000 675,000
TOTAL INVESTMENTS - 98.95% $ 75,439,318 76,198,513
Other assets less liabilities - 1.05% 809,276
TOTAL NET ASSETS - 100.00%
(equivalent to $11.10 per share;
10,000,000 shares of $1.00 par value
capital shares authorized;
6,937,967 shares outstanding) $ 77,007,789
For federal income tax purposes, the identified cost of investments owned at
June 30, 1995 was $75,439,318.
Net unrealized appreciation for federal income tax purposes was $759,195,
which is comprised of unrealized appreciation of $1,324,409 and unrealized
depreciation of $565,214.
See accompanying Notes to Financial Statements.
<PAGE>
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
June 30, 1995
ASSETS:
Investment securities, at market value
(identified cost $75,439,318) $ 76,198,513
Interest receivable 1,183,626
Total assets 77,382,139
LIABILITIES AND NET ASSETS:
Cash overdraft 374,350
Total liabilities 374,350
NET ASSETS $ 77,007,789
NET ASSETS CONSIST OF:
Capital (capital stock and paid-in capital) $ 75,699,520
Accumulated undistributed income:
Undistributed net investment income 448,731
Accumulated net realized gain on investment transactions 100,343
Net unrealized appreciation in value of investments 759,195
NET ASSETS APPLICABLE TO OUTSTANDING SHARES $ 77,007,789
Capital shares, $1.00 par value
Authorized 10,000,000
Outstanding 6,937,967
NET ASSET VALUE PER SHARE $ 11.10
See accompanying Notes to Financial Statements.
<PAGE>
FINANCIAL STATEMENTS
Statement of Operations
Year Ended June 30, 1995
INVESTMENT INCOME:
Income:
Interest $ 5,212,618
Expenses:
Management fees (Note 3) 653,567
Registration fees and other expenses 9,924
663,491
Net investment income 4,549,127
REALIZED AND UNREALIZED GAIN ON INVESTMENTS (Note 1):
Realized gain from investment transactions
(excluding commercial paper and repurchase agreements):
Proceeds from sales of investments 9,411,508
Cost of investments sold 9,353,939
Net realized gain from investment transactions 57,569
Unrealized appreciation (depreciation) on investments:
Beginning of year (1,543,018)
End of year 759,195
Increase in net unrealized appreciation on investments 2,302,213
Net gain on investments 2,359,782
Increase in net assets resulting from operations $ 6,908,909
See accompanying Notes to Financial Statements.
<PAGE>
FINANCIAL STATEMENTS
Statements of Changes in Net Assets
For The Two Years Ended June 30, 1995
1995 1994
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income $ 4,549,127 $ 4,827,486
Net realized gain from investment transactions 57,569 83,791
Increase (decrease) in net unrealized
appreciation on investments 2,302,213 (5,910,908)
Net increase (decrease) in net assets
resulting from operations 6,908,909 (999,631)
DISTRIBUTIONS TO SHAREHOLDERS FROM:*
Net investment income (4,549,127) (4,827,486)
Net realized gain from investment transactions (21,636) (292,239)
Total distributions to shareholders (4,570,763) (5,119,725)
INCREASE (DECREASE) FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from 823,896 and
1,508,352 shares sold 8,821,921 17,232,145
Net asset value of 40,160 and 57,624 shares
issued for reinvestment of distributions 430,480 652,895
9,252,401 17,885,040
Cost of 1,532,198 and 1,468,487 shares redeemed (16,336,469) (16,568,532)
Net increase (decrease) from capital share
transactions (7,084,068) 1,316,508
Total decrease in net assets (4,745,922) (4,802,848)
NET ASSETS:
Beginning of year 81,753,711 86,556,559
End of year (including undistributed net
investment income of $448,731
in 1995 and 1994) $ 77,007,789 $ 81,753,711
*Distributions to shareholders:
Income dividends per share $ 0.63 $ 0.62
Capital gains distribution per share $ 0.003 $ 0.0375
See accompanying Notes to Financial Statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES - The Fund is registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. The following is a summary of significant
accounting policies consistently followed by the Fund in the preparation of
its financial statements.
Investments - Debt securities (other than short-term obligations), including
listed issues, are valued at market on the basis of valuations furnished by
an independent pricing service which utilizes both dealer-supplied valuations
and electronic data processing techniques. Short-term obligations are valued
at amortized cost, which constitutes fair value as determined by the Fund's
Board of Directors. Investment transactions are recorded on the trade date.
Investment income is recorded daily and distributions to shareholders are
recorded on the ex-dividend dates. Realized gains and losses from investment
transactions and unrealized appreciation and depreciation of investments are
reported on the identified cost basis.
Federal and State Taxes - The Fund's policy is to comply with the requirements
of the Internal Revenue Code applicable to regulated investment companies and
to distribute all of its taxable income to its shareholders. Therefore, no
provision for federal or state tax is required.
2. PURCHASES AND SALES OF SECURITIES - The aggregate amounts of security
transactions during the year ended June 30, 1995 (excluding commercial paper
and repurchase agreements), were as follows:
Purchases $ 1,716,248
Proceeds from sales 9,411,508
3. MANAGEMENT FEES - Management fees, which include all normal expenses of
the Fund other than taxes, fees and other charges of governmental agencies
for qualifying the Fund's shares for sale, special legal fees, interest and
brokerage commissions, are paid to Jones & Babson, Inc., an affiliated
company. These fees are based on average daily net assets of the Fund at the
annual rate of .85 of one percent of net assets. Certain officers and/or
directors of the Fund are also officers and/or directors of Jones & Babson,
Inc.
<PAGE>
FINANCIAL HIGHLIGHTS
The following table sets forth information as to capital and income changes
for a share outstanding for each of the five years in the period ended
June 30, 1995:
1995 1994 1993 1992 1991
Net asset value, beginning of year $10.75 $11.53 $11.14 $10.68 $10.48
Income from investment operations:
Net investment income 0.63 0.62 0.68 0.75 0.80
Net gains or losses on securities
(both realized and unrealized) 0.35 (0.74) 0.39 0.43 0.16
Total from Investment Operations 0.98 (0.12) 1.07 1.18 0.96
Less distributions:
Dividends from net investment income (0.63) (0.62) (0.68) (0.72) (0.76)
Distributions from capital gains -* (0.04) - - -
Total Distributions (0.63) (0.66) (0.68) (0.72) (0.76)
Net asset value, end of year $11.10 $10.75 $11.53 $11.14 $10.68
Total Return 10% (1%) 10% 11% 9%
Ratios/Supplemental Data
Net assets, end of year (in millions) $ 77 $ 82 $ 87 $ 63 $ 43
Ratio of expenses to average net assets 0.86% 0.87% 0.87% 0.87% 0.87%
Ratio of net investment income to
average net assets 5.91% 5.50% 5.95% 6.77% 7.44%
Portfolio turnover rate 2% 9% 19% 24% 21%
*Capital gain distribution of .003 not significant for per share table.
See accompanying Notes to Financial Statements.
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and Board of Directors
of Scout Bond Fund, Inc.:
We have audited the accompanying statement of assets and liabilities,
including the statement of net assets, of Scout Bond Fund, Inc. (formerly UMB
Bond Fund, Inc.) (a Maryland corporation), as of June 30, 1995, and the
related statement of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended,
and the financial highlights for each of the five years in the period then
ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express
an opinion on these financial statements and financial highlights based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements and the financial highlights. Our procedures
included confirmation of securities owned as of June 30, 1995, by
correspondence with the custodian. An audit also includes assessing the
accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement and the financial
highlights presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Scout Bond Fund, Inc. as of June 30, 1995, the results of its operations for
the year then ended, the changes in its net assets for each of the two years
in the period then ended, and the financial highlights for each of the five
years in the period then ended in conformity with generally accepted
accounting principles.
ARTHUR ANDERSEN LLP
Kansas City, Missouri,
August 4, 1995
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.
