UMB SCOUT FUNDS
BOND fund
(UMBBX)
Semiannual Report December 31, 1998
A no-load mutual fund with primary emphasis
on maximum current income consistent
with its quality and maturity standards.
TO THE SHAREHOLDERS
The UMB Scout Bond Fund's share price was $11.33 per share at the close of
the quarter ended December 31, 1998, and investors earned a total return
(price change and reinvested distributions) of 0.13% for the quarter and
7.14% for the calendar year. The Fund seeks to provide maximum current income
consistent with its quality and maturity standards by investing in fixed-
income obligations.
Bond yields drifted higher during the quarter, despite declines in the Fed
Funds interest rate in October and November. While Fed Funds dropped to 4.75%
from 5.25% during the quarter, the yield on 10-year Treasury notes rose to
4.64% from 4.41%. The bullishness that helped drive rates sharply lower
earlier in the year was replaced by apprehension about the buoyant economy.
As economic reports showed continued signs of strength, investors began to
worry that rates might have fallen "too far, too fast." Selling pressure then
helped drive rates higher. At the same time, investors showed a renewed
appetite for stocks and many institutional managers moved money into them
from bonds. The quarter marked the close of one of the most volatile years in
the last decade.
A "flight to quality" had increased the yield difference between U.S.
Treasury securities and all other sectors during the third quarter of the
year, but this began to reverse during the fourth quarter. Yields on
corporate and agency issues moved closer to Treasuries in December as market
yields moved higher. The change helped provide some incremental performance
advantage for the Fund, as it is more heavily weighted in the corporate and
agency sectors. Our positions in issues from the Government National Mortgage
Association helped bolster the dividend yield while reducing share price
volatility.
The Fund has continued to focus on agency issues because they deliver
virtually the same yield as high-quality corporate bonds without the
corresponding credit risk. We invest in corporate issues with great care and
only when they are priced to provide sufficient additional yield to
compensate for the increase in credit risk.
The Fund's holdings in the corporate and GNMA sectors have been effective in
enhancing long-term returns. A strong performance in December helped reverse
some of the impact of the international market turbulence seen in prior
months. The Fund will continue to avoid the higher-risk sectors of the
corporate market, however, such as financial companies and BBB-rated
companies. We consider it prudent to maintain our proven style, looking for
less turbulent times ahead.
We believe the Fund is an outstanding choice for investors seeking a stable
fixed-income return, while avoiding the volatility associated with interest
rate speculation or aggressive exposure to credit risk.
For the six months ended December 31, 1998, shareholders received an ordinary
income dividend of $.31 per share and no short-term or long-term capital
gains.
We appreciate your continued participation in the UMB Scout Bond Fund as part
of your investment portfolio, and welcome your comments and questions.
Sincerely,
George W. Root
/s/George W. Root
UMB Investment Advisors
Chart - Taxable Yield Curves
COMPARATIVE RATES OF RETURN
as of December 31, 1998
1 Year 5 Years 10 Years 15 Years
UMB Scout Bond Fund 7.14% 5.63% 7.54% 8.38%
Lipper Intermed. Inv.
Grade Fund Index* 7.80% 6.42% 8.21% N.A.
Lehman Bros.
Govt./Corp. Intermed.* 8.44% 6.60% 8.52% 9.36%
Performance data contained in this report are for past periods only. Past
performance is not indicative of future results. Investment return and share
value will fluctuate, and redemption value may be more or less than original
cost.
* Unmanaged index of stocks, bonds or mutual funds (there are
no direct investments or fees in these indices).
Chart - Fund Diversification
Corporate Bonds 42.4%
Government
& Agency 55.1%
Short_Term 2.5%
Chart - Hypothetical Growth of $10,000
HISTORICAL PER SHARE RECORD
Income & Cumulative*
Net Short-Term Long-Term Value Per
Asset Gains Gains Share Plus
Value Distribution Distribution Distributions
12/31/82 $10.05 $0.03 $ - $ 10.08
12/31/83 9.59 0.94 - 10.56
12/31/84 10.37 0.45 - 11.79
12/31/85 10.94 0.98 0.02 13.36
12/31/86 11.37 0.83 0.03 14.64
12/31/87 10.42 1.25 0.01 14.95
12/31/88 10.19 0.81 0.03 15.56
12/31/89 10.50 0.82 - 16.69
12/31/90 10.54 0.79 - 17.52
12/31/91 11.19 0.71 - 18.88
12/31/92 11.20 0.71 - 19.60
12/31/93 11.44 0.64 0.04 20.52
12/31/94 10.46 0.63 - 20.17
12/31/95 11.26 0.63 0.01 21.60
12/31/96 11.02 0.62 - 21.99
12/31/97 11.17 0.63 - 22.76
12/31/98 11.33 0.62 - 23.54
*Does not assume any compounding of reinvested distributions.
Table shows calendar year distributions and net asset values; may differ from
fiscal year annual reports.
Shares of the UMB Scout Funds are not deposits or obligations of, nor
guaranteed by, UMB Bank, n.a. or any other banking institution; nor are they
insured by the Federal Deposit Insurance Corporation (OFDICO). These shares
involve investment risks, including the possible loss of the principal
invested.
FINANCIAL STATEMENTS DECEMBER 31, 1998 (unaudited)
STATEMENT OF NET ASSETS
FACE MARKET
AMOUNT DESCRIPTION VALUE
CORPORATE BONDS - 42.43%
$ 500,000 Alabama Power Company,
5.49%, due November 1, 2005 $ 498,930
1,000,000 Alabama Power Company, Sr. Note,
6.25%, due September 30, 2010 1,016,900
500,000 Albertson's Inc., Medium Term Note,
6.18%, due March 22, 2000 505,185
500,000 Albertson's Inc., Notes,
6.375%, due June 1, 2000 506,735
500,000 Amoco Canada Petroleum Co., Notes,
7.25%, due December 1, 2002 533,335
500,000 Baltimore Gas & Electric Co.,
1st & Refunding Mortgage,
6.50%, due February 15, 2003 519,925
500,000 BellSouth Telecommunications, Incorporated,
Notes,
6.25%, due May 15, 2003 520,975
500,000 BellSouth Telecommunications, Incorporated,
Notes,
6.375%, due June 15, 2004 527,040
500,000 Carolina Power & Light Company, 1st Mortgage,
5.875%, due January 15, 2004 509,540
500,000 Consolidated Edison Co. New York, Incorporated,
Debentures,
6.625%, due February 1, 2002 517,575
500,000 Cooper Industries Inc.,
Medium Term Notes,
5.88%, due February 20, 2003 504,735
500,000 Delmarva Power & Light Co.,
Medium Term Notes,
7.50%, due May 1, 1999 503,540
1,000,000 Dillard Department Stores Inc., Note,
6.875%, due June 1, 2005 1,020,520
500,000 duPont (E.I.) deNemours & Company,
Notes,
6.75%, due October 15, 2002 527,270
500,000 Duke Power Company, 1st & Refunding Mortgage,
7.00%, due June 1, 2000 511,850
500,000 Duke Power Company, 1st & Refunding Mortgage,
5.875%, due June 1, 2001 506,735
500,000 Emerson Electric Company, Notes,
6.30%, due November 1, 2005 520,720
500,000 Englehard Corp., Senior Note,
7.00%, due August 1, 2001 513,650
750,000 Florida Power & Light Company, 1st Mortgage,
5.50%, due July 1, 1999 751,500
500,000 General Mills Incorporated,
Medium Term Notes,
7.50%, due June 5, 2000 515,810
500,000 General Mills Incorporated,
Medium Term Notes,
5.98%, due July 9, 2001 507,100
500,000 GTE California Incorporated, Debentures,
Series A,
5.625%, due February 1, 2001 502,895
500,000 GTE Southwest Incorporated, Debentures,
6.00%, due January 15, 2006 512,370
500,000 GTE Southwest Incorporated, Debentures,
6.00%, due February 15, 2008 516,080
500,000 Honeywell Inc., Bond,
6.75%, due March 15, 2002 519,400
500,000 International Business Machines Corporation,
Notes, 6.375%, due June 15, 2000 509,255
500,000 International Business Machines Corporation,
Notes,
7.25%, due November 1, 2002 536,145
500,000 International Paper Company,
Medium Term Notes,
8.05%, due March 25, 1999 502,565
500,000 Kansas City Power & Light Company,
Medium Term Notes,
6.50%, due January 2, 2001 510,325
1,000,000 May Department Stores Inc.,
6.875%, due November 1, 2005 1,077,440
250,000 McDonald's Corporation, Series C,
Medium Term Notes,
8.75%, due November 15, 2000 265,890
500,000 McDonald's Corporation,
Medium Term Notes,
7.375%, due July 15, 2002 506,200
500,000 Minnesota Mining & Manufacturing Company,
Medium Term Notes,
6.25%, due March 29, 1999 501,330
750,000 Monongahela Power Company, 1st Mortgage,
5.625%, due April 1, 2000 751,538
500,000 Monongahela Power Company, 1st Mortgage,
7.375%, due July 1, 2002 528,675
1,000,000 New York Telephone Company, Notes,
5.875%, due September 1, 2003 1,020,360
500,000 Newell Company, Medium Term Notes,
6.18%, due July 11, 2000 506,055
500,000 Northwest Natural Gas Company,
Secured Medium Term Notes,
5.98%, due December 15, 2000 506,285
500,000 Pacific Bell Telephone Company, Notes,
7.25%, due July 1, 2002 531,850
500,000 Pacific Bell Telephone Company, Notes,
6.25%, due March 1, 2005 523,090
500,000 Pacific Gas & Electric Company, 1st Mortgage,
6.25%, due March 1, 2004 521,570
1,000,000 Public Service Company of Oklahoma,
Medium Term Notes,
6.02%, due March 1, 2001 1,014,070
500,000 Sara Lee Corporation, Series C,
Medium Term Notes,
6.45%, due September 26, 2005 523,390
500,000 Southwestern Bell Telephone Company,
Medium Term Notes,
6.125%, due March 12, 2001 508,620
500,000 Southwestern Bell Telephone Company,
Medium Term Notes,
5.77%, due October 14, 2003 506,610
500,000 Sysco Corporation, Notes,
7.00%, due May 1, 2006 543,805
500,000 Texaco Capital Incorporated,
Medium Term Notes,
8.24%, due October 15, 2001 536,745
250,000 Texaco Capital Incorporated,
Medium Term Notes,
5.70%, due December 1, 2008 248,555
1,000,000 Texas Instruments Incorporated,
Unsecured Note,
6.125%, due February 1, 2006 1,017,030
500,000 Tribune Company, Medium Term Notes,
5.30%, due April 17, 2000 500,415
500,000 Tribune Company, Medium Term Notes,
5.75%, due September 15, 2003 506,830
500,000 Union Electric Company, 1st Mortage,
6.75%, due October 15, 1999 505,495
500,000 Union Pacific Corporation, Notes,
6.25%, due March 15, 1999 500,600
500,000 Union Pacific Corporation, Notes,
7.875%, due February 15, 2002 527,405
500,000 Union Pacific Railroad Company Equipment Trust,
Series Cl.,
7.01%, due June 1, 2004 526,480
500,000 Wal-Mart Stores Incorporated, Notes,
6.125%, due October 1, 1999 502,730
500,000 Wal-Mart Stores Incorporated, Notes,
5.85%, due June 1, 2000 503,275
500,000 Wisconsin Electric Power Company,
6.625%, due November 15, 2006 530,525
550,000 Xerox Corporation, Note,
5.25%, due December 15, 2003 548,923
TOTAL CORPORATE BONDS - 42.43% 33,440,391
U.S. GOVERNMENTAL AGENCIES - 10.13%
32,160 Government National Mortgage Association,
9.00%, due July 15, 2001 32,751
32,477 Government National Mortgage Association,
8.00%, due February 20, 2002 32,916
72,721 Government National Mortgage Association,
8.50%, due February 20, 2002 74,184
27,887 Government National Mortgage Association,
8.00%, due January 15, 2004 28,766
100,555 Government National Mortgage Association,
9.50%, due April 15, 2005 105,672
133,402 Government National Mortgage Association,
9.75%, due May 15, 2005 140,189
61,893 Government National Mortgage Association,
9.00%, due October 20, 2005 64,392
95,582 Government National Mortgage Association,
7.50%, due February 15, 2006 98,763
45,558 Government National Mortgage Association,
7.50%, due March 15, 2006 47,249
89,338 Government National Mortgage Association,
8.00%, due June 20, 2006 91,450
91,516 Government National Mortgage Association,
8.50%, due July 15, 2006 94,937
46,406 Government National Mortgage Association,
8.00%, due August 15, 2006 48,264
146,158 Government National Mortgage Association,
8.00%, due August 15, 2006 152,012
155,557 Government National Mortgage Association,
7.50%, due August 20, 2006 158,748
121,186 Government National Mortgage Association,
7.50%, due September 15, 2006 125,686
65,611 Government National Mortgage Association,
7.50%, due April 15, 2007 68,377
134,384 Government National Mortgage Association,
7.50%, due March 20, 2009 137,620
338,647 Government National Mortgage Association,
6.00%, due May 15, 2009 342,938
264,307 Government National Mortgage Association,
7.00%, due May 15, 2009 271,134
446,364 Government National Mortgage Association,
6.00%, due April 15, 2011 450,345
414,030 Government National Mortgage Association,
7.00%, due August 20, 2011 422,500
387,865 Government National Mortgage Association,
6.50%, due October 15, 2011 395,521
351,883 Government National Mortgage Association,
7.00%, due October 20, 2011 359,083
442,661 Government National Mortgage Association,
6.50%, due February 15, 2012 451,258
413,516 Government National Mortgage Association,
7.00%, due April 20, 2012 421,808
464,045 Government National Mortgage Association,
6.50%, due September 20, 2012 470,736
435,094 Government National Mortgage Association,
6.50%, due October 20, 2012 441,368
479,304 Government National Mortgage Association,
6.00%, due February 20, 2013 481,480
480,783 Government National Mortgage Association,
6.00%, due March 20, 2013 482,067
492,795 Government National Mortgage Association,
6.00%, due August 15, 2013 496,575
492,342 Government National Mortgage Association,
6.00%, due August 20, 2013 493,657
500,000 Government National Mortgage Association,
6.00%, due December 20, 2013 501,336
TOTAL U.S. GOVERNMENTAL AGENCIES - 10.13% 7,983,782
U.S. GOVERNMENT SECURITIES - 8.61%
500,000 U.S. Treasury Notes,
6.375%, due January 15, 1999 500,235
1,000,000 U.S. Treasury Notes,
6.00%, due October, 15, 1999 1,010,000
500,000 U.S. Treasury Notes,
5.50%, due March 31, 2000 504,920
1,000,000 U.S. Treasury Notes,
7.50%, due November 15, 2001 1,075,310
1,500,000 U.S. Treasury Notes,
6.375%, due August 15, 2002 1,582,260
1,000,000 U.S. Treasury Notes,
6.25%, due February 15, 2003 1,057,500
1,000,000 U.S. Treasury Notes,
5.875%, due February 15, 2004 1,055,000
TOTAL U.S. GOVERNMENT SECURITIES - 8.61% 6,785,225
GOVERNMENT SPONSORED ENTERPRISES - 36.32%
500,000 Federal Farm Credit Bank Medium Term Notes,
6.70%, due October 11, 2006 541,250
500,000 Federal Home Loan Banks,
6.31%, due March 29, 2001 513,830
500,000 Federal Home Loan Banks,
6.18%, due December 19, 2001 515,470
500,000 Federal Home Loan Banks,
5.65%, due March 3, 2003 509,060
1,000,000 Federal Home Loan Banks,
5.28%, due December 10, 2003 994,645
1,000,000 Federal Home Loan Mortgage Corporation,
6.05%, due March 12, 2003 1,015,620
1,000,000 Federal Home Loan Mortgage Corporation,
6.75%, due May 30, 2006 1,092,340
1,000,000 Federal Home Loan Mortgage Corporation, Deb.,
6.13%, due August 19, 1999 1,006,720
1,000,000 Federal National Mortgage Association,
Series H, Deb.,
6.35%, due August 10, 1999 1,007,810
1,500,000 Federal National Mortgage Association, Deb.,
6.10%, due February 10, 2000 1,517,580
500,000 Federal National Mortgage Association,
5.90%, due November 20, 2000 508,125
1,000,000 Federal National Mortgage Association,
Series I, Deb.,
8.25%, due December 18, 2000 1,060,160
1,250,000 Federal National Mortgage Association, Deb.,
7.50%, due February 11, 2002 1,337,300
1,000,000 Federal National Mortgage Association,
Series SM-E, Deb.,
7.55%, due April 22, 2002 1,075,310
500,000 Federal National Mortgage Association, Series K, Deb.,
7.05%, due November 12, 2002 532,655
500,000 Federal National Mortgage Association, Deb.,
6.80%, due January 10, 2003 529,455
482,726 Federal National Mortgage Association,
6.50%, due November 1, 2004 487,597
500,000 Federal National Mortgage Association
Medium Term Notes,
5.40%, due March 12, 1999 500,235
500,000 Federal National Mortgage Association
Medium Term Notes,
6.36%, due August 16, 2000 510,545
500,000 Federal National Mortgage Association
Medium Term Notes,
5.72%, due March 8, 2001 507,500
1,000,000 Federal National Mortgage Association
Medium Term Notes,
6.45%, due April 23, 2001 1,030,160
500,000 Federal National Mortgage Association
Medium Term Notes,
6.625%, due May 21, 2001 517,500
500,000 Federal National Mortgage Association
Medium Term Notes,
6.41%, due February 6, 2002 519,375
500,000 Federal National Mortgage Association
Medium Term Notes,
6.09%, due September 30, 2002 515,545
500,000 Federal National Mortgage Association
Medium Term Notes,
6.15%, due January 27, 2003 499,530
1,000,000 Federal National Mortgage Association
Medium Term Notes,
6.36%, due December 27, 2004 1,014,060
500,000 Federal National Mortgage Association
Medium Term Notes,
6.10%, due January 26, 2005 503,435
1,000,000 Federal National Mortgage Association
Medium Term Notes,
6.82%, due August 23, 2005 1,085,780
500,000 Federal National Mortgage Association
Medium Term Notes,
5.875%, due February 14, 2006 515,310
1,500,000 Federal National Mortgage Association
Medium Term Notes,
6.41%, due March 8, 2006 1,593,510
500,000 Federal National Mortgage Association
Medium Term Notes,
6.96%, due April 2, 2007 551,405
500,000 Federal National Mortgage Association
Medium Term Notes,
6.70%, due June 19, 2007 542,030
500,000 Federal National Mortgage Association
Medium Term Notes,
6.38%, due February 20, 2008 503,360
2,000,000 Federal National Mortgage Association
Medium Term Notes,
6.00%, due September 29, 2008 1,974,380
1,000,000 Federal National Mortgage Association
Medium Term Notes,
6.01%, due November 13, 2008 992,500
500,000 Federal National Mortgage Association
Medium Term Notes,
6.11%, due December 4, 2008 501,640
TOTAL GOVERNMENT SPONSORED ENTERPRISES - 36.32% 28,622,727
SHORT-TERM CORPORATE NOTES - 1.26%
500,000 Lucent Technologies,
5.25%, due January 6, 1999 499,563
500,000 Progress Capital Holdings Inc.,
5.30%, due January 20, 1999 498,528
TOTAL SHORT-TERM CORPORATE NOTES - 1.26% 998,091
REPURCHASE AGREEMENT - 0.06%
45,000 Northern Trust Co.,
4.85%, due January 4, 1999
(Collateralized by U.S. Treasury Notes,
5.875%, due February 28, 1999) 45,000
TOTAL INVESTMENTS - 98.81% $ 77,875,216
Other assets less liabilities - 1.19% 938,558
TOTAL NET ASSETS - 100.00%
(equivalent to $11.33 per share;
10,000,000 shares of $1.00 par value
capital shares authorized;
6,955,045 shares outstanding) $ 78,813,774
See accompanying Notes to Financial Statements.
FINANCIAL STATEMENTS DECEMBER 31, 1998 (unaudited)
STATEMENT OF ASSETS AND LIABILITIES
ASSETS:
Investment securities, at market value
(identified cost $75,242,542) $ 77,875,216
Cash (206,199)
Interest receivable 1,130,801
Total assets 78,799,818
LIABILITIES:
Payable for investments purchased 749
Disbursements in excess of demand deposit cash (14,705)
Total liabilities (13,956)
NET ASSETS $ 78,813,774
NET ASSETS CONSIST OF:
Capital (capital stock and paid-in capital) $ 75,890,578
Accumulated undistributed income:
Net investment income 448,731
Net realized loss on investment transactions (36,211)
Net unrealized appreciation on investments 2,510,676
NET ASSETS APPLICABLE TO OUTSTANDING SHARES $ 78,813,774
Capital shares, $1.00 par value
Authorized 10,000,000
Outstanding 6,955,045
NET ASSET VALUE PER SHARE $ 11.33
See accompanying Notes to Financial Statements.
FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 1998 (unaudited)
STATEMENT OF OPERATIONS
INVESTMENT INCOME:
Income:
Interest $ 2,482,165
Expenses:
Management fees 335,464
Government fees 4,337
339,801
Net investment income 2,142,364
REALIZED and unrealized gain ON INVESTMENTS:
Net realized gain from investment transactions 14,023
Increase in net unrealized appreciation on investments 760,244
Net realized and unrealized gain on investments 774,267
Net increase in net assets resulting from operations $ 2,916,631
See accompanying Notes to Financial Statements.
FINANCIAL STATEMENTS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
DECEMBER 31, 1998 YEAR ENDED
(UNAUDITED) JUNE 30, 1998
</CAPTION>
<S> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income $ 2,142,364 $ 4,434,655
Net realized gain from investment transactions 14,023 20,956
Increase in net unrealized appreciation
(depreciation) on investments 760,244 1,602,921
Net increase in net assets resulting from operations 2,916,631 6,058,532
DISTRIBUTIONS TO SHAREHOLDERS FROM:*
Net investment income (2,142,364) (4,434,655)
INCREASE (DECREASE) FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from 795,559 and 1,414,139 shares sold 9,090,884 15,769,806
Net asset value of 44,161 and 89,801 shares issued for
reinvestment of distributions 499,764 1,002,078
9,590,648 16,771,884
Cost of 818,083 and 1,737,715 shares redeemed (9,255,414) (19,362,930)
Net increase (decrease) in net assets from
capital share transactions 335,234 (2,591,046)
Net increase (decrease) in net assets 1,109,501 (967,169)
NET ASSETS:
Beginning of period 77,704,273 78,671,442
End of period (including undistributed
net investment income of $448,731 and
$448,731, respectively) $ 78,813,774 $ 77,704,273
*Distributions to shareholders:
Income dividends per share $ 0.31 $ 0.62
</TABLE>
See accompanying Notes to Financial Statements.
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - The Fund is
registered under the Investment Company Act of 1940, as amended, as a
diversified, open-end management investment company. The following is a
summary of significant accounting policies consistently followed by the Fund
in the preparation of its financial statements. The policies are in
conformity with generally accepted accounting principles.
Investments - 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 formula-based techniques. Short-term obligations are valued at amortized
cost, which approximates market value. 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 Income Taxes - The Fund's policy is to comply with the requirements
of the Internal Revenue Code that are applicable to regulated investment
companies and to distribute all of its taxable income to its shareholders.
Therefore, no federal income tax provision is required.
Amortization - Discounts and premiums on securities purchased are amortized
over the life of the respective securities.
Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amount of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of income and expenses
during the reporting period. Actual results could differ from those
estimates.
2. PURCHASES AND SALES OF SECURITIES - The aggregate amounts of security
transactions during the six months ended December 31, 1998 (excluding
commercial paper and repurchase agreements), were as follows:
Other than
U.S. Government U.S. Government
Securities Securities
Purchases $ 2,292,298 $ 6,496,128
Proceeds from sales 2,000,000 6,772,402
3. MANAGEMENT FEES - UMB Bank, n.a. is the Fund's manager and investment
adviser and provides or pays the cost of all management, supervisory and
administrative services required in the normal operation of the Fund. This
includes investment management; fees of the custodian, independent public
accountants and legal counsel; remuneration of officers and directors; rent;
and shareholder services, including maintenance of the shareholder accounting
system and transfer agency. Not considered normal operating expenses and
therefore payable by the Fund are taxes, interest, fees and the other charges
of governments and their agencies for qualifying the fund's shares for sale,
special accounting and legal fees and brokerage commissions. UMB Bank's
management fees are based on average daily net assets of the Fund at the
annual rate of .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., which serves as the Fund's underwriter and distributor.
4. REPURCHASE AGREEMENTS - Securities purchased under agreements to resell
are held by the Fund's custodian and investment counsel, UMB Bank, n.a. The
custodian monitors the market values of the underlying securities which they
have purchased on behalf of the Fund to ensure that the collateral is
sufficient to protect the Fund in the event of default by the seller.
This report has been prepared for the information of the Shareholders of UMB
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 UMB Scout Funds are
offered only by the Prospectus, a copy of which may be obtained from Jones &
Babson, Inc.
UMB Scout Funds
100% No-Load Mutual Funds
Stock Fund
Regional Fund
WorldWide Fund
Capital Preservation Fund
Balanced Fund
Bond Fund
Kansas Tax-Exempt Bond Fund*
Money Market Fund
Tax-Free Money Market Fund
*Available in Kansas and Missouri only.
Manager and Investment Counsel
UMB Bank, n.a., Kansas City, Missouri
Auditors
Baird, Kurtz & Dobson, Kansas City, Missouri
Legal Counsel
Stradley, Ronon, Stevens & Young, LLP
Philadelphia, Pennsylvania
Custodian
UMB Bank, n.a., Kansas City, Missouri
Underwriter, Distributor
and Transfer Agent
Jones & Babson, Inc.
Kansas City, Missouri
UMB SCOUT FUNDS
P.O. Box 410498
Kansas City, MO 64141-0498
Toll Free 800-996-2862
www.umb.com
"UMB" and "Scout" are registered service marks of UMB Financial Corporation.
UMB Financial Corporation also claims service mark rights to the Scout
design.
JB27D(3/99) 505509
