UMB SCOUT FUNDS
BOND FUND
(UMBBX)
SEMIANNUAL REPORT DECEMBER 31, 1999
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 closed the quarter ended December
31, 1999 at $10.74 per share and had a total return (price
change and reinvested distributions) of 0.13% for the
quarter.
The final quarter of 1999 saw interest rates move to their
highest levels in more than two years as both the economy
and equity markets continued to display amazing strength.
While measured inflation (reported as the CPI) was holding
steady at reasonable levels, the Federal Open Market
Committee (FOMC) increased the Fed Funds rate to 5.50% on
November 16, largely in response to exceptionally strong
economic releases. Rates moved sharply higher in late
December, as the stock markets surged to new highs almost
daily, fueling concern that the FOMC might further tighten
rates to cool the "wealth effect" from stocks. Many
strategists believe the wealth created by lofty stock values
is the primary factor driving spending and therefore, the
overall economy. Bond market participants had already
discounted the Fed Funds increase to 5.50%. Then, due to
December's strength, the debate moved quickly from whether
or not another increase could be expected - to how much the
increase would be when it happened.
The 30-year treasury began the fourth quarter at 6.05% and
ended at 6.48%. By year-end, most strategists were
forecasting another 50-basis-point increase in Fed Funds by
mid-2000.
While Y2K concerns impinged liquidity during the last weeks
of the year, the agency and corporate sectors did see a
narrowing of their spread differential versus treasuries.
Relative yields for agencies and corporates moved from the
highest levels in more than five years to more average
trading ranges. This change, coupled with our holdings of
Governmental National Mortgage Association (GNMA) pools,
helped us outperform our index for the quarter. The Fund's
fourth quarter performance helped us finish the year well
ahead of our peer average. Given the inherent event risk
present in the sector, we continue to believe that high-
quality corporate bonds appear somewhat over-priced versus
values in the agency sector. As has been the case for
several quarters, we will focus new purchases more heavily
in the U.S. Agency sector.
We continue to avoid the higher-risk sectors of the
corporate market, such as financial companies and BBB-rated
companies. We enhance yield by replacing those sectors with
greater exposure to GNMA issues and callable agency issues,
thereby capturing higher yields without exposing the fund to
additional credit risk. We continue to believe that the Fund
is an outstanding choice for investors seeking a relatively
stable, fixed-income return, while avoiding the volatility
associated with interest rate speculation or aggressive
exposure to credit risk.
We appreciate your continued participation in the UMB Scout
Bond Fund as part of your investment portfolio. We welcome
your comments and questions.
Sincerely,
/s/George W. Root
George W. Root
UMB Investment Advisors
Shares of the UMB Scout Funds are not deposits or
obligations of, nor guaranteed by, UMB Bank, n.a. or any
other banking institution; nor are they insured by the
Federal Deposit Insurance Corporation ("FDIC") or any other
government agency. These shares involve investment risks,
including the possible loss of the principal invested.
CHART - HYPOTHETICAL GROWTH OF $10,000
CHART - COMPARATIVE RATES OF RETURN
UMB Scout Bond Fund (UMBBX)
as of December 31, 1999
1 Year 3 Years 5 Years 10 Years
UMB Scout Bond Fund 0.19% 4.81% 6.34% 6.41%
Lipper Intermed. Inv.
Grade Fund Index* -0.98% 4.99% 6.90% 6.97%
Lehman Bros.
Govt./Corp. Intermed.* 0.39% 5.50% 7.10% 7.26%
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
CHART - TAXABLE YIELD CURVES
CHART - HISTORICAL PER-SHARE RECORD
UMB Scout Bond Fund (UMBBX)
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
12/31/99 10.74 0.61 - 23.56
*Does not assume any compounding of reinvested distributions.
Table shows calendar year distributions and net asset values; may differ from
fiscal year annual reports.
FINANCIAL STATEMENTS DECEMBER 31, 1999 (UNAUDITED)
Statement of Net Assets
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT DESCRIPTION VALUE
</CAPTION>
<S> <C>
CORPORATE BONDS - 40.92%
$ 500,000 Alabama Power Company, 5.49%, due November 1, 2005 $ 460,540
1,000,000 Alabama Power Company, Senior Note, 6.25%, due September 30, 2010 932,900
500,000 Atlantic Richfield Company, Note, 5.55%, due April 15, 2003 485,435
500,000 Albertson's Incorporated, Notes, 6.38%, due June 1, 2000 501,490
500,000 Amoco Canada Petroleum Co., Notes, 7.25%, due December 1, 2002 510,630
500,000 Baltimore Gas & Electric Company, 1st & Refunding Mortgage,
6.50%, due February 15, 2003 497,030
500,000 BellSouth Telecommunications Incorporated, Notes,
6.25%, due May 15, 2003 495,090
500,000 BellSouth Telecommunications Incorporated, Notes,
6.38%, due June 15, 2004 494,040
500,000 Carolina Power & Light Company, 1st Mortgage,
5.88%, due January 15, 2004 482,965
500,000 Consolidated Edison Company New York Inc.,
6.63%, due February 1, 2002 500,970
500,000 Cooper Industries Incorporated, Medium-Term Notes,
5.88%, due February 20, 2003 489,800
1,000,000 Dillard Department Stores Incorporated, Notes,
6.88%, due June 1, 2005 957,940
500,000 Duke Power Company, 1st & Refunding Mortgage,
7.00%, due June 1, 2000 503,430
500,000 Duke Power Company, 1st & Refunding Mortgage,
5.88%, due June 1, 2001 495,990
500,000 duPont (E.I.) de Nemours & Company, Notes,
6.75%, due October 15, 2002 506,035
500,000 Emerson Electric Company, Notes, 6.30%, due November 1, 2005 488,840
500,000 Englehard Corporation, Senior Notes, 7.00%, due August 1, 2001 502,650
500,000 General Mills Incorporated, Medium-Term Notes,
5.98%, due July 9, 2001 498,250
500,000 General Mills Incorporated, Medium-Term Notes,
7.50%, due June 5, 2000 504,480
500,000 GTE California Incorporated, Debentures, Series A,
5.63%, due February 1, 2001 495,710
500,000 GTE Southwest Incorporated, Debentures,
6.00%, due January 15, 2006 478,170
500,000 GTE Southwest Incorporated, Debentures,
6.00%, due February 15, 2008 468,745
500,000 Honeywell Incorporated, Bond, 6.75%, due March 15, 2002 501,995
500,000 International Business Machines Corporation, Notes,
7.25%, due November 1, 2002 512,980
500,000 International Business Machines Corporation, Notes,
6.38%, due June 15, 2000 502,395
500,000 Kansas City Power & Light Company, Medium-Term Notes,
6.50%, due January 2, 2001 502,455
1,000,000 May Department Stores Incorporated, 6.88%, due November 1, 2005 1,000,340
250,000 McDonald's Corporation, Series C, Medium-Term Notes,
8.75%, due November 15, 2000 257,858
750,000 Monongahela Power Company, 1st Mortgage, 5.63%, due April 1, 2000 748,913
500,000 Monongahela Power Company, 1st Mortgage, 7.38%, due July 1, 2002 509,380
1,000,000 New York Telephone Company, Notes, 5.88%, due September 1, 2003 973,900
500,000 Newell Company, Medium-Term Notes, 6.18%, due July 11, 2000 499,420
500,000 Northwest Natural Gas Company, Secured Medium-Term Notes,
5.98%, due December 15, 2000 499,480
500,000 Oneok, Inc., 7.75%, due August 15, 2006 500,860
500,000 Pacific Bell Telephone Company, Notes, 7.25%, due July 1, 2002 509,080
500,000 Pacificorp, Notes, 5.65%, due November 1, 2006 444,870
500,000 Pacific Gas & Electric Company, 1st Mortgage,
6.25%, due March 1, 2004 490,810
1,000,000 Public Service Company of Oklahoma, Medium-Term Notes,
6.02%, due March 1, 2001 998,070
500,000 Sara Lee Corporation, Series C, Medium-Term Notes,
6.45%, due September 26, 2005 489,680
500,000 Southwestern Bell Telephone Company, Medium-Term Notes,
6.13%, due March 12, 2001 501,035
500,000 Southwestern Bell Telephone Company, Medium-Term Notes,
5.77%, due October 14, 2003 485,400
500,000 Stanley Works, Medium-Term Notes, 5.75%, due March 1, 2004 479,930
500,000 Sysco Corporation, Notes, 7.00%, due May 1, 2006 497,145
500,000 Texaco Capital Incorporated, Medium-Term Notes,
8.24%, due October 15, 2001 516,530
250,000 Texaco Capital Incorporated, Medium-Term Notes,
5.70%, due December 1, 2008 229,905
1,000,000 Texas Instruments Incorporated, Unsecured Note,
6.13%, due February 1, 2006 931,220
500,000 Tribune Company, Medium-Term Notes, 5.30%, due April 17, 2000 497,920
500,000 Tribune Company, Medium-Term Notes, 5.75%, due September 15, 2003 483,720
500,000 Union Pacific Corporation, Notes, 7.88%, due February 15, 2002 510,995
500,000 Union Pacific Railroad Company Equipment Trust, Series Cl.,
7.01%, due June 1, 2004 496,755
500,000 Wal-Mart Stores Incorporated, Notes, 5.85%, due June 1, 2000 499,895
500,000 Wisconsin Electric Power Company, 6.63%, due November 15, 2006 489,685
550,000 Xerox Corporation, Notes, 5.25%, due December 15, 2003 517,495
TOTAL CORPORATE BONDS - 40.92% 28,831,246
U.S. GOVERNMENTAL AGENCIES - 12.69%
8,483 Government National Mortgage Association, 9.00%, due July 15, 2001 8,625
19,116 Government National Mortgage Association,
8.00%, due February 20, 2002 19,353
42,864 Government National Mortgage Association,
8.50%, due February 20, 2002 43,718
13,226 Government National Mortgage Association,
8.00%, due January 15, 2004 13,506
80,227 Government National Mortgage Association, 9.50%, due April 15, 2005 84,866
112,374 Government National Mortgage Association, 9.75%, due May 15, 2005 118,871
40,562 Government National Mortgage Association,
9.00%, due October 20, 2005 42,203
67,381 Government National Mortgage Association,
7.50%, due February 15, 2006 68,435
40,837 Government National Mortgage Association, 7.50%, due March 15, 2006 41,643
61,543 Government National Mortgage Association, 8.00%, due June 20, 2006 62,683
77,147 Government National Mortgage Association, 8.50%, due July 15, 2006 79,733
37,266 Government National Mortgage Association,
8.00%, due August 15, 2006 38,294
115,602 Government National Mortgage Association,
8.00%, due August 15, 2006 118,794
141,271 Government National Mortgage Association,
7.50%, due August 20, 2006 142,989
88,723 Government National Mortgage Association,
7.50%, due September 15, 2006 90,475
51,939 Government National Mortgage Association, 7.50%, due April 15, 2007 52,920
108,812 Government National Mortgage Association, 7.50%, due March 20, 2009 110,278
271,161 Government National Mortgage Association, 6.00%, due May 15, 2009 263,951
212,212 Government National Mortgage Association, 7.00%, due May 15, 2009 213,233
381,088 Government National Mortgage Association, 6.00%, due April 15, 2011 368,337
351,698 Government National Mortgage Association,
7.00%, due August 20, 2011 352,254
331,168 Government National Mortgage Association,
6.50%, due October 15, 2011 326,207
280,047 Government National Mortgage Association,
7.00%, due October 20, 2011 280,489
398,031 Government National Mortgage Association,
6.50%, due February 15, 2012 391,487
348,354 Government National Mortgage Association, 7.00%, due April 20, 2012 348,723
435,133 Government National Mortgage Association,
6.50%, due September 20, 2012 426,348
336,256 Government National Mortgage Association,
6.50%, due October 20, 2012 329,467
404,382 Government National Mortgage Association,
6.00%, due February 20, 2013 388,955
435,215 Government National Mortgage Association, 6.00%, due March 20, 2013 418,612
475,193 Government National Mortgage Association,
6.00%, due August 15, 2013 458,399
449,913 Government National Mortgage Association,
6.00%, due August 20, 2013 432,749
474,344 Government National Mortgage Association,
6.00%, due December 20, 2013 455,802
471,417 Government National Mortgage Association,
6.00%, due January 20, 2014 453,432
480,304 Government National Mortgage Association,
6.00%, due February 15, 2014 463,330
481,354 Government National Mortgage Association,
6.00%, due February 20, 2014 462,538
492,517 Government National Mortgage Association, 6.00%, due May 15, 2014 475,112
494,592 Government National Mortgage Association, 7.00%, due June 15, 2014 496,971
TOTAL U.S. GOVERNMENTAL AGENCIES - 12.69% 8,943,782
U.S. GOVERNMENT SECURITIES - 5.07%
1,000,000 U.S. Treasury Notes, 7.50%, due November 15, 2001 1,035,780
1,500,000 U.S. Treasury Notes, 6.38%, due August 15, 2002 1,525,080
1,000,000 U.S. Treasury Notes, 6.25%, due February 15, 2003 1,012,970
TOTAL U.S. GOVERNMENT SECURITIES - 5.07% 3,573,830
GOVERNMENT-SPONSORED ENTERPRISES - 39.45%
500,000 Federal Farm Credit Bank, Medium-Term Note,
6.70%, due October 11, 2006 500,935
500,000 Federal Home Loan Banks, 6.31%, due March 29, 2001 501,640
500,000 Federal Home Loan Banks, 6.18%, due December 19, 2001 501,170
500,000 Federal Home Loan Banks, 5.13%, due February 26, 2002 488,985
500,000 Federal Home Loan Banks, 5.65%, due March 3, 2003 489,220
1,000,000 Federal Home Loan Banks, 5.28%, due December 10, 2003 955,780
1,000,000 Federal Home Loan Banks, 6.53%, due June 17, 2009 980,000
1,000,000 Federal Home Loan Mortgage Corporation, 6.05%, due March 12, 2003 981,870
1,000,000 Federal Home Loan Mortgage Corporation, 5.75%, due July 15, 2003 981,870
1,000,000 Federal Home Loan Mortgage Corporation, 6.75%, due May 30, 2006 1,004,060
1,000,000 Federal National Mortgage Association, Deb., 6.10%, due February 10, 2000 1,001,090
500,000 Federal National Mortgage Association, 5.90%, due November 20, 2000 500,000
1,000,000 Federal National Mortgage Association, Series I, Deb.,
8.25%, due December 18, 2000 1,024,840
1,250,000 Federal National Mortgage Association, Deb.,
7.50%, due February 11, 2002 1,285,150
1,000,000 Federal National Mortgage Association, Series SM-E, Deb.,
7.55%, due April 22, 2002 1,031,410
500,000 Federal National Mortgage Association, Series K, Deb.,
7.05%, due November 12, 2002 509,530
500,000 Federal National Mortgage Association, Deb.,
6.80%, due January 10, 2003 506,330
419,476 Federal National Mortgage Association, 6.50%, due November 1, 2004 415,949
500,000 Federal National Mortgage Association, Medium-Term Notes,
6.36%, due August 16, 2000 502,110
500,000 Federal National Mortgage Association, Medium-Term Notes,
5.72%, due March 8, 2001 497,580
1,000,000 Federal National Mortgage Association, Medium-Term Notes,
6.45%, due April 23, 2001 1,005,470
500,000 Federal National Mortgage Association, Medium-Term Notes,
6.63%, due May 21, 2001 504,295
500,000 Federal National Mortgage Association, Medium-Term Notes,
6.41%, due February 6, 2002 502,185
500,000 Federal National Mortgage Association, Medium-Term Notes,
6.09%, due September 30, 2002 496,330
500,000 Federal National Mortgage Association, Medium-Term Notes,
5.50%, due February 2, 2004 480,000
1,000,000 Federal National Mortgage Association, Medium-Term Notes,
6.36%, due December 27, 2004 977,030
500,000 Federal National Mortgage Association, Medium-Term Notes,
6.10%, due January 26, 2005 484,530
1,000,000 Federal National Mortgage Association, Medium-Term Notes,
6.82%, due August 23, 2005 1,013,910
500,000 Federal National Mortgage Association, Medium-Term Notes,
5.88%, due February 14, 2006 480,705
1,500,000 Federal National Mortgage Association, Medium-Term Notes,
6.41%, due March 8, 2006 1,481,490
500,000 Federal National Mortgage Association, Medium-Term Notes,
6.96%, due April 2, 2007 506,015
500,000 Federal National Mortgage Association, Medium-Term Notes,
6.70%, due June 19, 2007 498,435
500,000 Federal National Mortgage Association, Medium-Term Notes,
6.38%, due February 20, 2008 476,330
2,000,000 Federal National Mortgage Association, Medium-Term Notes,
6.00%, due September 29, 2008 1,860,940
1,000,000 Federal National Mortgage Association, Medium-Term Notes,
6.01%, due November 13, 2008 929,060
1,000,000 Federal National Mortgage Association, Medium-Term Notes,
7.15%, due June 11, 2009 970,780
500,000 Federal National Mortgage Association, Medium-Term Notes,
6.11%, due December 4, 2008 466,485
TOTAL GOVERNMENT-SPONSORED ENTERPRISES - 39.45% 27,793,509
REPURCHASE AGREEMENT - 0.65%
455,000 Northern Trust Co., 5.20%, due October 1, 1999
(Collateralized by U.S. Treasury Notes,
5.38%, due July 31, 2000) 455,000
TOTAL INVESTMENTS - 98.78% 69,597,367
Other assets less liabilities - 1.22% 857,654
TOTAL NET ASSETS - 100.00%
(equivalent to $10.88 per share; 10,000,000 shares of $1.00 par value
capital shares authorized; 6,475,501.158 shares outstanding) $70,455,021
</TABLE>
See accompanying Notes to Financial Statements.
FINANCIAL STATEMENTS DECEMBER 31, 1999 (UNAUDITED)
STATEMENT OF ASSETS AND LIABILITIES
ASSETS:
Investment securities, at market value
(identified cost $67,877,251) $66,483,075
Interest receivable 947,979
Cash (642,853)
Total assets 66,788,201
LIABILITIES:
Income payable 224
Accrued management expense (25,229)
Total liabilities (25,005)
NET ASSETS $66,813,206
NET ASSETS CONSIST OF:
Capital (capital stock and paid-in capital) $67,883,190
Accumulated undistributed income:
Net investment income 448,731
Net realized gain (loss) on investment
transactions 5,107
Net unrealized depreciation on investments (1,523,822)
NET ASSETS APPLICABLE TO OUTSTANDING SHARES $66,813,206
Capital shares, $1.00 par value
Authorized 10,000,000
Outstanding 6,220,316
NET ASSET VALUE PER SHARE $ 10.74
See accompanying Notes to Financial Statements.
FINANCIAL STATEMENTS SIX MONTHS ENDED DECEMBER 31, 1999 (UNAUDITED)
STATEMENT OF OPERATIONS
INVESTMENT INCOME:
Income:
Interest $ 2,290,257
Expenses:
Management fees 299,988
Government fees 4,337
304,325
Net investment income 1,985,932
REALIZED and unrealized gain (LOSS) ON INVESTMENTS:
Net realized gain (loss) from investment
transactions (1,341)
Decrease in net unrealized appreciation
(depreciation) on investments (1,363,681)
Net realized and unrealized gain (loss)
on investments (1,365,022)
Net increase (decrease) in net assets
resulting from operations $ 620,910
See accompanying Notes to Financial Statements.
FINANCIAL STATEMENTS
Statements of Changes in net assets
SIX MONTHS ENDED
DECEMBER 31, 1999 YEAR ENDED
(UNAUDITED) JUNE 30, 1999
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income $ 1,985,932 $ 4,238,356
Net realized gain (loss) from investment
transactions (1,341) 56,682
Increase (decrease) in net unrealized
appreciation on investments (1,363,681) (1,809,607)
Net increase (decrease) in net assets
resulting from operations 620,910 2,485,431
DISTRIBUTIONS TO SHAREHOLDERS FROM:*
Net investment income (1,985,932) (4,238,356)
DECREASE FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from 504,447 and 1,622,279 shares sold 5,479,522 18,682,363
Net asset value of 45,601 and 94,852 shares
issued for reinvestment of distributions 493,859 1,062,771
5,973,381 19,745,134
Cost of 928,710 and 2,092,454 shares redeemed (10,075,128) (23,416,507)
Net increase (decrease) in net assets
from capital share transactions (4,101,747) (3,671,373)
Net increase (decrease) in net assets (5,466,769) (5,424,298)
NET ASSETS:
Beginning of period 72,279,975 77,704,273
End of period (including undistributed net
investment income of $448,731 in 1999) $66,813,206 $ 72,279,975
*Distributions to shareholders:
Income dividends per share $ 0.31 $ 0.62
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, 1999 (excluding commercial paper and repurchase
agreements), were as follows:
Other than
U.S. Government U.S. Government
Securities Securities
Purchases $ 494,600 $1,513,223
Proceeds from sales 2,507,329 3,645,110
3. MANAGEMENT FEES - UMB Bank, n.a. is the Fund's manager
and investment advisor 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
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
*Available in Kansas and Missouri only.
INVESTMENT ADVISORS AND MANAGER
UMB Bank, n.a., Kansas City, Missouri
AUDITORS
Baird, Kurtz & Dobson, Kansas City, Missouri
Legal Counsel
Stradley, Ronon, Stevens & Young, LLP
Philadelphia, Pennsylvania
CUSTODIAN
UMB Bank, n.a., Kansas City, Missouri
UNDERWRITER, DISTRIBUTOR
AND TRANSFER AGENT
Jones & Babson, Inc., Kansas City, Missouri
UMB SCOUT FUNDS
P.O. Box 219757
Kansas City, MO 64121-9757
Toll Free 800-996-2862
www.umb.com
"UMB", "Scout" and the "Scout" design are registered
service marks of UMB Financial Corporation.
