UMB SCOUT FUNDS
STOCK FUND
(UMBSX)
STOCK SELECT FUND
ANNUAL REPORT JUNE 30, 1999
No-load mutual funds with primary emphasis
on long-term growth of both capital and income.
TO THE SHAREHOLDERS
The past 12 months have been especially noteworthy for the
global economy and financial markets. Attention was fixed
last fall on the financial contagion spreading from
Southeast Asia to Russia and elsewhere. Interest rates in
the developing world were rising or local currencies were
collapsing. There was widespread fear of an economic
slowdown because of slower demand and a flood of industrial
capacity.
In the U.S., the Federal Reserve lowered interest rates
three times in a relatively short period and long-term
interest rates moved to less than 5%. All but the "bluest"
of blue chip stocks declined sharply.
For the time being, the concerns of late 1998 no longer are
on investors' minds. Most indicators show the world's
economies are regaining their footing and many are growing
strongly. Interest rates have increased again, but
apparently not enough to stop this growth. The U.S. is
enjoying the lowest unemployment in decades with very low
inflation - a scenario the textbooks say cannot happen.
Our economic environment has been called a "virtuous cycle,"
but some investors are wondering whether it will become a
"vicious cycle." We do not see such a change now, although
we continue to watch the economic indicators very closely.
There are few signs that the economy is entering a long-term
slowdown caused by economic excess. Some market watchers
point to the high valuation of U.S. stocks as one such
excess, but valuation alone usually is not enough to make
stock prices decline. We see no other catalyst at this point
that would cause a major stock price correction.
In this annual report, you will find more details about the
activity and holdings in the UMB Scout Stock Fund and UMB
Scout Stock Select Fund during the period. I recently joined
the UMB team, and I want to thank each of you for your
confidence in UMB Investment Advisors and the UMB Scout
Funds. We look forward to helping you reach you financial
goals.
Sincerely,
/s/William B. Greiner, CFA
William B. Greiner, CFA
Executive Vice President / Chief Investment Officer
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"). These shares
involve investment risks, including the possible loss of the
principal invested.
TO THE SHAREHOLDERS
The UMB Scout Stock Fund closed the quarter ended June 30,
1999, at $20.53 per share and had a total return (price
change and reinvested distributions) of 13.70% for the
quarter and 13.92% for the fiscal year.
The UMB Scout Stock Select Fund closed the quarter at $10.08
per share and had
a total return of 2.34% for the month of June and 0.80%
since inception on May 17, 1999.
Each Fund's objective is to provide investors with long-term
growth of both capital and dividend income.
Markets jumped on the last day of the quarter after the
Federal Reserve Board increased the key Fed Funds rate to
5.00% from 4.75%, meeting widespread market expectations.
The Federal Reserve cited uncertainty about conflicting
economic indicators as its reason for raising rates. It then
cheered the markets by adopting a neutral policy stance,
indicating no firm intention to increase rates again soon.
The reaction of the stock and bond markets was immediate and
strong. The Standard & Poor's 500 Index soared to a new
record, and the yield on the 30-year U.S. Treasury bond
dropped below 6%.
Although the Federal Reserve was the big news at the end of
the quarter, the performance of basic industry stocks was
the major story starting in early April. Strength in the
U.S. economy finally awakened these stocks, which have
languished for several years, and they started to look
attractive in comparison with overvalued stocks in the
technology sector and elsewhere.
The recovery of the depressed economies in Southeast Asia
also contributed to the U.S. market's interest in industrial
stocks. Southeast Asia is a large consumer of paper and
chemical products, particularly those used in making
synthetic fibers for garments. Commodity prices have turned
higher as these economies increased their demand, prompting
interest in the related industrial stocks. A decision by the
Organization of Petroleum Exporting Countries (OPEC) to cut
production helped increase oil prices and the organization
appears to be holding to its quotas.
The market has been tracking interest rates closely since
October 1998, when the Federal Reserve last lowered rates.
Fears created by the collapse of the Russian financial
markets last year created a flight to quality, primarily to
U.S. Treasury bonds. The resulting sharp movement in U.S.
Treasury prices created problems for interest rate markets
and especially for large "hedge fund" operations that had
used investments in Treasuries to hedge their interest rate
exposure. The Federal Reserve's decision to lower interest
rates helped push stock and bond markets higher and prompted
a U.S. economic surge.
Over the ensuing months, many market participants became
concerned that the economy would overheat and inflation
would return. The Federal Reserve's interest rate hike in
June and its subsequent announcement of a neutral position
on future interest rate changes has calmed these fears.
As the new manager of the UMB Scout Stock Fund, effective
May 1, 1999, I will bring some modest changes to the way the
Fund invests. The Fund will keep a smaller list of stocks in
the portfolio, which provides more focus to the investment
process, and we are selling a number of small holdings. We
will introduce more growth stocks into the Fund, as can be
seen in the portfolio's increase in technology and health
care investments, and will eliminate holdings in small-
capitalization stocks.
During the latest quarter, the Fund sold holdings in
approximately 40 stocks and added several new names to the
portfolio. The sales included our position in BP Amoco,
Mitchell Energy, Burlington Resources and Baker Hughes,
Cyprus Amax, Newmont Mining, Alcoa, Worthington and
Carpenter Technologies. We made new investments in Amgen,
Gateway, Molex, Intel, First Merit and Lincoln National.
For the six months ended June 30, 1999, shareholders of UMB
Scout Stock Fund received an ordinary income dividend of
$0.18 per share and a long-term capital gain of $0.40 per
share. For corporate shareholders, 38.54% of ordinary income
distributions qualify for the corporate dividends received
deduction.
The introduction of the UMB Scout Stock Select Fund in May
1999 offers a new option for investors seeking long-term
growth. While it mirrors the investment objective of the
Stock Fund, the Stock Select Fund normally will maintain a
smaller cash reserve than its parent fund. The new Fund
still will benefit from the long-term management style that
is the key to the UMB Scout Funds' investment philosophy.
Thank you for your interest and participation in the UMB
Scout Stock Fund or UMB Scout Stock Select Fund. We welcome
your questions and comments.
Sincerely,
/s/James L. Moffett
James L. Moffett
UMB Investment Advisors
CHART - HYPOTHETICAL GROWTH OF $10,000
UMB Scout Stock Fund as of June 30, 1999
CHART - COMPARATIVE RATES OF RETURN
UMB Scout Stock Fund as of June 30, 1999
2 1/2 Years 6 1/2 Years 8 1/2 Years
UMB Scout Stock Fund 16.31% 12.88% 13.52%
Lipper Growth and Income
Fund Index* 20.96% 17.84% 17.96%
S&P 500* 30.00% 21.97% 21.14%
UMB Scout Stock Fund's average annual compound returns for
1-, 5- and 10-year periods ended June 30, 1999, are 13.92%,
14.88% and 11.87%, respectively.
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 - HYPOTHETICAL GROWTH OF $10,000
UMB Scout Stock Select Fund as of June 30, 1999
CHART - COMPARATIVE RATES OF RETURN
UMB Scout Stock Select Fund as of June 30, 1999
Month Inception
UMB Scout Stock Select Fund 2.34% 0.80%
Lipper Growth & Income Fund Index* 4.14% N.A.
S&P 500* 5.55% N.A.
Inception - May 17, 1999.
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 - TOP TEN EQUITY HOLDINGS
UMB Scout Stock Fund as of June 30, 1999
Market Percent
Value (000's) of Total
International Business Machines Corp. $ 5,170 2.84%
Williams Companies, Inc. 3,192 1.76%
Motorola, Inc. 3,032 1.67%
SBC Communications, Inc. 2,900 1.60%
Texas Instruments, Inc. 2,900 1.60%
Kimberly Clark Corp. 2,850 1.57%
Pharmacia & Upjohn, Inc. 2,778 1.53%
Mallinckrodt Group, Inc. 2,765 1.52%
Firstmerit Corp. 2,764 1.52%
Halliburton Co. 2,715 1.49%
Top Ten Equity Holdings Total: $31,066* 17.10%
As of June 30, 1999, statement of assets. Subject to change.
* Market Values are rounded; may not equal total.
CHART - TOP TEN EQUITY HOLDINGS
UMB Scout Stock Select Fund as of June 30, 1999
Market Percent
Value (000's) of Total
Motorola, Inc. $ 57 2.80%
Williams Companies, Inc. 51 2.50%
Intel Corp. 48 2.30%
Mallinckrodt Group, Inc. 45 2.20%
Pharmacia & Upjohn, Inc. 45 2.20%
Firstmerit Corp. 45 2.20%
FDX Corp. 43 2.10%
TJX Co., Inc. 43 2.10%
Grainger (W.W.), Inc. 43 2.10%
International Business Machines Corp. 43 2.10%
Top Ten Equity Holdings Total: $ 464* 22.40%
As of June 30, 1999, statement of assets. Subject to change.
* Market Values are rounded; may not equal total.
CHART - FUND DIVERSIFICATION
UMB Scout Stock Fund
Cash & Equivalents 14.2%
Capital Goods 4.1%
Basic Materials 9.6%
Consumer Cyclical 13.8%
Consumer Staples 15.4%
Energy 6.9%
Financial 3.2%
Transportation & Services 3.9%
Technology 14.7%
Utilities 13.4%
Convertible Bonds 0.8%
Based on total investments as of June 30, 1999. Subject to change.
CHART - FUND DIVERSIFICATION
UMB Scout Stock Select Fund as of June 30, 1999
Cash & Equivalents 12.8%
Basic Materials 8.5%
Capital Goods 5.5%
Consumer Cyclical 13.8%
Consumer Staples 18.3%
Energy 5.7%
Financial 4.5%
Technology Services 13.8%
Transportation & Services 4.1%
Based on total investments as of June 30, 1999. Subject to change.
CHART - HISTORICAL PER SHARE RECORD
UMB Scout Stock Fund
Income & Cumulative**
Net Short-Term Long-Term Value Per
Asset Gains Gains Share Plus
Value Distribution Distribution Distributions
12/31/82 $ 9.87 $ 0.03 $ - $ 9.90
12/31/83 11.34 0.86 - 12.23
12/31/84 11.20 0.62 0.11 12.82
12/31/85 12.74 0.73 0.22 15.31
12/31/86 12.78 0.51 1.01 16.87
12/31/87 11.87 0.78 0.97 17.71
12/31/88 12.62 0.49 0.39 21.39
12/31/89 13.87 0.62 0.49 21.70
12/31/90 12.76 0.59 0.21 21.39
12/31/91 15.40 0.48 - 24.51
12/31/92 15.77 0.39 0.31 25.58
12/31/93 16.24 0.38 0.79 27.21
12/31/94 15.01 0.46 1.19 27.63
12/31/95 16.34 0.73 0.87 30.56
12/31/96 16.97 0.47 0.62 32.28
12/31/97 19.01 0.46 1.00 35.78
12/31/98 18.86 0.45 1.10 37.18
06/30/99* 20.53 0.18 0.40 39.43
*Six-month only. Distributions typically occur in June and December.
**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
JUNE 30, 1999
STATEMENT OF NET ASSETS
MARKET
SHARES COMPANY VALUE
STOCK PORTFOLIO
COMMON STOCKS - 82.42%
Basic Materials - 9.31%
85,000 Brush Wellman, Inc. $ 1,540,625
10,000 Corning, Inc. 701,250
15,000 Crown Cork and Seal, Inc. 427,500
25,000 Eastman Chemical Co. 1,293,750
100,000 Engelhard Corp. 2,262,500
30,000 Hercules, Inc. 1,179,375
50,100 International Paper Co. 2,530,050
76,000 Mallinckrodt Group, Inc. 2,764,500
30,000 Rohm & Haas Co. 1,286,250
35,000 Weyerhaeuser Co. 2,406,250
35,000 Worthington Industries, Inc. 575,313
16,967,363
Capital Goods - 3.98%
125,000 Calgon Carbon Corp. 742,188
35,000 Cooper Industries, Inc. 1,820,000
18,000 Global Industries Technologies* 217,125
35,000 Grainger (W.W.), Inc. 1,883,437
50,000 Snap-On, Inc. 1,809,375
14,500 Waste Management International PLC 779,375
7,251,500
Consumer Cyclical - 13.36%
40,000 American Greetings Corp. 1,205,000
71,375 Bassett Furniture Industries, Inc. 1,632,703
40,000 Block (H&R), Inc. 2,000,000
10,483 Delphi Automotive Systems 194,591
50,000 Dillards, Inc. 1,756,250
40,000 Donnelley (R.R.) & Sons Co. 1,482,500
28,000 Dun & Bradstreet 992,250
5,000 Ford Motor Co. 282,188
14,000 Gannett Co., Inc. 999,250
15,000 General Motors Corp. 990,000
40,000 Genuine Parts Co. 1,400,000
25,000 Hillenbrand Industries, Inc. 1,081,250
28,934 Limited, Inc. 1,312,880
24,000 Masco Corp. 693,000
15,000 May Department Stores Co. 613,125
25,000 Penney (J.C.) & Co., Inc. 1,214,062
48,900 Pharmacia & Upjohn, Inc. 2,778,131
100,000 Sensormatic Electronics Corp.* 1,393,750
120,000 Stride Rite Corp. 1,237,500
4,500 TJX Co., Inc.* 149,906
9,822 Tyco International Ltd. 930,635
24,338,971
Consumer Staples - 14.89%
20,000 Abbott Laboratories 910,000
40,000 Alza Corp.* 2,035,000
16,000 American Home Products Corp. 920,000
15,000 Amgen, Inc.* 913,125
3,000 Anheuser-Busch Companies, Inc. 212,813
100,000 Archer-Daniels-Midland Co. 1,543,750
40,000 Bard (C.R.), Inc. 1,912,500
100,000 Bob Evans Farms, Inc. 1,987,500
77,000 Brinker International* 2,093,438
24,000 Bristol-Myers Squibb Co. 1,690,500
58,000 Covance, Inc.* 1,388,375
10,000 Eastman Kodak Co. 677,500
16,000 Heinz H.J. Co. 802,000
40,000 International Flavors & Fragrances, Inc. 1,775,000
50,000 Kimberly Clark Corp. 2,850,000
95,000 Lance, Inc. 1,484,375
30,000 Merck & Co., Inc. 2,220,000
65,000 Mylan Laboratories, Inc. 1,722,500
27,138,376
Energy - 6.69%
20,000 Atlantic Richfield Co. 1,671,250
60,000 Halliburton Co. 2,715,000
35,000 Kerr-McGee Corp. 1,756,562
30,000 Phillips Petroleum Co. 1,509,375
24,000 Schlumberger Limited 1,528,500
65,000 Union Pacific Resources Group, Inc. 1,060,313
60,000 USX-Marathon Group 1,953,750
12,194,750
Financial - 3.14%
100,000 Firstmerit Corp. 2,806,680
20,000 Liberty Corp. S.C. 1,090,000
35,000 Lincoln National Corp. Indiana* 1,830,937
5,727,617
Technology - 14.26%
35,000 Apple Computer, Inc.* 1,620,937
37,500 AT & T Corp. 2,092,969
20,000 Boeing Co. 883,750
3,000 Cisco Systems, Inc.* 193,500
23,625 Compaq Computer Corp. 559,617
10,000 Electronic Data Systems Corp. 565,625
40,000 Gateway, Inc.* 2,360,000
43,500 Intel Corp.* 2,588,250
40,000 International Business Machines Corp. 5,170,000
6,000 Lucent Technologies, Inc. 404,625
38,000 Molex, Inc. 1,406,000
32,000 Motorola, Inc. 3,032,000
40,000 Novell, Inc.* 1,060,000
10,000 PE Corp-PE Biosystems Group 1,147,500
20,000 Texas Instruments, Inc. 2,900,000
25,984,773
Transportation & Services - 3.77%
40,000 CNF Transportation, Inc. 1,535,000
900 Duke Realty Investment, Inc. 20,306
48,000 FDX Corp.* 2,604,000
40,000 Southwest Airlines Co. 1,245,000
25,000 Union Pacific Corp. 1,457,813
6,862,119
Utilities - 13.02%
40,000 Ameren Corp. 1,535,000
32,000 Bell Atlantic Corp. 2,092,000
44,000 Bell South Corp. 2,062,500
60,000 Comsat Corp. 1,950,000
40,000 Dominion Resources, Inc. VA 1,732,500
65,000 Entergy Corp. 2,031,250
43,000 Florida Progress Corp. 1,776,437
7,000 GTE Corp. 530,250
50,000 SBC Communications, Inc. 2,900,000
50,000 Scana Corp. 1,168,750
35,000 Texas Utilities Co. 1,443,750
22,273 US West, Inc. 1,308,539
75,000 Williams Companies, Inc. 3,192,187
23,723,163
TOTAL COMMON STOCKS (COST $99,072,873) - 82.42% 150,188,632
FACE MARKET
AMOUNT DESCRIPTION VALUE
CONVERTIBLE CORPORATE BONDS - 0.75%
$ 425,000 Telxon Corp., Cv. Sub. Deb.,
7.50%, due June 1, 2012 272,000
1,000,000 WMX Technologies, Inc., Cv. Sub. Notes,
2.00%, due January 24, 2005 1,085,000
TOTAL CONVERTIBLE CORPORATE BONDS (Cost $1,411,697) - 0.75% 1,357,000
SHORT-TERM CORPORATE NOTES - 9.30%
1,000,000 Abbott Labs,
4.80%, due July 8, 1999 998,933
1,500,000 Ameritech,
5.12%, due July 28, 1999 1,494,027
1,000,000 Archer-Daniels-Midland Co.,
4.82%, due July 8, 1999 998,929
1,500,000 Becton Dickinson,
5.15%, due August 13, 1999 1,490,558
500,000 Bellsouth Telecommunications, Inc.,
4.83%, due July 16, 1998 498,927
1,000,000 Chevron USA, Inc.,
5.01%, due July 28, 1999 996,103
1,000,000 Coca-Cola Co.,
4.79%, due July 9, 1999 998,802
1,500,000 Deere and Co.,
4.77%, due July 6, 1999 1,498,807
1,500,000 Gannett Co., Inc.,
4.78%, due July 27, 1999 1,494,623
1,000,000 Heinz Co.,
4.78%, due July 8, 1999 998,938
1,500,000 Johnson & Johnson,
4.85%, due August 6, 1999 1,492,523
1,500,000 Lucent Technologies, Inc.,
4.95%, due August 2, 1999 1,493,194
1,500,000 Proctor & Gamble Co.,
4.88%, due August 9, 1999 1,491,867
1,000,000 Progress Capital Holdings, Inc.,
4.90%, due July 2, 1999 999,728
TOTAL SHORT-TERM CORPORATE NOTES (Cost $16,945,959) - 9.30% 16,945,959
GOVERNMENT SPONSORED ENTERPRISES - 3.54%
1,500,000 Federal Home Loan Mortgage Corp.,
4.73%, due August 27, 1999 1,488,569
2,000,000 Federal Home Loan Mortgage Corp.,
4.76%, due July 8, 1999 1,997,884
1,500,000 Federal Home Loan Mortgage Corp.,
5.03%, due October 21, 1999 1,476,317
1,500,000 Federal National Mortgage Association,
Discount Notes, 4.70%, due August 9, 1999 1,492,167
TOTAL GOVERNMENT SPONSORED ENTERPRISES (Cost $6,454,937) - 3.54% 6,454,937
REPURCHASE AGREEMENT (Cost $1,750,000) - 0.96%
1,750,000 Northern Trust Co., 4.79% due July 1, 1999
(Collateralized by U.S. Treasury Notes,
7.125%, due September 30, 1999) 1,750,000
TOTAL INVESTMENTS (Cost $125,635,466) - 96.97% 176,696,528
Other assets less liabilities - 3.03% 5,526,731
TOTAL NET ASSETS - 100.00%
(equivalent to $20.53 per share;
20,000,000 shares of $1.00 par value
capital shares authorized;
8,874,746 shares outstanding) $ 182,223,259
For federal income tax purposes, the identified cost of
investments owned at June 30, 1999 was $125,764,631.
Net unrealized appreciation for federal income tax purposes was $49,190,226,
which is comprised of unrealized appreciation of $53,600,417 and unrealized
depreciation of $4,410,191.
*Non-income producing security
See accompanying Notes to Financial Statements.
FINANCIAL STATEMENTS
JUNE 30, 1999
STATEMENT OF NET ASSETS
MARKET
SHARES COMPANY VALUE
STOCK SELECT PORTFOLIO
COMMON STOCKS - 95.22%
Basic Materials - 9.27%
1,200 Brush Wellman, Inc. $ 21,750
600 Crown Cork and Seal, Inc.* 17,100
1,800 Engelhard Corp. 40,725
500 International Paper Co.* 25,250
1,250 Mallinckrodt Group, Inc. 45,469
600 Weyerhaeuser Co.* 41,250
191,544
Capital Goods - 6.01%
365 Armstrong World Industries, Inc.* 21,102
600 Cooper Industries, Inc. 31,200
800 Grainger (W.W.), Inc.* 43,050
800 Snap-On, Inc.* 28,950
124,302
Consumer Cyclical - 15.11%
600 American Greetings Corp.* 18,075
800 Block (H&R), Inc. 40,000
1,000 Dillards, Inc. 35,125
600 Donnelley (R.R.) & Sons Co.* 22,238
600 Genuine Parts Co.* 21,000
475 Knight Ridder, Inc. 26,095
800 Limited, Inc. 36,300
800 Pharmacia & Upjohn, Inc.* 45,450
2,400 Stride Rite Corp.* 24,750
1,300 TJX Co., Inc.* 43,306
312,339
Consumer Staples - 19.96%
600 Alza Corp.* 30,525
500 Amgen, Inc.* 30,437
200 Anheuser-Busch Companies, Inc.* 14,188
1,800 Archer-Daniels-Midland Co.* 27,787
800 Bard (C.R.), Inc.* 38,250
1,800 Bob Evans Farms, Inc.* 35,775
1,000 Covance, Inc.* 23,937
600 Darden Restaurants, Inc.* 13,088
600 International Flavors & Fragrances, Inc. 26,625
500 Kimberly Clark Corp. 28,500
800 McDonalds Corp. 33,050
500 Merck & Co., Inc.* 37,000
1,600 Mylan Laboratories, Inc. 42,400
800 Pepsico, Inc. 30,950
412,512
Energy - 6.22%
800 Halliburton Co. 36,200
800 Kerr-McGee Corp. 40,150
1,600 Union Pacific Resources Group, Inc. 26,100
800 USX-Marathon Group* 26,050
128,500
Financial - 4.93%
800 Allstate Corp. 28,700
1,600 Firstmerit Corp. 44,900
540 Lincoln National Corp. Indiana* 28,249
101,849
Technology - 15.11%
800 Apple Computer, Inc.* 37,050
600 AT & T Corp. 33,488
500 Gateway, Inc.* 29,500
800 Intel Corp.* 47,600
330 International Business Machines Corp.* 42,652
800 Molex, Inc. 29,600
600 Motorola, Inc. 56,850
800 Novell, Inc.* 21,200
210 Sun Microsystems* 14,464
312,404
Transportation & Services - 4.42%
600 CNF Transportation, Inc.* 23,025
800 FDX Corp.* 43,400
800 Southwest Airlines Co.* 24,900
91,325
Utilities - 14.19%
600 Ameren Corp. 23,025
600 Bell Atlantic Corp.* 39,225
600 Bell South Corp. * 28,125
1,200 Entergy Corp.* 37,500
600 Florida Progress Corp. 24,787
210 GTE Corp. 15,907
600 SBC Communications, Inc.* 34,800
600 Scana Corp. 14,025
600 Texas Utilities Co.* 24,750
1,200 Williams Companies, Inc. 51,075
293,219
TOTAL COMMON STOCKS (Cost $1,936,608) - 95.22% 1,967,994
FACE MARKET
AMOUNT DESCRIPTION VALUE
REPURCHASE AGREEMENT (Cost $290,000) - 14.03%
$ 290,000 Northern Trust Co., 4.79%, due July 1, 1999
(Collateralized by U.S. Treasury Notes,
7.125%, due September 30, 1999) 290,000
TOTAL INVESTMENTS (Cost $2,226,608) - 109.25% 2,257,994
Other assets less liabilities - (9.25%) (191,154)
TOTAL NET ASSETS - 100.00%
(equivalent to $10.08 per share;
10,000,000 shares of $1.00 par value
capital shares authorized;
205,064 shares outstanding) $ 2,066,840
For federal income tax purposes, the identified cost of investments owned at
June 30, 1999, was $2,226,608.
Net unrealized appreciation for federal income tax purposes was $31,387,
which is comprised of unrealized appreciation of $69,745 and unrealized
depreciation of $38,358.
*Non-income producing security
See accompanying Notes to Financial Statements.
FINANCIAL STATEMENTS JUNE 30, 1999
<TABLE>
STATEMENTS OF ASSETS AND LIABILITIES
<CAPTION>
STOCK
STOCK SELECT
</CAPTION>
<S> <C> <C>
ASSETS:
Investment securities, at market value
(identified cost $125,635,466 and 2,226,608, respectively) $ 176,696,528 $ 2,257,994
Cash - 406
Dividends receivable 228,770 1,330
Interest receivable 11,536 -
Receivable for investments sold 8,246,845 70,175
Total assets 185,183,679 2,329,905
LIABILITIES:
Disbursements in excess of demand deposit cash 1,376,033 -
Payable for investment purchases 1,584,387 263,065
Total liabilities 2,960,420 263,065
NET ASSETS $ 182,223,259 2,066,840
NET ASSETS CONSIST OF:
Capital (capital stock and paid-in capital) $ 122,053,220 $ 2,023,933
Accumulated undistributed income:
Net investment income (78,521) 2,697
Net realized gain on investment transactions 9,187,498 8,823
Net unrealized appreciation on investments 51,061,062 31,387
NET ASSETS APPLICABLE TO OUTSTANDING SHARES $ 182,223,259 $ 2,066,840
Capital shares, $1.00 par value
Authorized 20,000,000 10,000,000
Outstanding 8,874,746 205,064
NET ASSET VALUE PER SHARE $ 20.53 $ 10.08
</TABLE>
See accompanying Notes to Financial Statements.
FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 1999, AND THE PERIOD MAY 17, 1999 (INCEPTION)
TO JUNE 30, 1999
<TABLE>
STATEMENTS OF OPERATIONS
<CAPTION>
STOCK
STOCK SELECT
</CAPTION>
<S> <C> <C>
INVESTMENT INCOME:
Income:
Dividends $ 3,266,362 $ 2,019
Interest 1,795,904 1,659
5,062,266 3,678
Expenses:
Management fees 1,553,871 981
Government fees 14,455 -
1,568,326 981
Net investment income 3,493,940 2,697
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain from investment transactions 15,649,630 8,823
Increase in net unrealized appreciation on investments 4,475,877 31,387
Net realized and unrealized gain on investments 20,125,507 40,210
Net increase in net assets resulting from operations $ 23,619,447 $ 42,907
</TABLE>
See accompanying Notes to Financial Statements.
FINANCIAL STATEMENTS
<TABLE>
STATEMENTS OF CHANGES IN NET ASSET
<CAPTION>
STOCK SELECT
FOR THE PERIOD
STOCK STOCK MAY 17, 1999
YEAR ENDED YEAR ENDED (INCEPTION) TO
JUNE 30, 1999 JUNE 30, 1998 JUNE 30, 1999
</CAPTION>
<S> <C> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income $ 3,493,940 $ 4,088,558 $ 2,697
Net realized gain from investment transactions 15,649,630 12,393,259 8,823
Increase in net unrealized appreciation on investments 4,475,877 11,624,376 31,387
Net increase in net assets resulting from operations 23,619,447 28,106,193 42,907
Net equalization included in the price
of shares issued and redeemed (183,501) (67,790) -
DISTRIBUTIONS TO SHAREHOLDERS FROM:*
Net investment income (3,667,370) (3,967,243) -
In excess of net investment income (78,521) -
Net realized gain from investment transactions (11,380,820) (10,321,119)
Decrease in net assets from distributions (15,126,711) (14,288,362) -
INCREASE (DECREASE) FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from 1,609,570, 1,294,080
and 210,685 shares sold, respectively 30,716,658 23,397,925 2,079,639
Net asset value of 369,217 and 509,805 shares
issued for reinvestment of distributions 7,133,312 11,487,515
37,849,970 34,885,440 2,079,639
Cost of 3,022,551, 2,399,568 and 5,621 shares
redeemed, respectively (58,614,795) (46,635,978) (55,706)
Net increase (decrease) in net assets
from capital share transactions (20,764,825) $ (11,750,538) 2,023,933
Net increase (decrease) in net assets (12,455,590) 1,999,503 2,066,840
NET ASSETS:
Beginning of year 194,678,849 192,679,346 -
End of year (including undistributed net investment income
of ($78,521), $356,931 and $2,697, respectively) $ 182,223,259 $ 194,678,849 $ 2,066,840
*Distributions to shareholders:
Income dividends per share $ 0.41 $ 0.40 $ -
Capital gains distribution per share $ 1.24 $ 1.04 $ -
</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. Its shares are currently
issued in two series (Stock and Stock Select) with each
series, in effect, representing a separate fund. 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 - Securities traded on a national securities
exchange are valued at the last reported sales price on the
last business day of the year or, if no sale was reported on
that date, at the average of the last reported bid and asked
prices. Securities traded over-the-counter are valued at the
average of the last reported bid and asked prices. Short-
term obligations are valued at amortized cost, which
approximates market value. Investment transactions are
recorded on the trade date. Interest income is recorded
daily. Dividend income 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.
Equalization - The Fund uses the accounting practice known
as equalization, by which a portion of the proceeds from
sales and costs of redemption of capital shares, equivalent
on a per share basis to the amount of undistributed net
investment income on the date of the transactions, is
credited or charged to undistributed income. As a result,
undistributed net investment income per share is unaffected
by sales or redemptions of capital shares.
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 year ended June 30, 1999
(excluding commercial paper, repurchase agreements and short-
term securities), were as follows:
Other than
U.S. Government U.S. Government
Stock Fund Securities Securities
Purchases $ 21,557,454 $ -
Proceeds from sales 48,455,131 -
Stock Select Fund
Purchases $ 1,998,372 $ -
Proceeds from sales 70,588 -
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.
FINANCIAL HIGHLIGHTS
<TABLE>
Per share income and capital changes for a share
outstanding throughout the period.
<CAPTION>
STOCK STOCK STOCK STOCK STOCK STOCK SELECT
1999 1998 1997 1996 1995 1999*
</CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Net assets, beginning of year $ 19.63 $ 18.33 $ 16.69 $ 16.36 $ 15.42 $ 10.00
Income from investment operations:
Net investment income 0.37 0.41 0.43 0.48 0.48 0.01
Net realized and unrealized
gains on securities 2.18 2.33 2.23 1.36 2.06 0.07
Total from investment operations 2.55 2.74 2.66 1.84 2.54 0.08
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 $ 10.08
Total return 14% 15% 16% 12% 17% 6%
Ratios/Supplemental Data
Net assets, end of year (in millions) $ 182 $ 195 $ 193 $ 171 $ 137 $ 2
Ratio of expenses to average net assets 0.87% 0.86% 0.86% 0.85% 0.86% 0.85%
Ratio of net investment income
to average net assets 1.93% 2.07% 2.48% 2.81% 3.01% 2.35%
Portfolio turnover rate 14% 10% 16% 28% 52% 7%
Average commission rate** $ .0489 $ .0450 $ .0468 $ .0501 - $ .0723
</TABLE>
*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.
**For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for security
trades on which commissions are charged. This amount may vary from period to
period and fund to fund depending on the mix of trades executed in various
markets where trading practices and commission rate structures may differ.
See accompanying Notes to Financial Statements.
INDEPENDENT ACCOUNTANTS' REPORT
To the Shareholders and Board of Directors of UMB Scout
Stock Fund, Inc.:
We have audited the accompanying statements of assets and
liabilities of UMB Scout Stock Fund, Inc., including the
statements of net assets, as of June 30, 1999, and the
related statements of operations, changes in net assets and
the financial highlights for the periods indicated thereon
(periods presented prior to June 30, 1996 were audited by
other independent accountants whose reports thereon
expressed unqualified opinions). These financial statements
and financial highlights are the responsibility of the
Company'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. Our
procedures included verification of securities owned as of
June 30, 1999, by confirmation, or by the application of
alternative auditing procedures with respect to unsettled
portfolio security transactions. An audit also includes
assessing the accounting principles used and significant
estimates made by management, as well as evaluating the
overall financial statement 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 UMB Scout Stock Fund,
Inc., as of June 30, 1999, the results of its operations,
the changes in its net assets and the financial highlights
for the periods indicated in the first paragraph, in
conformity with generally accepted accounting principles.
BAIRD, KURTZ & DOBSON
Kansas City, Missouri
July 24, 1999
This report has been prepared for the information of the
Shareholders of UMB Scout Stock 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
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 219757
Kansas City, MO 64121-9757
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.
JB22B(8/99) 508761
