SCOUT
REGIONAL
FUND
A no-load mutual fund
that seeks long-term
growth of both capital
and income by investing
in smaller regional
companies.
Annual Report
June 30, 1997
TO THE SHAREHOLDERS
For the fiscal year ended June 30, 1997, Scout Regional Fund earned a total
return (price change and reinvested distributions) of 15.32%, in comparison
with the unmanaged Value Line Composite Index and Lipper Small Company Fund
Index, which had returns of 20.63% and 5.60%, respectively, for the same
period.
During the last quarter of Scout Regional Fund's fiscal year, large
capitalization stocks continued to boost the major market indices to new
highs. On April 1, the Standard & Poor's 500 index was barely 2% above its
December 31, 1996, level. Continued concern about fast economic growth and
fears about inflation caused a market sell-off in mid-April. The drop of 9.64%
from the mid-February high approached a "correction," which is defined as a
decline of 10% or more. However, that move was only a stumble in the 2 1/2-
year-old bull market as it rebounded from the April lows to new highs in June.
The rise in the market was fueled by the strength of the economy, low
inflation, higher than expected profit growth and the continuing flood of
dollars into retirement funds and other investment portfolios. As has been the
case for most of this bull market, the large capitalization stocks that
dominate the indices outperformed the broad market. Merger and acquisition
activity has been very prevalent and has driven market prices up as well.
Small capitalization stocks also began to participate in the market in a more
positive way in May after suffering comparatively more in April. Investors
finally seemed to have rediscovered the more appealing relative valuations of
these stocks, which peaked in early 1994 and have fluctuated down ever since
in comparison with the S & P 500.
As the chart shows, the current price/earnings ratio for small capitalization
stocks of 17.2 is nearly the same as in June 1983, while the P/E ratio for
large capitalization stocks has increased dramatically from 12.9 to 19.9,
underlining their current overvaluation.
After the May rally, small capitalization stocks are still selling at a
discount to large capitalization stocks despite their historically higher
growth rate.
If small capitalization stocks continue to come into favor, the Scout Regional
Fund should benefit. In the event of a market correction, the Fund's value
management style, high diversification, cash reserve and underweighting in
overvalued economic sectors should reduce the downside risk.
For the six months ended June 30, 1997, shareholders received an ordinary
income dividend of $.08 per share, a short term capital gain of $.01 per
share, and a long-term capital gain of $.20 per share.
For corporate shareholders, 65.46% of ordinary income distributions qualify
for the corporate dividends received deduction.
We appreciate you as a valued shareholder of Scout Regional Fund and
continually welcome your questions or comments.
Sincerely,
/s/David B. Anderson
David B. Anderson
UMB Investment Advisors
Top 10 Equity Holdings
Market Percent
Value of Total
Layne Christensen Co. $ 1,327,500 2.74%
Maverick Tube Corp. 1,125,000 2.32%
MYR Group Inc. 900,000 1.86%
B H A Group Inc. 895,400 1.85%
NPC International Inc. 871,875 1.80%
Outboard Marine Corp. 834,250 1.72%
Kellwood Co. 832,500 1.72%
CPI Corp. 798,000 1.65%
Aliant Communications Inc. 780,000 1.61%
Bandag Inc. 735,000 1.51%
Top 10 Equity Holdings Total: $9,099,525 18.78%
NOTE: All market values based on 6/30/97 statement of assets.
Largest 3000 U.S. Equities
MEDIAN VALUATION
Market Number Market
Cap. of Cap. Current June 1983**
Decile Companies Range P/E P/E
1 300 >$5.4B 19.9x 12.9x
2 300 $2.4-5.4B 19.7 13.0
3 300 $1.4-2.4B 18.4 13.3
4 300 $900M-1.4B 18.6 12.9
5 300 $650-900M 19.0 13.4
6 300 $480-650M 19.3 13.9
7 300 $370-480M 19.4 14.5
8 300 $300-370M 18.6 15.0
9 300 $220-300M 18.0 16.5
10 300 $170-220M 17.2 17.0
TOTALS 3000 B=Billion **Small Cap Peak
M=Million
Top 100 Companies: 20.4x The Leuthold Group
Bottom 200 Companies: 18.7x Copyright (c) 1997
Based on Trailing 12 Months Operating Earnings Since 1993
GRAPH - PIE CHART
Equity 80%
Cash & Equivalents 20%
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 insured by
the Federal Deposit Insurance Corporation or any other applicable deposit
insurance. These shares involve investment risks, including the possible loss
of the principal amount invested.
GRAPH - Scout Regional Fund versus Russell 2000 and Value Line Composite
Scout Regional Fund's average annual componded returns for one year,
five years, and since the change in the Fund's investment objectives on
August 16, 1991, were 15.32%, 10.91%, and 10.27%, 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, redemption value may be more or less than
original cost.
FINANCIAL STATEMENTS
Statement of Net Assets
June 30, 1997
<TABLE>
<CAPTION>
Market
Shares Company Cost Value
</CAPTION>
<S> <C> <C>
COMMON STOCKS - 80.04%
Basic Materials - 9.53%
15,000 ACX Technologies* $ 227,625 $ 337,500
50,000 Amax Gold, Inc.* 372,842 306,250
25,000 Cyprus Amax Minerals Co. 616,050 612,500
40,000 Huntco, Inc. Cl. A 681,210 570,000
25,000 Laclede Steel Co.* 307,465 93,750
55,000 Lawter International, Inc. 667,302 694,375
18,000 Mallinckrodt Group, Inc. 615,297 684,000
18,500 Republic Group, Inc. 221,580 372,312
42,000 Safety-Kleen Corp. 692,610 708,750
7,000 Sigma-Aldrich Corp. 138,687 245,438
4,540,668 4,624,875
Capital Goods - 12.95%
15,000 Atchison Casting Co.* 208,125 249,375
15,000 Baldor Electric 291,375 443,437
48,400 BHA Group, Inc. 631,108 895,400
60,000 Green (A.P.) Industries, Inc. 521,783 562,500
30,000 Harmon Industries, Inc. 499,800 645,000
75,000 Instituform Technologies Inc., Cl. A* 671,124 459,375
64,150 Isco, Inc. 673,325 561,313
60,000 Layne Christensen Co.* 365,014 1,327,500
50,000 MYR Group, Inc. 458,966 900,000
5,000 Paul Mueller Co. 152,913 190,625
10,000 Trion, Inc. 55,000 46,250
4,528,533 6,280,775
Consumer Cyclical - 15.76%
65,000 B.I. Inc.* 331,000 487,500
15,000 Bandag, Inc. 799,667 735,000
10,000 Block (H & R), Inc. 261,750 322,500
15,000 Brown Group, Inc. 414,162 280,312
15,000 Caseys General Stores, Inc. 226,406 322,969
25,000 Clarcor, Inc. 465,645 618,750
6,000 Dillards, Inc. 150,936 207,750
15,000 Donnelley (R.R.) & Sons 486,915 549,375
20,000 First Alert, Inc.* 132,500 56,250
37,925 Flexsteel Industries, Inc. 403,326 445,619
30,000 Kellwood Co. 521,748 832,500
25,000 Lawson Products 536,250 675,000
10,000 Lee Enterprises, Inc. 208,498 263,750
24,000 Maytag Corp. 356,950 627,000
35,000 O'Sullivan Industries, Inc.* 269,875 579,688
18,000 Rival Co. 261,000 265,500
60,000 Stimsonite Corp.* 509,199 375,000
6,335,827 7,644,463
Consumer Staples - 15.90%
20,000 Alberto-Culver Co. Cl. A 237,790 466,250
40,000 Angelica Corp. 902,176 700,000
20,000 Beverly Enterprises, Inc. 223,500 325,000
21,000 Brunswick Corp. 339,760 656,250
5,000 Celestial Seasonings, Inc.* 96,250 125,000
38,000 CPI Corp. 605,043 798,000
14,000 Medpartners, Inc.* 200,337 302,750
25,000 Midwest Grain Products, Inc.* 495,000 331,250
75,000 NPC International, Inc. Cl. B* 441,181 871,875
47,000 Outboard Marine Corp. 799,015 834,250
80,000 Sanfilippo (John B & Son), Inc.* 768,235 550,000
22,000 Sealright Co. 336,375 264,000
34,000 Stuart Entertainment, Inc.* 231,107 97,750
85,000 TCBY Enterprises, Inc. 394,112 536,562
41,300 VICORP Restaurants, Inc.* 598,750 495,600
50,000 Winnebago Industries, Inc. 393,250 359,375
7,061,881 7,713,912
Energy - 7.88%
2,500 Deltic Timber Corp. 39,294 73,281
7,500 Helmerich & Payne, Inc. 188,375 432,188
10,000 Kerr-McGee Corp. 556,766 633,750
30,000 Maverick Tube Corp.* 220,699 1,125,000
11,000 Murphy Oil Corp. 392,564 536,250
50,000 Southwestern Energy Co. 712,580 650,000
5,000 St. Mary Land & Exploration Co. 60,625 175,625
20,000 Total Petroleum North America Ltd. 188,500 197,500
2,359,403 3,823,594
Financial - 1.56%
11,000 Brenton Banks $ 168,182 $ 302,500
1,260 Commerce Bancshares, Inc. 29,796 57,015
700 Kansas City Life Insurance Co. 25,954 55,300
7,500 Old Republic International Corp. 158,812 227,344
2,000 Reinsurance Group of America, Inc. 53,350 115,000
436,094 757,159
Technology - 2.42%
3,500 DII Group Inc.* 64,531 154,000
35,000 Exabyte Corp.* 514,594 448,438
40,000 Fansteel, Inc.* 272,178 297,500
7,500 Molex, Inc. 179,946 273,750
1,031,249 1,173,688
Transportation & Service - 0.90%
22,500 Werner Enterprises, Inc. 288,750 435,937
Utilities - 13.14%
40,000 Aliant Communications, Inc. 611,362 780,000
8,000 Calenergy, Inc.* 126,930 304,000
40,000 Empire District Electric Co. 741,090 692,500
15,000 IES Industries, Inc. 359,313 442,500
15,000 Interstate Power Co. 422,780 429,375
7,000 Kansas City Power & Light Co. 147,920 199,938
30,000 Laclede Gas Co. 618,955 652,500
15,000 Mapco, Inc. 406,541 472,500
30,000 St. Joseph Light & Power Co. 418,625 491,250
15,000 Union Electric Co. 564,500 565,312
24,000 Utilicorp United, Inc. 646,143 699,000
20,000 Western Resources, Inc. 587,282 648,750
5,651,441 6,377,625
TOTAL COMMON STOCK - 80.04% 32,233,846 38,832,028
</TABLE>
<TABLE>
<CAPTION>
Face Market
Amount Description Cost Value
</CAPTION>
<S> <C> <C>
CONVERTIBLE CORPORATE BONDS - 0.78%
$ 371,000 Beverly Enterprises, Inc. CV. Sub. Deb., 7.625%
due March 15, 2003 $ 364,043 $ 376,565
SHORT-TERM CORPORATE NOTES - 14.39%
500,000 Abbott Laboratories, 5.46%, due July 14, 1997 498,939 498,939
500,000 American Tel. & Telegraph, 5.47%, due July 22, 1997 498,329 498,329
500,000 Anheuser-Busch Cos., 5.43%, due July 8, 1997 499,397 499,397
500,000 Campbell Soup Co., 5.48%, due July 25, 1997 498,097 498,097
500,000 du Pont (E.I.) de Nemours & Co., 5.52%, due July 18, 1997 498,620 498,620
500,000 Dun & Bradstreet Corp., 5.60%, due July 23, 1997 498,211 498,211
500,000 Gannett, Inc., 5.50%, due July 21, 1997 498,396 498,396
500,000 Motorola, Inc., 5.46%, due July 8, 1997 499,393 499,393
500,000 Philip Morris Cos., 5.54%, due July 2, 1997 499,846 499,846
500,000 Progress Capital Co., 5.55%, due July 8 1997 499,383 499,383
500,000 R. R. Donnelly & Co., 5.53%, due July 8, 1997 499,386 499,386
500,000 Southwestern Bell Telephone, 5.47%, due July 10, 1997 499,240 499,240
500,000 Wisconsin Electric Power Co., 5.50%, due July 25, 1997 498,090 498,090
500,000 Xerox Corp., 5.52%, due July 25, 1997 498,083 498,083
TOTAL SHORT-TERM CORPORATE NOTES - 14.39% 6,983,410 6,983,410
GOVERNMENT SPONSORED ENTERPRISES - 3.08%
500,000 Federal Home Loan Mortgage Company, 5.42%, due July 3, 1997 499,774 499,774
500,000 Federal Home Loan Mortgage Company, 5.48%, due July 15, 1997 498,858 498,858
500,000 Federal National Mortgage Association, 5.50%,
due September 5, 1997 494,882 494,882
TOTAL GOVERNMENT SPONSORED ENTERPRISES - 3.08% 1,493,514 1,493,514
REPURCHASE AGREEMENT - 1.59%
770,000 Northern Trust Co., 5.80%, due July 1, 1997
(Collateralized by U.S. Treasury Notes,
5.625%, due January 31, 1998) $ 770,000 $ 770,000
TOTAL INVESTMENTS - 99.87% $ 41,844,813 48,455,517
Other assets less liabilities - 0.13% 61,503
TOTAL NET ASSETS - 100.00%
(equivalent to $11.21 per share;
10,000,000 shares of $1.00 par value
value capital shares authorized;
4,329,214 shares outstanding) $ 48,517,020
</TABLE>
For federal income tax purposes, the identified cost of investments owned
at June 30, 1997 was $41,844,813.
Net unrealized appreciation for federal income tax purposes was $6,610,704,
which is comprised of unrealized appreciation of $9,063,406 and
unrealized depreciation of $2,452,702.
*Non-income producing security
See accompanying Notes to Financial Statements.
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Statement of Assets and Liabilities
June 30, 1997
</CAPTION>
<S> <C>
ASSETS:
Investment securities, at market value (identified cost $41,844,813) $ 48,455,517
Dividends receivable 72,737
Interest receivable 8,250
Total assets 48,536,504
LIABILITIES:
Disbursements in excess of demand deposit cash 19,484
Total liabilities 19,484
NET ASSETS $ 48,517,020
NET ASSETS CONSIST OF:
Capital (capital stock and paid-in capital) $ 41,357,433
Accumulated undistributed income:
Net investment income 166,958
Net realized gain on investment transactions 381,925
Net unrealized appreciation on investments 6,610,704
NET ASSETS APPLICABLE TO OUTSTANDING SHARES $ 48,517,020
Capital shares, $1.00 par value
Authorized 10,000,000
Outstanding 4,329,214
NET ASSET VALUE PER SHARE $ 11.21
See accompanying Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL STATEMENTS
Statement of Operations
Year Ended June 30, 1997
</CAPTION>
<S> <C>
INVESTMENT INCOME:
Income:
Dividends $ 792,580
Interest 570,767
1,363,347
Expenses:
Management fees 388,605
Government fees 11,941
400,546
Net investment income 962,801
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Realized gain from investment transactions:
Proceeds from sales of investments 6,983,561
Cost of investments sold 4,913,728
Net realized gain from investment transactions 2,069,833
Unrealized appreciation on investments:
Beginning of year 2,926,042
End of year 6,610,704
Increase in net unrealized appreciation on investments 3,684,662
Net realized and unrealized gain on investments 5,754,495
Net increase in net assets resulting from operations $ 6,717,296
See accompanying Notes to Financial Statements.
</TABLE>
FINANCIAL STATEMENTS
Statements of Changes in Net Assets
For the Year Ended June 30, 1997 and the Period of January 1, 1996
to June 30, 1996
<TABLE>
<CAPTION>
July 1, 1996 January 1, 1996
to June 30, to June 30,
1997 1996
</CAPTION>
<S> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income $ 962,801 389,089
Net realized gain from investment transactions 2,069,833 1,587,947
Increase in net unrealized appreciation on investments 3,684,662 964,658
Net increase in net assets resulting from operations 6,717,296 2,941,694
DISTRIBUTIONS TO SHAREHOLDERS FROM:*
Net investment income (794,637) (397,201)
Net realized gain from investment transactions (2,332,298) (1,512,894)
Decrease in net assets from distributions (3,126,935) (1,910,095)
INCREASE FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from 1,395,435 and 812,923 shares sold 14,709,173 8,467,334
Net asset value of 176,123 and 115,106 shares issued for
reinvestment of distributions 1,875,551 1,190,193
16,584,724 9,657,527
Cost of 1,278,012 and 469,494 shares redeemed (13,559,225) (4,955,644)
Net increase in net assets from capital share transactions 3,025,499 4,701,883
Net increase in net assets 6,615,860 5,733,482
NET ASSETS:
Beginning of year 41,901,160 36,167,678
End of year (including undistributed net investment
income [loss] of $166,958 and ($1,206), respectively) $ 48,517,020 $ 41,901,160
*Distributions to shareholders:
Income dividends per share $ 0.18 $ 0.10
Capital gains distribution per share $ 0.53 $ 0.40
See accompanying Notes to Financial Statements.
</TABLE>
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. Effective on April 24,
1996, the Fund's shareholders approved a change in the fiscal year-end. A
summary of significant accounting policies that the Fund uses in the
preparation of its financial statements follows. 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 period 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.
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, 1997 (excluding repurchase
agreements and short-term securities), were as follows:
Other than
U.S. Government U.S. Government
Securities Securities
Purchases $ 5,890,649 $ -
Proceeds from sales 6,983,561 -
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
Per share income and capital changes for a share
outstanding throughout the period.
<TABLE>
<CAPTION>
Year Ended January 1, 1996 Years Ended
June 30, to June 30, December 31,
1997 1996* 1995 1994 1993
</CAPTION>
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 10.38 $ 10.11 $ 9.20 $ 9.49 $ 9.09
Income from investment operations:
Net investment income 0.22 0.10 0.19 0.18 0.12
Net realized and unrealized gains
or (losses) on securities 1.32 0.67 1.62 (0.12) 0.42
Total from investment operations 1.54 0.77 1.81 0.06 0.54
Distributions from:
Net investment income (0.18) (0.10) (0.19) (0.18) (0.14)
Net realized gain on investment transactions (0.53) (0.40) (0.71) (0.17) -
Total distributions (0.71) (0.50) (0.90) (0.35) (0.14)
Net asset value, end of period $ 11.21 $ 10.38 $ 10.11 $ 9.20 $ 9.49
Total return 15% 15% 20% 1% 6%
Ratios/Supplemental Data
Net assets, end of period (in millions) $ 49 $ 42 $ 36 $ 28 $ 25
Ratio of expenses to average net assets 0.87% 0.86% 0.89% 0.91% 0.92%
Ratio of net investment income to average net assets 2.09% 1.94% 1.95% 1.95% 1.81%
Portfolio turnover rate 20% 29% 37% 27% 17%
Average commission rate** $ .0496 $ .0477 - - -
</TABLE>
*Ratios for this 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
Scout Regional Fund, Inc.:
We have audited the accompanying statement of assets and liabilities of Scout
Regional Fund, Inc., including the statement of net assets, as of June 30,
1997, and the related statement of operations, statements of changes in net
assets and the financial highlights for the periods indicated thereon. 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, 1997, 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 manage-ment, 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
Scout Regional Fund, Inc. as of June 30, 1997, the results of its operations,
the changes in its net assets and the financial highlights for the periods
indicated thereon in conformity with generally accepted accounting principles.
BAIRD, KURTZ & DOBSON
Kansas City, Missouri
July 22, 1997
This report has been prepared for the information of the Shareholders of Scout
Regional 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.
BOARD OF DIRECTORS
AND OFFICERS
Board of Directors
Larry D. Armel
William E. Hoffman, D.D.S.
Eric T. Jager
Stephen F. Rose
Stuart Wien
Officers
Larry D. Armel, President
P. Bradley Adams, Vice President & Treasurer
Elizabeth L. Allwood, Vice President
Michael A. Brummel, Vice President
Martin A. Cramer, Vice President & Secretary
John G. Dyer, Vice President
Constance E. Martin, Vice President
Investment Counsel
UMB Bank, n.a., Kansas City, Missouri
Auditors
Baird, Kurtz & Dobson, Kansas City, Missouri
Legal Counsel
Stradley, Ronon, Stevens & Young,
Philadelphia, Pennsylvania
John G. Dyer, Kansas City, Missouri
Custodian
UMB Bank, n.a., Kansas City, Missouri
JONES & BABSON
MUTUAL FUNDS
P.O. Box 410498
Kansas City, MO 64141-0498
TOLL-FREE 1-800-996-2862
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 41844813
<INVESTMENTS-AT-VALUE> 48455517
<RECEIVABLES> 80987
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 48536504
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 19484
<TOTAL-LIABILITIES> 19484
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 41357433
<SHARES-COMMON-STOCK> 4329214
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<ACCUMULATED-NII-CURRENT> 166958
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</TABLE>
