UMB SCOUT FUNDS
REGIONAL FUND
(UMBHX)
SEMIANNUAL REPORT DECEMBER 31, 1999
A no-load mutual fund that seeks long-term growth
of both capital and income by investing
in smaller regional companies.
TO THE SHAREHOLDERS
The UMB Scout Regional Fund closed the year at $9.87 per
share and had a total return (adjusted for reinvested
dividend and capital gain distributions) of -1.66% for the
quarter. The Fund pursues an investment goal of long-term
growth of both capital and income by investing in smaller
companies in an eight-state region (Missouri, Kansas,
Arkansas, Oklahoma, Iowa, Nebraska, Colorado and Illinois).
While the final quarter of 1999 was one of recovery for the
major market indices, it continued to be two-tiered in
nature. Large capitalization technology stocks, which are
now heavily weighted in the major stock indices, continued
to dominate, as smaller capitalization, value-oriented
stocks were left behind. For the full year of 1999,
investors in UMB Scout Regional Fund earned +1.26%, which
was comparable to the Lipper Small Co. Fund Index of +1.32%.
While the technology stock "mania" has driven communication
and internet-related securities to unprecedented valuation
levels in relation to underlying fundamentals, the dearth of
investors in Midwestern small-cap value companies has sent
them in the opposite direction. This weakness in overall market
breadth has driven small-cap value stocks in the UMB Scout Regional
Fund portfolio to an aggregate price-to-earnings ratio of 15.7X,
price-to-book ratio of 2.6X and a dividend yield of 2.3%.
It is our opinion that this weakness in the broad market
will eventually be corrected - unless the mania-driven
areas, where stocks are measured at multiples to sales,
continue to run rampant. Keep in mind that historically, the
long term markets tend to correct these excesses and
fundamentals usually do win out. Stocks in the UMB Scout
Regional Fund are basically on the 50%-off bargain counter
compared to their large-cap counterparts.
Utility stocks, which represent about 15% of the portfolio,
continue to be negatively affected by the gradual rise in
interest rates. And energy stocks, which comprise about 10%
of the portfolio, are certainly not yet rising as fast as
the price of oil. However, in the latest quarter, we took
advantage of price weakness in other small-cap value stock
industries and added to existing positions in Deltic Timber,
Lee Enterprises, Leggett & Platt and Valmont Industries. It
is our belief that well-managed companies such as these,
purchased at attractive price levels, will provide rewarding
long-term returns for fund investors.
For the six months ended December 31, 1999, shareholders
received an ordinary income dividend of $.529 per share, a
short-term capital gain of $.01 per share, and a long-term
gain of $.47 per share.
Thank you for your continued support of the UMB Scout
Regional Fund. We welcome your questions and comments.
Sincerely,
/s/David B. Anderson
David B. Anderson
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 - FUND DIVERSIFICATION - UMB SCOUT REGIONAL FUND
(UMBHX)
TOP TEN EQUITY HOLDINGS
CHART - UMB Scout Regional Fund (UMBHX)
Market Percent
Value (000's) of Total
Instituform Technologies, Inc., CL. A $ 2,204 5.96%
MYR Group, Inc. 1,175 3.18%
Kerr-McGee Corp. 930 2.51%
Empire District Electric Co. 905 2.45%
Maverick Tube Corp. 864 2.34%
Alltel Corp. 827 2.24%
Murphy Oil Corp. 803 2.17%
CPI Corp. 790 2.13%
Lawson Products 694 1.88%
Clarcor, Inc. 675 1.82%
Top Ten Equity Holdings Total: $ 9,866* 26.67%
As of December 31, 1999, statement of assets. Subject to change.
*Market Values are rounded; may not equal total.
CHART - HYPOTHETICAL GROWTH OF $10,000 - UMB SCOUT REGIONAL
FUND (UMBHX)
CHART - COMPARATIVE RATES OF RETURN
UMB Scout Regional Fund (UMBHX)
as of December 31, 1999
1 Year 3 Years 5 Years 10 Years
UMB Scout Regional Fund 1.26% 6.26% 10.13% 7.94%
Lipper Small Cap Value* 1.32% 7.91% 12.90% 11.45%
Russell 2000* 21.26% 13.08% 16.69% 13.40%
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.
The Fund's investment objective was changed August 16, 1991.
*Unmanaged index of stocks, bonds or mutual funds (there are
no direct investments or fees in these indices).
CHART - HISTORICAL PER-SHARE RECORD
UMB Scout Regional Fund (UMBHX)
Income & Cumulative*
Net Short-Term Long-Term Value Per
Asset Gains Gains Share Plus
Value Distribution Distribution Distributions
12/31/86 $10.00 $ 0.08 $ - $10.08
12/31/87 9.87 0.63 - 10.58
12/31/88 8.67 0.72 - 10.10
12/31/89 8.32 0.60 - 10.36
12/31/90 7.61 0.64 - 10.28
12/31/91 8.30 0.29 - 11.26
12/31/92 9.09 0.12 - 12.17
12/31/93 9.49 0.14 - 12.70
12/31/94 9.20 0.20 0.15 12.77
12/31/95 10.11 0.33 0.57 14.57
12/31/96 10.43 0.23 0.69 15.81
12/31/97 11.89 0.26 0.63 18.16
12/31/98 10.46 0.24 0.74 17.71
12/31/99 9.87 0.16 0.56 17.84
*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
Market
Shares Company Value
COMMON STOCKS - 95.28%
Basic Materials - 10.19%
50,000 ACX Technologies $ 534,375
500 Brush Wellman, Inc. 8,406
20,000 Deltic Timber Corp. 437,500
25,000 Falcon Products, Inc. 215,625
40,000 Huntco, Inc. CL. A 127,500
40,020 Kinross Gold Corp. 75,038
21,000 Mallinckrodt Group, Inc. 668,063
3,003 Phelps Dodge Corp. 201,576
30,000 Republic Group, Inc. 453,750
40,000 Safety-Kleen Corp. 452,500
20,000 Sigma-Aldrich Corp. 601,250
3,775,583
Capital Goods - 21.37%
30,000 Atchison Casting Co. 273,750
25,000 Baldor Electric 453,125
53,240 BHA Group, Inc. 419,265
18,000 Butler Manufacturing Co. 401,625
35,000 Federal Signal Corp. 562,188
45,000 Harmon Industries, Inc. 545,625
15,000 Hon Industries, Inc. 329,063
78,000 Instituform Technologies, Inc., CL. A 2,203,500
100,000 Isco, Inc. 500,000
50,000 Layne Christensen Co. 362,500
4,000 MYR Group, Inc. 1,175,000
10,000 Noble Affiliates, Inc. 214,375
10,000 Paul Mueller Co. 288,750
12,000 Valmont Industries, Inc. 192,750
7,921,515
Consumer Cyclical - 19.23%
10,000 American Italian Pasta Co., CL. A 307,500
80,000 B.I., Inc. 610,000
20,000 Bandag, Inc. 500,000
10,000 Belden, Inc. 210,000
2,200 Bergen Brunswig Corp., CL. A 18,288
5,000 Block (H & R), Inc. 218,750
15,000 Boise Cascade Office Product 225,000
15,000 Brown Shoe Co. 211,875
30,000 Casey's General Stores, Inc. 313,125
37,500 Clarcor, Inc. 675,000
6,000 Dillards, Inc. 121,125
12,000 Donnelley (R.R.) & Sons 297,750
6,000 Esco Electronics Corp. 69,750
37,925 Flexsteel Industries, Inc. 507,247
30,000 Kellwood Co. 583,125
30,000 Lawson Products 693,750
14,650 Lee Enterprises, Inc. 467,884
20,000 Leggett & Platt, Inc. 428,750
30,000 Lonestar Steakhouse and Saloon, Inc. 267,656
6,500 Maytag Corp. 312,000
20,000 Racing Champions Corp. 88,750
7,127,325
Consumer Staples - 13.58%
25,000 Alberto-Culver Co., CL. A 543,750
45,000 Angelica Corp. 438,750
50,000 Beverly Enterprises, Inc. 218,750
21,000 Brunswick Corp. 467,250
35,000 CPI Corp. 789,688
12,000 Caremark Rx, Inc. 60,750
35,000 I B P, Inc. 630,000
11,000 JPS Packaging Co. 32,656
25,000 Midwest Grain Products, Inc. 184,375
70,000 NPC International, Inc., CL. B 551,250
100,000 Sanfilippo (John B & Son), Inc. 400,000
95,000 TCBY Enterprises, Inc. 362,188
21,930 VICORP Restaurants, Inc. 353,621
5,033,028
Energy - 11.54%
25,000 Helmerich & Payne, Inc. 545,313
15,000 Kerr-McGee Corp. 930,000
35,000 Maverick Tube Corp. 864,063
14,000 Murphy Oil Corp. 803,250
85,000 Southwestern Energy Co. 557,813
5,000 St. Mary Land & Exploration Co. 123,750
20,000 Ultramar Diamond Shamrock Corp. 453,750
4,277,938
Financial - 1.47%
14,850 Brenton Banks, Inc. 150,356
2,625 Commerce Bancshares, Inc. 88,922
1,000 Kansas City Life Insurance Co. 33,750
20,000 Old Republic International Corp. 272,500
545,528
Technology - 2.48%
40,000 Exabyte Corp. 300,000
50,000 Fansteel, Inc. 193,750
7,500 Molex, Inc. 425,156
918,906
Transportation & Services - 0.95%
25,000 Werner Enterprises, Inc. 351,563
Utilities - 14.48%
20,000 Aliant Energy Corp. 550,000
10,000 Alltel Corp. 826,875
12,000 Ameren Corp. 393,000
40,000 Empire District Electric Co. 905,000
10,000 Kansas City Power & Light Co. 220,625
30,000 Laclede Gas Co. 648,750
4,000 Midamerican Energy Holdings Co. 134,750
25,000 St. Joseph Light & Power Co. 512,500
16,000 Utilicorp United, Inc. 311,000
15,000 Western Resources, Inc. 255,000
20,000 Williams Companies, Inc. 611,250
5,368,750
TOTAL COMMON STOCK - 95.28% 35,320,135
REPURCHASE AGREEMENT - 4.51%
$1,670,000 Northern Trust Co., 3.50%, due January 3, 2000
(Collateralized by U.S. Treasury Notes,
5.375%, due July 31, 2000) 1,670,000
TOTAL INVESTMENTS - 99.79% 36,990,135
Other assets less liabilities - (0.45%) (79,275)
TOTAL NET ASSETS - 100.00%
(equivalent to $9.87 per share; 10,000,000 shares of
$1.00 par value capital shares authorized;
3,745,341.836 shares outstanding) $ 37,069,409
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 $35,831,928) $36,990,134
Dividends receivable 73,530
Cash (99,989)
Total assets 36,963,675
NET ASSETS $36,963,675
NET ASSETS CONSIST OF:
Capital (capital stock and paid-in capital) $34,771,222
Accumulated undistributed income:
Net investment income 38,297
Net realized gain on investment transactions 995,950
Net unrealized appreciation on investments 1,158,206
NET ASSETS APPLICABLE TO OUTSTANDING SHARES $36,963,675
Capital shares, $1.00 par value
Authorized 10,000,000
Outstanding 3,745,342
NET ASSET VALUE PER SHARE $ 9.87
See accompanying Notes to Financial Statements.
FINANCIAL STATEMENTS SIX MONTHS ENDED DECEMBER 31, 1999 (UNAUDITED)
STATEMENT OF OPERATIONS
INVESTMENT INCOME:
Income:
Dividends $ 382,878
Interest 51,632
434,510
Expenses:
Management fees 170,086
Government fees 10,986
181,072
Net investment income 253,438
REALIZED and unrealized LOSS ON INVESTMENTS:
Net realized gain (loss) from investment transactions 1,898,298
Decrease in net unrealized appreciation on investments (5,906,284)
Net realized and unrealized loss on investments (4,007,986)
Net decrease in net assets resulting
from operations $(3,754,548)
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 $ 253,438 $ 774,041
Net realized gain from investment transactions 1,898,298 1,168,515
Increase (decrease) in net unrealized
appreciation on investments (5,906,284) (542,505)
Net increase (decrease) in net assets
resulting from operations (3,754,548) 1,400,051
DISTRIBUTIONS TO SHAREHOLDERS FROM:*
Net investment income (175,099) (857,792)
In excess of net investment income - (40,042)
Net realized gain (loss) from investment
transactions (1,728,090) (2,153,193)
Decrease in net assets from distributions (1,903,189) (3,051,027)
DECREASE FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from 295,138 and 1,231,832 shares sold 3,122,717 12,724,738
Net asset value of 132,980 and 98,713 shares
issued for reinvestment of distributions 1,276,608 1,054,588
4,399,325 13,779,326
Cost of 576,788 and 1,681,834 shares redeemed (6,137,224) (17,677,888)
Net decrease in net assets from
capital share transactions (1,737,899) (3,898,562)
Net increase (decrease) in net assets (7,395,636) (5,549,538)
NET ASSETS:
Beginning of period 44,359,311 49,908,849
End of period (including undistributed net
investment income of $40,041 and ($40,042),
respectively) $36,963,675 $44,359,311
*Distributions to shareholders:
Income dividends per share $ 0.05 $ 0.22
Capital gains distribution per share $ 0.48 $ 0.52
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. 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 six months ended
December 31, 1999 (excluding repurchase agreements and short-
term securities), were as follows:
Other than
U.S. Government U.S. Government
Securities Securities
Purchases $6,265,018 $ 491,339
Proceeds from sales 9,282,717 1,497,747
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 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 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.
