SCOUT
WORLDWIDE
FUND
A no-load mutual fund
that seeks a favorable
total return by investing
in established companies
either in the U.S. or
whose principal business
is carried on outside
the country.
Semiannual Report
December 31, 1996
TO THE SHAREHOLDERS
For the six months ended December 31, 1996, the net asset value of the Scout
WorldWide Fund rose from $12.90 to $13.94, and paid dividends of $0.16. The
total return (price change and reinvested distributions) for the period was
9.30%. Over the same period the international markets as measured by the
unmanaged Morgan Stanley Capital International (MSCI) EAFE (Europe, Asia and
Far East) index gained 1.46% and the unmanaged Standard & Poor's 500 index
earned 11.68%.
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, and redemption value may be more or less than
original cost.
While we read of the strong dollar, this effect applies mostly to Japan and
the countries tied to the German mark. A number of the countries represented
in our Fund had currencies that rose against the dollar (e.g., Australia,
Italy and Great Britain) which helped those investments.
The decline of the Japanese yen reflects the weakness of the Japanese economy
and the efforts of the government of the central bank to try to stimulate
their economy. So far these efforts have been to no avail as structural
problems, like rigid labor policies and real estate loans in their banking
system, have yet to be resolved.
International investing had a better year in 1996 than the widely used EAFE
would indicate because of high weighting in Japan. The problems outlined above
have put pressure on the Tokyo stock market, especially towards the end of the
year. We have responded to these challenges by underweighting Japan in our
portfolio, and by investing in the export sector which benefited from the weak
yen, producing a modest gain in the Japanese portion of the portfolio.
Several names are new to the portfolio: Hoechst, Imperial Oil and Novartis.
Novartis, a Swiss company, is literally a new name, not a new holding, being
the product of the merger of Sandoz and Ciba-Geigy, which we held. The merged
company is shedding its traditional chemical operations and becoming one of
the largest drug companies in the world.
Hoechst should be familiar to stockholders in the Kansas City area as the
German company which bought Marion Merrill Dow several years ago. This
acquisition was a step in Hoechst's transition from a chemical company to a
drug company. Several steps remain for the transition to be complete.
Corporate reorganizations appear to be a trend which has just started in
Germany.
Imperial Oil is the largest Canadian oil company and is 70% owned by Exxon.
The company is restricted by its charter to doing business in Canada. Because
it does not see good investments for its cash flow in Canada at this time it
is spending its excess cash flow buying back shares of its own stock.
We appreciate your interest and participation in Scout WorldWide Fund.
Top 10 Equity Holdings
Market Percent
Value of Total
Sony Corp. $ 721,875 2.14%
Siemens A G 730,750 2.16%
Rhone Poulenc S A 792,675 2.35%
Repsol S A 800,625 2.37%
Nokia Corp. 887,425 2.63%
Ericsson L M Telephone Co. 784,888 2.32%
Elan Corp Ltd . 764,750 2.27%
Canadian Pacific Co. Ltd. 755,250 2.24%
Cadbury Schweppes Ltd. 761,198 2.27%
Broken Hill Proprietary Co. 750,885 2.22%
Top 10 Equity Holdings Total: $7,750,321 22.97%
NOTE: All market values based on 12/31/96 statement of assets.
GRAPH -- Sector Diversification
Sincerely,
/s/James L. Moffett
James L. Moffett
UMB Investment Advisors
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.
FINANCIAL STATEMENTS
Statement of Net Assets
December 31, 1996 (unaudited)
Market
Shares Company Value
COMMON STOCKS (ADR's) - 79.20%
AUSTRIA - 1.03%
3,700 OMV A.G. * 416,780
AUSTRALIA - 3.43%
26,580 Broken Hill Proprietary Co. Ltd. 750,885
19,380 Coles Myer Ltd. 639,540
1,390,425
BELGIUM - 0.38%
250 Solvay NPV* 152,883
CANADA - 6.28%
10,000 BCE Inc.* 477,500
28,500 Canadian Pacific Ltd.* 755,250
15,000 Imperial Oil Ltd 705,000
7,200 Magna International Cl. A* 401,400
20,000 Total Petroleum North America LTD * 207,500
2,546,650
DENMARK - 3.12%
17,800 Novo-Nordisk A.S. 832,150
16,000 Tele Danmark A.S. 436,000
1,268,150
FINLAND - 2.19%
15,400 Nokia, CP ADS, Pfd. 887,425
FRANCE - 7.68%
29,458 Alcatel Alsthom 471,328
585 Carrefour Supermarche, SA * 379,892
6,638 Elf Aquitaine 300,370
23,400 Rhone-Poulenc SA 792,675
6,100 Schlumberger Ltd. 609,237
14,035 Total SA 564,909
3,118,411
GERMANY - 9.80%
11,000 Bayer A.G. 448,248
10,000 Daimler Benz A. G. 685,000
24,700 Dresdner Bank A.G. 738,863
8,500 Henkel KGAA, Pfd. * 426,348
8,000 Hoechst A.G. 370,000
4,140 SAP A.G.* 562,796
15,800 Siemens A.G. 743,295
3,974,550
HONG KONG - 0.99%
90,000 China Light & Power Ltd. 400,257
IRELAND - 1.88%
23,000 Elan Corp. PLC 764,750
ITALY - 3.52%
24,000 Benetton Group S.p.A. 597,000
3,200 Luxottica Group S.p.A. 166,400
15,000 STET Societa Finanziaria 665,625
1,429,025
JAPAN - 8.01%
5,700 Canon Inc. 627,000
16,000 Fuji Photo Film Ltd. 528,000
1,900 Hitachi, Ltd. 175,750
3,100 Ito Yokado, Ltd. 537,075
11,000 Sony Corp. 721,875
11,500 Toyota Motor Corp. 661,250
3,250,950
NETHERLANDS - 3.51%
2,700 Akzo N.V. 182,250
5,618 Koninklijke Ahold N.V. 346,911
18,000 Polygram N.V. 895,500
1,424,661
NEW ZEALAND - 1.00%
5,000 Telecom Corp. of New Zealand Ltd 405,000
NORWAY - 0.47%
3,555 Norsk Hydro A.S. 190,637
SPAIN - 3.17%
21,000 Repsol S.A. 800,625
7,000 Telefonica De Espana S. A. 484,750
1,285,375
SWEDEN - 3.78%
8,600 Aktiebolaget Electrolux 496,650
26,000 Ericsson (L.M.) Telephone Co. Cl. B 784,875
12,500 Svenska Cellulosa Aktiebol* 253,550
1,535,075
SWITZERLAND - 3.38%
4,280 ABB A.G. 530,728
8,650 Nestle S.A. 462,868
6,613 Novartis A. G. 377,506
1,371,102
UNITED KINGDOM - 14.79%
10,000 Bass Public Ltd. Co. 277,500
18,300 British Gas PLC 697,687
22,482 Cadbury Schweppes Ltd. PLC 767,198
14,200 Carlton Communications PLC 631,900
18,097 Grand Metropolitan Ltd. PLC 572,318
3,200 Reuters Holdings PLC 244,800
60,610 Royal Bank of Scotland PLC * 582,917
9,000 SmithKline Beecham PLC 612,000
5,000 Unilever PLC 487,500
13,000 Vodafone Group 537,875
75,000 Waste Management International 590,625
6,002,320
UNITED STATES - 0.79%
8,000 Sprint Corp. * 319,000
TOTAL COMMON STOCKS (ADR's) - 79.20% 32,133,426
ADR - American Depository Receipt
* Non ADR
Face Market
Amount Description Value
SHORT-TERM CORPORATE NOTES - 14.74%
$ 500,000 American Tel & Telegraph Co.,
5.23%, due January 14, 1997 498,983
500,000 Disney Walt Co.,
5.33%, due January 8, 1997 499,408
500,000 Dover Corp.,
5.54%, due January 17, 1997 498,691
500,000 du Pont (E.I.) de Nemours & Co.,
5.30%, due February 4, 1997 497,424
500,000 Flour Corp.,
5.39%, due January 21, 1997 498,428
500,000 International Business Machines Corp.,
5.30%, due February 14, 1997 496,687
500,000 Kellogg Co.,
5.33%, due January 3, 1997 499,778
500,000 Motorola Inc.,
5.30%, due February 14, 1997 496,687
500,000 Penny (J.C.) Funding Corp.,
5.34%, due January 21, 1997 498,443
500,000 Philip Morris Cos., Inc.,
5.25%, due January 7, 1997 499,489
500,000 Snap On Tools Corp.,
5.60%, due January 21, 1997 498,367
500,000 Xerox Corp.,
5.50%, due January 28, 1997 497,861
TOTAL SHORT-TERM CORPORATE NOTES - 14.74% 5,980,246
GOVERNMENT SPONSORED ENTERPRISES - 3.66%
500,000 Federal Home Loan Banks,
5.25%, due April 17, 1997 492,198
500,000 Federal National Mortgage Association,
5.41%, due January 17, 1997 498,723
500,000 Federal National Mortgage Association,
5.27%, due March 4, 1997 495,389
TOTAL GOVERNMENT SPONSORED ENTERPRISES - 3.66% 1,486,310
REPURCHASE AGREEMENT - 7.85%
3,185,000 Northern Trust Co.,
6.375%, due January 2, 1997
(Collateralized by U.S. Treasury Notes,
6.50%, due May 15, 1997) 3,185,000
TOTAL INVESTMENTS - 105.45% $ 42,784,982
Other assets less liabilities - (5.45%) (2,212,748)
TOTAL NET ASSETS - 100.00%
(equivalent to $13.94 per share;
10,000,000 shares of $1.00 par value
capital shares authorized;
2,910,195 shares outstanding) $ 40,572,234
See accompanying Notes to Financial Statements.
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
December 31, 1996 (unaudited)
ASSETS:
Investment securities, at market value
(identified cost $35,980,987) $ 42,784,982
Cash (460,995)
Dividends receivable 41,390
Interest receivable -
Securities sold receivable -
Total assets 42,365,377
LIABILITIES:
Payable for investments purchased $ 1,793,143
Total liabilities 1,793,143
NET ASSETS $ 40,572,234
NET ASSETS CONSIST OF:
Capital (capital stock and paid-in surplus of capital) $ 33,735,305
Accumulated undistributed income:
Undistributed net investment income 7,457
Accumulated net realized gain on investment transactions 51,103
Net unrealized appreciation in value of investments 6,778,369
NET ASSETS APPLICABLE TO OUTSTANDING SHARES $ 40,572,234
Capital shares, $1.00 par value
Authorized 10,000,000
Outstanding 2,910,195
NET ASSET VALUE PER SHARE $ 13.94
See accompanying Notes to Financial Statements.
FINANCIAL STATEMENTS
Statement of Operations
Six Months Ended December 31, 1996 (unaudited)
INVESTMENT INCOME:
Income:
Dividends $ 221,717
Interest 214,046
435,763
Expenses:
Withholding fees 29,656
Management fees (Note 3) 146,280
Registration fees and other expenses 8,017
183,953
Net investment income 251,810
REALIZED AND UNREALIZED GAIN ON INVESTMENTS (Note 1):
Realized gain from investment transactions
(excluding commercial paper
and repurchase agreements):
Proceeds from sales of investments 1,649,746
Cost of investments sold 1,451,727
Net realized gain from investment transactions 198,019
Unrealized appreciation of investments:
Beginning of period 4,021,776
End of period 6,778,369
Increase in net unrealized appreciation
of investments 2,756,593
Net gain on investments 2,954,612
Net increase in net assets resulting
from operations $ 3,206,422
See accompanying Notes to Financial Statements.
FINANCIAL STATEMENTS
Statements of Changes in Net Assets
Six Months Ended January 1, 1996
December 31, 1996 to
(unaudited) June 30, 1996
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income $ 251,810 $ 336,121
Net realized gain from investment transactions 198,019 105,839
Increase (decrease) in net unrealized
appreciation on investments 2,756,593 1,724,420
Net increase in net assets resulting
from operations 3,206,422 2,166,380
DISTRIBUTIONS TO SHAREHOLDERS FROM:*
Net investment income (260,743) (321,601)
Net realized gain from investment transactions (182,240) (97,877)
Total distributions to shareholders (442,983) (419,478)
INCREASE FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from 704,722
and 517,218 shares sold 9,434,837 6,520,012
Net asset value of 21,007
and 20,521 shares issued for
reinvestment of distributions 289,473 264,093
9,724,310 6,784,105
Cost of 186,215 and 133,153 shares redeemed (2,495,505) (1,704,205)
Net increase from capital share transactions 7,228,805 5,079,900
Total increase in net assets 9,992,244 6,826,802
NET ASSETS:
Beginning of period 30,579,990 23,753,188
End of period (including undistributed
net investment income of $7,457
and $51,013) $ 40,572,234 $ 30,579,990
*Distributions to shareholders:
Income dividends per share $ .093 $ 0.14
Capital gains distribution per share $ .065 $ 0.04
See accompanying Notes to Financial Statements.
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - The Fund was
capitalized on March 5, 1993 and initial public offering was made on September
14, 1993. 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. Investment transactions are recorded on the date securities are
purchased or sold. 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. Short-term investments are valued at
cost with interest income recorded on the accrual basis.
Federal Income Taxes - The Fund has complied with the Internal Revenue Code
requirements applicable to regulated investment companies and will distribute
all income to its shareholders. Therefore, no Federal income tax provision is
required.
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, 1996 (excluding
repurchase agreements and short-term securities), are as follows:
Other than
U.S. Government U.S. Government
Securities Securities
Purchases $ 7,491,795 $ 0,000,000
Proceeds from sales 1,649,746 0,000,000
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 shareholders 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 they are 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 Scout
WorldWide 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
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