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, 1997
TO THE SHAREHOLDERS
Scout WorldWide Fund earned a total return (price change and reinvested
distributions) of -2.77% for the quarter ended December 31, 1997. This
compares with the unmanaged Standard & Poor's 500 Index, which earned 2.87%,
and the Morgan Stanley Capital International EAFE (Europe, Australasia and
Far East) Index, which was down 7.77% for the same period.
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 the original cost. Along with the potential for higher returns,
international investments carry some additional risks from currency
fluctuations, economic and political factors, as well as differences in
accounting.
One of the critical variables in international investing is the choice
of countries. Since its inception the Fund has avoided Southeast Asia,
with the exception of a little exposure to Hong Kong which was sold in
June 1997. This decision reflects in part a skeptical attitude toward
the emerging markets in general, where we think the risks are not fully
appreciated and the rewards are overvalued.
Southeast Asia is the home of the "Tiger" countries which have been
growing very rapidly. Most of these countries were following sound
fiscal policies, with budgets close to balance and inflation under
control. But this was done within the context of an economic and
political structure controlled by an elite few. They also followed a
common practice of pegging their currencies to the U.S. Dollar. The rise
of the Dollar over the last two years meant these countries lost ground
to Asian competitors who devalued their currencies, such as China and
Japan. At the same time, their prosperity lead to an increase in
consumer goods imports.
These pressures were compounded by a flood of investment from foreign
investors and banks for building projects, or for lending to the local
banks who in turn lent to investors in these projects. Behind these
activities was an implicit guarantee from the national governments that
these banks could not fail. The economic bubble and subsequent collapse
are not surprising from controlled economies. The structure which
created these situations will probably make for a slow resolution of the
problems, so the Fund is in no hurry to invest in the area.
Japan is an interesting variation on this theme. Japan has been in a
recession since the early 1990s and has been slow to adapt to changes in
its economic situation. The Fund has maintained about 10% in Japanese
stocks, mainly in export-oriented companies which benefit from the weak
Yen. We are reluctant to increase this position until we see signs of
real change in the Japanese system.
We have added several new stocks to the Fund. Embotelladora Andina and
Coca Cola Amatil are Coca Cola bottlers. Andina is a Chilean company
with operations in Chile, Argentina and Brazil. Amatil has operations in
Australia, parts of Southeast Asia and Eastern Europe. These stocks are
fairly expensive, but should participate in Coke's long-term growth.
Andina's ADRs are listed on the New York Stock Exchange (NYSE) and
Amatil's ADRs trade on the NASDAQ.
Fresenius Medical Care is a German company that provides kidney dialysis
services and equipment around the world. The U.S. portion of the company
was part of W.R. Grace. These ADRs trade on the NYSE.
Parmalat is Italy's largest food company and the world's largest dairy
company. Its most interesting product is high-temperature pasteurized
milk which is distributed in aseptically packaged containers. Milk
processed and sold this way has a shelf life of weeks without
refrigeration, and demand is growing in many emerging countries.
The Fund now also has stock in Diageo, but it is not a new investment.
Diageo is a new name reflecting the merger of Grand Metropolitan, in
which we were invested, and Guinness. In addition to alcoholic
beverages, the company runs Burger King and Pillsbury.
For the six months ended December 31, 1997, shareholders received an
ordinary income dividend of $.12 per share, a short-term capital gain of
$.06 per share and a long-term capital gain of $.16 per share.
For corporate shareholders, 1.46% of ordinary income distributions
qualify for the corporate dividends received deduction.
We appreciate your interest and participation in Scout WorldWide Fund,
and welcome your questions and comments.
Sincerely,
/s/James L. Moffett
James L. Moffett
UMB Investment Advisors
TOP 10 EQUITY HOLDINGS
Market Percent
Value (000's) of Total
Novo-Nordisk A.S. $1,288 2.26%
Telecom Italia S.p.A. 1,280 2.25%
Rhone-Poulenc SA 1,260 2.21%
SAP A.G. 1,256 2.21%
Bass Public Ltd. Co. 1,240 2.18%
Elan Corp. PLC 1,177 2.07%
Dresdner Bank A.G. 1,140 2.00%
Aktiebolaget Electrolux 1,097 1.93%
Daimler Benz A. G. 1.084 1.90%
Aegon N.V. 1,076 1.89%
Top 10 Equity Holdings Total: $11,898 20.90%
NOTE: All market values based on 12/31/97 statement of assets.
GRAPH - Country Diversification
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 ("FDIC").
These shares involve investment risks, including the possible loss of
the principal invested.
FINANCIAL STATEMENTS
Statement of Net Assets
December 31, 1997 (unaudited)
Market
Shares Company Value
COMMON STOCKS (ADR's) - 86.49%
ARGENTINA - 1.20%
20,000 YPF Sociedad Anonima $ 683,750
AUSTRIA - 1.14%
4,700 OMV A.G. * 650,154
AUSTRALIA - 4.89%
40,000 Amcor Ltd. 680,000
56,580 Broken Hill Proprietary Co. Ltd. 1,046,730
20,000 Coca-Cola Amatil Ltd. 295,000
19,380 Coles Myer Ltd. 755,820
2,777,550
BELGIUM - 0.28%
2,500 Solvay NPV* 157,220
BRAZIL - 2.05%
24,000 Aracruz Celulose SA 345,000
7,040 Telecomunicacoes Brasileiras 819,720
1,164,720
CANADA - 5.02%
20,000 BCE Inc.* 666,250
28,500 Canadian Pacific Ltd.* 776,625
15,000 Imperial Oil Ltd. 959,062
7,200 Magna International Cl. A* 452,250
2,854,187
CHILE - 1.99%
37,500 Embotelladora Andina SA De Chile 780,469
8,000 Sociedad Quimica Minera De Chile 352,000
1,132,469
DENMARK - 2.27%
17,800 Novo-Nordisk A.S. 1,288,275
FINLAND - 1.68%
13,600 Nokia, CP ADS, Pfd. 952,000
FRANCE - 7.63%
29,458 Alcatel Alsthom 745,656
1,090 Carrefour Supermarche, SA * 568,929
28,400 Rhone-Poulenc SA 1,260,250
12,200 Schlumberger Ltd. 982,100
14,035 Total SA 778,943
4,335,878
GERMANY - 10.54%
15,000 Daimler Benz A. G. 1,083,750
24,700 Dresdner Bank A.G. 1,140,184
27,000 Fresenius Medical Care ADR 587,250
8,500 Henkel KGAA, Pfd. * 531,828
13,000 Hoechst A.G. 455,813
4,140 SAP A.G.* 1,256,015
15,800 Siemens A.G. 935,850
5,990,690
IRELAND - 2.07%
23,000 Elan Corp. PLC 1,177,312
ITALY - 6.08%
24,960 Benetton Group S.p.A. 814,320
17,200 Luxottica Group S.p.A. 1,075,000
200,000 Parmalat Finanziaria S.p.A. 286,180
20,000 Telecom Italia S.p.A. 1,280,000
3,455,500
JAPAN - 8.24%
5,700 Canon Inc. 665,475
20,000 Fuji Photo Film Ltd. 763,750
13,900 Hitachi, Ltd. 961,706
3,100 Ito Yokado, Ltd. 631,044
11,000 Sony Corp. 998,250
11,500 Toyota Motor Corp. 659,813
4,680,038
NETHERLANDS - 4.61%
12,000 Aegon N.V. 1,075,500
2,700 Akzo N.V. 234,563
17,361 Koninklijke Ahold N.V. 453,556
18,000 Polygram N.V. 858,375
2,621,994
NORWAY - 0.32%
3,555 Norsk Hydro A.S. 181,305
SPAIN - 2.70%
21,000 Repsol S.A. 893,812
7,000 Telefonica De Espana S. A. 637,438
1,531,250
SWEDEN - 5.32%
15,900 Aktiebolaget Electrolux 1,097,100
26,000 Ericsson (L.M.) Telephone Co. Cl. B 970,125
42,500 Svenska Cellulosa Aktiebol* 956,122
3,023,347
SWITZERLAND - 3.04%
4,280 ABB A.G. 538,466
8,650 Nestle S.A. 649,098
6,613 Novartis A. G. 537,273
1,724,837
UNITED KINGDOM - 14.59%
40,000 Bass Public Ltd. Co. 1,240,000
22,969 Cadbury Schweppes Ltd. PLC 950,342
14,200 Carlton Communications PLC 553,800
18,495 Diageo PLC 700,498
15,200 Reuters Holdings PLC 1,007,000
61,222 Royal Bank of Scotland PLC * 778,677
18,000 SmithKline Beecham PLC 925,875
20,000 Unilever PLC 690,000
13,000 Vodafone Group 942,500
80,000 Waste Management International 500,000
8,288,692
UNITED STATES - 0.82%
8,000 Sprint Corp. * 469,000
TOTAL COMMON STOCKS (ADR's) - 86.49% 49,140,168
ADR - American Depository Receipt
*Non ADR
Face Market
Amount Description Value
SHORT-TERM CORPORATE NOTES - 8.77%
$ 500,000 BP America,
5.87%, due January 20, 1998 $ 498,369
500,000 Dun & Bradstreet Corp.,
5.78%, due January 21, 1998 498,314
500,000 Emerson Electric Co.,
5.63%, due January 29, 1998 497,732
500,000 Emerson Electric Co.,
5.75%, due February 10, 1998 496,726
500,000 General Mills Inc.,
5.77%, due January 5, 1998 499,599
1,000,000 Penney's (J.C.) Co.,
5.78%, due January 13, 1998 997,913
500,000 Proctor & Gamble Co.,
5.62%, due January 14, 1998 498,907
500,000 Progress Cap Holdings Inc.,
5.74%, due January 6, 1998 499,522
500,000 Wisconsin Electric Power Co.,
5.77%, due January 16, 1998 498,718
TOTAL SHORT-TERM CORPORATE NOTES - 8.77% 4,985,800
GOVERNMENT SPONSORED ENTERPRISES - 1.73%
500,000 Federal National Mortgage Association,
5.60%, due March 13, 1998 494,400
500,000 Federal National Mortgage Association,
5.43%, due April 29, 1998 491,025
TOTAL GOVERNMENT SPONSORED ENTERPRISES - 1.73% 985,425
REPURCHASE AGREEMENT - 3.20%
1,820,000 Northern Trust Co.,
6.40%, due January 2, 1998
(Collateralized by U.S. Treasury Notes,
5.875%, due February 28, 1999) 1,820,000
TOTAL INVESTMENTS - 100.20% $ 56,931,393
Other assets less liabilities - (0.20%) (113,339)
TOTAL NET ASSETS - 100.00%
(equivalent to $16.02 per share;
10,000,000 shares of $1.00 par value
capital shares authorized;
3,547,683 shares outstanding) $ 56,818,054
See accompanying Notes to Financial Statements.
Statement of Assets and Liabilities
December 31, 1997 (unaudited)
ASSETS:
Investment securities, at market value
(identified cost $43,801,485) $ 56,931,393
Cash (179,480)
Dividends receivable 66,141
Interest receivable -
Securities sold receivable -
Total assets 56,818,054
LIABILITIES:
Payable for investments purchased -
Total liabilities -
NET ASSETS $ 56,818,054
NET ASSETS CONSIST OF:
Capital (capital stock and paid-in surplus of capital) $ 43,686,464
Accumulated undistributed income:
Undistributed net investment income (5,933)
Accumulated net realized gain on investment transactions 7,615
Net unrealized appreciation in value of investments 13,129,908
NET ASSETS APPLICABLE TO OUTSTANDING SHARES $ 56,818,054
Capital shares, $1.00 par value
Authorized 10,000,000
Outstanding 3,547,683
NET ASSET VALUE PER SHARE $ 16.02
See accompanying Notes to Financial Statements.
Statement of Operations
Six Months Ended December 31, 1997 (unaudited)
INVESTMENT INCOME:
Income:
Dividends $ 258,460
Interest 268,447
526,907
Expenses:
Withholding fees 12,552
Management fees (Note 3) 231,920
Registration fees and other expenses 8,420
252,892
Net investment income 274,015
REALIZED AND UNREALIZED GAIN ON INVESTMENTS (Note 1):
Realized gain from investment transactions
(excluding commercial paper
and repurchase agreements):
Proceeds from sales of investments 314,612
Cost of investments sold 162,507
Net realized gain from investment transactions 152,105
Unrealized appreciation of investments:
Beginning of period 12,526,280
End of period 13,129,908
Increase in net unrealized appreciation of investments 603,628
Net gain on investments 755,733
Net increase in net assets resulting from operations $ 1,029,748
See accompanying Notes to Financial Statements.
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended
December 31, 1997 Year Ended
(unaudited) June 30, 1997
</CAPTION>
<S> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income $ 274,015 $ 778,492
Net realized gain from investment transactions 152,105 778,561
Increase (decrease) in net unrealized appreciation
on investments 603,628 8,504,504
Net increase in net assets resulting from operations 1,029,748 10,061,557
DISTRIBUTIONS TO SHAREHOLDERS FROM:*
Net investment income (430,176) (644,654)
Net realized gain from investment transactions (776,136) (182,240)
Total distributions to shareholders (1,206,312) (826,894)
INCREASE FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from 992,931 and 1,292,511 shares sold 16,226,049 17,963,717
Net asset value of 5,511 and 35,885 shares issued for
reinvestment of distributions 85,865 525,289
16,311,914 18,489,006
Cost of 435,395 and 714,440 shares redeemed (7,078,385) (10,542,570)
Net increase from capital share transactions 9,233,529 7,946,436
Total increase in net assets 9,056,965 17,181,099
NET ASSETS:
Beginning of period 47,761,089 30,579,990
End of period (including undistributed net investment
income of $7,615 and $157,825) $ 56,818,054 $ 47,761,089
*Distributions to shareholders:
Income dividends per share $ .123 $ .21
Capital gains distribution per share $ .222 $ .07
</TABLE>
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, 1997
(excluding repurchase agreements and short-term securities), are as
follows:
Other than
U.S. Government U.S. Government
Securities Securities
Purchases $ 7,888,237 $ -
Proceeds from sales 314,612 -
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
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
www.umb.com
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