Scout SM
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.
Quarterly Report
March 31, 1998
TO THE SHAREHOLDERS
Scout WorldWide Fund rose to $18.27 per share from $16.02 per share,
providing a total return of 14.04% for the quarter ended March 31, 1998.
The Fund seeks a favorable return by investing in a diversified
portfolio of equity securities of established companies either located
outside the U.S. or whose primary business is done outside the country.
The Fund is designed for long-term investors who are able to accept the
risks of international investing.
The three major themes in international economics continued to play out
in the first quarter: Southeast Asia, Japan and the coming common
currency in Europe. The financial crisis in Southeast Asia has settled
down somewhat, although the long-range effects are yet to be felt. The
countries in this region are in severe recessions, but there are
considerable differences in how each government is responding. It will
take time to clarify these situations, and we do not think there is any
hurry to invest in Southeast Asia.
Japan got off to a good financial start as it tried to get the stock
market up for fiscal year-end (March 31) valuations. Much of the capital
in Japanese banks is represented by stocks, and the market needs to be
near 17,000 on the Nikkei 225 Index for the banks to meet international
solvency standards. The effort was fairly successful, but it did not
show any real change in Japan's approach to solving its economic
problems. We still think it is premature to increase our exposure to the
Japanese markets.
Europe is a very different story. The efforts toward a common currency
during the last few years seem to be succeeding. To meet the criteria
for convergence, the European countries have brought their budgets and
inflation under control. Economic activity seems to be increasing. The
Mediterranean countries are showing the most benefit: Italy, Spain and
Portugal. These countries have historically had higher inflation than
Germany, France and the Netherlands. A successful common currency and
the resulting lower inflation will lower financing costs dramatically,
which should provide a significant boost to their economies.
Most of the Fund's investments this quarter have been in these
Mediterranean countries. A new name in the portfolio is Portugal
Telecom, which is being privatized and is participating in Portugal's
growth. Fila, the Italian shoe and sportswear company, has returned to
the portfolio after a slowdown in earnings brought down the company's
stock from previously lofty levels.
Europe is often considered a mature, developed economy with limited
growth potential. But we think the restructuring necessary for Europe to
compete has just started and there is plenty of room for growth. The
region's stock markets have risen substantially since the first of the
year, however, so we must be cautious. The question is whether the
markets reflect Europe's improved prospects.
We appreciate your interest and participation in Scout WorldWide Fund,
and welcome your questions and comments.
Chart - Hypothetical Growth of $10,000
Chart - Comparative Rates of Return
2 1/4 Years 3 1/4 Years 4 1/4 Years
Scout WorldWide Fund 23.14% 20.47% 16.33%
Lipper Global Fund Index* 19.76% 17.96% 12.87%
MSCI EAFE Index* 10.22% 10.52% 9.89%
Scout WorldWide Fund's average annual compound returns for 1-, 5- and
10-year periods ended March 31, 1998, are 31.5%, 21.7% and 16.6%
respectively. Inception - September 14, 1993.
Performance data contained in this report are for past periods
only. Past performance is not predictive of future
performance. Investment return and share value will flucuate,
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.
*Unmanaged index of stocks, bonds, or mutual funds (there are no
direct investments or fees in these indicies).
Chart - Country Diversification
Chart - Top 10 Equity Holdings
Market Percent
Value (000's) of Total
Portugal Telecom S.A. $ 1,841 2.72%
SAP A.G. 1,648 2.43%
Luxittica Group S.p.A. 1,611 2.38%
Telecom Italia S.p.A. 1,589 2.34%
Elan Corp. PLC 1,486 2.19%
Novo-Nordsik A.S. 1,486 2.19%
Nokia, CP ADS, Pfd. 1,468 2.17%
Aegon N.V. 1,456 2.15%
Rhone-Poulec SA 1,431 2.11%
Bass Public Ltd. Co. 1,429 2.11%
Top 10 Equity Holdings Total: $ 15,445 22.79%
NOTE: All market values based on 3/31/98 statement of assets.
Sincerely,
/s/James L. Moffett
James L. Moffett
UMB Investment Advisors
FINANCIAL STATEMENTS
Statement of Net Assets
March 31, 1998 (unaudited)
Market
Shares Company Value
COMMON STOCKS (ADRs) - 88.62%
ARGENTINA - 1.00%
20,000 YPF Sociedad Anonima $ 680,000
AUSTRIA - 0.89%
4,700 OMV A.G.* 605,799
AUSTRALIA - 4.37%
40,000 Amcor Ltd. 700,000
56,580 Broken Hill Proprietary Co. Ltd. 1,170,499
20,000 Coca-Cola Amatil Ltd. 315,625
19,380 Coles Myer Ltd. 775,200
2,961,324
BELGIUM - 0.28%
2,500 Solvay NPV* 189,390
BRAZIL - 1.88%
24,000 Aracruz Celulose SA 360,000
7,040 Telecomunicacoes Brasileiras 913,880
1,273,880
CANADA - 4.55%
20,000 BCE, Inc.* 835,000
28,500 Canadian Pacific Ltd.* 840,750
15,000 Imperial Oil Ltd. 848,437
7,200 Magna International Cl. A* 561,150
3,085,337
CHILE - 1.79%
37,500 Embotelladora Andina SA De Chile 862,500
8,000 Sociedad Quimica Minera De Chile 352,000
1,214,500
DENMARK - 2.19%
17,800 Novo-Nordisk A.S. 1,486,300
FINLAND - 2.17%
13,600 Nokia, CP ADS, Pfd. 1,467,950
FRANCE - 7.32%
29,458 Alcatel Alsthom 1,119,404
1,090 Carrefour Supermarche, SA* 642,140
28,400 Rhone-Poulenc SA 1,430,650
12,200 Schlumberger Ltd. 924,150
14,035 Total SA 842,977
4,959,321
GERMANY - 10.28%
15,000 Daimler Benz A. G. 1,393,125
24,700 Dresdner Bank A.G. 1,124,586
27,000 Fresenius Medical Care ADR 621,000
8,500 Henkel KGAA, Pfd.* 612,219
13,000 Hoechst A.G. 510,250
4,140 SAP A.G.* 1,647,639
15,800 Siemens A.G. 1,057,698
6,966,517
IRELAND - 2.19%
23,000 Elan Corp. PLC 1,486,375
ITALY - 7.78%
24,960 Benetton Group S.p.A. 1,053,000
25,000 Fila Holding S.p.A. 585,937
17,200 Luxottica Group S.p.A. 1,611,425
200,000 Parmalat Finanziaria S.p.A. 430,080
20,000 Telecom Italia S.p.A. 1,588,750
5,269,192
JAPAN - 6.82%
28,500 Canon Inc. 650,156
20,000 Fuji Photo Film Ltd. 735,000
13,900 Hitachi, Ltd. 1,021,650
3,100 Ito Yokado, Ltd. 671,925
11,000 Sony Corp. 935,688
11,500 Toyota Motor Corp. 606,625
4,621,044
NETHERLANDS - 4.63%
12,000 Aegon N.V. 1,455,750
2,700 Akzo N.V. 275,062
17,361 Koninklijke Ahold N.V. 568,573
18,000 Polygram N.V. 834,750
3,134,135
NORWAY - 1.00%
13,555 Norsk Hydro A.S. 677,750
PORTUGAL - 2.72%
35,100 Portual Telecom S.A. 1,840,556
SPAIN - 2.94%
21,000 Repsol S.A. 1,068,375
7,000 Telefonica De Espana S. A. 925,750
1,994,125
SWEDEN - 5.49%
15,900 Aktiebolaget Electrolux 1,311,750
26,000 Ericsson (L.M.) Telephone Co. Cl. B 1,236,625
42,500 Svenska Cellulosa Aktiebol* 1,169,587
3,717,962
SWITZERLAND - 3.03%
4,280 ABB A.G. 639,551
8,650 Nestle S.A. 826,426
6,613 Novartis A. G. 585,178
2,051,155
UNITED KINGDOM - 14.50%
80,000 Bass Public Ltd. Co. CL B 131,288
71,428 Bass Public Ltd. Co. 1,428,560
22,969 Cadbury Schweppes Ltd. PLC 1,257,553
14,200 Carlton Communications PLC 568,887
15,979 Diageo PLC 775,980
13,173 Reuters Holdings PLC 850,482
62,425 Royal Bank of Scotland PLC * 970,097
18,000 SmithKline Beecham PLC 1,126,125
20,000 Unilever PLC 780,000
13,000 Vodafone Group 1,350,375
80,000 Waste Management International 590,000
9,829,347
UNITED STATES - 0.80%
8,000 Sprint Corp. * 541,500
TOTAL COMMON STOCKS (ADR's) - 88.62% 60,053,459
Face Market
Amount Description Value
SHORT-TERM CORPORATE NOTES - 10.30%
$ 500,000 Abbott Laboratories,
5.47%, due April 22, 1998 498,329
500,000 Archer-Daniels-Midland Co.,
5.47%, due April 1, 1998 499,924
500,000 Atlantic Richfield Co.,
5.51%, due April 28, 1998 497,857
500,000 Bell Atlantic Network Funding,
5.51%, due April 21, 1998 498,393
500,000 Deere & Co.,
5.53%, due April 8, 1998 499,386
1,000,000 Deere & Co.,
5.50%, due April 27 1998 995,875
500,000 Duke Energy,
5.48%, due April 17, 1998 498,706
500,000 Eastman Kodak Co.,
5.50%, due April 23, 1998 498,243
500,000 Heinz Co.,
5.49%, due May 13, 1998 496,721
500,000 Penny's (J.C.) Co.,
5.54%, due April 14, 1998 498,923
1,000,000 Proctor & Gamble Co.,
5.50%, due April 1, 1998 999,847
500,000 Texaco, Inc.,
5.51%, due April 14, 1998 498,929
TOTAL SHORT-TERM CORPORATE NOTES - 10.30% 6,981,133
GOVERNMENT SPONSORED ENTERPRISES - 1.46%
500,000 Federal National Mortgage Association,
5.43%, due April 29, 1998 497,813
500,000 Federal National Mortgage Association,
5.40%, due June 12, 1998 494,525
TOTAL GOVERNMENT SPONSORED ENTERPRISES - 1.46% 992,338
REPURCHASE AGREEMENT - 0.10%
65,000 Northern Trust Co.,
5.88%, due April 1, 1998
(Collateralized by U.S. Treasury Notes,
6.25%, due April 30, 2001) 65,000
TOTAL INVESTMENTS - 100.48% $ 68,091,930
Other assets less liabilities - (0.48%) (325,933)
TOTAL NET ASSETS - 100.00%
(equivalent to $18.27 per share;
10,000,000 shares of $1.00 par value
capital shares authorized;
3,709,243 shares outstanding) $ 67,765,997
ADR - American Depository Receipt
* Non ADR
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 (800) 996-2862
www.umb.com
JB25A 5/98
