UMB SCOUT FUNDS
WORLDWIDE FUND
QUARTERLY REPORT
SEPTEMBER 30, 1998
A no-load mutual fund that seeks favorable total return
by investing in established companies either located outside the U.S.
or whose principal business is carried on outside the country.
TO THE SHAREHOLDERS
The UMB Scout WorldWide Fund closed the quarter ended September 30,
1998, at $16.16 per share and had a total return (price change and
reinvested distributions) of -13.21% for the period. This result was
better than the average for comparable funds, as shown in the Lipper
Global Fund Index return of -14.47% and the Morgan Stanley EAFE Index of
- -14.15%. The Fund invests 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 Fund closed its fifth year in a turbulent quarter. There was
Russia's default on its debt, concern that Latin America may be the next
economic problem area, and the news that the Federal Reserve pressured
major bank and brokerage firms to bail out a major hedge fund. These
events took a toll on the Fund, although the comparison indexes show it
performed better than the average international fund.
The Fund ended the quarter with cash reserves of 27%, compared with 22%
on June 30 and 12% on March 31. We built these reserves because it was
difficult to find attractive stocks at the prices of that time. Price
changes have since prompted us to spend some of this cash.
The Fund has been heavily weighted toward Europe, which has shown more
stable economies and markets. This does not mean European stock prices
cannot go down; rather, it means they tend to be less volatile than the
emerging markets and Asia.
During the quarter, we added to our Latin American positions in natural
resource companies such as Aracruz Celulose, Sociedad Quimica Minera De
Chile, and YPF Sociedad Anonima. The market upheavals and the threat of
currency devaluation depressed these stock prices a great deal. We
believe the market risk is somewhat offset by the positive effects a
devaluation would bring to the natural resource, export-oriented
companies.
We also added to holdings of Telecomunicacoes Brasileiras (Telebras),
which is in the process of spinning off its 12 subsidiaries to
shareholders, much as was done with AT&T. At the same time, the
Brazilian government is selling its portion of these companies to
private investors. The Telebras ADR now trades on the New York Stock
Exchange under the symbol TBH. We exchanged our old Telebras ADRs for
the new "Holders," so named because they will hold the 12 Telebras
subsidiaries. We think the value of this package will be substantially
greater than the Telebras stock, but there is not enough information
available yet on the 12 subsidiaries to properly value them separately.
We have added two Japanese companies in the last few months: Takeda
Chemical and Kao, a producer of soaps and cosmetics. These investments
represent a shift from export-oriented companies such as Sony and Canon
to more stable, domestically oriented companies. Japan has tried to get
its economy going in recent years by increasing the money supply and
cheapening its currency, which would make exports less expensive and
thus more competitive. Much of the increased money supply came to the
U.S. to finance the purchase of government bonds by Japanese banks and
U.S. hedge funds, which did little to stimulate the domestic economy in
Japan. But recent efforts to solve problems in Japan's banking system,
which had restricted new lending, and the closure of some hedge fund
positions may free some money for domestic investment and growth.
We want to remind all shareholders that the Fund name is changing to UMB
Scout WorldWide Fund, Inc., effective October 31, 1998. However, the
ticker symbol will remain UMBWX.
We appreciate your interest and participation in UMB Scout WorldWide
Fund and welcome your questions and comments.
Sincerely,
/s/James L. Moffett
James L. Moffett
UMB Investment Advisors
COMPARATIVE RATES OF RETURN
as of September 30, 1998
2 3/4 Years 3 3/4 Years 4 3/4 Years
UMB Scout WorldWide Fund 13.84% 14.06% 11.82%
Lipper Global Fund Index* 9.83% 10.93% 8.03%
MSCI EAFE Index* 2.86% 5.02% 5.61%
UMB Scout WorldWide Fund's average annual compound returns for 1 year, 3
years, 5 Years and the life of the fund for periods ended September 30,
1998, are -0.85%, 13.30%, 12.38% and 12.32%, respectively. Inception -
September 14, 1993.
Performance data contained in this report are for past periods only.
Past performance is not predictive of future results. 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.
* Unmanaged index of stocks, bonds or mutual funds (there are no direct
investments or fees in these indices).
TOP TEN EQUITY HOLDINGS
Market Percent
Value (000's) of Total
Imperial Oil Ltd. $ 2,566 3.18%
Nokia, CP ADS, Pfd. 2,134 2.65%
Aegon N.V. 1,879 2.33%
SAP A.G. 1,843 2.28%
YPF Sociedad Anonima 1,820 2.26%
Elan Corp. PLC 1,657 2.05%
Takeda Chemical Inds. 1,609 1.99%
Repsol S.A. 1,477 1.83%
Vodafone Group 1,466 1.82%
Fuji Photo Film Ltd. 1,365 1.69%
Top 10 Equity Holdings Total: $ 17,816 22.08%
As of September 30, 1998, statement of assets.
COUNTRY DIVERSIFICATION - BAR CHART
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").
These shares involve investment risks, including the possible loss of
the principal invested.
FINANCIAL STATEMENTS
SEPTEMBER 30, 1998 (unaudited)
Statement of Net Assets
Market
Shares Company Value
COMMON STOCKS (ADR) - 76.56%
ARGENTINA - 2.26%
70,000 YPF Sociedad Anonima $ 1,820,000
AUSTRALIA - 2.88%
55,000 Amcor Ltd. 749,375
56,580 Broken Hill Proprietary Co. Ltd. 809,801
20,000 Coca-Cola Amatil Ltd. 105,396
19,380 Coles Myer Ltd. 655,286
2,319,858
AUSTRIA - 1.08%
9,700 OMV A.G. * 868,673
BELGIUM - 0.20%
2,500 Solvay NPV* 166,715
BRAZIL - 2.84%
176,000 Aracruz Celulose SA 1,199,000
15,540 Telecomunicacoes Brasileiras SA 1,094,599
2,293,599
CANADA - 5.27%
20,000 BCE Inc.* 558,750
28,500 Canadian Pacific Ltd.* 589,594
125,000 Imperial Oil Ltd. 2,566,250
7,200 Magna International Cl. A* 418,500
25,000 Prudential Steel Ltd. 117,935
4,251,029
CHILE - 2.32%
52,500 Embotelladora Andina SA De Chile 721,875
39,500 Sociedad Quimica Minera De Chile 1,150,438
1,872,313
DENMARK - 1.34%
17,800 Novo-Nordisk A.S. 1,068,000
FINLAND - 2.64%
27,200 Nokia, CP ADS, Pfd. 2,133,500
FRANCE - 4.80%
29,458 Alcatel Alsthom 500,786
1,090 Carrefour Supermarche, SA * 690,585
28,400 Rhone-Poulenc SA 1,185,700
12,200 Schlumberger Ltd. 613,813
14,035 Total SA 881,573
3,872,457
GERMANY - 7.18%
13,200 Daimler Benz A. G. 1,081,575
24,700 Dresdner Bank A.G. 919,218
27,000 Fresenius Medical Care ADR 460,687
8,500 Henkel KGAA, Pfd. * 617,912
4,140 SAP A.G.* 1,842,912
15,800 Siemens A.G. 872,549
5,794,853
IRELAND - 2.05%
23,000 Elan Corp. PLC 1,657,437
ITALY - 4.43%
24,960 Benetton Group S.p.A. 750,360
106,000 Luxottica Group S.p.A. 1,185,875
200,000 Parmalat Finanziaria S.p.A. 294,700
20,000 Telecom Italia S.p.A. 1,340,000
3,570,935
JAPAN - 9.22%
28,500 Canon Inc. 559,313
40,000 Fuji Photo Film Ltd. 1,365,000
18,000 Hitachi, Ltd. 780,750
12,400 Ito Yokado, Ltd. 582,800
37,000 Kao Corp. 592,562
11,000 Sony Corp. 756,250
60,000 Takeda Chemical Inds. 1,608,870
26,500 Toyota Motor Corp. 1,189,187
7,434,732
NETHERLANDS - 4.47%
24,123 Aegon N.V. 1,878,579
5,400 Akzo N.V. 189,675
17,708 Koninklijke Ahold N.V. 514,639
18,000 Polygram N.V. 1,021,500
3,604,393
NORWAY - 0.83%
18,555 Norsk Hydro A.S. 667,980
PORTUGAL - 1.64%
36,700 Portugal Telecom S.A. 1,321,200
SPAIN - 2.77%
35,000 Repsol S.A. 1,476,563
7,000 Telefonica De Espana S. A. 755,562
2,232,125
SWEDEN - 3.50%
39,750 Aktiebolaget Electrolux 1,031,016
52,000 Ericsson (L.M.) Telephone Co. C l. B 955,500
42,500 Svenska Cellulosa Aktiebol* 840,828
2,827,344
SWITZERLAND - 2.26%
4,280 ABB A.G. 434,396
8,650 Nestle S.A. 860,431
6,613 Novartis A. G. 530,019
1,824,846
UNITED KINGDOM - 11.87%
120,000 Bass Public Ltd. Co. CL B 609,852
71,428 Bass Public Ltd. Co. 870,529
22,969 Cadbury Schweppes Ltd. PLC 1,185,774
24,200 Carlton Communications PLC 819,775
40,000 Coca Cola Beverages PLC 91,084
15,979 Diageo PLC 579,239
13,173 Reuters Holdings PLC 655,357
62,425 Royal Bank of Scotland PLC * 710,765
18,000 SmithKline Beecham PLC 985,500
20,000 Unilever PLC 680,000
13,000 Vodafone Group 1,465,750
80,000 Waste Management International 920,000
9,573,625
UNITED STATES - 0.71%
8,000 Sprint Corp. * 576,000
TOTAL COMMON STOCKS (ADR) - 76.56% 61,751,614
<TABLE>
<CAPTION>
Face Market
Amount Description Value
</CAPTION>
<S> <C>
SHORT-TERM CORPORATE NOTES - 21.02%
$ 1,000,000 Amoco Co., 5.15%, due November 10, 1998 994,135
1,000,000 Chevron USA Inc., 5.53%, due October 2, 1998 999,693
1,000,000 Coca-Cola Co., 5.42%, due November 6, 1998 994,430
1,000,000 duPont (E.I.) deNemours & Co., 5.49%, due October 2, 1998 999,695
1,000,000 duPont (E.I.) deNemours & Co., 5.48%, due October 21, 1998 996,803
1,000,000 Gannett Inc., 5.48%, due October 23, 1998 996,499
1,000,000 General Mills Inc., 5.48%, due October 2, 1998 999,696
1,000,000 General RE Corp., 5.49%, due October 6, 1998 999,085
1,000,000 Heinz, (H.J.) & Co., 5.46%, due October 22, 1998 996,663
1,000,000 Hershey Foods Corp., 5.48%, due October 7, 1998 998,934
1,000,000 Lucent Technologies Inc., 5.46%, due October 16, 1998 997,573
1,000,000 Penney (J.C.) & Co., 5.52%, due October 5, 1998 999,233
1,000,000 Penney (J.C.) & Co., 5.22%, due November 30, 1998 991,155
1,000,000 PepsiCo, Inc., 5.30%, due October 14, 1998 997,939
1,000,000 Proctor & Gamble Co., 5.45%, due October 13, 1998 998,032
1,000,000 Times Mirror, 5.47%, due November 3, 1998 994,834
1,000,000 Toys `R' Us, 5.30%, due October 27, 1998 996,025
TOTAL SHORT-TERM CORPORATE NOTES - 21.02% 16,950,424
GOVERNMENT SPONSORED ENTERPRISES - 3.08%
1,000,000 Federal Home Loan Banks, 5.37%, due November 23, 1998 991,945
500,000 Federal Home Loan Mortgage Corp., 5.40%, due October 6, 1998 499,550
1,000,000 Federal Home Loan Mortgage Corp., 5.34%, due November 25, 1998 991,693
TOTAL GOVERNMENT SPONSORED ENTERPRISES - 3.08% 2,483,188
REPURCHASE AGREEMENT - 2.86%
2,310,000 Northern Trust Co., 5.35%, due October 1, 1998
(Collateralized by U.S. Treasury Notes, 5.875%, due March 31, 1999) 2,310,000
TOTAL INVESTMENTS - 103.52% $ 83,495,226
Other assets less liabilities - (3.52%) (2,841,310)
TOTAL NET ASSETS - 100.00%
(equivalent to $16.16 per share; 10,000,000 shares of $1.00 par value
capital shares authorized; 4,991,489 shares outstanding) $ 80,653,916
</TABLE>
ADR - American Depository Receipt
* Non ADR
This report has been prepared for the information of the Shareholders of
UMB 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 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
Regional Fund
WorldWide Fund
Capital Preservation Fund
Balanced Fund
Bond Fund
Kansas Tax-Exempt Bond Fund*
Money Market Fund
Tax-Free Money Market Fund
*Available in Kansas and Missouri only.
MANAGER AND INVESTMENT COUNSEL
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 410498
Kansas City, MO 64141-0498
TOLL FREE 800-996-2862
www.umb.com
"UMB" and "Scout" are registered service marks of UMB Financial
Corporation.
UMB Financial Corporation also claims service mark rights to the Scout
design.
