UMB SCOUT FUNDS
WorldWide fund
(UMBWX)
Semiannual Report December 31, 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 December 31, 1998, at
$18.55 per share and had a total return (price change and reinvested
distributions) of 15.68% for the period. 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 such as political instability and currency risk.
The international market outlook today differs sharply from that of three
months ago. During the third quarter of 1998, the financial markets
contracted sharply following turmoil in the Russian economy. This event
caused money to flee the other emerging markets for the safety of U.S.
government bonds and caused stock markets around the world to fall.
The picture became brighter as the year closed. Russia has faded as a source
of economic concern, international monetary authorities have created a loan
package to support the Brazilian currency, and the U.S. stock market has
recovered to its old high prices following interest rate cuts by the Federal
Reserve.
The economic upheaval originated in the collapse of Southeast Asia markets in
mid-1997, which cut the demand for major commodities. Prices for oil, for
example, fell to $11 per barrel from $21 per barrel. Many of the countries
that had difficulties last summer derive most of their export earnings from
commodities.
Monetary authorities have shown particular concern about assisting the
Brazilian economy. If Brazil were to collapse, they fear the rest of Latin
America would follow, and this in turn would hurt U.S. and other economic
interests. But this theory begs the question of whether Brazil's currency is
overvalued or whether Brazil's fiscal problems have been solved.
We think the risk of currency devaluation in Brazil is fairly high, but we
are maintaining the Fund's investments in Telebras Holders and Aracruz
Cellulosa. Telebras Holders represent a package of 12 telephone companies and
should do well even if the economy weakens. Aracruz Cellulosa exports pulp
and also should benefit if the currency is devalued.
The Fund has approximately 10% of its investments in Japan, and we continue
to watch for signs of real change in the economic situation there. We have
yet to see anything that would warrant increasing our holdings at this time.
Western Europe still is the largest portion of the Fund's investments. The
introduction of the Euro, the new currency for most of Western Europe, will
make international business more open and competitive, and that should help
growth in the long term. In the immediate future, competitive pressures are
likely to lead to consolidation and mergers in European companies. It should
be noted that individuals will not have actual currency denominated in the
Euro for several years. Companies that do business in multiple countries,
however, will be able to consolidate accounting and banking functions via the
Euro, rather than keep separate accounts for each currency.
For the six months ended December 31, 1998, shareholders received an ordinary
income dividend of $.11 per share, no short-term capital gain and a long-term
capital gain of $.02 per share.
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 December 31, 1998
1 Year 3 Years 5 Years
UMB Scout WorldWide Fund 17.96% 18.22% 14.49%
Lipper Global Fund Index* 14.59% 14.89% 11.08%
MSCI EAFE Index* 20.33% 9.28% 9.37%
Inception - September 14, 1993.
UMB Scout WorldWide Fund's average annual compound return since inception for
the period ended December 31, 1998, is 14.83%.
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 (000Os) of Total
Aegon N.V. $ 2,949 2.73%
Nokia, CP ADS, Pfd. 2,915 2.70%
Takeda Chemical Inds. 2,295 2.12%
BCE Inc. 2,276 2.11%
Carlton Communications PLC 2,248 2.08%
SmithKline Beecham PLC 2,224 2.06%
British Petroleum Ltd. 2,090 1.93%
Unilever PLC 2,025 1.87%
YPF Sociedad Anonima 1,956 1.81%
Repsol S.A. 1,912 1.77%
Top Ten Equity Holdings Total: $22,890 21.18%
As of December 31, 1998, statement of assets. Subject to change.
Chart - Hypothetical Growth of $10,000
Chart - Country Diversification
HISTORICAL PER SHARE RECORD
Income & Cumulative*
Net Short-Term Long-Term Value Per
Asset Gains Gains Share Plus
Value Distribution Distribution Distributions
12/31/93 $10.68 $ 0.03 $ - $10.71
12/31/94 10.84 0.24 - 11.11
12/31/95 12.08 0.30 0.04 12.69
12/31/96 13.94 0.24 0.10 14.89
12/31/97 16.02 0.31 0.16 17.44
12/31/98 18.55 0.31 0.02 20.31
*Does not assume any compounding of reinvested distributions.
Table shows calendar year distributions and net asset values; may differ from
fiscal year annual reports.
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 (OFDICO). These shares
involve investment risks, including the possible loss of the principal
invested.
FINANCIAL STATEMENTS DECEMBER 31, 1998 (unaudited)
STATEMENT OF NET ASSETS
MARKET
SHARES COMPANY VALUE
COMMON STOCKS (ADROs) - 86.26%
ARGENTINA - 1.81%
70,000 YPF Sociedad Anonima $ 1,955,625
AUSTRALIA - 2.49%
55,000 Amcor Ltd. 921,250
56,580 Broken Hill Proprietary Co. Ltd. 813,338
20,000 Coca-Cola Amatil Ltd. 149,170
19,380 Coles Myer Ltd. 805,481
2,689,239
AUSTRIA - 0.84%
9,700 OMV A.G.* 909,284
BELGIUM - 0.17%
2,500 Solvay NPV* 186,376
BRAZIL - 2.68%
176,000 Aracruz Celulose SA 1,408,000
20,540 Telecomunicacoes Brasileiras 1,493,001
2,901,001
CANADA - 6.37%
60,000 BCE Inc.* 2,276,250
77,000 Canadian Pacific Ltd.* 1,453,375
85,000 Imperial Oil Ltd. 1,365,313
25,200 Magna International Cl. A* 1,562,400
50,000 Prudential Steel Ltd. 222,421
6,879,759
CHILE - 1.94%
52,500 Embotelladora Andina SA De Chile 761,250
39,500 Sociedad Quimica Minera De Chile 1,330,656
2,091,906
DENMARK - 1.10%
17,800 Novo-Nordisk A.S. 1,183,700
FINLAND - 2.70%
24,200 Nokia, CP ADS, Pfd. 2,914,587
FRANCE - 6.02%
59,458 Alcatel Alsthom 1,453,005
2,090 Carrefour Supermarche, SA* 1,569,054
28,400 Rhone-Poulenc SA 1,427,100
12,200 Schlumberger Ltd. 562,725
30,035 Total SA 1,494,241
6,506,125
GERMANY - 6.60%
13,266 Daimler Benz A. G. $ 1,274,365
24,700 Dresdner Bank A.G. 1,038,114
27,000 Fresenius Medical Care ADR 634,500
18,500 Henkel KGAA, Pfd.* 1,645,181
3,540 SAP A.G.* 1,521,218
15,800 Siemens A.G. 1,019,802
7,133,180
IRELAND - 1.48%
23,000 Elan Corp. PLC 1,599,937
ITALY - 4.81%
24,960 Benetton Group S.p.A. 992,160
126,000 Luxottica Group S.p.A. 1,512,000
500,000 Parmalat Finanziaria S.p.A. 952,500
20,000 Telecom Italia S.p.A. 1,740,000
5,196,660
JAPAN - 10.71%
60,000 Canon Inc. 1,290,000
40,000 Fuji Photo Film Ltd. 1,465,000
18,000 Hitachi, Ltd. 1,087,875
22,400 Ito Yokado, Ltd. 1,545,600
37,000 Kao Corp. 829,588
23,000 Sony Corp. 1,650,250
60,000 Takeda Chemical Inds. 2,294,892
26,500 Toyota Motor Corp. 1,409,469
11,572,674
NETHERLANDS - 4.60%
24,123 Aegon N.V. 2,949,037
30,400 Akzo N.V. 1,356,600
17,708 Koninklijke Ahold N.V. 655,196
4,960,833
NEW ZEALAND - 1.49%
45,000 Telecom Corp. 1,605,937
NORWAY - 1.22%
38,555 Norsk Hydro A.S. 1,318,099
PORTUGAL - 1.51%
36,700 Portugal Telecom S.A. 1,637,737
SPAIN - 3.52%
35,000 Repsol S.A. 1,911,875
14,000 Telefonica De Espana S. A. 1,895,250
3,807,125
SWEDEN - 3.29%
39,750 Aktiebolaget Electrolux $ 1,386,281
52,000 Ericsson (L.M.) Telephone Co. Cl. B 1,244,750
42,500 Svenska Cellulosa Aktiebol* 925,778
3,556,809
SWITZERLAND - 2.74%
4,280 ABB A.G. 501,704
16,650 Nestle S.A. 1,812,312
6,613 Novartis A. G. 649,995
2,964,011
UNITED KINGDOM - 17.46%
111,428 Bass Public Ltd. Co. 1,601,777
22,000 British Petroleum Ltd. 2,090,000
22,969 Cadbury Schweppes Ltd. PLC 1,590,603
49,000 Carlton Communications PLC 2,247,875
40,000 Coca Cola Beverages PLC 70,544
30,979 Diageo PLC 1,432,779
40,000 Imperial Chemical Industries PLC 1,397,500
24,973 Reuters Holdings PLC 1,582,664
62,425 Royal Bank of Scotland PLC * 994,025
32,000 SmithKline Beecham PLC 2,224,000
45,000 Unilever PLC 2,025,000
10,000 Vodafone Group 1,611,250
18,868,017
UNITED STATES - 0.71%
8,000 Sprint Corp. * 673,000
4,000 Sprint PCS 92,500
765,500
TOTAL COMMON STOCKS (ADR'S) - 86.26% 93,204,121
FACE MARKET
AMOUNT DESCRIPTION VALUE
SHORT-TERM CORPORATE NOTES - 15.69%
$ 1,000,000 Aluminum Can Co.,
5.13%, due February 2, 1999 $ 995,298
1,000,000 Anheuser Busch Co.,
5.30%, due Janaury 19, 1999 997,203
1,000,000 Arco British Ltd.,
5.24%, due January 19, 1999 997,234
1,000,000 Arco British Ltd.,
5.22%, due January 22, 1999 996,810
1,000,000 Bell Atlantic Network,
5.23%, due January 5, 1999 999,274
1,000,000 Chevron USA Inc.,
5.00%, due January 28, 1999 996,111
1,000,000 Deere and Co.,
4.90%, due February 12, 1999 994,147
1,000,000 Disney Walt Co.,
5.10%, due January 5, 1999 999,292
1,000,000 Disney Walt Co.,
5.23%, due January 11, 1999 998,402
1,000,000 duPont (E.I.) deNemours & Co.,
5.11%, due January 25, 1999 996,450
1,000,000 Duke Power Co.,
5.14%, due January 7, 1999 999,001
1,000,000 Gannett Inc.,
5.19%, due January 12, 1999 998,270
1,000,000 Marsh and McLennan Inc.,
5.33%, due January 13, 1999 998,075
1,000,000 Marsh and McLennan Inc.,
5.40%, due January 15, 1999 997,750
1,000,000 Progress Capital Holdings Inc.,
5.30%, due January 20, 1999 997,056
1,000,000 Texaco Inc.,
5.61%, due January 5, 1999 999,221
1,000,000 Times Mirror,
5.12%, due February 5, 1999 994,880
TOTAL SHORT-TERM CORPORATE NOTES - 15.69% 16,954,474
GOVERNMENT SPONSORED ENTERPRISES - 2.30%
500,000 Federal Home Loan Bank,
5.04%, due January 4, 1999 499,720
1,000,000 Federal Home Loan Mortgage Corp.,
4.94%, due February 24, 1999 992,453
1,000,000 Federal Home Loan Mortgage Corp.,
4.90%, due March 12,1999 990,336
TOTAL GOVERNMENT SPONSORED ENTERPRISES - 2.30% 2,482,509
REPURCHASE AGREEMENT - 7.76%
8,385,000 Northern Trust Co., 4.85%, due January 4, 1999
(Collateralized by U.S. Treasury Notes,
5.875%, due February 28, 1999) 8,385,000
TOTAL INVESTMENTS - 112.01% $ 121,026,104
Other assets less liabilities - (12.01%) (12,979,022)
TOTAL NET ASSETS - 100.00%
(equivalent to $18.55 per share;
10,000,000 shares of $1.00 par
value capital shares authorized;
5,823,087 shares outstanding) $ 108,047,082
ADR D American Depository Receipt
*Non ADR
See accompanying Notes to Financial Statements.
FINANCIAL STATEMENTS DECEMBER 31, 1998 (unaudited)
STATEMENT OF ASSETS AND LIABILITIES
ASSETS:
Investment securities, at market value
(identified cost $98,414,726) $ 121,026,104
Cash 546,285
Dividends receivable 106,052
Total assets 121,678,441
LIABILITIES:
Payments for investments purchased 13,631,359
Total liabilities 13,631,359
NET ASSETS $ 108,047,082
NET ASSETS CONSIST OF:
Capital (capital stock and paid-in capital) $ 85,122,334
Accumulated undistributed income:
Net investment income (221)
Net realized gain on investment transactions 375,116
Net unrealized appreciation on investments and translation
of assets and liabilities in foreign currencies 22,549,853
NET ASSETS APPLICABLE TO OUTSTANDING SHARES $ 108,047,082
Capital shares, $1.00 par value
Authorized 10,000,000
Outstanding 5,823,087
NET ASSET VALUE PER SHARE $ 18.55
See accompanying Notes to Financial Statements.
FINANCIAL STATEMENTS SIX MONTHS ENDED DECEMBER 31, 1998 (unaudited)
STATEMENT OF OPERATIONS
INVESTMENT INCOME:
Income:
Dividends $ 348,277
Interest 580,964
929,241
Expenses:
Management fees 381,871
Government fees 21,570
403,441
Net investment income 525,800
REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCY:
Net realized gain from investment and
foreign currency transactions 367,518
Increase in net unrealized appreciation on investments
and translation of assets and liabilities
in foreign currencies 443,717
Net realized and unrealized gain on investments and
foreign currency 811,235
Net increase in net assets resulting from operations $ 1,337,035
See accompanying Notes to Financial Statements.
FINANCIAL STATEMENTS
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS ENDED
DECEMBER 31, 1998 YEAR ENDED
(unaudited) JUNE 30, 1998
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income $ 525,800 $ 1,258,411
Net realized gain from investment
and foreign currency transactions 367,518 243,483
Increase in net unrealized appreciation
on investments and translation of
assets and liabilities in foreign
currencies 443,717 9,912,299
Net increase in net assets
resulting from operations 1,337,035 11,414,193
DISTRIBUTIONS TO SHAREHOLDERS FROM:*
Net investment income (638,105) (1,296,555)
Net realized gain from investment
transactions (91,395) (776,136)
Decrease in net assets from
distributions (729,500) (2,072,691)
INCREASE FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from 2,441,542 and 2,490,461
shares sold 43,834,151 43,567,740
Net asset value of 12,822 and 88,697
shares issued for reinvestment of
distributions 230,791 1,479,088
44,064,942 45,046,828
Cost of 1,118,294 and 1,094,617
shares redeemed (19,860,166) (18,914,648)
Net increase in net assets from
capital share transactions 24,204,776 26,132,180
Net increase in net assets 24,812,311 35,473,682
NET ASSETS:
Beginning of period 83,234,771 47,761,089
End of period (including undis-
tributed net investment income of
$112,084 and $119,681, respectively) $108,047,082 $ 83,234,771
*Distributions to shareholders:
Income dividends per share $ 0.11 $ 0.32
Capital gains distribution per share $ 0.02 $ 0.22
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.
Foreign Currency Transactions - The accounting records of the Fund are
maintained in U.S. dollars. All assets and liabilities initially expressed in
foreign currencies are converted into U.S. dollars at prevailing exchange
rates. Purchases and sales of investment securities, dividend and interest
income, and certain expenses are translated at the rates of exchange
prevailing on the respective dates of such transactions.
The Fund does not isolate that portion of the results of operations resulting
from changes in the foreign exchange rates on investments from the
fluctuations arising from changes in the market prices of securities held.
Such fluctuations are included with the net realized and unrealized gain or
loss on investments.
Net realized foreign currency exchange gains or losses arise from sales of
foreign currencies and the difference between asset and liability amounts
initially stated in foreign currencies and the U.S. dollar value of the
amounts actually received or paid. Net unrealized foreign currency exchange
gains or losses arise from change in the value of assets and liabilities,
other than portfolio securities at the end of the reporting period, resulting
from changes in the exchange rates.
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, 1998 (excluding
repurchase agreements and short-term securities), were as follows:
Other than
U.S. Government U.S. Government
Securities Securities
Purchases $ 19,902,744 $ 4,439,580
Proceeds from sales 4,313,244 3,000,000
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 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 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.
JB25D(3/99) 505507
