SCOUT
BALANCED
FUND
A no-load mutual
fund investing in both
equities and fixed income
obligations with emphasis
on both long-term growth
of capital and high
current income.
Annual Report
June 30, 1997
TO THE SHAREHOLDERS
For the fiscal year ended June 30, 1997, Scout Balanced Fund earned a total
return (price change and reinvested distributions) of 8.70%, in comparison
with the Lipper Balanced Fund index which earned 20.42% for the same period.
The bull market in large capitalization stocks continued during the latest
quarter after recovering from brief falls early in the fiscal year and in the
first quarter of 1997. The unmanaged Standard & Poor's 500 index, today's
benchmark for stock market performance, surged 17.46% in the second quarter
and 20.61% for the first six months of 1997. The returns for this
capitalization-weighted index easily outperformed 95% of active fund managers.
We have always attempted to determine the value of a corporation before taking
investment action. We think the price of a company's stock should have a
direct relation to the company's sales, cash flows and earnings. The growth
rates of those components and the structure of the balance sheet are
incorporated into our analysis. Intangibles such as quality of management and
a firm's competitive position also are factors in our evaluation.
The value of the stock market has been an excellent measure of underlying
fundamentals over very long periods of time. For as many as 70 years, the
price growth of the S & P 500 has been a nearly perfect match to the growth
rate of sales, earnings and nominal gross domestic product at 6.5% per year.
This historic relationship is worth considering when looking at current market
performance.
If a company maintains the same level of profitability over a given period of
time, its net margins will be the same. If profits grow faster than sales, net
margins will rise. Since 1982, sales for the companies in the S & P 500 have
grown at their historic 6.5% annual rate. Earnings have grown at more than
twice that rate. In 1982, investors were valuing the market at eight times
earnings, which we now know was a very depressed level. Valuations today are
nearly 21 times earnings.
While we believe investors should pay more for businesses in anticipation of
improved performance, we also believe earnings cannot continue to compound
forever at double-digit rates if sales growth holds constant at the historic
6.5% per year or declines.
We think the biggest risk to investors today is a reversion to the mean of
earnings growth - not necessarily a decline in profits, but a rate of change
only as fast as sales growth. Many Wall Street analysts still look for 12% to
14% profit growth, but we disagree and strongly believe that investors today
are overpaying for most large capitalization stocks.
That said, Scout Balanced Fund ended the second quarter with 37.9% invested in
stocks and the remainder in fixed-income obligations (4.7 years to maturity
yielding 6.80%). Within the equity component, the price/earnings ratio of the
portfolio is 12 times earnings, compared with the average S & P 500 ratio of
21 times, a 30-year high. Our stocks are trading at two times book value
compared with almost five times for the market. Thus, we remain defensively
positioned as we have been throughout the fiscal year, in a world of high
risk. Our companies have clean balance sheets and we believe solid prospects
for growth in sales and earnings. The Fund should benefit in the event of a
significant market correction.
For the six months ended June 30, shareholders received an ordinary income
dividend of $0.16 per share; there were no capital gains distributed for this
period.
For corporate shareholders, 12.83% of ordinary income distributions qualify
for the corporate dividends received deduction.
We welcome new shareholders to Scout Balanced Fund and appreciate your
continued support. Please feel free to call with questions or comments.
Sincerely,
/s/Christopher P. Bloomstran, CFA
Christopher P. Bloomstran, CFA
UMB Investment Advisors
Top 10 Equity Holdings
Market Percent
Value of Total
O'Sullivan Industries, Inc. $ 165,625 2.02%
Mylan Laboratories, Inc. 147,500 1.80%
Bassett Furniture Industries, Inc. 141,562 1.73%
Bob Evans Farms, Inc. 135,500 1.65%
Rubbermaid, Inc. 119,000 1.45%
Dominion Resources, Inc. VA 109,875 1.34%
Giddings & Lewis 104,375 1.27%
Unicom Corp. 100,125 1.22%
Brinker International 99,750 1.22%
Cyprus Amax Mineral Co. 98,000 1.20%
Top 10 Equity Holdings Total: $ 1,221,312 14.90%
NOTE: All market values based on 6/30/97 statement of assets.
GRAPH - Pie Chart
Equity 38%
Government, Agency & Corporate Bonds 51%
Less Than 1 Year 11%
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.
GRAPH - Scout Balanced Fund versus Lipper Balanced Funds
Total return for one year ended June 30, 1997, was 8.70%; for the life of the
Fund (inception December 6, 1995) was 7.69%. 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.
FINANCIAL STATEMENTS
Statement of Net Assets
June 30, 1997
<TABLE>
<CAPTION>
Market
Shares Company Cost Value
</CAPTION>
<S> <C> <C>
COMMON STOCKS - 37.90%
BASIC MATERIALS - 6.78%
3,500 ACX Technologies* $ 57,703 $ 78,750
14,000 Amax Gold Inc.* 89,949 85,750
4,500 Brush Wellman, Inc. 82,015 94,219
4,000 Cyprus Amax Minerals Co. 93,612 98,000
4,000 Huntco, Inc. Cl. A 60,280 57,000
425 International Paper Co. 16,667 20,639
2,500 Newmont Mining Corp. 106,955 97,500
1,500 Worthington Industries, Inc. 28,850 27,468
536,031 559,326
CAPITAL GOODS - 3.04%
1,500 Browning Ferris Industries 41,201 49,875
7,000 Calgon Carbon Corp. 80,003 97,125
5,000 Giddings & Lewis, Inc. 70,522 104,375
191,726 251,375
CONSUMER CYCLICAL - 6.73%
12,000 B. I., Inc.* 85,045 90,000
5,000 Bassett Furniture Industries, Inc. 116,525 141,562
2,500 Dillards, Inc. 73,946 86,563
2,000 Limited, Inc. 33,795 40,500
200 May Department Stores Co. 7,668 9,450
10,000 O'Sullivan Industries, Inc.* 65,464 165,625
425 Penney (J.C.) & Co., Inc. 19,760 22,180
402,203 555,880
CONSUMER STAPLES - 10.42%
3,000 Archer-Daniels-Midland Co. 58,945 70,500
8,000 Bob Evans Farms, Inc. 107,838 135,500
7,000 Brinker International* 98,218 99,750
10,000 Darden Restaurants, Inc. 74,250 90,625
1,500 Fuji Photo Film, ADR 43,875 60,563
4,000 Lance, Inc. 67,963 76,500
10,000 Mylan Laboratories, Inc. 148,905 147,500
4,000 Rubbermaid, Inc. 97,143 119,000
5,000 VICORP Restaurants, Inc.* 57,075 60,000
754,212 859,938
ENERGY - 2.08%
92 Deltic Timber Corp. 1,505 2,696
1,000 Kerr McGee Corp. 59,457 63,375
325 Murphy Oil Corp. 11,960 15,844
1,000 Phillips Petroleum Co. 34,234 43,750
1,600 USX-Marathon Group 30,687 46,200
137,843 171,865
TECHNOLOGY - 3.21%
3,000 Alcatel Alsthom, Sponsored ADR 47,160 75,750
4,000 Apple Computer, Inc.* 85,812 57,000
6,000 Exabyte Corp.* 76,000 76,875
8,000 Novell, Inc.* 88,313 55,500
297,285 265,125
UTILITIES - 5.64%
3,000 Dominion Resources, Inc. V.A. 114,459 109,875
2,000 Entergy Corp. 46,870 54,750
3,000 Florida Progress Corp. 96,183 93,938
4,150 Niagara Mohawk Power Corp.* 34,474 35,534
2,000 Tele Danmark AS, Sponsored ADR 51,870 52,250
4,500 Unicom Corp. 115,928 100,125
500 U. S. West Communication Group 15,097 18,844
474,881 465,316
TOTAL COMMON STOCKS - 37.90% 2,794,181 3,128,825
</TABLE>
<TABLE>
<CAPTION>
Market
Face Amount Description Cost Value
</CAPTION>
<S> <C> <C>
SHORT-TERM CORPORATE NOTES - 8.46%
$ 100,000 Bell Atlantic Network Funding, 5.58%,
due July 18, 1997 $ 99,721 $ 99,721
100,000 du Pont (E.I.) de Nemours & Co., 5.52%,
due July 18, 1997 99,724 99,724
100,000 Eastman Kodak Co., 5.50%,
due July 30, 1997 99,542 99,542
100,000 Philip Morris Cos., 5.54%,
due July 2, 1997 99,969 99,969
100,000 Progress Capital Co., 5.55%,
due July 8, 1997 99,877 99,877
100,000 Progress Capital Co., 5.54%,
due July 23, 1997 99,646 99,646
100,000 Wisconsin Electric Power Co., 5.50%,
due July 25, 1997 99,618 99,618
TOTAL SHORT-TERM NOTES - 8.46% 698,097 698,097
GOVERNMENT SPONSORED ENTERPRISES - 38.44%
150,000 Federal Farm Credit Banks, 5.40%,
due March 6, 1998 150,000 149,649
100,000 Federal Farm Credit Banks, 5.20%,
due January 25, 1999 99,956 98,625
100,000 Federal Home Loan Banks, 6.055%,
due April 17, 1998 99,913 100,172
150,000 Federal Home Loan Banks, 5.035%,
due January 19, 1999 149,239 147,633
100,000 Federal Home Loan Banks, 5.86%,
due April 2, 1999 99,120 99,422
100,000 Federal Home Loan Banks, 5.96%,
due October 20, 2000 98,023 98,641
100,000 Federal Home Loan Banks, 5.50%,
due January 10, 2001 96,354 96,984
150,000 Federal Home Loan Banks, 6.75%,
due April 5, 2004 148,048 150,446
150,000 Federal Home Loan Mortgage Corporation,
6.745%, due August 1, 2001 149,838 151,218
200,000 Federal Home Loan Mortgage Corporation,
6.704%, due January 9, 2007 198,131 197,094
150,000 Federal Home Loan Mortgage Corporation,
Debentures, 6.99%, due July 5, 2006 148,925 151,149
200,000 Federal National Mortgage Association,
6.23%, due September 25, 1998 201,322 200,532
100,000 Federal National Mortgage Association,
5.55%, due March 12, 1999 98,528 99,062
65,760 Federal National Mortgage Association,
7.00%, due October 1, 1999 67,116 66,233
150,000 Federal National Mortgage Association,
6.29%, due October 4, 2000 148,080 149,508
75,216 Federal National Mortgage Association,
6.00%, due April 1, 2001 75,686 74,118
150,000 Federal National Mortgage Association,
7.05%, due November 12, 2002 151,031 152,906
63,574 Federal National Mortgage Association,
7.00%, due February 1, 2003 65,084 63,857
150,000 Federal National Mortgage Association,
6.71%, due May 21, 2003 148,731 150,680
150,000 Federal National Mortgage Association,
6.72%, due August 1, 2005 147,055 149,250
200,000 Federal National Mortgage Association,
6.14%, due November 25, 2005 191,614 189,184
187,803 Government National Mortgage Association,
7.00%, due September 15, 2010 185,632 189,082
100,000 Tennessee Valley Authority, 5.95%,
due September 15, 1998 101,734 99,937
150,000 Tennessee Valley Authority, 6.00%,
due November 1, 2000 150,771 147,961
TOTAL GOVERNMENT SPONSORED ENTERPRISES - 38.44% 3,169,931 3,173,343
U.S. GOVERNMENT SECURITIES - 11.97%
250,000 U.S. Treasury Notes, 5.625%,
due November 30, 1998 249,890 248,868
250,000 U.S. Treasury Notes, 5.875%,
due November 15, 1999 250,723 248,397
250,000 U.S. Treasury Notes, 5.75%,
due October 31, 2000 249,180 246,015
250,000 U.S. Treasury Notes, 5.875%,
due November 30, 2001 249,725 245,195
TOTAL GOVERNMENT Securities - 11.97% 999,518 988,475
REPURCHASE AGREEMENT - 2.48%
205,000 Northern Trust Co., 5.80%,
due July 1, 1997 (Collateralized by
U.S. Treasury Notes, 5.625%,
due January 31, 1998) 205,000 205,000
TOTAL INVESTMENTS - 99.25% $ 7,866,727 8,193,740
Other assets less liabilities - 0.75% 61,827
TOTAL NET ASSETS - 100%
(equivalent to $10.72 per share;
10,000,000 shares of $1.00 par value
capital shares authorized;
769,763 shares outstanding) $ 8,255,567
</TABLE>
For federal income tax purposes, the identified cost of investments owned at
June 30, 1997 was $7,866,727.
Net unrealized appreciation for federal income tax purposes was $327,013,
which is comprised of unrealized appreciation of $481,271 and unrealized
depreciation of $154,258.
ADR - American Depository Receipt
*Non-income producing security
See accompanying Notes to Financial Statements.
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
June 30, 1997
ASSETS:
Investment securities, at market value
(identified cost $7,866,727) $ 8,193,740
Dividends receivable 4,558
Interest receivable 59,653
Total assets 8,257,951
LIABILITIES:
Disbursements in excess of demand deposit cash 2,384
Total liabilities 2,384
NET ASSETS $ 8,255,567
NET ASSETS CONSIST OF:
Capital (capital stock and paid-in capital) $ 7,797,912
Accumulated undistributed income:
Net investment income 39,482
Net realized gain on investment transactions 91,160
Net unrealized appreciation on investments 327,013
NET ASSETS APPLICABLE TO OUTSTANDING SHARES $ 8,255,567
Capital shares, $1.00 par value
Authorized 10,000,000
Outstanding 769,763
NET ASSET VALUE PER SHARE $ 10.72
See accompanying Notes to Financial Statements.
FINANCIAL STATEMENTS
Statement of Operations
Year Ended June 30, 1997
INVESTMENT INCOME:
Income:
Dividends $ 46,397
Interest 280,654
327,051
Expenses:
Management fees 57,679
57,679
Net investment income 269,372
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Realized gain from investment transactions:
Proceeds from sales of investments 1,410,007
Cost of investments sold 1,311,782
Net realized gain from investment transactions 98,225
Unrealized appreciation of investments:
Beginning of year 29,396
End of year 327,013
Increase in net unrealized appreciation
of investments 297,617
Net realized and unrealized gain on investments 395,842
Net increase in net assets resulting
from operations $ 665,214
See accompanying Notes to Financial Statements.
FINANCIAL STATEMENTS
Statment of Changes in Net Assets
For the Year Ended June 30, 1997 and for the Period October 2, 1995
(Capitalization) to June 30, 1996
<TABLE>
<CAPTION>
1997 1996
</CAPTION>
<S> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income $ 269,372 $ 44,361
Net realized gain from investment transactions 98,225 1,339
Increase in net unrealized appreciation of
investments 297,617 29,396
Net increase in net assets resulting from
operations 665,214 75,096
DISTRIBUTIONS TO SHAREHOLDERS FROM:*
Net investment income (237,209) -
Net realized gain from investment transactions (8,404) (37,042)
Decrease in net assets from distributions (245,613) (37,042)
INCREASE FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from 632,164 and 349,299 shares sold 6,463,676 3,518,896
Net asset value of 23,225 and 3,648 shares issued
for reinvestment of distributions 244,693 37,042
6,708,369 3,555,938
Cost of 187,871 and 50,702 shares redeemed (1,948,920) (517,475)
Net increase in net assets from capital
share transactions 4,759,449 3,038,463
Net increase in net assets 5,179,050 3,076,517
NET ASSETS:
Beginning of year 3,076,517 -
End of year (including undistributed net
investment income of $39,482 and $7,319,
respectively) $ 8,255,567 $ 3,076,517
*Distributions to shareholders:
Income dividends per share $ 0.32 $ 0.24
Capital gains distribution per share $ 0.01 $ -
See accompanying Notes to Financial Statements.
</TABLE>
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. 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 - Common stocks 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. Debt securities (other than
short-term obligations), including listed issues, are valued at market on the
basis of valuations furnished by an independent pricing service which utilizes
both dealer-supplied valuations and formula-based techniques. 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.
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 year ended June 30, 1997 (excluding repurchase
agreements and short-term securities), were as follows:
Other than
U.S. Government U.S. Government
Securities Securities
Purchases $ 2,049,124 $ 2,827,768
Proceeds from sales 379,693 1,030,314
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, interests, 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.
FINANCIAL HIGHLIGHTS
Per share income and capital changes for a share
outstanding throughout the period.
<TABLE>
<CAPTION>
December 6, 1995
Year Ended to
June 30, 1997 June 30, 1996*
</CAPTION>
<S> <C> <C>
Net asset value, beginning of period $ 10.18 $ 10.09
Income from investment operations:
Net investment income 0.35 0.27
Net realized and unrealized gains on securities 0.52 0.06
Total from investment operations 0.87 0.33
Distributions from:
Net investment income (0.32) (0.24)
Net realized gain on investment transactions (0.01) -
Total distributions (0.33) (0.24)
Net asset value, end of period $ 10.72 $ 10.18
Total return 9% 6%
Ratios/Supplemental Data
Net assets, end of year (in millions) $ 8 $ 3
Ratio of expenses to average net assets 0.83% 0.85%
Ratio of net investment income to average net assets 3.85% 3.71%
Portfolio turnover rate 14% 5%
Average commission rate** $ .0641 $ .0660
</TABLE>
*The Fund was capitalized on October 2, 1995 with $100,000, representing
10,000 shares at a net asset value of
$10.00 per share. Initial public offering was made on December 6, 1995, at
which time net asset value was $10.09 per share.
Ratios for this initial period of operation are annualized.
**For fiscal years beginning on or after September 1, 1995, a fund is required
to disclose its average commission rate per share for
security trades on which commissions are charged. This amount may vary from
period to period and fund to fund depending on
the mix of trades executed in various markets where trading practices and
commission rate structures may differ.
See accompanying Notes to Financial Statements.
INDEPENDENT ACCOUNTANTS' REPORT
To the Shareholders and Board of Directors
of Scout Balanced Fund, Inc.:
We have audited the accompanying statement of assets and liabilities of Scout
Balanced Fund, Inc., including the statement of net assets, as of June 30,
1997, and the related statement of operations, statements of changes in net
assets and the financial highlights for the periods indicated thereon. These
financial statements and financial highlights are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included verification of securities
owned as of June 30, 1997, by confirmation, or by the application of
alternative auditing procedures with respect to unsettled portfolio security
transactions. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Scout Balanced Fund, Inc. as of June 30, 1997, the results of its operations,
the changes in its net assets and the financial highlights for the periods
indicated thereon in conformity with generally accepted accounting principles.
BAIRD, KURTZ & DOBSON
Kansas City, Missouri
July 22, 1997
This report has been prepared for the information of the Shareholders of Scout
Balanced 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
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 7866727
<INVESTMENTS-AT-VALUE> 8193740
<RECEIVABLES> 64211
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 8257951
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2384
<TOTAL-LIABILITIES> 2384
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 7797912
<SHARES-COMMON-STOCK> 769763
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 39482
<OVERDISTRIBUTION-NII> 91160
<ACCUMULATED-NET-GAINS> 327013
<OVERDISTRIBUTION-GAINS> 0
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<DIVIDEND-INCOME> 46397
<INTEREST-INCOME> 280654
<OTHER-INCOME> 0
<EXPENSES-NET> 57679
<NET-INVESTMENT-INCOME> 269372
<REALIZED-GAINS-CURRENT> 98225
<APPREC-INCREASE-CURRENT> 297617
<NET-CHANGE-FROM-OPS> 665214
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 237209
<DISTRIBUTIONS-OF-GAINS> 8404
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 632164
<NUMBER-OF-SHARES-REDEEMED> 187871
<SHARES-REINVESTED> 23225
<NET-CHANGE-IN-ASSETS> 5179050
<ACCUMULATED-NII-PRIOR> 7319
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 57679
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<GROSS-EXPENSE> 57679
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<PER-SHARE-NAV-BEGIN> 10.18
<PER-SHARE-NII> .35
<PER-SHARE-GAIN-APPREC> .52
<PER-SHARE-DIVIDEND> .32
<PER-SHARE-DISTRIBUTIONS> .01
<RETURNS-OF-CAPITAL> 0
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<EXPENSE-RATIO> .83
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
