Report of Independent Auditors
To the Shareholders and Board of Trustees of
PaineWebber S&P 500 Index Fund
In planning and performing our audit of the
financial statements of PaineWebber
S&P 500 Index Fund for the year ended May 31,
2000, we considered its internal
control, including control activities for
safeguarding securities, in order to determine
our auditing procedures for the purpose of
expressing our opinion on the financial
statements and to comply with the requirements
of Form N-SAR, not to provide
assurance on internal control.
The management of PaineWebber S&P 500 Index
Fund is responsible for
establishing and maintaining internal control.
In fulfilling this responsibility,
estimates and judgments by management are
required to assess the expected benefits
and related costs of controls. Generally,
controls that are relevant to an audit pertain
to the entity's objective of preparing
financial statements for external purposes that
are
fairly presented in conformity with generally
accepted accounting principles. Those
controls include the safeguarding of assets
against unauthorized acquisition, use or
disposition.
Because of inherent limitations in internal
control, error or fraud may occur and not
be detected. Also, projection of any
evaluation of internal control to future
periods
is subject to the risk that it may become
inadequate because of changes in conditions
or that the effectiveness of the design and
operation may deteriorate.
Our consideration of internal control would not
necessarily disclose all matters in
internal control that might be material
weaknesses under standards established by
the American Institute of Certified Public
Accountants. A material weakness is a
condition in which the design or operation of
one or more of the internal control
components does not reduce to a relatively low
level the risk that misstatements
caused by error or fraud in amounts that would
be material in relation to the financial
statements being audited may occur and not be
detected within a timely period by
employees in the normal course of performing
their assigned functions. However,
we noted no matters involving internal control
and its operation, including controls
for safeguarding securities, that we consider
to be material weaknesses as defined
above at May 31, 2000.
This report is intended solely for the
information and use of management, the Board
of Trustees of PaineWebber S&P 500 Index Fund,
and the Securities and Exchange
Commission and is not intended to be and should
not be used by anyone other than
these specified parties.
ERNST &
YOUNG LLP
July 2000
