<PAGE>
MITCHELL HUTCHINS LIR SELECT MONEY FUND ANNUAL REPORT
June 15, 2000
Dear Shareholder,
We are pleased to present you with the annual report for Mitchell Hutchins
LIR Select Money Fund (the "Fund") for the fiscal year ended April 30, 2000.
MARKET REVIEW
The Fund's fiscal year was a difficult time for the fixed income market. Rapid
economic growth caused the Federal Reserve (the "Fed") to increase short-term
interest rates. Yields on fixed income securities rose as interest rates rose,
causing losses in almost every sector of the bond market. Diversion of
investment funds into technology stocks hurt the bond markets, as did supply
surges brought on by Y2K worries. Finally, the market was disrupted by the U.S.
Treasury's announcement of a $30 billion buyback of long-term debt for calendar
year 2000.
Short-term yields (as measured by the 90-day U.S. Treasury bill) rose from
4.53% to 5.82% during the fiscal year. Rising yields created more attractive
conditions for money market funds, which benefited because of their emphasis on
short-maturity, highly liquid securities.
PORTFOLIO REVIEW
<TABLE>
<CAPTION>
Institutional Shares--Performance and Characteristics1 4/30/00 10/31/99
---------------------------------------------------------------------------------------------
<S> <C> <C>
Current Seven-Day Average Yield 1 6.02% 5.34%
Effective Seven-Day Yield 1 6.20% 5.48%
Weighted Average Maturity 29 days 38 days
---------------------------------------------------------------------------------------------
Net Assets $2.291 billion $1.725 billion
</TABLE>
1 Yields will fluctuate.
HIGHLIGHTS
We kept the Fund's weighted-average maturity at or below its peer group
average during the fiscal year. Because concerns about the approach of Y2K and
the expectation of higher interest rates, we increased the Fund's liquidity by
purchasing short-term assets. The new century dawned without major problems, and
with the Y2K issue behind us we continued to structure the Fund to balance its
goals of principal of stability and current income.
MITCHELL HUTCHINS LIR SELECT
MONEY FUND
Investment Goal:
Maximum current income consistent with liquidity and capital preservation
Portfolio Managers:
Kris Dorr
Michael Markowitz
Mitchell Hutchins Asset Management Inc.
Commencement:
August 10,1998
Dividend Payments:
Monthly
<PAGE>
ANNUAL REPORT MITCHELL HUTCHINS LIR SELECT MONEY FUND
Throughout the fiscal year, we maintained the Fund's focus on first-tier
credit-quality instruments.
The Fund tends to have a short weighted-average maturity in order to meet
investors' liquidity needs. We seek to enhance yield by employing a "barbell"
strategy--concentrating most of the portfolio in short-term obligations to
provide liquidity, but allocating a portion to longer-term obligations to
provide yield. To enhance yield, the Fund may allocate a portion of the
portfolio to obligations deemed to have maturities of up to 13 months.
<TABLE>
<CAPTION>
Sector Allocation* 4/30/00 10/31/99
--------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Commercial Paper 58.9% Commercial Paper 56.8%
Domestic Master Notes 15.3 Time Deposits 11.0
Time Deposits 7.3 Domestic Master Notes 8.7
Other Banking Obligations 6.1 Short-Term Corporate 5.6
Certificates of Deposit 4.6 Other Banking Obligations 5.2
Short-Term Corporate 4.4 Repurchase Agreements 2.9
Repurchase Agreements 2.2 Certificates of Deposit 2.8
U.S. Gov't Agency 1.3 U.S. Gov't Agency 1.8
Money Market Funds 0.1 Money Market Funds 0.8
Liabilities in excess of other assets -0.2 Assets in excess of other liabilities 4.4
--------------------------------------------------------------------------------------------
Total 100.0 Total 100.0
</TABLE>
OUTLOOK
We expect an active Fed and rising rates across the yield curve in the
first half of 2000. We look for moderating economic growth in the second half of
the year, and believe interest rates will stabilize in response to current
growth and the absence of real inflationary pressure. As always, we intend to
maintain the Fund's emphasis on maximizing income consistent with maintaining
liquidity.
* Weightings represent percentages of net assets as of the dates indicated.
The Fund's portfolio is actively managed and its composition will vary over
time.
2
<PAGE>
MITCHELL HUTCHINS LIR SELECT MONEY FUND ANNUAL REPORT
Our ultimate objective in managing your investments is to help you
successfully meet your financial goals. We thank you for your continued support
and welcome any comments or questions you may have. For a Quarterly Review of a
fund in the PaineWebber Family of Funds2, please contact your Financial Advisor.
Sincerely,
/s/ MARGO ALEXANDER /s/ BRIAN M. STORMS
MARGO ALEXANDER BRIAN M. STORMS
Chairman and Chief Executive Officer President and Chief
Mitchell Hutchins Asset Management Inc. Operating Officer
Mitchell Hutchins
Asset Management Inc.
/s/ DENNIS L. McCAULEY /s/ KRIS DORR
DENNIS L. McCAULEY KRIS DORR
Managing Director and Chief Portfolio Manager
Investment Officer--Fixed Income Mitchell Hutchins LIR
Mitchell Hutchins Asset Management Inc. Select Money Fund
/s/ MICHAEL MARKOWITZ
MICHAEL MARKOWITZ
Portfolio Manager
Mitchell Hutchins LIR Select Money Fund
This letter is intended to assist shareholders in understanding how the Fund
performed during the fiscal year ended April 30, 2000, and reflects our views at
the time of its writing. Of course, these views may change in response to
changing circumstances. We encourage you to consult your Financial Advisor
regarding your personal investment program.
2 Mutual funds are sold by prospectus only. The prospectuses for the funds
contain more complete information regarding risks, charges and expenses, and
should be read carefully before investing.
3
<PAGE>
Mitchell Hutchins LIR Select Money Fund
Statement of Net Assets April 30, 2000
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
--------- -------------------- -------------- --------------
<C> <S> <C> <C> <C>
U.S. Government Agency Obligations -- 1.31%
$ 15,000 Federal National
Mortgage Association... 05/01/00 6.120%* $ 14,997,951
15,000 Student Loan Marketing
Association............ 05/03/00 6.432* 14,998,074
--------------
Total U.S. Government Agency
Obligations (cost -- $29,996,025).. 29,996,025
--------------
Certificates of Deposit -- 4.58%
Domestic -- 0.65%
15,000 Sun Trust Banks, Inc.... 04/18/01 6.780 14,995,884
--------------
Yankee -- 3.93%
10,000 Canadian Imperial Bank
of Commerce............ 01/29/01 6.525 9,997,157
10,000 Dresdner Bank AG........ 05/23/00 6.115* 9,999,106
15,000 Royal Bank of Canada.... 01/16/01 6.525 14,994,925
55,000 UBS AG.................. 11/28/00 to 03/27/01 6.090 to 6.875 54,984,218
--------------
89,975,406
--------------
Total Certificates of Deposit
(cost -- $104,971,290)............. 104,971,290
--------------
Other Banking Obligations -- 6.15%
Domestic -- 5.50%
21,000 Bank One N.A. Illinois.. 07/20/00 to 07/26/00 6.253 to 6.258* 20,990,897
40,000 Comerica Bank, N.A.,
Detroit................ 05/15/00 6.045* 39,980,782
15,000 Key Bank N.A. .......... 05/08/00 6.120* 14,995,303
50,000 Strategic Money Market
Trust +................ 05/15/00 6.150* 50,000,000
--------------
125,966,982
--------------
15,000 Bank of Nova Scotia..... 10/02/00 5.920 14,981,445
--------------
Total Other Banking Obligations
(cost -- $140,948,427)............. 140,948,427
--------------
Foreign -- 0.65%
Commercial Paper@ -- 58.88%
20,000 Honeywell International
Incorporated........... 05/10/00 6.020 19,969,900
--------------
Aerospace & Defense -- 0.87%
99,515 Atlantis One Funding
Corporation............ 05/03/00 to 05/12/00 5.920 to 6.020 99,431,171
55,187 Woodstreet Funding
Corporation............ 05/05/00 to 05/26/00 6.050 to 6.200 55,055,003
--------------
154,486,174
--------------
Asset-Backed - Banking -- 6.74%
48,015 Enterprise Funding
Corporation............ 05/04/00 6.100 47,990,592
99,839 Parthenon Receivables
Funding LLC............ 05/02/00 to 05/18/00 6.050 to 6.100 99,691,293
50,000 Variable Funding Capital
Corporation............ 05/11/00 6.040 49,916,111
--------------
197,597,996
--------------
Asset-Backed - Miscellaneous --
8.63%
94,843 BMW US Capital
Incorporated........... 05/18/00 to 05/24/00 6.010 to 6.180 94,517,850
75,000 Daimler-Chrysler N.A.... 05/04/00 6.020 74,962,375
16,000 PACCAR Financial
Corporation............ 05/16/00 6.000 15,960,000
--------------
185,440,225
--------------
</TABLE>
Auto & Truck -- 8.10%
4
<PAGE>
Mitchell Hutchins LIR Select Money Fund
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
--------- -------------------- -------------- --------------
<C> <S> <C> <C> <C>
Commercial Paper@ -- (concluded)
Banking-Domestic -- 5.04%
$ 75,000 Cregem North American
Incorporated........... 05/09/00 5.900 to 6.020% $ 74,901,400
40,800 Unifunding Incorporated. 05/19/00 6.020 40,677,192
--------------
115,578,592
--------------
Banking-Foreign -- 2.34%
33,900 Alliance & Leicester
PLC.................... 05/08/00 5.910 33,861,043
20,000 Westpac Trust Securities
NZ Limited............. 08/17/00 5.760 19,654,400
--------------
53,515,443
--------------
Chemical -- 0.50%
11,400 Henkel Corporation...... 05/11/00 6.010 11,380,968
--------------
Drugs, Healthcare -- 5.53%
17,405 Glaxo Wellcome PLC...... 05/03/00 5.880 17,399,314
109,600 Pfizer Incorporated..... 05/15/00 6.000 109,344,267
--------------
126,743,581
--------------
Electronics -- 3.79%
66,868 Emerson Electric
Company................ 05/03/00 to 05/19/00 6.050 to 6.100 66,726,426
20,072 Vermont American
Corporation............ 05/17/00 6.020 20,018,296
--------------
86,744,722
--------------
28,214 UBS Finance (Delaware)
LLC.................... 05/01/00 6.040 28,214,000
--------------
Finance - Conduit -- 1.23%
75,000 Household Finance
Corporation............ 05/04/00 6.010 74,962,438
--------------
Finance - Consumer -- 3.27%
15,000 Dresdner U.S. Finance... 09/28/00 6.060 14,621,250
--------------
Finance - Subsidiary -- 0.64%
20,000 Fortune Brands
Incorporated........... 05/18/00 6.080 19,942,578
--------------
Food, Beverage & Tobacco -- 0.87%
25,000 Teachers Insurance &
Annuity Association of
America................ 05/25/00 6.120 24,898,000
--------------
Insurance -- 1.09%
41,500 Rio Tinto America
Incorporated........... 05/24/00 6.050 41,339,591
--------------
Metals & Mining -- 1.81%
17,665 Reed Elsevier (USA)
Incorporated........... 05/01/00 6.040 17,665,000
29,978 Tribune Company......... 05/23/00 6.120 29,865,882
--------------
47,530,882
--------------
Printing & Publishing -- 2.07%
50,000 American Telephone &
Telegraph Corporation.. 05/02/00 5.890 49,991,819
25,000 Bell Atlantic Financial
Services Incorporated.. 05/12/00 6.020 24,954,014
55,962 BellSouth Capital
Funding Corporation.... 05/17/00 6.000 55,812,768
15,000 Lucent Technologies
Incorporated........... 05/15/00 6.000 14,965,000
--------------
145,723,601
--------------
Total Commercial Paper (cost --
$1,348,689,941)................... 1,348,689,941
--------------
</TABLE>
Telecommunications -- 6.36%
5
<PAGE>
Mitchell Hutchins LIR Select Money Fund
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
--------- -------------------- -------------- --------------
<C> <S> <C> <C> <C>
Domestic Master Notes -- 15.28%
Broker-Dealer -- 15.28%
$ 100,000 Bank of America
Securities LLC. ....... 05/01/00 6.263% $ 100,000,000
100,000 Bear Stearns Companies
Incorporated........... 05/01/00 6.263 100,000,000
50,000 J.P. Morgan Securities
Inc. .................. 05/01/00 6.073 50,000,000
100,000 Morgan Stanley, Dean
Witter & Company....... 05/01/00 6.163 100,000,000
--------------
Total Domestic Master Notes
(cost -- $350,000,000)............. 350,000,000
--------------
Short-Term Corporate Obligations -- 4.37%
Asset-Backed - Finance -- 3.49%
45,000 Beta Finance
Incorporated........... 06/15/00 to 02/05/01 5.675 to 6.650 45,000,000
20,000 Beta Finance
Incorporated........... 05/10/00 6.110* 20,000,000
15,000 CC (USA) Incorporated... 02/15/01 6.810 15,000,000
--------------
80,000,000
--------------
15,000 Ford Motor Credit
Corporation............ 08/15/00 6.850 15,045,411
--------------
Auto & Truck -- 0.66%
5,000 International Lease
Financing.............. 09/01/00 6.310 5,004,199
--------------
Total Short-Term Corporate
Obligations (cost -- $100,049,610). 100,049,610
--------------
Finance - Aircraft -- 0.22%
50,000 Repurchase agreement
dated 04/28/00 with
Deutsche Bank
Securities Inc.
collateralized by
$52,289,000 U.S.
Treasury Notes 5.500%
due 03/31/03 (value --
$51,000,110);
proceeds; $50,023,750
(cost -- $50,000,000).. 05/01/00 5.700 50,000,000
--------------
Repurchase Agreement -- 2.18%
88,000 Societe Generale........ 05/01/00 6.063 88,000,000
80,000 State Street Bank &
Trust Company.......... 05/01/00 6.000 80,000,000
--------------
Total Time Deposits (cost --
$168,000,000)..................... 168,000,000
--------------
<CAPTION>
Number of
Shares
---------
<C> <S> <C> <C> <C>
Money Market Funds -- 0.13%
50,020 AIM Liquid Assets Money
Market Portfolio....... 50,020
2,948,019 Provident Temp Money
Market Fund............ 2,948,019
--------------
Total Money Market Funds (cost --
$2,998,039)...................... 2,998,039
--------------
Total Investments (cost --
$2,295,653,332 which approximates
cost for federal income tax
purposes) -- 100.21%.............. 2,295,653,332
Liabilities in excess of other
assets -- (0.21)%................. (4,831,666)
--------------
Net Assets (applicable to
2,290,822,103 Institutional shares
outstanding equivalent to $1.00
per share) -- 100.00%............. $2,290,821,666
==============
</TABLE>
Time Deposits -- 7.33%
---------
* Variable rate securities-maturity date reflects earlier of reset date or
maturity date. The interest rates shown are the current rates as of April 30,
2000 and reset periodically.
@ Interest rates shown are the discount rates at date of purchase.
+ Illiquid security representing 2.18% of net assets.
Weighted Average Maturity - 29 Days
See accompanying notes to financial statements
6
<PAGE>
Mitchell Hutchins LIR Select Money Fund
Statement of Operations
<TABLE>
<CAPTION>
For the
Year Ended
April 30, 2000
--------------
<S> <C>
Investment Income:
Interest......................................................... $100,722,673
------------
Expenses:
Management fee................................................... 3,216,160
Shareholder servicing fees -- Financial Intermediary Shares...... 5,518
Trustees' fees................................................... 10,500
------------
3,232,178
Less: Fee waivers from adviser................................... (687,813)
------------
Net expenses..................................................... 2,544,365
------------
Net investment income............................................ 98,178,308
Net realized losses from investment transactions................. (396)
------------
Net increase in net assets resulting from operations............. $ 98,177,912
============
</TABLE>
See accompanying notes to financial statements
7
<PAGE>
Mitchell Hutchins LIR Select Money Fund
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
For the Period
For the August 10, 1998+
Year Ended to
April 30, 2000 April 30, 1999
-------------- ----------------
<S> <C> <C>
From operations:
Net investment income......................... $ 98,178,308 $ 31,577,997
Net realized losses from investment
transactions................................. (396) (41)
-------------- --------------
Net increase in net assets resulting from
operations................................... 98,177,912 31,577,956
-------------- --------------
Dividends to shareholders from:
Net investment income -- Institutional Shares. (98,065,586) (31,570,819)
Net investment income -- Financial
Intermediary Shares.......................... (112,722) (7,178)
-------------- --------------
Total dividends to shareholders............... (98,178,308) (31,577,997)
-------------- --------------
Net increase in net assets from beneficial
interest transactions........................ 968,015,147 1,322,706,956
-------------- --------------
Net increase in net assets.................... 968,014,751 1,322,706,915
Net Assets:
Beginning of period........................... 1,322,806,915 100,000
-------------- --------------
End of period................................. $2,290,821,666 $1,322,806,915
============== ==============
</TABLE>
---------
+ Commencement of operations.
See accompanying notes to financial statements
8
<PAGE>
Notes to Financial Statements
Organization and Significant Accounting Policies
Mitchell Hutchins LIR Select Money Fund (the "Fund") is registered with the
Securities and Exchange Commission under the Investment Company Act of 1940, as
amended, as a diversified series of Mitchell Hutchins LIR Money Series (the
"Trust"), an open-end management investment company organized as a Delaware
business trust on April 29, 1998. The Trust is a series mutual fund with five
funds: the Fund, LIR Premier Money Market Fund, LIR Premier Tax-Free Money Mar-
ket Fund, LIR Liquid Assets Fund and LIR Cash Reserves Fund. The financial
statements for the LIR Premier Money Market Fund, LIR Premier Tax-Free Money
Market Fund, LIR Liquid Assets Fund and LIR Cash Reserves Fund are not included
herein. Prior to commencement of operations, August 10, 1998, the Fund had no
activity other than the sale of 100,000 Institutional shares on July 22, 1998
to Mitchell Hutchins Asset Management Inc. ("Mitchell Hutchins"), the invest-
ment adviser and an asset management subsidiary of PaineWebber Incorporated
("PaineWebber"), for $100,000.
The Fund currently offers two classes of shares, Institutional shares and Fi-
nancial Intermediary shares. Each class represents interests in the same assets
of the Fund, and both classes have equal voting privileges, except that benefi-
cial owners of Financial Intermediary shares receive certain services directly
from financial intermediaries, bear certain service fees and, to the extent
that matters pertaining to the Shareholder Services Plan or to the Financial
Intermediary shares are submitted to shareholders for approval, only the hold-
ers of Financial Intermediary shares are entitled to vote thereon. At April 30,
2000, there are no Financial Intermediary shares outstanding.
The preparation of financial statements in accordance with accounting princi-
ples generally accepted in the United States requires Fund management to make
estimates and assumptions that affect the reported amounts and disclosures in
the financial statements. Actual results could differ from those estimates.
Following is a summary of significant accounting policies:
Valuation and Accounting for Investments and Investment Income--Investments
are valued at amortized cost which approximates market value. Investment trans-
actions are recorded on the trade date. Realized gains and losses from
investment transactions are calculated using the identified cost method. Inter-
est income is recorded on an accrual basis. Premiums are amortized and dis-
counts are accreted as adjustments to interest income and the identified cost
of investments.
Repurchase Agreements--The Fund's custodian takes possession of the collateral
pledged for investments in repurchase agreements. The underlying collateral is
valued daily on a mark-to-market basis to ensure that the value, including ac-
crued interest, is at least equal to the repurchase price. In the event that a
counterparty defaults on its obligation to repurchase, the Fund has the right
to liquidate the collateral and apply the proceeds in satisfaction of the obli-
gation. Under certain circumstances, in the event of default or bankruptcy by
the other party to the agreement, realization and/or retention of the collat-
eral may be subject to legal proceedings.
Dividends and Distributions--Dividends and distributions to shareholders are
recorded on the ex-dividend date. The amount of dividends and distributions are
determined in accordance with federal income tax regulations, which may differ
from generally accepted accounting principles. These "book/tax" differences are
either considered temporary or permanent in nature. To the extent these differ-
ence are permanent in nature, such amounts are reclassified within the capital
accounts based on their federal tax-basis treatment; temporary differences do
not require reclassification.
Concentration of Risk
The ability of the issuers of the debt securities held by the Fund to meet
their obligations may be affected by economic developments, including those
particular to a specific industry or region.
9
<PAGE>
Notes to Financial Statements
Investment Adviser and Administrator
The Trust has an Investment Advisory and Administration Contract ("Advisory
Contract") under which Mitchell Hutchins serves as investment adviser and ad-
ministrator of the Fund. In accordance with the Advisory Contract, Mitchell
Hutchins receives compensation from the Fund, computed daily and paid monthly,
at an annual rate of 0.18% of the Fund's average daily net assets. At April 30,
2000, the Fund owed Mitchell Hutchins $307,320 in management fees.
Under the Advisory Contract, Mitchell Hutchins has agreed to pay all Fund ex-
penses other than the management fees, the fees payable pursuant to the Share-
holder Service Plan adopted by the Trust with respect to the Fund's Financial
Intermediary shares, fees and expenses (including counsel fees) of those trust-
ees who are not "interested persons" of the Trust (as defined in the Investment
Company Act of 1940, as amended) ("Independent Trustees"), interest, taxes and
the cost (including brokerage commissions and other transaction costs, if any)
of securities purchased or sold by the Fund and any losses incurred in connec-
tion therewith and extraordinary expenses (such as costs of litigation to which
the Trust or Fund is a party and of indemnifying officers and trustees of the
Trust). Although Mitchell Hutchins is not obligated to pay the fees and ex-
penses of the Independent Trustees, it is contractually obligated to reduce its
management fee in an amount equal to those fees and expenses. Mitchell Hutchins
had agreed to waive 6 basis points (0.06%) of its 18 basis points (0.18%) man-
agement fee from May 1, 1999 through August 31, 1999. From September 1, 1999
through April 30, 2000, Mitchell Hutchins had agreed to waive 3 basis points
(0.03%) of the 18 basis points (0.18%) fee. Mitchell Hutchins has agreed to ex-
tend that waiver of 3 basis points (0.03%) of its 18 basis points (0.18%) fee
through January 31, 2001. At April 30, 2000, management fees were 15 basis
points (0.15%).
For the year ended April 30, 2000, Mitchell Hutchins voluntarily waived
$687,813 of its management fees.
Other Liabilities
At April 30, 2000, dividends payable were $11,519,430.
Federal Tax Status
The Fund intends to distribute all of its taxable income and to comply with
the other requirements of the Internal Revenue Code applicable to regulated in-
vestment companies. Accordingly, no provision for federal income taxes is re-
quired. In addition, by distributing during each calendar year substantially
all of its net investment income, capital gains and certain other amounts, if
any, the Fund intends not to be subject to federal excise tax.
Shareholder Service Plan and Agreement
Under a Shareholder Service Plan and Agreement with respect to its Financial
Intermediary shares, the Fund pays PaineWebber monthly fees at the annual rate
of 0.25% of the average daily net assets of the Financial Intermediary shares
held by financial intermediaries on behalf of their customers. Under Service
Agreements with those financial intermediaries, PaineWebber pays an identical
fee to the financial intermediaries for certain support services that they pro-
vide to the beneficial owners of the Financial Intermediary shares.
10
<PAGE>
Notes to Financial Statements
Money Market Fund Bond
The Fund obtained an insurance bond that provides limited coverage for certain
loss events involving certain money market instruments held by the Fund. These
loss events include non-payment of principal or interest or a bankruptcy or in-
solvency of the issuer or credit enhancement provider (if any). The insurance
bond provides for coverage up to $200 million for a number of funds with a de-
ductible of 10 basis points (0.10%) of the total assets of the Fund for First
Tier Securities and 50 basis points (0.50%) of the total assets of the Fund for
Second Tier Securities, in each case determined as of the close of business on
the first business day prior to the loss event. In the event of a loss covered
under the bond, the Fund would expect to retain the security in its portfolio,
rather than having to sell it at its current market value, until the date of
payment of the loss, which is generally no later than the maturity of the secu-
rity. While the policy is intended to provide some protection against credit
risk and to help the Fund maintain a constant price per share of $1.00, there
is no guarantee that the insurance will do so. The Adviser pays the premium on
behalf of the Fund.
For the period September 30, 1999 to April 30, 2000, the Fund did not use this
insurance bond.
Shares of Beneficial Interest
There is an unlimited amount of $0.001 par value shares of beneficial interest
authorized. Transactions in shares of beneficial interest, at $1.00 per share,
were as follows:
<TABLE>
<CAPTION>
Institutional Shares Financial Intermediary Shares
--------------------------------- -------------------------------------
For the Period For the Period For the Period
For the Year August 10, 1998* November 4, 1999** December 29, 1998*
Ended to to to
April 30, 2000 April 30, 1999 March 6, 2000 February 9, 1999
--------------- ---------------- ------------------ ------------------
<S> <C> <C> <C> <C>
Shares sold............. 24,269,018,421 11,625,182,358 124,338,452 3,252,333
Shares repurchased ..... (23,371,429,911) (10,320,925,101) (124,338,452) (3,252,333)
Dividends reinvested.... 70,426,637 18,449,699 0 0
--------------- --------------- ------------ ----------
Net increase in shares
outstanding............ 968,015,147 1,322,706,956 0 0
=============== =============== ============ ==========
</TABLE>
---------
*Commencement of issuance of shares.
**Reissuance of shares.
11
<PAGE>
Mitchell Hutchins LIR Select Money Fund
Financial Highlights
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
Institutional Shares Financial Intermediary Shares(2)
------------------------------- -------------------------------------
For the Period For the Period For the Period
For the August 10, 1998+ November 4, 1999++ December 29, 1998+
Year Ended to to to
April 30, 2000 April 30, 1999 March 6, 2000 February 9, 1999
-------------- ---------------- ------------------ ------------------
<S> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ------- -------
Net investment income... 0.054 0.037 0.018 0.006
Dividends from net
investment income...... (0.054) (0.037) (0.018) (0.006)
---------- ---------- ------- -------
Net asset value, end of
period................. $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ======= =======
Total investment
return(1).............. 5.54% 3.81% 1.84% 0.57%
========== ========== ======= =======
Ratios/Supplemental
Data:
Net assets, end of
period (000's)......... $2,290,822 $1,322,807 -- --
Expenses to average net
assets net of waivers
from adviser........... 0.14% 0.07%* 0.40%* 0.32%*
Expenses to average net
assets before waivers
from adviser........... 0.18% 0.18%* 0.43%* 0.43%*
Net investment income to
average net assets net
of waivers from
adviser................ 5.48% 5.06%* 5.11%* 4.81%*
Net investment income to
average net assets
before waivers from
adviser................ 5.44% 4.95%* 5.08%* 4.70%*
</TABLE>
---------
+ Issuance of shares.
++Reissuance of shares.
*Annualized.
(1) Total investment return is calculated assuming a $1,000 investment on the
first day of the period reported, reinvestment of all dividends and
distributions at net asset value on the payable dates, and a sale at net
asset value on the last day of the period reported. Total investment return
for periods of less than one year has not been annualized.
(2) At March 6, 2000 and February 9, 1999, there were no longer any Financial
Intermediary shares outstanding. Any further subscriptions of such shares
would be at a $1.00 per share.
12
<PAGE>
Mitchell Hutchins LIR Select Money Fund
Report of Independent Auditors
The Board of Trustees and Shareholders of
Mitchell Hutchins LIR Select Money Fund
We have audited the accompanying statement of net assets of Mitchell Hutchins
LIR Select Money Fund as of April 30, 2000, and the related statement of opera-
tions for the year then ended, the statement of changes in net assets and the
financial highlights for each of the two years in the period then ended. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these finan-
cial statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally ac-
cepted in the United States. 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 and financial highlights. Our procedures included con-
firmation of securities owned at April 30, 2000, by correspondence with the
custodian and brokers. An audit also includes assessing the accounting princi-
ples used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits pro-
vide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above and audited by us present fairly, in all material respects, the financial
position of Mitchell Hutchins LIR Select Money Fund at April 30, 2000, the re-
sults of its operations for the year then ended, the changes in its net assets
and the financial highlights for each of the two years in the period then end-
ed, in conformity with accounting principles generally accepted in the United
States.
/s/ Ernst & Young LLP
New York, New York
June 8, 2000
13
<PAGE>
Mitchell Hutchins LIR Select Money Fund
Tax Information (unaudited)
We are required by Subchapter M of the Internal Revenue Code of 1986, as
amended, to advise you within 60 days of the Fund's fiscal year end, April 30,
2000, as to the federal tax status of distributions received by shareholders
during such fiscal period. Accordingly, we are advising you that all dividends
paid by the Fund during the fiscal period were derived from net investment in-
come. These amounts are taxable as ordinary income, none of which qualifies for
the dividend received deduction available to corporate shareholders.
Dividends received by tax-exempt recipients (e.g., IRAs and Keoghs) need not
be reported as taxable income. Some retirement trusts (e.g., corporate, Keogh
and 403(b)(7) plans) may need this information for their annual information re-
porting.
Because the Fund's fiscal year is not the calendar year, another notification
will be sent in respect of calendar year 2000. The second notification, which
will reflect the amounts to be used by calendar year taxpayers on their federal
income tax returns, will be made in conjunction with Form 1099 DIV and will be
mailed in January 2001. Shareholders are advised to consult their own tax ad-
visers with respect to the tax consequences of their investment in the Fund.
14
<PAGE>
TRUSTEES
E. Garrett Bewkes, Jr. Meyer Feldberg
Chairman
Margo N. Alexander
Richard Q. Armstrong
Richard R. Burt
Mary C. Farrell
PRINCIPAL OFFICERS
Margo N. Alexander Dennis L. McCauley
President Vice President
Dianne E. O'Donnell Kris Dorr
Vice President and Secretary Vice President
Paul H. Schubert
Vice President and Treasurer
INVESTMENT ADVISER AND ADMINISTRATOR
Mitchell Hutchins Asset Management Inc.
51 West 52nd Street
New York, New York 10019
DISTRIBUTOR
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
This report is not to be used in connection with the offering of shares of the
Fund unless accompanied or preceded by an effective prospectus.
A prospectus containing more complete information for any of the Funds listed on
the back cover can be obtained from a PaineWebber Financial Advisor or
correspondent firm. Read the prospectus carefully before investing.
<PAGE>
PaineWebber offers a family of 27 funds which encompass a diversified range of
investment goals.
BOND FUNDS
. High Income Fund
. Investment Grade Income Fund
. Low Duration U.S. Government Income Fund
. Strategic Income Fund
. U.S. Government Income Fund
TAX-FREE BOND FUNDS
. California Tax-Free Income Fund
. Municipal High Income Fund
. National Tax-Free Income Fund
. New York Tax-Free Income Fund
STOCK FUNDS
. Enhanced S&P 500 Fund
. Enhanced Nasdaq-100 Fund
. Financial Services Growth Fund
. Growth Fund
. Growth and Income Fund
. Mid Cap Fund
. Small Cap Fund
. S&P 500 Index Fund
. Strategy Fund
. Tax-Managed Equity Fund
. Utility Income Fund
ASSET ALLOCATION FUNDS
. Balanced Fund
. Tactical Allocation Fund
GLOBAL FUNDS
. Asia Pacific Growth Fund
. Emerging Markets Equity Fund
. Global Equity Fund
. Global Income Fund
PAINEWEBBER MONEY MARKET FUND
MITCHELL HUTCHINS
LIR SELECT
MONEY FUND
ANNUAL REPORT
PaineWebber
(C)2000 PaineWebber Incorporated
All Rights Reserved.
Member SIPC
APRIL 30, 2000
