MITCHELL HUTCHINS LIR SELECT MONEY FUND SEMIANNUAL REPORT
December 15, 1999
Dear Shareholder,
We are pleased to present you with the semiannual report for the Mitchell
Hutchins LIR Select Money Fund (the "Fund") for the six-month period ended
October 31, 1999.
MARKET REVIEW
- --------------------------------------------------------------------------------
[Graphic omitted]
During the past six-month period, fears of higher inflation became the dominant
theme of the fixed income markets, and bond yields rose in response. Interest
rates rose as the markets reacted to improving economic prospects in Asia and
Latin America, rapidly growing U.S. demand, higher oil prices and fears that
future wage increases might not be offset by commodity deflation. By the end of
the semiannual period on October 31, 1999, the Federal Reserve had raised the
federal funds rate twice, by 0.25% each time, to 5.25%. After period-end the Fed
raised rates for a third time, to 5.50%.
PORTFOLIO REVIEW
- -------------------------------------------------------------------------------
[Graphic omitted] Institutional Shares--Performance and Characteristics
10/31/99 4/30/99
--------------------------------------------------------------------
Current Seven-Day Average Yield(1) 5.34% 4.86%
Effective Seven-Day Yield(1) 5.48% 4.98%
Weighted Average Maturity 38 days 36 days
Net Assets $1.725 billion $1.323 billion
- --------------------------------------------------------------------------------
HIGHLIGHTS
Throughout the six-month period we positioned the Fund slightly "short" to its
peer group--that is, with a slightly lower weighted-average maturity. The Fund
tends to remain short 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.
MITCHELL HUTCHINS
LIR SELECT MONEY FUND
INVESTMENT GOAL:
Maximum current income
consistent with liquidity and
capital preservation
PORTFOLIO MANAGER:
Kris Dorr, Mitchell Hutchins
Asset Management Inc.
COMMENCEMENT:
August 10, 1998
DIVIDEND PAYMENTS:
Monthly
- ------------------------
1 Yields will fluctuate.
1
<PAGE>
SEMIANNUAL REPORT
MITCHELL HUTCHINS LIR SELECT MONEY FUND--SECTOR ALLOCATION*
As of 10/31/99 % As of 4/30/99 %
- --------------------------------------------------------------------------------
Commercial Paper 59.5 Commercial Paper 62.0
Time Deposits 11.5 Domestic Master Notes 15.5
Domestic Master Notes 9.1 Funding Agreements 10.2
Short-Term Corporate 5.8 Time Deposits 4.5
Bank Notes 5.5 Short-Term Corporate 2.7
Repurchase Agreements 3.0 Certificates of Deposit 2.0
Certificates of Deposit 2.9 Bank Notes 1.9
U.S. Gov't & Agency 1.8 Money Market Funds 1.2
Money Market Funds 0.9
- --------------------------------------------------------------------------------
Total 100.0 Total 100.0
OUTLOOK
The Federal Reserve has established a special Y2K lending program under which
credit may be extended to depository institutions to ease liquidity pressures
over the century date change. The Federal Reserve Bank of New York has said it
will expand the types of collateral it accepts in repurchase transactions, will
extend the maximum term of its repurchase transactions from 60 to 90 days and
will introduce a standby financing facility for banks.
It is likely that issues of new short-term debt will decrease toward
year-end, limiting supplies and potentially triggering price increases. Also,
investors might seek safety by reducing their exposure to corporate credits and
increasing their positions in U.S. government securities, precipitating a
"flight to quality." To provide sufficient liquidity at year-end, we may
increase the Fund's holdings of U.S. government securities. However, this
planned defensive posture may change in response to changing market
circumstances as Y2K approaches.
- ---------------
* Weightings represent percentages of portfolio 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 SEMIANNUAL 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 Funds,(2) 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 Operating Officer
Mitchell Hutchins Asset Management Inc. Mitchell Hutchins Asset Management Inc.
/s/ DENNIS L. MCCAULEY /s/ KRIS DORR
- ---------------------- -------------
DENNIS L. MCCAULEY KRIS DORR
Managing Director and Portfolio Manager
Chief Investment Officer--Fixed Income Mitchell Hutchins LIR Select Money Fund
Mitchell Hutchins Asset Management Inc.
This letter is intended to assist shareholders in understanding how the Fund
performed during the six-month period ended October 31, 1999, 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 OCTOBER 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
-------- -------- -------- -----
<S> <C> <C> <C> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS--1.74%
$15,000 Federal National Mortgage Association .................. 08/09/00 5.370%* $ 14,994,221
15,000 Student Loan Marketing Association ..................... 08/03/00 5.795* 14,994,344
------------
Total U.S. Government Agency Obligations (cost--$29,988,565) 29,988,565
------------
BANK NOTES--5.22%
15,000 Bank of Nova Scotia .................................... 10/02/00 5.920 14,959,516
50,000 Comerica Bank, N.A., Detroit ........................... 11/09/99 5.383 49,998,769
25,000 Harris Trust & Savings Bank ............................ 02/01/00 5.000 24,998,179
------------
Total Bank Notes (cost--$89,956,464) ................................... 89,956,464
------------
CERTIFICATES OF DEPOSIT--2.78%
YANKEE--2.78%
8,000 Canadian Imperial Bank of Commerce ..................... 02/07/00 5.010 7,999,172
10,000 Deutsche Bank AG ....................................... 01/18/00 5.518* 10,000,000
10,000 Dresdner Bank AG ....................................... 07/24/00 5.379* 9,997,168
20,000 Royal Bank of Canada ................................... 03/09/00 5.235 19,999,548
------------
Total Certificates of Deposit (cost--$47,995,888) ...................... 47,995,888
------------
COMMERCIAL [email protected]%
ASSET-BACKED--BANKING--5.29%
42,000 Atlantis One Funding Corporation ....................... 01/21/00 to 01/25/00 5.410 to 05.870 41,456,034
50,048 Wood Street Funding Corporation ........................ 11/22/99 to 11/26/99 5.350 49,868,031
------------
91,324,065
------------
ASSET-BACKED--FINANCE--2.96%
10,000 Beta Finance, Incorporated ............................. 01/24/00 5.440 9,873,067
41,700 CC (USA) Incorporated .................................. 11/17/99 to 02/15/00 4.830 to 5.830 41,190,762
------------
51,063,829
------------
ASSET-BACKED--MISCELLANEOUS--10.96%
15,000 Asset Securitization Cooperative Corporation ........... 01/26/00 5.420 14,805,783
25,000 Asset Securitization Cooperative Corporation ........... 03/14/00 5.542* 25,000,000
5,724 Enterprise Funding Corporation ......................... 01/19/00 5.430 5,655,794
25,000 Falcon Asset Securitization Corporation ................ 01/21/00 5.880 24,669,250
16,226 Parthenon Receivables Funding LLC ...................... 11/02/99 5.370 16,223,580
20,000 Receivables Capital Corporation ........................ 01/14/00 5.800 19,761,555
28,449 Triple A One Funding Corporation ....................... 11/29/99 to 01/18/00 5.360 to 5.440 28,254,221
30,000 Variable Funding Capital Corporation ................... 01/11/00 to 01/19/00 5.410 to 5.820 29,647,778
25,000 Variable Funding Capital Corporation ................... 03/16/00 5.507* 25,000,000
------------
189,017,961
------------
AUTO & TRUCK--2.89%
50,000 BMW US Capital Incorporated ............................ 11/29/99 5.280 49,794,667
------------
BANKING--6.54%
20,000 Abbey National North America ........................... 01/24/00 4.920 19,770,400
50,000 Banque et Caisse d'Epargne de L'Etat ................... 11/08/99 5.350 49,947,986
43,302 BCI Funding Corporation ................................ 11/23/99 5.310 43,161,485
------------
112,879,871
------------
BROKER-DEALER--1.74%
30,000 Morgan Stanley, Dean Witter & Company .................. 01/26/00 5.610* 30,000,000
------------
</TABLE>
4
<PAGE>
MITCHELL HUTCHINS LIR SELECT MONEY FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
-------- -------- -------- -----
<S> <C> <C> <C> <C>
COMMERCIAL PAPER@--(CONCLUDED)
BUSINESS SERVICES--1.45%
$25,000 First Data Corporation ................................. 11/16/99 5.270% $ 24,945,104
------------
CONSUMER PRODUCTS--2.78%
48,000 Fortune Brands Incorporated ............................ 11/01/99 5.320 48,000,000
------------
DRUGS, HEALTHCARE--2.02%
35,000 Pfizer Incorporated .................................... 11/19/99 5.270 34,907,775
------------
ELECTRONICS--1.62%
28,000 SIEMENS CAPITAL CORPORATION ............................ 11/01/99 5.300 28,000,000
ENERGY--1.89%
32,598 Mobil Australia Finance Company ........................ 11/05/99 5.250 32,578,984
------------
FINANCE--CONDUIT--1.73%
30,000 UBS Finance (Delaware) LLC ............................. 12/10/99 4.840 29,842,700
------------
FINANCE--CONSUMER--1.74%
30,000 Transamerica Finance Corporation ....................... 11/04/99 5.260 29,986,850
------------
FINANCE--SUBSIDIARY--1.69%
10,000 Dresdner U.S. Finance .................................. 01/18/00 4.930 9,893,183
19,200 National Australia Funding (Delaware) Incorporated ..... 11/01/99 5.320 19,200,000
------------
29,093,183
------------
MACHINERY--1.05%
18,100 Caterpillar Financial Services ......................... 11/17/99 5.260 18,057,686
------------
METALS & MINING--0.57%
10,000 Rio Tinto America Incorporated ......................... 01/24/00 4.930 9,884,967
------------
PRINTING & PUBLISHING--2.90%
50,000 Gannett Company ........................................ 11/01/99 5.330 50,000,000
------------
RETAIL--MERCHANDISE--2.95%
51,000 Wal-Mart Stores Incorporated ........................... 11/02/99 to 11/16/99 5.280 to 5.300 50,930,908
------------
TELECOMMUNICATIONS--1.14%
20,000 Lucent Technologies Incorporated ....................... 01/26/00 4.910 19,765,411
------------
UTILITY-ELECTRIC--2.91%
50,644 Southern Company ....................................... 11/24/99 to 01/26/00 5.310 to 5.350 50,231,443
------------
Total Commercial Paper (cost--$980,305,404) ............................ 980,305,404
------------
DOMESTIC MASTER NOTES--8.69%
BROKER-DEALER--8.69%
40,000 Bank of America Securities, LLC ........................ 11/01/99 5.575 40,000,000
40,000 Bear Stearns Companies Incorporated .................... 11/01/99 5.575 40,000,000
40,000 Goldman Sachs Group L.P. ............................... 11/01/99 5.406 40,000,000
30,000 Morgan Stanley, Dean Witter & Company .................. 11/01/99 5.475 30,000,000
------------
Total Domestic Master Notes (cost--$150,000,000) ....................... 150,000,000
------------
SHORT-TERM CORPORATE OBLIGATIONS--5.57%
ASSET-BACKED--FINANCE--2.60%
45,000 Beta Finance Incorporated .............................. 01/19/00 to 08/14/00 5.130 to 5.900 45,000,000
------------
</TABLE>
5
<PAGE>
MITCHELL HUTCHINS LIR SELECT MONEY FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
-------- -------- -------- -----
<S> <C> <C> <C> <C>
Short-Term Corporate Obligations--(concluded)
AUTO & TRUCK--0.88%
$ 15,000 Ford Motor Credit Corporation .......................... 08/15/00 6.850% $ 15,123,381
--------------
BANKING--1.22%
6,000 Bank One Corporation ................................... 10/20/00 6.158* 5,994,777
15,000 Bank One Corporation ................................... 10/26/00 6.159* 14,986,721
--------------
20,981,498
--------------
FINANCE--AIRCRAFT--0.29%
5,000 International Lease Financing .......................... 09/01/00 6.310 5,010,411
--------------
FINANCE--DIVERSIFIED--0.58%
10,000 Associates Corporation of North America ................ 02/15/00 6.200 10,027,856
--------------
Total Short-Term Corporate Obligations (cost--$96,143,146) ............. 96,143,146
--------------
REPURCHASE AGREEMENT--2.90%
50,000 Repurchase Agreement dated 10/29/99 with Deutsche Bank
Securities Inc. collateralized by $13,676,094 CSC Holdings
Inc., 7.625% due 07/15/18, and $39,444,044 FF Holdings
Corp., 14.250% due 10/02/02 (value--$51,769,624);
proceeds; $50,021,750 ..................................... 11/01/99 5.220 50,000,000
--------------
TIME DEPOSITS--11.01%
50,000 Dresdner Bank AG ....................................... 11/01/99 5.281 50,000,000
70,000 State Street Bank & Trust Co. .......................... 11/01/99 5.313 70,000,000
70,000 Westdeutsche Landesbank Girozentrale ................... 11/01/99 5.313 70,000,000
--------------
Total Time Deposits (cost--$190,000,000) ............................... 190,000,000
--------------
NUMBER OF
SHARES
--------
MONEY MARKET FUNDS--0.82%
781,082 AIM Liquid Money Market Fund ..................................................................... 781,082
13,351,973 Provident Temp Money Market Fund ................................................................. 13,351,973
--------------
Total Money Market Funds (cost--$14,133,055) ..................................................................... 14,133,055
--------------
Total Investments (cost--$1,648,522,522 which approximates cost for federal
income tax purposes)--95.55% 1,648,522,522
Other assets in excess of liabilities--4.55%+ .................................................................... 76,864,146
--------------
Net Assets (applicable to 1,725,386,709 Institutional shares outstanding at $1.00 per share)--100.00%............. $1,725,386,668
==============
</TABLE>
- ----------------
* Variable rate securities--maturity date reflects earlier of reset date or
maturity date. The interest rates shown are the current rates as of October
31, 1999 and reset periodically.
@ Interest rates shown are the discount rates at date of purchase.
+ Includes proceeds of illiquid securities sold representing 4.49% of net
assets settling November 1999 and December 1999.
Weighted Average Maturity--38 Days
See accompanying notes to financial statements
6
<PAGE>
MITCHELL HUTCHINS LIR SELECT MONEY FUND
STATEMENT OF OPERATIONS
FOR THE SIX
MONTHS ENDED
OCTOBER 31, 1999
(UNAUDITED)
----------------
INVESTMENT INCOME:
Interest .................................................... $39,794,958
-----------
EXPENSES:
Management fee .............................................. 1,365,830
Trustees' fees .............................................. 5,250
-----------
1,371,080
Less: Fee waivers from adviser .............................. (378,466)
-----------
Net expenses ................................................ 992,614
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ........ $38,802,344
===========
See accompanying notes to financial statements
7
<PAGE>
MITCHELL HUTCHINS LIR SELECT MONEY FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE SIX FOR THE PERIOD
MONTHS ENDED AUGUST 10, 1998+
OCTOBER 31, 1999 TO
(UNAUDITED) APRIL 30, 1999
---------------- ----------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income .............................................. $ 38,802,344 $ 31,577,997
Net realized losses from investment transactions ................... -- (41)
--------------- ---------------
Net increase in net assets resulting from operations ............... 38,802,344 31,577,956
--------------- ---------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income--Institutional Shares ........................ (38,802,344) (31,570,819)
Net investment income--Financial Intermediary Shares ............... -- (7,178)
--------------- ---------------
Total dividends to shareholders .................................... (38,802,344) (31,577,997)
--------------- ---------------
NET INCREASE IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS ... 402,579,753 1,322,706,956
--------------- ---------------
Net increase in net assets ......................................... 402,579,753 1,322,706,915
NET ASSETS:
Beginning of period ................................................ 1,322,806,915 100,000
--------------- ---------------
End of period ...................................................... $ 1,725,386,668 $ 1,322,806,915
=============== ===============
</TABLE>
- ---------------
+ Commencement of operations.
See accompanying notes to financial statements
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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 LIRMoney Series (the
"Trust"), an open-end management investment company organized as a Delaware
business trust on April 29, 1998. 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 investment adviser and an asset management subsidiary of
PaineWebber Incorporated ("PaineWebber"), for $100,000.
The Fund currently offers two classes of shares, Institutional shares and
Financial Intermediary shares. Each class represents interests in the same
assets of the Fund, and both classes have equal voting privileges, except that
beneficial 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 holders of Financial Intermediary shares are entitled to vote thereon. For
the six months ended October 31, 1999, there were no Financial Intermediary
shares outstanding.
The preparation of financial statements in accordance with generally
accepted accounting principles 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
transactions are recorded on the trade date. Realized gains and losses from
investment transactions are calculated using the identified cost method.
Interest income is recorded on an accrual basis. Premiums are amortized and
discounts 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 accrued 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 obligation. Under certain circumstances, in the event of default or
bankruptcy by the other party to the agreement, realization and/or retention of
the collateral 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 differences 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
administrator 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 October
31, 1999, the Fund owed Mitchell Hutchins $206,561 in management fees.
Under the Advisory Contract, Mitchell Hutchins has agreed to pay all Fund
expenses other than the management fees, the fees payable pursuant to the
Shareholder Service Plan adopted by the Trust with respect to the Fund's
Financial Intermediary shares, fees and expenses (including counsel fees) of
those trustees 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
connection 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
expenses 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%) management fee from May 1, 1999 through August 31, 1999. From September
1, 1999 through January 31, 2000, Mitchell Hutchins has also agreed to waive 3
basis points (0.03%) of its 18 basis points (0.18%). At October 31, 1999,
management fees were 15 basis points (0.15%). For the six months ended October
31, 1999, Mitchell Hutchins voluntarily waived $378,466 of its management fees.
OTHER LIABILITIES
At October 31, 1999, dividends payable were $7,004,390.
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
investment companies. Accordingly, no provision for federal income taxes is
required. 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
provide to the beneficial owners of the Financial Intermediary shares.
10
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
MONEY MARKET FUND BOND
Effective September 30, 1999, the LIR Select Money 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 insolvency 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 deductible 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 security. 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 October 31, 1999, the LIR Select Money 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>
FINANCIAL
INSTITUTIONAL SHARES INTERMEDIARY SHARES**
------------------------------------ -------------------
FOR THE PERIOD FOR THE PERIOD
FOR THE SIX AUGUST 10, 1998* DECEMBER 29, 1998*
MONTHS ENDED TO TO
OCTOBER 31, 1999 APRIL 30, 1999 FEBRUARY 9, 1999
---------------- -------------- ----------------
<S> <C> <C> <C>
Shares sold .......................... 12,810,329,941 11,625,182,358 3,252,333
Shares repurchased ................... (12,434,620,153) (10,320,925,101) (3,252,333)
Dividends reinvested ................. 26,869,965 18,449,699 0
--------------- --------------- ----------
Net Increase in shares outstanding ... 402,579,753 1,322,706,956 0
=============== =============== ==========
</TABLE>
- ----------
* Commencement of issuance of shares.
** For the six months ended October 31, 1999, there were no transactions in
Financial Intermediary 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>
FINANCIAL
INSTITUTIONAL SHARES INTERMEDIARY SHARES
------------------------------------- -------------------
FOR THE SIX FOR THE PERIOD FOR THE PERIOD
MONTHS ENDED AUGUST 10, 1998 DECEMBER 29, 1998
OCTOBER 31, 1999 TO TO
(UNAUDITED) APRIL 30, 1999 FEBRUARY 9, 1999(2)
---------------- -------------- -------------------
<S> <C> <C> <C>
Net asset value, beginning of period ................. $ 1.00 $ 1.00 $ 1.00
---------- ---------- --------------
Net investment income ................................ 0.026 0.037 0.006
Dividends from net investment income ................. (0.026) (0.037) (0.006)
---------- ---------- --------------
Net asset value, end of period ....................... $ 1.00 $ 1.00 $ 1.00
========== ========== ==============
Total investment return (1) .......................... 2.59% 3.81% 0.57%
========== ========== ==============
Ratios/Supplemental Data:
Net assets, end of period (000's) .................... $1,725,387 $1,322,807 --
Expenses to average net assets net of
waivers from adviser ............................... 0.13%* 0.07%* 0.32%*
Expenses to average net assets before
waivers from adviser ............................... 0.18%* 0.18%* 0.43%*
Net investment income to average net assets net of
waivers from adviser ............................... 5.09%* 5.06%* 4.81%*
Net investment income to average net assets before
waivers from adviser ............................... 5.04%* 4.95%* 4.70%*
</TABLE>
- ----------
+ Issuance 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 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
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================================================================================
TRUSTEES
E. Garrett Bewkes, Jr. Meyer Feldberg
CHAIRMAN George W. Gowen
Margo N. Alexander Frederic V. Malek
Richard Q. Armstrong Carl W. Schafer
Richard R. Burt Brian M. Storms
Mary C. Farrell
PRINCIPAL OFFICERS
Margo N. Alexander Paul H. Schubert
PRESIDENT VICE PRESIDENT AND TREASURER
Victoria E. Schonfeld Dennis L. McCauley
VICE PRESIDENT VICE PRESIDENT
Dianne E. O'Donnell Kris Dorr
VICE PRESIDENT AND SECRETARY VICE PRESIDENT
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.
THE FINANCIAL INFORMATION INCLUDED HEREIN IS TAKEN FROM THE RECORDS OF THE TRUST
WITHOUT EXAMINATION BY INDEPENDENT AUDITORS WHO DO NOT EXPRESS AN OPINION
THEREON.
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.
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PaineWebber offers a family of 28 funds which
encompass a diversified range of investment goals.
BOND FUNDS
o High Income Fund
o Investment Grade Income Fund
o Low Duration U.S. Government Income Fund
o Strategic Income Fund
o U.S. Government Income Fund
TAX-FREE BOND FUNDS
o California Tax-Free Income Fund
o Municipal High Income Fund
o National Tax-Free Income Fund
o New York Tax-Free Income Fund
STOCK FUNDS
o Financial Services Growth Fund
o Growth Fund
o Growth and Income Fund
o Mid Cap Fund
o Small Cap Fund
o S&P 500 Index Fund
o Strategy Fund
o Tax-Managed Equity Fund
o Utility Income Fund
Asset Allocation Funds
o Balanced Fund
o Tactical Allocation Fund
GLOBAL FUNDS
o Asia Pacific Growth Fund
o Emerging Markets Equity Fund
o Global Equity Fund
o Global Income Fund
MITCHELL HUTCHINS PORTFOLIOS
o Aggressive Portfolio
o Moderate Portfolio
o Conservative Portfolio
PaineWebber Money Market Fund
PAINEWEBBER
(C) 1999 PaineWebber Incorporated
Member sipc
All rights reserved.
================================================================================
MITCHELL HUTCHINS
LIR SELECT
MONEY FUND
OCTOBER 31, 1999
SEMIANNUAL REPORT
