<PAGE>
MITCHELL HUTCHINS LIR SELECT MONEY FUND SEMIANNUAL REPORT
December 15, 2000
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, 2000.
--------------------------------------------------------------------------------
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
--------------------------------------------------------------------------------
MARKET REVIEW
--------------------------------------------------------------------------------
[GRAPHIC] The six months ended October 31, 2000 began with fears that an
overheated economy would push the increase in the rate of inflation to
potentially disruptive levels--the period ended with some concern that economic
growth had been halted to the extent that it could endanger a hoped-for economic
soft landing. Uncertainty in the equity markets was further fueled by corporate
earnings disappointments, rising energy prices, and rising tensions in the
Middle East. These factors pulled investors increasingly to fixed income
investments, attracted by their relative security and stability of principal.
As the economy showed signs of slowing in October, and expectations of a
U.S. Federal Reserve Board (the "Fed") rate cut grew stronger, treasury yields
began to decline. Despite these declines, yields for the 90-day Treasury bill
rose 33 basis points while the 30-year bond rose three basis points (a basis
point equals 1/100th of one percent) during the six months ended October 31,
2000.
In the latter part of the fiscal period, as the markets struggled and the
economy began to show signs of slowing, the Fed continued to warn that inflation
was its primary concern as it contemplated the future course of interest rates
with a bias toward halting inflation. Late in the period and post-period,
however, home sales and durable goods sales began to dip while unemployment
figures rose. The Gross Domestic Product (GDP) for the third quarter was revised
downward to a 2.4% annual rate of increase, and Fed Chairman Alan Greenspan
noted for the first time in more than a year that inflation might not be the
Fed's primary concern any longer.
1
<PAGE>
SEMIANNUAL REPORT MITCHELL HUTCHINS LIR SELECT MONEY FUND
<TABLE>
<CAPTION>
PORTFOLIO REVIEW
--------------------------------------------------------------------------------
INSTITUTIONAL SHARES--PERFORMANCE
AND CHARACTERISTICS 10/31/00 4/30/00
--------------------------------------------------------------------------------
<S> <C> <C>
Current Seven-Day Average Yield(1) 6.57% 6.02%
Effective Seven-Day Yield(1) 6.78% 6.20%
Weighted Average Maturity 37 days 29 days
Net Assets $2.128 billion $2.291 billion
--------------------------------------------------------------------------------
</TABLE>
(1)Yields will fluctuate.
HIGHLIGHTS
[GRAPHIC] We continued to emphasize high credit quality and liquidity, building
our portfolio maturities to seek competitive yields by focusing on spread
product. During the period, the yield curve continued to be downward sloping,
making money market securities very attractive. We extended the Fund's average
maturity from 29 to 37 days.
<TABLE>
<CAPTION>
SECTOR ALLOCATION* 10/31/00 4/30/00
--------------------------------------------------------------------------------
<S> <C> <C>
Commercial Paper 44.8% Commercial Paper 58.9%
Domestic Master Notes 15.4 Domestic Master Notes 15.3
Certificates of Deposit 10.4 Time Deposits 7.3
Time Deposits 9.2 Other Banking Obligations 6.1
Short-Term Corporate 8.4 Certificates of Deposit 4.6
Repurchase Agreements 6.1 Short-Term Corporate 4.4
Other Banking Obligations 5.2 Repurchase Agreements 2.2
Money Market Funds 0.5 U.S. Gov't Agency 1.3
Money Market Funds 0.1
Liabilities in Excess of Other Assets -0.2
--------------------------------------------------------------------------------
Total 100.0 Total 100.0
</TABLE>
*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 SEMIANNUAL REPORT
OUTLOOK
--------------------------------------------------------------------------------
[GRAPHIC]Most signs now point to the economy growing at a sustainable pace
during the coming months. We expect the GDP to grow at about 2.0% during the
fourth quarter of this year, increasing slightly to 2.5% during the second
quarter of 2001. Depending largely upon inflation figures, the Fed may lower the
Federal Funds rate by between 0.25% to 0.50% during the first half of 2001 to
help ensure that the economy lands softly, although tensions across the globe
and the continued energy crisis continue to be areas of concern. We will
continue to focus on providing the Fund's shareholders with the highest credit
quality investments.
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. For additional information visit us at www.painewebber.com.
Sincerely,
/s/ Brian M. Storms
BRIAN M. STORMS
President and
Chief Executive Officer
Mitchell Hutchins
Asset Management Inc.
/s/ Kris Dorr
KRIS DORR
Portfolio Manager
Mitchell Hutchins
LIR Select Money Fund
/s/ Michael Markowitz
MICHAEL MARKOWITZ
Portfolio Manager
Mitchell Hutchins
LIRSelect Money Fund
This letter is intended to assist shareholders in understanding how the
Fund performed during the six-month period ended October 31, 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
OCTOBER 31, 2000(UNAUDITED)
STATEMENT OF NET ASSETS
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
--------- -------------- --------------- ---------------
<S> <C> <C> <C>
CERTIFICATES OF DEPOSIT--10.43%
DOMESTIC--1.93%
$ 11,000 Harris Trust & Savings Bank ....................... 11/01/00 6.620%* $ 11,002,914
15,000 Key Bank N.A. ..................................... 11/08/00 6.610* 14,999,828
15,000 Sun Trust Banks, Inc. ............................. 04/18/01 6.780 14,998,036
---------------
41,000,778
---------------
EURO-DOLLAR--2.35%
50,000 Svenska Handelsbanken ............................. 12/15/00 6.570 50,001,063
---------------
YANKEE--6.15%
10,000 Canadian Imperial Bank of Commerce ................ 01/29/01 6.525 9,999,073
40,000 Commerzbank AG .................................... 06/26/01 to 08/13/01 6.850 to 7.150 39,992,389
15,000 Royal Bank of Canada .............................. 01/16/01 6.525 14,998,517
11,000 Svenska Handelsbanken ............................. 06/20/01 7.110 11,014,831
55,000 UBS AG ............................................ 11/28/00 to 03/27/01 6.090 to 6.875 54,996,827
---------------
131,001,637
---------------
Total Certificates of Deposit (cost--$222,003,478) .......... 222,003,478
---------------
OTHER BANKING OBLIGATIONS--5.17%
DOMESTIC--5.17%
60,000 Comerica Bank, N.A., Detroit ...................... 11/07/00 to 11/14/00 6.535 to 6.570* 59,989,434
50,000 Strategic Money Market Trust + .................... 11/13/00 6.640* 50,000,000
---------------
Total Other Banking Obligations (cost--$109,989,434) ........ 109,989,434
---------------
COMMERCIAL [email protected]%
ASSET BACKED-BANKING--7.41%
80,792 Atlantis One Funding Corp. ........................ 11/01/00 to 02/23/01 6.480 to 6.630 79,604,284
78,377 Woodstreet Funding Corp. .......................... 11/10/00 to 11/24/00 6.500 78,094,990
---------------
157,699,274
---------------
ASSET BACKED-MISCELLANEOUS--21.84%
86,130 Falcon Asset Securitization Corp. ................. 11/20/00 to 11/24/00 6.500 to 6.520 85,808,749
41,311 Giro Funding Corp. ................................ 11/09/00 to 12/07/00 6.500 to 6.510 41,115,571
69,944 Parthenon Receivables Funding LLC ................. 11/08/00 to 12/13/00 6.500 to 6.520 69,709,581
97,475 Preferred Receivables Funding Corp. ............... 11/21/00 to 12/08/00 6.500 to 6.510 96,978,997
43,141 Triple A One Funding Corp. ........................ 11/06/00 6.500 43,102,053
50,000 Unilever Capital Corp. ............................ 11/01/00 6.510 50,000,000
78,107 Variable Funding Capital Corp. .................... 11/06/00 to 11/08/00 6.500 78,025,653
---------------
464,740,604
---------------
BANKING-FOREIGN--3.79%
47,000 Alliance & Leicester PLC .......................... 02/20/01 6.480 to 6.500 46,059,584
35,000 Halifax PLC ....................................... 01/05/01 6.530 34,587,340
---------------
80,646,924
---------------
</TABLE>
4
<PAGE>
MITCHELL HUTCHINS LIR SELECT MONEY FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
--------- -------------- --------------- ---------------
<S> <C> <C> <C>
COMMERCIAL PAPER@--(CONCLUDED)
BROKER-DEALER--1.17%
$ 25,000 Salomon Smith Barney Holdings, Inc. ............... 11/01/00 6.600% $ 25,000,000
---------------
ELECTRONICS--1.17%
25,000 Motorola Credit Corp. ............................. 12/01/00 6.490 24,864,792
---------------
ENERGY--0.89%
18,878 Exxon Mobil Australia, Ltd. ....................... 11/01/00 6.580 18,878,000
---------------
FINANCE-CONDUIT--0.55%
12,000 Svenska Handelsbanken ............................. 03/12/01 6.460 11,717,913
---------------
FINANCE-INDEPENDENT--0.46%
10,000 National Rural Utilities Cooperative Finance Corp. 02/22/01 6.460 9,797,228
---------------
INSURANCE--3.52%
50,500 Aegon Funding Corp. ............................... 12/19/00 to 12/27/00 6.550 to 6.650 50,005,955
5,000 AIG Funding, Inc. ................................. 01/17/01 6.480 4,930,700
20,000 The St. Paul Companies, Inc. ...................... 11/07/00 6.480 19,978,400
---------------
74,915,055
---------------
METALS & MINING--1.71%
36,735 Rio Tinto America, Inc. ........................... 12/12/00 6.470 36,464,314
---------------
PRINTING & PUBLISHING--2.34%
50,000 Gannett Co. ....................................... 11/27/00 6.500 49,765,278
---------------
Total Commercial Paper (cost--$954,489,382) ................. 954,489,382
---------------
DOMESTIC MASTER NOTES--15.37%
BROKER-DEALER--14.57%
73,000 Bank of America Securities ........................ 11/01/00 6.825* 73,000,000
95,000 Bear Stearns Companies, Inc. ...................... 11/01/00 6.825* 95,000,000
47,041 J.P. Morgan Securities, Inc. ...................... 11/01/00 6.588* 47,041,000
95,000 Morgan Stanley Dean Witter & Co. .................. 11/01/00 6.725* 95,000,000
---------------
310,041,000
---------------
OTHER BANKING OBLIGATION--0.80%
17,000 Bank of America N.A. .............................. 01/12/01 6.842* 17,008,013
---------------
Total Domestic Master Notes (cost--$327,049,013) ............ 327,049,013
---------------
SHORT-TERM CORPORATE OBLIGATIONS--8.45%
ASSET BACKED-FINANCE--3.76%
45,000 Beta Finance, Inc. ................................ 01/25/01 to 08/20/01 6.620 to 6.925 45,000,000
20,000 Beta Finance, Inc. ................................ 11/10/00 6.600* 20,000,000
15,000 CC (USA), Inc. .................................... 02/15/01 6.810 15,000,000
---------------
80,000,000
---------------
</TABLE>
5
<PAGE>
MITCHELL HUTCHINS LIR SELECT MONEY FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
--------- -------------- --------------- ---------------
<S> <C> <C> <C>
SHORT-TERM CORPORATE OBLIGATIONS--(CONCLUDED)
AUTO & TRUCK--2.36%
$ 50,000 General Motors Acceptance Corp. ................... 11/01/00 7.020% $ 50,108,466
---------------
TELECOMMUNICATIONS--2.33%
50,000 Verizon Global Funding Corp. ...................... 12/12/00 6.470 49,631,570
---------------
Total Short-Term Corporate Obligations (cost--$179,740,036) . 179,740,036
---------------
REPURCHASE AGREEMENTS--6.11%
80,000 Repurchase Agreement dated 10/31/00 with Deutsche
Bank Securities, Inc., collateralized by
$82,791,700 various Corporate Bonds and Asset
Backed Securities, 6.990%-14.000%.
due 10/31/03-10/20/08;(value--$83,518,709);
proceeds: $80,014,944 (cost--$80,000,000) ...... 11/01/00 6.725 80,000,000
50,000 Repurchase Agreement dated 10/31/00 with Goldman
Sachs, Inc., collateralized by $92,184,998
various Corporate Bonds, 7.250%-13.250%
due 04/01/01-03/01/10; (value--$53,372,447);
proceeds: $50,009,424 (cost--$50,000,000) ....... 11/01/00 6.785 50,000,000
---------------
Total Repurchase Agreements (cost--$130,000,000) ............ 130,000,000
---------------
TIME DEPOSITS--9.16%
100,000 Dresdner Bank ..................................... 11/01/00 6.531 100,000,000
95,000 Societe Generale .................................. 11/01/00 6.563 95,000,000
---------------
Total Time Deposits (cost--$195,000,000) .................... 195,000,000
---------------
NUMBER OF
SHARES
---------
MONEY MARKET FUNDS--0.47%
10,000,000 AIM Liquid Assets Money Market
Portfolio (cost--$10,000,000) ............................. 10,000,000
---------------
Total Investments (cost--$2,128,271,343 which approximates
cost for federal income tax purposes)--100.01% ............ 2,128,271,343
Liabilities in excess of other assets--(0.01)% .............. (213,194)
---------------
Net Assets (applicable to 2,128,058,610 Institutional shares
outstanding equivalent to $1.00 per share)--100.00% ....... $ 2,128,058,149
===============
</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, 2000 and reset periodically.
@ Interest rates shown are the discount rates at
date of purchase.
+ Illiquid security represents 2.35% of net assets.
Weighted average maturity--37 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, 2000
(UNAUDITED)
-------------------
INVESTMENT INCOME:
Interest ............................................... $65,104,300
-----------
EXPENSES:
Management Fee ......................................... 1,762,853
Trustees' fees ......................................... 5,250
-----------
1,768,103
Less: Fee waivers from adviser ......................... (294,684)
-----------
Net expenses ........................................... 1,473,419
-----------
Net investment income .................................. 63,630,881
NET REALIZED LOSSES FROM INVESTMENT TRANSACTIONS ....... (24)
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ... $63,630,857
===========
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
MONTHS ENDED FOR THE
OCTOBER 31, 2000 YEAR ENDED
(UNAUDITED) APRIL 30, 2000
---------------- -----------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income ................................................ $ 63,630,881 $ 98,178,308
Net realized losses from investment transactions ..................... (24) (396)
---------------- -----------------
Net increase in net assets resulting from operations ................. 63,630,857 98,177,912
---------------- -----------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income - Institutional shares ......................... (63,630,881) (98,065,586)
Net investment income - Financial Intermediary shares ................ -- (112,722)
---------------- -----------------
Total dividends to shareholders ...................................... (63,630,881) (98,178,308)
---------------- -----------------
NET INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS ..................................... (162,763,493) 968,015,147
---------------- -----------------
Net increase (decrease) in net assets ................................ (162,763,517) 968,014,751
NET ASSETS:
Beginning of period .................................................. 2,290,821,666 1,322,806,915
---------------- -----------------
End of period ........................................................ $ 2,128,058,149 $ 2,290,821,666
================ =================
</TABLE>
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 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
Market 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.
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. At
October 31, 2000, there are no Financial Intermediary shares outstanding.
The preparation of financial statements in accordance with accounting
principles 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
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 difference 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(UNAUDITED)
INVESTMENT ADVISER AND ADMINISTRATOR
The Trust has an Investment Advisory and Administration Contract ("Advisory
Contract") under which Mitchell Hutchins Asset Management Inc. ("Mitchell
Hutchins"), serves as investment adviser and administrator of the Fund. Mitchell
Hutchins is a wholly owned asset management subsidiary of PaineWebber
Incorporated ("PaineWebber"), a wholly owned indirect subsidiary of UBS AG. 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, 2000, the Fund owed Mitchell
Hutchins $267,283 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. From September
1, 1999 through October 31, 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 extend that waiver of 3 basis points (0.03%) of its 18 basis points (0.18%)
fee through January 31, 2002. At October 31, 2000, management fees were 15 basis
points (0.15%).
For the six months ended October 31, 2000, Mitchell Hutchins voluntarily
waived $294,684 of its management fees.
OTHER LIABILITIES
At October 31, 2000, dividends payable were $11,278,348.
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)
BANK LINE OF CREDIT
The Fund may participate with other funds managed by Mitchell Hutchins in a
$200 million committed credit facility ("Facility") to be utilized for temporary
financing until the settlement of sale or purchase of portfolio securities, the
repurchase or redemption of shares of the Fund at the request of the
shareholders and other temporary or emergency purposes. In connection therewith,
the Fund has agreed to pay a commitment fee, pro-rata, based on the relative
asset size of thefunds in the Facility. Interest is charged to the Fund at rates
based on prevailing market rates in effect at the time of borrowings. For the
six months ended October 31, 2000, the Fund did not borrow under the Facility.
MONEY MARKET FUND INSURANCE 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 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 six months ended October 31, 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>
FINANCIAL
INTERMEDIARY
SHARES
INSTITUTIONAL SHARES ------------------
----------------------------------- FOR THE PERIOD
FOR THE SIX MONTHS FOR THE YEAR NOVEMBER 4, 1999*
ENDED ENDED TO
OCTOBER 31, 2000 APRIL 30, 2000 MARCH 6, 2000
------------------ -------------- ------------------
<S> <C> <C> <C>
Shares sold ........................................ 17,042,463,978 24,269,018,421 124,338,452
Shares repurchased ................................. (17,256,007,014) (23,371,429,911) (124,338,452)
Dividends reinvested ............................... 50,779,543 70,426,637 0
---------------- -------------- ---------------
Net increase (decrease) in shares outstanding ...... (162,763,493) 968,015,147 0
================ ============== ===============
</TABLE>
------------------
* 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
--------------------------------------------------------
FOR THE SIX FOR THE PERIOD
MONTHS ENDED FOR THE AUGUST 10, 1998+
OCTOBER 31, 2000 YEAR ENDED TO
(UNAUDITED) APRIL 30, 2000 APRIL 30, 1999
---------------- -------------- ----------------
<S> <C> <C> <C>
Net asset value, beginning of period ............... $ 1.00 $ 1.00 $ 1.00
---------- ---------- -----------
Net investment income .............................. 0.033 0.054 0.037
Dividends from net investment income ............... (0.033) (0.054) (0.037)
---------- ---------- -----------
Net asset value, end of period ..................... $ 1.00 $ 1.00 $ 1.00
========== ========== ===========
Total investment return (1) ........................ 3.31% 5.54% 3.81%
========== ========== ===========
Ratios/Supplemental Data:
Net assets, end of period (000's) .................. $2,128,058 $2,290,822 $ 1,322,807
Expenses to average net assets net of
waivers from adviser ............................. 0.15%* 0.14% 0.07%*
Expenses to average net assets before
waivers from adviser ............................. 0.18%* 0.18% 0.18%*
Net investment income to average net assets
net of waivers from adviser ...................... 6.48%* 5.48% 5.06%*
Net investment income to average net assets
before waivers from adviser ...................... 6.45%* 5.44% 4.95%*
<CAPTION>
FINANCIAL INTERMEDIARY SHARES(2)
-------------------------------------------
FOR THE PERIOD FOR THE PERIOD
NOVEMBER 4, 1999++ DECEMBER 29, 1998+
TO TO
MARCH 6, 2000 FEBRUARY 9, 1999
------------------ --------------------
<S> <C> <C>
Net asset value, beginning of period ............... $ 1.00 $ 1.00
---------- ----------
Net investment income .............................. 0.018 0.006
Dividends from net investment income ............... (0.018) (0.006)
---------- ----------
Net asset value, end of period ..................... $ 1.00 $ 1.00
========== ==========
Total investment return (1) ........................ 1.84% 0.57%
========== ==========
Ratios/Supplemental Data:
Net assets, end of period (000's) .................. -- --
Expenses to average net assets net of
waivers from adviser ............................. 0.40%* 0.32%*
Expenses to average net assets before
waivers from adviser ............................. 0.43%* 0.43%*
Net investment income to average net assets
net of waivers from adviser ...................... 5.11%* 4.81%*
Net investment income to average net assets
before waivers from adviser ...................... 5.08%* 4.70%*
</TABLE>
------------------
+ Issuance of shares.
++ Reissuance of shares.
* Annualized.
(1)Total investment return is calculated assuming a $10,000 investment on the
first day of each 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 each 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 $1.00 per share.
12
<PAGE>
--------------------------------------------------------------------------------
TRUSTEES
E. Garrett Bewkes, Jr.
CHAIRMAN
Margo N. Alexander
Richard Q. Armstrong
Richard R. Burt
Meyer Feldberg
George W. Gowen
Frederic V. Malek
Carl W. Schafer
Brian M. Storms
OFFICERS
Brian M. Storms
PRESIDENT
Amy R. Doberman
VICE PRESIDENT
Dianne E. O'Donnell
VICE PRESIDENT AND SECRETARY
Paul H. Schubert
VICE PRESIDENT AND TREASURER
Elbridge T. Gerry III
VICE PRESIDENT
Kris Dorr
VICE PRESIDENT
INVESTMENT ADVISER AND
ADMINISTRATOR
Mitchell Hutchins Asset Management Inc.
51 West 52nd Street
New York, New York 10019-6114
DISTRIBUTOR
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019-6114
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.
THE FINANCIAL INFORMATION INCLUDED HEREIN IS TAKEN FROM RECORDS OF THE FUND
WITHOUT EXAMINATION BY INDEPENDENT AUDITORS WHO DO NOT EXPRESS AN OPINION
THEREON.
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.
<PAGE>
-----
PaineWebber offers a family of 26 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
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
PAINEWEBBER
-C-2000 PaineWebber Incorporated
All rights reserved
----------------------------
MITCHELL HUTCHINS
LIR SELECT
MONEY FUND
SEMIANNUAL REPORT
OCTOBER 31, 2000
