<PAGE>
LIR CASH RESERVES FUND SEMIANNUAL REPORT
Dear Shareholder, December 15, 2000
We are pleased to present you with the semiannual report for LIR Cash Reserves
Fund (the "Fund") for the six-month period ended October 31, 2000.
--------------------------------------------------------------------------------
LIR CASH RESERVES FUND
INVESTMENT GOAL:
Provide as high a level of current interest income as is consistent with
maintaining liquidity and principal stability
PORTFOLIO MANAGER:
Susan P. Ryan
Mitchell Hutchins Asset Management Inc.
COMMENCEMENT:
February 14, 2000
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 LIR CASH RESERVES FUND
PERFORMANCE AND PORTFOLIO REVIEW
--------------------------------------------------------------------------------
[GRAPHIC]
<TABLE>
<CAPTION>
YIELD AND CHARACTERISTICS 10/31/00 4/30/00
--------------------------------------------------------------------------------
<S> <C> <C>
Current Seven-Day Average Yield(1) 6.18% 5.75%
Effective Seven-Day Average Yield(1) 6.37% 5.91%
Weighted Average Maturity 44 days 33 days
Net Assets ($mm) $318.5 $270.4
--------------------------------------------------------------------------------
</TABLE>
(1) Yields will fluctuate.
<TABLE>
<CAPTION>
SECTOR ALLOCATION* 10/31/00 4/30/00
--------------------------------------------------------------------------------
<S> <C> <C> <C>
Commercial Paper 57.3% Commercial Paper 85.4%
Certificates of Deposit 17.0 Certificates of Deposit 8.1
U.S. Gov't & Agency 11.6 Money Market Funds 3.3
Short-Term Corporate Obligations 7.1 U.S. Gov't Agency 3.3
Money Market Funds 5.1 Liabilities in Excess
Bank Notes 1.6 of Other Assets -0.1
Other Assets in Excess of Liabilities 0.3
--------------------------------------------------------------------------------
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.
HIGHLIGHTS
Although we continue to seek only high credit quality debt instruments, the Fund
lowered its percentage of assets in commercial paper during the period, reducing
the percentage from 85.4% to 57.3%. We also increased the amount of U.S.
Government and Agency debt held by the Fund from 3.3% to 11.6%. The Fund's
average weighted maturity also increased by 33% during this time from 33 days to
44 days. During this period, fixed income investments generally performed well
across the board. The Fund yielded competitive returns compared to its peers.
2
<PAGE>
LIR CASH RESERVES 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 on 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/ Susan P. Ryan
SUSAN P. RYAN
Senior Vice President
Mitchell Hutchins
Asset Management Inc.
Portfolio Manager,
LIR Cash Reserves 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>
LIR CASH RESERVES FUND
STATEMENT OF NET ASSETS OCTOBER 31, 2000(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
----------- ----------- ----------- -----------
<S> <C> <C> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS--11.61%
$ 10,000 Federal Home Loan Bank ................................. 11/07/00 6.835%* $ 9,999,705
10,000 Federal Home Loan Mortgage Corp. ....................... 11/07/00 6.735* 10,000,000
7,000 Federal Home Loan Mortgage Corp. ....................... 11/30/00 6.400 6,963,911
10,000 Student Loan Marketing Association ..................... 11/07/00 6.835 to 7.065* 9,997,806
-----------
Total U.S. Government Agency Obligations (cost--$36,961,422) ..... 36,961,422
-----------
DOMESTIC BANK NOTE--1.57%
5,000 LaSalle Bank N.A. (cost--$4,998,972) ................... 09/15/01 6.750 4,998,972
-----------
CERTIFICATES OF DEPOSIT--16.95%
DOMESTIC--3.14%
10,000 Wachovia Bank N.A. ..................................... 12/28/00 6.550 10,000,000
-----------
EURO-DOLLAR--1.57%
5,000 Westdeutsche Landesbank Girozentrale ................... 12/29/00 6.590 5,000,076
-----------
YANKEE--12.24%
5,000 Bank of Nova Scotia .................................... 11/01/00 6.529* 4,999,037
7,000 Bank of Scotland ....................................... 11/06/00 6.770 6,999,134
5,000 Commerzbank AG ......................................... 12/01/00 6.580* 4,999,279
5,000 Deutsche Bank AG ....................................... 09/10/01 6.780 4,999,996
5,000 Societe Generale ....................................... 04/10/01 6.800 4,999,273
10,000 Svenska Handelsbanken .................................. 03/07/01 to 05/08/01 6.620 to 7.170 9,997,585
2,000 UBS AG ................................................. 07/19/01 7.030 1,999,730
-----------
38,994,034
-----------
Total Certificates of Deposit (cost--$53,994,110) ................ 53,994,110
-----------
COMMERCIAL [email protected]%
ASSET BACKED-AUTO & TRUCK--1.88%
6,000 New Center Asset Trust 11/01/00 6.650 6,000,000
-----------
ASSET BACKED-BANKING--1.88%
6,000 Centric Capital Corp. 11/09/00 6.500 5,991,333
-----------
ASSET BACKED-MISCELLANEOUS--7.83%
5,000 Asset Securitization Cooperative Corp. ................. 11/09/00 6.490 4,992,789
5,000 Delaware Funding Corp. ................................. 11/17/00 6.500 4,985,556
5,000 Enterprise Funding Corp. ............................... 11/15/00 6.500 4,987,361
5,000 Giro Funding Corp. ..................................... 11/16/00 6.520 4,986,417
5,000 Quincy Capital Corp. ................................... 11/17/00 6.510 4,985,533
-----------
24,937,656
-----------
</TABLE>
4
<PAGE>
LIR CASH RESERVES FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
----------- ----------- ----------- -----------
<S> <C> <C> <C>
COMMERCIAL PAPER@--(CONTINUED)
AUTO & TRUCK--6.12%
$ 8,000 DaimlerChrysler N.A. Holdings Corp. .................... 12/01/00 6.480% $ 7,956,800
5,000 Ford Motor Credit Corp. ................................ 11/15/00 6.490 4,987,380
6,568 PACCAR Financial Corp. ................................. 11/09/00 6.470 6,558,557
-----------
19,502,737
-----------
BANKING-DOMESTIC--11.26%
3,650 Abbey National N.A. .................................... 11/03/00 6.490 3,648,684
5,000 BBL North America Funding Corp. ........................ 11/14/00 6.490 4,988,282
8,000 Den Danske Corp. ....................................... 12/18/00 6.460 7,932,529
5,000 Dexia CLF Finance Co. .................................. 01/17/01 6.550 4,929,951
1,452 Fortis Funding LLC ..................................... 12/12/00 6.470 1,441,301
5,000 J.P. Morgan & Company, Inc. ............................ 12/11/00 6.480 4,964,000
8,000 KFW International Finance, Inc. ........................ 12/06/00 6.470 7,949,678
-----------
35,854,425
-----------
BROKER-DEALER--6.25%
10,000 Bear Stearns Companies, Inc. ........................... 11/27/00 6.500 9,953,055
10,000 Salomon Smith Barney Holdings, Inc. .................... 11/22/00 6.490 9,962,142
-----------
19,915,197
-----------
BUILDING MATERIALS--1.29%
4,100 Sherwin-Williams Co. ................................... 11/02/00 6.480 4,099,262
-----------
CHEMICALS--1.25%
4,000 Henkel Corp. ........................................... 12/01/00 6.470 3,978,433
-----------
CONSUMER PRODUCTS--3.13%
10,000 Unilever Capital Corp. ................................. 11/17/00 6.500 9,971,111
-----------
ELECTRONICS--4.05%
5,000 Emerson Electric Co. ................................... 12/15/00 6.450 4,960,583
8,000 Motorola Credit Corp. .................................. 12/18/00 6.470 7,932,425
-----------
12,893,008
-----------
FINANCE-CONSUMER--1.56%
5,000 Household Finance Corp. ................................ 11/29/00 6.490 4,974,761
-----------
FINANCE-INDEPENDENT--1.56%
5,000 National Rural Utilities Cooperative Finance Corp. ..... 11/20/00 6.480 4,982,900
-----------
FINANCE-SUBSIDIARY--2.51%
8,000 Dresdner U.S. Finance, Inc. ............................ 11/13/00 6.490 7,982,694
-----------
PRINTING & PUBLISHING--1.57%
5,000 Reed Elsevier (USA), Inc. .............................. 11/14/00 6.480 4,988,300
-----------
</TABLE>
5
<PAGE>
LIR CASH RESERVES FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
----------- ----------- ----------- -----------
<S> <C> <C> <C>
COMMERCIAL PAPER@--(CONCLUDED)
TELECOMMUNICATIONS--5.17%
$ 9,500 American Telephone & Telegraph ......................... 11/02/00 to 12/05/00 6.480 to 6.530% $ 9,471,895
2,000 Lucent Technology, Inc. ................................ 11/14/00 6.490 1,995,313
5,000 Verizon Global Funding Inc. ............................ 11/13/00 6.480 4,989,200
-----------
16,456,408
-----------
Total Commercial Paper (cost--$182,528,225) ...................... 182,528,225
-----------
SHORT-TERM CORPORATE OBLIGATIONS--7.07%
BANKING-DOMESTIC--0.79%
2,500 J.P. Morgan & Company, Inc. ............................ 11/16/00 6.610* 2,500,000
-----------
BANKING-FOREIGN--1.57%
5,000 Bank of Scotland Treasury Services PLC ................. 11/06/00 6.600* 5,000,000
-----------
BROKER-DEALER--4.71%
10,000 Merrill Lynch & Company, Inc. .......................... 11/06/00 6.580* 9,999,661
5,000 Morgan Stanley, Dean Witter & Co. ...................... 11/15/00 6.645* 5,000,000
-----------
14,999,661
-----------
Total Short-Term Corporate Obligations (cost--$22,499,661) ....... 22,499,661
-----------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES
-----------
<S> <C>
MONEY MARKET FUNDS--5.17%
13,545,900 AIM Liquid Assets Money Market Portfolio .............. 13,545,900
2,924,838 AIM Prime Money Market Portfolio ...................... 2,924,838
-----------
Total Money Market Funds (cost--$16,470,738) ...................... 16,470,738
-----------
Total Investments (cost--$317,453,128 which approximates cost
for federal income tax purposes)--99.68% ........................ 317,453,128
Other assets in excess of liabilities--0.32% ...................... 1,016,131
-----------
Net Assets (applicable to 318,468,419 shares of beneficial interest
outstanding equivalent to $1.00 per share)--100.00% ............. $318,469,259
============
</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 discount rates at date of purchase.
Weighted average maturity--44 days
See accompanying notes to financial statements#
6
<PAGE>
LIR CASH RESERVES FUND
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS FOR THE SIX
MONTHS ENDED
OCTOBER 31, 2000
(UNAUDITED)
----------------
<S> <C>
INVESTMENT INCOME:
Interest ................................................................ $9,635,635
----------
EXPENSES:
Investment advisory and administration .................................. 480,708
Transfer agency and related services fees ............................... 147,852
Federal and state registration fees ..................................... 59,462
Professional fees ....................................................... 25,047
Insurance ............................................................... 15,030
Custody and accounting .................................................. 14,316
Offering Costs .......................................................... 13,800
Reports and notices to shareholders ..................................... 13,206
Trustees' fees .......................................................... 5,250
Other expenses .......................................................... 7,349
----------
782,020
Less: Fee waivers and expense reimbursements from adviser (97,043)
----------
Net expenses 684,977
----------
Net investment income 8,950,658
NET REALIZED GAINS FROM INVESTMENT TRANSACTIONS 997
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $8,951,655
==========
</TABLE>
7
See accompanying notes to financial statements
<PAGE>
LIR CASH RESERVES FUND
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS FOR THE SIX FOR THE PERIOD
MONTHS ENDED FEBRUARY 14, 2000+
OCTOBER 31, 2000 TO
(UNAUDITED) APRIL 30, 2000
---------------- ------------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income ................................................... $ 8,950,658 $ 3,228,596
Net realized gains (losses) from investment transactions ................ 997 (157)
-------------- --------------
Net increase in net assets resulting from operations .................... 8,951,655 3,228,439
-------------- --------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income ................................................... (8,950,658) (3,228,596)
-------------- --------------
NET INCREASE IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS ........ 48,062,318 270,406,101
-------------- --------------
Net increase in net assets .............................................. 48,063,315 270,405,944
NET ASSETS:
Beginning of period ..................................................... 270,405,944 --
-------------- --------------
End of period ........................................................... $318,469,259 $270,405,944
============== ==============
</TABLE>
------------------
+ Commencement of operations.
See accompanying notes to financial statements
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS(UNAUDITED)
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
LIR Cash Reserves 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,
Mitchell Hutchins LIR Select Money Fund ("LIR Select Money Fund"), LIR Premier
Money Market Fund, LIR Premier Tax-Free Money Market Fund and LIR Liquid Assets
Fund. The financial statements for the LIR Select Money Fund, LIR Premier Money
Market Fund, LIR Premier Tax-Free Money Market Fund and LIR Liquid Assets Fund
are not included herein. Prior to commencement of operations, February 14, 2000,
the Fund had no activity.
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 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.
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
9
<PAGE>
NOTES TO FINANCIAL STATEMENTS(UNAUDITED)
compensation from the Fund, computed daily and paid monthly, at an annual rate
of 0.33% of the Fund's average daily net assets. At October 31, 2000, the Fund
owed Mitchell Hutchins $65,405 in management fees.
For the period February 14, 2000 (commencement of operations) through the
end of the Fund's first three fiscal years, Mitchell Hutchins has contractually
undertaken to waive 0.04% of its advisory and administration fees and reimburse
a portion of expenses to maintain the Fund's ordinary total annual operating
expenses at a level not exceeding 0.47% of the Fund's average daily net assets.
For the six months ended October 31, 2000, Mitchell Hutchins waived or
reimbursed $97,043 in investment advisory and administration fees and other
expenses.
OTHER LIABILITIES
At October 31, 2000, dividends payable were $724,394.
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.
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.
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>
FOR THE PERIOD
FOR THE SIX FEBRUARY 14, 2000+
MONTHS ENDED TO
OCTOBER 31, 2000 APRIL 30, 2000
---------------- ------------------
<S> <C> <C>
Shares sold ...................................................... 1,675,913,829 1,029,077,392
Shares repurchased ............................................... (1,636,609,538) (761,372,899)
Dividends reinvested ............................................. 8,758,027 2,701,608
--------------- ---------------
Net increase in shares outstanding ............................... 48,062,318 270,406,101
=============== ===============
</TABLE>
-------------------
+ Commencement of operations.
10
<PAGE>
LIR CASH RESERVES FUND
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
FOR THE FOR THE PERIOD
SIX MONTHS ENDED FEBRUARY 14, 2000+
OCTOBER 31, 2000 TO
(UNAUDITED) APRIL 30, 2000
----------------- -------------------
<S> <C> <C>
Net asset value, beginning of period ..................................................... $ 1.000 $ 1.000
-------- --------
Net investment income .................................................................... 0.031 0.012
Dividends from net investment income ..................................................... (0.031) (0.012)
-------- --------
Net asset value, end of period ........................................................... $ 1.000 $ 1.000
======== ========
Total investment return(1) ............................................................... 3.14% 1.18%
======== ========
Ratios/Supplemental Data:
Net assets, end of period (000's) ........................................................ $ 318,469 $ 270,406
Expenses to average net assets net of waivers/reimbursements from adviser ................ 0.47%* 0.47%*
Expenses to average net assets before waivers/reimbursements from adviser ................ 0.54%* 0.53%*
Net investment income to average net assets net of waivers/reimbursements from adviser ... 6.14%* 5.57%*
Net investment income to average net assets before waivers/reimbursements from adviser ... 6.08%* 5.51%*
</TABLE>
-------------------
+ Commencement of operations.
* 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.
11
<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
Susan P. Ryan
VICE PRESIDENT
INVESTMENT ADVISER,
ADMINISTRATOR AND
DISTRIBUTOR
Mitchell Hutchins Asset Management Inc.
51 West 52nd Street
New York, New York 10019-6114
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.
<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
------------------------
LIR CASH
RESERVES FUND
SEMIANNUAL REPORT
OCTOBER 31, 2000
