PAINEWEBBER
CASHFUND, INC.
A MONEY MARKET FUND
DESIGNED TO PROVIDE
INVESTORS WITH CURRENT
INCOME, STABILITY OF PRINCIPAL
AND HIGH LIQUIDITY
[ART WORK]
SEMI-ANNUAL REPORT
SEPTEMBER 30, 1995
A MEMBER OF THE PAINEWEBBER FAMILY OF FUNDS
<PAGE>
Dear Shareholder,
During the six months ended September 30, 1995, the U.S. economy suffered
lackluster growth before picking up its pace in the third quarter of 1995.
Inflation, already low, subsided even further by the end of the period. The
housing sector finally responded to historically attractive mortgage rates with
robust activity in 1995's third quarter, after a dismal second quarter.
On July 6, 1995, the Federal Reserve Board cut the benchmark Federal Funds rate,
the rate banks charge each other for overnight borrowing, by 0.25%. This
decrease, the first in nearly three years, signaled that the Federal Reserve
Board believes that inflationary pressures have eased enough to accommodate an
adjustment in monetary policy from restrictive toward neutral.
In addition to concerns over the strength of the recovery, economic news
centered on debate over whether inflation was still likely to become a threat
and details of efforts in Washington to implement a plan to balance the budget.
While the outcome of the budgetary process remains in question, the perception
that the Federal Reserve is winning its war against inflation is widespread.
The bond market continued the rally that began in mid-November 1994. The U.S.
stock market has also continued to rally during 1995, pushing the Dow Jones
Industrial Average and S&P 500 Index to a string of new highs. The value of the
U.S. dollar declined for much of the period, but began to recover in August
1995. We expect the current slow-growth, low inflation environment to persist
throughout the last quarter of 1995.
PORTFOLIO REVIEW
PaineWebber Cashfund's current yield for the seven-day period ended September
30, 1995 was 5.30%, and net assets totalled approximately $4.6 billion. The Fund
maintained a weighted average maturity of 44 days as of September 30, 1995.
Going forward, the Fund expects to maintain a neutral weighted average maturity
as short-term rates find stability. The Federal Reserve Board appears to have
engineered a soft landing and it seems as though the next short-term interest
rate move will be another decrease in the Federal Funds rate. However, if
inflation becomes problematic, further increases in short-term interest rates
could be possible. Investment decisions in the Fund will continue to be
dominated by credit quality and liquidity. Although we are interested in
maintaining higher yields, we will not do so by sacrificing the Fund's emphasis
on security, quality and liquidity.
1
<PAGE>
We regret to inform you that one of the Directors of your Fund recently passed
away. Thomas F. Murray had been a director or trustee of Mitchell Hutchins
advised funds since 1986, serving for much of that time as chairman of various
boards' audit committees. His insight and guidance will be missed.
We value you as a shareholder and as a client, and thank you for your continued
support. We welcome any comments or questions you may have.
Sincerely,
/s/ Dennis L. McCauley /s/ Susan P. Messina
DENNIS L. MCCAULEY SUSAN P. MESSINA
Managing Director and Chief Investment Senior Vice President,
Officer--Fixed Income, Taxable Money Funds
Mitchell Hutchins Asset Management Inc. Mitchell Hutchins Asset Management Inc.
2
<PAGE>
PaineWebber Cashfund, Inc.
- --------------------------------------------------------------------------------
Statement of Net Assets
September 30, 1995 (unaudited)
- --------------------------------------------------------------------------------
<TABLE><CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
- --------- --------------------- -------------- --------------
<S> <C> <C> <C>
U.S. GOVERNMENT AND AGENCY OBLIGATIONS--3.09%
$ 25,000 Federal Farm Credit Bank........... 09/03/96 5.875 % $ 24,976,963
33,000 Federal Home Loan Mortgage Corp.... 05/13/96 to 08/15/96 5.645 to 6.210 32,962,501
25,000 Federal National Mortgage
Association........................ 06/12/96 5.50 24,964,332
20,000 Federal National Mortgage
Association*....................... 10/03/95 5.47 20,000,000
40,000 Student Loan Marketing
Association*....................... 10/03/95 to 07/01/96 5.480 to 6.080 39,994,260
--------------
TOTAL U.S. GOVERNMENT AND AGENCY OBLIGATIONS
142,898,056
(cost--$142,898,056)..........................
--------------
DOMESTIC BANK NOTES--3.73%
27,000 Bank One (Milwaukee), N.A.......... 02/09/96 to 03/07/96 6.820 to 7.250 27,014,189
25,000 Comerica Bank Detroit*............. 10/03/95 5.400 24,995,720
10,200 Fifth Third Bank................... 10/18/95 6.250 10,200,000
30,000 LaSalle National Bank, N.A. ....... 01/11/96 to 01/18/96 5.700 to 7.560 30,000,000
20,000 NationsBank of Texas............... 11/20/95 6.000 20,000,000
20,000 NBD Bank N.A. ..................... 05/17/96 6.130 20,014,626
15,000 PNC Bank, N.A...................... 05/24/96 6.040 15,044,975
25,000 PNC Bank, N.A...................... 11/13/95 6.350 25,001,312
--------------
172,270,822
TOTAL DOMESTIC BANK NOTES
(cost--$172,270,822)...........................
--------------
DOMESTIC CERTIFICATES OF DEPOSIT--0.97%
20,000 Harris Trust & Savings Bank........ 11/15/95 5.700 20,000,000
10,000 Republic National Bank of New
York............................... 02/12/96 6.540 9,995,752
15,000 Wachovia Bank & Trust Co........... 10/27/95 5.750 15,000,000
--------------
44,995,752
TOTAL DOMESTIC CERTIFICATES OF DEPOSIT
(cost--$44,995,752)............................
--------------
COMMERCIAL PAPER @--88.57%
Aerospace--0.65%
30,000 Rockwell International Corp. ...... 10/10/95 5.730 29,957,025
--------------
Asset Backed--7.16%
107,000 Asset Securitization Cooperative
Corp. ............................. 11/02/95 to 11/10/95 5.700 to 5.750 106,387,276
45,073 Delaware Funding Corp.............. 10/26/95 to 10/27/95 5.720 to 5.750 44,888,544
97,422 Eiger Capital Corp................. 10/12/95 to 11/15/95 5.680 to 5.750 97,014,880
40,000 New Center Asset Trust............. 10/02/95 6.550 39,992,722
42,975 Preferred Receivables Funding
Corp. ............................. 10/05/95 to 10/25/95 5.730 to 5.750 42,856,928
--------------
331,140,350
--------------
Auto-Truck--2.62%
84,800 Daimler-Benz North America
Corp. ............................. 10/06/95 to 10/16/95 5.690 to 5.730 84,665,110
9,700 PACCAR Financial Corp. ............ 10/25/95 5.740 9,662,881
27,000 Toyota Motor Credit Corp. ......... 10/02/95 to 10/03/95 5.680 to 5.730 26,992,529
--------------
121,320,520
--------------
</TABLE>
3
<PAGE>
PaineWebber Cashfund, Inc.
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- --------------------------------------------------------------------------------
<TABLE><CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
- --------- --------------------- -------------- --------------
COMMERCIAL PAPER @--(continued)
<S> <C> <C> <C>
Banking--7.81%
$ 50,000 Abbey National North America ...... 11/07/95 to 11/09/95 5.650 to 5.670% $ 49,701,292
37,000 B.B.V. Finance (Delaware) Inc...... 12/15/95 5.630 36,566,021
60,000 BEX America Finance Inc. .......... 11/13/95 to 12/06/95 5.670 to 5.690 59,538,440
70,000 Canadian Imperial Holdings Inc. ... 10/25/95 to 11/21/95 5.665 to 5.720 69,564,583
25,000 Credito Italiano (Delaware)
Inc. .............................. 10/20/95 5.750 24,924,132
75,000 CREGEM North America Inc. ......... 10/30/95 to 12/11/95 5.650 to 5.680 74,355,431
25,000 Morgan (J.P.) & Co. Inc. .......... 10/31/95 5.720 24,880,833
21,650 MPS U.S. Commercial Paper Corp..... 12/05/95 5.700 21,427,185
--------------
360,957,917
--------------
Broker/Dealer--5.17%
20,000 Bear Stearns & Co., Inc. .......... 10/06/95 5.630 19,984,361
50,000 Goldman Sachs Group L.P. .......... 10/24/95 to 11/22/95 5.700 to 5.720 49,725,700
40,000 Merrill Lynch & Co., Inc. ......... 10/17/95 to 10/19/95 5.730 to 6.080 39,889,469
130,000 Morgan Stanley Group, Inc. ........ 10/02/95 to 01/22/96 5.650 to 5.840 129,407,400
--------------
239,006,930
--------------
Business Services--0.22%
10,000 Block Financial Corp. ............. 10/18/95 5.725 9,972,965
--------------
Chemicals--2.85%
133,000 Dupont (E.I.) deNemours & Co. ..... 10/04/95 to 08/06/96 5.500 to 6.090 131,538,353
--------------
Conglomerates--2.50%
116,355 BTR Dunlop Finance Inc. ........... 10/16/95 to 12/14/95 5.600 to 5.730 115,373,132
--------------
Consumer Products--1.25%
17,568 Clorox Co.......................... 12/15/95 5.630 17,361,942
40,545 Procter & Gamble Co. .............. 10/02/95 to 12/20/95 5.610 to 5.650 40,214,337
--------------
57,576,279
--------------
Drugs and Health Care--3.94%
20,000 Bayer Corp......................... 10/12/95 5.610 19,965,717
74,500 Lilly (Eli) & Co. ................. 10/20/95 to 01/16/96 5.660 to 6.080 73,957,514
88,664 Pfizer Inc. ....................... 10/13/95 to 10/27/95 5.700 to 5.730 88,359,655
--------------
182,282,886
--------------
Electronics--7.88%
14,650 Emerson Electric Co. .............. 10/26/95 5.700 14,592,010
21,000 Hewlett-Packard Co. ............... 10/17/95 5.650 20,947,267
64,296 Motorola Credit Corp. ............. 10/17/95 to 10/26/95 5.690 to 5.710 64,059,035
40,000 Motorola Inc. ..................... 10/24/95 5.700 39,854,333
41,600 Panasonic Finance Inc.............. 11/13/95 to 11/14/95 5.670 to 5.720 41,314,985
129,000 Siemens Corporation................ 10/04/95 to 12/01/95 5.650 to 5.720 128,564,638
55,338 Vermont American Corporation....... 10/20/95 to 11/02/95 5.690 to 5.710 55,112,678
--------------
364,444,946
--------------
Energy--5.73%
110,000 Chevron Oil Finance Co. ........... 10/12/95 to 10/26/95 5.700 to 5.740 109,674,572
25,000 Exxon Asset Management Corp. ...... 12/12/95 5.600 24,720,000
115,977 Exxon Imperial U.S. Inc. .......... 10/16/95 to 11/21/95 5.650 to 5.720 115,406,490
15,000 Koch Industries Inc. .............. 10/10/95 5.720 14,978,550
--------------
264,779,612
--------------
</TABLE>
4
<PAGE>
PaineWebber Cashfund, Inc.
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- --------------------------------------------------------------------------------
<TABLE><CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
- --------- --------------------- -------------- --------------
COMMERCIAL PAPER @--(continued)
<S> <C> <C> <C>
Finance-Conduit--2.90%
$ 89,581 MetLife Funding Corp. ............. 10/04/95 to 11/14/95 5.680 to 5.720% $ 89,234,759
45,000 UBS Finance (Delaware) Inc. ....... 10/02/95 6.500 44,991,875
--------------
134,226,634
--------------
Finance-Consumer--0.73%
34,000 American General Finance Corp...... 10/05/95 to 10/12/95 5.740 33,951,529
--------------
Finance-Credit Union--0.54%
25,000 U.S. Central Credit Union.......... 10/05/95 5.720 24,984,111
--------------
Finance-Diversified--4.42%
135,000 Associates Corp. of North
America............................ 10/04/95 to 11/20/95 5.620 to 5.750 134,564,898
40,000 Barclays U.S. Funding Corp. ....... 10/30/95 to 11/01/95 5.740 39,810,261
30,000 Sanwa Business Credit Corp. ....... 10/03/95 to 10/18/95 5.760 to 5.800 29,966,356
--------------
204,341,515
--------------
Finance-Independent--2.69%
125,050 National Rural Utility Coop.
Finance ........................... 10/13/95 to 11/10/95 5.650 to 5.720 124,556,714
--------------
Finance-Subsidiary--0.87%
40,000 Dresdner U.S. Finance, Inc. ....... 10/03/95 5.750 39,987,222
--------------
Food and Beverage--4.77%
20,000 Allied Domecq North America
Corp............................... 10/26/95 5.850 19,918,750
111,000 Campbell Soup Co................... 10/06/95 to 01/12/96 5.600 to 6.090 109,862,725
23,970 Coca-Cola Co....................... 10/06/95 to 10/13/95 5.700 23,939,940
22,500 Heinz (H.J.) Co. .................. 10/11/95 5.740 22,464,125
20,000 Philip Morris Companies, Inc. ..... 11/03/95 5.700 19,895,500
24,900 U.S. Borax Inc..................... 12/15/95 5.650 24,606,906
--------------
220,687,946
--------------
General Trade--2.30%
107,000 Mitsubishi International Corp. .... 10/16/95 to 12/20/95 5.630 to 5.750 106,100,569
--------------
Insurance--2.66%
65,000 American General Corp. ............ 10/06/95 to 10/24/95 5.700 to 5.730 64,864,133
40,000 Prudential Funding Corp............ 10/05/95 to 10/13/95 5.730 to 5.740 39,942,617
18,000 USAA Capital Corp. ................ 10/27/95 5.720 17,925,640
--------------
122,732,390
--------------
Insurance--Property/Casualty--2.61%
73,800 A.I. Credit Corp. ................. 10/02/95 to 10/16/95 5.700 to 5.750 73,691,899
47,000 A.I.G. Funding Corp. .............. 10/06/95 to 10/23/95 5.700 to 5.740 46,900,275
--------------
120,592,174
--------------
Metals & Mining--1.29%
60,000 RTZ America Inc.................... 10/19/95 to 12/15/95 5.620 to 5.630 59,502,047
--------------
Miscellaneous--0.54%
25,000 Beta Finance Inc................... 10/16/95 5.730 24,940,313
--------------
</TABLE>
5
<PAGE>
PaineWebber Cashfund, Inc.
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- --------------------------------------------------------------------------------
<TABLE><CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
- --------- --------------------- -------------- --------------
COMMERCIAL PAPER @--(concluded)
<S> <C> <C> <C>
Oil Equipment and Services--0.97%
$ 45,000 Colonial Pipeline Co............... 11/16/95 to 11/20/95 5.670 % $ 44,664,525
--------------
Paper and Paper Products--0.78%
36,000 Kimberly Clark Corp. .............. 10/23/95 5.700 35,874,600
--------------
Printing and Publishing--1.51%
15,000 McGraw-Hill, Inc. ................. 10/10/95 5.690 14,978,663
55,000 Reed Elsevier Inc.................. 10/02/95 to 10/25/95 5.700 to 5.720 54,911,994
--------------
69,890,657
--------------
Retail Merchandising--5.30%
40,000 J.C. Penney Funding Corp. ......... 11/03/95 to 11/07/95 5.700 to 5.710 39,778,128
134,500 Toys "R" Us, Inc. ................. 10/03/95 to 10/27/95 5.690 to 5.710 134,279,870
71,000 Wal-Mart Stores Inc. .............. 10/19/95 to 10/30/95 5.700 70,768,517
--------------
244,826,515
--------------
Telecommunications--1.42%
31,000 BellSouth Capital Funding Corp. ... 11/01/95 to 12/01/95 5.650 to 5.690 30,753,654
35,000 BellSouth Telecommunications
Inc................................ 10/18/95 5.700 34,905,792
--------------
65,659,446
--------------
Transportation--0.93%
43,300 Norfolk Southern Corp. ............ 11/16/95 to 12/15/95 5.630 to 5.680 42,894,969
--------------
Utilities-Electric--0.65%
30,000 Duke Power Co...................... 10/12/95 5.700 29,947,750
--------------
Utilities-Telephone--2.93%
25,000 American Telephone & Telegraph..... 11/17/95 5.650 24,815,590
26,688 Southern New England Telephone
Co. ............................... 10/11/95 5.760 26,645,299
45,000 Southwestern Bell Telephone Co. ... 10/05/95 5.700 44,971,500
39,000 U.S. West Communications Inc....... 10/20/95 5.700 38,882,675
--------------
135,315,064
--------------
4,094,027,605
TOTAL COMMERCIAL PAPER
(cost--$4,094,027,605).........................
--------------
SHORT-TERM CORPORATE OBLIGATIONS--3.18%
Broker/Dealer--2.43%
20,000 Goldman Sachs Group L.P.* ......... 10/03/95 5.770 19,993,080
10,000 Morgan (J.P.) & Co. Inc............ 05/13/96 6.200 9,999,693
72,000 Merrill Lynch & Co., Inc........... 10/03/95 to 08/02/96 5.610 to 6.491 71,999,066
10,000 Merrill Lynch & Co., Inc.*......... 10/02/95 6.20 9,999,693
--------------
111,991,532
--------------
Miscellaneous--0.75%
35,000 Beta Finance, Inc.* ............... 10/03/95 to 08/19/96 5.450 to 5.870 34,997,901
--------------
TOTAL SHORT-TERM CORPORATE OBLIGATIONS
(cost--$146,989,433).......................... 146,989,433
--------------
</TABLE>
6
<PAGE>
PaineWebber Cashfund, Inc.
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- --------------------------------------------------------------------------------
<TABLE><CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
- --------- --------------------- -------------- --------------
REPURCHASE AGREEMENTS--0.37%
<S> <C> <C> <C>
$ 12,000 Repurchase Agreement dated 09/29/95
with Citicorp Securities Inc.,
collateralized by $9,770,000 U.S.
Treasury Notes, 8.750% due
05/15/17; proceeds: $12,006,400.... 10/02/95 6.400 % $ 12,000,000
4,900 Repurchase Agreement dated 09/29/95
with J.P. Morgan Securities, Inc.,
collateralized by $4,965,000 U.S.
Treasury Notes, 5.875% due
07/31/97; proceeds: $4,902,450..... 10/02/95 6.000 4,900,000
--------------
16,900,000
TOTAL REPURCHASE AGREEMENTS
(cost--$16,900,000)...........................
--------------
4,618,081,668
TOTAL INVESTMENTS--(cost--$4,618,081,668 which
approximates cost for federal tax
purposes)--99.91%..............................
4,351,304
Other assets in excess of liabilities--0.09%...
--------------
$4,622,432,972
NET ASSETS (applicable to 4,624,176,889 shares
outstanding at $1.00 per share)--100.00%.......
--------------
--------------
</TABLE>
- ------------
* Variable rate securities--maturity date reflects earlier of reset date or
maturity date.
@ Interest rates reflect yield to maturity for discounted securities.
Weighted average maturity--44 days
See accompanying notes to financial statements.
7
<PAGE>
PaineWebber Cashfund, Inc.
- --------------------------------------------------------------------------------
Statement of Operations
For the Six Months Ended September 30, 1995 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INTEREST INCOME.............................................................. $123,300,566
------------
EXPENSES:
Investment advisory and administration..................................... 7,814,960
Transfer agency and service fees........................................... 3,604,765
Reports and notices to shareholders........................................ 225,654
Custody and accounting..................................................... 165,036
Insurance.................................................................. 161,653
Legal and audit............................................................ 72,874
Federal and state registration............................................. 51,262
Directors' fees............................................................ 26,250
Other expenses............................................................. 9,789
------------
12,132,243
------------
NET INVESTMENT INCOME........................................................ 111,168,323
NET REALIZED GAINS FROM INVESTMENT TRANSACTIONS.............................. 173,414
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS......................... $111,341,737
------------
------------
</TABLE>
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE><CAPTION>
FOR THE SIX
MONTHS ENDED
SEPTEMBER 30, FOR THE YEAR
1995 ENDED
(UNAUDITED) MARCH 31, 1995
-------------- --------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income..................................... $ 111,168,323 $ 154,325,918
Net realized gains (losses) from investment
transactions................................................ 173,414 (1,511,404)
-------------- --------------
Net increase in net assets resulting from operations...... 111,341,737 152,814,514
-------------- --------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income..................................... (111,168,323) (154,325,918)
-------------- --------------
NET INCREASE IN NET ASSETS DERIVED FROM CAPITAL SHARE
TRANSACTIONS................................................ 921,581,239 265,911,471
-------------- --------------
Net increase in net assets................................ 921,754,653 264,400,067
NET ASSETS:
Beginning of period....................................... 3,700,678,319 3,436,278,252
-------------- --------------
End of period............................................. $4,622,432,972 $3,700,678,319
-------------- --------------
-------------- --------------
</TABLE>
See accompanying notes to financial statements.
8
<PAGE>
PaineWebber Cashfund, Inc.
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited)
- --------------------------------------------------------------------------------
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
PaineWebber Cashfund, Inc. (the "Fund"), was organized under the laws of
Maryland on January 20, 1978 and is registered with the Securities and Exchange
Commission under the Investment Company Act of 1940, as amended, as an open-end
diversified management investment company.
Valuation and Accounting for Investments--Investment securities are valued
at amortized cost which approximates market value. Investment transactions are
recorded on 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.
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.
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 of default of the 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.
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. At March 31, 1995, the Fund had net capital loss carryforwards of
$1,746,060 available as reductions, to the extent provided in the regulations,
of any future net realized gains; these carryforwards will expire between March
31, 2000 and March 31, 2003. To the extent that such losses are used to offset
future capital gains, it is probable that the gains so offset will not be
distributed.
Dividends and Distributions to Shareholders--Dividends and distributions to
shareholders are recorded on the ex-dividend date. Dividends from net investment
income and distributions from realized gains from investment transactions 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 income tax classification. Net capital
gains, if any, will be distributed at least annually, but the Fund may make
9
<PAGE>
PaineWebber Cashfund, Inc.
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- --------------------------------------------------------------------------------
more frequent distributions of such gains, if necessary, to maintain its net
asset value per share at $1.00 or to avoid income or excise taxes.
INVESTMENT ADVISER AND ADMINISTRATOR
The Fund's board of directors has approved an investment advisory and
administration contract ("Advisory Contract") with PaineWebber Incorporated
("PaineWebber"), under which PaineWebber serves as investment adviser and
administrator of the Fund. In accordance with the Advisory Contract, PaineWebber
receives compensation from the Fund, computed daily and paid on a monthly basis
equivalent to 0.500% per annum of the Fund's first $500 million of average daily
net assets; 0.425% of the next $500 million; 0.390% of the next $500 million;
0.380% of the next $500 million; 0.350% of the next $500 million; 0.345% of the
next $1.0 billion; 0.325% of the next $500 million; 0.315% of the next $500
million; 0.300% of the next $500 million; 0.290% of the next $500 million; and
0.280% of assets in excess of $5.5 billion. At September 30, 1995, the Fund owed
PaineWebber $2,824,182 in investment advisory and administration fees.
Mitchell Hutchins Asset Management Inc. ("Mitchell Hutchins") serves as
sub-adviser to the Fund pursuant to Sub-Advisory Contract between PaineWebber
and Mitchell Hutchins. Mitchell Hutchins is an affiliate of PaineWebber. In
accordance with the sub-advisory contract, PaineWebber (not the Fund) pays
Mitchell Hutchins for sub-advisory services provided.
In compliance with applicable state securities laws, PaineWebber will reimburse
the Fund for those operating expenses, exclusive of taxes, interest, brokerage
fees, distribution fees and extraordinary expenses, which exceed applicable
limitations in any fiscal year. Currently, the most restrictive limitation is
2.5% on the first $30 million of average daily net assets, 2.0% of the next $70
million and 1.5% of any excess over $100 million. For the six months ended
September 30, 1995, no reimbursements were required pursuant to the above
limitation.
TRANSFER AGENCY SERVICE FEES
The Fund pays PaineWebber an annual fee of $4.00 per active PaineWebber
shareholder account, plus certain out-of-pocket expenses, for services not
provided by the Funds's transfer agent. For these services for the six months
ended September 30, 1995, PaineWebber earned $1,360,140. At September 30, 1995,
the Fund owed PaineWebber $226,690 for such shareholder service fees and
reimbursement of out-of-pocket expenses.
OTHER LIABILITIES
At September 30, 1995, dividends payable aggregated $3,351,015.
10
<PAGE>
PaineWebber Cashfund, Inc.
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CAPITAL SHARE TRANSACTIONS
There are 20 billion shares of $0.001 par value common stock. Transactions
in capital shares, at $1.00 per share, were as follows:
<TABLE><CAPTION>
FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 1995 MARCH 31, 1995
------------------ ---------------
<S> <C> <C>
Shares sold............................................... 7,944,704,563 11,629,927,695
Shares repurchased........................................ (7,129,678,607) (11,514,158,936)
Dividends reinvested in additional Fund shares............ 106,555,283 150,142,712
------------------ ---------------
Net increase in shares outstanding........................ 921,581,239 265,911,471
------------------ ---------------
------------------ ---------------
</TABLE>
11
<PAGE>
PaineWebber Cashfund, Inc.
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
Selected data for a share of common stock outstanding throughout each period
is presented below:
<TABLE><CAPTION>
For the
Six Months
Ended
September 30, For the Years Ended March 31,
1995 --------------------------------------------------------------
(unaudited) 1995 1994 1993 1992 1991
------------------ ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of
period............... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ---------- ----------
Net investment
income................ 0.0269 0.0433 0.0272 0.0317 0.0509 0.0743
Dividends from net
investment income..... (0.0269) (0.0433) (0.0272) (0.0317) (0.0509) (0.0743)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value,
end of period........ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
Total investment
return(1)............. 2.73% 4.44% 2.75% 3.17% 5.09% 7.43%
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
Ratios/Supplemental
Data:
Net assets, end of
period (000's)........ $4,622,433 $3,700,678 $3,436,278 $3,774,298 $4,234,968 $5,122,338
Ratios of expenses to
average net assets.... 0.59%* 0.62% 0.61% 0.57% 0.56% 0.53%
Ratios of net
investment income to
average net assets. 5.41%* 4.35% 2.73% 3.17% 5.09% 7.43%
</TABLE>
- -------------------
* Annualized
(1) Total investment return is calculated assuming a $1,000 investment on the
first day of each period reported, reinvestment of all dividends at net
asset value on the payable date 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 have not been annualized.
12
<PAGE>
PAINEWEBBER MUTUAL FUNDS ----------------------------
PAINEWEBBER OFFERS A FAMILY OF 22 DIRECTORS
MUTUAL FUNDS WHICH ENCOMPASS A E. Garrett Bewkes, Jr., Chairman
DIVERSIFIED RANGE OF INVESTMENT Meyer Feldberg
GOALS. INVESTORS MAY EXCHANGE THEIR FUND George W. Gowen
SHARES WITH OTHER FUNDS WITHIN THE FAMILY. Joseph J. Grano, Jr.
Frederic V. Malek
INCOME FUNDS Frank P.L. Minard
Judith Davidson Moyers
. PW GLOBAL INCOME FUND
----------------------------
. PW HIGH INCOME FUND PRINCIPAL OFFICERS
Margo N. Alexander
. PW INVESTMENT GRADE INCOME FUND President
Victoria E. Schonfeld
. PW LOW DURATION U.S. GOVERNMENT INCOME Vice President
FUND Dianne E. O'Donnell
Vice President and Secretary
. PW STRATEGIC INCOME FUND Julian F. Sluyters
Vice President and Treasurer
. PW U.S. GOVERNMENT INCOME FUND
----------------------------
TAX-FREE INCOME FUNDS ADMINISTRATOR AND
DISTRIBUTOR
. PW CALIFORNIA TAX-FREE INCOME FUND PaineWebber Incorporated
1285 Avenue of the Americas
. PW MUNICIPAL HIGH INCOME FUND New York, New York 10019
. PW NATIONAL TAX-FREE INCOME FUND ----------------------------
INVESTMENT ADVISERS
. PW NEW YORK TAX-FREE INCOME FUND
PaineWebber Incorporated
1285 Avenue of the Americas
GROWTH FUNDS New York, New York 10019
. PW CAPITAL APPRECIATION FUND Mitchell Hutchins Asset Management
Inc.
1285 Avenue of the Americas
. PW EMERGING MARKETS EQUITY FUND New York, New York 10019
. PW GLOBAL EQUITY FUND ----------------------------
This report is not to be
. PW GROWTH FUND used in connection with the
offering of shares of the
. PW REGIONAL FINANCIAL GROWTH FUND Fund unless accompanied or
preceded by an effective
. PW SMALL CAP GROWTH FUND prospectus.
. PW SMALL CAP VALUE FUND Logo Recycled Paper
(C)1995 PaineWebber Incorporated
GROWTH AND INCOME FUNDS
. PW BALANCED FUND
. PW GROWTH AND INCOME FUND
. PW TACTICAL ALLOCATION FUND
. PW UTILITY INCOME FUND
--------------------
THE FINANCIAL INFORMATION INCLUDED HEREIN IS
TAKEN FROM THE RECORDS OF THE FUND WITHOUT
EXAMINATION BY INDEPENDENT ACCOUNTANTS WHO DO
NOT EXPRESS AN OPINION THEREON.
A PROSPECTUS CONTAINING MORE COMPLETE
INFORMATION FOR ANY OF THE ABOVE FUNDS,
INCLUDING CHARGES AND EXPENSES, CAN BE
OBTAINED FROM A PAINEWEBBER INVESTMENT
EXECUTIVE OR CORRESPONDENT FIRM. READ
THE PROSPECTUS CAREFULLY BEFORE INVESTING.
