PAINEWEBBER CASHFUND INC, 485APOS, 1996-05-24

PAINEWEBBER CASHFUND INC
485APOS, 1996-05-24

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<PAGE>

As filed with the Securities and Exchange Commission on May 24, 1996

1933 Act Registration No. 2-60655
1940 Act Registration No. 811-2802

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Pre-Effective Amendment No. ____ [_]

Post-Effective Amendment No. 34 [X]

REGISTRATION STATEMENT UNDER INVESTMENT COMPANY ACT OF 1940 [X]

Amendment No. 30

PAINEWEBBER CASHFUND, INC.
(Exact name of registrant as specified in charter)

1285 Avenue of the Americas
New York, New York 10019
(Address of principal executive offices)

Registrant's telephone number, including area code: (212) 713-2000

DIANNE E. O'DONNELL, Esq.
Mitchell Hutchins Asset Management Inc.
1285 Avenue of the Americas
New York, New York 10019
(Name and address of agent for service)

Copies to:

ELINOR W. GAMMON, Esq.
Kirkpatrick & Lockhart LLP
1800 Massachusetts Avenue, N.W.
Washington, D.C. 20036-1800
Telephone: (202) 778-9000

It is proposed that this filing will become effective:

___ Immediately upon filing pursuant to Rule 485(b)

___ On pursuant to Rule 485(b)

___ 60 days after filing pursuant to Rule 485(a)(i)

X On August 1, 1996 pursuant to Rule 485(a)(i)

___ 75 days after filing pursuant to Rule 485(a)(ii)
___ On _________________ pursuant to Rule 485(a)(ii)

Registrant has filed a declaration pursuant to Rule 24f-2 under the Investment
Company Act of 1940 and filed the notice required by such Rule for its most
recent fiscal year on May 17, 1996.

<PAGE>

PaineWebber Cashfund, Inc.

Contents of Registration Statement

This registration statement consists of the following papers and documents.

Cover Sheet

Contents of Registration Statement

Cross Reference Sheets

Part A - Prospectus

Part B - Statement of Additional Information

Part C - Other Information

Signature Page

Exhibits

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PaineWebber Cashfund, Inc.
Form N-1A Cross Reference Sheet

Part A Item No.
and Caption Prospectus Caption
- --------------- ------------------
1 Cover Page

2 Highlights

3 Financial Highlights; Performance Information

4 Highlights; Investment Objective and Policies; General
Information

5 Management; General Information

6 Cover Page; Dividends and Taxes; General Information

7 Purchases; Management; Valuation of Shares; General Information

8 Redemptions

9 Not Applicable

Part B Item No. Statement of Additional
and Caption Information Caption
- --------------- ------------------
10 Cover Page

11 Table of Contents

12 Not Applicable

13 Investment Policies and Restrictions

14 Directors and Officers

15 Directors and Officers

16 Investment Advisory Services

17 Portfolio Transactions

18 General Information

19 Valuation of Shares; Additional Information Regarding
Redemptions

20 Dividends and Taxes

21 Investment Advisory Services

22 Calculation of Yield

23 Financial Statements

Part C
- ------
Information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C of this Registration Statement.

<PAGE>
PAINEWEBBER AUGUST 1, 1996
CASHFUND, INC.

1285 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK 10019

A PROFESSIONALLY MANAGED MONEY MARKET FUND, INVESTING IN HIGH-GRADE MONEY MARKET
INSTRUMENTS, DESIGNED TO PROVIDE:

o Current Income
o Stability of Principal
o High Liquidity

This Prospectus concisely sets forth information about the Fund a prospective
investor should know before investing. Please retain this Prospectus for future
reference.

A Statement of Additional Information dated August 1, 1996 (which is
incorporated by reference herein) has been filed with the Securities and
Exchange Commission ('SEC'). The Statement of Additional Information can be
obtained without charge, and further inquiries can be made, by contacting the
Fund, your PaineWebber Investment Executive or PaineWebber's correspondent firms
or by calling toll-free 1-800-441-7756.

AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT. WHILE THE FUND SEEKS TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00
PER SHARE, THERE CAN BE NO ASSURANCE THAT IT WILL BE ABLE TO DO SO.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS ANY SUCH
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

Table of Contents

Highlights .......................... 2
Financial Highlights ................ 4
Investment Objective and Policies ... 4
Purchases ........................... 8
Redemptions ......................... 9
Valuation of Shares ................. 12
Dividends and Taxes ................. 12
Management .......................... 13
Performance Information ............. 14
General Information ................. 15

<PAGE>
PAINEWEBBER CASHFUND, INC.
HIGHLIGHTS

See the body of the Prospectus for more information on the topics discussed
in these highlights.

The Fund: PaineWebber Cashfund, Inc. ('Fund') is a professionally
managed, diversified no-load money market fund that
started operations on May 1, 1978.

Investment Objective Current income, stability of principal and high
and Policies: liquidity; invests primarily in high-grade money market
instruments.

Total Net Assets: Over $5.1 billion as of April 30, 1996.

Distributor and
Investment Adviser: PaineWebber Incorporated ('PaineWebber'). See
'Management.'

Sub-adviser: Mitchell Hutchins Asset Management Inc. ('Mitchell
Hutchins').

Purchases: Shares of common stock are available exclusively through
PaineWebber and its correspondent firms. See 'Purchases.'

Redemptions: Shares may be redeemed through PaineWebber or its
correspondent firms. See 'Redemptions.'

Yield: Based on current money market rates; quoted in the
financial section of most newspapers.

Dividends: Declared daily and paid monthly. See 'Dividends and
Taxes.'

Reinvestment: All dividends are automatically paid in Fund shares.

Minimum Purchase: $1,000 for initial purchase.

Automatic Investment $500 daily investment, $1 or more on the next to last
Sweep: Business Day of each month.

Checkwriting: Available to qualified shareholders upon request.
Unlimited number of checks. Minimum amount per check:
$500.

Public Offering Net asset value, which the Fund seeks to maintain at
Price: $1.00 per share.

<PAGE>
WHO SHOULD INVEST. The Fund is designed for investors seeking safety,
liquidity and current income. The Fund provides a convenient means for investors
to enjoy current income at money market rates with minimal risk of fluctuation
of principal.

RISK FACTORS. There can be no assurance that the Fund will achieve its
investment objective. In periods of declining interest rates the Fund's yield
will tend to be somewhat higher than prevailing market rates, and in periods of
rising interest rates the Fund's yield generally will be somewhat lower. See
'Investment Objective and Policies.'

EXPENSES OF INVESTING IN THE FUND. The following tables are intended to
assist investors in understanding the expenses associated with investing in the
Fund.

SHAREHOLDER TRANSACTION EXPENSES

Sales charge on purchases of shares....... None
Sales charge on reinvested dividends...... None
Redemption fee or deferred sales charge... None

ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)

<TABLE>
<S> <C>
Management fees........................... 0.37%
12b-1 fees................................ None
Other expenses............................ 0.23%
-----
Total Operating Expenses.................. 0.60%
-----
-----
</TABLE>

EXAMPLE OF EFFECT OF FUND EXPENSES

An investor would pay directly or indirectly the following expenses on a
$1,000 investment in the Fund, assuming a 5% annual return:

<TABLE>
<CAPTION>
ONE YEAR THREE YEARS FIVE YEARS TEN YEARS
- -------- ----------- ---------- ---------
<S> <C> <C> <C>
$6 $19 $33 $75
</TABLE>

This Example assumes that all dividends are reinvested and that the
percentage amounts listed under Annual Fund Operating Expenses remain the same
in the years shown. The above tables and the assumption in the Example of a 5%
annual return are required by regulations of the SEC applicable to all mutual
funds; the assumed 5% annual return is not a prediction of, and does not
represent, the Fund's projected or actual performance.

THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES, AND THE FUND'S ACTUAL EXPENSES MAY BE MORE OR LESS THAN THOSE SHOWN.
The actual expenses of the Fund will depend upon, among other things, the level
of average net assets and the extent to which the Fund incurs variable expenses,
such as transfer agency costs.

<PAGE>
PaineWebber
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Financial Highlights

The table below provides selected per share data and
ratios for one share of the Fund for the periods shown.
This information is supplemented by the financial
statements and accompanying notes appearing in the Fund's
Annual Report to Shareholders for the fiscal year ended
March 31, 1996, which are incorporated by reference into
the Statement of Additional Information. The financial
statements and notes, as well as the information in the
table appearing below insofar as it relates to each of
the five years in the period ended March 31, 1996, have
been audited by Ernst & Young LLP, independent auditors,
whose report thereon is included in the Annual Report to
Shareholders. The information appearing below for each of
the five years in the period ended March 31, 1991 also
has been audited by Ernst & Young LLP, whose reports
thereon were unqualified.

<TABLE>
<CAPTION>
FOR THE YEARS ENDED MARCH 31,
--------------------------------------------------------------
1996 1995 1994 1993 1992
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.................... $ $ 1.00 $ 1.00 $ 1.00 $ 1.00
NET INCOME FROM INVESTMENT OPERATIONS:
Net investment income................................... 0.0433 0.0272 0.0317 0.0509
LESS DISTRIBUTIONS:
Dividends from net investment income.................... (0.0433) (0.0272) (0.0317) (0.0509)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period.......................... $ $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Total return (1)........................................ % 4.44% 2.75% 3.17% 5.09%
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's)....................... $ $3,700,678 $3,436,278 $3,774,298 $4,234,968
Ratio of expenses to average net assets................. % 0.62% 0.61% 0.57% 0.56%
Ratio of net investment income to average net assets.... % 4.35% 2.73% 3.17% 5.09%

<CAPTION>
FOR THE YEARS ENDED MARCH 31,
--------------------------------------------------------------
1991 1990 1989 1988 1987
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
NET INCOME FROM INVESTMENT OPERATIONS:
Net investment income................................... 0.0743 0.0846 0.0761 0.0638 0.0581
LESS DISTRIBUTIONS:
Dividends from net investment income.................... (0.0743) (0.0846) (0.0761) (0.0638) (0.0581)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period.......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Total return (1)........................................ 7.43% 8.46% 7.61% 6.38% 5.81%
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's)....................... $5,122,338 $5,236,560 $4,416,667 $4,071,212 $4,251,408
Ratio of expenses to average net assets................. 0.53% 0.54% 0.57% 0.58% 0.56%
Ratio of net investment income to average net assets.... 7.43% 8.46% 7.61% 6.38% 5.81%
</TABLE>

(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 dates and a sale at net asset value on the last
day of each period reported.

Investment Objective and Policies

The Fund's investment objective is to provide current
income, stability of principal and high liquidity. The
Fund invests exclusively in high-grade money market
instruments with remaining maturities of 13 months or
less. These instruments include U.S. government
securities, obligations of U.S. banks, commercial paper
and other short-term corporate obligations, variable and
floating rate securities and participation interests or
repurchase agreements involving any of the foregoing. The
Fund maintains a dollar-weighted average portfolio
maturity of 90 days or less.

The Fund invests The Fund may invest in obligations (including
exclusively certificates of deposit, bankers' acceptances, time
exclusively in deposits maturing in seven days or less and similar
high-grade money obligations) of U.S. banks having total assets in excess
market of

- --------------------------------------------------------------------------------
4

<PAGE>
Cashfund
- --------------------------------------------------------------------------------

instruments with $1.5 billion at the time of purchase. The Fund may also
remaining maturities invest in interest-bearing savings deposits in U.S.
of 13 months or commercial and savings banks, including time deposits
less. maturing in seven days or less of savings associations
and similar associations, provided that the principal
amounts at each such bank are fully insured by the
Federal Deposit Insurance Corporation and the aggregate
amount of such deposits does not exceed 5% of the value
of the Fund's assets.

The commercial paper and other short-term corporate
obligations purchased by the Fund consist only of
obligations that Mitchell Hutchins determines, pursuant
to procedures adopted by the Fund's board of directors,
present minimal credit risks and are either (1) rated in
the highest short-term rating category by at least two
nationally recognized statistical rating organizations
('NRSROs'), (2) rated in the highest short-term rating
category by a single NRSRO if only that NRSRO has
assigned the obligations a short-term rating or (3)
unrated, but determined by Mitchell Hutchins to be of
comparable quality ('First Tier Securities'). The Fund
may also purchase bonds and notes with remaining
maturities of 13 months or less, and participation
interests in any of the securities in which it is
permitted to invest. Participation interests are pro rata
interests in securities held by others. The Fund
generally may invest no more than 5% of its total assets
in the securities of a single issuer (other than
securities issued by the U.S. government, its agencies or
instrumentalities).

In managing the Fund's portfolio, Mitchell Hutchins may
employ a number of professional money management
techniques, including varying the composition and the
average weighted maturity of the Fund's portfolio based
upon its assessment of the relative values of various
money market instruments and future interest rate
patterns in order to respond to changing economic and
money market conditions and to shifts in fiscal and
monetary policy. Mitchell Hutchins may also seek to
improve the Fund's yield by purchasing or selling
securities to take advantage of yield disparities among
similar or dissimilar money market instruments that
regularly occur in the money market.

There can be no assurance that the Fund will achieve its
investment objective. In periods of declining interest
rates the Fund's yield will tend to be somewhat higher
than prevailing market rates, and in periods of rising
interest rates the opposite will be true. Also, when
interest rates
- --------------------------------------------------------------------------------
5
<PAGE>
PaineWebber
- --------------------------------------------------------------------------------
are falling, net cash inflows from the continuous sale of
Fund shares are likely to be invested in portfolio
instruments producing lower yields than the balance of
the Fund's portfolio, thereby reducing the Fund's yield.
In periods of rising interest rates, the opposite can be
true.

U.S. GOVERNMENT SECURITIES. The U.S. government
securities in which the Fund may invest include direct
obligations of the U.S. Treasury (such as Treasury bills,
notes and bonds) and obligations issued or guaranteed by
U.S. government agencies and instrumentalities. The Fund
may invest in U.S. government securities that are
supported by the full faith and credit of the U.S.
In periods of government (such as Government National Mortgage
declining interest Association certificates), securities supported primarily
rates, the Fund's or solely by the creditworthiness of the issuer (such as
yield will tend to securities of the Resolution Funding Corporation and the
be somewhat higher Tennessee Valley Authority) and securities that are
than prevailing supported primarily or solely by specific pools of assets
market rates, and in and the creditworthiness of a U.S. government-related
periods of rising issuer (such as mortgage-backed securities issued by the
rates, lower. Federal Home Loan Mortgage Corporation).

The Fund may also acquire securities issued or guaranteed
as to principal and interest by the U.S. government in
the form of custodial receipts that evidence ownership of
future interest payments, principal payments or both on
certain U.S. Treasury notes or bonds. Such notes and
bonds are held in custody by a bank on behalf of the
owners of such notes or bonds. These custodial receipts
are known by various names, including 'Treasury
Investment Growth Receipts' ('TIGRs') and 'Certificates
of Accrual on Treasury Securities' ('CATS'). The Fund
also may invest in separately traded principal and
interest components of securities issued or guaranteed by
the U.S. Treasury. The principal and interest components
of selected securities are traded independently under the
Separate Trading of Registered Interest and Principal of
Securities ('STRIPS') program. Under the STRIPS program,
the principal and interest components are individually
numbered and separately issued by the U.S. Treasury at
the request of depository financial institutions, which
then trade the component parts independently.

VARIABLE AND FLOATING RATE SECURITIES. The Fund may
purchase variable and floating rate securities with
remaining maturities in excess of 13 months issued by
U.S. government agencies or instrumentalities or
- --------------------------------------------------------------------------------
6
<PAGE>
Cashfund
- --------------------------------------------------------------------------------
guaranteed by the U.S. government, or (if subject to a
demand feature exercisable within 13 months or less)
issued by U.S. companies. The yield on these securities
is adjusted in relation to changes in specific rates such
as the prime rate, and different securities may have
different adjustment rates. The Fund's investment in
these securities must comply with conditions established
by the SEC under which they may be considered to have
remaining maturities of 13 months or less. Certain of
these obligations carry a demand feature that gives the
Fund the right to tender them back to the issuer or a
remarketing agent and receive the principal amount of the
security prior to maturity. The demand feature may or may
not be backed by a letter of credit or other credit
support arrangement provided by a bank or other financial
institution, the credit quality of which affects the
credit quality of the obligation.

Securities purchased by the Fund may include variable
amount master demand notes, which are unsecured
redeemable obligations that permit investment of varying
amounts at fluctuating interest rates under a direct
agreement between the issuer and the Fund. The principal
amount of these notes may be increased from time to time
by the parties (subject to specified maximums) or
decreased by the Fund or the issuer. These notes are
payable on demand and are typically unrated.

REPURCHASE AGREEMENTS. Repurchase agreements are
transactions in which the Fund purchases securities from
a bank or recognized securities dealer and simultaneously
commits to resell the securities to that bank or dealer
at an agreed-upon date and price reflecting a market rate
of interest unrelated to the coupon rate or maturity of
the purchased securities. Although repurchase agreements
carry certain risks not associated with direct
investments in securities, including possible decline in
the market value of the underlying securities and delays
and costs to the Fund if the other party to the
repurchase agreement becomes insolvent, the Fund intends
to enter into repurchase agreements only with banks and
dealers in transactions believed by Mitchell Hutchins to
present minimal credit risks in accordance with
guidelines established by the Fund's board of directors.

LENDING OF PORTFOLIO SECURITIES. The Fund is authorized
to lend up to 33 1/3% of the total value of its portfolio
securities to broker-dealers or institutional investors
that Mitchell Hutchins deems qualified. Lending

- --------------------------------------------------------------------------------
7
<PAGE>
PaineWebber
- --------------------------------------------------------------------------------

securities enables the Fund to earn additional income,
but could result in a loss or delay in recovering
securities.

OTHER INFORMATION. The Fund may borrow money for
temporary purposes, but not in excess of 10% of its total
assets and may engage in reverse repurchase agreements
with respect to up to 5% of its net assets. The Fund may
not invest more than 10% of its net assets in illiquid
securities, including repurchase agreements with
maturities in excess of seven days.

The Fund's investment objective may not be changed
without the approval of the Fund's shareholders. Certain
other investment limitations, as described in the
Statement of Additional Information, also may not be
changed without shareholder approval. All other
investment policies may be changed by the Fund's board of
directors without shareholder approval.

Purchases

GENERAL. Shares of the Fund are available through
PaineWebber and its correspondent firms. Investors may
contact a local PaineWebber office to open an account.
The minimum initial investment in the Fund is $1,000 and
the minimum for additional purchases is $500, except as
described below. All free credit cash balances in the
investor's PaineWebber account (including proceeds from
securities sold) of $500 or more are automatically
invested or 'swept' into shares of the Fund daily for
settlement on the next Business Day and all remaining
free credit cash of $1 or more are 'swept' on the next
last Business Day of the month for settlement on the last
Business Day of each month. A 'Business Day' is any day
The minimum initial on which the Philadelphia offices of the Fund's
investment is custodian, State Street Bank and Trust Company
$1,000. Automatic ('Custodian'), and the New York City offices of
investment daily of PaineWebber and PaineWebber's bank, The Bank of New York,
$500 or more and are all open for business. The Fund and PaineWebber
remaining $1 or more reserve the right to reject any purchase order and to
at each month end. suspend the offering of Fund shares for a period of time.

On any Business Day, the Fund will accept purchase orders
and credit shares to investors' accounts as follows:

PURCHASES BY CHECK. Investors may purchase Fund shares
by placing an order with their PaineWebber Investment
Executives or correspondent firms and forwarding checks
drawn on a U.S. bank. Checks should be made payable to
PaineWebber Cashfund, Inc. and

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8
<PAGE>
Cashfund
- --------------------------------------------------------------------------------
should include the investor's PaineWebber account number
on the check.

As noted above, Fund shares will be purchased when
federal funds are available. Federal funds are deemed
available to the Fund two Business Days after deposit of
a personal check and one Business Day after deposit of a
cashier's or certified check. PaineWebber may benefit
from the temporary use of the proceeds of personal checks
to the extent those checks are converted to federal funds
in fewer than two Business Days.

PURCHASES BY WIRE. Investors may also purchase Fund
shares by placing an order through their PaineWebber
Investment Executives or correspondent firms and
instructing their banks to transfer federal funds by wire
to: The Bank of New York, ABA 021-000018, PaineWebber
Cashfund, Inc., A/C 890-0114-061, OBI=FBO [Account Name]/
[PaineWebber Account Number]. The wire must include the
investor's name and PaineWebber account number. If
PaineWebber receives a notice from an investor's bank of
a wire transfer of federal funds for a purchase of Fund
shares by 2:00 p.m., Eastern time, on a Business Day, the
Fund shares may be purchase will be executed on that Business Day; otherwise
purchase by wire, the order will be executed at 2:00 p.m., Eastern time, on
check or with funds the next Business Day. PaineWebber and/or an investor's
held at PaineWebber. bank may impose a service charge for wire purchases.

Redemptions

Shareholders may redeem any number of shares from their
Shareholders may Fund accounts by wire, check, telephone or mail. In
redeem any number of addition, unless shareholders otherwise instruct their
shares from their PaineWebber Investment Executives, any securities
Fund accounts by purchase or other debit in their PaineWebber brokerage
wire, check, accounts will be paid for automatically on settlement
telephone or mail. date by redeeming Fund shares held in such accounts.

WIRE REDEMPTIONS. Shareholders who wish to redeem $5,000
or more may request that redemption proceeds be paid in
federal funds and wired directly to a pre-designated bank
account. To take advantage of this service, shareholders
should obtain an authorization form from their
PaineWebber Investment Executives or correspondent firms.
If a wire redemption order is received by PaineWebber's
New York City offices prior to 12:00 noon, Eastern time,
on any Business Day, the redemption proceeds will be
wired to the shareholder's bank on the same Business Day.
Proceeds of all other wire redemption orders will be
wired to the

- --------------------------------------------------------------------------------

9
<PAGE>
PaineWebber
- --------------------------------------------------------------------------------
shareholder's bank on the next Business Day. PaineWebber
reserves the right to charge a fee for wiring funds and
to redeem automatically an appropriate number of Fund
shares to pay that fee.

CHECK REDEMPTIONS. Shareholders may redeem Fund shares
by drawing a check, a supply of which may be obtained
through PaineWebber, for $500 or more against their Fund
accounts. When the check is presented to the Fund's
transfer agent ('Transfer Agent') for payment, the
Transfer Agent will cause the Fund to redeem sufficient
shares to cover the amount of the check. The shareholder
will continue to receive dividends on those shares until
the check is presented to the Transfer Agent for payment.
Cancelled checks are not returned; however, shareholders
may obtain photocopies of their cancelled checks upon
request. If a shareholder has insufficient shares to
cover a check, the check will be returned to the payee
marked 'nonsufficient funds.' Checks written in amounts
less than $500 will also be returned. Because the amount
Shareholders who are of Fund shares owned by a shareholder is likely to change
interested in the each day, shareholders should not attempt to redeem all
check redemption shares held in their accounts by writing a check. Charges
service should may be imposed for specially imprinted checks, business
obtain the necessary checks, copies of cancelled checks, stop payment orders,
forms from their checks returned 'nonsufficient funds' and checks returned
PaineWebber because they are written for less than $500; these
invetment executives charges will be paid by redeeming automatically an
or correspondent appropriate number of Fund shares. PaineWebber reserves
firms. Check may be the right to modify or terminate the checkwriting service
written in amounts at any time or to impose a service charge in connection
of $500 or more. with it.

Shareholders who are interested in the check redemption
service should obtain the necessary forms from their
PaineWebber Investment Executives or correspondent firms.
Checkwriting generally is not available to persons who
hold Fund shares through any sub-account or tax-deferred
retirement plan account.

REDEMPTIONS BY TELEPHONE OR MAIL. Shareholders may
submit redemption requests in from their PaineWebber
person or by telephone or mail to their PaineWebber
Investment Executives or investment executives or
correspondent firms; PaineWebber Investment Executives in
local branches correspondent firms. Checks throughout the
country and correspondent firms are responsible for
promptly may be written in amounts of forwarding orders
to PaineWebber's New York City offices. Such redemption
orders will be executed at the net asset value per share

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10
<PAGE>
Cashfund
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next determined after receipt by PaineWebber's New York
City offices, and redemption proceeds will be paid
promptly by check. Under certain circumstances,
PaineWebber may impose an administrative service fee of
up to $5.00 for processing redemptions paid by check.

Shareholders who send redemption orders to their
PaineWebber Investment Executives or correspondent firms
by mail are responsible for ensuring that the request for
redemption is received in good order. 'Good order' means
that the request must be accompanied by (a) a letter of
instruction or a stock assignment specifying the number
of shares or amount of investment to be redeemed (or that
all shares credited to a Fund account be redeemed),
signed by all registered owners of the shares in the
exact names in which they are registered, (b) a guarantee
of the signature of each registered owner by an eligible
institution acceptable to the Transfer Agent and in
accordance with SEC rules, such as a commercial bank,
trust company or member of a recognized stock exchange
and (c) other supporting legal documents for estates,
trusts, guardianships, custodianships, partnerships and
corporations.

ADDITIONAL INFORMATION ON REDEMPTIONS. Shareholders with
questions about redemption requirements should consult
their PaineWebber Investment Executives or correspondent
firms. Shareholders who redeem all their shares will
receive cash credits to their PaineWebber accounts for
dividends earned on those shares through the day before
redemption. The redemption price may be more or less than
the purchase price, although the Fund anticipates that
its net asset value per share will normally be $1.00 per
share. Because the Fund incurs certain fixed costs in
maintaining shareholder accounts, the Fund reserves the
right to redeem all Fund shares in any shareholder
account of less than $500 net asset value. If the Fund
elects to do so, it will notify the shareholder and
provide the shareholder with an opportunity to increase
the amount invested to $500 or more within 60 days of the
notice. This notice may appear on the shareholder's
account statement. If a shareholder requests redemption
of shares which were Shareholders should maintain
purchased recently, the Fund may delay payment until it
Shareholders should is assured that it has minimum balances of at least
maintain minimum received good payment for the purchase of the shares. In
balances of at least the case of purchases $500. by check, this can take up to
$500. 15 days.

- --------------------------------------------------------------------------------
11
<PAGE>
PaineWebber
- --------------------------------------------------------------------------------
Valuation of Shares

The Fund uses its best efforts to maintain its net asset
value at $1.00 per share. Net asset value per share is
determined by dividing the value of the securities held
by the Fund plus any cash or other assets minus all
liabilities by the number of Fund shares outstanding. The
Fund's net asset value is computed once each Business Day
at 2:00 p.m., Eastern time.

The Fund values its portfolio securities using the
amortized cost method of valuation, under which market
value is approximated by amortizing the difference
Dividends accrue to between the acquisition cost and value at maturity of an
shareholder accounts instrument on a straight-line basis over its remaining
daily and are life. All cash, receivables and current daily and
automatically paid payables are carried at their face value. Other assets
in additional Fund are valued at fair value as determined in good faith by
shares monthly. or under the direction of the Fund's board of directors.

Dividends and Taxes

DIVIDENDS. Each Business Day, the Fund declares as
dividends all of its net investment income. Shares begin
earning dividends on the day of purchase; dividends are
accrued to shareholder accounts daily and are
automatically paid in additional Fund shares monthly.
Shares do not earn dividends on the day of redemption.
Net investment income includes accrued interest and
earned discount (including both original issue and market
discounts), less amortization of premium and accrued
expenses. The Fund distributes any net short-term capital
gain annually, but may make more frequent distributions
of such gain if necessary to maintain its net asset value
per share at $1.00 or to avoid income or excise taxes.
The Fund does not expect to realize net long-term capital
gain and thus does not anticipate payment of any
long-term capital gain distributions.

TAXES. The Fund intends to continue to qualify for
treatment as a regulated investment company under the
Internal Revenue Code so that it will be relieved of
federal income tax on that part of its investment company
taxable income (consisting generally of net investment
income and net short-term capital gain, if any) that is
distributed to its shareholders.

Dividends paid by the Fund generally are taxable to its
shareholders as ordinary income, notwithstanding that
such dividends are paid in
- --------------------------------------------------------------------------------
12
<PAGE>
Cashfund
- --------------------------------------------------------------------------------
additional Fund shares. Shareholders not subject to tax
on their income generally will not be required to pay tax
on amounts distributed to them.

The Fund notifies its shareholders following the end of
each calendar year of the amount of all dividends paid
that year.

The Fund is required to withhold 31% of all dividends
payable to any individuals and certain other noncorporate
shareholders who do not provide the Fund with a correct
taxpayer identification number. Withholding at that rate
also is required from dividends payable to such
shareholders who otherwise are subject to backup
withholding.

The foregoing is only a summary of some of the important
federal income tax considerations generally affecting the
Fund and its shareholders; see the Statement of
Additional Information for a further discussion. There
may be other federal, state or local tax considerations
applicable to a particular investor. Prospective
shareholders are urged to consult their tax advisers.

Management

The Fund's board of directors, as part of its overall
management responsibility, oversees various organizations
responsible for the Fund's day-to-day management.
PaineWebber, the Fund's investment adviser and
The Fund's directors administrator, provides a continuous investment program
oversee various for the Fund and supervises all aspects of its
organizations operations. As sub-adviser to the Fund, Mitchell Hutchins
responsible for the makes and implements investment decisions and, as
Fund's day-to day sub-administrator, is responsible for the day-to-day
management. administration of the Fund.

PaineWebber receives a monthly fee for these services
and, for the fiscal year ended March 31, 1996, the Fund's
effective advisory and administration fee paid to
PaineWebber was equal to .37% of the Fund's average daily
net assets. PaineWebber (not the Fund) pays Mitchell
Hutchins fees for its sub-advisory and sub-administrative
services, in an aggregate annual amount equal to 20% of
the fee received by PaineWebber from the Fund for
advisory and administrative services.

The Fund pays PaineWebber an annual fee of $4.00 per
active Fund account, plus certain out-of-pocket expenses,
for certain services not performed by the Transfer Agent.
The Fund also incurs other expenses. For the fiscal year
ended March 31, 1996, the Fund's ratio of expenses as a
percentage of average net assets was .60%.

- --------------------------------------------------------------------------------
13

<PAGE>
PaineWebber
- --------------------------------------------------------------------------------

PaineWebber and Mitchell Hutchins are located at 1285
Avenue of the Americas, New York, New York 10019. Michell
Hutchins is a wholly owned subsidiary of PaineWebber,
which is in turn wholly owned by Paine Webber Group Inc.,
a publicly owned financial services holding company. At
April 30, 1996, PaineWebber or Mitchell Hutchins was
investment adviser to 31 registered investment companies
with 65 separate portfolios and aggregate assets
exceeding $30.1 billion.

Mitchell Hutchins investment personnel may engage in
securities transactions for their own accounts pursuant
to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.

Performance Information

From time to time the Fund may advertise its 'yield' and
'effective yield.' Both yield figures are based on
historical earnings and are not intended to indicate
future performance. The 'yield' of the Fund is the income
on an investment in the Fund over a specified seven-day
period. This income is then 'annualized' (that is,
assumed to be earned each week over a 52-week period) and
shown as a percentage of the investment. The 'effective
yield' is calculated similarly but, when annualized, the
income earned is assumed to be reinvested. The 'effective
yield' will be higher than the 'yield' because of the
compounding effect of this assumed reinvestment.

The Fund may also advertise other performance data, which
may consist of the annual or cumulative return (including
realized net short-term capital gain, if any) earned on a
hypothetical investment in the Fund since it began
operations on May 1, 1978, or for shorter periods. This
return data may or may not assume reinvestment of
dividends (compounding).
The Fund may
advertise its The performance of shareholder accounts with small
'yield' and balances will differ from the quoted performance because
'effective yield.' daily income for each shareholder account is rounded to
The 'effective the nearest whole penny. Accordingly, very small
yield' assumes shareholder accounts assumes (approximately $33 or lower
dividends are at current interest rates) which generate less than
reinvested. 1/2 cent per day of income will earn no dividends.
- --------------------------------------------------------------------------------
14

<PAGE>
Cashfund
- --------------------------------------------------------------------------------
General Information

The Fund is registered with the SEC as a diversified,
open-end management investment company and was
incorporated in Maryland on January 20, 1978. The Fund
has an authorized capitalization of 20 billion shares of
$0.001 par value common stock. The board of directors is
authorized to establish different series and classes of
shares, although at present the Fund offers a single
series with a single class of shares. Each share has one
vote with respect to matters upon which a shareholder
vote is required; voting rights are non-cumulative.

The Fund does not hold annual shareholder meetings. There
normally will be no meetings of shareholders to elect
directors unless fewer than a majority of the directors
holding office have been elected by shareholders. The
directors are required to call a meeting of shareholders
when requested in writing to do so by the shareholders of
record holding at least 25% of the Fund's outstanding
shares. Each share of the Fund has equal voting, dividend
and liquidation rights.

CERTIFICATES. To avoid additional operating expenses and
for investor convenience, share certificates are not
To avoid additional issued. Ownership of Fund shares is recorded on a stock
expense, share register by the Transfer Agent, and shareholders have the
certificates are not issued. same rights of ownership with respect to such
issued. shares as if certificates had been issued.

CUSTODIAN AND TRANSFER AGENT. State Street Bank and
Trust Company, One Heritage Drive, North Quincy,
Massachusetts 02171, is custodian of the Fund's assets.
PFPC, Inc., a subsidiary of PNC whose principal business
address is 400 Bellevue Parkway, Bellevue Corporate
Center, Wilmington, Delaware 19809, is the Fund's
transfer and dividend disbursing agent.

PRINCIPAL UNDERWRITER. PaineWebber serves as principal
underwriter of the Fund's shares.

CONFIRMATIONS AND STATEMENTS. Shareholders receive
confirmations of initial purchases of Fund shares, and
subsequent transactions are reported on account
statements sent to PaineWebber clients. These statements
are sent monthly except that, if a shareholder's only
Fund activity in a quarter was reinvestment of dividends,
the activity may be reported on a quarterly rather than
monthly statement. Shareholders also receive audited
annual and unaudited semi-annual financial statements.
- --------------------------------------------------------------------------------
15

<PAGE>
o Current Income
o Stability of Principal
o High Liquidity
o Professional Management
o Dividend Reinvestment
o Checkwriting Privileges

No person has been authorized to give any information or to make any
representations not contained in this Prospectus in connection with the offering
made by this Prospectus and, if given or made, such information or
representations must not be relied upon as having been authorized by the Fund or
its distributor. This Prospectus does not constitute an offering by the Fund or
by the distributor in any jurisdiction in which such offering may not lawfully
be made.

(Copyright) 1996 PaineWebber Incorporated

[LOGO] Recycled Paper

PAINEWEBBER
CASHFUND, INC.

Prospectus

August 1, 1996

<PAGE>
PAINEWEBBER CASHFUND, INC.
1285 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019

STATEMENT OF ADDITIONAL INFORMATION

PaineWebber Cashfund, Inc. ('Fund') is a professionally managed, no load
money market fund designed to provide investors with current income, stability
of principal and high liquidity. The Fund's investment adviser, administrator
and distributor is PaineWebber Incorporated ('PaineWebber'); its sub-adviser is
Mitchell Hutchins Asset Management Inc. ('Mitchell Hutchins'), a wholly owned
subsidiary of PaineWebber. Mitchell Hutchins also serves as the Fund's
sub-administrator. This Statement of Additional Information is not a prospectus
and should be read only in conjunction with the Fund's current Prospectus, dated
August 1, 1996. A copy of the Prospectus may be obtained by contacting any
PaineWebber Investment Executive or correspondent firm or by calling toll-free
1-800-441-7756. This Statement of Additional Information is dated August 1,
1996.

INVESTMENT POLICIES AND RESTRICTIONS

The following supplements the information contained in the Prospectus
concerning the Fund's investment policies and limitations.

YIELDS AND RATINGS OF MONEY MARKET INSTRUMENTS. The yields on the money
market instruments in which the Fund invests (such as commercial paper and bank
obligations) are dependent on a variety of factors, including general money
market conditions, conditions in the particular market for the obligation, the
financial condition of the issuer, the size of the offering, the maturity of the
obligation and the ratings of the issue. The ratings of nationally recognized
statistical rating organizations ('NRSROs') represent their opinions as to the
quality of the obligations they undertake to rate. Ratings, however, are general
and are not absolute standards of quality. Consequently, obligations with the
same rating, maturity and interest rate may have different market prices.
Subsequent to its purchase by the Fund, an issue may cease to be rated or its
rating may be reduced. In the event that a security in the Fund's portfolio
ceases to be a 'First Tier Security,' as defined in the Prospectus, or Mitchell
Hutchins becomes aware that a security has received a rating below the second
highest rating by any NRSRO, Mitchell Hutchins or the Fund's board of directors
will consider whether the Fund should continue to hold the obligation. A First
Tier security rated in the highest short-term rating category by a single NRSRO
at the time of purchase that subsequently receives a rating below the highest
rating category from a different NRSRO will continue to be considered a First
Tier security.

REPURCHASE AGREEMENTS. As stated in the Prospectus, the Fund may enter
into repurchase agreements with respect to any security in which it is
authorized to invest, except that securities subject to repurchase agreements
may have maturities in excess of 13 months. The Fund maintains custody of the

underlying securities prior to their repurchase; thus, the obligation of the
bank or securities dealer to pay the repurchase price on the date agreed to is,
in effect, secured by such securities. If the value of these securities is less
than the repurchase price, plus any agreed-upon additional amount, the other
party to the agreement must provide additional collateral so that at all times
the collateral is at least equal to the repurchase price, plus any agreed-upon
additional amount. The difference between the total amount to be received upon
repurchase of the

<PAGE>
securities and the price that was paid by the Fund upon acquisition is accrued
as interest and included in the Fund's net investment income.

Repurchase agreements carry certain risks not associated with direct
investments in securities. The Fund intends to enter into repurchase agreements
only with banks and dealers in transactions believed by Mitchell Hutchins to
present minimal credit risks in accordance with guidelines established by the
Fund's board of directors. Mitchell Hutchins will review and monitor the
creditworthiness of those institutions under the board's general supervision.

REVERSE REPURCHASE AGREEMENTS. The Fund may enter into reverse repurchase
agreements up to an aggregate value of not more than 5% of its net assets. Such
agreements involve the sale of securities held by the Fund subject to its
agreement to repurchase the securities at an agreed-upon date and price
reflecting a market rate of interest. Such agreements are considered to be
borrowings and may be entered into only for temporary or emergency purposes.
While a reverse repurchase agreement is outstanding, the Fund will maintain with
its custodian in a segregated account cash, U.S. government securities or other
liquid, high-grade debt obligations, marked to market daily, in an amount at
least equal to the Fund's obligation under the reverse repurchase agreement.

ILLIQUID SECURITIES. The Fund will not invest more than 10% of its net
assets in illiquid securities. The term 'illiquid securities' for this purpose
means securities that cannot be disposed of within seven days in the ordinary
course of business at approximately the amount at which the Fund has valued the
securities and includes, among other things, repurchase agreements maturing in
more than seven days and restricted securities other than those Mitchell
Hutchins has determined to be liquid pursuant to guidelines established by the
Fund's board of directors. Commercial paper issues in which the Fund may invest
include securities issued by major corporations without registration under the
Securities Act of 1933 ('1933 Act') in reliance on the exemption from such
registration afforded by Section 3(a)(3) thereof and commercial paper issued in
reliance on the so-called 'private placement' exemption from registration which
is afforded by section 4(2) of the 1933 Act ('Section 4(2) paper'). Section 4(2)
paper is restricted as to disposition under the federal securities laws in that
any resale must similarly be made in an exempt transaction. Section 4(2) paper
is normally resold to other institutional investors through or with the
assistance of investment dealers who make a market in Section 4(2) paper, thus
providing liquidity.

Not all restricted securities are illiquid. In recent years a large
institutional market has developed for certain securities that are not

registered under the 1933 Act, including private placements, repurchase
agreements, commercial paper, foreign securities and corporate bonds and notes.
These instruments are often restricted securities because the securities are
sold in transactions not requiring registration. Institutional investors
generally will not seek to sell these instruments to the general public, but
instead will often depend either on an efficient institutional market in which
such unregistered securities can be readily resold or on an issuer's ability to
honor a demand for repayment. Therefore, the fact that there are contractual or
legal restrictions on resale to the general public or certain institutions is
not dispositive of the liquidity of such investments.

Rule 144A under the 1933 Act establishes a 'safe harbor' from the
registration requirements of the 1933 Act for resales of certain securities to
qualified institutional buyers. Institutional markets for restricted securities
have developed as a result of Rule 144A, providing both readily ascertainable
values for restricted securities and the ability to liquidate an investment to
satisfy share redemption orders. Such markets include automated

2
<PAGE>
systems for the trading, clearance and settlement of unregistered securities,
such as the PORTAL System sponsored by the National Association of Securities
Dealers, Inc. ('NASD'). An insufficient number of qualified institutional buyers
interested in purchasing Rule 144A-eligible restricted securities held by the
Fund, however, could affect adversely the marketability of such portfolio
securities and the Fund might be unable to dispose of such securities promptly
or at favorable prices.

The Fund's board of directors has delegated the function of making
day-to-day determinations of liquidity to Mitchell Hutchins, pursuant to
guidelines approved by the board. Mitchell Hutchins takes into account a number
of factors in reaching liquidity decisions, including (1) the frequency of
trades for the security, (2) the number of dealers that make quotes for the
security, (3) the number of dealers that have undertaken to make a market in the
security, (4) the number of other potential purchasers and (5) the nature of the
security and how trading is effected (e.g., the time needed to sell the
security, how offers are solicited and the mechanics of transfer). Mitchell
Hutchins monitors the liquidity of restricted securities in the Fund's portfolio
and reports periodically on such decisions to the board of directors.

LENDING OF PORTFOLIO SECURITIES. As indicated in the Prospectus, the Fund
is authorized to lend up to 33 1/3% of its portfolio securities to
broker-dealers or institutional investors that Mitchell Hutchins deems
qualified, but only when the borrower maintains acceptable collateral with the
Fund's custodian, marked to market daily, in an amount at least equal to the
market value of the securities loaned, plus accrued interest and dividends.
Acceptable collateral is limited to cash, U.S. government securities and
irrevocable letters of credit that meet certain guidelines established by
Mitchell Hutchins. In determining whether to lend securities to a particular
broker-dealer or institutional investor, Mitchell Hutchins will consider, and
during the period of the loan will monitor, all relevant facts and
circumstances, including the creditworthiness of the borrower. The Fund will
retain authority to terminate any loan at any time. The Fund may pay reasonable

administrative and custodial fees in connection with a loan and may pay a
negotiated portion of the interest earned on the cash or money market
instruments held as collateral to the borrower or placing broker. The Fund will
receive reasonable interest on the loan or a flat fee from the borrower and
amounts equivalent to any dividends, interest or other distributions on the
securities loaned. The Fund will retain record ownership of loaned securities to
exercise beneficial rights, such as voting and subscription rights and rights to
dividends, interest or other distributions, when regaining such rights is
considered to be in the Fund's interest.

INVESTMENT LIMITATIONS. The Fund will not:

(1) purchase securities of any one issuer if, as a result, more than
5% of the Fund's total assets would be invested in securities of
that issuer or the Fund would own or hold more than 10% of the
outstanding voting securities of that issuer, except that up to
25% of the Fund's total assets may be invested without regard to
this limitation, and except that this limitation does not apply to
securities issued or guaranteed by the U.S. government, its
agencies and instrumentalities or to securities issued by other
investment companies.

The following interpretation applies to, but is not a part of,
this fundamental restriction: Mortgage- and asset-backed securites
will not be considered to have been issued by the same issuer by
reason of the securities having the same sponsor, and mortgage-and
asset-backed securities issued by a finance or other special
purpose subsidiary that are not guaranteed by the parent company
will be considered to be issued by a separate issuer from the
parent company.

3
<PAGE>

(2) purchase any security if, as a result of that purchase, 25% or
more of the Fund's total assets would be invested in securities of
issuers having their principal business activities in the same
industry, except that this limitation does not apply to securities
issued or guaranteed by the U.S. government, its agencies or
instrumentalities or to municipal securities or to certificates of
deposit and bankers' acceptances of domestic branches of U.S.
banks.

The following interpretation applies to, but is not a part of,
this fundamental restriction: With respect to this limitation,

domestic and foreign banking will be considered to be different
industries.

(3) issue senior securities or borrow money, except as permitted under
the Investment Company Act of 1940 ('1940 Act') and then not in
excess of 33 1/3% of the Fund's total assets (including the amount
of the senior securities issued but reduced by any liabilities not
constituting senior securities) at the time of the issuance or
borrowing, except that the Fund may borrow up to an additional 5%
of its total assets (not including the amount borrowed) for
temporary or emergency purposes.

(4) make loans, except through loans of portfolio securities or
through repurchase agreements, provided that for purposes of this
restriction, the acquisition of bonds, debentures, other debt
securities or instruments, or participations or other interests
therein and investments in government obligations, commercial
paper, certificates of deposit, bankers' acceptances or similar
instruments will not be considered the making of a loan.

(5) engage in the business of underwriting securities of other
issuers, except to the extent that the Fund might be considered an
underwriter under the federal securities laws in connection with
its disposition of portfolio securities.

(6) purchase or sell real estate, except that investments in
securities of issuers that invest in real estate and investments
in mortgage-backed securities, mortgage participations or other
instruments supported by interests in real estate are not subject
to this limitation, and except that the Fund may exercise rights
under agreements relating to such securities, including the right
to enforce security interests and to hold real estate acquired by
reason of such enforcement until that real estate can be
liquidated in an orderly manner.

(7) purchase or sell physical commodities unless acquired as a result
of owning securities or other instruments, but the Fund may
purchase, sell or enter into financial options and futures,
forward and spot currency contracts, swap transactions and other
financial contracts or derivative instruments.

The foregoing fundamental investment limitations cannot be changed without

the affirmative vote of the lesser of (a) more than 50% of the outstanding
shares of the Fund or (b) 67% or more of the shares present at a shareholders'
meeting if more than 50% of the outstanding shares are represented at the
meeting in person or by proxy. If a percentage restriction is adhered to at the
time of an investment or transaction, a later increase or decrease in percentage
resulting from changing values of portfolio securities or amount of total assets
will not be considered a violation of any of the foregoing limitations.

4
<PAGE>

The following non-fundamental investment restrictions may be changed by
vote of the Fund's board of directors without shareholder approval:

The Fund may not:

(1) purchase securities on margin, except for short-term credit
necessary for clearance of portfolio transactions and except that
the Fund may make margin deposits in connection with its use of
financial options and futures, forward and spot currency
contracts, swap transactions and other financial contracts or
derivative instruments.

(2) engage in short sales of securities or maintain a short position,
except that the Fund may (a) sell short 'against the box' and (b)
maintain short positions in connection with its use of financial
options and futures, forward and spot currency contracts, swap
transactions and other financial contracts or derivative
instruments.

(3) invest in oil, gas or mineral exploration or development programs
or leases, except that investments in securities of issuers that
invest in such programs or leases and investments in asset-backed
securities supported by receivables generated from such programs
or leases are not subject to this prohibition.

(4) purchase securities of other investment companies, except to the
extent permitted by the 1940 Act and except that this limitation
does not apply to securities received or acquired as dividends,
through offers of exchange, or as a result of reorganization,
consolidation, or merger.

(5) invest in real estate limited partnerships.

DIRECTORS AND OFFICERS

The directors and executive officers of the Fund, their ages, business
addresses and principal occupations during the past five years are:

5
<PAGE>

<TABLE>
<CAPTION>
POSITION BUSINESS EXPERIENCE;
NAME AND ADDRESS*; AGE WITH THE FUND OTHER DIRECTORSHIPS
- ----------------------------- ------------------ --------------------------------------------------------------------------------
<S> <C> <C>
Richard Q. Armstrong; 60 Director Mr. Armstrong is chairman and principal of RQA Enterprises (management
78 West Brother Drive consulting firm) (since April 1991 and principal occupation since March 1995).
Greenwich, CT 06830 Mr. Armstrong is also a director of Hi Lo Automotive, Inc. He was chairman of
the board, chief executive officer and co-owner of Adirondack Beverages
(producer and distributor of soft drinks and sparkling/still waters) (October
1993-March 1995). He was a partner of the New England Consulting Group
(management consulting firm) (December 1992-September 1993). He was managing
director of LVMH U.S. Corporation (U.S. subsidiary of the French luxury goods
conglomerate, Louis Vuitton Moet Hennessey Corporation) (1987-1991) and
chairman of its wine and spirits subsidiary, Schieffelin & Somerset Company
(1987-1991). Mr. Armstrong is a director or trustee of 29 investment companies
for which Mitchell Hutchins or PaineWebber serves as investment adviser.

E. Garrett Bewkes, Jr.**; 69 Director and Mr. Bewkes is a director of Paine Webber Group Inc. ('PW Group') (holding
Chairman of the company of PaineWebber and Mitchell Hutchins). Prior to December 1995, he was
Board of Directors a consultant to PW Group. Prior to 1988, he was chairman of the board,
president and chief executive officer of American Bakeries Company. Mr. Bewkes
is also a director of Interstate Bakeries Corporation and NaPro
Bio-Therapeutics, Inc. Mr. Bewkes is a director or trustee of 30 investment
companies for which Mitchell Hutchins or PaineWebber serves as investment
adviser.

</TABLE>

6
<PAGE>

<TABLE>
<CAPTION>
POSITION BUSINESS EXPERIENCE;
NAME AND ADDRESS*; AGE WITH THE FUND OTHER DIRECTORSHIPS
- ----------------------------- ------------------ --------------------------------------------------------------------------------
<S> <C> <C>
Richard Burt; 49 Director Mr. Burt is chairman of International Equity Partners (international investments
1101 Connecticut Avenue, N.W. and consulting firm) (since March 1994) and a partner of McKinsey & Company
Washington, D.C. 20036 (management consulting firm) (since 1991). He is also a director of American
Publishing Company. He was the chief negotiator in the Strategic Arms
Reduction Talks with the former Soviet Union (1989-1991) and the U.S.
Ambassador to the Federal Republic of Germany (1985-1989). Mr. Burt is a
director or trustee of 29 investment companies for which Mitchell Hutchins or
PaineWebber serves as investment adviser.

Mary C. Farrell**; 46 Director Ms. Farrell is a managing director, senior investment strategist, and member of
the Investment Policy Committee of PaineWebber. Ms. Farrell joined PaineWebber
in 1982. She is a member of the Financial Women's Association and Women's
Economic Roundtable, and is employed as a regular panelist on Wall Street Week
with Louis Rukeyser. She also serves on the Board of Overseers of New York
University's Stern School of Business. Ms. Farrell is a director or trustee of
29 investment companies for which Mitchell Hutchins or PaineWebber serves as
investment adviser.

Meyer Feldberg; 54 Director Mr. Feldberg is Dean and Professor of Management of the Graduate School of
Columbia University Business, Columbia University. Prior to 1989, he was president of the Illinois
101 Uris Hall Institute of Technology. Dean Feldberg is also a director of AMSCO
New York, New York 10027 International Inc., Federated Department Stores, Inc. and New World Communica-
tions Group Incorporated. Dean Feldberg is a director or trustee of 29 other
investment companies for which Mitchell Hutchins or PaineWebber serves as
investment adviser.
</TABLE>

<PAGE>

Frederic V. Malek; 59 Director Mr. Malek is chairman of Thayer Capital Partners (investment bank) and a
901 15th Street, N.W. co-chairman and director of CB Commercial Group Inc. (real estate). From Janu-
Suite 300 ary 1992 to November 1992, he was campaign manager of Bush-Quayle '92. From
Washington, D.C. 20005 1990 to 1992, he was vice chairman and, from 1989 to 1990, he was president of
Northwest Airlines Inc., NWA Inc. (holding company of Northwest Airlines Inc.)
and Wings Holdings Inc. (holding company of NWA Inc.). Prior to 1989, he was
employed by the Marriott Corporation (hotels, restaurants, airline catering
and contract feeding), where he most recently was an executive vice president
and president of Marriott Hotels and Resorts. Mr. Malek is also a director of
American Management Systems, Inc., Automatic Data Processing, Inc., Avis,
Inc., FPL Group, Inc., National Education Corporation and Northwest Airlines
Inc. Mr. Malek is a director or trustee of 29 investment companies for which
Mitchell Hutchins or PaineWebber serves as investment adviser.
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
POSITION BUSINESS EXPERIENCE;
NAME AND ADDRESS*; AGE WITH THE FUND OTHER DIRECTORSHIPS
- ----------------------------- ------------------ --------------------------------------------------------------------------------
<S> <C> <C>
Carl W. Schafer; 60 Director Mr. Schafer is president of the Atlantic Foundation (charitable foundation
P.O. Box 1164 supporting mainly oceanographic exploration and research). He also is a direc-
Princeton, NJ 08542 tor of Roadway Express, Inc. (trucking), The Guardian Group of Mutual Funds,
Evans Systems, Inc. (a motor fuels, convenience store and diversified com-
pany), Hidden Lake Gold Mines Ltd. (gold mining), Electronic Clearing House,
Inc. (financial transactions processing), Wainoco Oil Corporation and Nu-
traceutix Inc. (biotechnology). Prior to January 1993, Mr. Schafer was
chairman of the Investment Advisory Committee of the Howard Hughes Medical
Institute. Mr. Schafer is a director or trustee of 29 investment companies for
which Mitchell Hutchins or PaineWebber serves as investment adviser.

John R. Torell III; 56 Director Mr. Torell is chairman of Torell Management, Inc. (financial advisory firm),
767 Fifth Avenue chairman of Telesphere Corporation (electronic provider of financial informa-
Suite 4605 tion) and a partner of Zilkha & Company (merchant banking and private
New York, NY 10153 investment company). He is the former chairman and chief executive officer of
Fortune Bancorp (1990-1991 and 1990-1994, respectively), the former chairman,
president and chief executive officer of CalFed, Inc. (savings association)
(1988 to 1989) and the former president of Manufacturers Hanover Corp. (bank)
(prior to 1988). Mr. Torell is also a director of American Home Products
Corp., New Colt Inc. (armament manufacturer) and Volt Information Sciences
Inc. Mr. Torell is a director or trustee of 29 investment companies for which
Mitchell Hutchins or PaineWebber serves as investment adviser.
</TABLE>

<PAGE>

C. William Maher; 35 Vice President and Mr. Maher is a first vice president and a senior manager of the mutual fund
Assistant finance division of Mitchell Hutchins. Mr. Maher is a vice president and
Treasurer assistant treasurer of 30 investment companies for which Mitchell Hutchins or
PaineWebber serves as investment adviser.

Dennis McCauley; 48 Vice President Mr. McCauley is a managing director and chief investment officer--fixed income
of Mitchell Hutchins. Prior to December 1994, he was director of fixed
income investments of IBM Corporation. Mr. McCauley is a vice president of 19
investment companies for which Mitchell Hutchins or PaineWebber serves as
investment adviser.

Susan Messina; 35 Vice President Ms. Messina is a senior vice president of Mitchell Hutchins and has been with
Mitchell Hutchins since 1982. Ms. Messina is a vice president of five invest-
ment companies for which Mitchell Hutchins or PaineWebber serves as investment
adviser.

Ann E. Moran; 38 Vice President and Ms. Moran is a vice president of Mitchell Hutchins. Ms. Moran is a vice
Assistant president and assistant treasurer of 30 investment companies for which
Treasurer Mitchell Hutchins or PaineWebber serves as investment adviser.

Dianne E. O'Donnell; 43 Vice President and Ms. O'Donnell is a senior vice president and deputy general counsel of Mitchell
Secretary Hutchins. Ms. O'Donnell is a vice president and secretary of 30 investment
companies for which Mitchell Hutchins or PaineWebber serves as investment
adviser.
</TABLE>

<PAGE>

Paul H. Schubert; 33 Vice President and Mr. Schubert is a first vice president and a senior manager of the mutual fund
Assistant finance division of Mitchell Hutchins. From August 1992 to August 1994, he was
Treasurer a vice president at BlackRock Financial Management, Inc. Prior to August 1992,
he was an audit manager with Ernst & Young LLP. Mr. Schubert is a vice
president and assistant treasurer of 30 investment companies for which
Mitchell Hutchins or PaineWebber serves as investment adviser.

Julian F. Sluyters; 35 Vice President and Mr. Sluyters is a senior vice president and the director of the mutual fund
Treasurer finance division of Mitchell Hutchins. Prior to 1991, he was an audit senior
manager with Ernst & Young LLP. Mr. Sluyters is a vice president and treasurer
of 30 investment companies for which Mitchell Hutchins or PaineWebber serves
as investment adviser.

Keith A. Weller; 34 Vice President and Mr. Weller is a first vice president and associate general counsel of Mitchell
Assistant Hutchins. Prior to May 1995, he was an attorney in private practice. Mr.
Secretary Weller is a vice president and assistant secretary of 29 investment companies
for which Mitchell Hutchins or PaineWebber serves as investment adviser.
</TABLE>

- ------------------
* Unless otherwise indicated, the business address of each listed person is
1285 Avenue of the Americas, New York, New York 10019.

** Mrs. Alexander, Mr. Bewkes and Ms. Farrell are 'interested persons' of the
Fund as defined in the 1940 Act by virtue of their positions with Mitchell
Hutchins, PaineWebber and/or PW Group.

The Fund pays directors who are not 'interested persons' of the Fund $1,000
annually and $150 for each board meeting and each separate meeting of a board
committee. Directors are reimbursed for any expenses incurred in attending
meetings. Directors of the Fund who are 'interested persons' of the Fund receive
no compensation from the Fund. Certain committee chairs receive additional
compensation aggregating $15,000 annually from all the funds within the
PaineWebber fund complex. All directors are reimbursed for any expenses incurred
in attending meetings. Directors and officers of the Fund own in the aggregate
less than 1% of the

11
<PAGE>

Fund's shares. Because PaineWebber and Mitchell Hutchins perform substantially
all of the services necessary for the operation of the Fund, the Fund requires
no employees. No officer, director or employee of PaineWebber or Mitchell
Hutchins presently receives any compensation from the Fund for acting as a
director or officer. The table below includes certain information relating to
the compensation of the Fund's directors who held office during the fiscal year
ended March 31, 1996.

The table below includes certain information relating to the compensation
of the current directors of the Fund who held office with the Fund or with other
PaineWebber funds during the Fund's last fiscal year.

<TABLE>
<CAPTION>
TOTAL
AGGREGATE COMPENSATION
COMPENSATION FROM THE
FROM FUND AND THE
NAME OF PERSONS, POSITION THE FUND* FUND COMPLEX**
- ------------------------- ------------ --------------
<S> <C> <C>
Richard Q. Armstrong..... -- $ 9,000
Richard R. Burt,
Director............... -- $ 7,750
Meyer Feldberg,
Director............... $ 12,000 $106,375
George W. Gowen,
Director............... $ 12,000 $ 99,750
Frederic V. Malek,
Director............... $ 12,000 $ 99,750
Carl W. Schafer,
Director............... -- $118,175
John R. Torell III,
Director............... -- $ 28,125
</TABLE>

- ------------------

Only independent members of the board of directors are compensated by the Fund
and identified above; directors who are 'interested persons,' as defined by the
1940 Act, do not receive compensation.

* Represents fees paid to each director during the fiscal year ended March 31,
1996; the Fund does not have a pension or retirement plan.

** Represents total compensation paid to each director during the calendar year
ended December 31, 1995.

12
<PAGE>
INVESTMENT ADVISORY SERVICES

PaineWebber acts as the Fund's investment adviser and administrator
pursuant to a contract with the Fund dated July 23, 1987 ('PaineWebber
Contract'). Under the PaineWebber Contract, the Fund pays PaineWebber an annual
fee, computed daily and paid monthly, according to the following schedule:

<TABLE>
<CAPTION>
ANNUAL
AVERAGE DAILY NET ASSETS RATE
- ----------------------------------------------- ------
<S> <C>
Up to $500 million............................. 0.500 %
In excess of $500 million up to $1.0 billion... 0.425
In excess of $1.0 billion up to $1.5 billion... 0.390
In excess of $1.5 billion up to $2.0 billion... 0.380
In excess of $2.0 billion up to $2.5 billion... 0.350
In excess of $2.5 billion up to $3.5 billion... 0.345
In excess of $3.5 billion up to $4.0 billion... 0.325
In excess of $4.0 billion up to $4.5 billion... 0.315
In excess of $4.5 billion up to $5.0 billion... 0.300
In excess of $5.0 billion up to $5.5 billion... 0.290
In excess of $5.5 billion...................... 0.280
</TABLE>

Services provided by PaineWebber under the PaineWebber Contract, some of which
may be delegated to Mitchell Hutchins, as discussed below, include the provision
of a continuous investment program for the Fund and supervision of all matters
relating to the operation of the Fund. Under the PaineWebber Contract,
PaineWebber is also obligated to distribute the Fund's shares on an agency, or
'best efforts,' basis under which the Fund only issues such shares as are
actually sold. Shares of the Fund are offered continuously. Under the
PaineWebber Contract, during the fiscal years ended March 31, 1996, March 31,
1995 and March 31, 1994, the Fund paid (or accrued) to PaineWebber investment
advisory and administrative fees in the amount of $16,998,964, $13,839,569, and
$13,665,261, respectively.

Under a service agreement that is reviewed annually by the Fund's board of
directors, PaineWebber provides certain services to the Fund not otherwise
provided by the Fund's transfer agent. Pursuant to the service agreement, during
the fiscal years ended March 31, 1996, March 31, 1995 and March 31, 1994, the
Fund paid (or accrued) to PaineWebber $2,762,836, $2,551,016 and $2,379,604,

respectively.

Under a contract with PaineWebber dated July 23, 1987 ('MH Sub-Advisory
Contract'), Mitchell Hutchins is responsible for the actual investment
management of the Fund's assets, including the responsibility for making
decisions and placing orders to buy, sell or hold particular securities. Under
the MH Sub-Advisory Contract, PaineWebber (not the Fund) pays Mitchell Hutchins
an annual fee, computed daily and paid monthly, according to the following
schedule:

13
<PAGE>
<TABLE>
<CAPTION>
ANNUAL
AVERAGE DAILY NET ASSETS RATE
- ----------------------------------------------- ------
<S> <C>
In excess of $2.5 billion up to $3.5 billion... 0.0250
In excess of $3.5 billion up to $4.5 billion... 0.0200
In excess of $4.5 billion up to $5.5 billion... 0.0125
In excess of $5.5 billion...................... 0.0100
</TABLE>

Under the MH Sub-Advisory Contract, during the fiscal years ended March 31,
1996, March 31, 1995 and March 31, 1994, PaineWebber paid (or accrued) to
Mitchell Hutchins fees in the amount of $1,593,013, $1,435,247 and $1,424,776,
respectively.

Under a contract with PaineWebber dated May 24, 1988 ('Sub-Administration
Contract'), Mitchell Hutchins also serves as the Fund's sub-administrator. Under
the Sub-Administration Contract, PaineWebber (not the Fund) pays Mitchell
Hutchins 20% of the fees received by PaineWebber under the PaineWebber Contract,
such amount to be paid monthly and reduced by any amount paid by PaineWebber in
each such month under the MH Sub-Advisory Contract. During the fiscal years
ended March 31, 1996, March 31, 1995 and March 31, 1994, PaineWebber paid (or
accrued) to Mitchell Hutchins sub-administration fees of $1,806,780, $1,332,667

and $1,308,276, respectively.

Each of the advisory, sub-advisory and sub-administration contracts noted
above provides that the respective adviser, sub-adviser or sub-administrator, as
the case may be, shall not be liable for any error of judgment or mistake of law
or for any loss suffered by the Fund in connection with the performance of the
contract, except a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of such adviser, sub-adviser or sub-administrator in the
performance of its duties or from reckless disregard of its duties and
obligations thereunder. The PaineWebber Contract also provides that PaineWebber
shall not be liable for losses arising out of the receipt by PaineWebber of
inadequate consideration in connection with an order to purchase Fund shares
whether in the form of a fraudulent check, draft or wire; a check returned for
insufficient funds; or any other such inadequate consideration (hereinafter
'check losses'), except under the circumstances noted above, but the Fund shall
not be liable for check losses resulting from negligence on the part of
PaineWebber. Each of the advisory, sub-advisory and sub-administration contracts
is terminable by vote of the Fund's board of directors or by the holders of a
majority of the outstanding voting securities of the Fund at any time without
penalty, on 60 days' written notice to the respective adviser, sub-adviser or
sub-administrator, as the case may be. Each of the advisory and sub-advisory
contracts may also be terminated by the respective adviser or sub-adviser on 90
days' written notice to the Fund. The sub-administration contract may also be
terminated by the sub-administrator on 60 days' written notice to the Fund. Each
of the advisory, sub-advisory and sub-administration contracts terminates
automatically upon its assignment.

Under the terms of the PaineWebber Contract, the Fund bears all expenses
incurred in its operation that are not specifically assumed by PaineWebber.
Expenses borne by the Fund include the following: (a) the cost (including
brokerage commissions, if any) of securities purchased or sold by the Fund or
any losses incurred in connection therewith; (b) fees payable to and expenses
incurred on behalf of the Fund by PaineWebber; (c) filing fees and expenses
relating to the registration and qualification of the Fund's shares under
federal or state securities laws and maintaining such registrations and
qualifications; (d) fees and salaries payable to the Fund's directors and
officers who are not officers or employees of PaineWebber or interested persons
(as defined in the 1940 Act) of any investment adviser or underwriter of the
Fund ('Independent Directors');

14
<PAGE>
(e) taxes (including any income or franchise taxes) and governmental fees; (f)
costs of any liability, uncollectible items of deposit and other insurance or
fidelity bonds; (g) any costs, expenses or losses arising out of any liability
of or claim for damage or other relief asserted against the Fund for violation
of any law; (h) legal, accounting and auditing expenses, including legal fees of
special counsel for the Independent Directors; (i) charges of custodians,
transfer agents and other agents; (j) costs of preparing share certificates; (k)
expenses of setting in type and printing prospectuses, statements of additional
information and supplements thereto for existing shareholders, reports and
statements to shareholders and proxy materials; (l) any extraordinary expenses
(including fees and disbursements of counsel) incurred by the Fund; and (m) fees

and other expenses incurred in connection with membership in investment company
organizations.

As required by various state regulations, PaineWebber will reimburse the
Fund if and to the extent that the aggregate operating expenses of the Fund
exceed applicable limits for the fiscal year. Currently, the most restrictive
such limit applicable to the Fund is 2.5% of the first $30 million of the Fund's
average daily net assets, 2.0% of the next $70 million of its average daily net
assets and 1.5% of its average daily net assets in excess of $100 million.
Certain expenses, such as brokerage commissions, taxes, interest and
extraordinary items are excluded from this limitation. No reimbursement pursuant
to such limitation was required for the fiscal years ended March 31, 1996, March
31, 1995 and March 31, 1994.

The following table shows the approximate net assets as of April 30, 1996,
sorted by category of investment objective, of the investment companies as to
which Mitchell Hutchins serves as adviser or sub-adviser. An investment company
may fall into more than one of the categories below.

<TABLE>
<CAPTION>
NET ASSETS
INVESTMENT CATEGORY ($ MIL)
- ---------------------------------------- ----------
<S> <C>
Domestic (excluding Money Market)....... $ 5,589.0
Global.................................. 2,851.3
Equity/Balanced......................... 3,052.1
Fixed Income (excluding Money Market)... 5,388.2
Taxable Fixed Income............... 3,736.1
Tax-Free Fixed Income.............. 1,652.1
Money Market Funds...................... 21,751.2
</TABLE>

Mitchell Hutchins personnel may invest in securities for their own accounts
pursuant to a code of ethics that describes the fiduciary duty owed to
shareholders of the PaineWebber mutual funds and other Mitchell Hutchins'
advisory accounts by all Mitchell Hutchins' directors, officers and employees,
establishes procedures for personal investing and restricts certain
transactions. For example, employee accounts generally must be maintained at
PaineWebber, personal trades in most securities require pre-clearance and
short-term trading and participation in initial public offerings generally are
prohibited. In addition, the code of ethics puts restrictions on the timing of
personal investing in relation to trades by PaineWebber funds and other Mitchell
Hutchins advisory clients.

15
<PAGE>
PORTFOLIO TRANSACTIONS

The Fund purchases only securities with remaining maturities of 13 months
or less, except for securities subject to repurchase agreements. The Fund may
purchase variable rate and floating rate securities with remaining maturities of
more than 13 months so long as such securities comply with conditions
established by the Securities and Exchange Commission ('SEC') under which they
may be considered to have remaining maturities of 13 months or less.

The Fund purchases portfolio securities from dealers and underwriters as
well as from issuers. Securities are usually traded on a net basis with dealers
acting as principal for their own accounts without a stated commission. Prices
paid to dealers in principal transactions generally include a 'spread,' which is
the difference between the prices at which the dealer is willing to purchase and
sell a specific security at the time. When securities are purchased directly
from an issuer, no commissions or discounts are paid. When securities are
purchased in underwritten offerings, they include a fixed amount of compensation
to the underwriter.

The MH Sub-Advisory Contract authorizes Mitchell Hutchins (with the
approval of the Fund's board) to select brokers and dealers to execute purchases
and sales of the Fund's portfolio securities. It directs Mitchell Hutchins to
use its best efforts to obtain the best available price and the most favorable
execution with respect to all transactions for the Fund. To the extent that the
execution and price offered by more than one dealer are comparable, Mitchell
Hutchins may, in its discretion, effect transactions in portfolio securities
with dealers who provide the Fund with research, analysis, advice and similar
services. Although Mitchell Hutchins may receive certain research or execution
services in connection with these transactions, Mitchell Hutchins will not
purchase securities at a higher price or sell securities at a lower price than
would otherwise be paid if no weight was attributed to the services provided by
the executing dealer. Moreover, Mitchell Hutchins will not enter into any
explicit soft dollar arrangements relating to principal transactions and will
not receive in principal transactions the types of services which could be
purchased for hard dollars. Research services furnished by the dealers through
which or with which the Fund effects securities transactions may be used by
Mitchell Hutchins in advising other funds or accounts they advise and,
conversely, research services furnished to Mitchell Hutchins in connection with
other funds or accounts that Mitchell Hutchins advises may be used in advising
the Fund. During its past three fiscal years, the Fund has not paid any
brokerage commissions, nor has it allocated any transactions to dealers for
research, analysis, advice and similar services.

Mitchell Hutchins may engage in agency transactions in OTC equity and debt
securities in return for research and execution services. These transactions are
entered into only in compliance with procedures ensuring that the transaction
(including commissions) is at least as favorable as it would have been if
effected directly with a market-maker that did not provide research or execution
services. These procedures include Mitchell Hutchins receiving multiple quotes
from dealers before executing the transactions on an agency basis.

Investment decisions for the Fund and for other investment accounts managed
by Mitchell Hutchins are made independently of each other in light of differing
considerations for the various accounts. However, the same investment decision
may occasionally be made for the Fund and one or more of such accounts. In such
cases, simultaneous transactions are inevitable. Purchases or sales are then
averaged as to price and allocated between the Fund and such other account(s) as
to amount according to a formula deemed equitable to the Fund and such
account(s). While in some cases this practice could have a detrimental effect
upon the price or value of the security as far as the Fund is concerned or upon
its ability to complete its entire order, in other cases it is believed that
coordination and the ability to participate in volume transactions will be
beneficial to the Fund.

16
<PAGE>
Mitchell Hutchins may seek to obtain an undertaking from issuers of
commercial paper or dealers selling commercial paper to consider the repurchase
of such securities from the Fund prior to their maturity at their original cost
plus interest (sometimes adjusted to reflect the actual maturity of the
securities), if it believes that the Fund's anticipated need for liquidity makes
such actions desirable. Any such repurchase prior to maturity reduces the
possibility that the Fund would incur a capital loss in liquidating commercial
paper for which there is no established market, especially if interest rates
have risen since acquisition of the particular commercial paper.

ADDITIONAL INFORMATION REGARDING REDEMPTIONS

The Fund may suspend redemption privileges or postpone the date of payment
during any period (1) when the New York Stock Exchange, Inc. ('NYSE') is closed
or trading on the NYSE is restricted as determined by the SEC, (2) when an
emergency exists, as defined by the SEC, which makes it not reasonably
practicable for the Fund to dispose of securities owned by it or to determine
fairly the market value of its assets or (3) as the SEC may otherwise permit.
The redemption price may be more or less than the shareholder's cost, depending
on the market value of the Fund's portfolio at the time, although the Fund
attempts to maintain a constant net asset value of $1.00 per share.

Under normal circumstances, the Fund will redeem shares when so requested
by a shareholder's broker-dealer other than PaineWebber by telegram or telephone
to PaineWebber. Such a redemption order will be executed at the net asset value
next determined after the order is received by PaineWebber. Redemptions of Fund
shares effected through a broker-dealer other than PaineWebber may be subject to
a service charge by that broker-dealer.

VALUATION OF SHARES

The Fund uses its best efforts to maintain its net asset value at $1.00 per
share. The Fund's net asset value per share is determined by PFPC as of 2:00
p.m., Eastern time, on each Business Day. As defined in the Prospectus,
'Business Day' means any day on which PNC's Philadelphia offices, and the New

York City offices of PaineWebber and PaineWebber's bank, The Bank of New York,
are all open for business. One or more of these institutions will be closed on
the observance of the following holidays: New Year's Day, Martin Luther King,
Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Columbus Day, Veterans' Day, Thanksgiving Day and Christmas Day.

The Fund values its portfolio securities in accordance with the amortized
cost method of valuation under Rule 2a-7 under the 1940 Act. To use amortized
cost to value its portfolio securities, the Fund must adhere to certain
conditions under that Rule relating to the Fund's investments, some of which are
discussed in the Prospectus. Amortized cost is an approximation of market value,
whereby the difference between acquisition cost and value at maturity of the
instrument is amortized on a straight-line basis over the remaining life of the
instrument. The effect of changes in the market value of a security as a result
of fluctuating interest rates is not taken into account and thus the amortized
cost method of valuation may result in the value of a security being higher or
lower than its actual market value. In the event that a large number of
redemptions take place at a time when interest rates have increased, the Fund
might have to sell portfolio securities prior to maturity and at a price that
might not be as desirable.

17
<PAGE>
The Fund's board of directors has established procedures for the purpose of
maintaining a constant net asset value of $1.00 per share, which include a
review of the extent of any deviation of net asset value per share, based on
available market quotations, from the $1.00 amortized cost per share. Should
that deviation exceed 1/2 of 1%, the board of directors will promptly consider
whether any action should be initiated to eliminate or reduce material dilution
or other unfair results to shareholders. Such action may include redeeming
shares in kind, selling portfolio securities prior to maturity, reducing or
withholding dividends and utilizing a net asset value per share as determined by
using available market quotations. The Fund will maintain a dollar-weighted
average portfolio maturity of 90 days or less and will not purchase any
instrument with a remaining maturity greater than 13 months, will limit
portfolio investments, including repurchase agreements, to those U.S. dollar-
denominated instruments that are of high quality and that the directors
determine present minimal credit risks as advised by Mitchell Hutchins, and will
comply with certain reporting and recordkeeping procedures. There is no
assurance that constant net asset value per share will be maintained. In the
event amortized cost ceases to represent fair value, the board will take
appropriate action.

In determining the approximate market value of portfolio investments, the
Fund may employ outside organizations, which may use a matrix or formula method
that takes into consideration market indices, matrices, yield curves and other
specific adjustments. This may result in the securities being valued at a price
different from the price that would have been determined had the matrix or
formula method not been used. All cash, receivables and current payables are
carried at their face value. Other assets, if any, are valued at fair value as
determined in good faith by or under the direction of the board of directors.

TAXES

In order to continue to qualify for treatment as a regulated investment
company under the Internal Revenue Code, the Fund must distribute to its
shareholders for each taxable year at least 90% of its investment company
taxable income (consisting generally of net investment income and net short-term
capital gain, if any) and must meet several additional requirements. Among these
requirements are the following: (1) the Fund must derive at least 90% of its
gross income each taxable year from dividends, interest, payments with respect
to securities loans, gains from the sale or other disposition of securities and
certain other income; (2) the Fund must derive less than 30% of its gross income
each taxable year from the sale or other disposition of securities held for less
than three months; (3) at the close of each quarter of the Fund's taxable year,
at least 50% of the value of its total assets must be represented by cash and
cash items, U.S. government securities and other securities, with these other
securities limited, in respect of any one issuer, to an amount that does not
exceed 5% of the value of the Fund's total assets; and (4) at the close of each
quarter of the Fund's taxable year, not more than 25% of the value of its total
assets may be invested in securities (other than U.S. government securities) of
any one issuer.

CALCULATION OF YIELD

The Fund computes its yield and effective yield quotations using
standardized methods required by the SEC. The Fund from time to time advertises
(1) its current yield based on a recently ended seven-day period, computed by
determining the net change, exclusive of capital changes, in the value of a
hypothetical pre-existing account having a balance of one share at the beginning
of the period, subtracting a hypothetical charge reflecting deductions from that
shareholder account, dividing the difference by the value of the account at the
beginning of the base period to obtain the base period return and then
multiplying the base period return by

18
<PAGE>
(365/7), with the resulting yield figure carried to at least the nearest
hundredth of one percent; and (2) its effective yield based on the same
seven-day period by compounding the base period return by adding 1, raising the
sum to a power equal to (365/7) and subtracting 1 from the result, according to
the following formula:

365/7
EFFECTIVE YIELD = [(BASE PERIOD RETURN + 1) ] - 1

Yield may fluctuate daily and does not provide a basis for determining
future yields. Because the yield of the Fund fluctuates, it cannot be compared
with yields on savings accounts or other investment alternatives that provide an
agreed-to or guaranteed fixed yield for a stated period of time. However, yield
information may be useful to an investor considering temporary investments in
money market instruments. In comparing the yield of one money market fund to
another, consideration should be given to each fund's investment policies,
including the types of investments made, the average maturity of the portfolio
securities and whether there are any special account charges that may reduce the
yield.

The Fund's yield and effective yield for the seven-day period ended March
31, 1996 were 4.73% and 4.84%, respectively.

OTHER INFORMATION. The Fund's performance data quoted in advertising and
other promotional materials ('Performance Advertisements') represent past
performance and are not intended to predict or indicate future results. The
return on an investment in the Fund will fluctuate. In Performance
Advertisements, the Fund may compare its yield with data published by Lipper
Analytical Services, Inc. for money funds ('Lipper'), CDA Investment
Technologies, Inc. ('CDA'), IBC/Donoghue's Money Market Fund Report
('Donoghue'), Wiesenberger Investment Companies Service ('Wiesenberger'),
Investment Company Data Inc. ('ICD') or Morningstar Mutual Funds
('Morningstar'), or with the performance of recognized stock and other indexes,
including (but not limited to) the Standard & Poor's 500 Composite Stock Index,
the Dow Jones Industrial Average, the Morgan Stanley Capital World Index, the
Lehman Brothers Treasury Bond Index, the Lehman Brothers Government-Corporate
Bond Index, the Salomon Brothers Non-U.S. World Government Bond Index and the
Consumer Price Index as published by the U.S. Department of Commerce. The Fund
also may refer in such materials to mutual fund performance rankings and other
data, such as comparative asset, expense and fee levels, published by Lipper,
CDA, Donoghue, Wiesenberger, ICD or Morningstar. Performance Advertisements also
may refer to discussions of the Fund and comparative mutual fund data and
ratings reported in independent periodicals, including (but not limited to) THE
WALL STREET JOURNAL, MONEY Magazine, FORBES, BUSINESS WEEK, FINANCIAL WORLD,
BARRON'S, FORTUNE, THE NEW YORK TIMES, THE CHICAGO TRIBUNE, THE WASHINGTON POST
and THE KIPLINGER LETTERS.

The Fund may include discussions or illustrations of the effects of
compounding in Performance Advertisements. 'Compounding' refers to the fact
that, if dividends on a Fund investment are reinvested by being paid in
additional Fund shares, any future income of the Fund would increase the value,
not only of the original Fund investment, but also of the additional Fund shares
received through reinvestment. As a result, the value of the Fund investment
would increase more quickly than if dividends had been paid in cash.

The Fund may also compare its performance with the performance of bank
certificates of deposit (CDs) as measured by the CDA Investment Technologies,
Inc. Certificate of Deposit Index and the Bank Rate Monitor National Index and
the averages of yields of CDs of major banks published by Banxquotes (R) Money
Markets. In comparing the Fund's performance to CD performance, investors should
keep in mind that bank CDs are insured in whole or in part by an agency of the
U.S. government and offer fixed principal and fixed or variable

19
<PAGE>
rates of interest, and that bank CD yields may vary depending on the financial
institution offering the CD and prevailing interest rates. Fund shares are not
insured or guaranteed by the U.S. government and returns will fluctuate. While
the Fund seeks to maintain a stable net asset value of $1.00 per share, there
can be no assurance that it will be able to do so.

OTHER INFORMATION

COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts
Avenue, N.W., Washington, D.C. 20036-1800, counsel to the Fund, has passed upon
the legality of the shares offered by the Prospectus. Kirkpatrick & Lockhart LLP
also acts as counsel to PaineWebber and Mitchell Hutchins in connection with
other matters.

AUDITORS. Ernst & Young LLP, 787 Seventh Avenue, New York, New York 10019,
serves as the Fund's independent auditors.

FINANCIAL STATEMENTS

The Fund's Annual Report to Shareholders for the fiscal year ended March
31, 1996 is a separate document supplied with this Statement of Additional
Information and the financial statements accompanying notes and report of
independent auditors appearing therein are incorporated herein by this
reference.

<PAGE>
No person has been authorized to give any information or to make any
representations not contained in the Prospectus or in this Statement of
Additional Information in connection with the offering made by the Prospectus
and, if given or made, such information or representations must not be relied
upon as having been authorized by the Fund or its distributor. The Prospectus
and this Statement of Additional Information do not constitute an offering by
the Fund or by the distributor in any jurisdiction in which such offering may
not lawfully be made.

------------------------

TABLE OF CONTENTS

Page
----
Investment Policies and Restrictions............ 1
Directors and Officers.......................... 5
Investment Advisory Services.................... 13
Portfolio Transactions.......................... 16
Additional Information Regarding Redemptions.... 17
Valuation of Shares............................. 17
Taxes........................................... 18
Calculation of Yield............................ 18
Other Information............................... 20
Financial Statements............................ 20

(Copyright) 1996 PaineWebber Incorporated

[LOGO] Recycled Paper

PaineWebber
Cashfund, Inc.

-----------------------------------
Statement of Additional Information

August 1, 1996

-----------------------------------

<PAGE>
PART C. OTHER INFORMATION

Item 24. Financial Statements and Exhibits

(a) Financial Statements: (to be filed)

Included in Part A of this Registration Statement:

Financial Highlights for each of the ten years in the
period ended March 31, 1996.

Included in Part B of this Registration Statement through incorporation
by reference from the Annual Report to Shareholders (previously filed
with the Securities and Exchange Commission through EDGAR on ,
1996, Accession No. :

Statement of Net Assets as of March 31, 1996.

Statement of Operations for the year ended March 31, 1996.

Statement of Changes in Net Assets for each of the two years in the
period ended March 31, 1996.

Notes to Financial Statements

Financial Highlights for each of the five years in the period ended
March 31, 1996.

Report of Ernst & Young LLP, Independent Auditors, dated May ,
1996.

(b) Exhibits:

(1) Amended and Restated Articles of Incorporation filed May 22, 1996
(to be filed)

(2) (a) Amended By-Laws dated July 18, 1990 1/

(b) Certificate of Amendment dated September 28, 1994 to
By-laws 2/

(3) Voting Trust Agreement - none

(4) Instruments defining the rights of holders of Registrant's common
stock 3/

(5) (a) Investment Advisory, Administration and Distribution Contract
between Registrant and PaineWebber 4/

(b) Sub-Advisory Contract between PaineWebber and Mitchell
Hutchins 4/

(6) Underwriting Contract - See Exhibit 5(a)

C-1

<PAGE>
(7) Bonus, profit sharing or pension plans - none

(8) (a) Custodian Contract 1/

(b) Amendment to Custodian and Ancillary Services Agreement 2/

(d) Amendment No. 4 to Custodian Agreement 2/

(9) (a) Transfer Agency Services and Shareholder Services Agreement6/

(b) Service Contract 1/

(10) Opinion and consent of counsel 7/

(11) Other opinions, appraisals, rulings and consents: Consent of
Independent Auditors (to be filed)

(12) Financial statements omitted from Part B - none

(13) Letter of investment intent 7/

(14) Prototype Retirement Plan - none

(15) Plan pursuant to Rule 12b-1 - none

(16) Schedule of Calculation of Performance Quotations 6/

(17) and

(27) Financial Data Schedule (to be filed)

(18) Plan pursuant to Rule 18f-3 (none)

(19) Powers of attorney for Ms. Alexander and Messrs. Bewkes,
Armstrong, Burt, Feldberg, Gowen, Malek and Torell (filed
herewith)

- --------------

1/ Incorporated herein by reference from Post-Effective Amendment No. 24 to
registration statement (SEC File No. 2-60655), filed July 27, 1990.

2/ Incorporated herein by reference from Post-Effective Amendment No. 33 to
registration statement (SEC File No. 2-60655), filed July 28, 1995.

3/ Incorporated by reference from Articles Sixth, Eighth, Ninth and Twelfth of
the Registrant's Articles of Incorporation and Articles II, III, VIII, X,
and XI of the Registrant's By-Laws.

4/ Incorporated herein by reference from Post-Effective Amendment No. 21 to
registration statement (SEC File No. 2-60655), filed August 1, 1988.

5/ Incorporated herein by reference from Post-Effective Amendment No. 23 to
registration statement (SEC File No. 2-60655), filed July 31, 1989.

6/ Incorporated herein by reference from Post-Effective Amendment No. 25 to
registration statement (SEC File No. 2-60655), filed July 30, 1991.

C-2
<PAGE>

7/ Incorporated herein by reference from initial registration statement (SEC
File No. 2-60655), filed January 20, 1978.

Item 25. Persons Controlled by or under Common Control with Registrant

None.

Item 26. Number of Holders of Securities

Number of Record
Shareholders as
Title of Class of May 17 1996
-------------- --------------
Shares of common stock, 512,875
par value $.001 per share

Item 27. Indemnification

Article Eleventh of the Articles of Incorporation provides that the
directors and officers of the Registrant shall not be liable to the Registrant
or to any of its stockholders for money damages to the maximum extent permitted
by applicable law. Article Eleventh also provides that any repeal or
modification of Article Eleventh or adoption, or modification of any other
provision of the Articles or By-Laws inconsistent with Article Eleventh shall be
prospective only, to the extent that any such repeal or modification would, if
applied retroactively, adversely affect any limitation on the liability of any
director or officer of the Registrant or indemnification available to any person
covered by these provisions with respect to any act or omission which occurred
prior to such repeal, modification or adoption.

Section 10.01 of Article 10 of the By-Laws provides that the Registrant
shall indemnify its present and past directors, officers, employees and agents,
and any persons who are serving or have served at the request of the Registrant
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust, or enterprise, to the fullest extent permitted by law.

Section 10.02 of Article 10 of the By-Laws further provides that the
Registrant may purchase and maintain insurance on behalf of any person who is or
was a director, officer, employee or agent of the Registrant, or is or was
serving at the request of the Registrant as a director, officer or employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise against any liability asserted against him and incurred by him in any
such capacity or arising out of his status

C-3
<PAGE>
as such, whether or not the Registrant would have the power to indemnify him
against such liability.

Section 9 of the Investment Advisory, Administration and Distribution
Contract between Registrant and PaineWebber Incorporated ("PaineWebber")
provides that PaineWebber shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Registrant in connection with the
matters to which the Contract relates, except a loss resulting from willful
misfeasance, bad faith or gross negligence on its part in the performance of its
duties or from reckless disregard by it of its obligations and duties under the
Contract.

Section 7 of the Sub-Advisory Contract between PaineWebber and Mitchell
Hutchins Asset Management Inc. ("Mitchell Hutchins") provides that Mitchell
Hutchins will not be liable for any error of judgment or mistake of law or for
any loss suffered by PaineWebber or by the Registrant or its shareholders in
connection with the performance of the Contract, except a loss resulting from
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of its obligations or
duties under the Contract.

Section 8 of the Sub-Administration Contract between PaineWebber and
Mitchell Hutchins contains provisions similar to Section 9 of the Investment

Advisory, Administration and Distribution Contract between the Registrant and
PaineWebber.

Section 7 of the Service Contract between Registrant and PaineWebber
provides that PaineWebber shall be indemnified and held harmless by the
Registrant against all liabilities, except those arising out of bad faith, gross
negligence, willful misfeasance or reckless disregard of its duties under the
Service Contract.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended, may be provided to directors, officers and controlling
persons of the Registrant, pursuant to the foregoing provisions or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
persons of the Registrant in connection with the successful defense of any
action, suit or proceeding or payment pursuant to any insurance policy) is
asserted against the Registrant by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question

C-4
<PAGE>
whether such indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.

Item 28. Business and Other Connections of Investment Adviser

I. PaineWebber, a Delaware corporation, is a registered investment adviser
and is wholly owned by Paine Webber Group Inc. PaineWebber is primarily engaged
in the financial services business. Information as to the officers and directors
of PaineWebber is included in its Form ADV, as filed with the Securities and
Exchange Commission (registration number 801-7163) and is incorporated herein by
reference.

II. Mitchell Hutchins, a Delaware corporation, is a registered investment
adviser and is a wholly owned subsidiary of PaineWebber. Mitchell Hutchins is
primarily engaged in the investment advisory business. Information as to the
officers and directors of Mitchell Hutchins is included in its Form ADV, as
filed with the Securities and Exchange Commission (registration number
801-13219) and is incorporated herein by reference.

Item 29. Principal Underwriters

(a) PaineWebber serves as principal underwriter and/or investment adviser for
the following other investment companies:

LIQUID INSTITUTIONAL RESERVES
PAINEWEBBER RMA MONEY FUND, INC.
PAINEWEBBER RMA TAX-FREE FUND, INC.
PAINEWEBBER MUNICIPAL MONEY MARKET SERIES
PAINEWEBBER MANAGED MUNICIPAL TRUST

(b) PaineWebber is the principal underwriter of the Fund. The directors and
officers of PaineWebber, their principal business addresses and their positions
and offices with PaineWebber are identified in its Form ADV, as filed with the
Securities and Exchange Commission (registration number 801-7163) and such
information is hereby incorporated herein by reference. The information set
forth below is furnished for those directors and officers of PaineWebber who
also serve as directors or officers of the Fund:

C-5
<PAGE>

<TABLE>
<CAPTION>
Position and
Name and Principal Position With Offices With
Business Address Registrant Underwriter
- ------------------ ------------- ------------
<S> <C> <C>
Margo N. Alexander Director and President Executive vice
1285 Avenue of (Chief Executive president and
the Americas Officer) director
New York, NY 10019

Mary C. Farrell Director Managing director,
1285 Avenue of senior investment
the Americas strategist and
New York, NY 10019 member of the
Investment Policy
Committee
</TABLE>

Item 30. Location of Accounts and Records

The books and other documents required by paragraphs (b)(4), (c) and (d) of Rule
31a-1 under the Investment Company Act of 1940 are maintained in the physical
possession of Registrant's Portfolio Manager, Mitchell Hutchins Asset Management
Inc., 1285 Avenue of the Americas, New York, New York 10019. All other accounts,
books and documents required by Rule 31a-1 are maintained in the physical
possession of Registrant's transfer agent and custodian.

Item 31. Management Services

Not applicable.

Item 32. Undertakings

Registrant hereby undertakes to furnish each person to whom a prospectus is
delivered with a copy of the Registrant's latest annual report to shareholders
upon request and without charge.

C-6

<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New York
and State of New York, on the 23rd day of May, 1996.

PAINEWEBBER CASHFUND, INC.

By: /s/ Dianne E. O'Donnell
----------------------------
Dianne E. O'Donnell
Vice President and Secretary

Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment has been signed below by the following persons in the
capacities and on the dates indicated:

Signature Title Date
- --------- ----- ----

/s/ Margo N. Alexander President and Director May 23, 1996
- -------------------------- (Chief Executive Officer)
Margo N. Alexander*

/s/ E. Garrett Bewkes, Jr. Director and Chairman May 23, 1996
- -------------------------- of the Board of Directors
E. Garrett Bewkes, Jr.*

/s/ Richard Q. Armstrong Director May 23, 1996
- --------------------------
Richard Q. Armstrong*

/s/ Richard R. Burt Director May 23, 1996
- --------------------------
Richard R. Burt*

Director
- --------------------------
Mary C. Farrell

/s/ Meyer Feldberg Director May 23, 1996
- --------------------------
Meyer Feldberg*

/s/ George W. Gowen Director May 23, 1996
- --------------------------
George W. Gowen*

/s/ Frederic V. Malek Director May 23, 1996
- --------------------------
Frederic V. Malek*

Director
- --------------------------
Carl W. Schafer*

/s/ John R. Torell III Director May 23, 1996
- --------------------------
John R. Torell III*

/s/ Julian F. Sluyters Vice President and Treasurer May 23, 1996
- -------------------------- (Chief Financial and
Julian F. Sluyters Accounting Officer)

<PAGE>
SIGNATURES (Continued)

* Signature affixed by Elinor W. Gammon pursuant to powers of attorney dated
May 21, 1996 and filed herewith.

<PAGE>
EXHIBIT INDEX

(1) Amended and Restated Articles of Incorporation filed May 22, 1996 (to be
filed)

(2) (a) Amended By-Laws dated July 18, 1990 1/

(b) Certificate of Amendment dated September 28, 1994 to By-laws 2/

(3) Voting Trust Agreement - none

(4) Instruments defining the rights of holders of Registrant's common stock 3/

(5) (a) Investment Advisory, Administration and Distribution Contract between
Registrant and PaineWebber 4/

(b) Sub-Advisory Contract between PaineWebber and Mitchell Hutchins 4/

(6) Underwriting Contract - See Exhibit 5(a)

(7) Bonus, profit sharing or pension plans - none

(8) (a) Custodian Contract 1/

(b) Amendment to Custodian and Ancillary Services Agreement 2/

(d) Amendment No. 4 to Custodian Agreement 2/

(9) (a) Transfer Agency Services and Shareholder Services Agreement 6/

(b) Service Contract 1/

(10) Opinion and consent of counsel 7/

(11) Other opinions, appraisals, rulings and consents: Consent of Independent
Auditors (to be filed)

(12) Financial statements omitted from Part B - none

(13) Letter of investment intent 7/

(14) Prototype Retirement Plan - none

(15) Plan pursuant to Rule 12b-1 - none

(16) Schedule of Calculation of Performance Quotations 6/

(17) and

(27) Financial Data Schedule (to be filed)

(18) Plan pursuant to Rule 18f-3 (none)

(19) Powers of attorney for Ms. Alexander and Messrs. Bewkes, Armstrong, Burt,
Feldberg, Gowen, Malek and Torell (filed herewith)
- --------------
1/ Incorporated herein by reference from Post-Effective Amendment No. 24 to
registration statement (SEC File No. 2-60655), filed July 27, 1990.

<PAGE>
2/ Incorporated herein by reference from Post-Effective Amendment No. 33 to
registration statement (SEC File No. 2-60655), filed July 28, 1995.

3/ Incorporated by reference from Articles Sixth, Eighth, Ninth and Twelfth of
the Registrant's Articles of Incorporation and Articles II, III, VIII, X,
and XI of the Registrant's By-Laws.

4/ Incorporated herein by reference from Post-Effective Amendment No. 21 to
registration statement (SEC File No. 2-60655), filed August 1, 1988.

5/ Incorporated herein by reference from Post-Effective Amendment No. 23 to
registration statement (SEC File No. 2-60655), filed July 31, 1989.

6/ Incorporated herein by reference from Post-Effective Amendment No. 25 to
registration statement (SEC File No. 2-60655), filed July 30, 1991.

7/ Incorporated herein by reference from initial registration statement (SEC
File No. 2-60655), filed January 20, 1978.

<PAGE>
POWER OF ATTORNEY

I, Margo N. Alexander, Director, President and Chief Executive Officer of
Triple A and Government Series - 1997, Inc., All-American Term Trust Inc., 2002
Target Term Trust Inc., Global Small Cap Fund Inc., Global High Income Dollar
Fund Inc., Managed High Yield Fund Inc., Investment Grade Municipal Income Fund
Inc., Insured Municipal Income Fund Inc., PaineWebber Cashfund, Inc.,
PaineWebber RMA Money Fund, Inc., PaineWebber RMA Tax-Free Fund, Inc.,
PaineWebber Master Series, Inc., Strategic Global Income Fund, Inc. and
PaineWebber Financial Services Growth Fund Inc. (collectively, the "Funds"),
hereby constitute and appoint Victoria E. Schonfeld, Dianne E. O'Donnell,
Gregory K. Todd, Joan L. Cohen, Keith A. Weller, Elinor W. Gammon and Robert A.
Wittie, and each of them singly, my true and lawful attorneys, with full power
to them to sign for me, and in my capacity as Director, President and Chief
Executive Officer for each of the Funds, any and all amendments to each of the
particular registration statements of the Funds, and all instruments necessary
or desirable in connection therewith, filed with the Securities and Exchange
Commission, hereby ratifying and confirming my signature as it may be signed by
said attorneys to any and all amendments to said registration statements.

Pursuant to the requirements of the Securities Act of 1933, this instrument
has been signed below by the following in the capacity and on the date
indicated.

Signature Title Date

/s/ Margo N. Alexander Director, President & May 21, 1996
Margo N. Alexander Chief Executive Officer

<PAGE>
POWER OF ATTORNEY

I, E. Garrett Bewkes, Jr., Director of Triple A and Government Series -
1997, Inc., All-American Term Trust Inc., 2002 Target Term Trust Inc., Global
Small Cap Fund Inc., Global High Income Dollar Fund Inc., Managed High Yield
Fund Inc., Investment Grade Municipal Income Fund Inc., Insured Municipal Income
Fund Inc., PaineWebber Cashfund, Inc., PaineWebber RMA Money Fund, Inc.,
PaineWebber RMA Tax-Free Fund, Inc., PaineWebber Master Series, Inc., Strategic
Global Income Fund, Inc. and PaineWebber Financial Services Growth Fund Inc.
(collectively, the "Funds"), hereby constitute and appoint Victoria E.
Schonfeld, Dianne E. O'Donnell, Gregory K. Todd, Joan L. Cohen, Keith A. Weller,
Elinor W. Gammon and Robert A. Wittie, and each of them singly, my true and
lawful attorneys, with full power to them to sign for me, and in my capacity as
Director for each of the Funds, any and all amendments to each of the particular
registration statements of the Funds, and all instruments necessary or desirable
in connection therewith, filed with the Securities and Exchange Commission,
hereby ratifying and confirming my signature as it may be signed by said
attorneys to any and all amendments to said registration statements.

Pursuant to the requirements of the Securities Act of 1933, this instrument
has been signed below by the following in the capacity and on the date
indicated.

Signature Title Date

/s/ E. Garrett Bewkes, Jr. Director May 21, 1996
E. Garrett Bewkes, Jr.

<PAGE>
POWER OF ATTORNEY

I, Richard R. Burt, Director of Triple A and Government Series - 1997,
Inc., All-American Term Trust Inc., 2002 Target Term Trust Inc., Global Small
Cap Fund Inc., Global High Income Dollar Fund Inc., Managed High Yield Fund
Inc., Investment Grade Municipal Income Fund Inc., Insured Municipal Income Fund
Inc., PaineWebber Cashfund, Inc., PaineWebber RMA Money Fund, Inc., PaineWebber
RMA Tax-Free Fund, Inc., PaineWebber Master Series, Inc., Strategic Global
Income Fund, Inc. and PaineWebber Financial Services Growth Fund Inc.
(collectively, the "Funds"), hereby constitute and appoint Victoria E.
Schonfeld, Dianne E. O'Donnell, Gregory K. Todd, Joan L. Cohen, Keith A. Weller,
Elinor W. Gammon and Robert A. Wittie, and each of them singly, my true and
lawful attorneys, with full power to them to sign for me, and in my capacity as
Director for each of the Funds, any and all amendments to each of the particular
registration statements of the Funds, and all instruments necessary or desirable
in connection therewith, filed with the Securities and Exchange Commission,
hereby ratifying and confirming my signature as it may be signed by said
attorneys to any and all amendments to said registration statements.

Pursuant to the requirements of the Securities Act of 1933, this instrument
has been signed below by the following in the capacity and on the date
indicated.

Signature Title Date

/s/ Richard R. Burt Director May 21, 1996
Richard R. Burt

<PAGE>
POWER OF ATTORNEY

I, Richard Q. Armstrong, Director of Triple A and Government Series - 1997,
Inc., All-American Term Trust Inc., 2002 Target Term Trust Inc., Global Small
Cap Fund Inc., Global High Income Dollar Fund Inc., Managed High Yield Fund
Inc., Investment Grade Municipal Income Fund Inc., Insured Municipal Income Fund
Inc., PaineWebber Cashfund, Inc., PaineWebber RMA Money Fund, Inc., PaineWebber
RMA Tax-Free Fund, Inc., PaineWebber Master Series, Inc., Strategic Global
Income Fund, Inc. and PaineWebber Financial Services Growth Fund Inc.
(collectively, the "Funds"), hereby constitute and appoint Victoria E.
Schonfeld, Dianne E. O'Donnell, Gregory K. Todd, Joan L. Cohen, Keith A. Weller,
Elinor W. Gammon and Robert A. Wittie, and each of them singly, my true and
lawful attorneys, with full power to them to sign for me, and in my capacity as
Director for each of the Funds, any and all amendments to each of the particular
registration statements of the Funds, and all instruments necessary or desirable
in connection therewith, filed with the Securities and Exchange Commission,
hereby ratifying and confirming my signature as it may be signed by said
attorneys to any and all amendments to said registration statements.

Pursuant to the requirements of the Securities Act of 1933, this instrument
has been signed below by the following in the capacity and on the date
indicated.

Signature Title Date

/s/ Richard Q. Armstrong Director May 21, 1996
Richard Q. Armstrong

<PAGE>
POWER OF ATTORNEY

I, Meyer Feldberg, Director of Triple A and Government Series - 1997, Inc.,
All-American Term Trust Inc., 2002 Target Term Trust Inc., Global Small Cap Fund
Inc., Global High Income Dollar Fund Inc., Managed High Yield Fund Inc.,
Investment Grade Municipal Income Fund Inc., Insured Municipal Income Fund Inc.,
PaineWebber Cashfund, Inc., PaineWebber RMA Money Fund, Inc., PaineWebber RMA
Tax-Free Fund, Inc., PaineWebber Master Series, Inc., Strategic Global Income
Fund, Inc. and PaineWebber Financial Services Growth Fund Inc. (collectively,
the "Funds"), hereby constitute and appoint Victoria E. Schonfeld, Dianne E.
O'Donnell, Gregory K. Todd, Joan L. Cohen, Keith A. Weller, Elinor W. Gammon and
Robert A. Wittie, and each of them singly, my true and lawful attorneys, with
full power to them to sign for me, and in my capacity as Director for each of
the Funds, any and all amendments to each of the particular registration
statements of the Funds, and all instruments necessary or desirable in
connection therewith, filed with the Securities and Exchange Commission, hereby
ratifying and confirming my signature as it may be signed by said attorneys to
any and all amendments to said registration statements.

Pursuant to the requirements of the Securities Act of 1933, this instrument
has been signed below by the following in the capacity and on the date
indicated.

Signature Title Date

/s/ Meyer Feldberg Director May 21, 1996
Meyer Feldberg

<PAGE>
POWER OF ATTORNEY

I, John R. Torell III, Director of Triple A and Government Series - 1997,
Inc., All-American Term Trust Inc., 2002 Target Term Trust Inc., Global Small
Cap Fund Inc., Global High Income Dollar Fund Inc., Managed High Yield Fund
Inc., Investment Grade Municipal Income Fund Inc., Insured Municipal Income Fund
Inc., PaineWebber Cashfund, Inc., PaineWebber RMA Money Fund, Inc., PaineWebber
RMA Tax-Free Fund, Inc., PaineWebber Master Series, Inc., Strategic Global
Income Fund, Inc. and PaineWebber Financial Services Growth Fund Inc.
(collectively, the "Funds"), hereby constitute and appoint Victoria E.
Schonfeld, Dianne E. O'Donnell, Gregory K. Todd, Joan L. Cohen, Keith A. Weller,
Elinor W. Gammon and Robert A. Wittie, and each of them singly, my true and
lawful attorneys, with full power to them to sign for me, and in my capacity as
Director for each of the Funds, any and all amendments to each of the particular
registration statements of the Funds, and all instruments necessary or desirable
in connection therewith, filed with the Securities and Exchange Commission,
hereby ratifying and confirming my signature as it may be signed by said
attorneys to any and all amendments to said registration statements.

Pursuant to the requirements of the Securities Act of 1933, this instrument
has been signed below by the following in the capacity and on the date
indicated.

Signature Title Date

/s/ John R. Torell III Director May 21, 1996
John R. Torell III

<PAGE>
POWER OF ATTORNEY

I, Frederic V. Malek, Director of Triple A and Government Series - 1997,
Inc., All-American Term Trust Inc., 2002 Target Term Trust Inc., Global Small
Cap Fund Inc., Global High Income Dollar Fund Inc., Managed High Yield Fund
Inc., Investment Grade Municipal Income Fund Inc., Insured Municipal Income Fund
Inc., PaineWebber Cashfund, Inc., PaineWebber RMA Money Fund, Inc., PaineWebber
RMA Tax-Free Fund, Inc., PaineWebber Master Series, Inc., Strategic Global
Income Fund, Inc. and PaineWebber Financial Services Growth Fund Inc.
(collectively, the "Funds"), hereby constitute and appoint Victoria E.
Schonfeld, Dianne E. O'Donnell, Gregory K. Todd, Joan L. Cohen, Keith A. Weller,
Elinor W. Gammon and Robert A. Wittie, and each of them singly, my true and
lawful attorneys, with full power to them to sign for me, and in my capacity as
Director for each of the Funds, any and all amendments to each of the particular
registration statements of the Funds, and all instruments necessary or desirable
in connection therewith, filed with the Securities and Exchange Commission,
hereby ratifying and confirming my signature as it may be signed by said
attorneys to any and all amendments to said registration statements.

Pursuant to the requirements of the Securities Act of 1933, this instrument
has been signed below by the following in the capacity and on the date
indicated.

Signature Title Date

/s/ Frederic V. Malek Director May 21, 1996
Frederic V. Malek

<PAGE>
POWER OF ATTORNEY

I, George W. Gowen, Director of Triple A and Government Series - 1997,
Inc., All-American Term Trust Inc., 2002 Target Term Trust Inc., Global Small
Cap Fund Inc., Global High Income Dollar Fund Inc., Managed High Yield Fund
Inc., Investment Grade Municipal Income Fund Inc., Insured Municipal Income Fund
Inc., PaineWebber Cashfund, Inc., PaineWebber RMA Money Fund, Inc., PaineWebber
RMA Tax-Free Fund, Inc., PaineWebber Master Series, Inc., Strategic Global
Income Fund, Inc. and PaineWebber Financial Services Growth Fund Inc.
(collectively, the "Funds"), hereby constitute and appoint Victoria E.
Schonfeld, Dianne E. O'Donnell, Gregory K. Todd, Joan L. Cohen, Keith A. Weller,
Elinor W. Gammon and Robert A. Wittie, and each of them singly, my true and
lawful attorneys, with full power to them to sign for me, and in my capacity as
Director for each of the Funds, any and all amendments to each of the particular
registration statements of the Funds, and all instruments necessary or desirable
in connection therewith, filed with the Securities and Exchange Commission,
hereby ratifying and confirming my signature as it may be signed by said
attorneys to any and all amendments to said registration statements.

Pursuant to the requirements of the Securities Act of 1933, this instrument
has been signed below by the following in the capacity and on the date
indicated.

Signature Title Date

/s/ George W. Gowen Director May 21, 1996
George W. Gowen