<PAGE>
PAINEWEBBER/
KIDDER, PEABODY
CASH RESERVE
FUND, INC.
SEMI-ANNUAL REPORT
JANUARY 31, 1995
<PAGE>
- --------------------------------------------------------------------------------
March 15, 1995
Dear Shareholder,
We are pleased to provide you with this semi-annual report on the
PaineWebber/Kidder, Peabody Cash Reserve Fund, Inc., covering the six months
ended January 31, 1995.
Net assets of the Fund totalled approximately $1.5 billion on January 31, 1995.
As of January 31, 1995, the Fund offered a 7-day annualized yield of 5.07% and
an effective 7-day annualized yield of 5.20%(1).
NEW MANAGEMENT
Effective January 30, 1995, as a result of an asset purchase transaction by and
among Kidder, Peabody Group Inc., its parent, General Electric Company, and
Paine Webber Group Inc., the investment management for the Fund was transferred
to Mitchell Hutchins Asset Management Inc. ('Mitchell Hutchins'). Mitchell
Hutchins, a wholly owned investment management subsidiary of PaineWebber
Incorporated, provides investment advisory and portfolio management services to
individuals, pension and endowment funds, trusts and institutions. As of January
31, 1995, Mitchell Hutchins was adviser or sub-adviser to 36 investment
companies with 66 separate portfolios and aggregate assets of approximately $22
billion.
Dennis L. McCauley and Susan P. Messina are jointly responsible for the
day-to-day management of the Fund. Mr. McCauley is a Managing Director and Chief
Investment Officer -- Fixed Income of Mitchell Hutchins responsible for
overseeing all active fixed income investments, including domestic and global
taxable and tax-exempt mutual funds. Mrs. Messina is a Senior Vice President of
Mitchell Hutchins, responsible for overseeing taxable money funds. We are
excited by the addition of the Kidder, Peabody Funds to the PaineWebber Funds.
Together, our expanded capabilities should enable us to provide enhanced
investment services to our clients.
MARKET REPORT
During the six months ended January 31, 1995, the Federal Reserve continued its
monetary tightening policy. During 1994, the benchmark Federal Funds rate, the
rate banks charge each other for overnight borrowing, was increased six times
for a total increase of 2.5%. The Federal Reserve tightened another 0.5% on
February 1, 1995, increasing the Federal Funds rate to 6.0%.
Signals pointing to the Federal Reserve's initial progress in moderating
economic growth are beginning to emerge. Recent figures show only modest
increases in company payrolls, along with softer retail sales and drop-offs in
home building and business construction. Declines in consumer demand have caused
some business sectors to decrease inventory investment. During the six
- ------------
(1) The current yield is determined by computing the net change in value of one
share during a seven-day calendar period, dividing such change by the value
of the share at the beginning of the period and multiplying the return over
the seven-day period by 365/7. The effective yield is computed by
compounding the unannualized base period return, assuming the daily
reinvestment of dividends. Both figures are based on historical earnings and
are not intended to indicate future performance.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
months ended January 31, 1995, annual consumer inflation remained under 3.0%.
Balancing this data, however, are upticks in other important economic
indicators, including the persistent rise of industrial output, a prime
indicator that the economy is at full capacity utilization. A possibility of
further Federal Reserve action could continue as long as the economy's potential
strength remains uncertain.
PORTFOLIO FOCUS
The Fund continues to seek maximization of current income while preserving
capital. Investment decisions in the portfolio will be dominated by credit
quality and liquidity. The dollar-weighted average maturity of the Fund on
January 31, 1995 was 14 days. During the period, the Fund's average weighted
maturity was shortened as a defensive measure. We are planning to maintain a
neutral average weighted maturity as short-term interest rates find stability
during uncertain economic times.
Thank you for your participation in the PaineWebber/Kidder, Peabody Cash Reserve
Fund, Inc. We value you as a shareholder and as a client and welcome any
comments or questions you may have.
Sincerely,
<TABLE>
<S> <C>
FRANK P.L. MINARD DENNIS L. MCCAULEY
FRANK P.L. MINARD DENNIS L. MCCAULEY
Chairman, Managing Director and Chief Investment
Mitchell Hutchins Asset Officer -- Fixed Income
Management Inc. Mitchell Hutchins Asset
Management Inc.
SUSAN P. MESSINA
SUSAN P. MESSINA
Senior Vice President,
Taxable Money Funds
Mitchell Hutchins
Asset Management Inc.
</TABLE>
- --------------------------------------------------------------------------------
2
<PAGE>
PAINEWEBBER/KIDDER, PEABODY CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
Portfolio of Investments
January 31, 1995 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
- --------- -------------------- ------------------ --------------
<S> <C> <C> <C> <C>
U.S. GOVERNMENT AND AGENCY OBLIGATIONS -- 3.31%
$12,995 Federal Home Loan Bank...................... 02/06/95 to 02/09/95 5.420 to 5.700% $ 12,983,678
25,000 Federal Home Loan Mortgage Corp............. 02/02/95 5.970 24,995,854
12,000 Federal National Mortgage Association....... 02/03/95 to 02/13/95 5.000 to 5.700 11,985,311
--------------
TOTAL U.S. GOVERNMENT AND AGENCY OBLIGATIONS............ 49,964,843
--------------
BANKERS ACCEPTANCES - DOMESTIC -- 0.99%
15,000 Harris Trust & Savings Bank................. 02/03/95 5.730 14,995,225
--------------
CERTIFICATES OF DEPOSIT -- 4.97%
Domestic -- 1.66%
25,000 Harris Trust & Savings Bank................. 02/13/95 5.7300 25,000,000
--------------
Yankee -- 3.31%
50,000 Societe Generale............................ 02/03/95 to 02/15/95 5.550 to 5.750 50,000,000
--------------
TOTAL CERTIFICATES OF DEPOSIT........................... 75,000,000
--------------
COMMERCIAL PAPER -- 89.65%
Aerospace -- 1.32%
20,000 Raytheon Co................................. 02/02/95 5.400 19,997,000
--------------
Agriculture -- 0.35%
5,370 Cargill Inc................................. 02/14/95 5.650 5,359,044
--------------
Asset-Backed -- 5.28%
30,148 Delaware Funding Corp....................... 02/28/95 5.950 30,013,465
50,000 New Center Asset Trust...................... 03/01/95 5.950 49,768,611
--------------
79,782,076
--------------
Auto/Truck -- 4.23%
64,000 Daimler-Benz North America Corp............. 02/01/95 to 02/09/95 6.000 to 6.070 63,955,318
--------------
Banking -- 10.11%
20,000 Bayerische Vereinsbank AG................... 02/03/95 5.770 19,993,589
20,000 B.B.V. Finance (DE) Inc..................... 02/13/95 5.770 19,961,533
50,000 Canadian Imperial Holdings Inc.............. 02/15/95 5.640 49,890,333
58,000 Commerzbank U.S. Finance Inc................ 02/02/95 to 03/31/95 5.600 to 6.070 57,895,180
5,000 J.P. Morgan & Co. Inc....................... 02/14/95 5.930 4,989,293
--------------
152,729,928
--------------
Chemicals -- 3.30%
50,000 E.I. duPont De Nemours and Company.......... 02/14/95 to 02/22/95 5.770 to 5.870 49,862,306
--------------
Consumer Products -- 3.04%
40,000 Procter & Gamble Co......................... 02/07/95 to 02/08/95 6.020 to 6.040 39,958,094
6,000 Unilever Capital Corp....................... 02/13/95 5.700 5,988,600
--------------
45,946,694
--------------
Drugs and Healthcare -- 9.45%
18,000 Johnson & Johnson........................... 02/02/95 5.760 17,997,120
10,000 Lilly (Eli) & Co............................ 02/09/95 5.650 9,987,444
20,000 Miles Inc................................... 02/14/95 6.050 19,956,306
60,000 Pfizer, Inc................................. 02/10/95 to 02/13/95 5.550 to 5.650 59,911,792
35,000 Warner-Lambert Company...................... 02/14/95 to 02/17/95 5.900 34,913,139
--------------
142,765,801
--------------
</TABLE>
3
<PAGE>
PAINEWEBBER/KIDDER, PEABODY CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
- --------- -------------------- ------------------ --------------
COMMERCIAL PAPER -- (CONTINUED)
<S> <C> <C> <C> <C>
Electronics -- 5.90%
$36,000 Emerson Electric Co......................... 02/08/95 to 02/10/95 5.650% $ 35,955,428
35,060 Motorola Inc................................ 02/09/95 to 02/13/95 5.650 35,009,665
18,000 Siemens Corp................................ 02/03/95 6.050 17,993,950
--------------
88,959,043
--------------
Energy -- 6.34%
55,000 Exxon Imperial U.S. Inc..................... 02/15/95 to 02/23/95 5.670 to 5.900 54,843,711
41,000 Koch Industries, Inc........................ 02/10/95 5.680 40,941,780
--------------
95,785,491
--------------
Entertainment -- 0.33%
5,000 Walt Disney Co.............................. 02/15/95 5.730 4,988,858
--------------
Finance-Conduit -- 6.50%
48,314 Metlife Funding Inc......................... 03/02/95 5.950 48,082,428
50,000 UBS Finance (Delaware) Inc.................. 02/01/95 5.850 50,000,000
--------------
98,082,428
--------------
Finance-Diversified -- 4.30%
50,000 CIT Group Holdings Inc...................... 02/01/95 5.850 50,000,000
15,000 Sanwa Business Credit Corp.................. 03/02/95 6.010 14,927,379
--------------
64,927,379
--------------
Finance-Subsidiary -- 1.65%
25,000 Pitney Bowes Credit Corp.................... 02/15/95 5.700 24,944,583
--------------
Food and Beverage -- 9.56%
9,000 Anheuser-Busch Cos. Inc..................... 02/03/95 5.500 8,997,250
50,000 Campbell Soup Co............................ 04/03/95 6.050 49,487,431
45,000 Coca Cola Co................................ 02/15/95 5.700 to 5.730 44,899,959
16,000 Hershey Foods Corp.......................... 02/14/95 5.690 15,967,124
25,000 Philip Morris Companies, Inc................ 02/13/95 5.750 24,952,083
--------------
144,303,847
--------------
General Trade -- 0.66%
10,000 Mitsubishi International Corp............... 02/27/95 5.950 9,957,028
--------------
Insurance -- 1.32%
20,000 USAA Capital Corp........................... 03/09/95 5.950 19,881,000
--------------
Insurance-Property/Casualty -- 2.16%
32,700 A.I.G. Funding Corp......................... 02/10/95 to 02/13/95 5.670 to 6.120 32,641,797
--------------
Metals & Mining -- 2.57%
38,800 U.S. Borax & Chemical Corp.................. 02/06/95 to 02/10/95 5.730 to 6.070 38,755,554
--------------
Oil and Gas -- 4.03%
61,000 Repsol International Finance, B.V........... 02/09/95 to 02/15/95 5.700 to 6.000 60,888,200
--------------
Paper & Forest Products -- 0.92%
14,000 Kimberly-Clark Corp......................... 02/15/95 5.700 13,968,967
--------------
</TABLE>
4
<PAGE>
PAINEWEBBER/KIDDER, PEABODY CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
- --------- -------------------- ------------------ --------------
COMMERCIAL PAPER -- (CONCLUDED)
<S> <C> <C> <C> <C>
Telecommunications -- 2.61%
$39,500 U.S. West Communications Inc................ 02/01/95 to 02/15/95 5.680 to 6.050% $ 39,470,997
--------------
Transportation -- 3.71%
56,021 Norfolk Southern Corporation................ 02/08/95 to 02/10/95 6.020 to 6.100 55,943,432
--------------
TOTAL COMMERCIAL PAPER.................................. 1,353,896,771
--------------
REPURCHASE AGREEMENT -- 1.31%
19,793 Repurchase Agreement dated 01/31/95, with
Daiwa Securities (America) Inc.,
collateralized by $18,230,000 U.S. Treasury
Bonds, 8.500% due 02/15/20; proceeds:
$19,796,189................................. 02/01/95 5.800 19,793,000
--------------
TOTAL INVESTMENTS (which approximates cost for federal
income tax purposes) -- 100.23%......................... 1,513,649,839
Liabilities in excess of other assets -- (0.23)%........ (3,427,641)
--------------
NET ASSETS -- 100.00%................................... $1,510,222,198
--------------
--------------
</TABLE>
Weighted average maturity -- 14 days
See accompanying notes to financial statements
5
<PAGE>
PAINEWEBBER/KIDDER, PEABODY CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
Statement of Operations
For the Six Months Ended January 31, 1995 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INTEREST INCOME.................................................................................... $42,075,674
-----------
EXPENSES:
Investment advisory and administration fees.................................................... 3,846,996
Distribution fees.............................................................................. 983,962
Transfer agency and service fees............................................................... 503,146
Custody and accounting fees.................................................................... 240,814
Reports and notices to shareholders............................................................ 111,365
State registration fees........................................................................ 83,836
Legal and audit fees........................................................................... 42,738
Directors' fees and expenses................................................................... 21,677
Other expenses................................................................................. 43,728
-----------
5,878,262
-----------
NET INVESTMENT INCOME.............................................................................. 36,197,412
NET REALIZED LOSSES FROM INVESTMENT TRANSACTIONS................................................... (2,918)
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............................................... $36,194,494
-----------
-----------
</TABLE>
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the
Six Months Ended For the
January 31, 1995 Year Ended
(unaudited) July 31, 1994
---------------- --------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income.................................................. $ 36,197,412 $ 52,545,864
Net realized losses from investment transactions....................... (2,918) (14,604)
---------------- --------------
Net increase in net assets resulting from operations................... 36,194,494 52,531,260
---------------- --------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income.................................................. (36,194,494) (52,531,260)
---------------- --------------
NET INCREASE (DECREASE) FROM CAPITAL SHARE TRANSACTIONS:
Net decrease in net assets............................................. (240,225,999) (30,800,097)
NET ASSETS:
Beginning of period.................................................... 1,750,448,197 1,781,248,294
---------------- --------------
End of period.......................................................... $1,510,222,198 $1,750,448,197
---------------- --------------
---------------- --------------
</TABLE>
See accompanying notes to financial statements
6
<PAGE>
PAINEWEBBER/KIDDER, PEABODY CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
Notes to Financial Statements -- (unaudited)
- --------------------------------------------------------------------------------
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
PaineWebber/Kidder, Peabody Cash Reserve Fund, Inc. (the 'Fund') was
organized under the laws of Maryland on May 31, 1979 and is registered with the
Securities and Exchange Commission under the Investment Company Act of 1940, as
amended ('1940 Act'), as an open-end, diversified management investment company.
Valuation and Accounting for Investments -- Investments are valued at
amortized cost which approximates market value. Securities not subject to
amortization are valued at current market value, or, when appropriate, at cost,
which approximates market.
Investment transactions are recorded on trade date. Interest income,
adjusted for amortization of premiums and discounts on investments, is earned
from settlement date and recorded on an accrual basis. Premiums paid on
purchases of portfolio securities are amortized and discounts are accreted as
adjustments to interest income and the identified cost of securities. Realized
gains and losses from security transactions and principal paydowns on asset
backed securities are calculated using the identified cost method.
The ability of the issuers of the debt securities held by the Fund to meet
their obligations may be affected by economic developments, including those
particular to a specific industry or region.
Repurchase Agreements -- The Fund's custodian takes possession of the
collateral pledged for investments in repurchase agreements. The underlying
collateral is valued daily on a mark-to-market basis to ensure that the value,
including accrued interest, is at least equal to the repurchase price. In the
event of default of the obligation to repurchase, the Fund has the right to
liquidate the collateral and apply the proceeds in satisfaction of the
obligation. Under certain circumstances, in the event of default or bankruptcy
by the other party to the agreement, realization and/or retention of the
collateral may be subject to legal proceedings.
Federal Tax Status -- The Fund intends to distribute all of its taxable
income and to comply with the other requirements of the Internal Revenue Code
applicable to regulated investment companies. Accordingly, no provision for
federal income taxes is required. In addition, by distributing during each
calendar year substantially all of its net investment income, capital gains and
certain other amounts, if any, the Fund intends not to be subject to a Federal
excise tax.
At January 31, 1995, for Federal income tax purposes, the cost of
investments was the same as the cost for financial reporting purposes.
Dividends -- The Fund declares dividends on a daily basis from net
investment income. Such dividends are normally paid monthly. Net capital gains,
if any, will be declared and paid at least annually. To the extent that the Fund
earns net realized capital gains which can be offset by capital loss carryovers,
if any, it is the policy of the Fund not to distribute such gains.
7
<PAGE>
PAINEWEBBER/KIDDER, PEABODY CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
Notes to Financial Statements -- (continued)
- --------------------------------------------------------------------------------
INVESTMENT ADVISERS AND ADMINISTRATOR
The Fund's investment adviser and administrator receives compensation from
the Fund, computed daily and paid on a monthly basis equivalent to 0.500% of the
first $750 million of average daily net assets; 0.475% of the next $250 million;
0.450% of the next $250 million; 0.425% of the next $250 million; and 0.400% of
assets in excess of $1.5 billion. At January 31, 1995, the Fund owed Kidder,
Peabody Asset Management Inc. ('KPAM'), the Fund's predecessor investment
adviser and administrator, $570,406 in investment advisory and administration
fees.
Effective January 30, 1995, as a result of an asset purchase transaction by
and among Kidder, Peabody Group Inc. ('Kidder, Peabody'), its parent, General
Electric Company, and Paine Webber Group Inc., the investment advisory functions
for the Fund have been transferred, on an interim basis, from KPAM to Mitchell
Hutchins Asset Management Inc. ('Mitchell Hutchins'). During the interim period,
Mitchell Hutchins will provide investment advisory services to the Fund pursuant
to a contract that has substantially the same terms and conditions as the prior
investment advisory agreement between the Fund and KPAM. Fees paid by the Fund
for investment advisory services during the interim period will be paid into
escrow and, if approved by the shareholders, will be paid over to Mitchell
Hutchins. At January 31, 1995, the Fund owed Mitchell Hutchins $40,336 in
investment advisory and administration fees.
A special shareholders' meeting is expected to occur on March 31, 1995. At
the shareholders' meeting, it is also proposed that PaineWebber Incorporated
('PaineWebber') be appointed as investment adviser and administrator of the Fund
and Mitchell Hutchins be appointed as sub-adviser and sub-administrator. If
approved by the shareholders, PaineWebber and Mitchell Hutchins, as investment
adviser and sub-adviser, respectively, would continue to manage the Fund in
accordance with the Fund's investment objective, policies and restrictions.
During the interim period and thereafter, assuming shareholder approval, the
Fund would pay the same fee for investment advisory and administration services
as previously paid to KPAM, as described above and in the Fund's Prospectus.
After the interim period, assuming shareholder approval, PaineWebber (not the
Fund) would pay Mitchell Hutchins a fee at the annual rate of 20% of the fee
received by PaineWebber from the Fund.
In compliance with applicable state securities laws, the Fund's investment
adviser and administrator will reimburse the Fund for those operating expenses,
exclusive of taxes, interest, brokerage fees, distribution fees and
extraordinary expenses, which exceed applicable limitations in any fiscal year.
Currently, the most restrictive limitation is 2.5% on the first $30 million of
average daily net assets, 2.0% of the next $70 million and 1.5% of any excess
over $100 million. For the six months ended January 31, 1995, no reimbursements
were required pursuant to the above limitation.
8
<PAGE>
PAINEWEBBER/KIDDER, PEABODY CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
Notes to Financial Statements -- (concluded)
- --------------------------------------------------------------------------------
DISTRIBUTION PLAN
Effective January 30, 1995, PaineWebber serves as the exclusive distributor
of the Fund's shares. For its services, which include payment of sales
commissions to registered representatives and various other promotional and
sales related expenses, it receives from the Fund a distribution fee accrued
daily and paid monthly at the rate of 0.12% per annum of the Fund's average
daily net assets. For these services for the six months ended January 31, 1995,
Kidder, Peabody, the Fund's predecessor distributor, earned $983,962 in fees. At
January 31, 1995, $10,252 of this amount was payable to PaineWebber.
OTHER LIABILITIES
At January 31, 1995, the amounts payable to directors and payable for
dividends were $9,275 and $1,866,379, respectively.
CAPITAL SHARE TRANSACTIONS
There are 5 billion shares of $0.01 par value common stock authorized.
Transactions in capital shares at $1.00 per share were as follows:
<TABLE>
<CAPTION>
For the
Six Months
Ended For the
January 31, Year Ended
1995 July 31,
(unaudited) 1994
-------------- --------------
<S> <C> <C>
Shares sold...................................................... 2,939,603,273 6,993,148,724
Shares repurchased............................................... (3,212,916,592) (7,074,025,059)
Dividends reinvested in additional Fund shares................... 33,087,320 50,076,238
-------------- --------------
Net decrease in shares outstanding............................... (240,225,999) (30,800,097)
-------------- --------------
-------------- --------------
</TABLE>
9
<PAGE>
PAINEWEBBER/KIDDER, PEABODY CASH RESERVE FUND, INC.
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
Selected data for a share of capital stock outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
For the Six
Months Ended For the Years Ended July 31,
January 31, 1995 --------------------------------------------------------------
(unaudited) 1994 1993 1992 1991 1990
----------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value:
Beginning of period.................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- ------- ------- ------- ------- -------
Net investment income................ 0.0221 0.0285 0.0258 0.0405 0.0655 0.0785
--------- ------- ------- ------- ------- -------
Dividends from net investment
income............................. (0.0221) (0.0285) (0.0258) (0.0405) (0.0655) (0.0785)
--------- ------- ------- ------- ------- -------
Net asset value:
End of period........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- ------- ------- ------- ------- -------
--------- ------- ------- ------- ------- -------
Total return (unaudited)(1).............. 2.23% 2.87% 2.62% 4.22% 6.75% 8.13%
--------- ------- ------- ------- ------- -------
--------- ------- ------- ------- ------- -------
Ratios/Supplemental Data:
Net assets, end of period (000's).... $1,510,222 $1,750,448 $1,781,248 $1,860,557 $2,171,758 $2,091,165
Expenses to average net assets....... 0.72%* 0.70% 0.72% 0.68% 0.66% 0.68%
Net investment income to average net
assets............................. 4.44%* 2.85% 2.58% 4.09% 6.52% 7.85%
</TABLE>
- ------------
* Annualized
(1) Total return is calculated assuming a $1,000 investment on the first day of
each period reported, reinvestment of all dividends at net asset value on
the payable date and a sale at net asset value on the last day of each
period reported. Total returns for periods of less than one year have not
been annualized.
10
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11
<PAGE>
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12
<PAGE>
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13
<PAGE>
--------------------------------------------------
DIRECTORS
David J. Beaubien
William W. Hewitt, Jr.
Thomas R. Jordan
Carl W. Schafer
--------------------------------------------------
OFFICERS
Frank P.L. Minard
President
Victoria E. Schonfeld
Vice President
Dianne E. O'Donnell
Vice President and Secretary
Julian F. Sluyters
Vice President and Treasurer
--------------------------------------------------
ADMINISTRATOR
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
--------------------------------------------------
INVESTMENT ADVISERS
AND DISTRIBUTOR
Mitchell Hutchins Asset Management Inc.
1285 Avenue of the Americas
New York, New York 10019
--------------------------------------------------
The financial information included herein is
taken from the records of the Fund without
examination by independent accountants who
do not express an opinion thereon.
This report is not to be used in connection with
the offering of shares of the Fund unless
accompanied or preceded by an effective prospectus.
