<PAGE>
PAINEWEBBER GROWTH AND INCOME FUND
SUPPLEMENT TO PROSPECTUS DATED DECEMBER 1, 1996
October 13, 1997
Dear Investor,
This is a supplement to the Prospectus dated December 1, 1996 of
PaineWebber Growth and Income Fund ("Growth and Income Fund"), PaineWebber
Growth Fund ("Growth Fund") and PaineWebber Small Cap Fund ("Small Cap Fund").
The purpose of this supplement is to notify investors of a change to Growth and
Income Fund's dividend policy.
The first paragraph under the heading "Dividends & Taxes-Dividends" is
revised to include a new last sentence. The revised paragraph reads as
follows.
Growth Fund and Small Cap Fund each pays an annual dividend, and
Growth and Income Fund pays a semi-annual dividend, from its net
investment income and net short-term capital gain, if any. Each Fund
also distributes annually substantially all of its net capital gain
(the excess of net long-term capital gain over net short-term capital
loss), if any. Each Fund may make additional distributions, if necessary,
to avoid a 4% excise tax on certain undistributed income and capital gain.
If determined by its board of trustees to be in the best interests of its
shareholders, Growth and Income Fund may also make additional distributions
of net investment income, net short-term capital gain and net capital gain,
if any.
If you have any questions regarding PaineWebber Growth and Income Fund,
PaineWebber Growth Fund or PaineWebber Small Cap Fund, please call your
Investment Executive at PaineWebber or one of its correspondent firms.
