Report of Independent Auditors
To the Shareholders and
Board of Trustees of
PaineWebber Growth & Income Fund
In planning and performing our audit of the financial statements of
PaineWebber Growth & Income Fund for the year ended August 31,
2000, we considered its internal control, including control activities for
safeguarding securities, to determine our auditing procedures for the
purpose of expressing our opinion on the financial statements and to
comply with the requirements of Form N-SAR, and not to provide
assurance on internal control.
The management of PaineWebber Growth & Income Fund is
responsible for establishing and maintaining internal control. In
fulfilling this responsibility, estimates and judgments by management
are required to assess the expected benefits and related costs of control.
Generally, internal controls that are relevant to an audit pertain to the
entitys objective of preparing financial statements for external purposes
that are fairly presented in conformity with accounting principles
generally accepted in the United States. Those internal controls
include the safeguarding of assets against unauthorized acquisition,
use, or disposition.
Because of inherent limitations in internal control, misstatements due
to errors or fraud may occur and not be detected. Also, projections of
any evaluation of internal control to future periods are subject to the
risk that internal control may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
Our consideration of internal control would not necessarily disclose all
matters in internal control that might be material weaknesses under
standards established by the American Institute of Certified Public
Accountants. A material weakness is a condition in which the design
or operation of one or more of the specific internal control components
does not reduce to a relatively low level the risk that errors or fraud in
amounts that would be material in relation to the financial statements
being audited may occur and not be detected within a timely period by
employees in the normal course of performing their assigned functions.
However, we noted no matters involving internal control, including
control activities for safeguarding securities, and its operation that we
consider to be material weaknesses as defined above at August 31,
2000.
This report is intended solely for the information and use of the Board
of Trustees and management of PaineWebber Growth & Income Fund,
and the Securities and Exchange Commission and is not intended to be
and should not be used by anyone other than these specified parties.
ERNST &
YOUNG LLP
October 17, 2000
