PAINEWEBBER MUTUAL FUNDS
PROSPECTUS SUPPLEMENT
August 10, 2000
Dear Investor,
This is a supplement to the prospectuses of the PaineWebber Mutual
Funds listed on the reverse side. The purpose of this supplement is to notify
you that Paine Webber Group Inc. ("PW Group") (the ultimate parent company of
Mitchell Hutchins Asset Management Inc., the investment adviser and distributor
for each fund) and UBS AG ("UBS") announced on July 12, 2000 that they had
entered into an agreement and plan of merger under which PW Group will merge
into a wholly owned subsidiary of UBS. If all required approvals are obtained
and the required conditions are satisfied, PW Group and UBS expect to complete
the transaction in the fourth quarter of 2000. UBS, with headquarters in Zurich,
Switzerland, is an internationally diversified organization with operations in
many areas of the financial services industry.
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PAINEWEBBER BOND FUNDS
High Income Fund
Investment Grade Income Fund
Low Duration U.S. Government Income Fund
Strategic Income Fund
U.S. Government Income Fund
o PAINEWEBBER TAX-FREE BOND FUNDS
California Tax-Free Income Fund
Municipal High Income Fund
National Tax-Free Income Fund
New York Tax-Free Income Fund
o PAINEWEBBER ASSET ALLOCATION FUNDS
Balanced Fund
Tactical Allocation Fund
o PAINEWEBBER STOCK FUNDS
Enhanced S&P Nasdaq-100 Fund
Enhanced S&P 500 Fund
Growth Fund
Growth and Income Fund
Mid Cap Fund
Small Cap Fund
S&P 500 Index Fund
Strategy Fund
Tax-Managed Equity Fund
o PAINEWEBBER GLOBAL FUNDS
Asia Pacific Growth Fund
Emerging Markets Equity Fund
Global Equity Fund
Global Income Fund
o PAINEWEBBER MONEY MARKET FUND
