<PAGE> 1
Filed pursuant to Rule 497(e)
Registration No. 2-84397
PAINEWEBBER ATLAS GLOBAL GROWTH FUND
Class C Shares
SUPPLEMENT TO PROSPECTUS DATED JANUARY 1, 1995
The following amends the information appearing under the caption
"Management" on page 11 of the Prospectus:
GE Investment Management Incorporated ("GEIM") now serves as sub-
adviser for PaineWebber Atlas Global Growth Fund ("Fund") pursuant to an
interim sub-advisory agreement ("Interim Agreement") between Mitchell
Hutchins Asset Management Inc. ("Mitchell Hutchins") and GEIM that was
approved by the board of trustees of PaineWebber Atlas Fund ("Trust").
Under the Interim Agreement, GEIM makes and implements all investment
decisions with respect to the Fund's portfolio. Under its existing
Investment Advisory and Administration Contract with respect to the Fund,
Mitchell Hutchins supervises the activities of GEIM with respect to the
Fund and continues to supervise all other aspects of the Fund's
operations. Mitchell Hutchins (not the Fund) pays GEIM for its services
under the Interim Agreement at the annual rate of 0.31% of the Fund's
average daily net assets up to $500 million, 0.29% of the Fund's average
daily net assets in excess of $500 million to $1 billion and 0.265% of the
Fund's average daily net assets in excess of $1 billion. The Fund had
approximately $362 million in net assets as of February 28, 1995. The
Interim Agreement will continue in effect for the shorter of 120 days from
March 23, 1995 (the date of the Interim Agreement) or the date that a new
sub-advisory contract is approved by the Fund's shareholders.
GEIM is located at 3003 Summer Street, P.O. Box 7900, Stamford
Connecticut 06904 and is a wholly owned subsidiary of General Electric
Company. GEIM is a registered investment adviser, and its principal
officers and directors serve in similar capacities with respect to General
Electric Investment Corporation ("GEIC"), also a registered investment
adviser and a wholly owned subsidiary of General Electric Company. GEIM
and GEIC together provide investment management services to various
institutional accounts with total assets of approximately $45.8 billion as
of February 28, 1995.
The Trust's board of trustees expects to call a special meeting
of the shareholders of the Fund prior to the termination of the Interim
Agreement.
The following replaces the fifth paragraph appearing under the caption
"Management" on page 19:
Effective March 23, 1995, Ralph R. Layman became the individual
primarily responsible for the day-to-day management of the Fund's
portfolio. Mr. Layman is an executive vice president and a senior
DC-188497.2
<PAGE> 2
investment manager of GEIM and GEIC. From 1989 to 1991, Mr. Layman served
as executive vice president, partner and portfolio manager of Northern
Capital Management Co. and, prior thereto, served as vice president and
portfolio manager of Templeton Investment Counsel.
Dated: March 23, 1995
<PAGE> 3
<TABLE>
<S> <C>
PAINEWEBBER ATLAS PAINEWEBBER
GLOBAL GROWTH FUND DIVIDEND GROWTH FUND
</TABLE>
PAINEWEBBER
GROWTH FUND
CLASS C SHARES
1285 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019
PaineWebber Atlas Global Growth Fund ("Atlas Fund"), a series of PaineWebber
Atlas Fund, seeks long-term capital appreciation and invests primarily in
common stocks of issuers based in the United States, Europe, Japan and the
Pacific Basin.
PaineWebber Dividend Growth Fund ("Dividend Growth Fund"), a series of
PaineWebber America Fund, seeks current income and capital growth and invests
primarily in dividend-paying common stocks with the potential for increasing
dividends.
PaineWebber Growth Fund ("Growth Fund"), a series of PaineWebber Olympus Fund,
seeks long-term capital appreciation and invests primarily in common stocks
issued by companies deemed by its investment adviser to have substantial
potential for capital growth.
------------------------
The Class C shares described in this Prospectus are currently offered for
sale only to the trustee of the PaineWebber Savings Investment Plan on behalf of
that Plan.
------------------------
This Prospectus concisely sets forth information about the Funds a
prospective investor should know before investing. Please retain this Prospectus
for future reference. A Statement of Additional Information dated January 1,
1995 (which is incorporated by reference herein), has been filed with the
Securities and Exchange Commission. The Statement of Additional Information can
be obtained without charge, and further inquiries can be made, by contacting the
PaineWebber Incorporated Benefits Department, 1000 Harbor Boulevard, 10th Floor,
Weehawken, New Jersey 07087 or by calling 1-201-902-4444.
------------------------
Atlas Fund, Dividend Growth Fund and Growth Fund are series of PaineWebber
Atlas Fund, PaineWebber America Fund and PaineWebber Olympus Fund, respectively
(each a "Trust"), which are Massachusetts business trusts.
------------------------
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 REPRE-
SENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
The date of this Prospectus is January 1, 1995.
PAINEWEBBER INCORPORATED
<PAGE> 4
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR 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 FUNDS
OR THEIR DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING BY THE
FUNDS OR THEIR DISTRIBUTOR IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT
LAWFULLY BE MADE.
------------------------
FUND EXPENSES
The following tables are intended to assist investors in understanding the
expenses associated with investing in Class C shares of each Fund.
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<S> <C>
Maximum sales charge on purchases of shares......................................... None
Sales charge on reinvested dividends................................................ None
Redemption fee or deferred sales charge............................................. None
</TABLE>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
<TABLE>
<CAPTION>
DIVIDEND
ATLAS GROWTH GROWTH
FUND FUND FUND
---- ---- ----
<S> <C> <C> <C>
Management fees.................................... 0.75% 0.70% 0.75%
12b-1 fees......................................... 0.00 0.00 0.00
Other expenses..................................... 0.38 0.20 0.19
---- ---- ----
Total estimated operating expenses................. 1.13% 0.90% 0.94%
==== ==== ====
</TABLE>
EXAMPLE OF EFFECT OF FUND EXPENSES
An investor would directly or indirectly pay the following expenses on a
$1,000 investment in each Fund, assuming a 5% annual return:
<TABLE>
<CAPTION>
ONE THREE FIVE TEN
YEAR YEARS YEARS YEARS
--- --- --- ----
<S> <C> <C> <C> <C>
ATLAS FUND................................. $12 $36 $62 $137
DIVIDEND GROWTH FUND....................... $ 9 $29 $50 $111
GROWTH FUND................................ $10 $30 $52 $115
</TABLE>
This Example assumes that all dividends and other distributions 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
Securities and Exchange Commission ("SEC") applicable to all mutual funds; the
assumed 5% annual return is not a prediction of, and does not represent, the
projected or actual performance of the Class C shares of any Fund.
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES, AND A FUND'S ACTUAL EXPENSES MAY BE MORE OR LESS THAN THOSE SHOWN. The
actual expenses attributable to a Fund's Class C shares 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.
2
<PAGE> 5
FINANCIAL HIGHLIGHTS
The table below provides selected per share data and ratios for one Class C
share of each Fund for the periods shown. This information is supplemented by
the financial statements and accompanying notes appearing in each Fund's Annual
Report to Shareholders for the fiscal year ended August 31, 1994, which are
incorporated by reference into the Statement of Additional Information. Further
information about the performance of each Fund is also included in the Annual
Report to Shareholders, which may be obtained without charge. The financial
statements and notes, as well as the information in the tables appearing below,
have been audited by Ernst & Young LLP, independent auditors, whose report
thereon is included in the Annual Report to Shareholders.
<TABLE>
<CAPTION>
CLASS C
----------------------------------------------------------------------------------------------
DIVIDEND GROWTH FUND
-----------------------------
FOR THE
PERIOD
ATLAS FUND FEBRUARY GROWTH FUND
---------------------------- 12, -----------------------------
FOR THE YEARS 1992+
FOR THE YEARS ENDED AUGUST ENDED TO FOR THE YEARS ENDED AUGUST
31,++ AUGUST 31, AUGUST 31,++
---------------------------- ------------------ 31, -----------------------------
1994 1993 1992 1994 1993 1992 1994 1993 1992
------- ------- ------ ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period............... $ 15.64 $ 12.73 $13.62 $ 20.86 $ 20.48 $ 20.95 $ 20.71 $ 16.83 $ 17.50
------- ------- ------ ------- ------- ------- ------- ------- -------
Income (loss) from
investment operations:
Net investment
income.............. 0.04 0.09 0.19 0.33 0.33 0.16 0.03 0.08 0.05
Net realized and
unrealized gains
(losses) from
investment
transactions........ 1.49 2.82 (0.86) (0.40) 0.37 (0.49) 0.55 4.42 (0.11)
------- ------- ------ ------- ------- ------- ------- ------- -------
Total income (loss) from
investment operations... 1.53 2.91 (0.67) (0.07) 0.70 (0.33) 0.58 4.50 (0.06)
------- ------- ------ ------- ------- ------- ------- ------- -------
Less dividends and
distributions:
Dividends from net
investment income... (0.08) -- (0.22) (0.34) (0.32) (0.14) -- -- (0.01)
Distributions from net
realized gains on
investments and
foreign currency
transactions........ (0.68) -- -- (0.03) -- -- (1.07) (0.62) (0.60)
------- ------- ------ ------- ------- ------- ------- ------- -------
Total dividends and
distributions....... (0.76) -- (0.22) (0.37) (0.32) (0.14) (1.07) (0.62) (0.61)
------- ------- ------ ------- ------- ------- ------- ------- -------
Net asset value, end of
period.................. $ 16.41 $ 15.64 $12.73 $ 20.42 $ 20.86 $ 20.48 $ 20.22 $ 20.71 $ 16.83
======= ======= ====== ======= ======= ======= ======= ======= =======
Total Return(1)........... 9.59% 22.86% (5.10)% (0.31)% 3.44% (1.15)% 2.67% 27.26% (0.52)%
======= ======= ====== ======= ======= ======= ======= ======= =======
Ratios/Supplemental data:
Net assets, end of
period (000's)...... $38,912 $16,265 $6,327 $14,690 $17,005 $10,560 $30,521 $20,706 $11,581
Ratio of expenses to
average net
assets.............. 1.13% 1.10% 1.45% 0.90% 0.86% 0.93%* 0.94% 0.95% 1.12%
Ratio of net
investment income to
average net
assets.............. 0.40% 0.87% 0.93% 1.60% 1.62% 1.56%* 0.40% 0.60% 0.38%
Portfolio turnover.... 176.16% 258.05% 80.14% 94.32% 36.52% 15.57% 24.41% 35.81% 32.49%
</TABLE>
- ---------------
* Annualized.
+ Commencement of offering of shares.
++ A per share breakdown for Class C shares has been omitted for the period
August 25, 1991 (commencement of offering of shares) to August 31, 1991 due
to immaterial amounts.
(1) Total return is calculated assuming a $1,000 investment on the first day of
each period reported, reinvestment of all dividends and capital gain
distributions at net asset value on the payable date, and a sale at net
asset value on the last day of each period reported. Total return
information for periods less than one year are not annualized.
3
<PAGE> 6
INVESTMENT OBJECTIVES AND POLICIES
INVESTMENT OBJECTIVES AND PRIMARY INVESTMENTS
The investment objective of ATLAS FUND is to provide long-term capital
appreciation. Atlas Fund seeks to achieve this objective by investing primarily
in common stocks of issuers based in the United States, Europe, Japan and the
Pacific Basin.
The investment objective of DIVIDEND GROWTH FUND is to provide current
income and capital growth. Dividend Growth Fund seeks to achieve this objective
by investing primarily in dividend-paying common stocks of large, well
established companies with the potential for increasing dividends.
The investment objective of GROWTH FUND is to provide long-term capital
appreciation. Growth Fund seeks to achieve this objective by investing primarily
in common stocks issued by companies that, in the judgment of its investment
adviser have substantial potential for capital growth.
Mitchell Hutchins Asset Management Inc. ("Mitchell Hutchins") serves as
investment adviser and administrator for each Fund. Mitchell Hutchins
Institutional Investors Inc. ("Sub-Adviser") serves as sub-adviser for Dividend
Growth Fund.
There can be no assurance that any Fund will achieve its investment
objective. Each Fund's net asset value fluctuates based upon changes in the
value of its portfolio securities. Each Fund's investment objective and certain
investment limitations as described in the Statement of Additional Information
are fundamental policies that may not be changed without shareholder approval.
All other investment policies may be changed by each Trust's board of trustees
without shareholder approval.
ATLAS FUND
Normally, at least 80% of Atlas Fund's assets is invested in common stocks
and securities convertible into common stocks. In managing Atlas Fund's
portfolio, Mitchell Hutchins seeks to identify those companies, both in the
United States and abroad, likely to benefit from long-term trends and shifting
trade patterns as they develop in the global economy. Atlas Fund's investment
policies are designed to enable it to capitalize on unique investment
opportunities presented throughout the world and in international financial
markets influenced by the increasing interdependency of economic cycles and
currency exchange rates.
For example, according to Morgan Stanley Capital International, as of
November 30, 1994 approximately 63% of the world's equity securities were
denominated in a currency other than the U.S. dollar. Over the past ten years,
certain foreign equity markets have provided higher investment returns than the
U.S. equity market. These returns reflect interest rates and other market
conditions prevailing in those countries, particularly gains and losses in the
denominated currencies. Year-to-year fluctuations in certain markets have been
significant, and returns for various markets have sometimes been negative.
Mitchell Hutchins believes that, over time, investing in a combination of U.S.
and foreign equity securities is less risky than investing solely in foreign
securities and provides more opportunities for high total return than investing
solely in U.S. securities.
Atlas Fund's substantial foreign investments involve special risks,
including possible expropriation, confiscatory taxation, withholding taxes on
dividends and interest, limits on the use or transfer of Fund assets, political
or social instability and diplomatic developments. Foreign economies may differ
favorably or unfavorably from the U.S. economy in various respects, and many
foreign securities are less liquid and their prices more volatile than
comparable U.S. secu-
4
<PAGE> 7
rities. Although Atlas Fund generally invests only in securities traded on
recognized exchanges or in over-the-counter markets, foreign securities at times
may be difficult to liquidate rapidly without adverse price effects. Legal
remedies for defaults and disputes may have to be pursued in foreign courts,
whose procedures differ substantially from those of U.S. courts.
Because foreign securities ordinarily are denominated in currencies other
than the U.S. dollar (as are some securities of U.S. issuers), changes in
foreign currency exchange rates will affect Atlas Fund's net asset value, the
value of dividends and interest earned, gains and losses realized on the sale of
securities and net investment income and capital gain, if any, to be distributed
to shareholders by Atlas Fund. If the value of a foreign currency rises against
the U.S. dollar, the value of Atlas Fund's assets denominated in that currency
will increase; correspondingly, if the value of a foreign currency declines
against the U.S. dollar, the value of Atlas Fund's assets denominated in that
currency will decrease. The exchange rates between the U.S. dollar and other
currencies are determined by supply and demand in the currency exchange markets,
international balances of payments, speculation and other economic and political
conditions. In addition, some foreign currency values may be volatile and there
is the possibility of governmental controls on currency exchange or governmental
intervention in the currency markets. Foreign security trading practices,
including those involving securities settlement where Fund assets may be
released prior to receipt of payment, may expose the Fund to increased risk in
the event of a failed trade or the insolvency of a foreign broker-dealer. Any of
these factors could adversely affect Atlas Fund.
The costs attributable to foreign investing that Atlas Fund must bear
frequently are higher than those attributable to domestic investing. For
example, the costs of maintaining custody of securities in foreign countries
exceed custodian costs related to domestic securities.
Atlas Fund may enter into forward currency contracts to set the rate at
which currency exchanges will be made for specific contemplated transactions.
Atlas Fund might also enter into forward currency contracts for the purchase or
sale of a specified currency at a specified future date either with respect to
contemplated transactions or with respect to portfolio positions. For example,
when Mitchell Hutchins anticipates making a currency exchange transaction in
connection with the purchase or sale of a security, Atlas Fund may enter into a
forward contract in order to set the exchange rate at which the transaction will
be made. Atlas Fund also may enter into a forward contract to sell an amount of
a foreign currency approximating the value of some or all of its securities
denominated in such currency. Atlas Fund may use forward contracts in one
currency or a basket of currencies to hedge against fluctuations in the value of
another currency when Mitchell Hutchins anticipates there will be a correlation
between the two and may use forward currency contracts to shift the Fund's
exposure to foreign currency fluctuations from one country to another. The
purpose of entering into these contracts is to minimize the risk to Atlas Fund
from adverse changes in the relationship between the U.S. dollar and foreign
currencies.
Atlas Fund may also write covered put and call options and purchase put and
call options on foreign currencies to hedge against movements in currency
exchange rates. For the same purpose, Atlas Fund may purchase and sell foreign
currency futures contracts and write covered put and call options and purchase
put and call options on such contracts. The risks of these hedging strategies
are similar to those of the other hedging strategies in which Atlas Fund may
engage, as described under "Other Investment Policies and Risk Factors--Hedging
Strategies." See the Statement of Additional
5
<PAGE> 8
Information for more information on currency hedging strategies.
Atlas Fund may invest up to 20% of its assets in non-convertible debt
securities of both domestic and foreign issuers, as well as in obligations
issued or guaranteed by the U.S. or foreign governments, their agencies or
instrumentalities. Atlas Fund will not invest more than 5% of its assets in debt
securities rated lower than investment grade. See "Other Investment Policies and
Risk Factors--Debt Securities."
DIVIDEND GROWTH FUND
Mitchell Hutchins and the Sub-Adviser believe that companies with a history
of consistently increasing dividends have the potential for increased dividends
in the future. Under normal circumstances, at least 65% of Dividend Growth
Fund's total assets is invested in common stocks of issuers that, at the time of
purchase, meet the following criteria:
--at least 5% compound annual growth in earnings per share over the past
five years;
--at least 5% compound annual growth in dividends per common share over the
past five years; and
--an increased dividend per common share in each of the past five years.
If a common stock owned by Dividend Growth Fund ceases to meet these criteria
after purchase, the Sub-Adviser will consider selling the stock, but is not
required to do so. Over the past twenty years, the universe of issuers that have
met these criteria has varied between 100 and 300 companies.
Dividend Growth Fund may invest up to 35% of its total assets in common
stocks not meeting all the above criteria, as well as convertible debt
securities, convertible preferred stocks, U.S. government securities, investment
grade corporate debt securities and money market instruments. See "Other
Investment Policies and Risk Factors--Debt Securities." Dividend Growth Fund
will invest in instruments other than common stocks when, in the opinion of the
Sub-Adviser, their projected total return is equal to or greater than that of
common stocks or when such holdings might reduce the volatility of the Fund's
portfolio.
Dividend Growth Fund purchases common stocks only of issuers whose market
capitalizations exceed $300 million. Over the past 65 years, the total return of
equity investments, as measured by the Standard & Poor's 500 Composite Stock
Price Index ("S&P 500"), has exceeded the inflation rate, as measured by the
Consumer Price Index, as well as total return on long-term Treasury bonds,
long-term corporate bonds and short-term Treasury bills. However, year-to-year
fluctuations in each of these indexes and instruments have been significant, and
total return for the S&P 500 for some periods has been negative. Furthermore,
there can be no assurance that this trend will continue.
GROWTH FUND
In selecting stocks for investment by Growth Fund, Mitchell Hutchins
considers all those factors it believes affect potential capital appreciation,
including an issuer's current and projected revenues, earnings, cash flow and
assets, as well as general market conditions in relevant industries. Under
normal circumstances, at least 65% of Growth Fund's assets is invested in common
stocks. Growth Fund may invest up to 35%, and for temporary purposes more than
35%, of its assets in U.S. government securities and convertible and
non-convertible corporate debt securities. In seeking capital appreciation, the
Fund would invest in debt securities when, for instance, Mitchell Hutchins
anticipates that market interest rates may decline or credit factors or ratings
affecting particular issues may improve. Growth Fund may invest in corporate
debt securities rated lower
6
<PAGE> 9
than investment grade. See "Other Investment Policies and Risk Factors--Debt
Securities."
OTHER INVESTMENT POLICIES AND RISK FACTORS
DEBT SECURITIES. All the Funds are permitted to purchase investment grade
corporate debt securities. Securities rated BBB by Standard & Poor's Ratings
Group ("S&P"), Baa by Moody's Investor Services, Inc. ("Moody's") or comparably
rated by another nationally recognized statistical rating organization ("NRSRO")
are investment grade but Moody's considers securities rated Baa to have
speculative characteristics. Changes in economic conditions or other
circumstances are more likely to lead to a weakened capacity for such securities
to make principal and interest payments than is the case for higher-rated debt
securities. Atlas Fund and Growth Fund are also permitted to purchase debt
securities rated as low as B+ by S&P, B1 by Moody's or comparably rated by
another NRSRO, with Atlas Fund limited in such investments to 5%, and Growth
Fund limited to 35%, of total assets. These securities are deemed by those
NRSROs to be predominantly speculative with respect to the issuer's capacity to
pay interest and repay principal and may involve major risk exposure to adverse
conditions. Such securities are commonly referred to as "junk bonds." Each Fund
is also permitted to purchase debt securities that are not rated by S&P, Moody's
or another NRSRO but that Mitchell Hutchins or (for Dividend Growth Fund) the
Sub-Adviser determines to be of comparable quality to that of rated securities
in which the Fund may invest. Such securities are included in the computation of
any percentage limitations applicable to the comparable rated securities. See
the Statement of Additional Information for more information about S&P and
Moody's ratings.
Ratings of debt securities represent the NRSROs' opinions regarding their
quality, are not a guarantee of quality and may be reduced after the Fund has
acquired the security. Mitchell Hutchins or (for Dividend Growth Fund) the
Sub-Adviser will consider such an event in determining whether the Fund should
continue to hold the security but is not required to dispose of it. Credit
ratings attempt to evaluate the safety of principal and interest payments and do
not reflect an assessment of the volatility of the security's market value or
the liquidity of an investment in the security. Also, NRSROs may fail to make
timely changes in credit ratings in response to subsequent events, so that an
issuer's current financial condition may be better or worse than the rating
indicates.
Lower rated debt securities generally offer a higher current yield than
that available for higher grade issues, but they involve higher risks, in that
they are especially subject to adverse changes in general economic conditions
and in the industries in which the issuers are engaged, to changes in the
financial condition of the issuers and to price fluctuations in response to
changes in interest rates. During periods of economic downturn or rising
interest rates, highly leveraged issuers may experience financial stress which
could adversely affect their ability to make payments of interest and principal
and increase the possibility of default. In addition, such issuers may not have
more traditional methods of financing available to them, and may be unable to
repay debt at maturity by refinancing. The risk of loss due to default by such
issuers is significantly greater because such securities frequently are
unsecured and subordinated to the prior payment of senior indebtedness.
The market for lower rated debt securities has expanded rapidly in recent
years, and its growth paralleled a long economic expansion. In the past, the
prices of many lower rated debt securities declined substantially, reflecting an
expectation that many issuers of such securities might experience financial
difficulties. As a result, the yields on lower rated debt securities rose
dramatically. However, such higher yields
7
<PAGE> 10
did not reflect the value of the income stream that holders of such securities
expected, but rather the risk that holders of such securities could lose a
substantial portion of their value as a result of the issuers' financial
restructuring or default. There can be no assurance that such declines will not
recur. The market for lower-rated debt issues generally is thinner and less
active than that for higher quality securities, which may limit a Fund's ability
to sell such securities at fair value in response to changes in the economy or
financial markets. Adverse publicity and investor perceptions, whether or not
based on fundamental analysis, may also decrease the values and liquidity of
lower rated securities, especially in a thinly traded market.
U.S. government securities in which the Funds may invest include direct
obligations of the U.S. Treasury as well as obligations of U.S. government
agencies and instrumentalities backed by the U.S. Treasury or primarily or
solely by the credit of the issuer.
DOLLAR-DENOMINATED FOREIGN SECURITIES. Dividend Growth Fund and Growth Fund
each may invest up to 25% of its total assets in U.S. dollar-denominated
securities of foreign issuers that are traded on recognized U.S. exchanges or in
the U.S. over-the-counter ("OTC") market. Atlas Fund may invest in such
securities without limitation. These investments may involve special risks,
arising both from political and economic developments abroad and differences
between foreign and U.S regulatory systems. Foreign securities may be less
liquid and their prices more volatile than comparable U.S. securities. The
prices of these securities may also be affected by fluctuations in the values of
foreign currencies.
HEDGING STRATEGIES. Each Fund may attempt to reduce the overall risk of
its investments (hedge) by using options (both exchange-traded and OTC) and
futures contracts. A Fund's ability to use these instruments may be limited by
market conditions, regulatory limits and tax considerations. The Appendix to
this Prospectus describes the hedging instruments a Fund may use. The Statement
of Additional Information contains further information on these strategies.
The Funds may write (sell) covered put and call options or buy put and call
options on securities in which they may invest and on stock indices. In
addition, the Funds may buy and sell stock index futures contracts and interest
rate futures contracts and may write covered put and call options or buy put and
call options on such futures contracts. Because each Fund intends to use options
and futures for hedging purposes, each Fund may enter into options and futures
contracts that approximate (but do not exceed) the full value of its portfolio.
The Funds might not employ any of the strategies described above, and there
can be no assurance that any strategy used will succeed. If Mitchell Hutchins or
(for Dividend Growth Fund) the Sub-Adviser incorrectly forecasts interest rates,
market values or other economic factors in utilizing a hedging strategy for a
Fund, the Fund would be in a better position had it not hedged at all. The use
of these strategies involves certain special risks, including (1) the fact that
skills needed to use hedging instruments are different from those needed to
select a Fund's securities, (2) possible imperfect correlation, or even no
correlation, between price movements of hedging instruments and price movements
of the investments being hedged, (3) the fact that, while hedging strategies can
reduce the risk of loss, they can also reduce the opportunity for gain, or even
result in losses, by offsetting favorable price movements in hedged investments
and (4) the possible inability of a Fund to purchase or sell a portfolio
security at a time that otherwise would be favorable for it to do so, or the
possible need for a Fund to sell a portfolio security at a disadvantageous time,
due to the need for a Fund to maintain "cover" or to segregate securities in
connection with hedging
8
<PAGE> 11
transactions and the possible inability of such Fund to close out or to
liquidate its hedged position.
New financial products and risk management techniques continue to be
developed. Each Fund may use these instruments and techniques to the extent
consistent with its investment objective and regulatory and federal tax
considerations.
ILLIQUID SECURITIES. Each Fund may invest up to 10% of its net assets in
illiquid securities, including certain cover for OTC options and securities
whose disposition is restricted under the federal securities laws (other than
"Rule 144A securities" Mitchell Hutchins or (for Dividend Growth Fund) the
Sub-Adviser has determined to be liquid under procedures approved by the Trust's
trustees). Rule 144A establishes a "safe harbor" from the registration
requirements of the Securities Act of 1933. 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. An insufficient number of
qualified institutional buyers interested in purchasing Rule 144A-eligible
restricted securities held by a 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.
PORTFOLIO TURNOVER. Each Fund's portfolio turnover rate may vary greatly
from year to year and will not be a limiting factor when Mitchell Hutchins or
(for Dividend Growth Fund) the Sub-Adviser deems portfolio changes appropriate.
A higher turnover rate for (100% or more) a particular Fund will involve
correspondingly greater transaction costs, which will be borne directly by that
Fund, and may increase the potential for taxable short-term capital gains.
OTHER INFORMATION. When Mitchell Hutchins or (for Dividend Growth Fund)
the Sub-Adviser believes unusual circumstances warrant a defensive posture, each
Fund temporarily may commit all or a portion of its assets to cash or money
market instruments, including repurchase agreements. In the case of Atlas Fund,
such temporary investments may include foreign currencies and money market
instruments issued by U.S. or foreign issuers. The Funds may also engage in
short sales of securities "against the box" to defer realization of gains or
losses for tax or other purposes. Each Fund may borrow money for temporary
purposes, but not in excess of 10% of its total assets.
PURCHASES AND REDEMPTIONS
The Class C shares of the Funds described in this Prospectus currently are
offered for sale only to the trustee of the PaineWebber Savings Investment Plan
("PW SIP"), a defined contribution plan sponsored by Paine Webber Group Inc.
("PW Group"). Such shares may be purchased or redeemed only by such trustee on
behalf of the PW SIP at net asset value without any sales or redemption charge.
The trustee of the PW SIP purchases and redeems Fund shares to implement
the investment choices of individual plan participants with respect to their PW
SIP contributions. INDIVIDUAL PLAN PARTICIPANTS SHOULD CONSULT THE PLAN
INFORMATION STATEMENT AND SUMMARY PLAN DESCRIPTION OF THE PW SIP (COLLECTIVELY
THE "PLAN DOCUMENTS") FOR A DESCRIPTION OF THE PROCEDURES AND LIMITATIONS
APPLICABLE TO MAKING AND CHANGING INVESTMENT CHOICES. Copies of the Plan
Documents are available from the PaineWebber Incorporated Benefits Department,
1000 Harbor Boulevard, 10th Floor, Weehawken, New Jersey 07087 (telephone 1-201-
902-4444).
As described in the Plan Documents, the average net asset value per share
at which shares of a Fund are purchased or redeemed by the
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trustee of the PW SIP for the accounts of individual participants might be more
or less than the net asset value per share prevailing at the time that such
participants made their investment choices or made their contributions to the PW
SIP.
Purchase and redemption orders by the trustee of the PW SIP for shares of a
Fund will be effected at the net asset value per share next computed (see
"Valuation of Shares") after the order is received by the Funds' transfer agent,
PFPC Inc. ("Transfer Agent"). Each Fund and Mitchell Hutchins reserve the right
to reject any purchase order and to suspend the offering of Fund shares for a
period of time.
DIVIDENDS AND TAXES
DIVIDENDS. Dividend Growth Fund pays quarterly dividends from net
investment income; Atlas Fund and Growth Fund pay dividends from such income
annually. 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) and net short-term capital gain, if any. Atlas Fund also
distributes any net realized gains from foreign currency transactions with its
annual dividend. Each Fund may make additional distributions if necessary to
avoid a 4% excise tax on certain undistributed income and capital gain.
Each Fund's dividends and other distributions are paid in additional Fund
shares at net asset value unless the Transfer Agent is instructed otherwise.
TAXES. Each 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, net short-term capital
gain and, for Atlas Fund, net gains from certain foreign currency transactions)
and net capital gain that is distributed to its shareholders.
The Class C shares of the Funds described in this Prospectus currently are
offered for sale only to the trustee of the PW SIP acting on behalf of such
plan. As a qualified profit-sharing plan, the PW SIP generally pays no federal
income tax. Individual participants in the PW SIP should consult the Plan
Documents and their own tax advisers for information on the tax consequences
associated with participating in the PW SIP.
VALUATION OF SHARES
The net asset value of each Fund's shares fluctuates and is determined as
of the close of regular trading on the New York Stock Exchange Inc. ("NYSE")
(currently 4:00 p.m., eastern time) each Business Day. A "Business Day" is any
day, Monday through Friday, on which the NYSE is open for business. Each Fund's
net asset value per share is computed by dividing the value of the securities
held by the Fund plus any cash or other assets minus all liabilities by the
total number of Fund shares outstanding.
Each Fund values its assets based on their current market value where
market quotations are readily available. If such value cannot be established,
assets are valued at fair value as determined in good faith by or under the
direction of each Trust's board of trustees. The amortized cost method of
valuation generally is used to value debt obligations with 60 days or less
remaining to maturity, unless the board of trustees determines that this does
not represent fair value. Investments of Atlas Fund denominated in a foreign
currency are valued daily in U.S. dollars based on the then-prevailing exchange
rate. It should be recognized that judgment plays a greater role in valuing
lower rated debt securities in which Growth Fund and Atlas Fund may invest,
because there is less reliable, objective data available.
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MANAGEMENT
The board of trustees for each Trust, as part of its overall management
responsibility, oversees various organizations responsible for the Fund's
day-to-day management. Mitchell Hutchins, investment adviser and administrator
of each Fund, makes and implements all investment decisions and supervises all
aspects of the operations of Atlas Fund and Growth Fund. Mitchell Hutchins
supervises the activities of the Sub-Adviser for the Dividend Growth Fund and
supervises all other aspects of that Fund's operations. The Sub-Adviser makes
and implements all investment decisions for Dividend Growth Fund. Brokerage
transactions for the Funds may be conducted through PaineWebber or its
affiliates in accordance with procedures adopted by each Trust's board of
trustees.
Mitchell Hutchins receives a monthly fee for these services, at the annual
rate of 0.75% of average daily net assets for Atlas Fund and Growth Fund and
0.70% of average daily net assets for Dividend Growth Fund. The advisory fees
for Atlas Fund and Growth Fund are higher than those paid by most investment
companies to their advisers, but Mitchell Hutchins believes the fees are
comparable to the advisory fees paid by other funds with similar investment
objectives and policies. Mitchell Hutchins (not Dividend Growth Fund) pays the
Sub-Adviser a fee for its sub-investment advisory services in an amount equal to
0.25% of Dividend Growth Fund's average daily net assets.
Each Fund incurs other expenses and, for the fiscal year ended August 31,
1994, each Fund's total expenses for its Class C shares, stated as a percentage
of net assets, were as follows: 1.13% for Atlas Fund, 0.90% for Dividend Growth
Fund and 0.94% for Growth Fund. See "Fund Expenses."
Mitchell Hutchins is located at 1285 Avenue of the Americas, New York, New
York 10019. It is a wholly owned subsidiary of PaineWebber Incorporated
("PaineWebber"), which is in turn wholly owned by PW Group, the sponsor of the
PW SIP and a publicly owned financial services holding company. As of November
30, 1994, Mitchell Hutchins was adviser or a sub-adviser to 29 investment
companies with 55 separate portfolios and aggregate assets of approximately $23
billion.
The Sub-Adviser is a wholly owned subsidiary of Mitchell Hutchins and also
is located at 1285 Avenue of the Americas, New York, New York 10019. The
Sub-Adviser provides asset management services to corporations, mutual funds,
governmental organizations, employee benefit plans, insurance funds, endowments
and foundations, and, as of November 30, 1994, managed approximately $9.2
billion in assets.
Frank Jennings has been primarily responsible for the day-to-day portfolio
management of Atlas Fund since December 1992. Mr. Jennings is a vice president
of PaineWebber Atlas Fund and a managing director of global equities for
Mitchell Hutchins. Prior to December 1992, Mr. Jennings served as managing
director of Global Investments of AIG Global Investors.
Gyanendra (Joe) Joshi has been primarily responsible for the day-to-day
portfolio management of Dividend Growth Fund since May 1994. Mr. Joshi has been
a Managing Director, Equity Investments, of the Sub-Adviser since 1989.
Ellen R. Harris has been primarily responsible for the day-to-day portfolio
management of Growth Fund since its inception. Ms. Harris is a vice president of
PaineWebber Olympus Fund and chief domestic equity strategist, a managing
director and chief investment officer--domestic of Mitchell Hutchins. Prior to
joining Mitchell Hutchins in 1983 as a portfolio manager, Ms. Harris served as a
vice president and portfolio manager at American General Capital Management (now
American Capital Management).
Other members of Mitchell Hutchins' international and domestic equities and
fixed income
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groups provide input on market outlook, interest rate forecasts and other
considerations pertaining to global and domestic equity and fixed income
investments.
DISTRIBUTION ARRANGEMENTS. Mitchell Hutchins is the distributor of shares
of the Funds and has appointed PaineWebber as the exclusive dealer for the sale
of those shares.
PERFORMANCE INFORMATION
Each Fund performs a standardized computation of annualized total return
and may show this return in advertisements or promotional materials.
Standardized return shows the change in value of an investment in the Fund as a
steady compound annual rate of return. Actual year-by-year returns fluctuate and
may be higher or lower than standardized return. One-, five- and ten-year
periods will be shown, unless the Class has been in existence for a shorter
period. Total return calculations assume reinvestment of dividends and other
distributions.
Each Fund may use other total return presentations in conjunction with
standardized return. These may cover the same or different periods than those
used for standardized return and may include cumulative returns, average annual
rates, actual year-by-year rates or any combination thereof.
Each Fund also may use standardized return and, in conjunction therewith,
non-standardized return, of its Class A, Class B and Class D shares in
performance advertisements. Advertised returns for one Class of a Fund's shares
may include periods during which that Class was outstanding but others were not.
Standardized returns of the other Classes of Fund shares will reflect the higher
ongoing expenses attributable to those Classes, as well as the deduction of any
applicable initial or contingent deferred sales charge. Non-standardized return
of Class A or Class B shares will reflect such higher ongoing expenses but not
the sales charges, and would be lower if the sales charges were included.
Total return information reflects past performance and does not necessarily
indicate future results. Investment return and principal values will fluctuate,
and proceeds upon redemption may be more or less than a shareholder's cost.
GENERAL INFORMATION
ORGANIZATION. Each Fund is organized as a series of a Massachusetts
business trust (each a "Trust"), which is registered with the SEC as an open-end
management investment company. The three Trusts were organized under separate
Declarations of Trust, each dated October 31, 1986.
The trustees have authority to issue an unlimited number of shares of
beneficial interest of separate series, par value $.001 per share, of each
Trust. Although each Fund is offering only its own shares, it is possible that a
Fund could become liable for a misstatement in this Prospectus about another
Fund. The trustees of the Trusts have considered this factor in approving the
use of a combined Prospectus.
In addition to Growth Fund, shares of one other series of PaineWebber
Olympus Fund have been authorized.
The shares of beneficial interest of each Fund are divided into four
Classes, designated Class A shares, Class B shares, Class C shares and Class D
shares. Each Class represents interests in the same assets of each Fund. The
Classes differ as follows: (1) Class A, Class B and Class D shares, unlike Class
C shares, bear certain fees under plans of distribution and have exclusive
voting rights on matters pertaining to those plans, (2) Class A shares are
subject to an initial sales charge, (3) Class B shares bear ongoing distribution
fees, are subject to a contingent deferred sales charge upon certain redemptions
and will automatically convert to Class A shares
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approximately six years after issuance, (4) Class D shares are subject to
neither an initial nor a contingent deferred sales charge, bear ongoing
distribution fees and do not convert into another Class, (5) Class C shares are
subject to neither an initial or contingent deferred sales charge nor ongoing
service or distribution fees and (6) each Class may bear differing amounts of
certain Class-specific expenses. The board of trustees of each Trust does not
anticipate that there will be any conflicts among the interests of the holders
of each Class of Fund shares. On an ongoing basis, each board of trustees will
consider whether any such conflict exists and, if so, take appropriate action.
The Trusts do not hold annual shareholder meetings. There normally will be
no meetings of shareholders to elect trustees unless fewer than a majority of
the trustees of a Trust holding office have been elected by shareholders.
Shareholders of record holding at least two-thirds of the outstanding shares of
a Trust may remove a trustee by votes cast in person or by proxy at a meeting
called for that purpose. The trustees are required to call a meeting of
shareholders for the purpose of voting upon the question of removal of any
trustee when so requested in writing by the shareholders of record of not less
than 10% of a Trust's outstanding shares. Each share of a Fund has equal voting
rights, except as noted above. Each share of a Fund is entitled to participate
equally in dividends and distributions and the proceeds of any liquidation,
except that, due to the differing expenses borne by the four Classes, dividends
and liquidation proceeds of Class B and Class D shares are likely to be lower
for the other Classes than for Class C shares.
To avoid additional operating costs and for investor convenience, share
certificates are not issued. Ownership of shares of each Fund is recorded on a
stock register by the Transfer Agent and shareholders have the same rights of
ownership with respect to such 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 for Dividend
Growth Fund and Growth Fund. Brown Brothers Harriman & Co., 40 Water Street,
Boston, Massachusetts 02109, is custodian for Atlas Fund and employs foreign
sub-custodians to provide custody of the Fund's foreign assets. PFPC Inc., a
subsidiary of PNC Bank, National Association, whose principal address is 400
Bellevue Parkway, Wilmington, Delaware 19809, is the Funds' transfer and
dividend disbursing agent.
CONFIRMATIONS AND STATEMENTS. The PW SIP receives confirmations of
purchases and redemptions of shares of the Funds and quarterly statements from
the Transfer Agent. The PW SIP also receives audited annual and unaudited
semi-annual financial statements of the Funds. PW SIP participants receive
periodic information about their plan participation from the PW SIP plan
administrator.
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APPENDIX
The Funds may use the hedging instruments described below except only Atlas
Fund may use foreign currency options, futures contracts and forward contracts:
OPTIONS ON EQUITY AND DEBT SECURITIES AND FOREIGN CURRENCIES--A call
option is a short-term contract pursuant to which the purchaser of the
option, in return for a premium, has the right to buy the security or
currency underlying the option at a specified price at any time during the
term of the option. The writer of the call option, who receives the
premium, has the obligation, upon exercise of the option during the option
term, to deliver the underlying security or currency against payment of the
exercise price. A put option is a similar contract that gives its
purchaser, in return for a premium, the right to sell the underlying
security or currency at a specified price during the option term. The
writer of the put option, who receives the premium, has the obligation,
upon the exercise of the option during the option term, to buy the
underlying security or currency at the exercise price.
OPTIONS ON STOCK INDEXES--A stock index assigns relative values to the
stocks included in the index and fluctuates with changes in the market
values of those stocks. A stock index option operates in the same way as a
more traditional stock option, except that exercise of a stock index option
is effected with cash payment and does not involve delivery of securities.
Thus, upon exercise of a stock index option, the purchaser will realize,
and the writer will pay, an amount based on the difference between the
exercise price and the closing price of the stock index.
STOCK INDEX FUTURES CONTRACTS--A stock index futures contract is a
bilateral agreement pursuant to which one party agrees to accept, and the
other party agrees to make, delivery of an amount of cash equal to a
specified dollar amount times the difference between the stock index value
at the close of trading of the contract and the price at which the futures
contract is originally struck. No physical delivery of the stocks
comprising the index is made. Generally, contracts are closed out prior to
the expiration date of the contract.
INTEREST RATE AND FOREIGN CURRENCY FUTURES CONTRACTS--Interest rate
and foreign currency futures contracts are bilateral agreements pursuant to
which one party agrees to make, and the other party agrees to accept,
delivery of a specified type of debt security or currency at a specified
future time and at a specified price. Although such futures contracts by
their terms call for actual delivery or acceptance of debt securities or
currency, in most cases the contracts are closed out before the settlement
date without the making or taking of delivery.
OPTIONS ON FUTURES CONTRACTS--Options on futures contracts are similar
to options on securities or currency, except that an option on a futures
contract gives the purchaser the right, in return for the premium, to
assume a position in a futures contract (a long position if the option is a
call and a short position if the option is a put), rather than to purchase
or sell a security or currency, at a specified price at any time during the
option term. Upon exercise of the option, the delivery of the futures
position to the holder of the option will be accompanied by delivery of the
accumulated balance that represents the amount by which the market price of
the futures contract exceeds, in the case of a call, or is less than, in
the case of a put, the exercise price of the option on the future. The
writer of an option, upon exercise, will assume a short position in the
case of a call and a long position in the case of a put.
FORWARD CURRENCY CONTRACTS--A forward currency contract involves an
obligation to purchase or sell a specific currency at a specified future
date, which may be any fixed number of days from the contract date agreed
upon by the parties, at a price set at the time the contract is entered
into.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Fund Expenses........................... 2
Financial Highlights.................... 3
Investment Objectives and Policies...... 4
Purchases and Redemptions............... 9
Dividends and Taxes..................... 10
Valuation of Shares..................... 10
Management.............................. 11
Performance Information................. 12
General Information..................... 12
Appendix................................ 14
</TABLE>
(C)1995 PaineWebber Incorporated
(LOGO) Recycled
Paper
- - PAINEWEBBER
ATLAS GLOBAL GROWTH FUND
DIVIDEND GROWTH FUND
GROWTH FUND
Class C Shares
PROSPECTUS
JANUARY 1, 1995
