<PAGE>
PAINEWEBBER ASIA PACIFIC GROWTH FUND
June 16, 1997
Dear Shareholder,
We are pleased to report to you on the activity of the PaineWebber Asia Pacific
Growth Fund.
GENERAL MARKET OVERVIEW
- -----------------------
The Asia Pacific stock markets were weak performers during the reporting period,
(March 25, 1997 to April 30, 1997). The March interest rate increase in the
U.S. rattled financial markets around the world. Global investors were
concerned a U.S. economic slowdown, due to rising interest rates, would hurt
demand, economic growth and profits in regional companies. Finally, investors
shunned some Asian markets due to concerns about local real estate markets.
PORTFOLIO REVIEW
- ----------------
On April 30, 1997, the Fund was roughly 82% invested in stocks and 18% in cash.
OUR FAVORITE COUNTRIES
Normally, we would like to discuss holdings that have done particularly well,
or those that are indicative of some specific strategy or outlook. Since we
are still in the process of accumulating shares in many companies, however, we
will focus more on speaking generally about the Asia Pacific countries we
particularly favor.
o Hong Kong (23.3% of total net assets). We have invested a similar portion of
assets in Hong Kong than our benchmark. We think the outlook for corporate
profits is good because the economic recovery in China continues, and easier
monetary policy there has increased consumer demand-positive news for Hong Kong
companies that supply goods to the mainland. Hong Kong investors have also
reacted positively to the U.S. Federal Reserve's decision not to raise interest
rates in May.
o Singapore (10.5% of total net assets). Although this market was recently
roiled by concerns over government changes in the public sector housing policy,
a gradually improving electronics sector has helped stabilize stock prices.
We are optimistic about Singapore stocks, and expect real economic growth of 7%
this year.
o Australia (18.3% of total net assets). This market recently rose on evidence
of a revival in domestic consumer demand. Industrial companies continue to
perform better than natural resources companies. But we think growing demand
from OECD countries will eventually translate to higher prices for the
companies that produce natural resources.
SEMIANNUAL REPORT
PAINEWEBBER ASIA PACIFIC
GROWTH FUND
FUND PROFILE
GOAL:
Long-term capital
appreciation
PORTFOLIO MANAGER:
Schroder Capital
TOTAL NET ASSETS:
$62.9 million
(as of April 30, 1997)
DIVIDEND PAYMENT:
Annually
PAINEWEBBER
ASIA PACIFIC
GROWTH FUND
Top Five Countries*
(% of net assets as of
April 30, 1997)
Hong Kong 23.3%
- -------------------
Australia 18.3%
- -----------------
Malaysia 13.0%
- ----------
Singapore 10.5%
- ---------
Philippines 3.8%
- -----
* Holdings subject to change
<PAGE>
SEMIANNUAL REPORT
PAINEWEBBER
ASIA PACIFIC
GROWTH FUND
Top Ten Holdings*
(% of net assets as of
April 30, 1997)
Broken Hill Propriety Co. Ltd.
2.9%
- ----------------------------
Hutchison Whampoa Ltd.
2.9%
- ----------------------------
HSBC Holdings plc
2.9%
- ----------------------------
Malayan Banking Berhad
2.7%
- -------------------------
Australia & New Zealand
Banking Group Ltd. 2.5%
- ----------------------
United Overseas Bank Ltd.
2.4%
- --------------------
Citic Pacific Ltd.
2.3%
- ------------------
Tenaga Nasional Berhad
2.3%
- ------------------
Singapore Press Holdings Ltd.
2.0%
- ---------------
Woodside Petroleum Ltd.
1.9%
- -------------
* Holdings subject to change
THE EMERGING MARKETS
We hold fewer emerging markets stocks than our benchmark but there are some
countries we currently like:
o India (where interest rates are falling and the outlook for corporate profits
remains bright);
o Indonesia (where the market is underpinned by solid fundamentals and we
expect a rally once the elections are over); and
o Philippines (where we feel low stock prices already reflect the risk of
a real estate crisis and the economic and profit outlook is bright).
Our ultimate objective in managing your investments is to help you
successfully meet your financial goals. We thank you for your continued
support, and welcome any comments or questions you may have.
Sincerely,
/s/ MARGO N. ALEXANDER
- ----------------------
MARGO N. ALEXANDER
President,
Mitchell Hutchins
Asset Management Inc.
/s/ LOUISE CROSET
- ----------------------
LOUISE CROSET
Portfolio Manager,
PaineWebber Asia Pacific
Growth Fund
/s/ HEATHER CRIGHTON
- ----------------------
HEATHER CRIGHTON
Portfolio Manager,
PaineWebber Asia Pacific
Growth Fund
<PAGE>
PAINEWEBBER ASIA PACIFIC GROWTH FUND
PERFORMANCE RESULTS--(unaudited)
<TABLE>
<CAPTION>
NET ASSET VALUE TOTAL RETURN(1)
--------------- ------------------------------
04/30/97 FOR THE PERIOD ENDED 04/30/97+
- -------------- --------------- ------------------------------
<S> <C> <C>
Class A Shares $12.48 (0.16)%
- -------------- --------------- ------------------------------
Class B Shares 12.47 (0.24)
- -------------- --------------- ------------------------------
Class C Shares 12.47 (0.24)
- -------------- --------------- ------------------------------
</TABLE>
PERFORMANCE SUMMARY CLASS A SHARES
<TABLE>
<CAPTION>
NET ASSET VALUE
--------------------
CAPITAL GAINS TOTAL
PERIOD COVERED BEGINNING ENDING DISTRIBUTED DIVIDENDS PAID RETURN(1)
- ----------------- ----------- -------- -------------- -------------- ---------
<S> <C> <C> <C> <C> <C>
03/25/97-04/30/97 $12.50 -- $12.48 -- (0.16)%
- ----------------- ----------- -------- -------------- -------------- ---------
Total: $0.0000 $0.0000
- ----------------- ----------- -------- -------------- -------------- ---------
CUMULATIVE TOTAL RETURN AS OF
04/30/97: (0.16)%
- ----------------- ----------- -------- ----------------------------- ---------
</TABLE>
PERFORMANCE SUMMARY CLASS B SHARES
<TABLE>
<CAPTION>
NET ASSET VALUE
--------------------
CAPITAL GAINS TOTAL
PERIOD COVERED BEGINNING ENDING DISTRIBUTED DIVIDENDS PAID RETURN(1)
- ----------------- ----------- -------- -------------- -------------- ---------
<S> <C> <C> <C> <C> <C>
03/25/97-04/30/97 $12.50 -- $12.47 -- (0.24)%
- ----------------- ----------- -------- -------------- -------------- ---------
Total: $0.0000 $0.0000
- ----------------- ----------- -------- -------------- -------------- ---------
CUMULATIVE TOTAL RETURN AS OF
04/30/97: (0.24)%
- ----------------- ----------- -------- ----------------------------- ---------
</TABLE>
PERFORMANCE SUMMARY CLASS C SHARES
<TABLE>
<CAPTION>
NET ASSET VALUE
--------------------
CAPITAL GAINS TOTAL
PERIOD COVERED BEGINNING ENDING DISTRIBUTED DIVIDENDS PAID RETURN(1)
- ----------------- ----------- -------- -------------- -------------- ---------
<S> <C> <C> <C> <C> <C>
03/25/97-04/30/97 $12.50 -- $12.47 -- (0.24)%
- ----------------- ----------- -------- -------------- -------------- ---------
Total: $0.0000 $0.0000
- ----------------- ----------- -------- -------------- -------------- ---------
CUMULATIVE TOTAL RETURN AS OF
04/30/97: (0.24)%
- ----------------- ----------- -------- ----------------------------- ---------
</TABLE>
(1) Figures assume reinvestment of all dividends and capital gain
distributions at net asset value on the payable dates and do not include
sales charges; results would be lower if sales charges were included. If
sales charges were included, the cumulative total return as of April 30,
1997 for Class A, B and C shares would have been (4.66)%, (5.24)% and
(1.24)%, respectively.
+ Commencement of operations was March 25, 1997 for Class A, Class B and
Class C shares.
Note: Since the Fund has been in existence for less than one year, average
annual total returns are not provided.
The above data represents past performance of the Fund's shares, which is
no guarantee of future results. The principal value of an investment in the
Fund will fluctuate, so that an investor's shares, when redeemed, may be
worth more or less than their original cost.
3
<PAGE>
PAINEWEBBER ASIA PACIFIC GROWTH FUND
PORTFOLIO OF INVESTMENTS APRIL 30, 1997 (unaudited)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- -------------------- -------------
<S> <C> <C>
COMMON STOCKS--81.72%
AUSTRALIA--18.29%
BANKS--3.05%
247,000 Australia & New Zealand Banking Group
Ltd. ................................... $ 1,577,579
55,000 St. George Bank Ltd. ................... 337,986
-------------
1,915,565
-------------
BREWERY--0.84%
257,000 Foster's Brewing Group Ltd.............. 529,112
-------------
DIVERSIFIED INDUSTRIES--4.52%
129,000 Broken Hill Propriety Co. Ltd........... 1,818,857
173,000 WMC Ltd. ............................... 1,025,345
-------------
2,844,202
-------------
ENGINEERING SERVICES--1.01%
154,000 Henry Walker Group Ltd.................. 285,830
53,000 Simsmetal Ltd. ......................... 349,255
-------------
635,085
-------------
EXTRACTIVE INDUSTRIES--2.40%
53,000 Brambles Industries Ltd. ............... 958,902
37,000 CRA Ltd................................. 551,696
-------------
1,510,598
-------------
LEISURE & ENTERTAINMENT--1.12%
142,000 TABCORP Holdings Ltd. .................. 701,528
-------------
MEDIA--0.67%
91,000 News Corp. Ltd. ........................ 419,410
-------------
OIL REFINING & DISTRIBUTION--1.87%
148,000 Woodside Petroleum Ltd.................. 1,177,260
-------------
REAL ESTATE--1.73%
57,000 Lend Lease Corp. Ltd. .................. 1,090,837
-------------
RETAIL--1.08%
231,000 Woolworths Ltd. ........................ 680,948
-------------
Total Australia Common Stocks ................................. 11,504,545
-------------
HONG KONG--23.31%
BANKS--2.86%
71,200 HSBC Holdings plc....................... $ 1,801,485
-------------
COMMERCIAL SERVICES--2.29%
266,000 Citic Pacific Ltd....................... 1,438,766
-------------
ELECTRIC COMPANIES--1.66%
295,000 Hong Kong Electric Holdings ............ 1,043,439
-------------
REAL ESTATE--13.82%
79,000 Cheung Kong Holdings Ltd. .............. 693,474
1,165,000 China OverSeas Land & Investment ....... 657,958
390,000 China Resources Enterprises............. 1,077,390
92,000 Henderson Land Development Co. Ltd. .... 774,931
243,000 Hutchison Whampoa Ltd................... 1,803,718
194,000 Kerry Properties Ltd.................... 444,523
141,000 New World Development Co. Ltd. ......... 813,619
209,000 New World Infrastructure Ltd............ 590,860
75,000 Sun Hung Kai Properties Ltd............. 813,271
270,000 Wharf (Holdings) Ltd.................... 1,021,235
-------------
8,690,979
-------------
SHIPPING--1.00%
452,000 Cosco Pacific Ltd....................... 633,086
-------------
UTILITY-ELECTRIC, GAS & WATER--1.68%
666,000 Hong Kong & China Gas Co. Ltd. ......... 1,057,484
-------------
Total Hong Kong Common Stocks ................................. 14,665,239
-------------
4
<PAGE>
PAINEWEBBER ASIA PACIFIC GROWTH FUND
NUMBER OF
SHARES VALUE
- -------------------- -------------
COMMON STOCKS--(CONTINUED)
INDIA--3.31%
BANKS--1.03%
26,700 State Bank India GDR*................... $ 649,478
-------------
ELECTRIC, GAS & SANITARY SERVICES--0.60%
16,000 BSES Ltd. GDR........................... 376,000
-------------
METALS & MINING--0.61%
45,000 Steel Authority of India Ltd.
GDR (1)................................. 382,500
-------------
TELECOMMUNICATIONS--1.07%
34,000 Videsh Sanchar Nigam Ltd. GDR........... 671,330
-------------
Total India Common Stocks .................................. 2,079,308
-------------
INDONESIA--3.50%
BANKS--0.92%
800,000 P.T. Bank Internasional Indonesia ..... 576,132
-------------
FOOD, BEVERAGE & TOBACCO--0.90%
135,000 P.T. Gudang Garam....................... 566,667
-------------
REAL ESTATE--0.78%
380,000 P.T. Jaya Real Property................. 492,593
-------------
TELECOMMUNICATIONS--0.90%
390,000 P.T. Telekomunikasi Indonesia........... 565,741
-------------
Total Indonesia Common Stocks ............................... 2,201,133
-------------
MALAYSIA--13.04%
BANKS--3.72%
205,000 DCB Holdings Berhad..................... 665,425
168,000 Malayan Banking Berhad*................. 1,672,774
-------------
2,338,199
-------------
MALAYSIA--(CONCLUDED)
COMMERCIAL SERVICES--1.26%
256,000 Sime Darby Berhad....................... $ 790,186
-------------
CONSTRUCTION--2.09%
162,000 Gamuda Berhad........................... 583,917
103,000 United Engineers (Malaysia) Ltd.
Berhad.................................. 730,206
-------------
1,314,123
-------------
FOOD--0.97%
64,000 KFC Holdings (Malaysia) Berhad.......... 262,546
282,000 IOI Corp. .............................. 350,422
-------------
612,968
-------------
MANUFACTURING-GENERAL--0.47%
113,000 MBM Resources Berhad.................... 294,786
-------------
SERVICES--1.04%
415,000 Magnum Corp. Berhad*.................... 657,838
-------------
TELECOMMUNICATIONS--1.24%
111,000 Telekom Malaysia Berhad................. 778,079
-------------
UTILITY-ELECTRIC, GAS & WATER--2.25%
307,000 Tenaga Nasional Berhad.................. 1,418,353
-------------
Total Malaysia Common Stocks ................................ 8,204,532
-------------
NEW ZEALAND--0.93%
TELECOMMUNICATIONS--0.93%
130,000 Telecom Corp. of New Zealand Ltd. ..... 583,085
-------------
5
<PAGE>
PAINEWEBBER ASIA PACIFIC GROWTH FUND
NUMBER OF
SHARES VALUE
- -------------------- -------------
COMMON STOCKS--(CONTINUED)
PHILIPPINES--3.76%
BANKS--0.81%
25,000 Metropolitan Bank & Trust Co. .......... $ 511,945
-------------
OIL & GAS--0.66%
1,130,000 Petron Corp. ........................... 415,662
-------------
REAL ESTATE--0.64%
556,250 Ayala Land Inc. Class B................. 400,787
-------------
TELECOMMUNICATIONS--0.91%
10,000 Philippine Long Distance Co. ........... 570,724
-------------
UTILITY-ELECTRIC, GAS & WATER--0.74%
75,000 Manila Electric Co. (Class B)........... 466,439
-------------
Total Philippines Common Stocks ............................. 2,365,557
-------------
SINGAPORE--10.49%
BANKS--3.44%
53,000 Development Bank of Singapore Ltd.* .... 629,776
163,000 United Overseas Bank Ltd................ 1,531,468
-------------
2,161,244
-------------
MISCELLANEOUS MANUFACTURING--1.15%
256,000 Venture Manufacturing (Singapore) Ltd. 725,112
-------------
REAL ESTATE--3.87%
99,000 City Development Ltd.* ................. 800,208
100,000 DBS Land Ltd.* ......................... 323,316
75,000 Keppel Land Ltd.* ...................... 192,746
117,000 Parkway Holdings Ltd. .................. 476,891
249,000 Wing Tai Holdings Ltd................... 643,357
-------------
2,436,518
-------------
SERVICES--2.03%
69,000 Singapore Press Holding Ltd.* .......... 1,277,513
-------------
Total Singapore Common Stocks ............................... 6,600,387
-------------
SOUTH KOREA--1.43%
BANKS--0.11%
5,000 Shinhan Bank............................ $ 70,314
-------------
ELECTRIC COMPANIES--0.71%
15,000 Korea Electric Power Corp. ............. 447,310
-------------
STEEL--0.61%
5,500 Pohang Iron & Steel Co.................. 380,067
-------------
Total South Korea Common Stocks ............................... 897,691
-------------
TAIWAN--1.80%
CONSTRUCTION--0.43%
14,800 Asia Cement Corp. GDR .................. 268,250
-------------
MANUFACTURING-GENERAL--0.47%
14,100 Teco Electric & Machinery Ltd. GDR .... 294,338
-------------
METALS & MINING--0.47%
13,100 China Steel Corp. GDS................... 294,422
-------------
TRANSPORTATION EQUIPMENT--0.43%
15,000 Evergreen Marine Corp. GDR.............. 273,375
-------------
Total Taiwan Common Stocks ................................. 1,130,385
-------------
6
<PAGE>
PAINEWEBBER ASIA PACIFIC GROWTH FUND
NUMBER OF
SHARES VALUE
- -------------------- -------------
COMMON STOCKS--(CONCLUDED)
THAILAND--1.86%
BANKS--0.59%
40,000 Bangkok Bank Public Co. Ltd. ........... $ 370,562
-------------
ELECTRIC COMPANIES--0.47%
110,000 Electricity Generating Public Co. Ltd. 294,765
-------------
THAILAND--(CONCLUDED)
TELECOMMUNICATIONS--0.80%
170,000 TelecomAsia Corporation Public Co.
Ltd..................................... $ 257,058
48,000 Total Access Communication Public Co.
Ltd. ................................... 247,200
-------------
504,258
-------------
Total Thailand Common Stocks ................................ 1,169,585
-------------
Total Common Stocks (cost--$51,572,812)..................... 51,401,447
-------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATE RATE
- ----------- ---------- ----------
<S> <C> <C> <C> <C>
REPURCHASE AGREEMENT--15.37%
$9,669 Repurchase Agreement dated 04/30/97 with State Street
Bank & Trust Company, collateralized by $9,867,345 U.S.
Treasury Notes, 6.250% due 03/31/99;
proceeds: $9,670,343 (cost--$9,669,000)................. 05/01/97 5.000% 9,669,000
------------
Total Investments (cost--$61,241,812)--97.09%............................................. 61,070,447
Other assets in excess of liabilities--2.91% ............................................. 1,828,480
------------
Net Assets--100.00% ...................................................................... $62,898,927
============
</TABLE>
- ------------
* Non-income producing security
(1) Illiquid security represents 0.61% of net assets.
GDR Global Depositary Receipt
GDS Global Depositary Shares
See accompanying notes to financial statements
7
<PAGE>
PAINEWEBBER ASIA PACIFIC GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES APRIL 30, 1997 (unaudited)
<TABLE>
<CAPTION>
<S> <C>
ASSETS
Investments, at value (cost -$51,572,812)................................................. $51,401,447
Repurchase agreement (cost -$9,669,000)................................................... 9,669,000
Cash ..................................................................................... 172,535
Cash denominated in foreign currencies, at value (cost -$339,473) ........................ 339,530
Receivable for investments sold .......................................................... 2,651,001
Dividends and interest receivable ........................................................ 64,866
Deferred organizational expenses .......................................................... 146,959
Other assets .............................................................................. 246
-------------
Total assets .............................................................................. 64,445,584
-------------
LIABILITIES
Payable for investments purchased ........................................................ 1,253,196
Payable to affiliates .................................................................... 96,661
Payable for shares of beneficial interest repurchased .................................... 34,852
Accrued expenses and other liabilities ................................................... 161,948
-------------
Total liabilities ......................................................................... 1,546,657
-------------
NET ASSETS
Beneficial interest shares of $0.001 par value outstanding (unlimited amount authorized) . 63,037,771
Undistributed net investment income ...................................................... 50,303
Accumulated net realized losses from investments ......................................... (15,647)
Net unrealized depreciation of investments and other assets and liabilities denominated in
foreign currencies ....................................................................... (173,500)
-------------
Net assets ................................................................................ $62,898,927
=============
CLASS A:
Net assets ................................................................................ $26,254,755
-------------
Shares outstanding ........................................................................ 2,104,552
-------------
Net asset and redemption value per share.................................................. $ 12.48
=============
Maximum offering price per share (net asset value plus sales charge of 4.50% of offering
price) ................................................................................... $ 13.07
=============
CLASS B:
Net assets ................................................................................ $22,934,509
-------------
Shares outstanding ........................................................................ 1,839,828
-------------
Net asset value and offering price per share.............................................. $ 12.47
=============
CLASS C:
Net assets ................................................................................ $13,709,663
-------------
Shares outstanding ........................................................................ 1,099,838
-------------
Net asset value and offering price per share.............................................. $ 12.47
=============
</TABLE>
See accompanying notes to financial statements
8
<PAGE>
PAINEWEBBER ASIA PACIFIC GROWTH FUND
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE
PERIOD ENDED
APRIL 30, 1997+
(UNAUDITED)
---------------
<S> <C>
INVESTMENT INCOME:
Dividends (net of foreign withholding taxes of $6,128) ........ $ 127,420
Interest........................................................ 63,576
---------------
190,996
---------------
EXPENSES:
Investment advisory and administration fees..................... 70,807
Service fees--Class A .......................................... 6,261
Service and distribution fees--Class B ......................... 20,896
Service and distribution fees--Class C ......................... 13,065
Custody and accounting ......................................... 7,460
Transfer agency and service fees................................ 4,851
State registration fees ........................................ 4,247
Reports and notices to shareholders ............................ 4,092
Legal and audit fees............................................ 3,227
Amortization of organizational expenses ........................ 3,041
Trustees' fees and expenses .................................... 2,363
Other expenses.................................................. 383
---------------
140,693
---------------
Net investment income........................................... 50,303
---------------
REALIZED AND UNREALIZED LOSSES FROM INVESTMENT TRANSACTIONS:
Net realized losses from:
Investment transactions ....................................... --
Foreign currency transactions ................................. (15,647)
Net change in unrealized appreciation/depreciation of:
Investments.................................................... (171,365)
Other assets and liabilities denominated in foreign
currencies..................................................... (2,135)
---------------
NET REALIZED AND UNREALIZED LOSSES FROM INVESTMENT TRANSACTIONS (189,147)
---------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS .......... $(138,844)
===============
</TABLE>
+ For the period March 25, 1997 (commencement of operations) through April
30, 1997
See accompanying notes to financial statements
9
<PAGE>
PAINEWEBBER ASIA PACIFIC GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE
PERIOD ENDED
APRIL 30, 1997+
(UNAUDITED)
---------------
<S> <C>
FROM OPERATIONS:
Net investment income ................................................... $ 50,303
Net realized gains from investment transactions.......................... --
Net realized losses from foreign currency transactions................... (15,647)
Net changes in unrealized appreciation/depreciation of:
Investments............................................................. (171,365)
Other assets and liabilities denominated in foreign currencies ......... (2,135)
---------------
Net decrease in net assets resulting from operations..................... (138,844)
---------------
FROM BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from the sale of shares .................................... 66,263,004
Cost of shares repurchased............................................... (3,225,233)
---------------
Net increase in net assets from beneficial interest transactions ........ 63,037,771
---------------
Net increase in net assets .............................................. 62,898,927
NET ASSETS:
Beginning of period...................................................... 0
---------------
End of period (including undistributed net investment income of
$50,303)................................................................. $62,898,927
===============
</TABLE>
- -----------------
+ For the period March 25, 1997 (commencement of operations) through April
30, 1997
See accompanying notes to financial statements
10
<PAGE>
NOTES TO FINANCIAL STATEMENTS--(unaudited)
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
PaineWebber Asia Pacific Growth Fund (the "Fund") is a diversified series
of PaineWebber Managed Investments Trust (the "Trust") which is registered
with the Securities and Exchange Commission under the Investment Company Act
of 1940, as amended, as an open-end management investment company.
Organizational costs have been deferred and are being amortized using the
straight-line method over a period not to exceed 60 months from the date the
Fund commenced operations.
The Fund offers Class A, Class B and Class C shares. Each class represents
interests in the same assets of the Fund and the classes are identical except
for differences in their sales charge structures, ongoing
service/distribution charges and certain transfer agency expenses. In
addition, Class B shares and all corresponding reinvested dividend shares
automatically convert to Class A shares approximately six years after initial
issuance. All classes of shares have equal voting privileges, except that
each class has exclusive voting rights with respect to their
service/distribution plan.
The preparation of financial statements in accordance with generally
accepted accounting principles requires the Fund's management to make
estimates and assumptions that affect the reported amounts and disclosures in
the financial statements. Actual results could differ from those estimates.
The following is a summary of significant accounting policies:
Valuation of Investments--Securities which are listed on U.S. and foreign
stock exchanges are valued at the last sale price on the day the securities
are being valued or, lacking any sales on such day, at the last available bid
price. In cases where securities are traded on more than one exchange, the
securities are generally valued on the exchange designated as the primary
market by Mitchell Hutchins Asset Management Inc. ("Mitchell Hutchins"), a
wholly owned subsidiary of PaineWebber Incorporated ("PaineWebber") and
investment adviser and administrator of the Fund, or Schroder Capital
Management International Inc. ("Schroder"), the sub-adviser to the Fund.
Securities traded in the over-the-counter ("OTC") market and listed on The
Nasdaq Stock Market, Inc. ("Nasdaq") are valued at the last trade price on
Nasdaq prior to the time of valuation; other OTC securities (other than
short-term debt securities described below) are valued at the last quoted bid
price in the OTC market. The amortized cost method of valuation, which
approximates market value, is used to value short-term debt instruments with
60 days or less remaining to maturity unless the Trust's board of trustees
determines that this does not represent fair value. Securities and assets for
which market quotations are not readily available (including restricted
securities subject to limitations as to their sale) are valued at fair value
as determined in good faith by or under the direction of the Trust's board of
trustees.
All investments quoted in foreign currencies are valued daily in U.S.
dollars on the basis of the foreign currency exchange rates prevailing at the
time such valuation is determined by the Fund's custodian, unless the board
of trustees determines that this does not represent fair value. Foreign
currency exchange rates are generally determined prior to the close of
trading on the New York Stock Exchange ("NYSE"). Occasionally, events
affecting the value of foreign investments and such exchange rates occur
between the time at which they are determined and the close of trading on the
NYSE, which will not be reflected in a
11
<PAGE>
NOTES TO FINANCIAL STATEMENTS--(unaudited)
computation of the Fund's net asset value. If events materially affecting the
value of such investments or currency exchange rates occur during such time
period, the securities will be valued at their fair value as determined in
good faith by or under the direction of the Trust's board of trustees.
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. The Fund occasionally
participates in joint repurchase agreement transactions with other funds
managed by Mitchell Hutchins.
Investment Transactions and Investment Income--Investment transactions are
recorded on the trade date. Realized gains and losses from investment and
foreign exchange transactions are calculated using the identified cost
method. Dividend income is recorded on the ex-dividend date ("ex-date")
(except in the case of certain foreign dividends which are recorded as soon
after the ex-date as the Fund using reasonable diligence becomes aware of
such dividends). Interest income is recorded on an accrual basis. Discounts
are accreted and premiums are amortized as adjustments to interest income and
the identified cost of investments.
Income, expenses (excluding class-specific expenses) and
realized/unrealized gains/losses are allocated proportionately to each class
of shares based upon the relative net asset value of outstanding shares (or
the value of dividend-eligible shares, as appropriate) of each class at the
beginning of the day (after adjusting for current capital share activity of
the respective classes). Class-specific expenses are charged directly to the
applicable class of shares.
Foreign Currency Translation--The books and records of the Fund are
maintained in U.S. dollars. Foreign currency amounts are translated into U.S.
dollars on the following basis: (1) the foreign currency market value of
investment securities and other assets and liabilities stated in foreign
currencies are translated at the exchange rates prevailing at the end of the
period; and (2) purchases, sales, income and expenses are translated at the
rate of exchange prevailing on the respective dates of such transactions.
Although the net assets and the market values of the Fund are presented at
the foreign exchange rates at the end of the period, the Fund does not
generally isolate the effect of fluctuations in foreign exchange rates from
the effect of the changes in market prices of securities. However, the Fund
does isolate the effect of fluctuations in foreign exchange rates when
determining the realized gain or loss upon the sale or maturity of foreign
currency denominated debt obligations. Pursuant to federal income tax
regulations, realized currency gain/loss on investment transactions includes
realized foreign exchange gains/losses from the sale of portfolio debt
securities, sales of foreign currencies, currency gains/losses realized
12
<PAGE>
NOTES TO FINANCIAL STATEMENTS--(unaudited)
between the trade and settlement dates on securities transactions, and the
difference between the amounts of dividends, interest and foreign withholding
taxes recorded on the Fund's books and the U.S. dollar equivalent of the
amounts received or paid. Gains/losses from translating foreign currency
denominated assets and liabilities at year-end exchange rates are included in
change in unrealized appreciation/depreciation of other assets and
liabilities denominated in foreign currencies. Net realized foreign currency
gain (loss) is treated as ordinary income for income tax reporting purpose.
Dividends and Distributions--Dividends and distributions to shareholders
are recorded on the ex-date. The amount of dividends and distributions are
determined in accordance with federal income tax regulations, which may
differ from generally accepted accounting principles. These "book/tax"
differences are either considered temporary or permanent in nature. To the
extent these differences are permanent in nature, such amounts are
reclassified within the capital accounts based on their federal tax-basis
treatment; temporary differences do not require reclassification.
CONCENTRATION OF RISK
Investing in securities of foreign issuers and currency transactions may
involve certain considerations and risks not typically associated with
investments in the United States. These risks include revaluation of
currencies, adverse fluctuations in foreign currency values and possible
adverse political, social and economic developments, including those
particular to a specific industry, country or region, which could cause the
securities and their markets to be less liquid and prices more volatile than
those of comparable U.S. companies. These risks are greater with respect to
securities of issuers located in emerging market countries in which the Fund
is authorized to invest. The ability of the issuers of debt securities held
by the Fund to meet their obligations may be affected by economic and
political developments in a specific industry, country or region.
INVESTMENT ADVISER AND ADMINISTRATOR
The Trust's board of trustees has approved an investment advisory and
administration contract ("Advisory Contract") with Mitchell Hutchins, under
which Mitchell Hutchins serves as investment adviser and administrator of the
Fund. In accordance with the Advisory Contract, Mitchell Hutchins receives
compensation from the Fund, computed daily and paid monthly, at an annual
rate of 1.20% of the Fund's average daily net assets up to and including $100
million and 1.10% of its average daily net assets over $100 million. At April
30, 1997, the Fund owed Mitchell Hutchins $59,437 in investment advisory and
administration fees.
Under a separate contract with Mitchell Hutchins ("Sub-Advisory
Contract"), Schroder serves as the Fund's sub-adviser. Under the Sub-Advisory
Contract, Mitchell Hutchins (not the Fund) pays Schroder a fee, computed
daily and paid monthly, at an annual rate of 0.65% of the Fund's average
daily net assets up to and including $100 million and 0.55% of the Fund's
average daily net assets over $100 million.
13
<PAGE>
NOTES TO FINANCIAL STATEMENTS--(unaudited)
DISTRIBUTION PLAN
Mitchell Hutchins is the distributor of the Fund's shares and has
appointed PaineWebber as the exclusive dealer for the sale of those shares.
Under separate plans of distribution pertaining to Class A, Class B and Class
C shares, each class of shares of the Fund pays Mitchell Hutchins monthly
service fees at the annual rate of 0.25% of the average daily net assets of
Class A, Class B and Class C shares and monthly distribution fees at the
annual rate of 0.75% of the average daily net assets of Class B and Class C
shares. At April 30, 1997 the Fund owed Mitchell Hutchins $35,486 in service
and distribution fees.
Mitchell Hutchins also receives the proceeds of the initial sales charges
paid by shareholders upon the purchase of Class A shares and the contingent
deferred sales charges paid by shareholders upon certain redemptions of Class
A, Class B and Class C shares. Mitchell Hutchins has informed the Fund that
for the period ended April 30, 1997 it had earned approximately $866,000 in
sales charges.
TRANSFER AGENCY SERVICE FEES
The Fund pays PaineWebber an annual fee of $4.00 per active PaineWebber
shareholder account for certain services not provided by the Fund's transfer
agent. For these services for the period ended April 30, 1997, PaineWebber
earned $3,382 from the Fund. At April 30, 1997, the Fund owed PaineWebber
$1,738 for service fees.
INVESTMENTS IN SECURITIES
For federal income tax purposes, the cost of securities owned at April 30,
1997 was substantially the same as the cost of securities for financial
statement purposes.
At April 30, 1997, the components of the net unrealized depreciation of
investments were as follows:
<TABLE>
<CAPTION>
<S> <C>
Gross appreciation (investments having an excess of value over
cost).............................................................. $ 1,825,736
Gross depreciation (investments having an excess of cost over
value)............................................................. (1,997,101)
-------------
Net unrealized depreciation of investments.......................... $ (171,365)
=============
</TABLE>
For the period ended April 30, 1997, aggregate purchases and sales of
portfolio securities, excluding short-term securities, were $51,572,812 and
$0, respectively.
FEDERAL INCOME TAX STATUS
The Fund intends to distribute substantially 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.
14
<PAGE>
NOTES TO FINANCIAL STATEMENTS--(unaudited)
SHARES OF BENEFICIAL INTEREST
There is an unlimited amount of $0.001 par value shares of beneficial
interest authorized. Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
------------------------- ------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Period ended
April 30, 1997+:
Shares sold ....... 2,214,942 $27,683,162 1,936,462 $24,197,493 1,150,760 $14,382,349
Shares
repurchased....... (110,390) (1,380,792) (96,634) (1,208,130) (50,922) (636,311)
----------- ------------- ----------- ------------- ----------- -------------
Net increase ...... 2,104,552 $26,302,370 1,839,828 $22,989,363 1,099,838 $13,746,038
=========== ============= =========== ============= =========== =============
</TABLE>
+ For the period March 25, 1997 (commencement of operations) through April
30, 1997
15
<PAGE>
PAINEWEBBER ASIA PACIFIC GROWTH FUND
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout the
period is presented below:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
--------------- --------------- ---------------
FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD
ENDED ENDED ENDED
APRIL 30, 1997+ APRIL 30, 1997+ APRIL 30, 1997+
(UNAUDITED) (UNAUDITED) (UNAUDITED)
--------------- --------------- ---------------
<S> <C> <C> <C>
Net asset value, beginning of period................. $ 12.50 $ 12.50 $ 12.50
--------------- --------------- ---------------
Net investment income ............................... 0.02 0.01 0.01
Net realized and unrealized losses from investments (0.04) (0.04) (0.04)
--------------- --------------- ---------------
Net decrease from investment operations.............. (0.02) (0.03) (0.03)
--------------- --------------- ---------------
Net asset value, end of period ...................... $ 12.48 $ 12.47 $ 12.47
=============== =============== ===============
Total investment return (1).......................... (0.16)% (0.24)% (0.24)%
=============== =============== ===============
Ratios/Supplemental Data:
Net assets, end of period (000's).................... $26,255 $22,935 $13,710
Expenses to average net assets....................... 1.92%* 2.73%* 2.73%*
Net investment income to average net assets ......... 1.32%* 0.51%* 0.49%*
Portfolio turnover................................... 0% 0% 0%
Average commission rate paid (2)..................... $0.0186 $0.0186 $0.0186
</TABLE>
- ----------------------
* Annualized
+ For the period March 25, 1997 (commencement of operations) through April
30, 1997
(1) Total investment return is calculated assuming a $1,000 investment on
the first day of each period reported, reinvestment of all dividends and
other distributions, if any, at net asset value on the payable dates,
and a sale at net asset value on the last day of each period reported.
The figures do not include sales charges; results for each class would
be lower if sales charges were included. Total investment returns for
periods less than a year have not been annualized.
(2) The average commission rate paid per share of common stock investments
purchased or sold.
16
<PAGE>
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<PAGE>
This Page Intentionally Left Blank.
<PAGE>
TRUSTEES
E. Garrett Bewkes, Jr.
Chairman
Margo N. Alexander
Richard Q. Armstrong
Richard R. Burt
Mary C. Farrell
Meyer Feldberg
George W. Gowen
Frederic V. Malek
Carl W. Schafer
PRINCIPAL OFFICERS
Margo N. Alexander
President
Victoria E. Schonfeld
Vice President
Dianne E. O'Donnell
Vice President and Secretary
Paul H. Schubert
Vice President and Treasurer
INVESTMENT ADVISER,
ADMINISTRATOR AND DISTRIBUTOR
Mitchell Hutchins Asset Management Inc.
1285 Avenue of the Americas
New York, New York 10019
INVESTMENT SUB-ADVISER
Schroder Capital Management International Inc.
787 Seventh Avenue
New York, NY 10019
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.
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.
A prospectus containing more complete information for any of the Funds listed
on the back cover can be obtained from a PaineWebber investment executive or
correspondent firm. Read the prospectus carefully before investing.
<PAGE>
PaineWebber offers a family of 22 funds which encompass a diversified range
of investment goals.
BOND FUNDS
[] High Income Fund
[] Investment Grade Income Fund
[] Low Duration U.S. Government Income Fund
[] Strategic Income Fund
[] U.S. Government Income Fund
TAX-FREE BOND FUNDS
[] California Tax-Free Income Fund
[] Municipal High Income Fund
[] National Tax-Free Income Fund
[] New York Tax-Free Income Fund
STOCK FUNDS
[] Capital Appreciation Fund
[] Financial Services Growth Fund
[] Growth Fund
[] Growth and Income Fund
[] Small Cap Fund
[] Utility Income Fund
ASSET ALLOCATION FUNDS
[] Balanced Fund
[] Tactical Allocation Fund
GLOBAL FUNDS
[] Asia Pacific Growth Fund
[] Emerging Markets Equity Fund
[] Global Equity Fund
[] Global Income Fund
PAINEWEBBER MONEY MARKET FUND
PaineWebber
(Copyright) 1997 PaineWebber Incorporated
Member SIPC
PAINEWEBBER
ASIA PACIFIC
GROWTH FUND
SEMIANNUAL REPORT
APRIL 30, 1997
