PAINEWEBBER MANAGED INVESTMENTS TRUST, 497, 1998-10-06

PAINEWEBBER MANAGED INVESTMENTS TRUST
497, 1998-10-06

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<PAGE>
Filed pursuant to Rule 497(__)
Registration File Nos. 33-39659
811-6292
------------------------------

PAINEWEBBER ASIA PACIFIC GROWTH FUND
PAINEWEBBER EMERGING MARKETS EQUITY FUND
PAINEWEBBER GLOBAL EQUITY FUND
PAINEWEBBER GLOBAL INCOME FUND

1285 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK 10019
PROSPECTUS -- MARCH 1, 1998, AS REVISED OCTOBER 2, 1998
(DATED OCTOBER 2, 1998 FOR PAINEWEBBER GLOBAL EQUITY FUND)

PaineWebber Global Funds are designed for investors generally seeking
long-term growth by investing mainly in foreign stocks or high current
income by investing mainly in global debt instruments. PaineWebber Asia
Pacific Growth Fund seeks long-term capital appreciation by investing
primarily in equity securities of companies in the Asia Pacific region,
excluding Japan. PaineWebber Emerging Markets Equity Fund seeks long-term
capital appreciation by investing primarily in equity securities of
companies in newly industrializing countries. PaineWebber Global Equity
Fund seeks long-term growth of capital by investing primarily in U.S. and
foreign equity securities. PaineWebber Global Income Fund seeks high
current income and, secondarily, capital appreciation by investing
primarily in high-quality bonds of foreign and U.S. issuers.

This Prospectus concisely sets forth information that a prospective
investor should know about the Funds before investing. Please read this
Prospectus carefully and retain a copy for future reference.

A Statement of Additional Information, dated March 1, 1998, as revised
October 2, 1998 (dated October 2, 1998 for PaineWebber Global Equity
Fund), has been filed with the Securities and Exchange Commission ("SEC"
or "Commission") and is legally part of this Prospectus. The Statement of
Additional Information can be obtained without charge, and further
inquiries can be made, by contacting an individual Fund, your investment
executive at PaineWebber or one of its correspondent firms or by calling
toll-free 1-800-647-1568. In addition, the Commission maintains a website
(http://www.sec.gov) that contains the Statement of Additional
Information, material incorporated by reference, and other information
regarding registrants that file electronically with the Commission.

THE PAINEWEBBER FAMILY OF MUTUAL FUNDS

The PaineWebber Family of Mutual Funds consists of seven broad
categories, which are presented here. Generally, investors seeking to
maximize return must assume greater risk. The Funds offered by this
Prospectus are in the GLOBAL category.

o MONEY MARKET FUND for income and stability by
investing in high-quality, short-term investments.

o BOND FUNDS for income by investing mainly in bonds.

o TAX-FREE BOND FUNDS for income exempt from federal
income tax and, in some cases, state and local income
taxes, by investing in municipal bonds.

o ASSET ALLOCATION FUNDS for high total return by in-
vesting in stocks and bonds.

o STOCK FUNDS for long-term growth by investing mainly
in stocks.

o GLOBAL FUNDS for long-term growth by investing mainly
in foreign stocks or high current income by investing
mainly in global debt instruments.

o FUNDS OF FUNDS for either long-term growth of cap-
ital; total return; or income and, secondarily,
growth of capital by investing in other PaineWebber
mutual funds.

A complete listing of the PaineWebber Family of Mutual Funds is found on
the back cover of this Prospectus.

INVESTORS SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR REFERRED TO IN
THIS PROSPECTUS. THE FUNDS AND THEIR DISTRIBUTOR HAVE NOT AUTHORIZED
ANYONE TO PROVIDE INVESTORS WITH INFORMATION THAT IS DIFFERENT. THIS
PROSPECTUS IS NOT AN OFFER TO SELL SHARES OF THE FUNDS IN ANY JURISDICTION
WHERE THE FUNDS OR THEIR DISTRIBUTOR MAY NOT LAWFULLY SELL THOSE SHARES.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.

---------------------
Prospectus Page 1
<PAGE>

------------------------------
PaineWebber
Asia Pacific Growth Fund Global Equity Fund
Emerging Markets Equity Fund Global Income Fund

TABLE OF CONTENTS

- --------------------------------------------------------------------------------
PAGE
----

The Funds at a Glance................... 3

Expense Table........................... 6

Financial Highlights.................... 9

Investment Objectives & Policies........ 21

Investment Philosophy & Process......... 23

Performance............................. 26

The Funds' Investments.................. 30

Flexible Pricing(Service Mark).......... 37

How to Buy Shares....................... 41

How to Sell Shares...................... 43

Other Services.......................... 43

Management.............................. 44

Determining the Shares' Net Asset
Value................................. 47

Dividends & Taxes....................... 48

General Information..................... 49

--------------------
Prospectus Page 2
<PAGE>
------------------------------

PaineWebber
Asia Pacific Growth Fund Global Equity Fund
Emerging Markets Equity Fund Global Income Fund

THE FUNDS AT A GLANCE

- --------------------------------------------------------------------------------

The Funds offered by this Prospectus are not intended to provide a complete or
balanced investment program, but one or more of them may be appropriate as a
component of an investor's overall portfolio. Some common reasons to invest in
the Funds are to finance college educations, plan for retirement or diversify a
portfolio. When selling shares, investors should be aware that they may get more
or less for their shares than they originally paid for them. As with any mutual
fund, there is no assurance that the Funds will achieve their goals.

ASIA PACIFIC GROWTH FUND

GOAL: To increase the value of your investment by investing primarily in equity
securities of Asia Pacific Region companies (as described under "Investment
Objectives and Policies").

INVESTMENT OBJECTIVE: Long-term capital appreciation.

SIZE: On August 31, 1998, the Fund had approximately $26 million in net assets.

WHO SHOULD INVEST: Asia Pacific Growth Fund is for investors who want long-term
capital appreciation and who can withstand short-term market fluctuations. The
Fund seeks to achieve this by investing primarily in equity securities of Asia
Pacific Region companies (excluding Japan). While recent currency devaluations
have diminished prospects for short-term growth in corporate earnings in many
Asia Pacific Region countries, conditions in the Asia Pacific Region may provide
for high levels of economic activity in the long term, offering the potential
for long-term capital appreciation from investment in equity securities of Asia
Pacific Region companies. Because the value of these securities tends to be more
volatile than that of U.S. stocks, investors must be willing to tolerate greater
fluctuations in the value of the Fund's investments. These fluctuations may be
caused by events affecting the companies' businesses, as well as market
conditions, currency fluctuations, interest rate changes, liquidity concerns,
and adverse changes in economic, political and social conditions. The Fund may
be appropriate as a longer-term component of an investor's overall portfolio,
but it is not intended to provide current income.

EMERGING MARKETS EQUITY FUND

GOAL: To increase the value of your investment by investing primarily in equity
securities of companies in newly industrializing countries.

INVESTMENT OBJECTIVE: Long-term capital appreciation.

SIZE: On August 31, 1998, the Fund had approximately $7 million in net assets.

WHO SHOULD INVEST: Emerging Markets Equity Fund is for investors who want
long-term capital appreciation. The Fund seeks to achieve this by investing
primarily in equity securities of companies in emerging market countries. Over
time, foreign stocks have shown substantial growth potential. However, because
their value tends to fluctuate more than that of U.S. stocks, investors must be
willing to tolerate volatility in the value of the Fund's investments. These
risks are greater with respect to securities of issuers located in emerging
markets. Accordingly, Emerging Markets Equity Fund is designed for investors who
are able to bear the risk that comes with investment in equity securities of
emerging market issuers. The Fund may be appropriate as a longer-term component
of an investor's overall portfolio, but it is not intended to provide current
income.

GLOBAL EQUITY FUND

GOAL: To increase the value of your investment by investing primarily in equity
securities of U.S. and foreign companies.

INVESTMENT OBJECTIVE: Long-term growth of capital.

SIZE: On August 31, 1998, the Fund had approximately $380.7 million in net
assets.

WHO SHOULD INVEST: Global Equity Fund is for investors who want long-term growth
of capital. The Fund seeks to achieve this by investing primarily in equity
securities of U.S. and foreign companies. Over time, foreign stocks have shown
substantial growth potential. However, because their value can fluctuate more
than that of U.S. stocks, investors must be willing to tolerate volatility in
the value of the Fund's investments. Accordingly, Global Equity Fund is designed
for investors who are able to bear the risks that come with investments in
foreign equity securities. The Fund may be appropriate as a longer-term
component of an investor's overall portfolio, but it is not intended to provide
current income.

--------------------
Prospectus Page 3
<PAGE>
------------------------------

PaineWebber
Asia Pacific Growth Fund Global Equity Fund
Emerging Markets Equity Fund Global Income Fund

THE FUNDS AT A GLANCE
(Continued)
- --------------------------------------------------------------------------------

GLOBAL INCOME FUND

GOAL: To provide high current income and, secondarily, capital appreciation by
investing primarily in high-quality bonds of foreign and U.S. issuers.

INVESTMENT OBJECTIVE: The primary investment objective is high current income
consistent with prudent investment risk; capital appreciation is a secondary
objective.

SIZE: On August 31, 1998, the Fund had approximately $482.1 million in net
assets.

WHO SHOULD INVEST: Global Income Fund is for investors who want high current
income consistent with prudent investment risk and, secondarily, capital
appreciation. The Fund seeks to achieve this by investing primarily in
high-quality bonds of foreign and U.S. issuers. The Fund also may invest in
bonds rated below investment grade, including bonds of issuers in emerging
market countries. Global Income Fund is designed for investors who are able to
bear the special risks that come with investments in foreign securities.

MANAGEMENT

Mitchell Hutchins Asset Management Inc. ("Mitchell Hutchins"), a wholly owned
asset management subsidiary of PaineWebber Incorporated ("PaineWebber"), is the
investment adviser and administrator of each Fund. Mitchell Hutchins has
appointed Schroder Capital Management International Inc. ("Schroder Capital") as
the investment sub-adviser for Asia Pacific Growth Fund and Emerging Markets
Equity Fund, and has appointed Invista Capital Management, Inc. ("Invista") as
the investment sub-adviser for the foreign investments of Global Equity Fund.
Mitchell Hutchins provides all investment management services for Global Income
Fund and the U.S. investments of Global Equity Fund.

MINIMUM INVESTMENT

To open an account, investors need $1,000; to add to an account, investors need
only $100.

RISKS

EACH FUND invests in foreign securities, including emerging market securities.
Investors in any of the Funds should be able to assume the special risks of
investing in these securities. These include possible adverse political, social
and economic developments abroad and differing characteristics of foreign
economies and markets. These risks are greater with respect to securities of
issuers located in emerging markets. Most of the Funds' foreign securities are
denominated in foreign currencies, and the value of these investments can be
adversely affected by fluctuations in foreign currency values. Foreign currency
values and securities prices in the Asia Pacific Region recently have been
highly volatile, and recent currency devaluations in some Asia Pacific Region
countries have resulted in high interest rate levels and sharp reductions in
economic activity. Each Fund may use derivatives, such as options, futures and
forward currency contracts and, in the case of Asia Pacific Growth Fund and
Global Income Fund, swap agreements, all of which may involve additional risks.
Each Fund's share price will rise and fall, and investors may lose money by
investing in a Fund. Investment in any of the Funds is not guaranteed.

ASIA PACIFIC GROWTH FUND, EMERGING MARKETS EQUITY FUND AND GLOBAL EQUITY FUND
all invest primarily in equity securities. Historically, equity
securities have shown greater growth potential than other types of securities,
but they also have shown greater volatility.

GLOBAL INCOME FUND invests primarily in bonds, which are subject to interest
rate and credit risk. Interest rate risk is the risk that interest rates will
rise and bond prices will fall, lowering the value of the Fund's investments and
share price. Credit risk is the risk that an issuer may be unable or unwilling
to pay interest and principal. Certain investment grade bonds in which the Fund
may invest have speculative characteristics. Bonds rated below investment grade,
in which the Fund may invest up to 20% of its total assets, are subject to
greater risks of default or price fluctuation than investment grade bonds and
are considered predominantly speculative. The Fund may invest in mortgage-backed
securities, which involve special risks. The Fund is a non-diversified fund, as
defined in the Investment Company Act of 1940 ("1940 Act"), and as such is
subject to greater risk than funds that have a broader range of investments.

--------------------
Prospectus Page 4
<PAGE>
------------------------------

PaineWebber
Asia Pacific Growth Fund Global Equity Fund
Emerging Markets Equity Fund Global Income Fund

THE FUNDS AT A GLANCE
(Continued)
- --------------------------------------------------------------------------------

HOW TO PURCHASE SHARES OF THE FUNDS

Investors may select among these classes of shares:

CLASS A SHARES

The price is the net asset value plus the initial sales charge; the maximum
sales charge is 4.5% of the public offering price (4% in the case of Global
Income Fund). Although investors pay an initial sales charge when they buy
Class A shares, the ongoing expenses for this class are lower than the ongoing
expenses of Class B and Class C shares.

CLASS B SHARES

The price is the net asset value. Investors do not pay an initial sales charge
when they buy Class B shares. As a result, 100% of their purchase is immediately
invested. However, Class B shares have higher ongoing expenses than Class A
shares. Depending upon how long they own the shares, investors may have to pay a
sales charge when they sell Class B shares. This sales charge is called a
"contingent deferred sales charge" and applies when investors sell their
Class B shares within six years after purchase. After six years, Class B shares
convert to Class A shares, which have lower ongoing expenses and no contingent
deferred sales charge.

CLASS C SHARES

The price is the net asset value. Investors do not pay an initial sales charge
when they buy Class C shares. As a result, 100% of their purchase is immediately
invested. However, Class C shares have higher ongoing expenses than Class A
shares. A contingent deferred sales charge of 1% (0.75% in the case of Global
Income Fund) is charged on shares sold within one year of purchase. Class C
shares never convert to any other class of shares.

CLASS Y SHARES

Class Y shares are offered only to limited groups of investors. See "How to Buy
Shares." The price is the net asset value. Investors do not pay an initial sales
charge when they buy Class Y shares. As a result, 100% of their purchase is
immediately invested. Investors also do not pay a contingent deferred sales
charge when they sell Class Y shares. Class Y shares have lower ongoing expenses
than any other class of shares.

--------------------
Prospectus Page 5

<PAGE>
------------------------------

PaineWebber
Asia Pacific Growth Fund Global Equity Fund
Emerging Markets Equity Fund Global Income Fund

EXPENSE TABLE

- --------------------------------------------------------------------------------

The following tables are intended to assist investors in understanding the
expenses associated with investing in each class of shares of the Funds.
Expenses shown below are based on those incurred for the most recent fiscal
year, except in the case of Asia Pacific Growth Fund, where amounts were
annualized because it commenced operations on March 25, 1997, and "Other
Expenses" are based on estimated amounts for its current fiscal year. In
addition, in the case of Emerging Markets Equity Fund, expenses shown below
reflect anticipated fee waivers.

<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES CLASS A CLASS B CLASS C CLASS Y
------- ------- ------- -------
<S> <C> <C> <C> <C>
Maximum Sales Charge on Purchases of Shares (as a % of
offering price)
ASIA PACIFIC GROWTH FUND, EMERGING MARKETS EQUITY FUND
AND GLOBAL EQUITY FUND.................................. 4.5% None None None
GLOBAL INCOME FUND...................................... 4% None None None
Sales Charge on Reinvested Dividends (as a % of offering
price)...................................................... None None None None
Maximum Contingent Deferred Sales Charge (as a % of offering
price or net asset value at the time of sale, whichever is
less)
ASIA PACIFIC GROWTH FUND, EMERGING MARKETS EQUITY FUND
AND GLOBAL EQUITY FUND.................................. None 5% 1% None
GLOBAL INCOME FUND...................................... None 5% 0.75% None
Exchange Fee................................................ None None None None

ANNUAL FUND OPERATING EXPENSES (as a % of average net
assets)
ASIA PACIFIC GROWTH FUND
Management Fees............................................. 1.20% 1.20% 1.20% 1.20%
12b-1 Fees.................................................. 0.25 1.00 1.00 None
Other Expenses (estimated).................................. 1.20 1.21 1.18 1.20
----- ----- ----- -----
Total Operating Expenses.................................... 2.65% 3.41% 3.38% 2.40%
----- ----- ----- -----
----- ----- ----- -----
EMERGING MARKETS EQUITY FUND
Management Fees (after fee waivers)*........................ 0.70% 0.70% 0.70% 0.70%
12b-1 Fees.................................................. 0.25 1.00 1.00 None
Other Expenses.............................................. 1.49 1.49 1.49 1.49
----- ----- ----- -----
Total Operating Expenses.................................... 2.44% 3.19% 3.19% 2.19%
----- ----- ----- -----
----- ----- ----- -----
GLOBAL EQUITY FUND
Management Fees............................................. 0.85% 0.85% 0.85% 0.85%
12b-1 Fees.................................................. 0.25 1.00 1.00 None
Other Expenses.............................................. 0.34 0.41 0.35 0.25
----- ----- ----- -----
Total Operating Expenses.................................... 1.44% 2.26% 2.20% 1.10%
----- ----- ----- -----
----- ----- ----- -----
GLOBAL INCOME FUND
Management Fees............................................. 0.74% 0.74% 0.74% 0.74%
12b-1 Fees.................................................. 0.25 1.00 0.75 None
Other Expenses.............................................. 0.22 0.25 0.20 0.20
----- ----- ----- -----
Total Operating Expenses.................................... 1.21% 1.99% 1.69% 0.94%
----- ----- ----- -----
----- ----- ----- -----
</TABLE>

- ------------------
* "Management Fees" for Emerging Markets Equity Fund reflects anticipated fee
waivers by Mitchell Hutchins. Under an advisory contract for Emerging
Markets Equity Fund effective February 25, 1997, the annual percentage rate
at which the investment advisory and administrative fee is payable to
Mitchell Hutchins is 1.20% of the Fund's average daily net assets. This fee
is lower than the fee that was payable under the prior advisory contract;
however, after giving effect to fee waivers, the effective annual rate
actually paid by the Fund during the fiscal year ended October 31, 1997, was
0.78%. Without taking into account anticipated fee waivers, "Management
Fees" and "Total Operating Expenses" for shares of Emerging Markets Equity
Fund would be as follows: 1.20% and 2.94% for Class A; 1.20% and 3.69% for
Class B; 1.20% and 3.69% for Class C; and 1.20% and 2.69% for Class Y.

--------------------
Prospectus Page 6
<PAGE>
------------------------------

PaineWebber
Asia Pacific Growth Fund Global Equity Fund
Emerging Markets Equity Fund Global Income Fund

EXPENSE TABLE
(Continued)
- --------------------------------------------------------------------------------

CLASS A SHARES: Sales charge waivers and a reduced sales charge purchase plan
are available. Purchases of $1 million or more are not subject to an initial
sales charge; however, if a shareholder sells these shares within one year
after purchase, a contingent deferred sales charge of 1% of the offering price
or the net asset value of the shares at the time of sale by the shareholder,
whichever is less, is imposed.

CLASS B SHARES: Sales charge waivers are available. The maximum 5% contingent
deferred sales charge applies to sales of shares during the first year after
purchase. The charge generally declines by 1% annually, reaching zero after six
years.

CLASS C SHARES: If a shareholder sells these shares within one year after
purchase, a contingent deferred sales charge of 1% (0.75% in the case of Global
Income Fund) of the offering price or the net asset value of the shares at the
time of sale by the shareholder, whichever is less, is imposed.

CLASS Y SHARES: No initial or contingent deferred sales charge is imposed, nor
are Class Y shares subject to 12b-1 distribution or service fees. Class Y
shares may be purchased by participants in certain investment programs that are
sponsored by PaineWebber and that may invest in PaineWebber mutual funds ("PW
Programs"), when Class Y shares are purchased through that Program.
Participation in a PW Program is subject to an advisory fee at the effective
maximum annual rate of 1.5% of assets held through that PW Program. This
account charge is not included in the table because investors who are not PW
Programs participants also are permitted to purchase Class Y Shares.

12b-1 distribution fees are asset-based sales charges. Long-term Class B and
Class C shareholders may pay more in direct and indirect sales charges
(including 12b-1 distribution fees) than the economic equivalent of the maximum
front-end sales charge permitted by the National Association of Securities
Dealers, Inc. 12b-1 fees have two components, as follows:

<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS Y
------- ------- ------- -------
<S> <C> <C> <C> <C>
12b-1 service fees................. 0.25% 0.25% 0.25% None
12b-1 distribution fees............ 0.00 0.75 0.75* None
</TABLE>

* 12b-1 distribution fees for Class C shares of Global Income Fund are 0.50%.

For more information, see "Management" and "Flexible Pricing(Service Mark)."

EXAMPLES OF EFFECT OF FUND EXPENSES

The following examples should assist investors in understanding various costs
and expenses they would incur as shareholders of a Fund. The assumed 5% annual
return shown in the examples is required by regulations of the SEC applicable to
all mutual funds. THESE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF
PAST OR FUTURE EXPENSES. ACTUAL EXPENSES OF A FUND MAY BE MORE OR LESS THAN
THOSE SHOWN.

An investor would pay the following expenses, directly or indirectly, on a
$1,000 investment in a Fund, assuming a 5% annual return:

<TABLE>
<CAPTION>
ASIA PACIFIC GROWTH FUND
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A............................ $71 $124 $179 $ 330
Class B (Assuming sale of all
shares at end of period)......... $84 $135 $197 $ 337
Class B (Assuming no sale of
shares).......................... $34 $105 $177 $ 337
Class C (Assuming sale of all
shares at end of period)......... $44 $104 $176 $ 367
Class C (Assuming no sale of
shares).......................... $34 $104 $176 $ 367
Class Y............................ $24 $ 75 $128 $ 274
</TABLE>

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Prospectus Page 7
<PAGE>
------------------------------

PaineWebber
Asia Pacific Growth Fund Global Equity Fund
Emerging Markets Equity Fund Global Income Fund

EXPENSE TABLE
(Continued)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
EMERGING MARKETS EQUITY FUND
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A............................ $69 $118 $169 $310
Class B (Assuming sale of all
shares at end of period)......... $82 $128 $187 $316
Class B (Assuming no sale of
shares).......................... $32 $ 98 $167 $316
Class C (Assuming sale of all
shares at end of period)......... $42 $ 98 $167 $349
Class C (Assuming no sale of
shares).......................... $32 $ 98 $167 $349
Class Y............................ $22 $ 69 $117 $252

<CAPTION>
GLOBAL EQUITY FUND
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A............................ $59 $ 89 $120 $210
Class B (Assuming sale of all
shares at end of period)......... $73 $101 $141 $220
Class B (Assuming no sale of
shares).......................... $23 $ 71 $121 $220
Class C (Assuming sale of all
shares at end of period)......... $32 $ 69 $118 $253
Class C (Assuming no sale of
shares).......................... $22 $ 69 $118 $253
Class Y............................ $11 $ 35 $ 61 $134

<CAPTION>
GLOBAL INCOME FUND

1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A............................ $52 $ 77 $104 $181
Class B (Assuming sale of all
shares at end of period)......... $70 $ 92 $127 $193
Class B (Assuming no sale of
shares).......................... $20 $ 62 $107 $193
Class C (Assuming sale of all
shares at end of period)......... $25 $ 53 $ 92 $200
Class C (Assuming no sale of
shares).......................... $17 $ 53 $ 92 $200
Class Y............................ $10 $ 30 $ 52 $115
</TABLE>

ASSUMPTIONS MADE IN THE EXAMPLES

o ALL CLASSES: Reinvestment of all dividends and other distributions;
percentage amounts listed under "Annual Fund Operating Expenses" remain the
same for years shown.

o CLASS A SHARES: Deduction of the maximum 4.5% (4% in the case of Global
Income Fund) initial sales charge at the time of purchase.

o CLASS B SHARES: Deduction of the maximum applicable contingent deferred
sales charge at the time of sale, which declines over a period of six years.
Ten-year figures assume that Class B shares convert to Class A shares at the
end of the sixth year.

o CLASS C SHARES: Deduction of a 1% (0.75% in the case of Global Income Fund)
contingent deferred sales charge for sales of shares within one year of
purchase.

--------------------
Prospectus Page 8
<PAGE>
------------------------------
PaineWebber
Asia Pacific Growth Fund Global Equity Fund
Emerging Markets Equity Fund Global Income Fund

FINANCIAL HIGHLIGHTS

- --------------------------------------------------------------------------------

ASIA PACIFIC GROWTH FUND

The following table provides investors with data and ratios for one Class A,
Class B, Class C and Class Y share for each of the periods shown. This
information is supplemented by the financial statements and accompanying notes
appearing in Asia Pacific Growth Fund's Annual Report to Shareholders for the
period ended October 31, 1997 and the report of Ernst & Young LLP, independent
auditors, appearing in the Fund's Annual Report to Shareholders. The financial
statements, accompanying notes and auditors' report are incorporated by
reference into the Statement of Additional Information. The financial statements
and notes, as well as the financial information in the table below relating to
the period March 25, 1997 (commencement of operations) through October 31, 1997,
have been audited by Ernst & Young LLP, independent auditors. Further
information about the Fund's performance is also included in the Annual Report
to Shareholders, which may be obtained without charge by calling 1-800-647-1568.
The financial statements and notes and the financial information in the table
below insofar as they relate to the six months ended April 30, 1998 have been
taken from the records of the Fund without examination by the Fund's independent
auditors, who do not express an opinion thereon.

<TABLE>
<CAPTION>
ASIA PACIFIC GROWTH FUND
-----------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS C CLASS Y
------------------------- ------------------------- ------------------------- -----------
FOR THE FOR THE FOR THE FOR THE
SIX MONTHS FOR THE SIX MONTHS FOR THE SIX MONTHS FOR THE PERIOD
ENDED PERIOD ENDED PERIOD ENDED PERIOD ENDED
APRIL 30, ENDED APRIL 30, ENDED APRIL 30, ENDED APRIL 30,
1998 OCTOBER 31, 1998 OCTOBER 31, 1998 OCTOBER 31, 1998++
(UNAUDITED) 1997+ (UNAUDITED) 1997+ (UNAUDITED) 1997+ (UNAUDITED)
----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period...................... $ 8.96 $ 12.50 $ 8.92 $ 12.50 $ 8.92 $ 12.50 $ 8.66
------- ------- ------- ------- ------- ------- -------
Net investment income
(loss)...................... 0.00 0.03 (0.04) (0.03) (0.05) (0.03) 0.00
Net realized and unrealized
losses from investments and
foreign currency............ (0.82) (3.57) (0.81) (3.55) (0.80) (3.55) (0.53)
------- ------- ------- ------- ------- ------- -------
Net decrease from investment
operations.................. (0.82) (3.54) (0.85) (3.58) (0.85) (3.58) (0.53)
------- ------- ------- ------- ------- ------- -------
Net asset value, end of
period...................... $ 8.14 $ 8.96 $ 8.07 $ 8.92 $ 8.07 $ 8.92 $ 8.13
------- ------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- ------- -------
Total investment return (1)... (9.15)% (28.32)% (9.53)% (28.64)% (9.53)% (28.64)% (6.12)%
------- ------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- ------- -------
Ratios/Supplemental Data:
Net assets, end of period
(000's)..................... $16,631 $21,466 $18,781 $22,949 $ 9,080 $13,887 $ 10
Expenses to average net
assets...................... 2.65%* 2.33%* 3.41%* 3.12%* 3.38%* 3.10%* 2.40%*
Net investment income (loss)
to average net assets....... (0.20)%* 0.37%* (0.96)%* (0.43)%* (0.95)%* (0.42)%* (0.28)%*
Portfolio turnover rate....... 31% 13% 31% 13% 31% 13% 31%
Average commission rate
paid........................ $0.0108 $0.0156 $0.0108 $0.0156 $0.0108 $0.0156 $0.0108
</TABLE>

- ------------------
* Annualized

+ For the period March 25, 1997 (commencement of operations) to October 31,
1997.

++ For the period March 13, 1998 (commencement of offering) through April 30,
1998.

(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 (except Class Y) would be
lower if sales charges were included. Total investment returns for periods
less than a year have not been annualized.

--------------------
Prospectus Page 9
<PAGE>
------------------------------
PaineWebber
Asia Pacific Growth Fund Global Equity Fund
Emerging Markets Equity Fund Global Income Fund

FINANCIAL HIGHLIGHTS
(Continued)
- --------------------------------------------------------------------------------

EMERGING MARKETS EQUITY FUND

<TABLE>
<CAPTION>
EMERGING MARKETS EQUITY FUND
--------------------------------------------------------------------------------
CLASS A
--------------------------------------------------------------------------------
FOR THE FOR THE FOR THE
SIX MONTHS YEAR FOUR
ENDED ENDED MONTHS FOR THE YEARS ENDED
APRIL 30, OCTOBER ENDED JUNE 30, FOR THE
1998 31, OCTOBER -------------------- PERIOD ENDED
(UNAUDITED) 1997*** 31, 1996 1996 1995** JUNE 30, 1994+
----------- --------- --------- -------- -------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period....................... $ 9.39 $ 9.46 $ 10.06 $ 9.73 $ 10.79 $ 12.00
------- --------- --------- -------- -------- --------
Net investment income
(loss)....................... (0.01)@ (0.06) (0.13) (0.14) (0.04) 0.04
Net realized and unrealized
gains (losses) from
investment and foreign
currency..................... 0.31@ (0.01) (0.47) 0.47 (0.97) (1.25)
------- --------- --------- -------- -------- --------
Net increase (decrease) from
investment operations........ 0.30 (0.07) (0.60) 0.33 (1.01) (1.21)
------- --------- --------- -------- -------- --------
Dividends from net investment
income....................... -- -- -- -- (0.05) --
------- --------- --------- -------- -------- --------
Net asset value, end of
period....................... $ 9.69 $ 9.39 $ 9.46 $ 10.06 $ 9.73 $ 10.79
------- --------- --------- -------- -------- --------
------- --------- --------- -------- -------- --------
Total investment return (1)... 3.19% (0.74)% (5.96)% 3.39% (9.29)% (10.08)%
------- --------- --------- -------- -------- --------
------- --------- --------- -------- -------- --------
Ratios/Supplemental Data:
Net assets, end of period
(000's)...................... $ 7,837 $ 9,222 $ 14,992 $ 20,680 $ 33,043 $ 46,758
Expenses, net of fee waivers,
to average net assets........ 2.44%* 2.44% 2.44%* 2.44% 2.44% 2.47%*
Expenses, before fee waivers,
to average net assets........ 3.66%* 3.01% 3.48%* 3.42% 2.54% 2.47%*
Net investment income (loss),
net of fee waivers, to
average net assets........... (0.31)%* (0.40)% (1.42)%* (0.52)% (0.76)% 0.72%*
Net investment income (loss),
before fee waivers, to
average net assets........... (1.53)%* (0.97)% (2.46)%* (1.50)% (0.86)% 0.72%*
Portfolio turnover rate....... 32% 87% 22% 69% 76% 8%
Average commission rate paid
(2).......................... $0.0029 $ 0.0009 $ 0.0024 -- -- --
</TABLE>

- ------------------
* Annualized

** Investment advisory functions for the Fund were transferred from Kidder
Peabody Asset Management, Inc. to Mitchell Hutchins on February 13, 1995.

*** Investment sub-advisory functions for the Fund were transferred from
Emerging Markets Management to Schroder Capital effective February 25,
1997.

+ For the period January 19, 1994 (commencement of operations) to June 30,
1994.

++ For the period December 5, 1995 (commencement of offering of shares) to
June 30, 1996.

@ Calculated using the average shares outstanding for the period.

(1) Total investment return is calculated assuming a $1,000 investment on the
first day of each period reported, reinvestment of all dividends 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 of less than one year have not been
annualized.

(2) Effective for fiscal years beginning on or after September 1, 1995, the
Fund is required to disclose the average commission rate paid per share of
common stock investments purchased or sold.

--------------------
Prospectus Page 10
<PAGE>
------------------------------
PaineWebber
Asia Pacific Growth Fund Global Equity Fund
Emerging Markets Equity Fund Global Income Fund

FINANCIAL HIGHLIGHTS
(Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EMERGING MARKETS EQUITY FUND
------------------------------------------------------------------------------
CLASS B
------------------------------------------------------------------------------
FOR THE
SIX MONTHS
ENDED FOR THE
APRIL 30, YEAR ENDED FOR THE FOR THE
1998 OCTOBER 31, FOUR MONTHS ENDED PERIOD ENDED
(UNAUDITED) 1997*** OCTOBER 31, 1996 JUNE 30, 1996++
--------------- --------------- ----------------- ------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of
period....................... $ 9.19 $ 9.32 $ 9.94 $ 9.13
------- ------- ------- ------
Net investment income
(loss)....................... (0.05)@ (0.10) (0.07) (0.01)
Net realized and unrealized
gains (losses) from
investment and foreign
currency..................... 0.31@ (0.03) (0.55) 0.82
------- ------- ------- ------
Net increase (decrease) from
investment operations........ 0.26 (0.13) (0.62) 0.81
------- ------- ------- ------
Dividends from net investment
income....................... -- -- -- --
------- ------- ------- ------
Net asset value, end of
period....................... $ 9.45 $ 9.19 $ 9.32 $ 9.94
------- ------- ------- ------
------- ------- ------- ------
Total investment return (1)... 2.83 % (1.39)% (6.24)% 8.87 %
------- ------- ------- ------
------- ------- ------- ------
Ratios/Supplemental Data:
Net assets, end of period
(000's)...................... $ 907 $ 1,598 $ 879 $ 936
Expenses, net of fee waivers,
to average net assets........ 3.19 %* 3.19 % 3.19 %* 3.19 %*
Expenses, before fee waivers,
to average net assets........ 4.50 %* 3.82 % 4.23 %* 4.97 %*
Net investment income (loss),
net of fee waivers, to
average net assets........... (1.17)%* (1.25)% (2.12)%* (0.21)%*
Net investment income (loss),
before fee waivers, to
average net assets........... 2.48)%* (1.88)% (3.16)%* (1.99)%*
Portfolio turnover rate....... 32 % 87 % 22 % 69 %
Average commission rate paid
(2).......................... $0.0029 $0.0009 $0.0024 --

<CAPTION>
EMERGING MARKETS EQUITY FUND
----------------------------------------------------------------------------------------------------
CLASS C
----------------------------------------------------------------------------------------------------
FOR THE
SIX MONTHS
ENDED FOR THE FOR THE YEARS ENDED
APRIL 30, YEAR ENDED FOR THE JUNE 30, FOR THE
1998 OCTOBER 31, FOUR MONTHS ENDED -------------------- PERIOD ENDED
(UNAUDITED) 1997*** OCTOBER 31, 1996 1996 1995** JUNE 30, 1994+
--------------- --------------- ----------------- -------- -------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period....................... $ 9.17 $ 9.32 $ 9.94 $ 9.67 $ 10.75 $ 12.00
------- ------- ------- -------- -------- --------
Net investment income
(loss)....................... (0.05)@ (0.14) (0.22) (0.24) (0.17) --
Net realized and unrealized
gains (losses) from
investment and foreign
currency..................... 0.31@ (0.01) (0.40) 0.51 (0.90) (1.25)
------- ------- ------- -------- -------- --------
Net increase (decrease) from
investment operations........ 0.26 (0.15) (0.62) 0.27 (1.07) (1.25)
------- ------- ------- -------- -------- --------
Dividends from net investment
income....................... -- -- -- -- (0.01) --
------- ------- ------- -------- -------- --------
Net asset value, end of
period....................... $ 9.43 $ 9.17 $ 9.32 $ 9.94 $ 9.67 $ 10.75
------- ------- ------- -------- -------- --------
------- ------- ------- -------- -------- --------
Total investment return (1)... 2.84 % (1.61)% (6.24)% 2.79 % (10.01)% (10.42)%
------- ------- ------- -------- -------- --------
------- ------- ------- -------- -------- --------
Ratios/Supplemental Data:
Net assets, end of period
(000's)...................... $ 4,623 $ 5,345 $ 7,882 $11,561 $18,551 $ 26,721
Expenses, net of fee waivers,
to average net assets........ 3.19 %* 3.19 % 3.19 %* 3.19 % 3.19 % 3.22 %*
Expenses, before fee waivers,
to average net assets........ 4.44 %* 3.78 % 4.23 %* 4.17 % 3.29 % 3.22 %*
Net investment income (loss),
net of fee waivers, to
average net assets........... (1.15)%* (1.18)% (2.16)%* (1.28)% (1.50)% (0.03)%*
Net investment income (loss),
before fee waivers, to
average net assets........... (2.40)%* (1.77)% (3.20)%* (2.26)% (1.60)% (0.03)%*
Portfolio turnover rate....... 32 % 87 % 22 % 69 % 76 % 8 %
Average commission rate paid
(2).......................... $0.0029 $0.0009 $0.0024 -- -- --
</TABLE>

--------------------
Prospectus Page 11
<PAGE>
------------------------------
PaineWebber
Asia Pacific Growth Fund Global Equity Fund
Emerging Markets Equity Fund Global Income Fund

FINANCIAL HIGHLIGHTS
(Continued)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
EMERGING MARKETS EQUITY FUND
--------------------------------------------------------------------------------
CLASS Y
--------------------------------------------------------------------------------
FOR THE
SIX MONTHS FOR THE FOR THE
ENDED YEAR FOUR MONTHS FOR THE YEARS ENDED FOR THE PERIOD
APRIL 30, ENDED ENDED JUNE 30, ENDED
1998 OCTOBER 31, OCTOBER 31, -------------------- JUNE 30,
(UNAUDITED) 1997*** 1996 1996 1995** 1994+
----------- ----------- ----------- -------- -------- --------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period...................... $ 9.46 $ 9.51 $ 10.11 $ 9.75 $ 10.80 $ 12.00
------- ------- ------- -------- -------- --------
Net investment income
(loss)...................... (0.01)@ (0.02) (0.05) (0.01) 0.01 0.05
Net realized and unrealized
gains (losses) from
investment and foreign
currency.................... 0.32@ (0.03) (0.55) 0.37 (0.99) (1.25)
------- ------- ------- -------- -------- --------
Net increase (decrease) from
investment operations....... 0.31 (0.05) (0.60) 0.36 (0.98) (1.20)
------- ------- ------- -------- -------- --------
Dividends from net investment
income...................... -- -- -- -- (0.07) --
------- ------- ------- -------- -------- --------
Net asset value, end of
period...................... $ 9.77 $ 9.46 $ 9.51 $ 10.11 $ 9.75 $ 10.80
------- ------- ------- -------- -------- --------
------- ------- ------- -------- -------- --------
Total investment return (1)... 3.28% (0.53)% (5.93)% 3.69% (9.03)% (10.00)%
------- ------- ------- -------- -------- --------
------- ------- ------- -------- -------- --------
Ratios/Supplemental Data:
Net assets, end of period
(000's)..................... $ 1,779 $10,053 $11,375 $12,979 $12,332 $ 15,435
Expenses, net of fee waivers,
to average net assets....... 2.19%* 2.19% 2.19%* 2.19% 2.19% 2.22%*
Expenses, before fee waivers,
to average net assets....... 3.28%* 2.69% 3.23%* 3.29% 2.29% 2.22%*
Net investment income (loss),
net of fee waivers, to
average net assets.......... (0.25)%* (0.15)% (1.13)%* (0.15)% (0.51)% 0.97%*
Net investment income (loss),
before fee waivers, to
average net assets.......... (1.34)%* (0.65)% (2.17)%* (1.25)% (0.61)% 0.97%*
Portfolio turnover rate....... 32% 87% 22% 69% 76% 8%
Average commission rate paid
(2)......................... $0.0029 $0.0009 $0.0024 -- -- --
</TABLE>

- ------------------
* Annualized

** Investment advisory functions for the Fund were transferred from Kidder
Peabody Asset Management, Inc. to Mitchell Hutchins on February 13, 1995.

*** Investment sub-advisory functions for the Fund were transferred from
Emerging Markets Management to Schroder Capital effective February 25, 1997.

+ For the period January 19, 1994 (commencement of operations) to June 30,
1994.

@ Calculated using the average shares outstanding for the period.

(1) Total investment return is calculated assuming a $1,000 investment on the
first day of each period reported, reinvestment of all dividends at net
asset value on the payable dates, and a sale at net asset value on the last
day of each period reported. Total investment returns for periods of less
than one year have not been annualized.

(2) Effective for fiscal years beginning on or after September 1, 1995, the
Fund is required to disclose the average commission rate paid per share of
common stock investments purchased or sold.

--------------------
Prospectus Page 12
<PAGE>

[This page intentionally left blank]

--------------------
Prospectus Page 13

<PAGE>
------------------------------
PaineWebber
Asia Pacific Growth Fund Global Equity Fund
Emerging Markets Equity Fund Global Income Fund

FINANCIAL HIGHLIGHTS
(Continued)
- --------------------------------------------------------------------------------

GLOBAL EQUITY FUND
The following tables provide investors with data and ratios for one Class A,
Class B, Class C and Class Y share for each of the periods shown. This
information is supplemented by the financial statements and accompanying notes
appearing in Global Equity Fund's Annual Report to Shareholders for the fiscal
year ended October 31, 1997 and the report of Ernst & Young LLP, independent
auditors, appearing in the Fund's Annual Report to Shareholders. The financial
statements, accompanying notes and auditors' report are incorporated by
reference into the Statement of Additional Information. The financial statements
and notes, as well as the financial information in the table below relating to
the fiscal year ended October 31, 1997, the two months ended October 31, 1996
and to each of the two years in the period ended August 31, 1996, have been
audited by Ernst & Young LLP, independent auditors. The financial information
for the prior years was audited by another independent accounting firm, whose
reports thereon were unqualified. Further information about the Fund's
performance is also included in the Annual Report to Shareholders, which may be
obtained without charge by calling 1-800-647-1568. The financial statements and
notes and the financial information in the table below insofar as they relate to
the six months ended April 30, 1998 have been taken from the records of the Fund
without examination by the Fund's independent auditors, who do not express an
opinion thereon.

Effective October 1, 1998, investment sub-advisory functions for the Fund's
foreign investments were transferred from GE Investment Management Incorporated
to Invista and Mitchell Hutchins assumed all investment management
responsibilities for the Fund's U.S. investments.

<TABLE>
<CAPTION>
GLOBAL EQUITY FUND
--------------------------------------------------------------------------------------------------------
CLASS A
--------------------------------------------------------------------------------------------------------
FOR THE SIX FOR THE FOR THE
MONTHS YEAR TWO MONTHS FOR THE
ENDED APRIL ENDED ENDED FOR THE YEARS ENDED AUGUST 31, PERIOD
30, 1998 OCTOBER 31, OCTOBER 31, -------------------------------------------- NOV. 14, 1991+
(UNAUDITED) 1997 1996 1996 1995** 1994 1993 TO AUG. 31, 1992
----------- ----------- ----------- -------- -------- -------- -------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 18.37 $ 17.43 $ 16.81 $ 16.12 $ 16.98 $ 14.55 $ 12.87 $ 12.00
--------- --------- --------- -------- -------- -------- -------- --------
Net investment income
(loss)................. (0.03) 0.00 (0.02) 0.02 0.02 0.01 0.03 0.09
Net realized and
unrealized gains
(losses) from
investments and foreign
currency............... 3.31 1.52 0.64 1.24 0.37 2.63 1.89 0.78
--------- --------- --------- -------- -------- -------- -------- --------
Net increase (decrease)
from investment
operations............. 3.28 1.52 0.62 1.26 0.39 2.64 1.92 0.87
--------- --------- --------- -------- -------- -------- -------- --------
Dividends from net
investment income...... -- -- -- -- -- -- (0.08) --
Distributions from net
realized gains......... (2.48) (0.58) -- (0.57) (1.25) (0.21) (0.16) --
--------- --------- --------- -------- -------- -------- -------- --------
Total dividends and
distributions.......... (2.48) (0.58) 0.00 (0.57) (1.25) (0.21) (0.24) 0.00
--------- --------- --------- -------- -------- -------- -------- --------
Net asset value, end of
period................. $ 19.17 $ 18.37 $ 17.43 $ 16.81 $ 16.12 $ 16.98 $ 14.55 $ 12.87
--------- --------- --------- -------- -------- -------- -------- --------
--------- --------- --------- -------- -------- -------- -------- --------
Total investment return
(1).................... 20.81% 8.87% 3.69% 8.06% 3.24% 18.23% 15.24% 7.25%
--------- --------- --------- -------- -------- -------- -------- --------
--------- --------- --------- -------- -------- -------- -------- --------
Ratios/Supplemental Data:
Net assets, end of period
(000's)................ $ 319,586 $ 294,878 $ 307,267 $305,218 $360,652 $185,493 $156,451 $113,070
Expenses to average net
assets................. 1.51%* 1.44% 1.53%* 1.48% 1.71%(2) 1.58% 1.53% 1.68%*
Net investment income
(loss) to average net
assets................. (0.31)%* 0.01% (0.80)%* 0.10% 0.09%(2) 0.07% 0.22% 0.93%*
Portfolio turnover
rate................... 32% 86% 3% 33% 40% 51% 56% 30%
Average commission rate
paid (3)............... $ 0.0220 $ 0.0069 $ 0.0069 $ 0.0120 -- -- -- --
</TABLE>

- ------------------
* Annualized

** Investment advisory functions for the Fund were transferred from Kidder
Peabody Asset Management, Inc. to Mitchell Hutchins on February 13, 1995.

+ Commencement of operations

++ Commencement of offering of shares

(1) Total investment return is calculated assuming a $1,000 investment on the
first day of each period reported, reinvestment of all dividends and
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 of less than one
year have not been annualized.

(2) These ratios include non-recurring reorganization expenses of 0.06%, 0.00%
and 0.06% for Class A, Class B and Class C shares, respectively.

(3) Effective for fiscal years beginning on or after September 1, 1995, the Fund
is required to disclose the average commission rate paid per share of common
stock investments purchased or sold.

--------------------
Prospectus Page 14
<PAGE>
------------------------------
PaineWebber
Asia Pacific Growth Fund Global Equity Fund
Emerging Markets Equity Fund Global Income Fund

FINANCIAL HIGHLIGHTS
(Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL EQUITY FUND
------------------------------------------------------------------
CLASS B
------------------------------------------------------------------
FOR THE
PERIOD
FOR THE SIX FOR THE FOR THE AUG. 25,
MONTHS ENDED YEAR TWO MONTHS FOR THE 1995++
APRIL 30, ENDED ENDED YEAR ENDED TO
1998 OCTOBER 31, OCTOBER 31, AUGUST 31, AUG. 31,
(UNAUDITED) 1997 1996 1996 1995
------------ ----------- ----------- ---------- --------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 17.69 $ 16.93 $ 16.35 $ 15.82 $ 15.83
-------- ------- --------- -------- --------
Net investment income
(loss)................. (0.17) (0.21) (0.05) (0.12) 0.00
Net realized and
unrealized gains
(losses) from
investments and foreign
currency............... 3.22 1.55 0.63 1.22 (0.01)
-------- ------- --------- -------- --------
Net increase (decrease)
from investment
operations............. 3.05 1.34 0.58 1.10 (0.01)
-------- ------- --------- -------- --------
Dividends from net
investment income...... -- -- -- -- --

Distributions from net
realized gains......... (2.48) (0.58) -- (0.57) --
-------- ------- --------- -------- --------
Total dividends and
distributions.......... (2.48) (0.58) 0.00 (0.57) 0.00
-------- ------- --------- -------- --------
Net asset value, end of
period................. $ 18.26 $ 17.69 $ 16.93 $ 16.35 $ 15.82
-------- ------- --------- -------- --------
-------- ------- --------- -------- --------

Total investment
return(1)............... 20.25 % 8.05 % 3.55 % 7.18% (0.06)%
-------- ------- --------- -------- --------
-------- ------- --------- -------- --------
Ratios/Supplemental Data:
Net assets, end of period
(000's)................ $ 75,078 $87,104 $ 113,445 $113,235 $142,880
Expenses to average net
assets................. 2.35%* 2.26% 2.34%* 2.25% 2.17%*(2)
Net investment income
(loss) to average net
assets................. (1.19)%* (0.80)% (1.61)%* (0.68)% (1.92)%*(2)
Portfolio turnover
rate................... 32% 86% 3% 33% 40%
Average commission rate
paid (3)............... $ 0.0220 $0.0069 $ 0.0069 $ 0.0120 --

<CAPTION>
GLOBAL EQUITY FUND
-------------------------------------------------------------------------------------
CLASS C
-------------------------------------------------------------------------------------
FOR THE
FOR THE SIX PERIOD
MONTHS FOR THE FOR THE MAY 10,
ENDED YEAR TWO MONTHS FOR THE YEARS ENDED AUGUST 31, 1993++
APRIL 30, ENDED ENDED TO
1998 OCTOBER 31, OCTOBER 31, -------------------------------- AUG. 31,
(UNAUDITED) 1997 1996 1996 1995** 1994 1993
----------- ----------- ----------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 17.69 $ 16.93 $ 16.35 $ 15.82 $ 16.81 $ 14.52 $ 13.80
----------- ------- ------- ------- ------- ------- --------
Net investment income
(loss)................. (0.11) (0.23) (0.05) (0.13) (0.11) (0.07) (0.02)
Net realized and
unrealized gains
(losses) from
investments and foreign
currency............... 3.18 1.57 0.63 1.23 0.37 2.57 0.74
----------- ------- ------- ------- ------- ------- --------
Net increase (decrease)
from investment
operations............. 3.07 1.34 0.58 1.10 0.26 2.50 0.72
----------- ------- ------- ------- ------- ------- --------
Dividends from net
investment income...... -- -- -- -- -- -- --

Distributions from net
realized gains......... (2.48) (0.58) -- (0.57) (1.25) (0.21) --
----------- ------- ------- ------- ------- ------- --------
Total dividends and
distributions..........
(2.48) (0.58) 0.00 (0.57) (1.25) (0.21) 0.00
----------- ------- ------- ------- ------- ------- --------

Net asset value, end of
period................ $ 18.28 $ 17.69 $ 16.93 $ 16.35 $ 15.82 $ 16.81 $ 14.52
----------- ------- ------- ------- ------- ------- --------
----------- ------- ------- ------- ------- ------- --------
Total investment
return................. 20.38% 8.05% 3.55% 7.18% 2.46% 17.29% 5.22%
----------- ------- ------- ------- ------- ------- --------
----------- ------- ------- ------- ------- ------- --------

Ratios/Supplemental Data:
Net assets, end of period
(000's)................ $ 54,893 $54,510 $67,530 $66,585 $83,485 $31,837 $ 10,807
Expenses to average net
assets................. 2.29%* 2.20% 2.30%* 2.27% 2.48%(2) 2.33% 2.28%*
Net investment income
(loss) to average net
assets................. (1.11)%* (0.75)% (1.57)%* (0.70)% (0.68)%(2) (0.68)% (0.53)%*
Portfolio turnover
rate................... 32% 86% 3% 33% 40% 51% 56%
Average commission rate
paid (3)............... $ 0.0220 $0.0069 $0.0069 $0.0120 -- -- --
</TABLE>

--------------------
Prospectus Page 15

<PAGE>
------------------------------
PaineWebber
Asia Pacific Growth Fund Global Equity Fund
Emerging Markets Equity Fund Global Income Fund

FINANCIAL HIGHLIGHTS
(Continued)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
GLOBAL EQUITY FUND
---------------------------------------------------------------------------------------------
CLASS Y
---------------------------------------------------------------------------------------------
FOR THE SIX FOR THE FOR THE
MONTHS YEAR TWO MONTHS FOR THE
ENDED APRIL ENDED ENDED FOR THE YEARS ENDED AUGUST 31, PERIOD
30, 1998 OCTOBER 31, OCTOBER 31, -------------------------------- MAY 10, 1993+
(UNAUDITED) 1997 1996 1996 1995** 1994 TO AUGUST 31, 1993
----------- ----------- ----------- ------- ------- ------- ------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period........................... $ 18.63 $ 17.60 $ 16.97 $ 16.22 $ 17.03 $ 14.56 $ 13.80
------- ------- ------- ------- ------- ------- --------
Net investment income (loss)....... (0.02) 0.10 (0.01) 0.07 0.07 0.05 0.02
Net realized and unrealized gains
from investments and foreign
currency......................... 3.38 1.51 0.64 1.25 0.37 2.63 0.74
------- ------- ------- ------- ------- ------- --------
Net increase from investment
operations....................... 3.36 1.61 0.63 1.32 0.44 2.68 0.76
------- ------- ------- ------- ------- ------- --------
Dividends from net investment
income........................... -- -- -- -- -- -- --
Distributions from net realized
gains............................ (2.48) (0.58) -- (0.57) (1.25) (0.21) --
------- ------- ------- ------- ------- ------- --------
Total dividends and
distributions.................... (2.48) (0.58) 0.00 (0.57) (1.25) (0.21) 0.00
------- ------- ------- ------- ------- ------- --------
Net asset value, end of period..... $ 19.51 $ 18.63 $ 17.60 $ 16.97 $ 16.22 $ 17.03 $ 14.56
------- ------- ------- ------- ------- ------- --------
------- ------- ------- ------- ------- ------- --------
Total investment return (1)........ 20.97% 9.31% 3.71% 8.39% 3.54% 18.49% 5.51%
------- ------- ------- ------- ------- ------- --------
------- ------- ------- ------- ------- ------- --------
Ratios/Supplemental Data:
Net assets, end of period
(000's).......................... $65,207 $57,683 $63,225 $61,736 $57,150 $28,390 $ 19,098
Expenses to average net assets..... 1.17%* 1.10% 1.18%* 1.17% 1.46%(2) 1.33% 1.28%*
Net investment income (loss) to
average net assets............... 0.04%* 0.36% (0.45)%* 0.46% 0.36%(2) 0.32% 0.47%*
Portfolio turnover rate............ 32% 86% 3% 33% 40% 51% 56%
Average commission rate paid (3)... $0.0220 $0.0069 $0.0069 $0.0120 -- -- --
</TABLE>

- ------------------
* Annualized

** Investment advisory functions for the Fund were transferred from Kidder
Peabody Asset Management, Inc. to Mitchell Hutchins on February 13, 1995.

+ Commencement of offering of shares

(1) Total investment return is calculated assuming a $1,000 investment on the
first day of each period reported, reinvestment of all dividends and
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. Total investment
returns for periods of less than one year have not been annualized.

(2) These ratios include non-recurring reorganization expenses of 0.06% for
Class Y shares.

(3) Effective for fiscal years beginning on or after September 1, 1995, the Fund
is required to disclose the average commission rate paid per share of common
stock investments purchased or sold.

--------------------
Prospectus Page 16
<PAGE>
[This page intentionally left blank]

--------------------
Prospectus Page 17

<PAGE>
------------------------------

PaineWebber
Asia Pacific Growth Fund Global Equity Fund
Emerging Markets Equity Fund Global Income Fund

FINANCIAL HIGHLIGHTS
(Continued)
- --------------------------------------------------------------------------------

GLOBAL INCOME FUND

The following tables provide investors with data and ratios for one Class A,
Class B, Class C and Class Y share for each of the periods shown. This
information is supplemented by the financial statements and accompanying notes
appearing in Global Income Fund's Annual Report to Shareholders for the fiscal
year ended October 31, 1997 and the report of Price Waterhouse LLP, independent
accountants, appearing in the Fund's Annual Report to Shareholders. The
financial statements, accompanying notes and independent accountants' report are
incorporated by reference into the Statement of Additional Information. The
financial statements and notes, as well as the financial information in the
table below insofar as they relate to each of the periods presented in the five
year period ended October 31, 1997, have been audited by Price Waterhouse LLP,
independent accountants. Further information about the Fund's performance is
also included in the Annual Report to Shareholders, which may be obtained
without charge by calling 1-800-647-1568. The financial statements and notes and
the financial information in the tables below insofar as they relate to the six
months ended April 30, 1998 have been taken from the records of the Fund without
examination by the Fund's independent accountants, who do not express an opinion
thereon.
<TABLE>
<CAPTION>
GLOBAL INCOME FUND
-------------------------------------------------------------------------------------------------------
CLASS A
-------------------------------------------------------------------------------------------------------
FOR THE
PERIOD
FOR THE JULY 1,
SIX MONTHS 1991+ TO
ENDED FOR THE YEARS ENDED OCTOBER 31, OCTOBER
APRIL 30, 1998 ------------------------------------------------------------------------- 31,
(UNAUDITED) 1997 1996 1995 1994 1993 1992 1991
-------------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period..... $ 10.27 $ 10.46 $ 10.35 $ 9.99 $ 10.97 $ 10.64 $ 10.75 $ 10.40
-------------- -------- -------- -------- -------- -------- -------- --------
Net investment income.... 0.31@ 0.69@ 0.72@ 0.77@ 0.72 0.59 0.83 0.20
Net realized and
unrealized gains
(losses) from
investments and foreign
currency ............... (0.09)@ (0.19)@ 0.13@ 0.31@ (1.05) 0.68 (0.12) 0.40
-------------- -------- -------- -------- -------- -------- -------- --------
Net increase (decrease)
from investment
transactions............ 0.22 0.50 0.85 1.08 (0.33) 1.27 0.71 0.60
-------------- -------- -------- -------- -------- -------- -------- --------
Dividends from net
investment income ...... (0.32) (0.54) (0.74) (0.72) (0.33) (0.80) (0.64) (0.23)
Distributions from net
realized gains from
investments and foreign
currency transactions... -- -- -- -- -- (0.14) (0.18) (0.02)
Distributions in excess
of net investment
income.................. -- (0.06) -- -- -- -- -- --
Distributions from
paid-in-capital......... -- (0.09) -- -- (0.32) -- -- --
-------------- -------- -------- -------- -------- -------- -------- --------
Total dividends and
distributions to
shareholders............ (0.32) (0.69) (0.74) (0.72) (0.65) (0.94) (0.82) (0.25)
-------------- -------- -------- -------- -------- -------- -------- --------
Net asset value, end of
period.................. $ 10.17 $ 10.27 $ 10.46 $ 10.35 $ 9.99 $ 10.97 $ 10.64 $ 10.75
-------------- -------- -------- -------- -------- -------- -------- --------
-------------- -------- -------- -------- -------- -------- -------- --------
Total investment return
(1)..................... 2.21% 4.99% 8.60% 11.09% (3.10)% 12.41% 6.70% 5.79%
-------------- -------- -------- -------- -------- -------- -------- --------
-------------- -------- -------- -------- -------- -------- -------- --------
Ratios/supplemental data:
Net assets, end of period
(000's)................. $ 428,389 $486,718 $549,932 $663,022 $611,855 $648,853 $107,033 $16,501
Expenses to average net
assets.................. 1.28%* 1.21% 1.27% 1.24%(2) 1.17% 1.32%** 1.21% 1.35%*
Net investment income to
average net assets...... 6.07%* 6.66% 6.88% 7.47%(2) 6.94% 6.82%** 7.84% 8.59%*
Portfolio turnover
rate.................... 62% 172% 126% 113% 108% 90% 92% 53%

<CAPTION>
GLOBAL INCOME FUND
----------------------------------------------------------------
CLASS B
----------------------------------------------------------------
FOR THE
SIX MONTHS FOR THE YEARS
ENDED ENDED OCTOBER 31,
APRIL 30, 1998 ----------------------------------------------
(UNAUDITED) 1997 1996 1995 1994
-------------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period..... $ 10.24 $ 10.44 $ 10.31 $ 9.96 $ 10.95
-------------- -------- -------- -------- --------
Net investment income.... 0.25@ 0.58@ 0.64@ 0.69@ 0.86
Net realized and
unrealized gains
(losses) from
investments and foreign
currency ............... (0.07)@ (0.17)@ 0.15@ 0.30@ (1.28)
-------------- -------- -------- -------- --------
Net increase (decrease)
from investment
transactions............ 0.18 0.41 0.79 0.99 (0.42)
-------------- -------- -------- -------- --------
Dividends from net
investment income ...... (0.28) (0.48) (0.66) (0.64) (0.29)
Distributions from net
realized gains from
investments and foreign
currency transactions... -- -- -- -- --
Distributions in excess
of net investment
income.................. -- (0.05) -- -- --
Distributions from
paid-in-capital......... -- (0.08) -- -- (0.28)
-------------- -------- -------- -------- --------
Total dividends and
distributions to
shareholders............ (0.28) (0.61) (0.66) (0.64) (0.57)
-------------- -------- -------- -------- --------
Net asset value, end of
period.................. $ 10.14 $ 10.24 $ 10.44 $ 10.31 $ 9.96
-------------- -------- -------- -------- --------
-------------- -------- -------- -------- --------
Total investment return
(1)..................... 1.79% 4.11% 7.95% 10.24% (3.90)%
-------------- -------- -------- -------- --------
-------------- -------- -------- -------- --------
Ratios/supplemental data:
Net assets, end of period
(000's)................. $ 56,289 $103,312 $307,577 $484,534 $725,553
Expenses to average net
assets.................. 2.13%* 1.99% 1.99% 2.00%(2) 1.94%
Net investment income to
average net assets...... 5.18%* 5.83% 6.14% 6.71%(2) 6.05%
Portfolio turnover
rate.................... 62% 172% 126% 113% 108%
</TABLE>
- ------------------
@ Calculated using the average shares outstanding for the period.

* Annualized

** Includes 0.15% of interest expense related to the reverse repurchase
agreement transactions entered into during the fiscal year.

+ Commencement of issuance of shares.

(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 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 return for periods of less than one
year has not been annualized.

(2) These ratios include non-recurring acquisition expenses of 0.04%.

--------------------
Prospectus Page 18
<PAGE>
------------------------------

PaineWebber
Asia Pacific Growth Fund Global Equity Fund
Emerging Markets Equity Fund Global Income Fund

FINANCIAL HIGHLIGHTS
(Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL INCOME FUND
--------------------------------------------------------------------------------
CLASS B
--------------------------------------------------------------------------------
FOR THE YEARS ENDED OCTOBER 31,
--------------------------------------------------------------------------------
1993 1992 1991 1990 1989 1988
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period..... $ 10.62 $ 10.74 $ 11.07 $ 10.08 $ 11.10 $ 10.28
---------- ---------- ---------- ---------- ---------- ----------
Net investment income.... 0.78 0.94 0.85 1.01 1.01 0.98

Net realized and
unrealized gains
(losses) from
investments and foreign
currency ............... 0.40 (0.32) (0.09) 0.96 (0.64) 1.15
---------- ---------- ---------- ---------- ---------- ----------
Net increase (decrease)
from investment
transactions............ 1.18 0.62 0.76 1.97 0.37 2.13
---------- ---------- ---------- ---------- ---------- ----------
Dividends from net
investment income ...... (0.71) (0.56) (0.97) (0.98) (0.94) (1.06)

Distributions from net
realized gains from
investments and foreign
currency transactions... (0.14) (0.18) (0.12) -- (0.45) (0.25)

Distributions in excess
of net investment
income.................. -- -- -- -- -- --

Distributions from
paid-in-capital......... -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------
Total dividends and
distributions to
shareholders............ (0.85) (0.74) (1.09) (0.98) (1.39) (1.31)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of
period.................. $ 10.95 $ 10.62 $ 10.74 $ 11.07 $ 10.08 $ 11.10
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
Total investment return
(1)..................... 11.45% 5.93% 7.39% 20.32% 3.66% 18.29%
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------

Ratios/supplemental data:
Net assets, end of period
(000's)................. $1,188,890 $1,542,255 $1,593,814 $1,323,495 $1,085,851 $1,145,460

Expenses to average net
assets.................. 2.11%** 1.98% 1.94% 1.90% 1.95% 2.05%

Net investment income to
average net assets...... 5.97%** 7.11% 8.09% 9.88% 9.73% 9.13%

Portfolio turnover
rate.................... 90% 92% 33% 126% 124% 120%

<CAPTION>
GLOBAL INCOME FUND
--------------------------------------------------------------------------------
CLASS C
--------------------------------------------------------------------------------
FOR THE FOR THE
SIX MONTHS PERIOD
ENDED JULY 2,
APRIL 30, FOR THE YEARS ENDED OCTOBER 31, 1992+ TO
1998 ----------------------------------------------------- OCTOBER
(UNAUDITED) 1997 1996 1995 1994 1993 31, 1992
----------- ------- ------- ------- ------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period..... $ 10.26 $ 10.45 $ 10.33 $ 9.98 $ 10.96 $ 10.64 $ 10.94
---------- ------- ------- ------- ------- ------- -------
Net investment income.... 0.28@ 0.63@ 0.67@ 0.71@ 0.70 0.68 0.20

Net realized and
unrealized gains
(losses) from
investments and foreign
currency ............... (0.09)@ (0.18)@ 0.14@ 0.31@ (1.09) 0.52 (0.13)
---------- ------- ------- ------- ------- ------- -------
Net increase (decrease)
from investment
transactions............ 0.19 0.45 0.81 1.02 (0.39) 1.20 0.07
---------- ------- ------- ------- ------- ------- -------

Dividends from net
investment income ...... (0.29) (0.50) (0.69) (0.67) (0.30) (0.74) (0.21)

Distributions from net
realized gains from
investments and foreign
currency transactions... -- -- -- -- -- (0.14) (0.16)

Distributions in excess
of net investment
income.................. -- (0.06) -- -- -- -- --

Distributions from
paid-in-capital......... -- (0.08) -- -- (0.29) -- --
---------- ------- ------- ------- ------- ------- -------

Total dividends and
distributions to
shareholders............ (0.29) (0.64) (0.69) (0.67) (0.59) (0.88) (0.37)
---------- ------- ------- ------- ------- ------- -------

Net asset value, end of
period.................. $ 10.16 $ 10.26 $ 10.45 $ 10.33 $ 9.98 $ 10.96 $ 10.64
---------- ------- ------- ------- ------- ------- -------
---------- ------- ------- ------- ------- ------- -------
Total investment return
(1)..................... 1.91% 4.48% 8.12% 10.49% (3.56)% 11.64% 0.61%
---------- ------- ------- ------- ------- ------- -------
---------- ------- ------- ------- ------- ------- -------
Ratios/supplemental data:
Net assets, end of period
(000's)................. $ 30,634 $36,935 $50,928 $71,329 $92,480 $135,847 $36,598

Expenses to average net
assets.................. 1.83%* 1.69% 1.73% 1.75%(2) 1.68% 1.83%** 1.75%*

Net investment income to
average net assets...... 5.51%* 6.17% 6.40% 6.96%(2) 6.34% 6.17%** 7.02%*

Portfolio turnover
rate.................... 62% 172% 126% 113% 108% 90% 92%

</TABLE>

--------------------
Prospectus Page 19

<PAGE>
------------------------------

PaineWebber
Asia Pacific Growth Fund Global Equity Fund
Emerging Markets Equity Fund Global Income Fund

FINANCIAL HIGHLIGHTS
(Concluded)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
GLOBAL INCOME FUND
--------------------------------------------------------------------------------------------------
CLASS Y
--------------------------------------------------------------------------------------------------
FOR THE
FOR THE PERIOD
SIX MONTHS AUGUST 26,
ENDED FOR THE YEARS ENDED OCTOBER 31, 1991+ TO
APRIL 30, 1998 ----------------------------------------------------------------- OCTOBER 31,
(UNAUDITED) 1997 1996 1995 1994 1993 1992 1991
-------------- ------- ------- ------- -------- ------- ------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $10.27 $ 10.49 $ 10.35 $ 9.99 $ 10.97 $ 10.64 $ 10.76 $ 10.53
------ ------- ------- ------- -------- ------- ------- -------
Net investment income.... 0.31@ 0.71@ 0.75@ 0.78@ 0.75 0.71 0.81 0.17
Net realized and
unrealized gains
(losses) from
investments and
foreign currency....... (0.08)@ (0.21)@ 0.17@ 0.32@ (1.06) 0.58 (0.08) 0.32
------ ------- ------- ------- -------- ------- ------- -------
Net increase (decrease)
from investment
transactions........... 0.23 0.50 0.92 1.10 (0.31) 1.29 0.73 0.49
------ ------- ------- ------- -------- ------- ------- -------
Dividends from net
investment income...... (0.34) (0.56) (0.78) (0.74) (0.34) (0.82) (0.67) (0.24)
Distributions from net
realized gains from
investments and
foreign currency
transactions........... -- -- -- -- -- (0.14) (0.18) (0.02)
Distributions in excess
of net investment
income................. -- (0.06) -- -- -- -- -- --
Distributions from
paid-in-capital........ -- (0.10) -- -- (0.33) -- -- --
------ ------- ------- ------- -------- ------- ------- -------
Total dividends and
distributions to
shareholders........... (0.34) (0.72) (0.78) (0.74) (0.67) (0.96) (0.85) (0.26)
------ ------- ------- ------- -------- ------- ------- -------
Net asset value, end of
period................. $10.16 $ 10.27 $ 10.49 $ 10.35 $ 9.99 $ 10.97 $ 10.64 $ 10.76
------ ------- ------- ------- -------- ------- ------- -------
------ ------- ------- ------- -------- ------- ------- -------
Total investment return
(1).................... 2.28% 5.20% 9.25% 11.39% (2.86)% 12.60% 6.98% 4.63%
------ ------- ------- ------- -------- ------- ------- -------
------ ------- ------- ------- -------- ------- ------- -------
Ratios/supplemental data:
Net assets, end of period
(000's)................ $9,506 $10,096 $13,077 $16,613 $ 12,975 $12,043 $ 7,252 $ 2,565
Expenses to average net
assets................. 1.08%* 0.94% 0.96% 0.95%(2) 0.88% 1.06%** 0.94% 1.09%*
Net investment income to
average net assets..... 6.29%* 6.93% 7.19% 7.77%(2) 7.23% 7.00%** 8.15% 8.79%*
Portfolio turnover
rate................... 62% 172% 126% 113% 108% 90% 92% 53%
</TABLE>

- ------------------
@ Calculated using the average shares outstanding for the period.

* Annualized

** Includes 0.15% of interest expense related to the reverse repurchase
agreement transactions entered into during the fiscal year.

+ Commencement of issuance of shares.

(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 at net asset value on the payable dates and a sale at net
asset value on the last day of each period reported. Total investment
return for periods of less than one year has not been annualized.

(2) These ratios include non-recurring acquisition reorganization expenses of
0.04%.

--------------------
Prospectus Page 20

<PAGE>
------------------------------

PaineWebber
Asia Pacific Growth Fund Global Equity Fund
Emerging Markets Equity Fund Global Income Fund

INVESTMENT OBJECTIVES & POLICIES

- --------------------------------------------------------------------------------

The Funds' investment objectives may not be changed without shareholder
approval. Except where noted, the Funds' other investment policies are not
fundamental and may be changed by their boards.

ASIA PACIFIC GROWTH FUND

Asia Pacific Growth Fund's investment objective is long-term capital
appreciation. The Fund seeks to achieve its objective by investing primarily in
equity securities of Asia Pacific Region companies. The Fund considers the "Asia
Pacific Region" to be the region located south of the former Soviet Union, east
of Afghanistan and Iran and west of the International Date Line, but excluding
Japan. The Asia Pacific Region countries that currently have established
securities markets and that Schroder Capital normally considers for investments
by the Fund include: Australia, China, Hong Kong, India, Indonesia, Malaysia,
New Zealand, Pakistan, the Philippines, Singapore, South Korea, Sri Lanka,
Taiwan and Thailand. The Fund may also invest in other Asia Pacific Region
countries whose securities markets become sufficiently established. Except under
unusual conditions, the Fund invests in a minimum of three, and generally in a
larger number of, Asia Pacific Region countries. The Fund invests across a broad
spectrum of industries, including trade, finance, real estate, transportation,
communications, energy, construction, manufacturing, services, food processing
and others. The mix of industries and countries changes over time as investment
opportunities change.

The Fund defines Asia Pacific Region companies as companies:

o that are organized under the laws of countries in the Asia Pacific Region that
now or in the future permit foreign investors to participate in their stock
markets,

o that regardless of where organized, and as determined by Schroder Capital,
either (A) derive at least 50% of their revenues from goods produced or sold,
investments made or services performed in Asia Pacific Region countries or (B)
maintain at least 50% of their assets in Asia Pacific Region countries, or

o for which the principal securities trading market is an exchange or
over-the-counter ("OTC") market in the Asia Pacific Region.

Under normal market conditions, the Fund will invest at least 65% of its total
assets in equity securities of Asia Pacific Region companies. Most of the equity
securities purchased by the Fund are expected to be traded on a foreign stock
exchange or in a foreign OTC market. When Schroder Capital believes it is
consistent with the Fund's investment objective, the Fund may invest up to 10%
of its total assets in convertible and non-convertible bonds, which may be rated
below investment grade, issued or guaranteed by Asia Pacific Region issuers,
including obligations of sovereign governmental issuers ("sovereign debt").

EMERGING MARKETS EQUITY FUND

Emerging Markets Equity Fund's investment objective is long-term capital
appreciation. The Fund seeks to achieve its objective through investment in a
diversified portfolio consisting primarily of equity securities of issuers in
emerging markets. "Emerging markets" are the markets in all the countries not
included in the Morgan Stanley Capital International ("MSCI") World Index, an
index of major world economies. Malaysia also is considered an emerging market.
Under normal market conditions, the Fund invests a minimum of 65% of its total
assets in equity securities of issuers located in emerging market countries and
maintains investments in at least three emerging market countries. The Fund
considers issuers to be located in an emerging market country if: (1) the
principal securities trading market for the issuer is in an emerging market
country; (2) the issuer derives 50% or more of its annual revenue or profit from
either goods produced, sales made, investments made or services performed in
emerging market countries; or (3) the issuer is organized under the laws of an
emerging market country.

Schroder Capital attempts to spread the Fund's investments over geographic as
well as economic sectors. Generally, Schroder Capital will invest no more than
35% of the Fund's total assets in any single country, and it does not invest 25%
or more of the Fund's total assets in any single industry. Within each emerging
market, the Fund is diversified through investments in a number of local
companies characterized by attractive valuation relative to expected growth.

There are currently over 60 newly industrializing and developing countries with
equity markets. A number of these emerging markets are not yet easily accessible
to foreign investors and have unattractive tax barriers

--------------------
Prospectus Page 21
<PAGE>
------------------------------

PaineWebber
Asia Pacific Growth Fund Global Equity Fund
Emerging Markets Equity Fund Global Income Fund

or insufficient liquidity to make significant investments by the Fund feasible
or attractive. However, many of the largest of the emerging market countries
have liberalized access in recent years, and more are expected to do so in the
future.

In recent years, many emerging market countries have begun programs of economic
reform: removing import tariffs, dismantling trade barriers, deregulating
foreign investment, privatizing state owned industries, permitting the value of
their currencies to float against the dollar and other major currencies, and
generally reducing the level of state intervention in industry and commerce.
Important intra-regional economic integration also holds the promise of greater
trade and growth. At the same time, significant progress has been made in
restructuring the heavy external debt burden that certain emerging market
countries accumulated during the 1970s and 1980s. While there is no assurance
that these trends will continue, and events within the past several months have
shown reversals in some countries, Schroder Capital will seek out attractive
investment opportunities in these countries.

GLOBAL EQUITY FUND

Global Equity Fund's investment objective is long-term growth of capital. The
Fund attempts to achieve this goal by investing primarily in equity securities
issued by companies in foreign countries, as well as in the United States. Under
normal circumstances, the Fund invests at least 80% of its total assets in
securities of issuers in the United States and countries represented in the MSCI
Europe, Australia and Far East Index ("EAFE Index"). The EAFE Index is a well
known index that reflects most major equity markets outside the United States.
The Fund may invest up to 20% of its total assets in securities of issuers
located in other countries (for example, Canada) and in emerging markets.

The Fund normally invests in at least three countries, one of which is typically
the United States. The Fund considers an issuer to be located in the country in
which the issuer (a) is organized, (b) derives at least 50% of its revenues or
profits from goods produced or sold, investments made or services performed,
(c) has at least 50% of its assets situated or (d) has the principal trading
market for its securities. The Fund normally invests at least 65% of its total
assets in equity securities of foreign and U.S. companies.

When Mitchell Hutchins or Invista believes it is consistent with the Fund's
investment objective of long-term growth of capital, the Fund may invest up to
35% of its total assets in investment grade bonds that are issued by corporate
or governmental entities and that have maturities no longer than seven years.
The Fund may invest up to 10% of its net assets in convertible securities rated
below investment grade. When Mitchell Hutchins or Invista considers market,
economic, political or currency conditions abroad to be unstable, the Fund may
assume a temporary defensive position by investing all or a significant portion
of its assets in securities of U.S. and Canadian issuers or by holding cash or
short-term money market investments.

GLOBAL INCOME FUND

Global Income Fund's primary investment objective is high current income
consistent with prudent investment risk; capital appreciation is a secondary
objective. The Fund seeks to achieve these objectives by investing principally
in high-quality bonds issued or guaranteed by foreign governments, by the U.S.
government, by their respective agencies or instrumentalities or by
supranational organizations, or issued by U.S. or foreign companies.

The Fund's portfolio consists primarily of bonds rated within one of the two
highest grades assigned by Standard & Poor's, a division of The McGraw-Hill
Companies, Inc. ("S&P"), Moody's Investors Service, Inc. ("Moody's") or another
nationally recognized statistical rating organization ("NRSRO") or, if unrated,
determined by Mitchell Hutchins to be of comparable quality. Normally, at least
65% of the Fund's total assets consist of high-quality bonds (and receivables
from the sale of such bonds), denominated in foreign currencies or U.S. dollars,
of issuers located in at least three of the following countries: Australia,
Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland,
Italy, Japan, the Netherlands, New Zealand, Norway, Portugal, Singapore, Spain,
Sweden, Switzerland, Thailand, the United Kingdom and the United States. No more
than 40% of the Fund's assets normally are invested in securities of issuers
located in any one country other than the United States. Up to 5% of the Fund's
total assets may be invested in bonds convertible into equity securities. At
least 65% of the Fund's total assets normally are invested in income producing
securities.

The Fund may invest up to 35% of its total assets in bonds rated below the two
highest grades assigned by an NRSRO. Except as noted below, these securities
must be investment grade (that is, rated at least BBB by S&P, Baa by Moody's or
comparably rated by another NRSRO or, if unrated, determined by Mitchell

--------------------
Prospectus Page 22
<PAGE>
------------------------------

PaineWebber
Asia Pacific Growth Fund Global Equity Fund
Emerging Markets Equity Fund Global Income Fund

Hutchins to be of comparable quality). Within this 35% limitation, the Fund may
invest up to 20% of its total assets in bonds that are below investment grade.
These bonds may be rated as low as D by S&P, C by Moody's or comparably rated by
another NRSRO or, in the case of bonds assigned a short-term debt rating, as low
as D by S&P or comparably rated by another NRSRO or, if not so rated, determined
by Mitchell Hutchins to be of comparable quality. Bonds rated D by S&P are in
payment default or such rating is assigned upon the filing of a bankruptcy
petition or the taking of a similar action if payments on an obligation are
jeopardized. Bonds rated C by Moody's are in the lowest rated class and can be
regarded as having extremely poor prospects of attaining any real investment
standing. Mitchell Hutchins will purchase such securities for the Fund only when
it concludes that the anticipated return to the Fund on such investments
warrants exposure to the additional level of risks. Lower-rated bonds are often
issued by businesses and governments in emerging markets. Because the Fund may
also invest in emerging market bonds that are investment grade, the Fund's total
investment in emerging market bonds may exceed the 20% noted above.

In the event that, due to a downgrade of one or more bonds, an amount in excess
of 20% of the Fund's total assets is held in securities rated below investment
grade and comparable unrated securities, Mitchell Hutchins will engage in an
orderly disposition of such securities to the extent necessary to ensure that
the Fund's holdings of such securities do not exceed 20% of the Fund's total
assets.

The Fund may invest up to 35% of its total assets in mortgage-backed securities
of U.S. or foreign issuers that are rated in one of the two highest rating
categories by S&P, Moody's or another NRSRO or, if unrated, determined by
Mitchell Hutchins to be of comparable quality. Up to 20% of the Fund's total
assets may be invested in bonds that are not paying current income. The Fund may
purchase these bonds if Mitchell Hutchins believes that they have a potential
for capital appreciation.

- --------------------------------------------------------------------------------

INVESTMENT PHILOSOPHY & PROCESS

- --------------------------------------------------------------------------------

ASIA PACIFIC GROWTH FUND

Stock selection is at the heart of Schroder Capital's investment philosophy. Its
approach to selecting investments emphasizes fundamental company analysis.
Schroder Capital's stock selection focuses on Asia Pacific Region companies that
it believes have a sustainable competitive advantage and whose growth potential
is undervalued by other investors. In selecting companies for investment,
Schroder Capital considers historical growth rates and future growth prospects,
management capability, the ability of the company to access capital, government
regulation, market share, profit margins, competitive position in both domestic
and export markets and other factors. Schroder Capital allocates investments
among Asia Pacific Region countries based on its assessment of the likelihood
that those countries will have favorable long-term business environments.

Schroder Capital is committed to maximizing risk-adjusted returns for investors
through comprehensive research conducted by an extensive network of locally
based analysts. This investment approach is consistent with the Fund's overall
strategy of taking a long-term view to investment based upon its assessment of
growth potential. Schroder Capital is a wholly owned indirect subsidiary of
Schroders plc, the holding company parent of an international group of banks and
financial services companies ("Schroder Group"), with associated companies and
investment and representative offices located around the world. Schroder Capital
believes that one of its key strengths is the Schroder Group's worldwide network
of investment management affiliates and access to its extensive network of
research offices, many long established, in the Asia Pacific Region, including,
as of December 31, 1997, offices in Bangkok, Beijing, Hong Kong, Singapore,
Manila, Seoul, Sydney, Jakarta, Kuala Lumpur, Shanghai, Taipei and Tokyo. As of
that date, Schroder Capital's global research network was staffed by over 50
investment professionals, including 10 Asia Pacific Region specialists in
Schroder Capital's London office.

Each year, the Schroder Group researches and conducts on-site visits with
approximately 1,200 companies in the Asia Pacific Region countries. Of those

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PaineWebber
Asia Pacific Growth Fund Global Equity Fund
Emerging Markets Equity Fund Global Income Fund

companies, the Schroder Group's investment professionals further develop
extensive management contacts with, and produce independent forecasts of
earnings estimates for, approximately 550 companies. Schroder Capital's analysis
includes small and medium-sized companies, as well as the larger capitalization
companies.

Starting in mid-1997, some Asia Pacific Region countries began to experience
currency devaluations that resulted in high interest rate levels and sharp
reductions in economic activity. While the currency crisis diminished prospects
for short-term corporate earnings growth, International Monetary Fund
initiatives may persuade governments and corporations to restructure the
financial sector in a manner that would be a positive long-term factor for the
Asia Pacific Region. Such restructuring may provide for a return to high levels
of long-term economic activity and the return of economic conditions that have
supported economic growth in the Asia Pacific Region in the past. There can be
no assurance that economic growth in the Asia Pacific Region will occur, that
the growth rate will be as high on either an absolute or relative scale as in
the past or that market performance will reflect any actual economic growth in
the Asia Pacific Region overall. Many of the countries within the Asia Pacific
Region may experience political, social or economic instability.

EMERGING MARKETS EQUITY FUND

In selecting emerging market equity securities for Emerging Markets Equity Fund,
Schroder Capital combines rigorous, fundamental research with a quantitative
assessment of the economic potential of the various countries in which
investments might be made. Schroder Capital focuses on companies in emerging
market countries where it believes there is likely to be a favorable long-term
business environment and where it believes a company's growth is less likely to
be impeded by adverse macro-economic or political factors. Within those
countries, Schroder Capital selects stocks of companies that, based on its
analysis of fundamental corporate data, it believes have a sustainable
competitive advantage and whose growth potential is undervalued by other
investors.

Schroder Capital believes that one of its key strengths is the Schroder Group's
worldwide network of investment management affiliates and access to its network
of local research offices, many long established, in emerging market countries.
Each year, the Schroder Group researches and conducts on-site visits with
approximately 1,200 companies in emerging market countries. Of those companies,
the Schroder Group's investment professionals further develop extensive
management contacts with, and produce independent forecasts of earnings
estimates for, approximately 1,000 companies. Schroder Capital's analysis
includes small and medium-sized companies, as well as the larger capitalization
companies.

GLOBAL EQUITY FUND

Mitchell Hutchins is responsible for allocating Global Equity Fund's investments
between U.S. and foreign securities markets and for the management of the Fund's
U.S. investments. The Fund's foreign investments are managed by Invista. In
determining the portion of the Fund's assets allocated between U.S. and foreign
securities markets, Mitchell Hutchins considers the expected performance of the
U.S. equity markets versus that of certain developed foreign countries in the
EAFE Index. Mitchell Hutchins uses this analysis in determining the relative
attractiveness of the U.S. and foreign market segments. If Mitchell Hutchins
believes that a segment shows greater potential for higher returns on a
risk-weighted basis, Mitchell Hutchins may allocate a higher portion of Fund
assets to that segment.

Mitchell Hutchins expects initially to reevaluate the allocation of the Fund's
assets monthly and does not expect to reallocate the Fund's assets to reflect
relatively minor changes (that is, less than 5%) in the asset allocation model
employed. When Mitchell Hutchins determines that a reallocation of the Fund's
assets is appropriate, the Fund may effect the reallocation by using cash flows
from the purchase or redemption of its securities in addition to selling
portfolio securities from the applicable segment. The Fund also may use futures
contracts to adjust its exposure to U.S. and foreign equity markets in
connection with a reallocation. Mitchell Hutchins will determine the extent to
which the Fund uses futures contracts for this purpose and will be responsible
for implementing its decisions using these futures contracts.

For the U.S portion of the Fund's portfolio, Mitchell Hutchins follows a
disciplined investment process that relies on the Mitchell Hutchins Equity
Research Team and the Mitchell Hutchins Factor Valuation Model. The Model
screens a universe of over 3500 companies to identify undervalued companies with
relatively strong earnings momentum that rank well in three measures:

o VALUE: projected dividends, cash flow, earnings and book values;

o MOMENTUM: earnings and stock prices to identify companies that could surprise
on the upside; and

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PaineWebber
Asia Pacific Growth Fund Global Equity Fund
Emerging Markets Equity Fund Global Income Fund

o ECONOMIC SENSITIVITY: performance forecasts for different equity securities
and industries under various economic scenarios.

The Mitchell Hutchins Equity Research Team then applies traditional fundamental
analysis and may speak to the management of these companies, as well as their
competitors. Based on the Team's evaluations, Mitchell Hutchins selects U.S.
securities for purchase and sale for the Fund. The securities selected by
Mitchell Hutchins as part of the U.S. portion of the Fund's portfolio may
include investments aggregating up to 10% of the Fund's total assets in U.S.
dollar-denominated equity securities and bonds of foreign issuers that are
traded on recognized U.S. exchanges or in the U.S. over the counter ("OTC")
market.

For the foreign portion of the Fund's portfolio, Invista performs a qualitative
analysis of a company's fundamental business prospects and then analyzes the
long-term ability of the company to generate free cash flow. Invista will
consider factors such as competitive position, market share, competitive
strengths, industry supply and demand trends, economic conditions, balance sheet
strength, earnings, book value, return on equity, revenue growth and margin
development in analyzing the quality of the company. Invista also makes a
quantitative assessment of country risk, which it considers in assessing the
companies under analysis, and will analyze a large universe of companies to
determine the most appropriate foreign investments for the Fund. Invista may
make changes in investments as opportunities or prospects change for particular
countries, industries or companies.

GLOBAL INCOME FUND

Global Income 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 interdependence of
economic cycles and currency exchange rates. Over the past decade, bonds offered
by certain foreign governments provided higher investment returns than U.S.
government debt securities. Such returns reflect interest rates and other market
conditions prevailing in those countries and the effect of gains and losses in
the denominated currencies, which have had a substantial impact on investment in
foreign bonds. The importance of global debt markets is illustrated by the
Salomon Brothers World Government Bond Market Index, a popular index used to
assess both U.S. government and foreign government debt markets. As of
December 31, 1997, more than 65% of this index was represented by securities
denominated in currencies other than the U.S. dollar.

The Global Fixed Income Management Team at Mitchell Hutchins relies on
fundamental economic strength, credit quality and currency and interest rate
trends as the principal determinants of the various country, geographic and
industry sector weightings within the Fund's portfolio. In addition, certain of
the Fund's assets are invested in bonds of U.S. governmental and corporate
issuers. The Global Fixed Income Management Team believes that over time
investment in a composite of foreign fixed income markets and in the U.S.
government and corporate bond markets is less risky than a portfolio comprised
exclusively of foreign securities and provides investors with the potential to
earn a higher return than a portfolio invested exclusively in U.S. debt
securities.

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PaineWebber
Asia Pacific Growth Fund Global Equity Fund
Emerging Markets Equity Fund Global Income Fund

PERFORMANCE

- --------------------------------------------------------------------------------

These charts show the total returns for the Funds. Sales charges have not been
deducted from total returns for Class A, B and C shares. Returns would be lower
if sales charges were deducted. Average annual total returns both before and
after deducting the maximum sales charges are shown below in the tables that
follow the performance charts. Past results are not a guarantee of future
results. World financial markets have experienced significant volatility since
the end of the periods represented below, and this volatility has impacted each
Fund's performance.

ASIA PACIFIC GROWTH FUND

The 1997 return represents the period from inception on March 25, 1997 through
December 31, 1997. The Fund had no Class Y shares outstanding during the period
shown.

3/25/97-12/31/97
----------------

Class A (33.92)%

Class B (34.32)%

Class C (34.32)%

<TABLE>
<CAPTION>
TOTAL RETURN
As of April 30, 1998
CLASS A CLASS B CLASS C CLASS Y
SHARES SHARES SHARES SHARES
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Inception Date..................... 3/25/97 3/25/97 3/25/97 3/13/98
ONE YEAR
Before deducting maximum sales
charges....................... (34.78)% (35.28)% (35.28)% (6.12)%
After deducting maximum sales
charges....................... (37.72)% (38.52)% (35.93)% (6.12)%
LIFE
Before deducting maximum sales
charges....................... (32.26)% (32.79)% (32.79)% (6.12)%
After deducting maximum sales
charges....................... (35.04)% (35.23)% (32.79)% (6.12)%
</TABLE>

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PaineWebber
Asia Pacific Growth Fund Global Equity Fund
Emerging Markets Equity Fund Global Income Fund

EMERGING MARKETS EQUITY FUND

1/19/94-12/31/94 1995 1996 1997
---------------- ---- ---- ----

Class A (12.58)% (11.20)% 4.86% (4.53)%

Class B -- 0.55% 4.14% (4.52)%

Class C (13.17)% (11.87)% 4.03% (5.34)%

Class Y (12.33)% (10.92)% 5.05% (4.50)%

The 1994 return for Class A, Class C and Class Y shares represents the period
from inception on January 19, 1994 through December 31, 1994. The 1995 return
for Class B shares represents the period from inception on December 5, 1995 to
December 31, 1995. Schroder Capital was appointed sub-adviser for Emerging
Markets Equity Fund effective February 25, 1997; thus, while past performance is
never a guarantee of future results, information for periods prior to that date
may be less relevant than would otherwise be the case.

<TABLE>
<CAPTION>
AVERAGE ANNUAL RETURNS
As of April 30, 1998
CLASS A CLASS B CLASS C CLASS Y
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Inception Date..................... 1/19/94 12/5/95 1/19/94 1/19/94

ONE YEAR
Before deducting maximum sales
charges....................... (7.36)% (7.98)% (8.09)% (7.22)%
After deducting maximum sales
charges....................... (11.51)% (12.59)% (9.01)% (7.22)%

LIFE
Before deducting maximum sales
charges....................... (4.74)% 1.44 % (5.46)% (4.52)%
After deducting maximum sales
charges....................... (5.77)% 0.21% (5.46)% (4.52)%
</TABLE>

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PaineWebber
Asia Pacific Growth Fund Global Equity Fund
Emerging Markets Equity Fund Global Income Fund

GLOBAL EQUITY FUND

<TABLE>
<CAPTION>
11/14/91-
12/31/91 1992 1993 1994 1995 1996 1997
------------ -------- --------- --------- --------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Class A 2.42% 3.26% 30.77% (2.53)% 13.54% 14.80% 6.34%

Class B -- -- -- -- 1.29% 13.91% 5.49%

Class C -- -- 17.39% (3.12)% 12.76% 13.91% 5.55%

Class Y -- -- 18.19% (2.16)% 13.90% 15.12% 6.79%
</TABLE>

The 1991 return for Class A shares represents the period from inception on
November 14, 1991 through December 31, 1991. The 1995 return for Class B shares
represents the period from inception on August 25, 1995 through December 31,
1995. The 1993 returns for Class C and Class Y shares represent the period from
inception on May 10, 1993 through December 31, 1993. Invista was appointed
sub-adviser for the Fund's foreign investments on October 1, 1998, and Mitchell
Hutchins assumed all investment mangement responsibilities for the Fund's U.S.
investments on the same date. Thus, while past performance is never a guarantee
of future results, information for periods prior to that date may be less
relevant than otherwise would be the case.

<TABLE>
<CAPTION>
AVERAGE ANNUAL RETURNS
As of April 30, 1998
CLASS A CLASS B CLASS C CLASS Y
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Inception Date..................... 11/14/91 8/25/95 5/10/93 5/10/93

ONE YEAR
Before deducting maximum sales
charges....................... 26.45% 25.36% 25.48% 26.82%
After deducting maximum sales
charges....................... 20.74% 20.36% 24.48% 26.82%

FIVE YEARS
Before deducting maximum sales
charges....................... 13.88% N/A N/A N/A
After deducting maximum sales
charges....................... 12.84% N/A N/A N/A

LIFE
Before deducting maximum sales
charges....................... 13.15% 14.58% 12.85% 14.05%
After deducting maximum sales
charges....................... 12.34% 13.69% 12.85% 14.05%
</TABLE>

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PaineWebber
Asia Pacific Growth Fund Global Equity Fund
Emerging Markets Equity Fund Global Income Fund

GLOBAL INCOME FUND

<TABLE>
<CAPTION>
3/20/87-
12/31/87 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
------------ -------- -------- --------- --------- ---------- --------- ---------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A -- -- -- -- 11.11% 1.22% 14.16% (3.89)% 13.20% 7.13% 3.84%

Class B 17.58% 12.15% 5.44% 17.72% 10.75% 0.38% 13.36% (4.77)% 12.39% 6.34% 3.06%

Class C -- -- -- -- -- 0.10% 13.64% (4.43)% 12.54% 6.70% 3.33%

Class Y -- -- -- -- 9.83% 1.51% 14.54% (3.74)% 13.53% 7.54% 4.05%
</TABLE>

The 1991 return for Class A shares represents the period from inception on
July 1, 1991 through December 31, 1991. The 1987 return for Class B shares
represents the period from inception on March 20, 1987 through December 31,
1987. The 1992 return for Class C shares represents the period from inception on
July 2, 1992 through December 31, 1992. The 1991 return for Class Y shares
represents the period from inception on August 26, 1991 through December 31,
1991.

ONE YEAR
Before deducting maximum sales
charges....................... 7.58% 6.65% 6.91% 7.71%
After deducting maximum sales
charges....................... 3.28% 1.65% 6.16% 7.71%

FIVE YEARS
Before deducting maximum sales
charges....................... 5.93% 5.11% 5.39% 6.19%
After deducting maximum sales
charges....................... 5.08% 4.80% 5.39% 6.19%

TEN YEARS (OR LIFE OF CLASS)
Before deducting maximum sales
charges....................... 7.03% 7.56% 5.66% 7.28%
After deducting maximum sales
charges....................... 6.40% 7.56% 5.66% 7.28%
</TABLE>

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PaineWebber
Asia Pacific Growth Fund Global Equity Fund
Emerging Markets Equity Fund Global Income Fund

PERFORMANCE INFORMATION

The Funds perform 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 a Fund as a steady compound annual
rate of return. Actual year-by-year returns fluctuate and may be higher or lower
than standardized return. Standardized returns for Class A shares of the Funds
reflect deduction of the Funds' maximum initial sales charge of 4.5% (4% in the
case of Global Income Fund) at the time of purchase, and standardized returns
for the Class B and Class C shares of the Funds reflect deduction of the
applicable contingent deferred sales charge imposed on the sale of shares held
for the period. One-, five- and ten-year periods will be shown, unless the Fund
or Class has been in existence for a shorter period. If so, returns will be
shown for the period since inception, known as "Life." Total return calculations
assume reinvestment of dividends and other distributions.

The Funds may use other total return presentations in conjunction with
standardized return. These may cover the same or different periods as those used
for standardized return and may include cumulative returns, average annual
rates, actual year-by-year rates or any combination thereof. Non-standardized
return does not reflect initial or contingent deferred sales charges and would
be lower if such charges were deducted.

Global Income Fund also may advertise its yield. Yield reflects investment
income net of expenses over a 30-day (or one month) period on a Fund share.
Yield is expressed as an annualized percentage of the maximum offering price for
a Fund share at the end of the period. For Class B, C and Y shares, the maximum
offering price is the same as the net asset value per share. Yield computations
differ from other accounting methods and may differ from dividends actually paid
or reported net income.

Total return information reflects past performance and does not indicate future
results. The investment return and principal value of shares of the Funds will
fluctuate. The amount investors receive when selling shares may be more or less
than what they paid. Further information about each Fund's performance is
contained in its Annual Report to Shareholders, which may be obtained without
charge by contacting the Fund, your PaineWebber investment executive or
PaineWebber's correspondent firms or by calling toll-free 1-800-647-1568.

- --------------------------------------------------------------------------------
THE FUNDS' INVESTMENTS
- --------------------------------------------------------------------------------

EQUITY SECURITIES include common stocks, most preferred stocks and securities
that are convertible into them, including common stock purchase warrants and
rights, equity interests in trusts, partnerships, joint ventures or similar
enterprises and depository receipts. Common stocks, the most familiar type,
represent an equity (ownership) interest in a corporation.

Preferred stock has certain fixed income features, like a bond, but is actually
equity in a company, like common stock. Convertible securities may include
debentures, notes and preferred equity securities, that may be converted into or
exchanged for a prescribed amount of common stock of the same or a different
issuer within a particular period of time at a specified price or formula.
Depository receipts typically are issued by banks or trust companies and
evidence ownership of underlying equity securities.

BONDS are fixed or variable rate debt obligations, including notes, debentures,
and similar instruments and securities. Mortgage- and asset-backed securities
are types of bonds, and income-producing, non-convertible preferred stocks may
be treated as bonds for investment purposes. Bonds are used by corporations and
governments to borrow money from investors. The issuer pays the investor a fixed
or variable rate of interest and normally must repay the amount borrowed on or
before maturity. Bonds have varying degrees of investment risk and varying
levels of sensitivity to changes in interest rates.

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PaineWebber
Asia Pacific Growth Fund Global Equity Fund
Emerging Markets Equity Fund Global Income Fund

RISKS

EQUITY SECURITIES. While past performance does not guarantee future results,
equity securities historically have provided the greatest long-term growth
potential in a company. However, their prices generally fluctuate more than
other securities, and reflect changes in a company's financial condition and in
overall market and economic conditions. Common stocks generally represent the
riskiest investment in a company. It is possible that a Fund may experience a
substantial or complete loss on an individual equity investment.

BONDS. Bonds are subject to interest rate risk and credit risk. Interest rate
risk is the risk that interest rates will rise and bond prices will fall,
lowering the value of a Fund's investments in bonds. Credit risk is the risk
that an issuer may be unable or unwilling to pay interest and principal on the
bond. In addition, there is a risk that bonds will be downgraded by rating
agencies, which can be expected to lower value and liquidity. Credit ratings
attempt to evaluate the safety of principal and interest payments and do not
evaluate the volatility of the security's value or its liquidity and do not
guarantee the performance of the issuer. Rating agencies 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.

Bonds rated below investment grade (that is, rated lower than BBB by S&P, Baa by
Moody's, comparably rated by another NRSRO or determined to be of similar
quality), generally offer a higher current yield than that available for higher
grade issues, but they involve higher risks. 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. Such
securities, commonly referred to as "junk bonds," are considered predominantly
speculative with respect to the issuer's capacity to pay interest and repay
principal and may involve major risk exposure to adverse conditions. These
securities may be rated in the lowest rating category by a ratings agency and
may be in default.

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.

CONVERTIBLE SECURITIES. Each Fund may invest in convertible securities. A
convertible security is a bond, debenture, note, preferred stock or other
security that may be converted into or exchanged for a prescribed amount of
common stock of the same or a different issuer within a particular period of
time at a specified price or formula. A convertible security entitles the holder
to receive interest or dividends until the convertible security matures or is
redeemed, converted or exchanged. Convertible securities have unique investment
characteristics in that they generally (1) have higher yields than common
stocks, but lower yields than comparable non-convertible securities, (2) are
less subject to fluctuation in value than the underlying stock because they have
fixed income characteristics and (3) provide the potential for capital
appreciation if the market price of the underlying common stock increases. While
no securities investment is without some risk, investments in convertible
securities generally entail less risk than the issuer's common stock. However,
the extent to which such risk is reduced depends in large measure upon the
degree to which the convertible security sells above its value as a fixed income
security.

FOREIGN INVESTING. Investing in foreign securities involves more risks than
investing in the United States. Their value is subject to economic and political
developments in the countries where the companies operate and to changes in
foreign currency values. Values may also be affected by foreign tax laws,
changes in foreign economic or monetary policies, exchange control regulations
and regulations involving prohibitions on the repatriation of foreign
currencies. Investments in foreign countries could be affected by other factors
not present in the United States, including expropriation, confiscatory
taxation, lack of uniform accounting and auditing standards and potential
difficulties in enforcing contractual obligations. Transactions in foreign
securities may be subject to less efficient settlement practices, including
extended clearance and settlement periods.

In general, less information may be available about foreign companies than about
U.S. companies, and foreign companies are generally not subject to the same
accounting, auditing and financial reporting standards as are U.S. companies.
Foreign securities markets may be less liquid and subject to less regulation
than the U.S. securities markets. The costs of investing outside the United
States frequently are

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PaineWebber
Asia Pacific Growth Fund Global Equity Fund
Emerging Markets Equity Fund Global Income Fund

higher than those in the United States. These costs include relatively higher
brokerage commissions and foreign custody expenses.

Investments in foreign government bonds involve special risks. The issuer of the
bond or the governmental authorities that control the repayment of the bond may
be unable or unwilling to pay interest or repay principal when due in accordance
with the terms of the bond, and a Fund may have limited legal recourse in the
event of default. Political conditions, especially a sovereign entity's
willingness to meet the terms of its debt obligations, are of considerable
significance.

INVESTING IN EMERGING MARKETS. Investing in securities issued by companies
located in emerging markets involves additional risks. These countries typically
have economic and political systems that are relatively less mature, and can be
expected to be less stable, than those of developed countries. Emerging market
countries may have policies that restrict investment by foreigners in those
countries, and there is a risk of government expropriation or nationalization of
private property. The possibility of low or nonexistent trading volume in the
securities of companies in emerging markets may also result in a lack of
liquidity and in price volatility. Issuers in emerging markets typically are
subject to a greater degree of change in earnings and business prospects than
are companies in developed markets.

The emerging markets in which the Funds may invest include formerly communist
countries of Eastern Europe, the Commonwealth of Independent States (formerly
the Soviet Union) and the People's Republic of China. Upon the accession to
power of communist regimes approximately 50 to 80 years ago, the governments of
a number of these countries expropriated a large amount of property. The claims
of many property owners against those governments were never finally settled.
There can be no assurance that a Fund's investments in these countries, if any,
would not also be expropriated, nationalized or otherwise confiscated, in which
case the Fund could lose its entire investment in the country involved. In
addition, any change in the leadership or policies of these countries may halt
the expansion of or reverse the liberalization of foreign investment policies
now occurring. The Funds may invest in Hong Kong, which reverted to Chinese
administration on July 1, 1997. The long-term effects of this reversion are not
known at this time. However, a Fund's investments in Hong Kong may now be
subject to the same or similar risks as any investment in China.

Asia Pacific Growth Fund's investments have included securities issued by
Malaysian companies. Currency restrictions imposed by the Malaysian government
may delay for up to one year the proceeds of any sale of those securities by the
Fund. Fund assets subject to those restrictions would be unavailable to the Fund
to meet redemption requests or for reinvestment in other securities; in
addition, it may be difficult for the Fund to determine the fair value of such
securities (or of the Malaysian currency in which they are denominated) for
purposes of computing the Fund's net asset value. To the extent that another
Fund invests in Malaysian securities, it would also be subject to these
considerations.

CURRENCY. Currency risk is the risk that changes in foreign exchange rates may
reduce the U.S. dollar value of a Fund's foreign investments. A Fund's share
value may change significantly when investments are denominated in foreign
currencies. Generally, currency exchange rates are determined by supply and
demand in the foreign exchange markets and the relative merits of investments in
different countries. Currency exchange rates can also be affected by the
intervention of the U.S. and foreign governments or central banks, the
imposition of currency controls, speculation, devaluation or other political or
economic developments inside and outside the United States.

EUROPEAN CURRENCY UNIFICATION. Several European countries expect to adopt a
single currency, the euro, effective January 1, 1999. Countries participating in
the Economic and Monetary Union expect that their exchange rates will become
irrevocably fixed on that date. The countries expected to participate are
Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the
Netherlands, Portugal and Spain. A newly created European Central Bank
(ECB) will attempt to manage monetary policy for this region. Pre-existing
national currencies will continue to be valid until they are replaced by euro
coins and bank notes, which is expected to occur by sometime in 2002. These
changes may significantly impact European capital markets, and related risks may
increase volatility in world capital markets. This, in turn, may impact a Fund's
share price.

Risks related to the euro include the following: market uncertainties if its
introduction is delayed; potential increased volatility in exchange rates,
especially between European countries that are participating in the new currency
and those that are not; unanticipated expenses incurred in accommodating the new
currency; investor uncertainty resulting in asset shifts away from

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PaineWebber
Asia Pacific Growth Fund Global Equity Fund
Emerging Markets Equity Fund Global Income Fund

the affected currencies; possible inconsistent treatment of European Currency
Units, a currency basket used as a unit of account for settlement purposes which
preexists the euro's introduction; disputes concerning the enforceability of
contracts; and interest rate and exchange rate volatility as the new ECB and
market participants search for a common understanding of policy targets and
instruments. Additional information is provided in the Statement of Additional
Information.

CURRENCY-LINKED INVESTMENTS. The Funds may invest in securities that are indexed
to specific foreign currency exchange rates. The principal amount of these
securities may be adjusted up or down (but not below zero) at maturity to
reflect changes in the exchange rate between two currencies. A Fund may
experience loss of principal due to these adjustments.

DERIVATIVES. Some of the instruments in which the Funds may invest may be
referred to as "derivatives," because their value depends on (or "derives" from)
the value of an underlying asset, reference rate or index. These instruments
include options, futures contracts, forward currency contracts, swap agreements
and similar instruments. There is limited consensus as to what constitutes a
"derivative" security. However, in Mitchell Hutchins' view, derivative
securities also include "stripped" securities, specially structured types of
mortgage- and asset-backed securities and dollar denominated securities whose
value is linked to foreign currencies. The market value of derivative
instruments and securities sometimes is more volatile than that of other
investments, and each type of derivative instrument may pose its own special
risks. Mitchell Hutchins and the sub-advisers take these risks into account in
their management of the Funds.

COUNTERPARTIES. The Funds may be exposed to the risk of financial failure or
insolvency of another party. To help lessen those risks, Mitchell Hutchins and
the sub-advisers, subject to the supervision of the Funds' boards, monitor and
evaluate the creditworthiness of the parties with which each Fund does business.

U.S. GOVERNMENT SECURITIES. The U.S. government securities in which Global
Income Fund may invest include direct obligations of the U.S. government (such
as Treasury bills, notes and bonds) and obligations issued or guaranteed as to
principal and interest (but not as to market value) by U.S. government agencies
and instrumentalities, including U.S. government mortgage-backed securities.

Global Income Fund may invest in "zero coupon" Treasury securities, which are
Treasury bills, notes and bonds that have been stripped of their unmatured
interest coupons, and receipts or certificates representing interest in such
stripped debt obligations and coupons. A zero coupon security pays no cash
interest to its holder prior to maturity. Accordingly, these securities usually
are issued and traded at a deep discount from their face or par value and are
subject to greater fluctuations of market value in response to changing interest
rates than debt obligations of comparable maturities that make current income
payments. Federal tax law requires that the holder of a zero coupon security
include in gross income each year the original issue discount that accrues on
the security for the year, even though the holder receives no interest payment
on the security during the year. For additional discussion of the tax treatment
of zero coupon securities, see "Taxes" in the Statement of Additional
Information.

Global Income Fund may also invest in Treasury Inflation-Protection Securities
("TIPS"), which are Treasury bonds on which the principal value is adjusted
daily in accordance with changes in the Consumer Price Index. Interest on TIPS
is payable semiannually on the adjusted principal value. The principal value of
TIPS would decline during periods of deflation, but the principal amount payable
at maturity would not be less than the original par amount. If inflation is
lower than expected while the Fund holds TIPS, the Fund may earn less on the
TIPS than it would on conventional Treasury bonds. Any increase in the principal
value of TIPS is taxable in the year the increase occurs, even though holders do
not receive cash representing the increase at that time.

MORTGAGE-BACKED SECURITIES. Mortgage-backed securities are bonds that represent
direct or indirect interests in pools of underlying mortgage loans that are
secured by real property. U.S. government mortgage-backed securities are issued
or guaranteed by Ginnie Mae (also known as the Government National Mortgage
Association), Fannie Mae (also known as the Federal National Mortgage
Association), Freddie Mac (also known as the Federal Home Loan Mortgage
Corporation) or other government sponsored enterprises. Other domestic
mortgage-backed securities are sponsored or issued by private entities,
including investment banking firms and mortgage originators. Foreign mortgage-
backed securities may be issued by mortgage banks and other private or
governmental entities outside the United States and are supported by interests
in foreign real estate. While all the Funds may invest in mortgage-backed
securities, only Global Income Fund is expected to have substantial portions of
its assets invested in these securities under normal circumstances.

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Prospectus Page 33
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PaineWebber
Asia Pacific Growth Fund Global Equity Fund
Emerging Markets Equity Fund Global Income Fund

Mortgage-backed securities may be composed of one or more classes and may be
structured either as pass-through securities or collateralized debt obligations.
Multiple-class mortgage-backed securities are referred to in this Prospectus as
"CMOs." Some CMOs are directly supported by other CMOs, which in turn are
supported by mortgage pools. Investors typically receive payments out of the
interest and principal on the underlying mortgages. The portions of these
payments that investors receive, as well as the priority of their rights to
receive payments, are determined by the specific terms of the CMO class. CMOs
involve special risk, and evaluating them requires special knowledge.

A major difference between mortgage-backed securities and traditional bonds is
that interest and principal payments are made more frequently (usually monthly)
and that principal may be repaid at any time. When interest rates go down and
homeowners refinance their mortgages, mortgage-backed securities may be paid off
more quickly than investors expect. When interest rates rise, mortgage-backed
securities may be paid off more slowly than originally expected. Changes in the
rate or "speed" of these prepayments can cause the value of mortgage-backed
securities to fluctuate rapidly.

Because of prepayments, mortgage-backed securities may benefit less than other
bonds from declining interest rates. Reinvestments of prepayments may occur at
lower interest rates than the original investment, thus adversely affecting a
Fund's yield. Actual prepayment experience may cause the yield of a mortgage-
backed security to differ from what was assumed when the Fund purchased the
security.

CMO classes may be specially structured in a manner that provides any of a wide
variety of investment characteristics, such as yield, effective maturity and
interest rate sensitivity. As market conditions change, however, and
particularly during periods of rapid or unanticipated changes in market interest
rates, the attractiveness of the CMO classes and the ability of the structure to
provide the anticipated investment characteristics may be significantly reduced.
These changes can result in volatility in the market value, and in some
instances reduced liquidity, of the CMO class.

Certain classes of CMOs and other mortgage-backed securities are structured in a
manner that makes them extremely sensitive to changes in prepayment rates.
Interest-only ("IO") and principal-only ("PO") classes are examples of this. IOs
are entitled to receive all or a portion of the interest, but none (or only a
nominal amount) of the principal payments, from the underlying mortgage assets.
If the mortgage assets underlying an IO experience greater than anticipated
principal prepayments, then the total amount of interest payments allocable to
the IO class, and therefore the yield to investors, generally will be reduced.
In some instances, an investor in an IO may fail to recoup all of his or her
initial investment, even if the security is government issued or guaranteed or
is rated AAA or the equivalent. Conversely, PO classes are entitled to receive
all or a portion of the principal payments, but none of the interest, from the
underlying mortgage assets. PO classes are purchased at substantial discounts
from par, and the yield to investors will be reduced if principal payments are
slower than expected. Some IOs and POs, as well as other CMO classes, are
structured to have special protections against the effects of prepayments. These
structural protections, however, normally are effective only within certan
ranges of prepayment rates and thus will not protect investors in all
circumstances. Inverse floating rate CMO classes also may be extremely volatile.
These classes pay interest at a rate that decreases when a specified index of
market rates increases.

The market for privately issued mortgage-backed securities is smaller and less
liquid than the market for U.S. government mortgage-backed securities. Foreign
mortgage-backed securities markets are substantially smaller than U.S. markets,
but have been established in several countries, including Germany, Denmark,
Sweden, Canada and Australia, and may be developed elsewhere. Foreign
mortgage-backed securities generally are structured differently than domestic
mortgage-backed securities, but they normally present substantially similar
investment risks as well as the other risks normally associated with foreign
securities.

During 1994, the value and liquidity of many mortgage-backed securities declined
sharply due primarily to increases in interest rates. There can be no assurance
that such declines will not recur. The market value of certain mortgage-backed
securities in which a Fund may invest, including IO and PO classes of
mortgage-backed securities, can be extremely volatile and these securities may
become illiquid. Mitchell Hutchins seeks to manage Global Income Fund's
investments in mortgage-backed securities so that the volatility of the Fund's
portfolio, taken as a whole, is consistent with the Fund's investment objective.
If market interest rates or other factors that affect the volatility of
securities held by the Fund change in ways that Mitchell Hutchins does not
anticipate, the Fund's ability to meet its investment objective may be reduced.

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Prospectus Page 34
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PaineWebber
Asia Pacific Growth Fund Global Equity Fund
Emerging Markets Equity Fund Global Income Fund

LOAN PARTICIPATIONS AND ASSIGNMENTS. Global Income Fund may invest in fixed and
floating rate loans arranged through private negotiations with a U.S. or foreign
borrower. These investments normally are participations in or assignments of all
or a portion of loans made by banks. Participations typically will result in the
Fund's having a contractual relationship only with the lender, not with the
borrower. In a participation, the Fund is entitled to receive payments of
principal, interest and any loan fees by the lender only when and if they are
received. Also, the Fund may not directly benefit from any collateral supporting
the underlying loan. As a result, the Fund assumes the credit risk of both the
borrower and the lender that is selling the participation. If the lender becomes
insolvent, the Fund may be treated as a general creditor of the lender and may
not benefit from any set-off between the lender and the borrower. In a loan
assignment, the Fund is entitled to receive payments directly from the borrower
and, therefore, does not depend on the selling bank to pass these payments on to
the Fund.

NON-DIVERSIFIED STATUS. Global Income Fund is "non-diversified," as that term is
defined in the 1940 Act, but it intends to continue to qualify as a "regulated
investment company" for federal income tax purposes. See "Dividends & Taxes."
This means, in general, that more than 5% of the total assets of the Fund may be
invested in securities of one issuer (including a foreign government), but only
if, at the close of each quarter of the Fund's taxable year, the aggregate
amount of such holdings does not exceed 50% of the value of its total assets and
no more than 25% of the value of its total assets is invested in the securities
of a single issuer. To the extent that the Fund's portfolio at times may include
the securities of a smaller number of issuers than if it were "diversified" (as
defined in the 1940 Act), the Fund will at such times be subject to greater risk
with respect to its portfolio securities than an investment company that invests
in a broader range of securities, in that changes in the financial condition or
market assessment of a single issuer may cause greater fluctuation in the Fund's
total return and the price of Fund shares.

YEAR 2000 RISK. Like other mutual funds and other financial and business
organizations around the world, each of the Funds could be adversely affected if
the computer systems used by Mitchell Hutchins, sub-advisers and other service
providers and entities with computer systems that are linked to Fund records do
not properly process and calculate date-related information and data from and
after January 1, 2000. This is commonly known as the "Year 2000 Issue." Mitchell
Hutchins is taking steps that it believes are reasonably designed to address the
Year 2000 Issue with respect to the computer systems that it uses and to obtain
satisfactory assurances that comparable steps are being taken by each of the
Funds' other major service providers. However, there can be no assurance that
these steps will be sufficient to avoid any adverse impact on the Funds.

Similarly, the companies in which a Fund invests and trading systems used by a
Fund could be adversely affected by the Year 2000 Issue. The ability of a
company or trading system to respond successfully to the Year 2000 Issue
requires both technological sophistication and diligence, and there can be no
assurance that any steps taken will be sufficient to avoid an adverse impact.

OTHER INVESTMENT TECHNIQUES AND STRATEGIES

STRATEGIES USING DERIVATIVE INSTRUMENTS. Each Fund may use certain instruments
and strategies designed to adjust the overall risk of its investment portfolio
("hedge") or, in the case of Global Income Fund, to enhance income or realize
gains. Mitchell Hutchins also may use futures contracts to adjust Global Equity
Fund's exposure to U.S. and foreign equity markets in connection with a
reallocation of that Fund's assets. Use of derivative instruments solely to
enhance income or realize gains may be considered a form of speculation. These
strategies involve derivative instruments, including options (both exchange
traded and over-the-counter), futures contracts and forward currency contracts.
In addition, Asia Pacific Growth Fund and Global Income Fund may use interest
rate swaps and similar contracts to preserve a return or spread on a particular
investment or portion of its portfolio or to protect against an increase in the
price of securities that either Fund anticipates purchasing at a later date.
Asia Pacific Growth Fund may also engage in currency swaps. New financial
products and risk management techniques continue to be developed, and they may
be used by any Fund if consistent with its investment objective and policies.
The Funds' ability to use these strategies may be limited by market conditions,
regulatory limits and tax considerations. In addition, in some countries there
may not be a market for derivative instruments, or it may be too small to permit
effective hedging. The Statement of Additional Information contains further
information on these derivative instruments and related strategies.

The Funds might not use any derivative instruments or strategies, and there can
be no assurance that using any strategy will succeed. If a sub-adviser or
Mitchell

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<PAGE>
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PaineWebber
Asia Pacific Growth Fund Global Equity Fund
Emerging Markets Equity Fund Global Income Fund

Hutchins, as applicable, is incorrect in its judgment on market values, interest
rates or other economic factors in using a derivative instrument or strategy, a
Fund may have lower net income and a net loss on the investment. Each of these
strategies involves certain risks, which include:

o the fact that the skills needed to use derivative instruments are different
from those needed to select securities for the Funds;

o the possibility of imperfect correlation, or even no correlation, between
price movements of derivative instruments used in hedging strategies and price
movements of the securities or currencies being hedged;

o possible constraints placed on a Fund's ability to purchase or sell portfolio
investments at advantageous times due to the need for the Fund to maintain
"cover" or to segregate securities; and

o the possibility that a Fund is unable to close out or liquidate its hedged
position.

REPURCHASE AGREEMENTS. Each Fund may use repurchase agreements. Repurchase
agreements are transactions in which a Fund purchases obligations from a bank or
securities dealer (or its affiliate) and simultaneously commits to resell the
securities to the counterparty at an agreed-upon date or upon demand and at a
price reflecting a market rate of interest unrelated to the coupon rate or
maturity of the purchased obligations. Each Fund maintains custody of the
underlying obligations prior to their repurchase, either through a regular
custodian or through a special "tri-party" custodian or sub-custodian that
maintains separate accounts for both the Fund and its counterparty. Thus, the
obligation of the counterparty to pay the repurchase price on the date agreed to
or upon demand is, in effect, secured by such obligations. Repurchase agreements
carry certain risks not associated with direct investments in securities,
including a possible decline in the market value of the underlying obligations.
Repurchase agreements involving obligations other than U.S. government
securities (such as commercial paper and corporate bonds) may be subject to
special risks and may not have the benefit of certain protections in the event
of the counterparty's insolvency. If the seller or guarantor becomes insolvent,
the Fund may suffer delays, costs and possible losses in connection with the
disposition of collateral. Each Fund intends to enter into repurchase agreements
only with counterparties in transactions believed by Mitchell Hutchins or a
sub-adviser to present minimum credit risks in accordance with guidelines
established by the Fund's board.

REVERSE REPURCHASE AGREEMENTS. Each Fund may enter into reverse repurchase
agreements with banks and securities dealers up to the percentages specified
below under "Other Information." Such agreements involve the sale of securities
held by the Fund subject to its agreement to repurchase the securities at an
agreed-upon date or upon demand and at a price reflecting a market rate of
interest. Such agreements are considered to be borrowings and may be entered
into only for temporary or emergency purposes.

WHEN-ISSUED AND DELAYED-DELIVERY SECURITIES.
Each Fund may purchase securities on a "when-issued" basis or may purchase or
sell securities for delayed delivery, i.e., for issuance or delivery to the
Funds later than the normal settlement date for such securities at a stated
price and yield. The Funds generally would not pay for such securities or start
earning interest on them until they are received. However, when a Fund
undertakes a when-issued or delayed-delivery obligation, it immediately assumes
the risks of ownership, including the risks of price fluctuation. Failure of the
issuer to deliver a security purchased by a Fund on a when-issued or delayed-
delivery basis may result in that Fund's incurring or missing an opportunity to
make an alternative investment. Depending on market conditions, a Fund's
when-issued and delayed-delivery purchase commitments could cause its net asset
value per share to be more volatile, because such securities may increase the
amount by which the Fund's total assets, including the value of when-issued and
delayed-delivery securities held by that Fund, exceeds its net assets.
When-issued and delayed-delivery securities will not exceed 10% of Global Equity
Fund's net assets.

LENDING PORTFOLIO SECURITIES. Each Fund may lend its securities to qualified
broker-dealers or institutional investors in an amount up to 33 1/3% of that
Fund's total assets. Lending securities enables a Fund to earn additional
income, but could result in a loss or delay in recovering these securities.

PORTFOLIO TURNOVER. Each Fund's portfolio turn- over rate may vary greatly from
year to year and will not be a limiting factor when Mitchell Hutchins or a
sub-adviser deems portfolio changes appropriate. A higher turnover rate (100% or
more) for a Fund will involve correspondingly greater transaction costs, which
will be borne directly by the Fund, and may increase the potential for
short-term capital gains.

Mitchell Hutchins and Invista may restructure a substantial portion of Global
Equity Fund's portfolio investments after assuming day-to-day portfolio
management of the Fund's investments to reflect their

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PaineWebber
Asia Pacific Growth Fund Global Equity Fund
Emerging Markets Equity Fund Global Income Fund

investment philosophies and processes. This restructuring could result in higher
than usual portfolio turnover for the current fiscal year. The restructuring
could involve correspondingly increased transaction costs, which would be borne
directly by Global Equity Fund, and may increase the potential for realizing
short-term and long-term capital gains, which could increase taxable
distributions to Fund shareholders.

DEFENSIVE AND TEMPORARY POSITIONS. When Mitchell Hutchins or a sub-adviser, as
applicable, believes that unusual circumstances warrant a defensive posture,
each Fund may temporarily commit all or any portion of its assets to cash (U.S.
dollars or foreign currencies) or investment grade money market instruments of
U.S. or foreign issuers, including repurchase agreements. Each Fund may invest
up to 35% of its total assets in cash (U.S. dollars or foreign currencies) or
investment grade money market instruments of U.S. or foreign issuers for
liquidity purposes, pending investment in other securities, to reinvest cash
collateral from securities lending or, in the case of Global Income Fund, as
part of its ordinary investment activities. Global Income Fund's investment of
cash collateral from securities lending in such money market instruments is not
subject to this 35% limitation.

ILLIQUID SECURITIES. Global Equity Fund and Global Income Fund each may invest
up to 10% of its net assets, and Emerging Markets Equity Fund and Asia Pacific
Growth Fund up to 15% of its net assets, in illiquid securities, including
certain cover for over-the-counter options and securities whose disposition is
restricted under the federal securities laws other than those Mitchell Hutchins,
or a sub-adviser, as applicable, has determined to be liquid pursuant to
guidelines established by a Fund's board. To the extent that securities are
freely tradeable in the country in which they are principally traded, they are
generally not considered illiquid even if they are not freely tradeable in the
United States. Each Fund may invest in restricted securities that are eligible
for resale to qualified institutional buyers pursuant to SEC Rule 144A, but a
Fund will not consider those securities to be illiquid if Mitchell Hutchins or a
sub-adviser, as applicable, determines them to be liquid in accordance with
procedures approved by the Fund's board. The lack of a liquid secondary market
for illiquid securities may make it more difficult for a Fund to assign a value
to those securities for purposes of valuing its portfolio and calculating its
net asset value.

OTHER INFORMATION. Each Fund may borrow money from banks or through reverse
repurchase agreements for temporary or emergency purposes in the following
amounts of total assets: Asia Pacific Growth Fund--33 1/3%, Emerging Markets
Equity Fund--33 1/3%, Global Equity Fund--20%, and Global Income Fund--10%.
However, none of the Funds will purchase portfolio securities while borrowings
(including reverse repurchase agreements) in excess of 5% of the value of its
total assets are outstanding. Each Fund may sell securities short "against the
box." When a security is sold against the box, the seller owns the security. In
addition, each Fund may invest up to 10% of its total assets in the securities
of other investment companies. To the extent a Fund invests in other investment
companies, its shareholders incur duplicative fees and expenses, including
investment advisory fees.

- --------------------------------------------------------------------------------
FLEXIBLE PRICING(ServiceMark)
- --------------------------------------------------------------------------------

Each Fund offers through this Prospectus four classes of shares that differ in
terms of sales charges and expenses. An eligible investor can select the class
that is best suited to his or her investment needs, based upon the holding
period and the amount of investment.

CLASS A SHARES

HOW PRICE IS CALCULATED: The price is the net asset value plus the initial sales
charge (the maximum is 4.5% of the public offering price or, in the case of
Global Income Fund, 4% of the public offering price) next calculated after
PaineWebber's New York City headquarters or PFPC Inc., the Funds' transfer agent
("Transfer Agent"), receives the purchase order. Although investors pay an
initial sales charge when they buy Class A shares, the ongoing expenses for this
class are lower than the ongoing expenses of Class B and Class C shares. Class A
shares sales charges are calculated as follows:

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PaineWebber
Asia Pacific Growth Fund Global Equity Fund
Emerging Markets Equity Fund Global Income Fund

ASIA PACIFIC GROWTH FUND, EMERGING MARKETS
EQUITY FUND AND GLOBAL EQUITY FUND

<TABLE>
<CAPTION>
SALES CHARGE AS A
PERCENTAGE OF DISCOUNT TO
------------------------- SELECTED DEALERS
OFFERING NET AMOUNT AS PERCENTAGE
AMOUNT OF INVESTMENT PRICE INVESTED OF OFFERING PRICE
- ----------------------------------- -------- ---------- -----------------
<S> <C> <C> <C>
Less than $50,000.................. 4.50% 4.71% 4.25%
$50,000 to $99,999................. 4.00 4.17 3.75
$100,000 to $249,999............... 3.50 3.63 3.25
$250,000 to $499,999............... 2.50 2.56 2.25
$500,000 to $999,999............... 1.75 1.78 1.50
$1,000,000 and over (1)............ None None 1.00 (2)
</TABLE>

GLOBAL INCOME FUND

<TABLE>
<CAPTION>
SALES CHARGE AS A
PERCENTAGE OF DISCOUNT TO
------------------------- SELECTED DEALERS
OFFERING NET AMOUNT AS PERCENTAGE
AMOUNT OF PURCHASE PRICE INVESTED OF OFFERING PRICE
- ----------------------------------- -------- ---------- -----------------
<S> <C> <C> <C>
Less than $100,000................. 4.00% 4.17% 3.75%
$100,000 to $249,999............... 3.00 3.09 2.75
$250,000 to $499,999............... 2.25 2.30 2.00
$500,000 to $999,999............... 1.75 1.78 1.50
$1,000,000 and over (1)............ None None 1.00 (2)
</TABLE>

- ------------------
(1) A contingent deferred sales charge of 1% of the shares' offering price or
the net asset value at the time of sale by the shareholder, whichever is
less, is charged on sales of shares made within one year of the purchase
date. Class A shares representing reinvestment of any dividends or other
distributions are not subject to the 1% charge. Withdrawals under the
Systematic Withdrawal Plan are not subject to this charge. However,
investors may withdraw annually no more than 12% of the value of the Fund
account under the Plan in the first year after purchase.

(2) Mitchell Hutchins pays 1% to PaineWebber.

SALES CHARGE REDUCTIONS & WAIVERS

Investors who are purchasing Class A shares in more than one PaineWebber mutual
fund may combine those purchases to get a reduced sales charge. Investors who
already own Class A shares in one or more PaineWebber mutual funds may combine
the amount they are currently purchasing with the value of such previously owned
shares to qualify for a reduced sales charge. To determine the sales charge
reduction in either case, please refer to the charts above.

Investors may also qualify for a lower sales charge when they combine their
purchases with those of:

o their spouses, parents or children under age 21;

o their Individual Retirement Accounts (IRAs);

o certain employee benefit plans, including 401(k) plans;

o any company controlled by the investor;

o trusts created by the investor;

o Uniform Gifts to Minors Act/Uniform Transfers to Minors Act accounts created
by the investor or group of investors for the benefit of the investors'
children; or

o accounts with the same adviser.

Employers who own Class A shares for one or more of their qualified retirement
plans may also qualify for the reduced sales charge.

The sales charge will not apply when the investor:

o is an employee, director, trustee or officer of PaineWebber, its affiliates or
any PaineWebber mutual fund;

o is the spouse, parent or child of any of the above;

o buys these shares through a PaineWebber investment executive who was formerly
employed as a broker with a competing brokerage firm that was registered as a
broker-dealer with the SEC; and

o was the investment executive's client at the competing brokerage firm;

o within 90 days of buying Class A shares in a Fund, the investor sells
shares of one or more mutual funds that (a) were principally underwritten
by the competing brokerage firm or its affiliates and (b) the investor
either paid a sales charge to buy those shares, paid a contingent
deferred sales charge when selling

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PaineWebber
Asia Pacific Growth Fund Global Equity Fund
Emerging Markets Equity Fund Global Income Fund

them or held those shares until the contingent deferred sales charge was
waived; and

o the amount that the investor purchases does not exceed the total amount
of money the investor received from the sale of the other mutual fund;

o is a certificate holder of unit investment trusts sponsored by PaineWebber and
has elected to have dividends and other distributions from that investment
automatically invested in Class A shares;

o is an employer establishing an employee benefit plan qualified under section
401, including a salary reduction plan qualified under section 401(k), or
section 403(b) of the Internal Revenue Code ("Code") (each a "qualified
plan"). (This waiver is subject to minimum requirements, with respect to the
number of employees and amount of plan assets, established by Mitchell
Hutchins. Currently, the plan must have 50 or more eligible employees and at
least $1 million in plan assets.) For investments made pursuant to this
waiver, Mitchell Hutchins may make a payment to PaineWebber out of its own
resources in an amount not to exceed 1% of the amount invested;

o is a participant in the PaineWebber Members Only Program(Trademark). For
investments made pursuant to this waiver, Mitchell Hutchins may make payments
out of its own resources to PaineWebber and to participating membership
organizations in a total amount not to exceed 1% of the amount invested;

o is a variable annuity offered only to qualified plans. For investments made
pursuant to this waiver, Mitchell Hutchins may make payments out of its own
resources to PaineWebber and to the variable annuity's sponsor, adviser or
distributor in a total amount not to exceed 1% of the amount invested;

o acquires Class A shares through an investment program that is not sponsored by
PaineWebber or its affiliates and that charges participants a fee for program
services, provided that the program sponsor has entered into a written
agreement with PaineWebber permitting the sale of Class A shares at net asset
value to that program. For investments made pursuant to this waiver, Mitchell
Hutchins may make a payment to PaineWebber out of its own resources in an
amount not to exceed 1% of the amount invested. For subsequent investments or
exchanges made to implement a rebalancing feature of such an investment
program, the minimum subsequent investment requirement is also waived; or

o acquires Class A shares in connection with a reorganization pursuant to which
a Fund acquires substantially all of the assets and liabilities of another
investment company in exchange solely for shares of the Fund.

o acquires Class A shares in connection with the disposition of proceeds from
the sale of shares of Managed High Yield Plus Fund Inc. that were acquired
during that fund's initial public offering of shares and that meet certain
other conditions described in its prospectus.

For more information on how to get any reduced sales charge, investors should
contact their investment executive at PaineWebber or one of its correspondent
firms or call 1-800-647-1568. Investors must provide satisfactory information to
PaineWebber or the Fund if they seek any of these sales charge reductions or
waivers.

CLASS B SHARES

HOW PRICE IS CALCULATED: The price is the net asset value next calculated after
PaineWebber's New York City headquarters or the Transfer Agent receives the
purchase order. The ongoing expenses investors pay for Class B shares are higher
than those of Class A shares. Because investors do not pay an initial sales
charge when they buy Class B shares, 100% of their purchase is immediately
invested.

Depending on how long they own their Fund investment, investors may have to pay
a sales charge when they sell their Fund shares. This sales charge is called a
"contingent deferred sales charge." The amount of the charge depends on how long
the investor owned the shares. The sales charge is calculated by multiplying the
offering price (the net asset value of the shares at the time of purchase) or
the net asset value of the shares at the time of sale by the shareholder,
whichever is less, by the percentage shown on the following table. Investors who
own shares for more than six years do not have to pay a sales charge when
selling those shares.

<TABLE>
<CAPTION>
PERCENTAGE BY WHICH
THE SHARES' NET
ASSET
IF THE INVESTOR VALUE IS
SELLS SHARES WITHIN: MULTIPLIED:
- ----------------------------------- -------------------
<S> <C>
1st year since purchase 5%
2nd year since purchase 4
3rd year since purchase 3
4th year since purchase 2
5th year since purchase 2
6th year since purchase 1
7th year since purchase None
</TABLE>

--------------------
Prospectus Page 39
<PAGE>
------------------------------

PaineWebber
Asia Pacific Growth Fund Global Equity Fund
Emerging Markets Equity Fund Global Income Fund

CONVERSION OF CLASS B SHARES

Class B shares automatically convert to the appropriate number of Class A shares
of equal dollar value after the investor has owned them for six years. Dividends
and other distributions paid to the investor by the Fund in the form of
additional Class B shares will also convert to Class A shares on a pro-rata
basis. This benefits shareholders because Class A shares have lower ongoing
expenses than Class B shares. If the investor has exchanged Class B shares
between PaineWebber funds, the Fund uses the purchase date at which the initial
investment was made to determine the conversion date.

MINIMIZING THE CONTINGENT DEFERRED
SALES CHARGE

When investors sell Class B shares they have owned for less than six years, the
Fund automatically will minimize the sales charge by assuming the investors are
selling:

o First, Class B shares owned through reinvested dividends and capital gain
distributions; and

o Second, Class B shares held in the portfolio the longest.

WAIVERS OF THE CONTINGENT DEFERRED SALES CHARGE

The contingent deferred sales charge will not apply to:

o sales of shares under the Fund's "Systematic Withdrawal Plan" (investors may
withdraw annually no more than 12% of the value of the Fund account under the
Plan);

o a distribution from an IRA, a self-employed individual retirement plan ("Keogh
Plan") or a custodial account under Section 403(b) of the Code (after the
investor reaches age 59 1/2);

o a tax-free return of an excess IRA contribution;

o a tax-qualified retirement plan distribution following retirement; or

o Class B shares sold within one year of an investor's death if the investor
owned the shares at the time of death either as the sole shareholder or with
his or her spouse as a joint tenant with the right of survivorship.

Investors must provide satisfactory information to PaineWebber or the Fund to
seek any of these waivers.

CLASS C SHARES

HOW PRICE IS CALCULATED: The price of Class C shares is the net asset value next
calculated after PaineWebber's New York City headquarters or the Transfer Agent
receives the purchase order. Investors do not pay an initial sales charge when
they buy Class C shares, but the ongoing expenses of Class C shares are higher
than those of Class A shares. Because investors do not pay an initial sales
charge when they buy Class C shares, 100% of their purchase is immediately
invested. Class C shares never convert to any other class of shares.

A contingent deferred sales charge of 1% (0.75% in the case of Global Income
Fund) of the offering price (the net asset value at the time of purchase) or the
net asset value of the shares at the time of sale by the shareholder, whichever
is less, is charged on sales of shares made within one year of the purchase
date. Other PaineWebber mutual funds may impose a different contingent deferred
sales charge on Class C shares sold within one year of the purchase date. A sale
of Class C shares acquired through an exchange and held less than one year will
be subject to the same contingent deferred sales charge that would have been
imposed on Class C shares of the PaineWebber mutual fund originally purchased.
Class C shares representing reinvestment of any dividends or capital gain
distributions will not be subject to the 1% charge. Withdrawals under the
Systematic Withdrawal Plan also will not be subject to this charge. However,
investors may withdraw no more than 12% of the value of the Fund account under
the Plan in the first year after purchase.

CLASS Y SHARES

HOW PRICE IS CALCULATED: Eligible investors may purchase Class Y shares at the
net asset value next calculated after PaineWebber's New York City headquarters
or the Transfer Agent receives the purchase order. Because investors do not pay
an initial sales charge when they buy Class Y shares, 100% of their purchase is
immediately invested. No contingent deferred sales charge is imposed on Class Y
shares, and the ongoing expenses for Class Y shares are lower than for the other
classes because Class Y shares are not subject to Rule 12b-1 distribution or
service fees.

LIMITED GROUPS OF INVESTORS. Only the following investors are eligible to buy
Class Y shares:

o a participant in the PW Program listed below when Class Y shares are purchased
through that PW Program;

o an investor who buys $10 million or more at any one time in any combination of
PaineWebber mutual funds in the Flexible Pricing System(Service Mark);

--------------------
Prospectus Page 40
<PAGE>
------------------------------

PaineWebber
Asia Pacific Growth Fund Global Equity Fund
Emerging Markets Equity Fund Global Income Fund

o a qualified plan that has either 5,000 or more eligible employees or
$50 million or more in assets;

o an investment company advised by PaineWebber or an affiliate of PaineWebber;
and

o for Global Equity Fund and Global Income Fund, the trustee of the PaineWebber
Savings Investment Plan ("PW SIP").

PACE MULTI-ADVISOR PROGRAM. An investor who participates in the PACE
Multi-Advisor Program is eligible to purchase Class Y shares. The PACE Multi-
Advisor Program is an advisory program sponsored by PaineWebber that provides
comprehensive investment services, including investor profiling, a personalized
asset allocation strategy using an appropriate combination of funds, and a
quarterly investment performance review. Participation in the PACE Multi-
Advisor Program is subject to payment of an advisory fee at the effective
maximum annual rate of 1.5% of assets. Employees of PaineWebber and its
affiliates are entitled to a waiver of this fee.

Please contact your PaineWebber investment executive or PaineWebber's
correspondent firms for more information concerning mutual funds that are
available through the PACE Multi-Advisor Program.

PURCHASES BY THE TRUSTEE OF THE PW SIP. The Class Y shares of Global Equity Fund
and Global Income Fund also are offered for sale to the trustee of the PW SIP, a
defined contribution plan sponsored by Paine Webber Group Inc. ("PW Group"). The
trustee of the PW SIP purchases and redeems these Class Y shares to implement
the investment choices of individual plan participants with respect to their PW
SIP contributions. Individual plan participants should consult the Summary Plan
Description and other plan material 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 Benefits Connection,
100 Halfday Road, Lincolnshire, IL 60069 or by calling
1-888-PWebber (1-888-793-2237).

As described in the Plan Documents, the average net asset value per share at
which Class Y shares of Global Equity Fund and Global Income Fund are purchased
or redeemed by the 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.

- --------------------------------------------------------------------------------
HOW TO BUY SHARES
- --------------------------------------------------------------------------------

Prices are calculated for each class of a Fund's shares once each Business Day,
at the close of regular trading on the New York Stock Exchange (usually
4:00 p.m., Eastern time). Prices will be calculated earlier when the New York
Stock Exchange closes early because trading has been halted for the day. A
"Business Day" is any day, Monday through Friday, on which the New York Stock
Exchange is open for business. The Funds and Mitchell Hutchins reserve the right
to reject any purchase order and to suspend the offering of Fund shares for a
period of time.

When placing an order to buy shares, investors should specify which class of
shares they want to buy. If investors fail to specify the class, they will
automatically receive Class A shares, which include an initial sales charge.
Investors in Class Y shares must provide satisfactory information to PaineWebber
or an individual Fund that they are eligible to purchase Class Y shares.

PAINEWEBBER CLIENTS

Investors who are PaineWebber clients may buy shares through PaineWebber
investment executives or its correspondent firms. Investors may buy shares in
person, by mail, by telephone or by wire (the minimum wire purchase is
$1 million). PaineWebber investment executives and correspondent firms are
responsible for promptly sending investors' purchase orders to PaineWebber's New
York City headquarters.

Investors may pay for their purchases with checks drawn on U.S. banks or with
funds they have in their brokerage accounts at PaineWebber or its correspondent
firms.

OTHER INVESTORS

Investors who are not PaineWebber clients may purchase Fund shares and set up an
account through the Transfer Agent (PFPC Inc.) by completing an account

--------------------
Prospectus Page 41
<PAGE>
------------------------------

PaineWebber
Asia Pacific Growth Fund Global Equity Fund
Emerging Markets Equity Fund Global Income Fund

application, which you may obtain by calling 1-800-647-1568. The application and
check must be mailed to PFPC Inc., Attn: PaineWebber Mutual Funds, P.O. Box
8950, Wilmington, DE 19899.

Investors who are new to PaineWebber may complete and sign an account
application and mail it along with a check. Investors may also open an account
in person.

Investors who already have money invested in a PaineWebber mutual fund, and want
to invest in another PaineWebber mutual fund, can:

o mail an application with a check; or

o open an account by exchanging from another PaineWebber mutual fund.

Investors do not have to send an application when making additional investments
in the Fund.

MINIMUM INVESTMENTS

<TABLE>
<S> <C>
To open an account................. $1,000
To add to an account............... $ 100
</TABLE>

A Fund may waive or reduce these minimums for:

o employees of PaineWebber or its affiliates;

o participants in certain pension plans, retirement accounts, unaffiliated
investment programs or the Fund's automatic investment plan; or

o transactions in Class A and Class Y shares made in certain investment
programs.

HOW TO EXCHANGE SHARES

As shareholders, investors have the privilege of exchanging Class A, B and C
shares for the same class of most other PaineWebber mutual funds. Class Y shares
are not exchangeable. For classes of shares where no initial sales charge is
imposed, a contingent deferred sales charge may apply if the investor sells the
shares acquired through the exchange.

Exchanges may be subject to minimum investment requirements of the fund into
which exchanges are made.

o Investors who purchased their shares through an investment executive at
PaineWebber or one of its correspondent firms may exchange their shares by
contacting their investment executive in person or by telephone, mail or wire.

o Investors who do not have an account with an investment executive at
PaineWebber or one of its correspondent firms may exchange their shares by
writing a "letter of instruction" to the Transfer Agent. The letter of
instruction must include:

o the investor's name and address;

o the Fund's name;

o the Fund account number;

o the dollar amount or number of shares to be sold; and

o a guarantee of each registered owner's signature. A signature guarantee
may be obtained from a domestic bank or trust company, broker, dealer,
clearing agency or savings association which is a participant in a
medallion program recognized by the Securities Transfer Agents
Association. The three recognized medallion programs are Securities
Transfer Agents Medallion Program (STAMP), Stock Exchanges Medallion
Program (SEMP) and the New York Stock Exchange Medallion Signature
Program (MSP). Signature guarantees which are not a part of these
programs will not be accepted.

The letter must be mailed to PFPC Inc., Attn: PaineWebber Mutual Funds, P.O. Box
8950, Wilmington, DE 19899.

No contingent deferred sales charge is imposed when Class A, B or C shares are
exchanged for the corresponding class of shares of other PaineWebber mutual
funds. A Fund will use the purchase date of the initial investment to determine
any contingent deferred sales charge due when the acquired shares are sold. Fund
shares may be exchanged only after the settlement date has passed and payment
for the shares has been made. The exchange privilege is available only in those
jurisdictions where the sale of the Fund shares to be acquired is authorized.
This exchange privilege may be modified or terminated at any time and, when
required by SEC rules, upon 60 days' notice. See the back cover of this
Prospectus for a list of other PaineWebber mutual funds.

--------------------
Prospectus Page 42
<PAGE>
------------------------------

PaineWebber
Asia Pacific Growth Fund Global Equity Fund
Emerging Markets Equity Fund Global Income Fund

- --------------------------------------------------------------------------------

HOW TO SELL SHARES

- --------------------------------------------------------------------------------

Investors can sell (redeem) shares at any time. Shares will be sold at the share
price for that class as next calculated after the order is received and accepted
(less any applicable contingent deferred sales charge). Share prices are
normally calculated at the close of regular trading on the New York Stock
Exchange (usually 4:00 p.m., Eastern time). Prices will be calculated earlier
when the New York Stock Exchange closes early because trading has been halted
for the day.

Investors who own more than one class of shares should specify which class they
are selling. If they do not, the Fund will assume they are first selling their
Class A shares, then Class C, then Class B and last, Class Y.

If a shareholder wants to sell shares that were purchased recently, the Fund may
delay payment until it verifies that good payment was received. In the case of
purchases by check, this can take up to 15 days.

Investors who have an account with PaineWebber or one of PaineWebber's
correspondent firms can sell their shares by contacting their investment
executive. Investors who do not have an account and have bought their shares
through the Fund's Transfer Agent (PFPC Inc.) may sell shares by writing a
"letter of instruction," as detailed in "How to Exchange Shares."

Because the Funds incur certain fixed costs in maintaining shareholder accounts,
each Fund reserves the right to purchase back all Fund shares in any shareholder
account with a net asset value of less than $500.

If a Fund elects to do so, it will notify the shareholder of the opportunity to
increase the amount invested to $500 or more within 60 days of the notice. A
Fund will not purchase back accounts that fall below $500 solely due to a
reduction in net asset value per share.

SALES BY PARTICIPANTS IN PW SIP

The trustee of the PW SIP sells Class Y shares of Global Equity Fund and Global
Income Fund to implement the investment choices of individual plan participants
with respect to their PW SIP contributions, as described in the Plan Documents
referenced under "How to Buy Shares" above. The price at which Class Y shares
are sold by the trustee of PW SIP might be more or less than the price per share
at the time the participants made their investment choices.

REINSTATEMENT PRIVILEGE

Shareholders who sell their Class A shares may reinstate their Fund account
without a sales charge up to the dollar amount sold by purchasing the Fund's
Class A shares within 365 days after the sale. To take advantage of this
reinstatement privilege, shareholders must notify their investment executive at
PaineWebber or one of its correspondent firms at the time of purchase.

- --------------------------------------------------------------------------------

OTHER SERVICES
- --------------------------------------------------------------------------------

Investors should consult their investment executives at PaineWebber or one of
its correspondent firms to learn more about the following services available
with respect to the Funds' Class A, B and C shares:

AUTOMATIC INVESTMENT PLAN

Investing on a regular basis helps investors meet their financial goals.
PaineWebber offers an Automatic Investment Plan with a minimum initial
investment of $1,000 through which a Fund will deduct $50 or more on a monthly,
quarterly, semiannual or annual basis from the investor's bank account to invest
directly in the Fund. In addition to providing a convenient and disciplined
manner of investing, participation in the Automatic Investment Plan enables the
investor to use the technique of "dollar cost averaging."

--------------------
Prospectus Page 43
<PAGE>
------------------------------

PaineWebber
Asia Pacific Growth Fund Global Equity Fund
Emerging Markets Equity Fund Global Income Fund

SYSTEMATIC WITHDRAWAL PLAN

The Systematic Withdrawal Plan allows investors to set up monthly, quarterly
(March, June, September and December), semiannual (June and December) or annual
(December) withdrawals from their PaineWebber Mutual Fund accounts. Minimum
balances and withdrawals vary according to the class of shares:

o CLASS A AND CLASS C SHARES. Minimum value of Fund shares is $5,000; minimum
withdrawals of $100.

o CLASS B SHARES. Minimum value of Fund shares
is $20,000; minimum monthly, quarterly, and semi-
annual and annual withdrawals of $200, $400, $600 and $800, respectively.

Withdrawals under the Systematic Withdrawal Plan will not be subject to a
contingent deferred sales charge. An investor may withdraw no more than 12% of
the value of the Fund account when the investor signed up for the Plan (for
Class B shares, annually; for Class A and Class C shares, during the first year
under the Plan). Shareholders who elect to receive dividends or other
distributions in cash may not participate in this Plan.

INDIVIDUAL RETIREMENT ACCOUNTS

Self-directed IRAs are available through PaineWebber in which purchases of
PaineWebber mutual funds and other investments may be made. Investors
considering establishing an IRA should review applicable tax laws and should
consult their tax advisers.

TRANSFER OF ACCOUNTS

If investors holding shares of a Fund in a PaineWebber brokerage account
transfer their brokerage accounts to another firm, the Fund shares will be moved
to an account with the Transfer Agent. However, if the other firm has entered
into a selected dealer agreement with Mitchell Hutchins relating to the Fund,
the shareholder may be able to hold Fund shares in an account with the other
firm.

- --------------------------------------------------------------------------------
MANAGEMENT
- --------------------------------------------------------------------------------

Each Fund is governed by a board of trustees, which oversees the Fund's
operations. Each board has appointed Mitchell Hutchins as investment adviser and
administrator responsible for the Fund's operations (subject to the authority of
the board). Mitchell Hutchins is responsible for the day-to-day management of
Global Income Fund's investments. Mitchell Hutchins is also responsible for
allocating Global Equity Fund's investments between U.S. and foreign securities
markets and for the day-to-day management of that Fund's U.S. investments.
Mitchell Hutchins has appointed sub-advisers to be responsible for the
day-to-day management of Global Equity Fund's foreign investments and the other
Funds' investments, as described below. The Funds have applied for exemptive
relief to the SEC to permit their boards to appoint or replace sub-advisers and
to amend sub-advisory contracts without obtaining shareholder approval.

In accordance with procedures adopted by each Fund's board, brokerage
transactions for each Fund may be conducted through PaineWebber or its
affiliates or the affiliates of a sub-adviser, and each Fund may pay fees to
PaineWebber for its services as lending agent in its portfolio securities
lending program. Personnel of Mitchell Hutchins and each sub-adviser may engage
in securities transactions for their own accounts pursuant to each firm's code
of ethics that establishes procedures for personal investing and restricts
certain transactions.

ASIA PACIFIC GROWTH FUND. Schroder Capital is the Fund's sub-adviser. Since its
founding in 1980, Schroder Capital has developed an expertise in Asia Pacific
Region investments. Louise Croset and Heather Crighton, with the assistance of
Schroder Capital's Asia Pacific Region investment committee, are primarily
responsible for the day-to-day management of the Fund. Mesdames Croset and
Crighton have served in this capacity since the Fund's inception. Ms. Croset, a
first vice president and director of Schroder Capital, has been with the firm
since 1993. Previously, she was a Vice President of Wellington Management Co.
Ms. Croset has managed Asia Pacific Region equity investments for the past 14
years. Ms. Crighton, a first vice president of Schroder Capital, has also been
with the firm since 1993. Previously, she was fund manager at Mercantile &
General Reinsurance Co. She has managed Asia Pacific Region equity investments
for the past ten years.

--------------------
Prospectus Page 44
<PAGE>
------------------------------

PaineWebber
Asia Pacific Growth Fund Global Equity Fund
Emerging Markets Equity Fund Global Income Fund

EMERGING MARKETS EQUITY FUND. Schroder Capital is the Fund's sub-adviser.
Schroder Group companies have invested internationally for over 50 years.
Schroder Capital has developed an expertise in emerging markets investments and
has over 50 investment professionals located in 13 offices in emerging market
countries around the world. John A. Troiano, with the assistance of an emerging
markets investment committee, has been primarily responsible for the day-to-day
management of Emerging Markets Equity Fund since Schroder Capital was appointed
sub-adviser on February 25, 1997; recently, Ms. Crighton and Mark Bridgeman
began sharing primary responsibility for the day-to-day management of the Fund
with Mr. Troiano. Mr. Troiano has been chief executive of Schroder Capital since
July 1997, and has been employed by various Schroder Group companies in the
portfolio management area since 1988. He is currently chairman of Schroder
Capital's emerging markets investment committee. Mr. Bridgeman has been a vice
president and international fund manager of Schroder Capital since 1995. After
joining Schroders in 1990, he worked in the Schroders U.K. Research Department
as an Investment Analyst and then from 1992 until 1995 served in Schroders
Australia as an Industrial Analyst and Fund Manager.

GLOBAL EQUITY FUND. Mitchell Hutchins, the Fund's investment adviser, is
responsible both for allocating the Fund's assets between U.S. and foreign
markets and for managing the U.S. investments. T. Kirkham Barneby is responsible
for the asset allocation decisions for Global Equity Fund. Mr. Barneby is a
managing director and chief investment officer--quantitative investments of
Mitchell Hutchins. He is also a vice president of PaineWebber Investment Trust.
Mr. Barneby rejoined Mitchell Hutchins in 1994, after being with Vantage Global
Management for one year. During the eight years that Mr. Barneby was previously
with Mitchell Hutchins, he was a senior vice president responsible for
quantitative management and asset allocation models. Mr. Barneby assumed his
Global Equity Fund responsibilities on October 1, 1998.

Mark A. Tincher is primarily responsible for the day-to-day management of Global
Equity Fund's U.S. investments. Mr. Tincher is a managing director and chief
investment officer of equities of Mitchell Hutchins, responsible for overseeing
the management of equity investments. He is also a vice president of PaineWebber
Investment Trust, PaineWebber Investment Trust II and PaineWebber Managed
Investments Trust. Prior to joining Mitchell Hutchins in March 1995,
Mr. Tincher worked for Chase Manhattan Private Bank, where he was vice president
and directed the U.S. funds management and equity research area. At Chase since
1988, Mr. Tincher oversaw the management of all Chase equity funds (the Vista
Funds and Trust Investment Funds). Mr. Tincher assumed his Global Equity Fund
responsibilities on October 1, 1998.

Invista is the Fund's sub-adviser and manages the Fund's foreign investments.
Scott D. Opsal is primarily responsible for the day-to-day management of Global
Equity Fund's foreign investments. Mr. Opsal has served as executive vice
president and chief investment officer of Invista since 1997. Previously, he
served as a vice president of Invista from 1986 to 1997. Mr. Opsal assumed his
Global Equity Fund responsibilities on October 1, 1998.

GLOBAL INCOME FUND. Mitchell Hutchins is responsible for the day-to-day
management of the Fund's investments. Stuart Waugh and William King are
primarily responsible for the day-to-day portfolio management of the Fund. Mr.
Waugh has been involved with the Fund since its inception, first as an analyst
and then as portfolio manager since 1993. Mr. Waugh is a vice president of
PaineWebber Investment Series and a managing director of Mitchell Hutchins
responsible for global fixed income investments and currency trading. Mr. Waugh
has been with Mitchell Hutchins since 1983. Mr. King joined Mitchell Hutchins in
November 1995 and assumed his present responsibilities with respect to the Fund
in 1997. Previously, he was at IBM Corporation where he was responsible for the
management of IBM Pension Fund's global bond portfolio. Both Mr. Waugh and
Mr. King are Chartered Financial Analysts.

Other members of Mitchell Hutchins' international fixed income group provide
input on market outlook, interest rate forecasts and other considerations
pertaining to global fixed income investments.

ABOUT THE INVESTMENT ADVISER

Mitchell Hutchins, located at 1285 Avenue of the Americas, New York, New York
10019, is an asset management subsidiary of PaineWebber, which is wholly owned
by Paine Webber Group Inc., a publicly owned financial services holding company.
On August 31, 1998, Mitchell Hutchins was adviser or sub-adviser of 32
investment companies with 68 separate portfolios and aggregate assets of over
$38.9 billion.

--------------------
Prospectus Page 45
<PAGE>
------------------------------

PaineWebber
Asia Pacific Growth Fund Global Equity Fund
Emerging Markets Equity Fund Global Income Fund

ABOUT THE SUB-ADVISERS

Schroder Capital, the sub-adviser to Asia Pacific Growth Fund and Emerging
Markets Equity Fund, is located at 1301 Avenue of the Americas, New York, New
York 10019. It is a wholly owned indirect subsidiary of Schroders plc, which is
listed on the London Stock Exchange, and is the holding company parent of a
large worldwide group of banks and financial services companies (referred to as
the "Schroder Group"), with associated companies, branch and representative
offices located in 23 countries worldwide. As of December 31, 1997, the
investment management subsidiaries of the Schroder Group had approximately $175
billion in client assets under management. Schroder Capital, together with its
United Kingdom affiliate Schroder Capital Management International Limited, had
over $25 billion under management as of that date.

Invista, sub-adviser for Global Equity Fund's foreign investments, is located at
1800 Hub Tower, 699 Walnut, Des Moines, Iowa 50309. Invista, which was founded
in 1984, is an indirect wholly owned subsidiary of Principal Life Insurance
Company and manages substantially all of Principal Life Insurance Company's
equity accounts in addition to providing investment advice to other affiliated
and non-affiliated customers. As of August 31, 1998, Invista managed
approximately $26 billion in client assets.

MANAGEMENT FEES & OTHER EXPENSES

ASIA PACIFIC GROWTH FUND. The Fund pays Mitchell Hutchins a monthly fee for its
services at the annual rate of 1.20% of its average daily net assets up to
$100 million and 1.10% of its average daily net assets over $100 million.

Mitchell Hutchins (not the Fund) pays Schroder Capital a monthly fee for
sub-advisory services at an annual rate of 0.65% of the Fund's average daily net
assets up to $100 million and 0.55% of the Fund's average daily net assets over
$100 million.

EMERGING MARKETS EQUITY FUND. The Fund is obligated to pay Mitchell Hutchins a
monthly fee for its services at an annual rate of 1.20% of the Fund's average
daily net assets. However, after giving effect to fee waivers, the effective
annual rate actually paid by the Fund during the fiscal year ended October 31,
1997, was 0.78%. During that year, Mitchell Hutchins (not the Fund) paid
Schroder Capital a fee for sub-advisory services at the annual rate of 0.70% of
the Fund's average daily net assets.

GLOBAL EQUITY FUND. For the fiscal year ended October 31, 1997, Global Equity
Fund paid advisory fees to Mitchell Hutchins at the annual rate of 0.85% of its
average daily net assets. Under its sub-advisory contract with Invista, Mitchell
Hutchins (not the Fund) is obligated to pay Invista at the annual rate of 0.40%
of the Fund's average daily net assets allocated to its management up to and
including $100 million. This fee drops to 0.29% of the Fund's average daily net
assets allocated to Invista's management in excess of $100 million up to and
including $300 million and to 0.26% of such assets in excess of $300 million.

GLOBAL INCOME FUND. For the fiscal year ended October 31, 1997, Global Income
Fund paid advisory fees to Mitchell Hutchins at the effective annual rate of
0.74% of its average daily net assets.

Each Fund incurs various other expenses in its operations, such as custody and
transfer agency fees, brokerage commissions, professional fees, expenses of
board and shareholder meetings, fees and expenses relating to registration of
its shares, taxes and governmental fees, fees and expenses of trustees, costs of
obtaining insurance, expenses of printing and distributing shareholder
materials, organizational expenses and extraordinary expenses, including costs
or losses in any litigation.

DISTRIBUTION ARRANGEMENTS

Mitchell Hutchins is the distributor of each Fund's shares and has appointed
PaineWebber as the exclusive dealer for the sale of those shares. There is no
distribution plan with respect to the Funds' Class Y shares. Under distribution
plans for Class A, Class B and Class C shares ("Class A Plan," "Class B Plan"
and "Class C Plan," collectively, "Plans"), each Fund pays Mitchell Hutchins:

o Monthly service fees at the annual rate of 0.25% of the average daily net
assets of each class of shares.

o Monthly distribution fees at the annual rate of 0.75% of the average daily net
assets of Class B and Class C shares (0.50% for Class C shares of Global
Income Fund).

Mitchell Hutchins uses the service fees under the Plans for Class A, B and C
shares primarily to pay PaineWebber for shareholder servicing, currently at the
annual rate of 0.25% of the aggregate investment amounts maintained in each Fund
by PaineWebber clients. PaineWebber then compensates its investment executives
for shareholder servicing that they perform and offsets its own expenses in
servicing and maintaining shareholder accounts.

--------------------
Prospectus Page 46
<PAGE>
------------------------------

PaineWebber
Asia Pacific Growth Fund Global Equity Fund
Emerging Markets Equity Fund Global Income Fund

Mitchell Hutchins uses the distribution fees under the Class B and Class C Plans
to:

o Offset the commissions it pays to PaineWebber for selling each Fund's Class B
and Class C shares, respectively.

o Offset each Fund's marketing costs attributable to such classes, such as
preparation, printing and distribution of sales literature, advertising and
prospectuses to prospective investors and related overhead expenses, such as
employee salaries and bonuses.

PaineWebber compensates investment executives when Class B and Class C shares
are bought by investors, as well as on an ongoing basis. Mitchell Hutchins
receives no special compensation from any of the Funds or investors at the time
Class B or C shares are bought.

Mitchell Hutchins receives the proceeds of the initial sales charge paid when
Class A shares are bought and of the contingent deferred sales charge paid upon
sales of shares. These proceeds may be used to cover distribution expenses.

The Plans and the related distribution contracts for Class A, Class B and
Class C shares ("Distribution Contracts") specify that each Fund must pay
service and distribution fees to Mitchell Hutchins for its activities, not as
reimbursement for specific expenses incurred. Therefore, even if Mitchell
Hutchins' expenses exceed the service or distribution fees it receives, the
Funds will not be obligated to pay more than those fees. On the other hand, if
Mitchell Hutchins' expenses are less than such fees, it will retain its full
fees and realize a profit. Expenses in excess of service and distribution fees
received or accrued through the termination date of any Plan will be Mitchell
Hutchins' sole responsibility and not that of the Funds. Annually, the board of
each Fund reviews the Plans and Mitchell Hutchins' corresponding expenses for
each class separately from the Plans and expenses of the other classes.

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DETERMINING THE SHARES'
NET ASSET VALUE

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The net asset value of each Fund's shares fluctuates and is determined
separately for each class, normally as of the close of regular trading on the
New York Stock Exchange (usually 4:00 p.m., Eastern time) each Business Day.
Each Fund's net asset value per share is determined 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. If trading on the
NYSE is halted for the day before 4:00 p.m, Eastern time, and trading on the
NYSE will not resume again that day, the Fund's net asset value per share will
be calculated at the time trading was halted.

Each Fund values its assets based on their current market value when market
quotations are readily available. If market quotations are not readily
available, assets are valued at fair value as determined in good faith by or
under the direction of each Fund's board. The amortized cost method of valuation
generally is used to value debt obligations with 60 days or less remaining to
maturity, unless the board determines that this does not represent fair value.
Investments denominated in foreign currencies are valued daily in U.S. dollars
based on the then-prevailing exchange rates. It should be recognized that
judgment plays a greater role in valuing thinly traded securities and
lower-rated debt securities in which a Fund may invest, because there is less
reliable, objective data available.

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PaineWebber
Asia Pacific Growth Fund Global Equity Fund
Emerging Markets Equity Fund Global Income Fund

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DIVIDENDS & TAXES

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DIVIDENDS

Asia Pacific Growth Fund, Emerging Markets Equity Fund and Global Equity Fund
each pays an annual dividend from its net investment income, net short-term
capital gains and net realized gains from foreign currency transactions, if any.
Global Income Fund declares monthly dividends from its net investment income,
which may be accompanied by distributions of net realized short-term capital
gains and foreign currency gains. Although Global Income Fund will not, in any
month, distribute more than the amount of such income and gains then available
for distribution, capital losses and/or foreign currency losses realized later
in the same fiscal year may convert a portion of such a distribution to a
nontaxable return of capital. Each Fund also distributes annually substantially
all of its net capital gain (the excess of net long-term capital gain over net
short-term capital loss), if any. In the case of Global Income Fund, that
distribution is accompanied by any undistributed net realized short-term capital
gains and foreign currency gains. The Funds may make additional distributions,
if necessary, to avoid a 4% excise tax on certain undistributed income and
capital gains.

Dividends and other distributions paid on each class of shares of a Fund are
calculated at the same time and in the same manner. Dividends on Class A,
Class B and Class C shares of a Fund are expected to be lower than those on its
Class Y shares because the other shares have higher expenses resulting from
their service fees and, in the case of Class B and Class C shares, their
distribution fees. Dividends on Class B and Class C shares of a Fund are
expected to be lower than those on its Class A shares because Class B and
Class C shares have higher expenses resulting from their distribution fees.
Dividends on each class also might be affected differently by the allocation of
other class-specific expenses. See "General Information."

The Funds' dividends and other distributions are paid in additional Fund shares
of the same class at net asset value, unless the shareholder has requested cash
payments. Shareholders who wish to receive dividends and other distributions in
cash, either mailed to them by check or credited to their PaineWebber accounts,
should contact their investment executives at PaineWebber or one of its
correspondent firms or complete the appropriate section of the account
application. For PW SIP participants, each Fund's Class Y dividends and other
distributions are paid in additional Class Y 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 not have to pay federal
income tax on that part of its investment company taxable income (generally
consisting of net investment income, net short-term capital gains and net gains
from certain foreign currency transactions) and net capital gain that it
distributes to its shareholders.

Dividends from each Fund's investment company taxable income (whether paid in
cash or additional shares) are generally taxable to its shareholders as ordinary
income. Distributions of each Fund's net capital gain (whether paid in cash or
additional shares) are taxable to its shareholders as long-term capital gain,
regardless of how long they have held their Fund shares. Under the Taxpayer
Relief Act of 1997, as modified by recent legislation, the maximum tax rate
applicable to a non-corporate taxpayer's net capital gain recognized on capital
assets held for more than one year is 20% (10% for taxpayers in the 15% marginal
tax bracket). In the case of a regulated investment company such as a Fund, the
relevant holding period is determined by how long the Fund has held the
portfolio securities on which the gain was realized, not by how long the
shareholders have held their Fund shares.

Shareholders who are not subject to tax on their income generally will not be
required to pay tax on distributions from the Funds.

YEAR-END TAX REPORTING

Following the end of each calendar year, each Fund notifies its shareholders of
the amounts of dividends and capital gain distributions paid (or deemed paid)
for that year, their share of any foreign taxes paid by the Fund that year and
any portion of those dividends that qualifies for special treatment.

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Prospectus Page 48
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PaineWebber
Asia Pacific Growth Fund Global Equity Fund
Emerging Markets Equity Fund Global Income Fund

BACKUP WITHHOLDING

Each Fund is required to withhold 31% of all dividends, capital gain
distributions and redemption proceeds payable to individuals and certain other
non-corporate shareholders who do not provide the Fund with a correct taxpayer
identification number. Withholding at that rate also is required from dividends
and capital gain distributions payable to those shareholders who otherwise are
subject to backup withholding.

TAXES ON THE SALE OR EXCHANGE OF FUND SHARES

A shareholder's sale (redemption) of shares may result in a taxable gain or
loss. This depends upon whether the shareholder receives more or less than his
or her adjusted basis for the shares (which normally includes any initial sales
charge paid on Class A shares). An exchange of any Fund's shares for shares of
another PaineWebber mutual fund generally will have similar tax consequences. In
addition, if a Fund's shares are bought within 30 days before or after selling
other shares of the Fund (regardless of class) at a loss, all or a portion of
that loss will not be deductible and will increase the basis of the newly
purchased shares.

SPECIAL TAX RULES
FOR CLASS A SHAREHOLDERS

Special tax rules apply when a shareholder sells or exchanges Class A shares
within 90 days of purchase and subsequently acquires Class A shares of a
PaineWebber mutual fund without paying a sales charge due to the 365-day
reinstatement privilege or the exchange privilege. In these cases, any gain on
the sale or exchange of the original Class A shares would be increased, or any
loss would be decreased, by the amount of the sales charge paid when those
shares were bought, and that amount will increase the basis of the PaineWebber
mutual fund shares subsequently acquired.

No gain or loss will be recognized by a shareholder as a result of a conversion
from Class B shares into Class A shares.

* * * *

The foregoing only summarizes some of the important federal income tax
considerations affecting the Funds and their shareholders; see the Statement of
Additional Information for a further discussion. Prospective shareholders are
urged to consult their tax advisers.

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GENERAL INFORMATION
- --------------------------------------------------------------------------------

ORGANIZATION

ASIA PACIFIC GROWTH FUND

Asia Pacific Growth Fund is a diversified series of PaineWebber Managed
Investments Trust ("Managed Trust"), an open-end management investment company
that was organized on November 21, 1986 as a business trust under the laws of
the Commonwealth of Massachusetts. The trustees have authority to issue an
unlimited number of shares of beneficial interest of separate series, par value
of $0.001 per share. Shares of five other series have been authorized.

EMERGING MARKETS EQUITY FUND
Emerging Markets Equity Fund is a diversified series of PaineWebber Investment
Trust II, an open-end management investment company that was organized on
August 10, 1992 as a business trust under the laws of the Commonwealth of
Massachusetts. The trustees have authority to issue an unlimited number of
shares of beneficial interest of separate series, par value of $0.001 per share.

GLOBAL EQUITY FUND

Global Equity Fund is a diversified series of PaineWebber Investment Trust
("Investment Trust"), an open-end management investment company that was
organized on March 28, 1991 as a business trust under the laws of the
Commonwealth of Massachusetts. The trustees have authority to issue an unlimited
number of shares of beneficial interest of separate series, par value of $0.001
per share. Shares of one other series have been authorized.

GLOBAL INCOME FUND

Global Income Fund is a non-diversified series of PaineWebber Investment Series,
an open-end management investment company that was organized

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Prospectus Page 49
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PaineWebber
Asia Pacific Growth Fund Global Equity Fund
Emerging Markets Equity Fund Global Income Fund

on December 22, 1986 as a business trust under the laws of the Commonwealth of
Massachusetts. The trustees have authority to issue an unlimited number of
shares of beneficial interest of separate series, with a par value of $0.001 per
share.

The shares of each Fund are divided into four classes, designated Class A,
Class B, Class C and Class Y shares. A share of each class represents an
identical interest in the respective Fund's investment portfolio and has the
same rights, privileges and preferences. However, each class may differ with
respect to sales charges, if any, distribution and/or service fees, if any,
other expenses allocable exclusively to each class, voting rights on matters
exclusively affecting that class, and its exchange privilege, if any. The
different sales charges and other expenses applicable to the different classes
of shares of the Funds will affect the performance of those classes.

Each share of each Fund is entitled to participate equally in dividends, other
distributions and the proceeds of any liquidation of that Fund. However, due to
the differing expenses of the classes, dividends and liquidation proceeds on
Class A, B, C and Y shares will differ.

Although each Fund is offering only its own shares, it is possible that a Fund
might become liable for a misstatement in this Prospectus about another Fund.
The board of each Fund has considered this factor in approving the use of a
single, combined Prospectus.

VOTING RIGHTS

Shareholders of each Fund are entitled to one vote for each full share held and
fractional votes for fractional shares held. Voting rights are not cumulative
and, as a result, the holders of more than 50% of all the shares of any Fund (or
Investment Trust or Managed Trust, which each have more than one series) may
elect all of the board members of that Fund or of Investment Trust or Managed
Trust. The shares of a Fund will be voted together, except that only the
shareholders of a particular class of a Fund may vote on matters affecting only
that class, such as the terms of a Plan as it relates to the class. The shares
of each series of Investment Trust and Managed Trust will be voted separately,
except when an aggregate vote of all the series is required by law.

SHAREHOLDER MEETINGS

The Funds do not hold annual meetings.

Shareholders of record of no less than two-thirds of the outstanding shares of
Managed Trust or Global Income Fund or shareholders of a majority of the
outstanding shares of Investment Trust or Emerging Markets Equity Fund may
remove a board member through a declaration in writing or by vote cast in person
or by proxy at a meeting called for that purpose. A meeting will be called to
vote on the removal of a board member at the written request of holders of 10%
of the outstanding shares of Investment Trust, Managed Trust or a Fund.

REPORTS TO SHAREHOLDERS

Each Fund sends its shareholders audited annual and unaudited semiannual
reports, each of which includes a list of the investment securities held by the
Fund as of the end of the period covered by the report. The Statement of
Additional Information, which is incorporated herein by reference, is available
to shareholders upon request.

CUSTODIAN & RECORDKEEPING AGENT; TRANSFER & DIVIDEND AGENT

State Street Bank and Trust Company, located at One Heritage Drive, North
Quincy, Massachusetts 02171, serves as custodian and recordkeeping agent for
Asia Pacific Growth Fund, Emerging Markets Equity Fund and Global Equity Fund
and employs foreign sub-custodians approved by the respective boards in
accordance with applicable requirements under the 1940 Act to provide custody of
the Funds' foreign assets. Brown Brothers Harriman & Co., 40 Water Street,
Boston, Massachusetts 02109, serves as custodian for Global Income Fund and
employs foreign sub-custodians approved by the Fund's board in accordance with
those same requirements to provide custody of the Fund's foreign assets. PFPC
Inc., a subsidiary of PNC Bank, N.A., serves as each Fund's transfer and
dividend disbursing agent. It is located at 400 Bellevue Parkway, Wilmington, DE
19809.

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Prospectus Page 51
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PAINEWEBBER ASIA PACIFIC GROWTH FUND
PAINEWEBBER EMERGING MARKETS EQUITY FUND
PAINEWEBBER GLOBAL EQUITY FUND
PAINEWEBBER GLOBAL INCOME FUND

PROSPECTUS--MARCH 1, 1998, AS REVISED OCTOBER 2, 1998
(DATED OCTOBER 2, 1998 FOR PAINEWEBBER GLOBAL EQUITY FUND)

o PAINEWEBBER BOND FUNDS
High Income Fund
Investment Grade Income Fund
Low Duration U.S. Government Income Fund
Strategic Income Fund
U.S. Government Income Fund

o PAINEWEBBER TAX-FREE BOND FUNDS
California Tax-Free Income Fund
Municipal High Income Fund
National Tax-Free Income Fund
New York Tax-Free Income Fund

o PAINEWEBBER ASSET
ALLOCATION FUNDS
Balanced Fund
Tactical Allocation Fund

o PAINEWEBBER STOCK FUNDS
Financial Services Growth Fund
Growth Fund
Growth and Income Fund
Mid Cap Fund
Small Cap Fund
S&P 500 Index Fund
Utility Income Fund

o PAINEWEBBER GLOBAL FUNDS
Asia Pacific Growth Fund
Emerging Markets Equity Fund
Global Equity Fund
Global Income Fund

o PAINEWEBBER MONEY MARKET FUND

o PAINEWEBBER FUNDS OF FUNDS
Aggressive Portfolio
Moderate Portfolio
Conservative Portfolio

A prospectus containing more complete information for any of these funds,
including charges and expenses, can be obtained from a PaineWebber investment
executive or correspondent firm. Please read it carefully before investing. It
is important you have all the information you need to make a sound investment
decision.

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