<PAGE>
PaineWebber
Global Equity Fund
PaineWebber
Global Income Fund
PaineWebber
Asia Pacific
Growth Fund
PaineWebber
Emerging Markets
Equity Fund
---------------------------
PROSPECTUS
March 1, 1999
---------------------------
This prospectus offers shares in PaineWebber's four Global Funds. Each fund
offers four classes of shares. Each class has different sales charges and
ongoing expenses. You can choose the class that is best for you based on how
much you plan to invest and how long you plan to hold your fund shares. Class
Y shares are available only to certain types of investors.
As with all mutual funds, the Securities and Exchange Commission has not
approved any fund's shares as investments or determined whether this prospectus
is complete or accurate. To state otherwise is a crime.
<PAGE>
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PaineWebber Global Equity Fund PaineWebber Asia Pacific Growth
PaineWebber Global Income Fund Fund
PaineWebber Emerging Markets
Equity Fund
Contents
The Funds
----------------------------------------------------------------
<TABLE>
<S> <C> <C>
What every investor 3 PaineWebber Global Equity Fund
should know about
the funds 6 PaineWebber Global Income Fund
9 PaineWebber Asia Pacific Growth Fund
12 PaineWebber Emerging Markets Equity Fund
15 More About Risks and Investment Strategies
Your Investment
------------------------------------------------------------------------------
Information for 17 Managing Your Fund Account
managing your fund --Flexible Pricing
account --Buying Shares
--Selling Shares
--Exchanging Shares
--Pricing and Valuation
Additional Information
------------------------------------------------------------------------------
Additional important 22 Management
information about
the funds 24 Dividends and Taxes
25 Financial Highlights
------------------------------------------------------------------------------
Where to learn more
about PaineWebber Back Cover
mutual funds
</TABLE>
The funds are not
complete or balanced
investment programs.
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Prospectus Page 2
<PAGE>
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PaineWebber Global Equity Fund
PaineWebber Global Equity Fund
Investment Objective, Strategies and Risks
- --------------------------------------------------------------------------------
Fund Objective
Long-term growth of capital.
Principal Investment Strategies
The fund invests primarily in stocks of companies in the United States and in
foreign countries that are represented in the MSCI Europe, Australia and Far
East Index. The EAFE Index reflects stocks in most developed countries outside
North America. The fund also invests, to a lesser extent, in stocks of issuers
in other countries, including emerging markets, and in U.S. and foreign bonds.
The fund's investment adviser, Mitchell Hutchins Asset Management Inc.,
allocates the fund's assets between U.S. and foreign markets based on how it
expects U.S. stock markets to perform in comparison to stock markets in certain
of the EAFE countries. Mitchell Hutchins may increase the allocation of the
fund's assets to either the U.S. or foreign markets if it believes that one of
those markets has a greater potential for high returns, relative to the risk of
loss. Mitchell Hutchins may use futures and foreign currency contracts to
adjust the fund's exposure to either the U.S. or foreign markets.
Mitchell Hutchins manages the fund's U.S. investments using its own Factor
Valuation Model to identify companies that appear undervalued. The model ranks
companies based on "value" factors, such as dividends, cash flows, earnings and
book values, as well as on "growth" factors, such as earnings momentum and
industry performance forecasts. Mitchell Hutchins then applies fundamental
analysis to select specific stocks from among those identified by the model.
Mitchell Hutchins has appointed Invista Capital Management, LLC as the sub-
adviser for the fund's foreign investments. Invista selects foreign stocks for
the fund through an analysis of the fundamental business prospects of
industries and of individual companies and by making an assessment of the
relative risks presented by the countries in which those companies operate.
Principal Risks
An investment in the fund is not guaranteed; investors may lose money by
investing in the fund. The principal risks presented by the fund are:
. Equity Risk
. Sector Allocation Risk
. Foreign Securities Risk
. Emerging Markets Risk
. Currency Risk
. Interest Rate Risk
. Credit Risk
. Derivatives Risk
For an explanation of each of these risks, see "More About Risks and Investment
Strategies," below.
Information on the fund's recent investment strategies and holdings can be
found in its current annual/semi-annual reports (see back cover for information
on ordering those reports).
----------
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Prospectus Page 3
<PAGE>
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PaineWebber Global Equity Fund
Performance
- --------------------------------------------------------------------------------
Risk/Return Bar Chart and Table
The following bar chart shows how the fund's performance has varied from year
to year. The chart shows Class A shares because they have the longest
performance history of any class of fund shares. The chart does not reflect the
effect of sales charges; if it did, the total returns shown would be lower.
The table that follows the chart shows the average annual returns over several
time periods for each class of the fund's shares. That table does reflect fund
sales charges. The table compares fund returns to returns on a broad-based
market index that is unmanaged and that, therefore, does not include any sales
charges or expenses.
The fund's past performance does not necessarily indicate how the fund will
perform in the future. This may be particularly true of the period prior to
October 1, 1998, when Mitchell Hutchins and Invista assumed the day-to-day
management of the fund's assets. Prior to that date, another sub-adviser was
responsible for managing all fund assets.
Total Return on Class A Shares
[CHART APPEARS HERE]
Calendar Year Percentage
- ------------- ----------
1992 3.26%
1993 30.77%
1994 -2.38%
1995 13.54%
1996 14.80%
1997 6.34%
1998 11.61%
Best quarter during years shown: 1st quarter, 1998--19.22%
Worst quarter during years shown: 3rd quarter, 1998--(19.41)%
Average Annual Total Returns
as of December 31, 1998
<TABLE>
<CAPTION>
MSCI
Class Class A Class B Class C Class Y World
(Inception Date) (11/14/91) (8/25/95) (5/10/93) (5/10/93) Index
- ---------------- ---------- --------- --------- --------- ------
<S> <C> <C> <C> <C> <C>
One Year........................ 6.59% 5.67% 9.73% 11.92% 24.80%
Five Years...................... 7.60% N/A 7.76% 8.93% 16.19%
Life of Class................... 10.15% 8.79% 9.92% 11.10% *
</TABLE>
- -------
* Average annual total returns for the MSCI World Index for the life of each
class were as follows: Class A -- 13.96%; Class B -- 18.98%; Class C --
15.76%; and Class Y -- 15.76%.
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Prospectus Page 4
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PaineWebber Global Equity Fund
Expenses and Fee Tables
- --------------------------------------------------------------------------------
Fees and Expenses These tables describe the fees and expenses that you may pay
if you buy and hold shares of the fund.
Shareholder Transaction Expenses (fees paid directly from your investments)
<TABLE>
<CAPTION>
Class A Class B Class C Class Y
------- ------- ------- --------
<S> <C> <C> <C> <C>
Maximum Sales Charge (Load) Imposed on
Purchases
(as a % of offering price)................ 4.5% None None None
Maximum Contingent Deferred Sales Charge
(Load) (CDSC)
(as a % of offering price)................ None 5% 1% None
Exchange Fee............................... None None None None
Annual Fund Operating Expenses (expenses that are deducted from fund assets)
<CAPTION>
Class A Class B Class C Class Y
------- ------- ------- --------
<S> <C> <C> <C> <C>
Management Fees............................ 0.85% 0.85% 0.85% 0.85%
Distribution and/or Service (12b-1) Fees... 0.25 1.00 1.00 None
Other Expenses............................. 0.45 0.53 0.47 0.36
---- ------ ------ ------
Total Annual Fund Operating Expenses....... 1.55% 2.38% 2.32% 1.21%
Example
This example is intended to help you compare the cost of investing in
PaineWebber Global Equity Fund with the cost of investing in other mutual
funds.
This example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods unless
otherwise stated. The example also assumes that your investment has a 5% return
each year and that the fund's operating expenses remain the same. Although your
actual costs may be higher or lower, based on these assumptions your costs
would be:
<CAPTION>
1 year 3 years 5 years 10 years
------- ------- ------- --------
<S> <C> <C> <C> <C>
Class A.................................... $601 $ 918 $1,257 $2,212
Class B (assuming sales of all shares at
end of period)............................ 741 1,042 1,470 2,320
Class B (assuming no sales of shares)...... 241 742 1,270 2,320
Class C (assuming sales of all shares at
end of period)............................ 335 724 1,240 2,656
Class C (assuming no sales of shares)...... 235 724 1,240 2,656
Class Y.................................... 123 384 665 1,466
</TABLE>
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Prospectus Page 5
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PaineWebber Global Income Fund
PaineWebber Global Income Fund
Investment Objective, Strategies and Risks
- --------------------------------------------------------------------------------
Fund Objective
Primarily, high current income consistent with prudent investment risk;
secondarily, capital appreciation.
Principal Investment Strategies
The fund invests primarily in high quality bonds of governmental and private
issuers in the U.S. and in developed foreign countries. These high quality
bonds are rated in one of the two highest rating categories or are of
comparable quality. The fund also invests, to a lesser extent, in lower quality
bonds, including bonds of issuers in emerging markets. These may include bonds
that have very low credit ratings but that Mitchell Hutchins Asset Management
Inc., the fund's investment adviser, believes may provide a return that is high
enough to justify the additional risk. Some of the fund's bonds may be backed
by mortgages.
Mitchell Hutchins normally invests a portion of the fund's assets in bonds of
U.S. government and private issuers, and allocates the balance of the fund's
portfolio among bonds of issuers in different foreign countries. Mitchell
Hutchins determines the allocation to different geographic areas, countries and
industries based upon its assessment of fundamental economic strengths, credit
quality and currency and interest rate trends. Mitchell Hutchins uses foreign
currency contracts to increase or decrease the fund's exposure to various
foreign currencies.
Principal Risks
An investment in the fund is not guaranteed; investors may lose money by
investing in the fund. The principal risks presented by the fund are:
. Interest Rate Risk
. Foreign Securities Risk
. Sovereign Risk
. Sector Allocation Risk
. Currency Risk
. Emerging Markets Risk
. Credit Risk
. Non-Diversified Status Risk
. Prepayment Risk
. Derivatives Risk
For an explanation of each of these risks, see "More About Risks and Investment
Strategies," below.
Information on the fund's recent investment strategies and holdings can be
found in its current annual/semi-annual reports (see back cover for information
on ordering these reports).
----------
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Prospectus Page 6
<PAGE>
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-------------------
PaineWebber Global Income Fund
Performance
- --------------------------------------------------------------------------------
Risk/Return Bar Chart and Table
The following bar chart shows how the fund's performance has varied from year
to year. The chart shows Class B shares because they have the longest
performance history of any class of fund shares. The chart does not reflect the
effect of sales charges; if it did, the total returns shown would be lower.
The table that follows the chart shows the average annual returns over several
time periods for each class of the fund's shares. That table does reflect fund
sales charges. The table compares fund returns to returns on a broad-based
market index that is unmanaged and that, therefore, does not include any sales
charges or expenses.
The fund's past performance does not necessarily indicate how the fund will
perform in the future.
Total Return on Class B Shares
[CHART APPEARS HERE]
Calendar Year Percentage
- ------------- ----------
1989 5.44%
1990 17.72%
1991 10.75%
1992 0.38%
1993 13.36%
1994 -4.77%
1995 12.39%
1996 6.34%
1997 3.06%
1998 9.73%
Best quarter during years shown: 3rd quarter, 1991--7.17%
Worst quarter during years shown: 1st quarter, 1994--(3.92)%
Average Annual Total Returns
as of December 31, 1998
<TABLE>
<CAPTION>
Salomon
Brothers
World
Class Class A Class B Class C Class Y Government
(Inception Date) (7/1/91) (3/20/87) (7/2/92) (8/26/91) Bond Index
- ---------------- -------- --------- -------- --------- ----------
<S> <C> <C> <C> <C> <C>
One Year....................... 6.33% 4.73% 9.47% 11.12% 15.31%
Five Years..................... 5.16% 4.86% 5.50% 6.32% 7.85%
Ten Years...................... N/A 7.75% N/A N/A 8.96%
Life of Class.................. 6.92% 9.06% 6.29% 7.78% *
</TABLE>
- -------
* Average annual total returns for the Salomon Brothers World Government Bond
Index for the life of each class were as follows: Class A -- 9.95%; Class
B -- 8.90%; Class C -- 8.42%; and Class Y -- 9.58%.
-----------
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Prospectus Page 7
<PAGE>
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-------------------
PaineWebber Global Income Fund
Expenses and Fee Tables
- --------------------------------------------------------------------------------
Fees and Expenses These tables describe the fees and expenses that you may pay
if you buy and hold shares of the fund.
Shareholder Transaction Expenses (fees paid directly from your investments)
<TABLE>
<CAPTION>
Class A Class B Class C Class Y
------- ------- ------- -------
<S> <C> <C> <C> <C>
Maximum Sales Charge (Load) Imposed on
Purchases
(as a % of offering price).................... 4% None None None
Maximum Contingent Deferred Sales Charge (Load)
(CDSC)
(as a % of offering price).................... None 5% 0.75% None
Exchange Fee................................... None None None None
</TABLE>
Annual Fund Operating Expenses (expenses that are deducted from fund assets)
<TABLE>
<CAPTION>
Class A Class B Class C Class Y
------- ------- ------- -------
<S> <C> <C> <C> <C>
Management Fees................................ 0.75% 0.75% 0.75% 0.75%
Distribution and/or Service (12b-1) Fees....... 0.25 1.00 0.75 None
Other Expenses................................. 0.24 0.38 0.27 0.21
---- ---- ---- ----
Total Annual Fund Operating Expenses........... 1.24% 2.13% 1.77% 0.96%
</TABLE>
Example
This example is intended to help you compare the cost of investing in
PaineWebber Global Income Fund with the cost of investing in other mutual
funds.
The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods unless
otherwise stated. The example also assumes that your investment has a 5% return
each year and that the fund's operating expenses remain the same. Although your
actual costs may be higher or lower, based on these assumptions your costs
would be:
<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A....................................... $521 $778 $1,054 $1,840
Class B (assuming sales of all shares at end
of period)................................... 716 967 1,344 2,026
Class B (assuming no sales of shares)......... 216 667 1,144 2,026
Class C (assuming sales of all shares at end
of period)................................... 255 557 959 2,084
Class C (assuming no sales of shares)......... 180 557 959 2,084
Class Y....................................... 98 306 531 1,178
</TABLE>
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Prospectus Page 8
<PAGE>
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-------------------
PaineWebber Asia Pacific Growth Fund
PaineWebber Asia Pacific Growth Fund
Investment Objective, Strategies and Risks
- --------------------------------------------------------------------------------
Fund Objective
Long-term capital appreciation.
Principal Investment Strategies
The fund invests primarily in stocks of companies in the Asia Pacific Region,
except Japan.
Mitchell Hutchins Asset Management Inc., the fund's investment adviser, has
appointed Schroder Capital Management International Inc. as the fund's sub-
adviser. Schroder Capital allocates investments among Asia Pacific Region
countries based on its assessment of those countries' long-term business
environments. Within those countries, Schroder Capital selects stocks of
companies that, based on its analyses of fundamental corporate data, it
believes have sustainable competitive advantages and whose growth prospects are
undervalued by other investors. Schroder Capital's extensive network of locally
based analysts conducts comprehensive research to assess potential returns. It
also considers companies' management capability, the ability of companies to
tap capital markets, competitive position in both domestic and export markets,
government regulation, and other factors.
Principal Risks
An investment in the fund is not guaranteed; investors may lose money by
investing in the fund. The principal risks presented by the fund are:
. Equity Risk
. Foreign Securities Risk
. Emerging Markets Risk
. Currency Risk
. Regional Concentration Risk
For an explanation of each of these risks, see "More About Risks and Investment
Strategies," below.
Information on the fund's recent investment strategies and holdings can be
found in its current annual/semi-annual reports (see back cover for information
on ordering those reports).
-----------
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Prospectus Page 9
<PAGE>
- --------------------------------------------------------------------------------
-------------------
PaineWebber Asia Pacific Growth Fund
Performance
- --------------------------------------------------------------------------------
Risk/Return Bar Chart and Table
The following bar chart shows the fund's performance for the last calendar
year. The chart shows Class A shares because they have as long a performance
history as any class of fund shares. The chart does not reflect the effect of
sales charges; if it did, the total returns shown would be lower.
The table that follows the chart shows the average annual returns during the
last calendar year and for the life of the fund for each class of the fund's
shares. That table does reflect fund sales charges. The table compares fund
returns to returns on a broad-based market index that is unmanaged and that,
therefore, does not include any sales charges or expenses.
The fund's past performance does not necessarily indicate how the fund will
perform in the future.
Total Return on Class A Shares
[CHART APPEARS HERE]
Calendar Year Percentage
- ------------- ----------
1998 -11.74%
Best quarter during the year shown: 4th quarter--19.90%
Worst quarter during the year shown: 2nd quarter--(25.95)%
Average Annual Total Returns
as of December 31, 1998
<TABLE>
<CAPTION>
MSCI
Asia Pacific
Free
Class Class A Class B Class C Class Y (ex-Japan)
(Inception Date) (3/25/97) (3/25/97) (3/25/97) (3/13/98) Index
- ---------------- --------- --------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
One Year................... (15.72)% (16.69)% (13.18)% N/A (4.42)%
Life of Class.............. (28.12)% (28.41)% (26.74)% (16.28)% *
</TABLE>
- -------
* Average annual total returns for the MSCI Asia Pacific Free (ex-Japan) Index
for the life of each class were as follows: Class A -- (22.07)%; Class B --
(22.07)%; Class C -- (22.07)%; and Class Y -- (13.05)%.
-----------
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Prospectus Page 10
<PAGE>
- --------------------------------------------------------------------------------
-------------------
PaineWebber Asia Pacific Growth Fund
Expenses and Fee Tables
- --------------------------------------------------------------------------------
Fees and Expenses These tables describe the fees and expenses that you may pay
if you buy and hold shares of the fund.
Shareholder Transaction Expenses (fees paid directly from your investments)
<TABLE>
<CAPTION>
Class A Class B Class C Class Y
------- ------- ------- -------
<S> <C> <C> <C> <C>
Maximum Sales Charge (Load) Imposed on
Purchases
(as a % of offering price).................... 4.5% None None None
Maximum Contingent Deferred Sales Charge (Load)
(CDSC)
(as a % of offering price).................... None 5% 1% None
Exchange Fee................................... None None None None
</TABLE>
Annual Fund Operating Expenses (expenses that are deducted from fund assets)
<TABLE>
<CAPTION>
Class A Class B Class C Class Y
------- ------- ------- -------
<S> <C> <C> <C> <C>
Management Fees................................ 1.20% 1.20% 1.20% 1.20%
Distribution and/or Service (12b-1) Fees....... 0.25 1.00 1.00 None
Other Expenses................................. 1.43 1.43 1.40 1.46
---- ---- ---- ----
Total Annual Fund Operating Expenses........... 2.88% 3.63% 3.60% 2.66%
</TABLE>
Example
The following example is intended to help you compare the cost of investing in
PaineWebber Asia Pacific Growth Fund with the cost of investing in other mutual
funds.
The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods unless
otherwise stated. The example also assumes that your investment has a 5% return
each year and that the fund's operating expenses remain the same. Although your
actual costs may be higher or lower, based on these assumptions your costs
would be:
<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A....................................... $728 $1,302 $1,900 $3,510
Class B (assuming sales of all shares at end
of period)................................... 865 1,411 2,078 3,573
Class B (assuming no sales of shares)......... 365 1,111 1,878 3,573
Class C (assuming sales of all shares at end
of period)................................... 462 1,103 1,864 3,862
Class C (assuming no sales of shares)......... 362 1,103 1,864 3,862
Class Y....................................... 269 826 1,410 2,993
</TABLE>
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Prospectus Page 11
<PAGE>
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PaineWebber Emerging Markets Equity Fund
PaineWebber Emerging Markets Equity Fund
Investment Objective, Strategies and Risks
- --------------------------------------------------------------------------------
Fund Objective
Long-term capital appreciation.
Principal Investment Strategies
The fund invests primarily in stocks of companies in emerging market countries.
Mitchell Hutchins Asset Management Inc., the fund's investment adviser, has
appointed Schroder Capital Management International Inc. as the fund's sub-
adviser. Schroder Capital diversifies the fund's investments by spreading them
among different geographic areas and industries. Schroder Capital assesses
emerging market countries to determine which are most likely to have favorable
long-term business environments and to have economic and political conditions
that will not impede a company's growth.
Within individual countries, Schroder Capital tries to diversify the fund's
investments among companies that it believes have attractive stock prices
relative to expected growth. Schroder Capital selects stocks of companies that,
based on its analyses of fundamental corporate data, it believes have
sustainable competitive advantages and whose growth prospects are undervalued
by other investors.
Principal Risks
An investment in the fund is not guaranteed; investors may lose money by
investing in the fund. The principal risks presented by the fund are:
.Equity Risk
.Foreign Securities Risk
.Emerging Markets Risk
.Currency Risk
.Sector Allocation Risk
For an explanation of each of these risks, see "More About Risks and Investment
Strategies," below.
Information on the fund's recent investment strategies and holdings can be
found in its current annual/semi-annual reports (see back cover for information
on ordering those reports).
-----------
- --------------------------------------------------------------------------------
Prospectus Page 12
<PAGE>
- --------------------------------------------------------------------------------
-------------------
PaineWebber Emerging Markets Equity Fund
Performance
- --------------------------------------------------------------------------------
Risk/Return Bar Chart and Table
The following bar chart shows how the fund's performance has varied from year
to year. The chart shows Class A shares because they have as long a performance
history as any class of fund shares. The chart does not reflect the effect of
sales charges; if it did, the total returns shown would be lower.
The table that follows the chart shows the average annual returns over several
time periods for each class of the fund's shares. That table does reflect fund
sales charges. The table compares fund returns to returns on a broad-based
market index that is unmanaged and that, therefore, does not include any sales
charges or expenses.
The fund's past performance does not necessarily indicate how the fund will
perform in the future. This may be particularly true of the period prior to
February 25, 1997, which is when Mitchell Hutchins appointed Schroder Capital
as the fund's sub-adviser. Prior to that date, another sub-adviser was
responsible for managing the fund's assets.
Total Return on Class A Shares
[CHART APPEARS HERE]
Calendar Year Percentage
- ------------- ----------
1995 -11.20
1996 4.86
1997 -4.53
1998 -26.43
Best quarter during years shown: 4th quarter, 1998--16.58%
Worst quarter during years shown: 2nd quarter, 1998--(22.48)%
Average Annual Total Returns
as of December 31, 1998
<TABLE>
<CAPTION>
MSCI
Emerging
Class Class A Class B Class C Class Y Markets
(Inception Date) (1/19/94) (12/5/95) (1/19/94) (1/19/94) Free Index
- ---------------- --------- --------- --------- --------- ----------
<S> <C> <C> <C> <C> <C>
One Year..................... (29.76)% (30.17)% (27.72)% (26.26)% (25.34)%
Life of Class................ (11.51)% (10.63)% (11.36)% (10.49)% *
</TABLE>
- -------
* Average annual total returns for the MSCI Emerging Markets Free Index for the
life of each class were as follows: Class A -- (9.75)%; Class B -- (9.66)%;
Class C -- (9.75)%; and Class Y -- (9.75)%.
-----------
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Prospectus Page 13
<PAGE>
- --------------------------------------------------------------------------------
-------------------
PaineWebber Emerging Markets Equity Fund
Expenses and Fee Tables
- --------------------------------------------------------------------------------
Fees and Expenses These tables describe the fees and expenses that you may pay
if you buy and hold shares of the fund.
Shareholder Transaction Expenses (fees paid directly from your investments)
<TABLE>
<CAPTION>
Class A Class B Class C Class Y
------- ------- ------- -------
<S> <C> <C> <C> <C>
Maximum Sales Charge (Load) Imposed on
Purchases
(as a % of offering price).................... 4.5% None None None
Maximum Contingent Deferred Sales Charge (Load)
(CDSC)
(as a % of offering price).................... None 5% 1% None
Exchange Fee................................... None None None None
</TABLE>
Annual Fund Operating Expenses (expenses that are deducted from fund assets)
<TABLE>
<CAPTION>
Class A Class B Class C Class Y
------- ------- ------- -------
<S> <C> <C> <C> <C>
Management Fees................................ 1.20% 1.20% 1.20% 1.20%
Distribution and/or Service (12b-1) Fees....... 0.25 1.00 1.00 None
Other Expenses................................. 2.26 2.72 2.22 2.16
---- ---- ---- ----
Total Annual Fund Operating Expenses........... 3.71% 4.92% 4.42% 3.36%
Expense Reimbursement*......................... 1.27 1.73 1.23 1.17
---- ---- ---- ----
Net Expenses*.................................. 2.44% 3.19% 3.19% 2.19%
</TABLE>
- -------
* The fund and Mitchell Hutchins have entered into an expense reimbursement
agreement. Mitchell Hutchins has agreed to reimburse the fund to the extent
that the fund's expenses through the end of the current fiscal year otherwise
would exceed the "Net Expenses" rates for each class as shown above. The fund
has agreed to repay Mitchell Hutchins for those reimbursed expenses if it can
do so over the following three years without causing the fund's expenses in
any of those years to exceed those "Net Expenses" rates.
Example
The following example is intended to help you compare the cost of investing in
PaineWebber Emerging Markets Equity Fund with the cost of investing in other
mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods unless
otherwise stated. The example also assumes that your investment has a 5% return
each year and that the fund's operating expenses remain the same, except for
the one year period when the fund's expenses are lower due to its reimbursement
agreement with Mitchell Hutchins. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A....................................... $686 $1,422 $2,177 $4,152
Class B (assuming sales of all shares at end
of period)................................... 822 1,624 2,529 4,388
Class B (assuming no sales of shares)......... 322 1,324 2,329 4,388
Class C (assuming sales of all shares at end
of period)................................... 422 1,227 2,143 4,479
Class C (assuming no sales of shares)......... 322 1,227 2,143 4,479
Class Y....................................... 222 924 1,650 3,570
</TABLE>
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Prospectus Page 14
<PAGE>
- --------------------------------------------------------------------------------
-------------------
PaineWebber Global Equity Fund PaineWebber Asia Pacific Growth
PaineWebber Global Income Fund Fund
PaineWebber Emerging Markets
Equity Fund
More About Risks and Investment Strategies
- --------------------------------------------------------------------------------
Principal Risks
The main risks of investing in one or more of the funds are described below.
Not all of these risks apply to each fund. You can find a list of the main
risks that apply to a particular fund by looking under the "Investment
Objective, Strategies and Risks" heading for that fund.
Other risks of investing in a fund, along with further detail about some of the
risks described below, are discussed in the funds' Statement of Additional
Information ("SAI"). Information on how you can obtain the SAI is on the back
cover of this prospectus.
Credit Risk. Credit risk is the risk that the issuer of a bond will not make
principal or interest payments when they are due. Even if an issuer does not
default on a payment, a bond's value may decline if the market believes that
the issuer has become less able, or less willing, to make payments on time.
Even high quality bonds are subject to some credit risk. However, credit risk
is higher for lower quality bonds. Low quality bonds involve high credit risk
and are considered speculative. Some low quality bonds may be in default when
purchased by a fund.
Currency Risk. Currency risk is the risk that the value of a foreign currency
in which one or more of a fund's investments are denominated will fall in
relation to the U.S. dollar. Currency exchange rates can be volatile and can be
affected by, among other factors, the general economics of a country, the
actions of the U.S. and foreign governments or central banks, the imposition of
currency controls, and speculation.
Derivatives Risk. The value of "derivatives" -- so- called because their value
"derives" from the value of an underlying asset, reference rate or index -- may
rise or fall more rapidly than other investments. For some derivatives, it is
possible for a fund to lose more than the amount it invested in the derivative.
Options, futures contracts and forward currency contracts are examples of
derivatives. If a fund uses derivatives to adjust or "hedge" the overall risk
of its portfolio, it is possible that the hedge will not succeed. This may
happen for various reasons, including unexpected changes in the value of the
derivatives that are not matched by opposite changes in the value of the rest
of the fund's portfolio.
Emerging Markets Risk. Securities of issuers located in emerging market
countries are subject to all of the risks of other foreign securities (see
below). However, the level of those risks often is higher due to the fact that
political, legal and economic systems in emerging market countries may be less
fully developed and less stable than those in developed countries. Emerging
market securities also may be subject to additional risks, such as lower
liquidity and larger or more rapid changes in value.
Equity Risk. The prices of common stocks and other equity securities generally
fluctuate more than those of other investments. They reflect changes in the
issuing company's financial condition and changes in the overall market. A fund
may lose a substantial part, or even all, of its investment in a company's
stock.
Foreign Securities Risk. Foreign securities involve risks that normally are not
associated with securities of U.S. issuers. These include risks relating to
political, social and economic developments abroad and differences between U.S.
and foreign regulatory requirements and market practices. When securities are
denominated in foreign currencies, they also are subject to currency risk (see
above).
Interest Rate Risk. The value of bonds generally can be expected to fall when
interest rates rise and to rise when interest rates fall. Interest rate risk is
the risk that interest rates will rise, so that the value of a fund's
investments in bonds will fall. Because interest rate risk is the primary risk
presented by U.S. government and other very high quality bonds, changes in
interest rates may actually have a larger effect on the value of those bonds
than on lower quality bonds.
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Prospectus Page 15
<PAGE>
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PaineWebber Global Equity Fund PaineWebber Asia Pacific Growth
PaineWebber Global Income Fund Fund
PaineWebber Emerging Markets
Equity Fund
Non-Diversified Status Risk. This means that a fund is not subject to certain
limitations on its ability to invest more than 5% of its total assets in
securities of a single issuer. When a fund holds a large position in the
securities of one issuer, changes in the financial condition or in the market's
assessment of that issuer may cause larger changes in the fund's total return
and in the price of its shares than if the fund held only a smaller position.
Prepayment Risk. Payments on bonds that are backed by mortgage loans or similar
assets may be received earlier or later than expected due to changes in the
rate at which the underlying loans are prepaid. Faster prepayments often happen
when market interest rates are falling. As a result, a fund may need to
reinvest these early payments at those lower interest rates, thus reducing its
income. Conversely, when interest rates rise, prepayments may happen more
slowly, causing the underlying loans to be outstanding for a longer time. This
can cause the market value of the security to fall because the market may view
its interest rate as too low for a longer term investment.
Regional Concentration Risk. Asia Pacific Growth Fund invests primarily in
stocks of companies in the Asia Pacific Region (excluding Japan). As a result,
factors affecting this region will affect the value of the fund's investments
more than if the fund invested in several geographic areas. The Asia Pacific
Region countries in which the fund invests generally have less stable
economies, stock markets, currencies and political systems than in Europe or
North America. Also, countries in the Asia Pacific Region generally are heavily
dependent on international trade and on the availability of foreign capital.
This makes these countries more subject to external influences.
Sector Allocation Risk. Mitchell Hutchins, Schroder Capital or Invista may not
be successful in choosing the best allocation among geographic or other market
sectors. A fund that allocates its assets among market sectors is more
dependent on its investment adviser's or sub-adviser's ability to successfully
assess the relative values in each sector than are funds that do not do so.
Sovereign Risk. Investments in foreign government bonds involve special risks
because the investors may have limited legal recourse in the event of default.
Political conditions, especially a country's willingness to meet the terms of
its debt obligations, can be of considerable significance.
Additional Risks
Year 2000 Risk. The funds could be adversely affected by problems relating to
the inability of computer systems used by Mitchell Hutchins and the funds'
other service providers to recognize the year 2000. While year 2000-related
computer problems could have a negative effect on the funds, Mitchell Hutchins
is working to avoid these problems with respect to its own computer systems and
to obtain assurances from other service providers that they are taking similar
steps.
Similarly, the companies in which the funds invest and trading systems used by
the funds could be adversely affected by this issue. The ability of a company
or trading system to respond successfully to the 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 on the funds.
Additional Investment Strategies
Defensive Positions; Cash Reserves. In order to protect itself from adverse
market conditions, a fund may take a defensive position that is different from
its normal investment strategy. This means that the fund may temporarily invest
a larger-than-normal part, or even all, of its assets in cash or money market
instruments. Since these investments provide relatively low income, a defensive
position may not be consistent with achieving a fund's investment objective.
However, Global Income Fund may invest in money market instruments on an
unlimited basis as part of its ordinary investment strategy. Each of the other
funds may invest up to 35% of its total assets in cash or money market
instruments as a cash reserve for liquidity or other purposes.
Portfolio Turnover. Each fund may engage in frequent trading in order to
achieve its investment objective. Frequent trading may result in a high
portfolio turnover rate and higher fund expenses due to transaction costs.
Frequent trading also may increase the portion of a fund's dividends that
represent short-term capital gains. The federal income tax rate payable by
shareholders on dividends representing short-term capital gains is the same as
the rate on dividends representing ordinary income, but it is higher than the
rate on dividends representing long-term capital gains.
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Prospectus Page 16
<PAGE>
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PaineWebber Global Equity Fund PaineWebber Asia Pacific Growth
PaineWebber Global Income Fund Fund
PaineWebber Emerging Markets
Equity Fund
Your Investment
Managing Your Fund Account
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Flexible Pricing
The funds offer four classes of shares--Class A, Class B, Class C and Class Y.
Each class has different sales charges and ongoing expenses. You can choose the
class that is best for you, based on how much you plan to invest in the funds
and how long you plan to hold your fund investment. Class Y shares are only
available to certain types of investors.
Class A Shares
Class A shares have a front-end sales charge that is included in the offering
price of the Class A shares. This sales charge is not invested in the fund.
Class A shares pay an annual 12b-1 service fee of 0.25% of average net assets,
but they pay no 12b-1 distribution fees. The ongoing expenses for Class A
shares are lower than for Class B and Class C shares.
The Class A sales charges for each fund are described in the following tables.
Class A Sales Charges for: Global Equity Fund
Asia Pacific Growth Fund
Emerging Markets Equity Fund
<TABLE>
<CAPTION>
Sales Charge as a Percentage of: Discount to Selected Dealers as
Amount of Investment Offering Price Net Amount Invested Percentage 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)
Class A Sales Charges for: Global Income Fund
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 dividends are not subject
to this 1% charge. Withdrawals in the first year after purchase of up to
12% of the value of the fund account under the funds' Systematic Withdrawal
Plan are not subject to this charge.
(2) Mitchell Hutchins pays 1% to PaineWebber.
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Prospectus Page 17
<PAGE>
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PaineWebber Global Equity Fund PaineWebber Asia Pacific Growth
PaineWebber Global Income Fund Fund
PaineWebber Emerging Markets
Equity Fund
Sales Charge Reductions and Waivers. You may qualify for a lower sales charge
if you already own Class A shares of a PaineWebber mutual fund. You can combine
the value of Class A shares that you own in other PaineWebber funds and the
purchase amount of the Class A shares of the PaineWebber fund that you are
buying.
You may also qualify for a lower sales charge if you combine your purchases
with those of:
. your spouse, parents or children under age 21;
. your Individual Retirement Accounts (IRAs);
. certain employee benefit plans, including 401(k) plans;
. a company that you control;
. a trust that you created;
. Uniform Gifts to Minors Act/Uniform Transfers to Minors Act accounts created
by you or by a group of investors for your children; or
. accounts with the same adviser.
You may qualify for a complete waiver of the sales charge if you:
. Are an employee of PaineWebber or its affiliates or the spouse, parent or
child under age 21 of a PaineWebber employee;
. Buy these shares through a PaineWebber Financial Advisor who was formerly
employed as an investment executive with a competing brokerage firm that was
registered as a broker-dealer with the SEC, and
--you were the Financial Advisor's client at the competing brokerage firm;
--within 90 days of buying shares in a fund, you sell shares of one or more
mutual funds that were principally underwritten by the competing brokerage
firm or its affiliates, and you either paid a sales charge to buy those
shares, pay a contingent deferred sales charge when selling them or held
those shares until the contingent deferred sales charge was waived; and
--you purchase an amount that does not exceed the total amount of money you
received from the sale of the other mutual fund;
. Acquire these shares through the reinvestment of dividends of a PaineWebber
unit investment trust;
. Are a 401(k) or 403(b) qualified employee benefit plan with 50 or more
eligible employees in the plan or at least $1 million in assets; or
. Are a participant in the PaineWebber Members Only Program(TM). 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.
Note: See the funds' Statement of Additional Information for some other sales
charge waivers. If you think you qualify for any sales charge reductions or
waivers, you will need to provide documentation to PaineWebber or the fund. For
more information, you should contact your PaineWebber Financial Advisor or
correspondent firm or call 1-800-647-1568. If you want information on the
funds' Systematic Withdrawal Plan, see the Statement of Additional Information
or contact your PaineWebber Financial Advisor or correspondent firm.
Class B Shares
Class B shares have a contingent deferred sales charge. When you purchase Class
B shares, we invest 100% of your purchase in fund shares. However, you may have
to pay the deferred sales charge when you sell your fund shares, depending on
how long you own the shares.
Class B shares pay an annual 12b-1 distribution fee of 0.75% of average net
assets, as well as an annual 12b-1 service fee of 0.25% of average net assets.
Over time, these fees will increase the cost of your investment and may cost
you more than if you paid a front-end sales charge. If you hold your Class B
shares for six years, they will automatically convert to Class A shares, which
have lower ongoing expenses.
If you sell Class B shares before the end of six years, you will pay a deferred
sales charge. We calculate the deferred sales charge by multiplying the lesser
of the net asset value of the Class B shares at the time of
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Prospectus Page 18
<PAGE>
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PaineWebber Global Equity Fund PaineWebber Asia Pacific Growth
PaineWebber Global Income Fund Fund
PaineWebber Emerging Markets
Equity Fund
purchase or the net asset value at the time of sale by the percentage shown
below:
<TABLE>
<CAPTION>
Percentage by which
If you sell the shares' net asset
shares within: value is 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>
We will not impose the deferred sales charge on Class B shares representing
reinvestment of dividends or on withdrawals in any year of up to 12% of the
value of your Class B shares under the Systematic Withdrawal Plan.
To minimize the deferred sales charge, we will assume that you are selling
. First, Class B shares representing reinvested dividends and
. Second, Class B shares that you have owned the longest.
Sales Charge Waivers. You may qualify for a waiver of the deferred sales charge
on a sale of shares if:
. You participate in the Systematic Withdrawal Plan;
. You are older than 59 1/2 and are selling shares to take a distribution from
certain types of retirement plans;
. You receive a tax-free return of an excess IRA contribution;
. You receive a tax-qualified retirement plan distribution following
retirement; or
. The shares are sold within one year of your death and you owned the shares
either (1) as the sole shareholder or (2) with your spouse as a joint tenant
with the right of survivorship.
Note: If you think you qualify for any of these sales charge waivers, you will
need to provide documentation to PaineWebber or the fund. For more information,
you should contact your PaineWebber Financial Advisor or correspondent firm or
call 1-800-647-1568. If you want information on the Systematic Withdrawal Plan,
see the Statement of Additional Information or contact your PaineWebber
Financial Advisor or correspondent firm.
Class C Shares
Class C shares have a level load sales charge in the form of ongoing 12b-1
distribution fees. When you purchase Class C shares, we will invest 100% of
your purchase in fund shares.
Class C shares pay an annual 12b-1 distribution fee of 0.75% (0.50% for Global
Income Fund) of average net assets, as well as an annual 12b-1 service fee of
0.25% of average net assets. Over time these fees will increase the cost of
your investment and may cost you more than if you paid a front-end sales
charge. Class C shares do not convert to another class of shares. This means
that you will pay the 12b-1 fees for as long as you own your shares.
Class C shares also have a contingent deferred sales charge. You may have to
pay the deferred sales charge if you sell your shares within one year of the
date you purchased them. We calculate the deferred sales charge on sales of
Class C shares by multiplying 1.00% (0.75% for Global Income Fund) by the
lesser of the net asset value of the Class C shares at the time of purchase or
the net asset value at the time of sale. We will not impose the deferred sales
charge on Class C shares representing reinvestment of dividends or on
withdrawals, in the first year after purchase, of up to 12% of the value of
your Class C shares under the Systematic Withdrawal Plan.
Note: If you want information on the funds' Systematic Withdrawal Plan, see the
Statement of Additional Information or contact your PaineWebber Financial
Advisor or correspondent firm.
Class Y Shares
Class Y shares have no sales charge. Only specific types of investors can
purchase Class Y shares. You may be eligible to purchase Class Y shares if you:
. Buy shares through PaineWebber's PACE Multi-Advisor Program;
. Buy $10 million or more of PaineWebber fund shares at any one time;
. Are a qualified retirement plan with 5,000 or more eligible employees or $50
million in assets; or
. Are an investment company advised by PaineWebber or an affiliate of
PaineWebber.
The trustee of PaineWebber's 401(k) Plus Plan for its employees is also
eligible to purchase Class Y shares.
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Prospectus Page 19
<PAGE>
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PaineWebber Global Equity Fund PaineWebber Asia Pacific Growth
PaineWebber Global Income Fund Fund
PaineWebber Emerging Markets
Equity Fund
Class Y shares do not pay ongoing sales or distribution fees or sales charges.
The ongoing expenses for Class Y shares are the lowest for all the classes.
Buying Shares
If you are a PaineWebber client, or a client of a PaineWebber correspondent
firm, you can purchase fund shares through your Financial Advisor. Otherwise,
you can invest in the funds through the funds' transfer agent, PFPC Inc. You
can obtain an application by calling 1-800-647-1568. You must complete and sign
the application and mail it, along with a check, to: PFPC Inc., Attn.:
PaineWebber Mutual Funds, P.O. Box 8950, Wilmington, DE 19899.
If you wish to invest in other PaineWebber Funds, you can do so by:
. Contacting your Financial Advisor (if you have an account at PaineWebber or
at a PaineWebber correspondent firm);
. Mailing an application with a check; or
. Opening an account by exchanging shares from another PaineWebber fund.
You do not have to complete an application when you make additional investments
in the same fund.
The funds and Mitchell Hutchins reserve the right to reject a purchase order or
suspend the offering of shares.
<TABLE>
<CAPTION>
Minimum Investments:
- --------------------
<S> <C>
To open an account...................................................... $1,000
To add to an account.................................................... $ 100
</TABLE>
Each fund may waive or reduce these amounts for:
. Employees of PaineWebber or its affiliates; or
. Participants in certain pension plans, retirement accounts, unaffiliated
investment programs or the funds' automatic investment plans.
Selling Shares
You can sell your fund shares at any time. If you own more than one class of
shares, you should specify which class you want to sell. If you do not, the
fund will assume that you want to sell shares in the following order: Class A,
then Class C, then Class B and last, Class Y.
If you want to sell shares that you purchased recently, the fund may delay
payment until it verifies that it has received good payment. If you purchased
shares by check, this can take up to 15 days.
If you have an account with PaineWebber or a PaineWebber correspondent firm,
you can sell shares by contacting your Financial Advisor.
If you do not have an account at PaineWebber or a correspondent firm, and you
bought your shares through the transfer agent, you can sell your shares by
writing to the fund's transfer agent. Your letter must include:
. Your name and address;
. The fund's name;
. The fund account number;
. The dollar amount or number of shares you want to sell; and
. 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 that is a participant in one of the medallion
programs recognized by the Securities Transfer Agents Association. These are:
Securities Transfer Agents Medallion Program (STAMP), Stock Exchanges
Medallion Program (SEMP) and the New York Stock Exchange Medallion Signature
Program (MSP). The funds will not accept signature guarantees that are not a
part of these programs.
Mail the letter to:
PFPC Inc.
Attn.: PaineWebber Mutual Funds
P.O. Box 8950
Wilmington, DE 19899.
If you sell Class A shares and then repurchase Class A shares of the same fund
within 365 days of the sale, you can reinstate your account without paying a
sales charge.
It costs each fund money to maintain shareholder accounts. Therefore, the funds
reserve the right to repurchase all shares in any account that has a net asset
value of less than $500. If a fund elects to do this with your account, it will
notify you that you can increase the amount invested to $500 or more within 60
days. A fund will not repurchase shares in accounts that fall below $500 solely
because of a decrease in the fund's net asset value.
Exchanging Shares
You may exchange Class A, Class B or Class C shares of each fund for shares of
the same class of most other PaineWebber funds. You may not exchange Class Y
shares.
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Prospectus Page 20
<PAGE>
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PaineWebber Global Equity Fund PaineWebber Asia Pacific Growth
PaineWebber Global Income Fund Fund
PaineWebber Emerging Markets
Equity Fund
You will not pay either a front-end sales charge or a deferred sales charge
when you exchange shares. However, you may have to pay a deferred sales charge
if you later sell the shares you acquired in the exchange. Each fund will use
the date that you purchased the shares in the first fund to determine whether
you must pay a deferred sales charge when you sell the shares in the acquired
fund.
Other PaineWebber funds may have different minimum investment amounts. You may
not be able to exchange your shares if your exchange is not as large as the
minimum investment amount in that other fund.
You may exchange shares of one fund for shares of another fund only after the
first purchase has settled and the first fund has received your payment.
PaineWebber Clients. If you bought your shares through PaineWebber or a
correspondent firm, you may exchange your shares by placing an order with your
PaineWebber Financial Advisor.
Other Investors. If you are not a PaineWebber client, you may exchange your
shares by writing to the fund's transfer agent. You must include:
.Your name and address;
. The name of the fund whose shares you are selling and the name of the fund
whose shares you want to buy;
. Your account number;
. How much you are exchanging (by dollar amount or by number of shares to be
sold); and
. A guarantee of your signature. (See "Buying Shares" for information on
obtaining a signature guarantee.)
Mail the letter to:
PFPC Inc.
Attn.: PaineWebber Mutual Funds
P.O. Box 8950
Wilmington, DE 19899.
A fund may modify or terminate the exchange privilege at any time.
Pricing and Valuation
The price at which you may buy, sell or exchange fund shares is based on net
asset value per share. Each fund calculates net asset value on days that the
New York Stock Exchange is open. Each fund calculates net asset value
separately for each class as of the close of regular trading on the NYSE
(generally, 4:00 p.m., Eastern time). The NYSE normally is not open, and the
funds do not price their shares, on national holidays and on Good Friday. If
trading on the NYSE is halted for the day before 4:00 p.m., Eastern time, the
fund's net asset value per share will be calculated as of the time trading was
halted.
Your price for buying, selling or exchanging shares will be based on the net
asset value that is next calculated after the fund accepts your order. If you
place your order through PaineWebber, your PaineWebber Financial Advisor is
responsible for making sure that your order is promptly sent to the fund.
You should keep in mind that a front-end sales charge may be applied to your
purchase if you buy Class A shares. A deferred sales charge may be applied when
you sell Class B or Class C shares.
Each fund calculates its net asset value based on the current market value for
its portfolio securities. The funds normally obtain market values for their
securities from independent pricing services that use reported last sales
prices, current market quotations or valuations from computerized "matrix"
systems that derive values based on comparable securities. If a market value is
not available from an independent pricing source for a particular security,
that security is valued at a fair value determined by or under the direction of
the fund's board. The funds normally use the amortized cost method to value
bonds that will mature in 60 days or less.
Judgment plays a greater role in valuing thinly traded securities, including
many lower-rated bonds, because there is less reliable, objective data
available.
The funds calculate the U.S. dollar value of investments that are denominated
in foreign currencies daily, based on current exchange rates. A fund may own
securities, including some securities that trade primarily in foreign markets,
that trade on weekends or other days on which a fund does not calculate net
asset value. You will not be able to sell your shares on those days. If a fund
concludes that a material change in the value of a foreign security has
occurred after the close of trading in its principal foreign market but before
the close of regular trading on the NYSE, the fund may use fair value methods
to reflect those changes. Any use of fair value methods would be intended to
assure that the fund's net asset value fairly reflects security values as of
the time of pricing.
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Prospectus Page 21
<PAGE>
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PaineWebber Global Equity Fund PaineWebber Asia Pacific Growth
PaineWebber Global Income Fund Fund
PaineWebber Emerging Markets
Equity Fund
Management
- --------------------------------------------------------------------------------
Investment Advisers
Mitchell Hutchins Asset Management Inc. is the investment adviser and
administrator of the funds. Mitchell Hutchins is located at 1285 Avenue of the
Americas, New York, New York, 10019, and is a wholly owned asset management
subsidiary of PaineWebber Incorporated, which is wholly owned by Paine Webber
Group Inc., a publicly owned financial services holding company. On January 31,
1999, Mitchell Hutchins was adviser or sub-adviser of 33 investment companies
with 75 separate portfolios and aggregate assets of approximately $47.7
billion.
Invista Capital Management, LLC is the sub-adviser for Global Equity Fund's
foreign investments. It is located at 1800 Hub Tower, 699 Walnut, Des Moines,
Iowa 50309. As of December 31, 1998, Invista managed approximately $31.0
billion in client assets.
Schroder Capital Management International Inc. is the sub-adviser to Asia
Pacific Growth Fund and Emerging Markets Equity Fund. Schroder Capital is
located at 1301 Avenue of the Americas, New York, New York 10019. As of
December 31, 1998, Schroder Capital, together with its United Kingdom
affiliate, Schroder Capital Management International Limited, had over $27.1
billion under management.
The funds have received an exemptive order from the SEC that permits their
boards to appoint and replace sub-advisers and to amend sub-advisory contracts
without obtaining shareholder approval. A fund's shareholders must approve this
policy before its board may implement it. As of March 1, 1999, only the
shareholders of Global Equity Fund have done so.
Portfolio Managers
Global Equity Fund. Mitchell Hutchins is responsible for allocating Global
Equity Fund's assets between U.S. and foreign markets and for managing its U.S.
investments. Since October 1, 1998, T. Kirkham Barneby has been responsible for
the fund's asset allocation decisions. Mr. Barneby is a managing director and
chief investment officer for quantitative investments of Mitchell Hutchins. Mr.
Barneby rejoined Mitchell Hutchins in 1994, after being with Vantage Global
Management for one year. Prior to that year, Mr. Barneby was a senior vice
president responsible for quantitative management and asset allocation models.
Mark A. Tincher has been primarily responsible for the day-to-day management of
the fund's U.S. investments since October 1, 1998. Mr. Tincher is a
managing director and chief investment officer for equities (stocks) of
Mitchell Hutchins. 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 and oversaw the
management of all Chase equity funds.
Scott D. Opsal has been primarily responsible for the day-to-day management of
the fund's foreign investments since October 1, 1998, when Invista was
appointed as the fund's sub-adviser for foreign investments. Mr. Opsal is an
executive vice president and chief investment officer of Invista, where he has
been employed since 1986.
Global Income Fund. Stuart Waugh and William King are primarily responsible for
the day-to-day management of Global Income 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 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 the fund in
1997. Prior to 1995, 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
information on market outlook, interest rate forecasts and other factors
affecting global fixed income investments.
-----------
- --------------------------------------------------------------------------------
Prospectus Page 22
<PAGE>
- --------------------------------------------------------------------------------
-------------------
PaineWebber Global Equity Fund PaineWebber Asia Pacific Growth
PaineWebber Global Income Fund Fund
PaineWebber Emerging Markets
Equity Fund
Asia Pacific Growth Fund. Louise Croset and Heather Crighton, with the
assistance of Schroder Capital's Asia Pacific Region investment committee, have
been primarily responsible for the day-to-day management of Asia Pacific Growth
Fund since its inception. Ms. Croset is a first vice president and director of
Schroder Capital and has been with the firm since 1993. She has managed Asia
Pacific Region stocks for the past 14 years. Ms. Crighton is a first vice
president of Schroder Capital and has also been with the firm since 1993. She
has managed Asia Pacific Region stocks for the past ten years.
Emerging Markets Equity Fund. John A. Troiano, Ms. Crighton and Mark Bridgeman,
with the assistance of Schroder Capital's emerging markets investment
committee, have 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. 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 joined Schroder
Capital in 1990 and has been a vice president and international fund manager of
the firm since 1995.
The funds paid advisory fees to Mitchell Hutchins for the most recent fiscal
year at the following rates of average daily net assets:
<TABLE>
<S> <C>
Global Equity Fund........................................................ 0.85%
Global Income Fund........................................................ 0.75%
Asia Pacific Growth Fund.................................................. 1.20%
Emerging Markets Equity Fund.............................................. 1.20%
</TABLE>
-----------
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Prospectus Page 23
<PAGE>
- --------------------------------------------------------------------------------
-------------------
PaineWebber Global Equity Fund PaineWebber Asia Pacific Growth
PaineWebber Global Income Fund Fund
PaineWebber Emerging Markets
Equity Fund
Dividends and Taxes
- --------------------------------------------------------------------------------
Dividends
Global Income Fund normally declares and pays dividends monthly, and it
distributes substantially all of its gains, if any, annually. The other funds
normally declare and pay dividends and distribute any gains annually.
Classes with higher expenses are expected to have lower dividends. For example,
Class B shares are expected to have the lowest dividends of any class of a
fund's shares, while Class Y shares are expected to have the highest.
You will receive dividends in additional shares of the same class unless you
elect to receive them in cash. Contact your Financial Advisor at PaineWebber or
one of its corresponding firms if you prefer to receive dividends in cash.
Taxes
The dividends that you receive from a fund generally are subject to federal
income tax regardless of whether you receive them in additional fund shares or
in cash. If you hold fund shares through a tax-exempt account or plan, such as
an IRA or 401(k) plan, dividends on your shares generally will not be subject
to tax.
When you sell fund shares, you generally will be subject to federal income tax
on any gain you realize. If you exchange any fund's shares for shares of
another PaineWebber mutual fund, the transaction will be treated as a sale of
the first fund's shares, and any gain will be subject to federal income tax.
Global Income Fund expects that its dividends will be taxed primarily as
ordinary income. The other funds expect that their dividends will be comprised
primarily of capital gain distributions. The distribution of capital gains may
be taxed at a lower rate than ordinary income, depending on whether the fund
held the assets that generated the gains for more than 12 months. Your fund
will tell you how you should treat its dividends for tax purposes.
-----------
- --------------------------------------------------------------------------------
-----------
- --------------------------------------------------------------------------------
Prospectus Page 24
<PAGE>
- --------------------------------------------------------------------------------
-------------------
PaineWebber Global Equity Fund PaineWebber Asia Pacific Growth
PaineWebber Global Income Fund Fund
PaineWebber Emerging Markets
Equity Fund
Financial Highlights
- --------------------------------------------------------------------------------
The following financial highlights tables are intended to help you understand
the funds' financial performance for the past 5 years. Shorter periods are
shown for funds or classes of fund shares that have existed for less than 5
years. Certain information reflects financial results for a single fund share.
In the tables, "total investment return" represents the rate that an investor
would have earned (or lost) on an investment in a fund (assuming reinvestment
of all dividends).
The information in the financial highlights has been audited by Ernst &
Young LLP, independent auditors (or for Global Income Fund,
PricewaterhouseCoopers LLP, independent accountants), whose reports, along with
the funds' financial statements, are included in the funds' Annual Reports to
Shareholders. Annual Reports may be obtained without charge by calling 1-800-
647-1568.
-----------
- --------------------------------------------------------------------------------
Prospectus Page 25
<PAGE>
- --------------------------------------------------------------------------------
-------------------
PaineWebber Global Equity Fund
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Global Equity Fund
---------------------------------------------------------------------------------------------------
Class A Class B
----------------------------------------------------------------- --------------------------------
For the For the For the
Years Ended For the Two Years Ended Years Ended For the Two
October 31, Months Ended August 31, October 31, Months Ended
------------------ October 31, ------------------------------- ----------------- October 31,
1998# 1997 1996 1996 1995** 1994 1998# 1997 1996
-------- -------- ------------ -------- -------- -------- ------- ------- ------------
<S> <C> <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 $ 17.69 $ 16.93 $ 16.35
-------- -------- -------- -------- -------- -------- ------- ------- --------
Net investment income
(loss)................. 0.03+ 0.00 (0.02) 0.02 0.02 0.01 (0.12)+ (0.21) (0.05)
Net realized and
unrealized gains
(losses) from
investments, futures
and foreign currency... 0.35+ 1.52 0.64 1.24 0.37 2.63 0.34+ 1.55 0.63
-------- -------- -------- -------- -------- -------- ------- ------- --------
Net increase (decrease)
from investment
operations............. 0.38 1.52 0.62 1.26 0.39 2.64 0.22 1.34 0.58
-------- -------- -------- -------- -------- -------- ------- ------- --------
Distributions from net
realized gains......... (2.48) (0.58) -- (0.57) (1.25) (0.21) (2.48) (0.58) --
-------- -------- -------- -------- -------- -------- ------- ------- --------
Net asset value, end of
period................. $ 16.27 $ 18.37 $ 17.43 $ 16.81 $ 16.12 $ 16.98 $ 15.43 $ 17.69 $ 16.93
======== ======== ======== ======== ======== ======== ======= ======= ========
Total investment return
(1).................... 2.53% 8.87% 3.69% 8.06% 3.24% 18.23% 1.62% 8.05% 3.55%
======== ======== ======== ======== ======== ======== ======= ======= ========
Ratios/Supplemental
Data:
Net assets, end of
period (000's)......... $251,680 $294,878 $307,267 $305,218 $360,652 $185,493 $52,709 $87,104 $113,445
Expenses to average net
assets................. 1.55% 1.44% 1.53%* 1.48% 1.71%(2) 1.58% 2.38% 2.26% 2.34%*
Net investment income
(loss) to average net
assets................. 0.17% 0.01% (0.80)%* 0.10% 0.09%(2) 0.07% (0.74)% (0.80)% (1.61)%*
Portfolio turnover
rate................... 151% 86% 3% 33% 40% 51% 151% 86% 3%
</TABLE>
- -------
* Annualized
** Investment advisory functions for the fund were transferred from Kidder
Peabody Asset Management Inc. to Mitchell Hutchins on February 13, 1995.
# Effective October 1, 1998, Invista Capital Management, LLC oversees the day-
to-day management of the international portion of the fund's assets and
Mitchell Hutchins allocates the portfolio between domestic and international
investments and manages the domestic portion of the fund's assets.
+ Calculated using the average monthly shares outstanding for the year.
++ For the period August 25, 1995 (commencement of offering of shares) to
August 31, 1995.
(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 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%,
0.06% and 0.06% for Class A, Class B, Class C and Class Y shares,
respectively.
-----------
- --------------------------------------------------------------------------------
Prospectus Page 26
<PAGE>
- --------------------------------------------------------------------------------
-------------------
PaineWebber Global Equity Fund
Financial Highlights
(Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Global Equity Fund
- -------------------------------------------------------------------------------------------------------------------------------
Class B Class C Class Y
- ------------------------ ---------------------------------------------------------------- -------------------------------
For the For the For the
For the For the Years Ended For the Two Years Ended Years Ended For the Two
Year Ended Period Ended October 31, Months Ended August 31, October 31, Months Ended
August 31, Aug. 31, ----------------- October 31, ------------------------------ ---------------- October 31,
1996 1995++ 1998# 1997 1996 1996 1995** 1994 1998# 1997 1996
- ---------- ------------ ------- ------- ------------ ------- ------- ------- ------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 15.82 $ 15.83 $ 17.69 $ 16.93 $ 16.35 $ 15.82 $ 16.81 $ 14.52 $ 18.63 $ 17.60 $ 16.97
- --------- -------- ------- ------- ------- ------- ------- ------- ------- ------- -------
(0.12) 0.00 (0.11)+ (0.23) (0.05) (0.13) (0.11) (0.07) 0.09+ 0.10 (0.01)
1.22 (0.01) 0.35 + 1.57 0.63 1.23 0.37 2.57 0.35+ 1.51 0.64
- --------- -------- ------- ------- ------- ------- ------- ------- ------- ------- -------
1.10 (0.01) 0.24 1.34 0.58 1.10 0.26 2.50 0.44 1.61 0.63
- --------- -------- ------- ------- ------- ------- ------- ------- ------- ------- -------
(0.57) -- (2.48) (0.58) -- (0.57) (1.25) (0.21) (2.48) (0.58) --
- --------- -------- ------- ------- ------- ------- ------- ------- ------- ------- -------
$ 16.35 $ 15.82 $ 15.45 $ 17.69 $ 16.93 $ 16.35 $ 15.82 $ 16.81 $ 16.59 $ 18.63 $ 17.60
========= ======== ======= ======= ======= ======= ======= ======= ======= ======= =======
7.18% (0.06)% 1.74% 8.05% 3.55% 7.18% 2.46% 17.29% 2.86% 9.31% 3.71%
========= ======== ======= ======= ======= ======= ======= ======= ======= ======= =======
$113,235 $142,880 $41,103 $54,510 $67,530 $66,585 $83,485 $31,837 $51,025 $57,683 $63,225
2.25% 2.17%*(2) 2.32% 2.20% 2.30%* 2.27% 2.48%(2) 2.33% 1.21% 1.10% 1.18%*
(0.68)% (1.92)%*(2) (0.65)% (0.75)% (1.57)%* (0.70)% (0.68)%(2) (0.68)% 0.50% 0.36% (0.45)%*
33% 40% 151% 86% 3% 33% 40% 51% 151% 86% 3%
<CAPTION>
Global Equity Fund
- -------------------------------------------------------------------------------------------------------------------------------
Class Y
- -----------------------------
For the
Years Ended
August 31,
- -----------------------------
1996 1995** 1994
- -------- ----------- --------
<S> <C> <C>
$ 16.22 $ 17.03 $ 14.56
- -------- ----------- --------
0.07 0.07 0.05
1.25 0.37 2.63
- -------- ----------- --------
1.32 0.44 2.68
- -------- ----------- --------
(0.57) (1.25) (0.21)
- -------- ----------- --------
$ 16.97 $ 16.22 $ 17.03
======== =========== ========
8.39% 3.54% 18.49%
======== =========== ========
$61,736 $57,150 $28,390
1.17% 1.46%(2) 1.33%
0.46% 0.36%(2) 0.32%
33% 40% 51%
</TABLE>
-----------
- --------------------------------------------------------------------------------
Prospectus Page 27
<PAGE>
- --------------------------------------------------------------------------------
-------------------
PaineWebber Global Income Fund
Financial Highlights
(continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Global Income Fund
-----------------------------------------------------------------------------------
Class A Class B
---------------------------------------------------- ----------------------------
For the Years Ended October 31,
-----------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1998 1997 1996
-------- -------- -------- -------- -------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of year...... $ 10.27 $ 10.46 $ 10.35 $ 9.99 $ 10.97 $ 10.24 $ 10.44 $ 10.31
-------- -------- -------- -------- -------- ------- -------- --------
Net investment income... 0.62@ 0.69@ 0.72@ 0.77@ 0.72 0.51@ 0.58@ 0.64@
Net realized and
unrealized gains
(losses) from
investments and foreign
currency............... 0.32@ (0.19)@ 0.13@ 0.31@ (1.05) 0.33@ (0.17)@ 0.15@
-------- -------- -------- -------- -------- ------- -------- --------
Net increase (decrease)
from investment
transactions........... 0.94 0.50 0.85 1.08 (0.33) 0.84 0.41 0.79
-------- -------- -------- -------- -------- ------- -------- --------
Dividends from net
investment income...... (0.50) (0.54) (0.74) (0.72) (0.33) (0.43) (0.48) (0.66)
Distributions in excess
of net investment
income................. (0.05) (0.06) -- -- -- (0.04) (0.05) --
Distribution from paid-
in capital............. (0.08) (0.09) -- -- (0.32) (0.07) (0.08) --
-------- -------- -------- -------- -------- ------- -------- --------
Total dividends and
distributions to
shareholders........... (0.63) (0.69) (0.74) (0.72) (0.65) (0.54) (0.61) (0.66)
-------- -------- -------- -------- -------- ------- -------- --------
Net asset value, end of
year................... $ 10.58 $ 10.27 $ 10.46 $ 10.35 $ 9.99 $ 10.54 $ 10.24 $ 10.44
======== ======== ======== ======== ======== ======= ======== ========
Total investment return
(1).................... 9.51% 4.99% 8.60% 11.09% (3.10)% 8.53% 4.11% 7.95%
======== ======== ======== ======== ======== ======= ======== ========
Ratio/Supplemental data:
Net assets, end of year
(000's)................ $408,190 $486,718 $549,932 $663,022 $611,855 $33,478 $103,312 $307,577
Expenses to average net
assets................. 1.24% 1.21% 1.27% 1.24%(2) 1.17% 2.13% 1.99% 1.99%
Net investment income to
average net assets..... 6.07% 6.66% 6.88% 7.47%(2) 6.94% 5.16% 5.83% 6.14%
Portfolio turnover
rate................... 93% 172% 126% 113% 108% 93% 172% 126%
</TABLE>
- -------
@ Calculated using the average monthly shares outstanding for the year.
(1) Total investment return is calculated assuming a $1,000 investment on the
first day of each year reported, reinvestment of all dividends and
distributions at net asset value on the payable dates and a sale at net
asset value on the last day of each year reported. The figures do not
include sales charges; results would be lower if sales charges were
included.
(2) These ratios include non-recurring reorganization expenses of 0.04%.
-----------
- --------------------------------------------------------------------------------
Prospectus Page 28
<PAGE>
- --------------------------------------------------------------------------------
-------------------
PaineWebber Global Income Fund
Financial Highlights
(Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Global Income Fund
- ------------------------------------------------------------------------------------------------------------------------
Class B Class C Class Y
- --------------------- ----------------------------------------------- ----------------------------------------------
For the Years Ended October 31,
- ------------------------------------------------------------------------------------------------------------------------
1995 1994 1998 1997 1996 1995 1994 1998 1997 1996 1995 1994
- -------- -------- ------- ------- ------- ------- ------- ------ ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 9.96 $ 10.95 $ 10.26 $ 10.45 $ 10.33 $ 9.98 $ 10.96 $10.27 $ 10.49 $ 10.35 $ 9.99 $ 10.97
- -------- -------- ------- ------- ------- ------- ------- ------ ------- ------- ------- -------
0.69@ 0.86 0.56@ 0.63@ 0.67@ 0.71@ 0.70 0.65@ 0.71@ 0.75@ 0.78@ 0.75
0.30@ (1.28) 0.33@ (0.18)@ 0.14@ 0.31@ (1.09) 0.32@ (0.21)@ 0.17@ 0.32@ (1.06)
- -------- -------- ------- ------- ------- ------- ------- ------ ------- ------- ------- -------
0.99 (0.42) 0.89 0.45 0.81 1.02 (0.39) 0.97 0.50 0.92 1.10 (0.31)
- -------- -------- ------- ------- ------- ------- ------- ------ ------- ------- ------- -------
(0.64) (0.29) (0.46) (0.50) (0.69) (0.67) (0.30) (0.52) (0.56) (0.78) (0.74) (0.34)
-- -- (0.04) (0.06) -- -- -- (0.05) (0.06) -- -- --
-- (0.28) (0.07) (0.08) -- -- (0.29) (0.09) (0.10) -- -- (0.33)
- -------- -------- ------- ------- ------- ------- ------- ------ ------- ------- ------- -------
(0.64) (0.57) (0.57) (0.64) (0.69) (0.67) (0.59) (0.66) (0.72) (0.78) (0.74) (0.67)
- -------- -------- ------- ------- ------- ------- ------- ------ ------- ------- ------- -------
$ 10.31 $ 9.96 $ 10.58 $ 10.26 $ 10.45 $ 10.33 $ 9.98 $10.58 $ 10.27 $ 10.49 $ 10.35 $ 9.99
======== ======== ======= ======= ======= ======= ======= ====== ======= ======= ======= =======
10.24% (3.90)% 9.01% 4.48% 8.12% 10.49% (3.56)% 9.89% 5.20% 9.25% 11.39% (2.86)%
======== ======== ======= ======= ======= ======= ======= ====== ======= ======= ======= =======
$484,534 $725,553 $28,633 $36,935 $50,928 $71,329 $92,480 $9,547 $10,096 $13,077 $16,613 $12,975
2.00%(2) 1.94% 1.77% 1.69% 1.73% 1.75%(2) 1.68% 0.96% 0.94% 0.96% 0.95%(2) 0.88%
6.71%(2) 6.05% 5.54% 6.17% 6.40% 6.96%(2) 6.34% 6.35% 6.93% 7.19% 7.77%(2) 7.23%
113% 108% 93% 172% 126% 113% 108% 93% 172% 126% 113% 108%
</TABLE>
-----------
- --------------------------------------------------------------------------------
Prospectus Page 29
<PAGE>
- --------------------------------------------------------------------------------
-------------------
PaineWebber Asia Pacific Growth Fund
Financial Highlights
(continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Asia Pacific Growth Fund
------------------------------------------------------------------------
Class A Class B Class C Class Y
----------------- ----------------- ---------------- -----------
For the For the For the
Fiscal Years Fiscal Years Fiscal Years For the
Ended Ended Ended Fiscal Year
October 31, October 31, October 31, Ended
----------------- ----------------- ---------------- October 31,
1998 1997+ 1998 1997+ 1998 1997+ 1998++
------- ------- ------- ------- ------ ------- -----------
<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 (0.06)@ (0.03) (0.06)@ (0.03) (0.06)@
Net realized and
unrealized losses from
investments and foreign
currency............... (2.14)@ (3.57) (2.12)@ (3.55) (2.12)@ (3.55) (1.93)@
Net decrease from
investment operations.. (2.14) (3.54) (2.18) (3.58) (2.18) (3.58) (1.87)
------- ------- ------- ------- ------ ------- ------
Net asset value, end of
period................. $ 6.82 $ 8.96 $ 6.74 $ 8.92 $ 6.74 $ 8.92 $ 6.79
======= ======= ======= ======= ====== ======= ======
Total investment return
(1).................... (23.88)% (28.32)% (24.44)% (28.64)% (24.44)% (28.64)% (21.59)%
======= ======= ======= ======= ====== ======= ======
Ratios/Supplemental
Data:
Net assets, end of
period (000s).......... $11,526 $21,466 $12,746 $22,949 $6,220 $13,887 $ 47
Expenses to average net
assets................. 2.88% 2.33%* 3.63% 3.12%* 3.60% 3.10%* 2.66%*
Net investment income
(loss) to average net
assets................. (0.02)% 0.37%* (0.78)% (0.43)%* (0.79)% (0.42)%* 1.46%*
Portfolio turnover
rate................... 59% 13% 59% 13% 59% 13% 59%
</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 October 31,
1998.
@ Calculated using the average monthly 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 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 would be lower if sales charges were
included. Total investment returns for periods less than a year have not
been annualized.
-----------
- --------------------------------------------------------------------------------
Prospectus Page 30
<PAGE>
- --------------------------------------------------------------------------------
-------------------
PaineWebber Global Equity Fund PaineWebber Asia Pacific Growth
PaineWebber Global Income Fund Fund
PaineWebber Emerging Markets
Equity Fund
[Intentionally Left Blank]
-----------
- --------------------------------------------------------------------------------
Prospectus Page 31
<PAGE>
- --------------------------------------------------------------------------------
-------------------
PaineWebber Emerging Markets Equity Fund
Financial Highlights
(Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Emerging Markets Equity Fund
-------------------------------------------------------------------------------------------------
Class A Class B
-------------------------------------------------------------- --------------------------------
For the For the For the For the Years
Years Ended For the Four Years Ended Period Ended October For the Four
October 31, Months Ended June 30, Ended 31, Months Ended
----------------- October 31, ----------------- June 30, ----------------- October 31,
1998 1997*** 1996 1996 1995** 1994+ 1998 1997*** 1996
------- ------- ------------ ------- ------- -------- ------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 9.39 $ 9.46 $ 10.06 $ 9.73 $ 10.79 $ 12.00 $ 9.19 $ 9.32 $9.94
------- ------- ------- ------- ------- ------- ------- ------ -----
Net investment income
(loss)................. (0.01)@ (0.06) (0.13) (0.14) (0.04) 0.04 (0.08)@ (0.10) (0.07)
Net realized and
unrealized gains
(losses) from
investments and foreign
currency............... (2.86)@ (0.01) (0.47) 0.47 (0.97) (1.25) (2.74)@ (0.03) (0.55)
------- ------- ------- ------- ------- ------- ------- ------ -----
Net increase (decrease)
from investment
operations............. (2.87) (0.07) (0.60) 0.33 (1.01) (1.21) (2.82) (0.13) (0.62)
------- ------- ------- ------- ------- ------- ------- ------ -----
Dividends from net
investment income...... -- -- -- -- (0.05) -- -- -- --
------- ------- ------- ------- ------- ------- ------- ------ -----
Net asset value, end of
period................. $ 6.52 $ 9.39 $ 9.46 $ 10.06 $ 9.73 $ 10.79 $ 6.37 $ 9.19 $9.32
======= ======= ======= ======= ======= ======= ======= ====== =====
Total investment return
(1).................... (30.56)% (0.74)% (5.96)% 3.39% (9.29)% (10.08)% (30.69)% (1.39)% (6.24)%
======= ======= ======= ======= ======= ======= ======= ====== =====
Ratios/Supplemental
Data:
Net assets, end of
period (000's)......... $ 4,237 $ 9,222 $14,992 $20,680 $33,043 $46,758 $ 461 $1,598 $ 879
Expenses net of fee
waivers, to average net
assets................. 2.44% 2.44% 2.44%* 2.44% 2.44% 2.47%* 3.19% 3.19% 3.19%*
Expenses before fee
waivers, to average net
assets................. 3.71% 3.01% 3.48%* 3.42% 2.54% 2.47%* 4.92% 3.82% 4.23%*
Net investment income
(loss), net of fee
waivers, to average net
assets................. (0.16)% (0.40)% (1.42)%* (0.52)% (0.76)% 0.72%* (0.99)% (1.25)% (2.12)%*
Net investment income
(loss), before fee
waivers, to average net
assets................. (1.43)% (0.97)% (2.46)%* (1.50)% (0.86)% 0.72%* (2.72)% (1.88)% (3.16)%*
Portfolio turnover
rate................... 64% 87% 22% 69% 76% 8% 64% 87% 22%*
</TABLE>
- -------
+ 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 monthly shares outstanding for the year.
* 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.
(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 would be lower if sales charges were included. Total investment
returns for periods of less than one year have not been annualized.
-----------
- --------------------------------------------------------------------------------
Prospectus Page 32
<PAGE>
- --------------------------------------------------------------------------------
-------------------
PaineWebber Emerging Markets Equity Fund
Financial Highlights
(Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Emerging Markets Equity Fund
---------------------------------------------------------------------------------------------------------------------------------
Class B Class C Class Y
-------- ------------------------------------------------------------- ----------------------------------------------------
For the For the For the For the For the For the
Period Years Ended For the Four Years Ended Period Years Ended For the Four Years Ended
Ended October 31, Months Ended June 30, Ended October 31, Months Ended June 30,
June 30, ----------------- October 31, ----------------- June 30, ---------------- October 31, -----------------
1996++ 1998 1997*** 1996 1996 1995** 1994+ 1998 1997*** 1996 1996 1995**
-------- ------- ------- ------------ ------- ------- -------- ------ ------- ------------ ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$9.13 $ 9.17 $ 9.32 $ 9.94 $ 9.67 $ 10.75 $ 12.00 $ 9.46 $ 9.51 $ 10.11 $ 9.75 $ 10.80
----- ------- ------ ------ ------- ------- ------- ------ ------- ------- ------- -------
(0.01) (0.08)@ (0.14) (0.22) (0.24) (0.17) -- (0.01)@ (0.02) (0.05) (0.01) (0.01)
0.82 (2.77)@ (0.01) (0.40) 0.51 (0.90) (1.25) (2.87)@ (0.03) (0.55) 0.37 (0.99)
----- ------- ------ ------ ------- ------- ------- ------ ------- ------- ------- -------
0.81 (2.85) (0.15) (0.62) 0.27 (1.07) (1.25) (2.88) (0.05) (0.60) 0.36 (0.98)
----- ------- ------ ------ ------- ------- ------- ------ ------- ------- ------- -------
-- -- -- -- -- (0.01) -- -- -- -- -- (0.07)
----- ------- ------ ------ ------- ------- ------- ------ ------- ------- ------- -------
$9.94 $ 6.32 $ 9.17 $ 9.32 $ 9.94 $ 9.67 $ 10.75 $ 6.58 $ 9.46 $ 9.51 $ 10.11 $ 9.75
===== ======= ====== ====== ======= ======= ======= ====== ======= ======= ======= =======
8.87% (31.08)% (1.61)% (6.24)% 2.79% (10.01)% (10.42)% (30.44)% (0.53)% (5.93)% 3.69% (9.03)%
===== ======= ====== ====== ======= ======= ======= ====== ======= ======= ======= =======
$ 936 $ 2,575 $5,345 $7,882 $11,561 $18,551 $26,721 $ 877 $10,053 $11,375 $12,979 $12,332
3.19%* 3.19% 3.19% 3.19%* 3.19% 3.19% 3.22%* 2.19% 2.19% 2.19%* 2.19% 2.19%
4.97%* 4.42% 3.78% 4.23%* 4.17% 3.29% 3.22%* 3.36% 2.69% 3.23%* 3.29% 2.29%
(0.21)%* (0.96)% (1.18)% (2.16)%* (1.28)% (1.50)% (0.03)%* (0.08)% (0.15)% (1.13)%* (0.15)% (0.51)%
(1.99)%* (2.19)% (1.77)% (3.20)%* (2.26)% (1.60)% (0.03)%* (1.25)% (0.65)% (2.17)%* (1.25)% (0.61)%
64% 64% 87% 22% 69% 76% 8% 64% 87% 22% 69% 76%
<CAPTION>
Emerging Markets Equity Fund
- ----------------------------------------------------------------------------------------------------------------------------------
Class Y
- ------------
For the
Period
Ended
June 30,
1994+
- ----------
<S> <C>
$ 12.00
- ----------
0.05
(1.25)
- ----------
(1.20)
- ----------
--
- ----------
$ 10.80
==========
(10.00)%
==========
$15,435
2.22%*
2.22%*
0.97%*
0.97%*
8%
</TABLE>
-----------
- --------------------------------------------------------------------------------
Prospectus Page 33
<PAGE>
- --------------------------------------------------------------------------------
-------------------
PaineWebber Global Equity Fund PaineWebber Asia Pacific Growth
PaineWebber Global Income Fund Fund
PaineWebber Emerging Markets
Equity Fund
<TABLE>
<S> <C> <C> <C> <C>
Ticker Symbol: Global Equity Fund Class A: KPGEX.Q Asia Pacific Growth Fund Class A: PPGAX.Q
B: KPGLX.Q B: PPGBX.Q
C: KPGBX.Q C: PPGCX.Q
Y: KPGCX.Q Y: None
Global Income Fund Class A: PGBAX.Q Emerging Markets Equity Fund Class A: KPEAX.Q
B: PGBBX.Q B: None
C: PWIDX.Q C: KPEBX.Q
Y: None Y: None
</TABLE>
For investors who want more information about the funds, the following
documents are available free upon request:
Annual/Semi-Annual Reports
Additional information about the funds' investments is available in the funds'
annual and semi-annual reports to shareholders. In the funds' annual reports,
you will find a discussion of the market conditions and investment strategies
that significantly affected the funds' performance during the last fiscal year.
Statement of Additional Information (SAI)
The SAI provides more detailed information about the funds and is incorporated
by reference into this prospectus.
You may discuss your questions about the funds by contacting your PaineWebber
Financial Advisor. You may obtain free copies of annual and semi-annual reports
and the SAI by contacting the funds directly at 1-800-647-1568.
You may review and copy information about the funds, including shareholder
reports and the SAI, at the Public Reference Room of the Securities and
Exchange Commission. You can get text-only copies of reports and other
information about the funds:
.For a fee, by writing to or calling the Commission's Public Reference Room,
Washington, D.C. 20549-6009
Telephone: 1-800-SEC-0330
.Free from the Commission's Internet website at: http://www.sec.gov
Investment Company Act File No.
PaineWebber Global Equity Fund: 811-6292
PaineWebber Global Income Fund: 811-5259
PaineWebber Asia Pacific Growth Fund: 811-4040
PaineWebber Emerging Markets Equity Fund: 811-7104
-----------
- --------------------------------------------------------------------------------
