<PAGE>
PAINEWEBBER GLOBAL EQUITY FUND ANNUAL REPORT
PERFORMANCE AT A GLANCE
- --------------------------------------------------------------------------------
Comparison of the change of a $10,000 investment in PaineWebber Global Equity
Fund (Class A) and the Morgan Stanley Capital International (MSCI) World Index,
from November 30, 1991 through October 31, 1999
[GRAPH]
<TABLE>
<CAPTION>
PAINEWEBBER GLOBAL
EQUITY FUND (A) MSCI WORLD INDEX
<S> <C> <C>
Nov-91 $9,149 $10,000
Dec-91 $9,777 $10,730
Jan-92 $9,793 $10,534
Feb-92 $9,897 $10,354
Mar-92 $9,682 $9,868
Apr-92 $10,024 $10,007
May-92 $10,549 $10,407
Jun-92 $10,278 $10,061
Jul-92 $10,088 $10,088
Aug-92 $10,239 $10,335
Sep-92 $10,072 $10,242
Oct-92 $9,944 $9,967
Nov-92 $10,040 $10,147
Dec-92 $10,096 $10,231
Jan-93 $10,104 $10,267
Feb-93 $10,396 $10,512
Mar-93 $10,834 $11,124
Apr-93 $11,077 $11,641
May-93 $11,321 $11,912
Jun-93 $10,996 $11,814
Jul-93 $11,191 $12,060
Aug-93 $11,799 $12,614
Sep-93 $11,888 $12,384
Oct-93 $12,496 $12,727
Nov-93 $12,083 $12,009
Dec-93 $13,202 $12,598
Jan-94 $13,859 $13,431
Feb-94 $13,646 $13,259
Mar-94 $13,153 $12,690
Apr-94 $13,284 $13,085
May-94 $13,416 $13,120
Jun-94 $13,046 $13,086
Jul-94 $13,482 $13,338
Aug-94 $13,950 $13,742
Sep-94 $13,662 $13,383
Oct-94 $13,892 $13,766
Nov-94 $13,243 $13,171
Dec-94 $12,888 $13,301
Jan-95 $12,531 $13,105
Feb-95 $12,736 $13,299
Mar-95 $13,209 $13,942
Apr-95 $13,781 $14,430
May-95 $13,969 $14,556
Jun-95 $14,236 $14,554
Jul-95 $14,951 $15,285
Aug-95 $14,397 $14,947
Sep-95 $14,585 $15,385
Oct-95 $14,129 $15,145
Nov-95 $14,281 $15,674
Dec-95 $14,633 $16,134
Jan-96 $14,901 $16,430
Feb-96 $15,031 $16,533
Mar-96 $15,392 $16,811
Apr-96 $15,882 $17,209
May-96 $15,901 $17,227
Jun-96 $15,938 $17,316
Jul-96 $15,169 $16,707
Aug-96 $15,558 $16,902
Sep-96 $16,188 $17,566
Oct-96 $16,132 $17,693
Nov-96 $16,826 $18,687
Dec-96 $16,798 $18,392
Jan-97 $16,894 $18,616
Feb-97 $16,970 $18,834
Mar-97 $16,760 $18,465
Apr-97 $16,779 $19,072
May-97 $17,878 $20,253
Jun-97 $18,806 $21,266
Jul-97 $19,590 $22,248
Aug-97 $18,270 $20,764
Sep-97 $19,207 $21,896
Oct-97 $17,563 $20,746
Nov-97 $17,601 $21,118
Dec-97 $17,864 $21,377
Jan-98 $18,052 $21,976
Feb-98 $19,458 $23,466
Mar-98 $20,642 $24,461
Apr-98 $21,217 $24,703
May-98 $21,151 $24,397
Jun-98 $20,752 $24,980
Jul-98 $20,819 $24,942
Aug-98 $17,133 $21,620
Sep-98 $16,724 $22,007
Oct-98 $18,008 $24,001
Nov-98 $18,937 $25,431
Dec-98 $19,938 $26,678
Jan-99 $20,217 $27,264
Feb-99 $19,717 $26,542
Mar-99 $19,950 $27,651
Apr-99 $20,741 $28,746
May-99 $20,066 $27,700
Jun-99 $20,775 $28,996
Jul-99 $20,927 $28,912
Aug-99 $20,706 $28,866
Sep-99 $20,299 $28,589
Oct-99 $21,726 $30,078
</TABLE>
Past performance is no guarantee of future performance. The performance of the
classes will vary from the performance of the class shown because of
differences in sales charges and fees paid by shareholders investing in
different classes.
The graph depicts the performance of PaineWebber Global Equity Fund (Class A)
versus the MSCI World Index. It is important to note PaineWebber Global Equity
Fund is a professionally managed mutual fund while the Index is not available
for investment and is unmanaged. The comparison is shown for illustrative
purposes only.
<TABLE>
<CAPTION>
- ------------------------------------------------------
AVERAGE ANNUAL % TOTAL RETURN, PERIODS ENDED 10/31/99
- --------------------------------------------------------------------------------------------
1 Year 5 Years Inception(0)
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS A* 15.56 8.42 10.27
Before Deducting CLASS B** 14.63 N/A 8.29
Maximum Sales Charge CLASS C+ 14.67 7.60 9.20
CLASS Y++ 15.97 8.78 10.39
- --------------------------------------------------------------------------------------------
After Deducting CLASS A* 10.34 7.42 9.63
Maximum Sales Charge CLASS B** 9.63 N/A 7.92
CLASS C+ 13.67 7.60 9.20
- --------------------------------------------------------------------------------------------
MSCI World Index 25.33 16.93 14.12+ +
- --------------------------------------------------------------------------------------------
</TABLE>
The investment return and the principal value of an investment in the Fund will
fluctuate, so that an investor's shares, when redeemed, may be worth more or
less than their original cost.
(0) Inception: since commencement of issuance on November 14, 1991 for Class A
shares, August 25, 1995 for Class B shares and May 10, 1993 for Classes C
and Y shares.
* Maximum sales charge for Class A shares is 4.5% of the public offering
price. Class A shares bear ongoing 12b-1 service fees.
** Maximum contingent deferred sales charge for Class B shares is 5% and is
reduced to 0% after six years. Class B shares bear ongoing 12b-1
distribution and service fees.
+ Maximum contingent deferred sales charge for Class C shares is 1% and is
reduced to 0% after one year. Class C shares bear ongoing 12b-1
distribution and service fees.
++ The Fund offers Class Y shares to a limited group of eligible investors,
including participants in certain investment programs that are sponsored by
PaineWebber and that may invest in PaineWebber mutual funds, as well as the
trustee of the PaineWebber 401(k) Plus Plan. Class Y shares do not bear
initial or contingent deferred sales charges or ongoing distribution and
service fees.
+ + Inception to date return for the MSCI World Index matches the time period
for Class A (November 14, 1991 through October 31, 1999).
1
<PAGE>
ANNUAL REPORT PAINEWEBBER EMERGING MARKETS EQUITY FUND
PERFORMANCE AT A GLANCE
- --------------------------------------------------------------------------------
Comparison of the change of a $10,000 investment in PaineWebber Emerging Markets
Equity Fund (Classes A, C and Y) and the Morgan Stanley Capital International
(MSCI) Emerging Markets Free Index, from January 31, 1994 through October 31,
1999
[GRAPH]
<TABLE>
<CAPTION>
PAINEWEBBER PAINEWEBBER PAINEWEBBER MSCI
EMERGING EMERGING EMERGING EMERGING
MARKETS MARKETS MARKETS MARKETS
FUND (A) FUND (C) FUND (Y) FREE INDEX
<S> <C> <C> <C> <C>
Jan-94 $9,594 $10,042 $10,050 $10,000
Feb-94 $9,364 $9,800 $9,817 $9,822
Mar-94 $8,775 $9,175 $9,192 $8,933
Apr-94 $8,735 $9,133 $9,158 $8,754
May-94 $8,902 $9,300 $9,333 $9,054
Jun-94 $8,584 $8,958 $9,000 $8,804
Jul-94 $8,942 $9,325 $9,375 $9,352
Aug-94 $9,666 $10,083 $10,142 $10,512
Sep-94 $9,745 $10,150 $10,225 $10,632
Oct-94 $9,531 $9,925 $10,000 $10,441
Nov-94 $9,109 $9,475 $9,558 $9,898
Dec-94 $8,345 $8,683 $8,767 $9,103
Jan-95 $7,351 $7,642 $7,717 $8,134
Feb-95 $7,080 $7,358 $7,442 $7,925
Mar-95 $7,210 $7,486 $7,574 $7,976
Apr-95 $7,410 $7,695 $7,792 $8,334
May-95 $7,658 $7,945 $8,053 $8,777
Jun-95 $7,786 $8,061 $8,187 $8,804
Jul-95 $8,155 $8,445 $8,582 $9,001
Aug-95 $7,922 $8,195 $8,330 $8,789
Sep-95 $8,011 $8,287 $8,431 $8,747
Oct-95 $7,666 $7,920 $8,069 $8,412
Nov-95 $7,354 $7,603 $7,742 $8,263
Dec-95 $7,410 $7,653 $7,809 $8,629
Jan-96 $7,834 $8,078 $8,246 $9,243
Feb-96 $7,850 $8,095 $8,271 $9,096
Mar-96 $7,842 $8,078 $8,263 $9,167
Apr-96 $8,211 $8,453 $8,649 $9,534
May-96 $8,139 $8,378 $8,582 $9,491
Jun-96 $8,051 $8,287 $8,489 $9,550
Jul-96 $7,586 $7,795 $8,002 $8,897
Aug-96 $7,738 $7,945 $8,162 $9,125
Sep-96 $7,802 $8,003 $8,229 $9,204
Oct-96 $7,570 $7,770 $8,103 $8,959
Nov-96 $7,682 $7,878 $8,204 $9,109
Dec-96 $7,770 $7,961 $8,204 $9,150
Jan-97 $8,139 $8,328 $8,590 $9,774
Feb-97 $8,419 $8,620 $8,892 $10,193
Mar-97 $8,363 $8,553 $8,834 $9,925
Apr-97 $8,371 $8,553 $8,842 $9,942
May-97 $8,827 $9,020 $9,329 $10,227
Jun-97 $9,395 $9,587 $9,925 $10,774
Jul-97 $9,635 $9,829 $10,186 $10,934
Aug-97 $8,691 $8,853 $9,195 $9,544
Sep-97 $9,059 $9,220 $9,581 $9,808
Oct-97 $7,514 $7,645 $7,944 $8,198
Nov-97 $7,266 $7,386 $7,675 $7,899
Dec-97 $7,418 $7,536 $7,834 $8,090
Jan-98 $6,946 $7,053 $7,347 $7,455
Feb-98 $7,442 $7,553 $7,868 $8,234
Mar-98 $7,690 $7,795 $8,128 $8,591
Apr-98 $7,754 $7,861 $8,204 $8,497
May-98 $6,658 $6,744 $7,037 $7,333
Jun-98 $5,962 $6,036 $6,315 $6,564
Jul-98 $6,258 $6,327 $6,617 $6,772
Aug-98 $4,481 $4,527 $4,736 $4,814
Sep-98 $4,681 $4,727 $4,954 $5,119
Oct-98 $5,218 $5,269 $5,525 $5,659
Nov-98 $5,450 $5,494 $5,769 $6,129
Dec-98 $5,458 $5,502 $5,777 $6,040
Jan-99 $5,442 $5,477 $5,769 $5,943
Feb-99 $5,378 $5,410 $5,693 $6,001
Mar-99 $6,058 $6,094 $6,424 $6,792
Apr-99 $6,746 $6,786 $7,154 $7,632
May-99 $6,650 $6,678 $7,053 $7,588
Jun-99 $7,458 $7,486 $7,910 $8,449
Jul-99 $7,234 $7,253 $7,666 $8,219
Aug-99 $7,250 $7,261 $7,692 $8,294
Sep-99 $6,922 $6,919 $7,339 $8,014
Oct-99 $7,001 $6,999 $7,428 $8,184
</TABLE>
Past performance is no guarantee of future performance. The performance of the
classes varies based on difference in sales charges and fees paid by
shareholders investing in different classes. Class B shares are not shown
because they were first offered at a later date.
The graph depicts the performance of PaineWebber Emerging Markets Equity Fund
(Classes A, C and Y) versus the MSCI Emerging Markets Free Index. It is
important to note PaineWebber Emerging Markets Equity Fund is a professionally
managed mutual fund while the Index is not available for investment and is
unmanaged. The comparison is shown for illustrative purposes only.
<TABLE>
<CAPTION>
- ------------------------------------------------------
AVERAGE ANNUAL % TOTAL RETURN, PERIODS ENDED 10/31/99
- --------------------------------------------------------------------------------------------
1 Year 5 Years Inception(0)
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS A* 34.82 -5.89 -5.14
Before Deducting CLASS B** 33.75 N/A -1.75
Maximum Sales Charge CLASS C+ 33.39 -6.67 -5.91
CLASS Y++ 35.11 -5.68 -4.93
- --------------------------------------------------------------------------------------------
After Deducting CLASS A* 28.70 -6.75 -5.90
Maximum Sales Charge CLASS B** 28.75 N/A -2.26
CLASS C+ 32.39 -6.67 -5.91
- --------------------------------------------------------------------------------------------
MSCI Emerging Markets 44.63 -4.76 -3.43+ +
Free Index
- --------------------------------------------------------------------------------------------
</TABLE>
The investment return and the principal value of an investment in the Fund will
fluctuate, so that an investor's shares, when redeemed, may be worth more or
less than their original cost.
(0) Inception: since commencement of issuance on January 19, 1994 for Classes
A, C and Y shares and December 5, 1995 for Class B shares.
* Maximum sales charge for Class A shares is 4.5% of the public offering
price. Class A shares bear ongoing 12b-1 service fees.
** Maximum contingent deferred sales charge for Class B shares is 5% and is
reduced to 0% after six years. Class B shares bear ongoing 12b-1
distribution and service fees.
+ Maximum contingent deferred sales charge for Class C shares is 1% and is
reduced to 0% after one year. Class C shares bear ongoing 12b-1
distribution and service fees.
++ The Fund offers Class Y shares to a limited group of eligible investors,
including participants in certain investment programs that are sponsored by
PaineWebber and that may invest in PaineWebber mutual funds, as well as the
trustee of the PaineWebber 401(k) Plus Plan. Class Y shares do not bear
initial or contingent deferred sales charges or ongoing distribution and
service fees.
+ + Inception to date return for the MSCI Emerging Markets Free Index matches
the time period for Classes A, C and Y (January 19, 1994 through October
31, 1999).
2
<PAGE>
PAINEWEBBER ASIA PACIFIC GROWTH FUND ANNUAL REPORT
PERFORMANCE AT A GLANCE
- --------------------------------------------------------------------------------
Comparison of the change of a $10,000 investment in PaineWebber Asia Pacific
Growth Fund (Classes A, B and C) and the Morgan Stanley Capital International
(MSCI) All Country Asia Pacific Free (ex-Japan) Index, from March 31, 1997
through October 31, 1999
[GRAPH]
<TABLE>
<CAPTION>
PAINEWEBBER PAINEWEBBER PAINEWEBBER MSCI ALL COUNTRY
ASIA PACIFIC ASIA PACIFIC ASIA PACIFIC ASIA PACIFIC
GROWTH FUND (A) GROWTH FUND (B) GROWTH FUND (C) FREE (EX-JAPAN) INDEX
<S> <C> <C> <C> <C>
Mar-97 $9,549 $10,000 $10,000 $10,000
Apr-97 $9,534 $9,976 $9,976 $9,933
May-97 $10,122 $10,592 $10,592 $10,339
Jun-97 $10,435 $10,912 $10,912 $10,717
Jul-97 $10,405 $10,864 $10,864 $10,770
Aug-97 $8,686 $9,072 $9,072 $9,100
Sep-97 $8,808 $9,184 $9,192 $9,166
Oct-97 $6,845 $7,136 $7,136 $7,327
Nov-97 $6,417 $6,688 $6,688 $6,910
Dec-97 $6,310 $6,568 $6,568 $6,763
Jan-98 $5,959 $6,200 $6,200 $6,455
Feb-98 $6,746 $7,016 $7,016 $7,434
Mar-98 $6,623 $6,888 $6,888 $7,355
Apr-98 $6,218 $6,456 $6,456 $6,863
May-98 $5,424 $5,632 $5,632 $6,005
Jun-98 $4,905 $5,088 $5,088 $5,526
Jul-98 $4,798 $4,968 $4,976 $5,437
Aug-98 $4,179 $4,328 $4,328 $4,661
Sep-98 $4,645 $4,808 $4,816 $5,058
Oct-98 $5,210 $5,392 $5,392 $5,942
Nov-98 $5,462 $5,648 $5,656 $6,388
Dec-98 $5,569 $5,760 $5,760 $6,464
Jan-99 $5,584 $5,768 $5,768 $6,525
Feb-99 $5,409 $5,584 $5,592 $6,391
Mar-99 $5,921 $6,112 $6,112 $6,978
Apr-99 $6,883 $7,104 $7,104 $8,081
May-99 $6,730 $6,936 $6,936 $7,743
Jun-99 $7,670 $7,896 $7,896 $8,717
Jul-99 $7,594 $7,816 $7,816 $8,582
Aug-99 $7,731 $7,952 $7,960 $8,610
Sep-99 $7,212 $7,416 $7,416 $8,161
Oct-99 $7,418 $7,616 $7,624 $8,309
</TABLE>
Performance is no guarantee of future performance. The performance of the
classes varies based on the difference in sales charges and fees paid by
shareholders investing in different classes. Class Y shares are not shown
because they were first offered at a later date.
The graph depicts the performance of PaineWebber Asia Pacific Growth Fund
(Classes A, B and C) versus the MSCI All Country Asia Pacific Free (ex-Japan)
Index. It is important to note PaineWebber Asia Pacific Growth Fund is a
professionally managed mutual fund while the Index is not available for
investment and is unmanaged. The comparison is shown for illustrative purposes
only.
<TABLE>
<CAPTION>
- ------------------------------------------------------
AVERAGE ANNUAL % TOTAL RETURN, PERIODS ENDED 10/31/99
- ----------------------------------------------------------------------------------------------
1 Year Inception(0)
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CLASS A* 42.38 -9.24
Before Deducting CLASS B** 41.25 -9.92
Maximum Sales Charge CLASS C+ 41.39 -9.89
CLASS Y++ 42.56 7.03
- ----------------------------------------------------------------------------------------------
CLASS A* 35.99 -10.83
After Deducting CLASS B** 36.25 -10.97
Maximum Sales Charge CLASS C+ 40.39 -9.89
- ----------------------------------------------------------------------------------------------
MSCI All Country Asia Pacific 39.83 -5.11+ +
Free (ex-Japan) Index
- ----------------------------------------------------------------------------------------------
</TABLE>
The investment return and the principal value of an investment in the Fund will
fluctuate, so that an investor's shares, when redeemed, may be worth more or
less than their original cost.
(0) Inception: since commencement of issuance on March 25, 1997 for Classes A,
B and C shares and March 13, 1998 for Class Y Shares.
* Maximum sales charge for Class A shares is 4.5% of the public offering
price. Class A shares bear ongoing 12b-1 service fees.
** Maximum contingent deferred sales charge for Class B shares is 5% and is
reduced to 0% after six years. Class B shares bear ongoing 12b-1
distribution and service fees.
+ Maximum contingent deferred sales charge for Class C shares is 1% and is
reduced to 0% after one year. Class C shares bear ongoing 12b-1
distribution and service fees.
++ The Fund offers Class Y shares to a limited group of eligible investors,
including participants in certain investment programs that are sponsored by
PaineWebber and that may invest in PaineWebber mutual funds, as well as the
trustee of the PaineWebber 401(k) Plus Plan. Class Y shares do not bear
initial or contingent deferred sales charges or ongoing distribution and
service fees.
+ + Inception to date return for the MSCI All Country Asia Pacific Free
(ex-Japan) Index matches the time period for Classes A, B and C (March 25,
1997 through October 31, 1999).
3
<PAGE>
ANNUAL REPORT
Dear Shareholder, December 15, 1999
We are pleased to present you with the annual report for PaineWebber Global
Equity Fund, PaineWebber Emerging Markets Equity Fund and PaineWebber Asia
Pacific Growth Fund for the fiscal year ended October 31, 1999.
PAINEWEBBER GLOBAL EQUITY FUND
- --------------------------------------------------------------------------------
MARKET REVIEW
The global economic recovery that began in the first half of the Fund's fiscal
year continued into the second half. Japan was the best-performing stock market
for the fiscal year, with a return of 58.66% as measured by the Morgan Stanley
Capital International (MSCI) Japan Index. Continental Europe advanced 12.63% as
measured by the MSCI Europe ex-UK Index; the UK gained 13.25% as measured by the
MSCI UK Index. The U.S. dollar weakened against the euro, the pound and the yen.
PERFORMANCE ATTRIBUTION
The Fund underperformed its benchmark for the fiscal year (see page 1) because
of investment style issues and asset allocation decisions. First, the investment
style of the Fund's U.S. component kept the U.S. portfolio tilted away from
large-capitalization growth stocks because of the high valuations of those
stocks. Large-cap growth stocks dominated the market through most of the Fund's
fiscal year, and outperformed the Fund's holdings.
Second, the Fund's international portion slightly underperformed because
of its underweighting in Japan. Late in the fiscal year, Japan rallied
strongly after an extended period of underperformance--by being underweighted
the Fund did not fully participate in the rally.
PAINEWEBBER GLOBAL EQUITY FUND, CHARACTERISTICS*
<TABLE>
<CAPTION>
10/31/99 4/30/99
- --------------------------------------------------------------------------
<S> <C> <C>
Net Assets ($mm) $349.0 $385.9
Stocks 95.4% 95.6%
Cash 4.6% 4.4%
Number of Securities 143 172
U.S. Allocation 35.8% 41.1%
International Allocation 64.2% 58.9%
- --------------------------------------------------------------------------
</TABLE>
* Weightings represent percentages of portfolio assets as of October 31, 1999,
unless indicated otherwise. The Fund's portfolio is actively managed and its
composition will vary over time.
[Sidenote:]
- -----------------------------------
PAINEWEBBER GLOBAL EQUITY FUND
PROFILE
INVESTMENT GOAL:
Long-term growth of capital
PORTFOLIO MANAGERS/
SUBADVISERS:
Kirk Barneby and Mark
Tincher, Mitchell Hutchins
Asset Management Inc.;
Scott Opsal, Invista Capital
Management, Inc.
COMMENCEMENT:
November 14, 1991 (Class A),
August 25, 1995 (Class B),
May 10, 1993 (Classes C
and Y)
DIVIDEND PAYMENTS:
Annually, if any
- -----------------------------------
4
<PAGE>
PAINEWEBBER GLOBAL EQUITY FUND, PAINEWEBBER EMERGING MARKETS ANNUAL REPORT
EQUITY FUND, PAINEWEBBER ASIA PACIFIC GROWTH FUND
PORTFOLIO POSITIONING
PAINEWEBBER GLOBAL EQUITY FUND, TOP FIVE SECTORS*
<TABLE>
<CAPTION>
As of 10/31/99 As of 4/30/99
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Financial Services 21.6% Consumer Cyclical 25.0%
Consumer Cyclical 20.1% Financial Services 20.6%
Technology 13.2% Capital Goods 9.1%
Utilities 10.7% Utilities 9.0%
Capital Goods 7.9% Consumer Noncyclical 8.2%
- --------------------------------------------------------------------------------------
Total 73.5% Total 71.9%
</TABLE>
The portfolio remains overweighted in capital goods (7.9%) and cyclical stocks
(20.1%) relative to the S&P 500 Index. We expect these positions to help
performance going forward, if market gains broaden again and these sectors
rebound. Also, we believe the Fund's holdings are well positioned to benefit
from the strengthening global economic recovery.
During the latter half of the fiscal year, we underweighted consumer
nondurables--a sector that generally performs poorly when interest rates are
rising. This underweighting helped Fund performance after the U.S. Federal
Reserve raised the federal funds rate twice, in June and again in August. After
period-end, the Fed raised short-term rates a third time, thus fully taking back
the cuts it had made in the fall of 1998 to restore market confidence during
last year's crisis.
The Fund finished the fiscal year underweighted in financial services
(21.6%), another rate-sensitive sector, though we are looking for values in that
sector. We believe financial services stocks will perform well once investors
put interest rate and inflation fears behind them.
Europe is expected to benefit from a stronger global economy throughout the next
year. Interest rates may increase slightly, but both interest rates and
inflation are expected to remain at low levels. We have increased the Fund's
exposure to Continental Europe while lowering exposure to the UK (see table
below).
PAINEWEBBER GLOBAL EQUITY FUND, TOP FIVE COUNTRIES*
<TABLE>
<CAPTION>
As of 10/31/99 As of 4/30/99
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
United States 35.8% United States 41.1%
Japan 10.1% United Kingdom 12.7%
United Kingdom 9.5% Netherlands 6.3%
France 7.1% Sweden 4.5%
Netherlands 7.0% France 4.4%
- ---------------------------------------------------------------------------------------------------------------------------
Total 69.5% Total 69.0%
</TABLE>
* Weightings represent percentages of portfolio assets as of October 31, 1999,
unless indicated otherwise. The Fund's portfolio is actively managed and its
composition will vary over time.
5
<PAGE>
ANNUAL REPORT
Our bottom-up company research continues to point us toward better value on the
Continent. Japan continues to build on its improving economy, though consumers
there remain cautious. Economic activity throughout the rest of Asia continues
to improve, pointing to a potential end to the economic crisis that swept over
the Pacific Region in late 1997. We have therefore increased the Fund's Japan
exposure, from 1.8% as of April 30, 1999, to 10.1% as of October 31.
PAINEWEBBER GLOBAL EQUITY FUND, TOP TEN EQUITY HOLDINGS*
<TABLE>
<CAPTION>
As of 10/31/99 As of 4/30/99
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Koninklijke Philips Electronics N.V. 1.7% YPF Sociedad Anonima, ADR 1.9%
Ericsson LM 1.7% Koninklijke Philips Electronics N.V. 1.8%
United News & Media PLC 1.4% Telecom Italia SpA 1.7%
Hoechst AG 1.4% United News & Media PLC 1.5%
Total S.A. 1.4% Imasco Ltd. 1.4%
Sanwa Bank 1.4% Cookson Group PLC 1.4%
Diageo PLC 1.4% Diageo PLC 1.3%
Merita OYJ PLC 1.4% Hoechst AG 1.3%
Applied Materials, Inc. 1.3% Australia & New Zealand Banking Group Ltd. 1.3%
Amvescap PLC 1.3% Bank of Ireland 1.3%
- ------------------------------------------------------------------------------------------------
Total 14.4% Total 14.9%
</TABLE>
PAINEWEBBER EMERGING
MARKETS EQUITY FUND
- --------------------------------------------------------------------------------
MARKET REVIEW
After suffering losses in 1998, emerging markets rebounded in the first ten
months of 1999. The Morgan Stanley Capital International (MSCI) Emerging Markets
Free Index (the Fund's benchmark) gained 44.63% for the year ended October 31,
1999. There was significant divergence among markets, however. Asia as a region
outperformed Latin America, but some smaller Asian markets suffered significant
corrections. Greece announced its intention to join the European Monetary Union
and rose spectacularly as a result--90.09% for the fiscal year, as measured by
Morgan Stanley Capital International. The wide range of market returns,
especially within regions, suggests that the market contagion, which started in
mid-1997 with the devaluation of the Thai Baht, has ended. It appears that
investors are starting to refocus on country and stock fundamentals, though
sensitivity to country risk remains high.
* Weightings represent percentages of portfolio assets as of October 31, 1999,
unless indicated otherwise. The Fund's portfolio is actively managed and its
composition will vary over time.
[Sidenote:]
- -----------------------------------
PAINEWEBBER EMERGING MARKETS
EQUITY FUND
PROFILE
INVESTMENT GOAL:
Long-term capital appreciation
PORTFOLIO MANAGERS/
SUBADVISERS:
John Troiano, Mark
Bridgeman, Heather Crighton,
Schroder Investment
Management North
America Inc.
COMMENCEMENT:
January 19, 1994 (Classes A,
C and Y), December 5, 1995
(Class B)
DIVIDEND PAYMENTS:
Annually, if any
- -----------------------------------
6
<PAGE>
PAINEWEBBER GLOBAL EQUITY FUND, PAINEWEBBER EMERGING MARKETS ANNUAL REPORT
EQUITY FUND, PAINEWEBBER ASIA PACIFIC GROWTH FUND
EMERGING MARKETS EQUITY FUND, CHARACTERISTICS*
<TABLE>
<CAPTION>
10/31/99 4/30/99
- --------------------------------------------------------------------------
<S> <C> <C>
Net Assets ($mm) $8.5 $8.9
Number of Securities 197 190
Stocks 98.0% 93.7%
Cash 2.0% 6.3%
- --------------------------------------------------------------------------
</TABLE>
PERFORMANCE ATTRIBUTION
Fund performance lagged its benchmark for the fiscal year (see page 2). The
emphasis on Asia throughout the year was the strongest contributor to
performance. The Fund's underweighting in Greece hurt performance; the
underweighting in South Africa helped performance.
PORTFOLIO POSITIONING
During the latter half of the fiscal year the key changes to the portfolio were:
- - Reduced exposure to Latin America, especially Mexico and Argentina, as both
countries are closely linked to the United States and have upcoming elections.
- - The underweighting in Europe, Middle East and Africa (EMEA) was maintained
with main underweighted positions in South Africa (8.4%) and Greece (4.9%).*
- - Asia remained a favorite area of investment as it is expected to continue to
benefit from strong internal growth and the stronger Japanese economy.
- - After benefiting from twelve months of strong performance in Korea, the Fund
moved to an underweighting there (13.3%), on a view that the Korean economy is
suffering from the threat of higher interest rates.
- - We reversed the underweight position in Taiwan (12.5%) as the market started
to benefit from the recovery of electronics and cyclical stocks.
EMERGING MARKETS EQUITY FUND, REGIONAL ALLOCATION*
<TABLE>
<CAPTION>
As of 10/31/99 As of 4/30/99
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
Asia 43.8% Asia 36.7%
Latin America 28.8% Latin America 34.9%
Europe/Africa 25.4% Europe/Africa 27.4%
Cash 2.0% Cash 1.0%
- ------------------------------------------------------------------------------------
Total 100.0% Total 100.0%
</TABLE>
* Weightings represent percentages of portfolio assets as of October 31, 1999,
unless indicated otherwise. The Fund's portfolio is actively managed and its
composition will vary over time.
7
<PAGE>
ANNUAL REPORT
Going forward, the Fund remains overweighted in Asia (43.8%), where economic
recovery continues and corporate earnings growth is expected to grow. The main
risk for Asia is the threat of a devaluation of the Chinese currency, the
remnimbi. However, recent yen strength and signs of an improving Japanese trade
balance have relieved pressure on the remnimbi and are likely to support the
other Asian currencies.
Latin American economic fundamentals are starting to recover, thanks to
higher global commodity prices, lower interest rates at home and general
improvement in the political situation. Although the Fund is underweighted in
Latin America, we are increasing exposure to Brazil (10.1%), where valuations
are attractive and there is the possibility of further interest rate reductions.
We expect Brazil to benefit from resumed economic growth and progress on
reforms--fiscal results for the second quarter complied with the International
Monetary Fund targets that are essential to improving Brazil's creditworthiness.
The positive medium-term outlook for emerging Europe is supported by the
expected economic recovery in Western Europe. We expect Eastern Europe to
benefit from the economic recovery in Germany; consequently, the Fund is
overweighted in the Czech Republic (1.2%), Poland (1.6%) and Hungary (1.8%). The
Fund remains underweighted in Greece despite the potential for further
gains--valuations there appear stretched to us. We expect to maintain the
underweight position in South Africa, as the local economy still appears weak
and lower interest rates have yet to impact the economy.
EMERGING MARKETS EQUITY FUND, TOP 10 COUNTRIES*
<TABLE>
<CAPTION>
As of 10/31/99 As of 4/30/99
- --------------------------------------------------------------------------
<S> <C> <C> <C>
Korea 13.3% Mexico 15.2%
Taiwan 12.5% Korea 12.0%
Mexico 10.3% Brazil 10.9%
Brazil 10.1% S. Africa 8.9%
S. Africa 8.4% Taiwan 8.1%
India 8.2% India 6.7%
Greece 4.9% Argentina 5.1%
Turkey 3.7% Israel 4.3%
Israel 3.5% Greece 3.7%
Thailand 2.4% Turkey 2.9%
- --------------------------------------------------------------------------
Total 77.3% Total 77.8%
</TABLE>
* Weightings represent percentages of portfolio assets as of October 31, 1999,
unless indicated otherwise. The Fund's portfolio is actively managed and its
composition will vary over time.
8
<PAGE>
PAINEWEBBER GLOBAL EQUITY FUND, PAINEWEBBER EMERGING MARKETS ANNUAL REPORT
EQUITY FUND, PAINEWEBBER ASIA PACIFIC GROWTH FUND
OUTLOOK
A number of concerns remain for emerging markets, including global interest rate
uncertainties and local issues such as fiscal reforms in Brazil and social
instability in Indonesia. We believe concerns about U.S. interest rates will add
an element of caution to investor sentiment over the next year. Nonetheless, our
outlook remains strongly positive for the emerging markets, as we believe they
will continue to benefit from more balanced global growth, economic recovery and
restructuring in Asia and the potential for lower interest rates in Latin
America.
EMERGING MARKETS EQUITY FUND, TOP TEN EQUITY HOLDINGS*
<TABLE>
<CAPTION>
As of 10/31/99 As of 4/30/99
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Samsung Electronics Corp. 4.1% Telefonos de Mexico 4.9%
Taiwan Semiconductor 3.6% Samsung Electronics Corp. 3.8%
Telefonos de Mexico 2.5% YPF Sociedad Anonima 2.0%
Korea Electric Power Corp. 1.9% Taiwan Semiconductor 1.9%
Alpha Credit Bank 1.7% Cifra 1.8%
Hellenic Telecommunications 1.5% Pohang Iron & Steel 1.7%
Petroleo Brasileiros 1.4% Korea Electric Power Corp. 1.7%
Shinhan Bank 1.3% Companhia Vale Do Rio Doce 1.6%
Hindustan Lever 1.2% Anglo-American Corp. 1.3%
Kookmin Bank 1.1% Telecomunicacoes de Sao Paulo 1.3%
- --------------------------------------------------------------------------------------
Total 20.3% Total 22.0%
</TABLE>
PAINEWEBBER ASIA PACIFIC GROWTH FUND
- --------------------------------------------------------------------------------
MARKET REVIEW
During the fiscal year the Pacific Region markets experienced a significant
recovery. The smaller, regional markets--especially Malaysia, Korea and
Indonesia--rose sharply as their economies restructured in response to the Asian
crisis of 1997-1998.
The markets continued to rally in the second half of the fiscal year as the
broader economic environment in Asia improved. Growth estimates were steadily
revised upwards. Intra-Asia trade rebounded, helped by a more active Japanese
economy. Consumer confidence returned and local investor participation in stock
markets became evident over the summer. Government-led restructuring and
corporate emphasis on shareholder returns continued across the region.
PERFORMANCE ATTRIBUTION
Against this market background the Fund outperformed its benchmark for the
fiscal year, before deducting sales charges (see page 3). During the year we
maintained the Fund's overweighting in Singapore, which contributed to
performance, as did the underweight position in Australia. Strong stock
selection generally benefited performance, especially in Australia and the
emerging markets of Korea and Taiwan.
* Weightings represent percentages of portfolio assets as of October 31, 1999,
unless indicated otherwise. The Fund's portfolio is actively managed and its
composition will vary over time.
[Sidenote:]
- -----------------------------------
PAINEWEBBER ASIA PACIFIC
GROWTH FUND
PROFILE
INVESTMENT GOAL:
Long-term capital appreciation
PORTFOLIO MANAGERS
/SUBADVISERS:
Louise Croset and Heather
Crighton, Schroder Investment
Management North
America Inc.
COMMENCEMENT:
March 25, 1997 (Classes A, B
and C), March 13, 1998
(Class Y)
DIVIDEND PAYMENTS:
Annually, if any
- -----------------------------------
9
<PAGE>
ANNUAL REPORT
PAINEWEBBER ASIA PACIFIC GROWTH FUND, CHARACTERISTICS*
<TABLE>
<CAPTION>
10/31/99 4/30/99
- --------------------------------------------------------------------------
<S> <C> <C>
Net Assets ($mm) $39.1 $36.7
Number of Securities 114 107
Stocks 95.5% 96.6%
Cash 4.5% 3.4%
- --------------------------------------------------------------------------
</TABLE>
PAINEWEBBER ASIA PACIFIC GROWTH FUND, TOP 10 COUNTRIES*
<TABLE>
<CAPTION>
As of 10/31/99 As of 4/30/99
- --------------------------------------------------------------------------
<S> <C> <C> <C>
Hong Kong 21.8% Hong Kong 25.5%
Australia 15.4% Australia 22.7%
Korea 13.5% Korea 12.7%
Taiwan 11.8% Singapore 10.9%
Singapore 10.6% Malaysia 6.2%
India 8.3% Taiwan 6.1%
Malaysia 6.3% Thailand 2.2%
Thailand 2.5% Philippines 2.1%
Indonesia 2.0% New Zealand 2.0%
China 1.5% India 1.3%
- --------------------------------------------------------------------------
Total 93.7% Total 91.7%
</TABLE>
PORTFOLIO POSITIONING
Within the developed markets of the region we overweighted the Fund in
Singapore. We like Singapore because of its continuing corporate restructuring
driven by the financial services sector and because of its strong earnings
growth. The Fund ended the fiscal year underweighted in Australia, although it
was overweighted in the resources sector based on our favorable outlook for
commodity prices.
In the second half of the fiscal year we reduced the Fund's weighting in
Hong Kong but kept the Fund overweighted versus the Index. Potentially higher
U.S. interest rates remain a concern for Hong Kong. On the other hand, China's
export activity is increasing--this is good news for Hong Kong because Hong Kong
is China's service provider.
Toward the end of the fiscal year we raised the Fund's exposure to emerging
markets in response to upward revisions in growth forecasts and improving
domestic demand in those markets. This positive outlook is further bolstered by
the fact that many emerging-market governments have initiated policies to
promote economic growth and corporate restructuring. Currently, we prefer the
North Asian markets such as China and Korea.
* Weightings represent percentages of portfolio assets as of October 31, 1999,
unless indicated otherwise. The Fund's portfolio is actively managed and its
composition will vary over time.
10
<PAGE>
PAINEWEBBER GLOBAL EQUITY FUND, PAINEWEBBER EMERGING MARKETS ANNUAL REPORT
EQUITY FUND, PAINEWEBBER ASIA PACIFIC GROWTH FUND
PAINEWEBBER ASIA PACIFIC GROWTH FUND, TOP TEN EQUITY HOLDINGS*
<TABLE>
<CAPTION>
As of 10/31/99 As of 4/30/99
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Samsung Electronics Corp. 3.9% Pohang Iron and Steel Co. Ltd. 3.2%
Hutchison Whampoa (Hong Kong) Ltd. 3.5% Cheung Kong Holdings Ltd. 3.2%
Taiwan Semiconductor 3.2% Sun Hung Kai Properties Ltd. 3.2%
Cheung Kong Holdings Ltd. 2.8% Hutchison Whampoa (Hong Kong) Ltd. 2.9%
Pohang Iron and Steel Co. Ltd. 2.8% Samsung Electronics Corp. 2.7%
Dao Heng Bank Group 2.3% Korea Electric Power Corp. 2.5%
Sun Hung Kai Properties Ltd. 2.2% Kookmin Bank 2.4%
Nan Ya Plastic 2.1% Telstra Corp. 2.3%
Korea Electric Power Corp. 2.1% News Corp. Ltd. 2.3%
Telstra Corp. 2.0% Broken Hill Properties Co. Ltd. 2.2%
- --------------------------------------------------------------------------------------
Total 26.9% Total 26.9%
</TABLE>
OUTLOOK
In the near term, concerns over higher interest rates in the United States and
new equity supplies are likely to leave markets cautious. However, we believe
the underlying trend for the region is positive, supported by economic data and
corporate earnings that continue to grow above expectations. Asia is also
benefiting from growing exports to Japan as the Japanese economy strengthens.
* Weightings represent percentages of portfolio assets as of October 31, 1999,
unless indicated otherwise. The Fund's portfolio is actively managed and its
composition will vary over time.
11
<PAGE>
ANNUAL REPORT
Our ultimate objective in managing your investments is to help you
successfully meet your financial goals. We thank you for your continued support
and welcome any comments or questions you may have. For a QUARTERLY REVIEW on
PaineWebber Global Equity Fund, PaineWebber Emerging Markets Equity Fund,
PaineWebber Asia Pacific Growth Fund or another fund in the PaineWebber Family
of Funds,(1) please contact your Financial Advisor.
Sincerely,
<TABLE>
<S> <C> <C>
/s/Margo Alexander /s/Brian M. Storms /s/T. Kirkham Barneby
MARGO ALEXANDER BRIAN M. STORMS T. KIRKHAM BARNEBY
Chairman and President and Managing Director and Chief
Chief Executive Officer Chief Operating Officer Investment Officer - Quantitative
Mitchell Hutchins Mitchell Hutchins Investments
Asset Management Inc. Asset Management Inc. Mitchell Hutchins
Asset Management Inc.
Portfolio Manager, PaineWebber
Global Equity Fund
/s/Mark A. Tincher /s/Scott Opsal /s/John Troiano
MARK A. TINCHER SCOTT OPSAL JOHN TROIANO
Managing Director and Chief Portfolio Manager, PaineWebber Portfolio Manager, PaineWebber
Investment Officer - Equities Global Equity Fund Emerging Markets Equity Fund
Mitchell Hutchins Asset
Management Inc.
Portfolio Manager, PaineWebber
Global Equity Fund
/s/Mark Bridgeman /s/Heather Crighton /s/Louise Croset
MARK BRIDGEMAN HEATHER CRIGHTON LOUISE CROSET
Portfolio Manager, PaineWebber Portfolio Manager, PaineWebber Portfolio Manager, PaineWebber
Emerging Markets Equity Fund Emerging Markets Equity Fund, Asia Pacific Growth Fund
PaineWebber Asia Pacific
Growth Fund
</TABLE>
This letter is intended to assist shareholders in understanding how the
funds performed during the fiscal year ended October 31, 1999, and reflects our
views at the time of its writing. Of course, these views may change in response
to changing circumstances. We encourage you to consult your Financial Advisor
regarding your personal investment program.
(1) Mutual funds are sold by prospectus only. The prospectuses for the funds
contain more complete information regarding risks, charges and expenses, and
should be read carefully before investing.
12
<PAGE>
PAINEWEBBER GLOBAL EQUITY FUND
PERFORMANCE RESULTS(UNAUDITED)
<TABLE>
<CAPTION>
NET ASSET VALUE TOTAL RETURN(1)
--------------------------------------------- -------------------------------------
12 MONTHS 6 MONTHS
10/31/99 04/30/99 10/31/98 ENDED 10/31/99 ENDED 10/31/99
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
Class A Shares $17.90 $17.84 $16.27 15.56% 0.34%
- --------------------------------------------------------------------------------------------------------------------------
Class B Shares 16.81 16.82 15.43 14.63 (0.06)
- --------------------------------------------------------------------------------------------------------------------------
Class C Shares 16.84 16.85 15.45 14.67 (0.06)
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
PERFORMANCE SUMMARY CLASS A SHARES
<TABLE>
<CAPTION>
NET ASSET VALUE
-------------------------- CAPITAL GAINS DIVIDENDS TOTAL
PERIOD COVERED BEGINNING ENDING DISTRIBUTED PAID RETURN(1)
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
11/14/91-12/31/91 $12.00 $12.29 -- -- 2.42%
- -------------------------------------------------------------------------------------------------------------------------
1992 12.29 12.45 $0.1610 $0.0800 3.26
- -------------------------------------------------------------------------------------------------------------------------
1993 12.45 16.07 0.2100 -- 30.77
- -------------------------------------------------------------------------------------------------------------------------
1994 16.07 14.43 1.2530 -- (2.38)
- -------------------------------------------------------------------------------------------------------------------------
1995 14.43 15.81 0.5743 -- 13.54
- -------------------------------------------------------------------------------------------------------------------------
1996 15.81 17.57 0.5784 -- 14.80
- -------------------------------------------------------------------------------------------------------------------------
1997 17.57 16.14 2.4768 -- 6.34
- -------------------------------------------------------------------------------------------------------------------------
1998 16.14 17.15 0.8142 0.0185 11.61
- -------------------------------------------------------------------------------------------------------------------------
01/01/99-10/31/99 17.15 17.90 -- -- 4.37
- -------------------------------------------------------------------------------------------------------------------------
Total: $6.0677 $0.0985
- -------------------------------------------------------------------------------------------------------------------------
CUMULATIVE TOTAL RETURN AS OF 10/31/99: 117.99%
- -------------------------------------------------------------------------------------------------------------------------
PERFORMANCE SUMMARY CLASS B SHARES
<CAPTION>
NET ASSET VALUE
-------------------------- CAPITAL GAINS DIVIDENDS TOTAL
PERIOD COVERED BEGINNING ENDING DISTRIBUTED PAID RETURN(1)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
08/25/95-12/31/95 $15.83 $15.46 $0.5743 -- 1.29%
- -------------------------------------------------------------------------------------------------------------------------
1996 15.46 17.03 0.5784 -- 13.91
- -------------------------------------------------------------------------------------------------------------------------
1997 17.03 15.42 2.4768 -- 5.49
- -------------------------------------------------------------------------------------------------------------------------
1998 15.42 16.22 0.8142 -- 10.67
- -------------------------------------------------------------------------------------------------------------------------
01/01/99-10/31/99 16.22 16.81 -- -- 3.64
- -------------------------------------------------------------------------------------------------------------------------
Total: $4.4437 $0.0000
- -------------------------------------------------------------------------------------------------------------------------
CUMULATIVE TOTAL RETURN AS OF 10/31/99: 39.59%
- -------------------------------------------------------------------------------------------------------------------------
PERFORMANCE SUMMARY CLASS C SHARES
<CAPTION>
NET ASSET VALUE
-------------------------- CAPITAL GAINS DIVIDENDS TOTAL
PERIOD COVERED BEGINNING ENDING DISTRIBUTED PAID RETURN(1)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
05/10/93-12/31/93 $13.80 $15.99 $0.2100 -- 17.39%
- -------------------------------------------------------------------------------------------------------------------------
1994 15.99 14.23 1.2530 -- (3.12)
- -------------------------------------------------------------------------------------------------------------------------
1995 14.23 15.46 0.5743 -- 12.67
- -------------------------------------------------------------------------------------------------------------------------
1996 15.46 17.03 0.5784 -- 13.91
- -------------------------------------------------------------------------------------------------------------------------
1997 17.03 15.43 2.4768 -- 5.55
- -------------------------------------------------------------------------------------------------------------------------
1998 15.43 16.24 0.8142 -- 10.73
- -------------------------------------------------------------------------------------------------------------------------
01/01/99-10/31/99 16.24 16.84 -- -- 3.69
- -------------------------------------------------------------------------------------------------------------------------
Total: $5.9067 $0.0000
- -------------------------------------------------------------------------------------------------------------------------
CUMULATIVE TOTAL RETURN AS OF 10/31/99: 76.90%
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
- -----------------
(1) Figures assume reinvestment of all dividends and capital gain
distributions, if any, at net asset value on the payable dates and do not
include sales charges; results for each class would be lower if sales
charges were included. Total investment returns for periods of less than
one year have not been annualized.
Note: The Fund offers Class Y shares to a limited group of eligible investors,
including participants in certain investment programs that are sponsored by
PaineWebber and may invest in PaineWebber mutual funds. For the one and five
years ended October 31, 1999, and since inception, May 10, 1993, through
October 31, 1999, Class Y shares had a total return of 15.97%, 8.78% and 89.74%,
respectively. Class Y shares do not have initial or contingent deferred sales
charges or ongoing distribution and service fees.
The data above represents past performance of the Fund's shares, which is no
guarantee of future results. The principal value of an investment in the Fund
will fluctuate, so that an investor's shares, when redeemed, may be worth more
or less than their original cost.
13
<PAGE>
PAINEWEBBER ASIA PACIFIC GROWTH FUND
PERFORMANCE RESULTS(UNAUDITED)
<TABLE>
<CAPTION>
NET ASSET VALUE TOTAL RETURN(1)
--------------------------------------------- ---------------------------------------
12 MONTHS SIX MONTHS
10/31/99 04/30/99 10/31/98 ENDED 10/31/99 ENDED 10/31/99
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------
Class A Shares $ 9.71 $9.01 $ 6.82 42.38% 7.77%
- ---------------------------------------------------------------------------------------------------------------------------
Class B Shares 9.52 8.88 6.74 41.25 7.21
- ---------------------------------------------------------------------------------------------------------------------------
Class C Shares 9.53 8.88 6.74 41.39 7.32
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
PERFORMANCE SUMMARY CLASS A SHARES
<TABLE>
<CAPTION>
NET ASSET VALUE
-------------------------- CAPITAL GAINS DIVIDENDS TOTAL
PERIOD COVERED BEGINNING ENDING DISTRIBUTED PAID RETURN(1)
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------
03/25/97-12/31/97 $12.50 $8.26 -- -- (33.92)%
- ---------------------------------------------------------------------------------------------------------------------------
1998 8.26 7.29 -- -- (11.74)
- ---------------------------------------------------------------------------------------------------------------------------
01/01/99-10/31/99 7.29 9.71 -- -- 33.20
- ---------------------------------------------------------------------------------------------------------------------------
Total: $0.0000 $0.0000
- ---------------------------------------------------------------------------------------------------------------------------
CUMULATIVE TOTAL RETURN AS OF 10/31/99: (22.32)%
- ---------------------------------------------------------------------------------------------------------------------------
PERFORMANCE SUMMARY CLASS B SHARES
<CAPTION>
NET ASSET VALUE
-------------------------- CAPITAL GAINS DIVIDENDS TOTAL
PERIOD COVERED BEGINNING ENDING DISTRIBUTED PAID RETURN(1)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
03/25/97-12/31/97 $12.50 $8.21 -- -- (34.32)%
- ---------------------------------------------------------------------------------------------------------------------------
1998 8.21 7.20 -- -- (12.30)
- ---------------------------------------------------------------------------------------------------------------------------
01/01/99-10/31/99 7.20 9.52 -- -- 32.22
- ---------------------------------------------------------------------------------------------------------------------------
Total: $0.0000 $0.0000
- ---------------------------------------------------------------------------------------------------------------------------
CUMULATIVE TOTAL RETURN AS OF 10/31/99: (23.84)%
- ---------------------------------------------------------------------------------------------------------------------------
PERFORMANCE SUMMARY CLASS C SHARES
<CAPTION>
NET ASSET VALUE
-------------------------- CAPITAL GAINS DIVIDENDS TOTAL
PERIOD COVERED BEGINNING ENDING DISTRIBUTED PAID RETURN(1)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
03/25/97-12/31/97 $12.50 $8.21 -- -- (34.32)%
- ---------------------------------------------------------------------------------------------------------------------------
1998 8.21 7.20 -- -- (12.30)
- ---------------------------------------------------------------------------------------------------------------------------
01/01/99-10/31/99 7.20 9.53 -- -- 32.36
- ---------------------------------------------------------------------------------------------------------------------------
Total: $0.0000 $0.0000
- ---------------------------------------------------------------------------------------------------------------------------
CUMULATIVE TOTAL RETURN AS OF 10/31/99: (23.76)%
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
- -----------------
(1) Figures assume reinvestment of all dividends and capital gain
distributions, if any, at net asset value on the payable dates and 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.
Note: The Fund offers Class Y shares to a limited group of eligible investors,
including participants in certain investment programs that are sponsored by
PaineWebber and may invest in PaineWebber mutual funds. For the year ended
October 31, 1999 and since inception, March 13, 1998 through October 31, 1999,
Class Y shares had a total return of 42.56% and 11.78%, respectively. Class Y
shares do not have initial or contingent deferred sales charges or ongoing
distribution and service fees.
The above data represents past performance of the Fund's shares, which is no
guarantee of future results. The principal value of an investment in the Fund
will fluctuate so that an investor's shares, when redeemed, may be worth more or
less than their original cost.
14
<PAGE>
PAINEWEBBER EMERGING MARKETS EQUITY FUND
PERFORMANCE RESULTS(UNAUDITED)
<TABLE>
<CAPTION>
NET ASSET VALUE TOTAL RETURN(1)
--------------------------------------------- -------------------------------------
12 MONTHS 6 MONTHS
10/31/99 04/30/99 10/31/98 ENDED 10/31/99 ENDED 10/31/99
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
Class A Shares $ 8.79 $ 8.43 $ 6.52 34.82% 4.27%
- --------------------------------------------------------------------------------------------------------------------------
Class B Shares 8.52 8.21 6.37 33.75 3.78
- --------------------------------------------------------------------------------------------------------------------------
Class C Shares 8.43 8.14 6.32 33.39 3.56
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
PERFORMANCE SUMMARY CLASS A SHARES
<TABLE>
<CAPTION>
NET ASSET VALUE
-------------------------- CAPITAL GAINS DIVIDENDS TOTAL
PERIOD COVERED BEGINNING ENDING DISTRIBUTED PAID RETURN(1)
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
01/19/94-12/31/94 $12.00 $10.49 -- -- (12.58)%
- -------------------------------------------------------------------------------------------------------------------------
1995 10.49 9.26 -- $0.0517 (11.20)
- -------------------------------------------------------------------------------------------------------------------------
1996 9.26 9.71 -- -- 4.86
- -------------------------------------------------------------------------------------------------------------------------
1997 9.71 9.27 -- -- (4.53)
- -------------------------------------------------------------------------------------------------------------------------
1998 9.27 6.82 -- -- (26.43)
- -------------------------------------------------------------------------------------------------------------------------
01/01/99-10/31/99 6.82 8.79 -- -- 28.89
- -------------------------------------------------------------------------------------------------------------------------
Total: $0.0000 $0.0517
- -------------------------------------------------------------------------------------------------------------------------
CUMULATIVE TOTAL RETURN AS OF 10/31/99: (26.32)%
- -------------------------------------------------------------------------------------------------------------------------
PERFORMANCE SUMMARY CLASS B SHARES
<CAPTION>
NET ASSET VALUE
-------------------------- CAPITAL GAINS DIVIDENDS TOTAL
PERIOD COVERED BEGINNING ENDING DISTRIBUTED PAID RETURN(1)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
12/05/95-12/31/95 $ 9.13 $ 9.18 -- -- 0.55%
- -------------------------------------------------------------------------------------------------------------------------
1996 9.18 9.56 -- -- 4.14
- -------------------------------------------------------------------------------------------------------------------------
1997 9.56 9.06 -- -- (5.23)
- -------------------------------------------------------------------------------------------------------------------------
1998 9.06 6.66 -- -- (26.49)
- -------------------------------------------------------------------------------------------------------------------------
01/01/99-10/31/99 6.66 8.52 -- -- 27.93
- -------------------------------------------------------------------------------------------------------------------------
Total: $0.0000 $0.0000
- -------------------------------------------------------------------------------------------------------------------------
CUMULATIVE TOTAL RETURN AS OF 10/31/99: (6.68)%
- -------------------------------------------------------------------------------------------------------------------------
PERFORMANCE SUMMARY CLASS C SHARES
<CAPTION>
NET ASSET VALUE
-------------------------- CAPITAL GAINS DIVIDENDS TOTAL
PERIOD COVERED BEGINNING ENDING DISTRIBUTED PAID RETURN(1)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
01/19/94-12/31/94 $12.00 $10.42 -- -- (13.17)%
- -------------------------------------------------------------------------------------------------------------------------
1995 10.42 9.18 -- $0.0034 (11.87)
- -------------------------------------------------------------------------------------------------------------------------
1996 9.18 9.55 -- -- 4.03
- -------------------------------------------------------------------------------------------------------------------------
1997 9.55 9.04 -- -- (5.34)
- -------------------------------------------------------------------------------------------------------------------------
1998 9.04 6.60 -- -- (26.99)
- -------------------------------------------------------------------------------------------------------------------------
01/01/99-10/31/99 6.60 8.43 -- -- 27.73
- -------------------------------------------------------------------------------------------------------------------------
Total: $0.0000 $0.0034
- -------------------------------------------------------------------------------------------------------------------------
CUMULATIVE TOTAL RETURN AS OF 10/31/99: (29.72)%
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
- -----------------
(1) Figures assume reinvestment of all dividends and capital gain
distributions, if any, at net asset value on the payable dates and do not
include sales charges; results for each class would be lower if sales
charges were included. Total investment returns for periods of less than
one year have not been annualized.
Note: The Fund offers Class Y shares to a limited group of eligible investors
including participants in certain investment programs that are sponsored by
PaineWebber and may invest in PaineWebber mutual funds. For the one and five
years ended October 31, 1999 and since inception, January 19, 1994 through
October 31, 1999, Class Y shares had a total return of 35.11%, (5.68)% and
(25.35)%, respectively. Class Y shares do not have initial or contingent
deferred sales charges or ongoing distribution and service fees.
The data above represents past performance of the Fund's shares, which is no
guarantee of future results. The principal value of an investment in the Fund
will fluctuate, so that an investor's shares, when redeemed, may be worth more
or less than their original cost.
15
<PAGE>
PAINEWEBBER GLOBAL EQUITY FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1999
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
COMMON STOCKS--89.15%
AUSTRALIA--2.44%
BANKS--1.98%
472,000 Australia & New Zealand Banking
Group Ltd.(1)........................... $ 3,114,990
246,000 National Australia Bank, Ltd.(1)........ 3,796,354
------------
6,911,344
------------
INSURANCE--0.46%
381,000 QBE Insurance Group Ltd................. 1,591,412
------------
Total Australia Common Stocks...................... 8,502,756
------------
AUSTRIA--1.45%
BANKS--0.68%
47,900 Bank of Austria AG...................... 2,381,633
------------
ENERGY SOURCES--0.77%
27,600 OMV AG.................................. 2,665,342
------------
Total Austria Common Stocks........................ 5,046,975
------------
CANADA--0.93%
BANKS--0.93%
75,200 Royal Bank of Canada.................... 3,241,688
------------
DENMARK--0.96%
FOOD & HOUSEHOLD PRODUCTS--0.96%
80,300 Danisco A/S............................. 3,340,980
------------
FINLAND--3.02%
BANKS--1.26%
760,889 Merita OYJ "A" Shares PLC............... 4,409,879
------------
ELECTRICAL & ELECTRONICS--1.04%
31,732 Nokia OYJ "A" Shares(1)................. 3,631,784
------------
FOREST PRODUCTS, PAPER--0.72%
79,400 UPM-Kymmene OY.......................... 2,505,506
------------
Total Finland Common Stocks........................ 10,547,169
------------
FRANCE--6.65%
AEROSPACE & MILITARY TECHNOLOGY--1.01%
87,000 Lagardere S.C.A......................... 3,523,171
------------
BEVERAGES & TOBACCO--0.49%
30,600 Seita................................... 1,705,890
------------
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
</TABLE>
FRANCE--(CONCLUDED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
BUILDING MATERIALS & COMPONENTS--0.55%
20,100 Lafarge................................. $ 1,934,510
------------
CHEMICALS--0.55%
100,000 Rhodia(1)............................... 1,930,145
------------
COMPUTER-BUSINESS SERVICES--0.91%
20,900 Cap Gemini.............................. 3,165,647
------------
ENERGY SOURCES--1.34%
7 Elf Aquitaine........................... 1,031
34,485 Total S.A. (Class B).................... 4,661,086
------------
4,662,117
------------
HEALTH & PERSONAL CARE--0.40%
25,000 Rhone Poulenc S.A.*..................... 1,398,960
------------
RECREATION & OTHER CONSUMER GOODS--0.37%
26,200 Bic..................................... 1,281,469
------------
WIRELESS TELECOMMUNICATIONS--1.03%
23,000 Alcatel................................. 3,592,593
------------
Total France Common Stocks......................... 23,194,502
------------
GERMANY--2.79%
DIVERSIFIED INDUSTRIALS--0.72%
28,000 Siemens AG.............................. 2,513,711
------------
HEALTH & PERSONAL CARE--1.34%
106,000 Hoechst AG(1)........................... 4,666,111
------------
INDUSTRIAL SERVICES & SUPPLIES--0.03%
5,820 Celanese AG............................. 91,826
------------
MOTOR VEHICLES--0.70%
31,600 DaimlerChrysler AG(1)................... 2,459,646
------------
Total Germany Common Stocks........................ 9,731,294
------------
GREECE--1.00%
WIRELESS TELECOMMUNICATIONS--1.00%
333,000 Hellenic Telecommunications ADR......... 3,496,500
------------
IRELAND--1.11%
BANKS--1.11%
495,151 Bank of Ireland......................... 3,864,515
------------
</TABLE>
16
<PAGE>
PAINEWEBBER GLOBAL EQUITY FUND
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
</TABLE>
COMMON STOCKS--(CONTINUED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
ISRAEL--1.47%
ELECTRICAL & ELECTRONICS--0.87%
104,695 ECI Telecommunications Ltd.(1).......... $ 3,049,242
------------
ELECTRICAL EQUIPMENT--0.60%
26,800 Orbotech Ltd.*.......................... 2,093,750
------------
Total Israel Common Stocks......................... 5,142,992
------------
ITALY--0.57%
WIRELESS TELECOMMUNICATIONS--0.57%
408,000 Telecom Italia SPA...................... 2,004,153
------------
JAPAN--9.49%
BANKS--1.31%
308,000 Sanwa Bank(1)........................... 4,581,452
------------
BEVERAGES & TOBACCO--0.82%
261 Japan Tobacco Inc....................... 2,878,584
------------
COMPUTER HARDWARE--0.61%
105,000 NEC Corp................................ 2,124,772
------------
DATA PROCESSING & REPRODUCTION--0.81%
100,000 Canon Inc............................... 2,829,193
------------
DRUGS & MEDICINE--0.68%
57,000 Taisho Pharmaceutical Co................ 2,372,494
------------
ELECTRONIC COMPONENTS--1.17%
135,000 Fujitsu(1).............................. 4,065,407
------------
FINANCIAL SERVICES--0.67%
18,000 Takefuji Corp........................... 2,330,488
------------
HEALTH & PERSONAL CARE--1.71%
55,000 Takeda Chemical Industries.............. 3,159,586
92,000 Terumo Corp............................. 2,796,969
------------
5,956,555
------------
MERCHANDISING--0.76%
37,400 Yamada Denki Co......................... 2,665,024
------------
MOTOR VEHICLES--0.95%
52,000 Honda Motor Co.......................... 2,194,303
214,000 Mitsubishi Motor(1)..................... 1,110,329
------------
3,304,632
------------
Total Japan Common Stocks.......................... 33,108,601
------------
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
KOREA--1.16%
BANKS--0.67%
48,000 Housing and Commercial Bank............. $ 1,268,529
101,000 Shinhan Bank............................ 1,069,362
------------
2,337,891
------------
WIRELESS TELECOMMUNICATIONS--0.49%
49,000 Korea Telecom........................... 1,727,250
------------
Total Korea Common Stocks.......................... 4,065,141
------------
MEXICO--0.39%
MULTI-INDUSTRY--0.39%
86,893 Desc S.A. De C.V........................ 1,379,426
------------
NETHERLANDS--6.50%
APPLIANCE & HOUSEHOLD DURABLES--1.59%
54,072 Koninklijke Philips Electronics
N.V.(1)................................. 5,545,374
------------
BUSINESS & PUBLIC SERVICES--0.88%
182,307 Vedior N.V. CVA......................... 3,068,154
------------
COMPUTER-BUSINESS SERVICES--0.84%
59,000 Getronics NV............................ 2,941,603
------------
FINANCIAL SERVICES--1.13%
66,600 Internationale Nederlander Groep N.V.... 3,928,584
------------
FOREST PRODUCTS, PAPER--1.01%
19,700 Benckiser N.V........................... 1,164,545
137,000 Buhrmann N.V............................ 2,361,855
------------
3,526,400
------------
WIRELESS TELECOMMUNICATIONS--1.05%
71,500 Kon KPN N.V.(1)......................... 3,669,362
------------
Total Netherlands Common Stocks.................... 22,679,477
------------
NEW ZEALAND--1.02%
WIRELESS TELECOMMUNICATIONS--1.02%
882,000 Telecom Corp. of New Zealand Ltd.(1).... 3,549,861
------------
NORWAY--0.89%
MULTI-INDUSTRY--0.89%
222,000 Orkla ASA............................... 3,097,280
------------
</TABLE>
17
<PAGE>
PAINEWEBBER GLOBAL EQUITY FUND
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
</TABLE>
COMMON STOCKS--(CONTINUED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
PORTUGAL--0.83%
RAILROADS--0.83%
74,000 Brisa Auto Estrada...................... $ 2,914,992
------------
SPAIN--0.15%
AIRLINES--0.15%
90,599 Amadeus Global Travel................... 542,237
------------
SWEDEN--5.44%
BANKS--0.74%
186,000 Svenska Handelsbanken Series A.......... 2,578,307
------------
BEVERAGES & TOBACCO--0.95%
906,000 Swedish Match AB(1)..................... 3,315,978
------------
FINANCIAL SERVICES--1.01%
275,000 Investor Ab............................. 3,527,784
------------
INDUSTRIAL PARTS--0.59%
65,068 Autoliv, Inc............................ 2,072,935
------------
MULTI-INDUSTRY--0.57%
218,000 Trelleborg AB........................... 1,988,084
------------
WIRELESS TELECOMMUNICATIONS--1.58%
132,562 Ericsson LM B Shares(1)................. 5,512,671
------------
Total Sweden Common Stocks......................... 18,995,759
------------
SWITZERLAND--2.72%
BANKS--1.14%
13,600 UBS AG.................................. 3,956,964
------------
CHEMICALS--0.75%
6,000 Clariant(1)............................. 2,625,468
------------
HEALTH & PERSONAL CARE--0.83%
1,943 Novartis AG............................. 2,906,278
------------
Total Switzerland Common Stocks.................... 9,488,710
------------
UNITED KINGDOM--8.91%
BEVERAGES & TOBACCO--1.30%
448,000 Diageo PLC.............................. 4,556,788
------------
BROADCASTING & PUBLISHING--1.34%
488,000 United News & Media PLC................. 4,678,977
------------
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
</TABLE>
UNITED KINGDOM--(CONCLUDED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
BUSINESS & PUBLIC SERVICES--1.53%
323,000 Securicor PLC........................... $ 3,157,982
200,000 WPP Group PLC........................... 2,169,023
------------
5,327,005
------------
FINANCIAL SERVICES--1.16%
459,000 Amvescap PLC............................ 4,067,931
------------
FOOD & HOUSEHOLD PRODUCTS--0.66%
189,000 Reckitt & Colman PLC.................... 2,291,967
------------
HEALTH & PERSONAL CARE--0.57%
43,936 Astrazeneca PLC......................... 1,984,706
------------
LEISURE & TOURISM--0.93%
449,000 Carlton Communications PLC.............. 3,246,304
------------
MEDIA--0.35%
459,000 Aegis Group............................. 1,206,765
------------
MULTI INDUSTRY--1.07%
233,000 Charter PLC............................. 1,201,240
822,000 Cookson Group PLC....................... 2,524,206
------------
3,725,446
------------
Total United Kingdom Common Stocks................. 31,085,889
------------
UNITED STATES--29.26%
APPAREL, RETAIL--0.75%
80,000 TJX Companies, Inc...................... 2,170,000
16,200 Tommy Hilfiger Corp.*................... 457,650
------------
2,627,650
------------
BANKS--2.89%
67,800 Bank of New York Co. Inc................ 2,839,125
38,700 The Chase Manhattan Corp................ 3,381,412
74,400 Mellon Financial Corp................... 2,748,150
23,500 Wells Fargo and Co...................... 1,125,063
------------
10,093,750
------------
COMPUTER HARDWARE--2.24%
48,400 Cisco Systems, Inc.*.................... 3,581,600
52,400 Dell Computer Corp.*.................... 2,102,550
21,600 International Business
Machines Corp........................... 2,124,900
------------
7,809,050
------------
</TABLE>
18
<PAGE>
PAINEWEBBER GLOBAL EQUITY FUND
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
</TABLE>
COMMON STOCKS--(CONTINUED)
UNITED STATES--(CONTINUED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
COMPUTER SOFTWARE--1.09%
10,000 BMC Software, Inc.*..................... $ 641,875
20,100 Compuware Corp.*........................ 559,031
28,000 Microsoft Corp.*........................ 2,591,750
------------
3,792,656
------------
CONSTRUCTION, REAL PROPERTY--0.18%
21,600 Lafarge Corp............................ 641,250
------------
DEFENSE & AEROSPACE--0.67%
41,100 Allied-Signal, Inc...................... 2,340,131
------------
DIVERSIFIED RETAIL--1.81%
40,000 Dayton Hudson Corp...................... 2,585,000
55,300 Family Dollar Stores Inc.(1)............ 1,140,563
40,200 Federated Department Stores, Inc.*...... 1,716,037
15,700 Wal Mart Stores, Inc.................... 889,994
------------
6,331,594
------------
DRUGS & MEDICINE--1.49%
21,400 Biogen Inc.*............................ 1,586,275
31,700 Schering-Plough Corp.................... 1,569,150
25,400 Warner Lambert Co....................... 2,027,237
------------
5,182,662
------------
ELECTRIC UTILITIES--0.21%
29,600 Energy East Corp........................ 743,700
------------
ELECTRICAL EQUIPMENT--0.33%
11,800 Motorola, Inc........................... 1,149,763
------------
ENERGY RESERVES & PRODUCTION--1.63%
10,300 Atlantic Richfield Co................... 959,831
25,900 Mobil Corp.............................. 2,499,350
36,900 Royal Dutch Petroleum Co. ADR........... 2,211,694
------------
5,670,875
------------
ENTERTAINMENT--0.37%
29,200 Viacom, Inc., Class B*.................. 1,306,700
------------
FINANCIAL SERVICES--0.63%
31,300 MBNA Corp............................... 864,662
12,300 Providian Financial Corp................ 1,340,700
------------
2,205,362
------------
FOREST PRODUCTS, PAPER--0.47%
28,100 Champion International Corp............. 1,624,531
------------
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
</TABLE>
UNITED STATES--(CONTINUED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
GAS UTILITY--0.89%
35,000 Coastal Corp............................ $ 1,474,375
25,200 Columbia Energy Group................... 1,638,000
------------
3,112,375
------------
INDUSTRIAL PARTS--2.14%
15,700 American Standard Companies Inc.*....... 599,544
41,000 Ingersoll Rand Co....................... 2,142,250
48,200 Mettler-Toledo International Inc.*...... 1,436,962
7,600 SPX Corp.*.............................. 644,100
44,000 United Technologies Corp................ 2,662,000
------------
7,484,856
------------
INDUSTRIAL SERVICES/SUPPLIES--0.69%
60,000 Tyco International Ltd.................. 2,396,250
------------
INFORMATION & COMPUTER SERVICES--0.24%
19,800 Valassis Communications Inc.*........... 851,400
------------
LIFE INSURANCE--1.00%
20,900 American General Corp................... 1,550,519
41,800 Lincoln National Corp................... 1,928,025
------------
3,478,544
------------
LONG DISTANCE & PHONE COMPANIES--2.83%
40,000 BellSouth Corp.......................... 1,800,000
28,550 Century Telephone Enterprises, Inc...... 1,154,491
28,500 GTE Corp................................ 2,137,500
20,000 MCI WorldCom Inc.*...................... 1,716,250
60,490 SBC Communications, Inc................. 3,081,209
------------
9,889,450
------------
MEDIA--0.42%
34,600 Comcast Corp., Class A.................. 1,457,525
------------
MINING & METALS--0.14%
8,000 Alcoa, Inc.............................. 486,000
------------
MOTOR VEHICLES--0.94%
27,600 Borg Warner Automotive, Inc.(1)......... 1,090,200
40,000 Ford Motor Co........................... 2,195,000
------------
3,285,200
------------
OTHER INSURANCE--0.87%
17,200 Ambac Financial Group Inc............... 1,027,700
19,463 American International Group, Inc....... 2,003,473
------------
3,031,173
------------
</TABLE>
19
<PAGE>
PAINEWEBBER GLOBAL EQUITY FUND
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
</TABLE>
COMMON STOCKS--(CONCLUDED)
UNITED STATES--(CONTINUED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
PUBLISHING--0.54%
29,700 Knight Ridder, Inc...................... $ 1,885,950
------------
RESTAURANTS--0.20%
30,150 Outback Steakhouse Inc.*................ 693,450
------------
SECURITIES & ASSET MANAGEMENT--0.53%
16,800 Morgan Stanley Dean Witter & Co......... 1,853,250
------------
SEMICONDUCTOR--2.94%
47,000 Applied Materials, Inc.*................ 4,221,187
20,200 Atmel Corp.*............................ 780,225
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
</TABLE>
UNITED STATES--(CONCLUDED)
SEMICONDUCTOR--(CONCLUDED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ------------
<C> <S> <C>
20,000 JDS Uniphase Corp.*..................... $ 3,337,500
41,800 Vitesse Semiconductor Corp.*............ 1,917,575
------------
10,256,487
------------
SPECIALTY RETAIL--0.13%
10,700 Zale Corp.*............................. 448,063
------------
Total United States Common Stocks.................. 102,129,647
------------
Total Common Stocks (cost--$263,277,324)........... 311,150,544
------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
RIGHTS
- ---------------------
<S> <C> <C>
RIGHTS--0.12%
NORWAY--0.12%
DIVERSIFIED RETAIL--0.12%
222,000 Orkla ASA, Rights Expiring 11/22/99......................... 415,194
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATE RATE
- --------- ---------- --------------
<S> <C> <C> <C> <C>
U.S. GOVERNMENT AND AGENCY [email protected]%
$ 1,000 Federal Home Loan Bank
Consolidated Discount
Note........................ 11/01/99 5.160% 1,000,000
6,000 U.S. Treasury Bills........... 01/20/00 4.900 to 4.955 5,934,178
------------
Total U.S. Government and Agency Obligations (cost--$6,934,178)....... 6,934,178
------------
REPURCHASE AGREEMENTS--2.25%
7,591 Repurchase Agreement dated 11/01/99 5.200 7,591,000
10/29/99 with Dresner Bank
AG, collaterized by
$2,473,000 U.S. Treasury
Note, 6.250% due 10/31/01;
(value--$2,565,668) and
$4,387,000 U.S. Treasury
Bond, 8.125% due 08/15/19;
(value--$5,204,338);
proceeds: $7,594,289........
275 Repurchase Agreement dated 11/01/99 4.250 275,000
10/29/99 with State Street
Bank & Trust Company,
collaterized by $280,558
U.S. Treasury Note, 5.625%
due 09/30/01; (value--
$280,588); proceeds:
$275,097....................
------------
Total Repurchase Agreements (cost--$7,866,000)........................ 7,866,000
------------
</TABLE>
20
<PAGE>
PAINEWEBBER GLOBAL EQUITY FUND
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------------------- ------------
<S> <C> <C>
MONEY MARKET FUND--0.02%
88,276 Liquid Assets Portfolio (cost--$88,276)..................... $ 88,276
------------
Total Investments (cost--$278,165,778)--93.53%...................................... 326,454,192
Other assets in excess of liabilities--6.47%........................................ 22,573,570
------------
Net Assets--100.00%................................................................. $349,027,762
============
</TABLE>
- -----------------
* Non-income producing security.
ADR American Depositary Receipt.
@ Interest rate shown is the discount rate at date of purchase.
(1) Security, or portion thereof, was on loan at October 31, 1999.
FUTURES CONTRACTS
<TABLE>
<CAPTION>
UNREALIZED
NUMBER OF OUTSTANDING FUTURES IN EXPIRATION APPRECIATION
CONTRACTS CONTRACTS EXCHANGE FOR DATES (DEPRECIATION)
- --------------------- ---------------------- ------------ ---------- --------------
<C> <S> <C> <C> <C>
50 CAC40 Ten Euro
(France)............ $ 2,683,853 Nov 1999 $ (108,404)
21 DAX Index (Germany)... 3,172,668 Dec 1999 (108,216)
63 FTSE Index (United
Kingdom)............ 6,679,796 Dec 1999 (162,100)
9 Hang Seng Index (Hong
Kong)............... 805,814 Nov 1999 (32,739)
11 IBEX Plus (Spain)..... 1,191,133 Nov 1999 (55,327)
6 MIB 30 Index
(Italy)............. 1,032,766 Dec 1999 18,378
79 OMX Index (Sweden).... 953,280 Nov 1999 (67,569)
161 S&P 500 (United
States)............. 52,846,676 Dec 1999 2,545,374
12 SPI Futures
(Australia)......... 547,412 Dec 1999 2,524
37 Topix Index (Japan)... 5,702,689 Dec 1999 (142,042)
----------
$1,889,879
==========
</TABLE>
See accompanying notes to financial statements
21
<PAGE>
PAINEWEBBER ASIA PACIFIC GROWTH FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1999
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------- -----------
<C> <S> <C>
COMMON STOCKS--93.29%
AUSTRALIA--15.05%
BANKS--2.54%
56,700 Australia & New Zealand Banking
Group Ltd.(1)................ $ 374,195
15,000 Macquarie Bank Ltd............. 220,006
25,900 National Australia Bank
Ltd.(1)........................ 399,698
-----------
993,899
-----------
BREWERIES, PUBS, & RESTAURANTS--1.05%
153,600 Foster's Brewing Group Ltd..... 408,258
-----------
CONSTRUCTION/BUILDING MATERIALS--0.45%
79,500 Pioneer International Ltd...... 173,891
-----------
DIVERSIFIED INDUSTRIALS--2.51%
63,539 Broken Hill Propriety Co.
Ltd............................ 656,688
75,500 WMC Ltd........................ 324,025
-----------
980,713
-----------
LEISURE & HOTELS--0.68%
42,100 TABCORP Holdings Ltd........... 266,861
-----------
MEDIA--1.11%
59,700 News Corp. Ltd................. 431,722
-----------
MINING--3.05%
19,200 Brambles Industries Ltd........ 539,953
54,700 Delta Gold NL.................. 92,438
123,000 North Ltd...................... 237,664
20,000 Rio Tinto Ltd.................. 321,490
-----------
1,191,545
-----------
OIL EXPLORATION & PRODUCTION--0.81%
52,600 Woodside Petroleum Ltd......... 316,981
-----------
REAL ESTATE--0.88%
30,000 Lend Lease Corp Ltd............ 345,181
-----------
TELECOMMUNICATIONS--1.97%
75,200 Telstra Corp................... 241,214
103,800 Telstra Corp. Class A.......... 528,023
-----------
769,237
Total Australia Common Stocks................ 5,878,288
-----------
CHINA--1.43%
CHEMICALS--0.51%
736,000 Yizheng Chemical Fibre*........ 201,326
-----------
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------- -----------
<C> <S> <C>
</TABLE>
CHINA--(CONCLUDED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------- -----------
<C> <S> <C>
SERVICES--0.92%
220,000 Beijing Enterprise............. $ 358,241
-----------
Total China Common Stocks.................... 559,567
-----------
HONG KONG--21.28%
BANKS--2.60%
189,500 Dao Heng Bank Group............ 861,087
12,800 HSBC Holdings PLC.............. 154,058
-----------
1,015,145
-----------
COMMERCE/INDUSTRIAL--0.53%
80,000 Citic Pacific Ltd.............. 207,505
-----------
COMMUNICATIONS--4.05%
172,600 Cable & Wireless Hong Kong
Telecom
Co. Ltd........................ 394,368
224,000 China Telecom.................. 766,995
722,000 Global Technology Holdings..... 422,875
-----------
1,584,238
-----------
ELECTRICAL APPLIANCES--0.45%
148,000 ASM Pacific Technology......... 174,319
-----------
ELECTRICITY & GAS--0.95%
280,530 Hong Kong & China Gas Ltd...... 371,946
-----------
LAND TRANSPORTATION--0.29%
736,000 Jiangsu Expressway............. 112,742
-----------
REAL ESTATE--11.23%
342,000 Amoy Properties Ltd............ 294,961
116,000 Cheung Kong Holdings Ltd....... 1,056,446
295,000 China Resources Developement
Enterprises Ltd.............. 377,840
75,000 Henderson Land Developement Co.
Ltd............................ 340,799
134,000 Hutchison Whampoa Ltd.......... 1,345,434
117,000 New World Infrastructure
Ltd.*.......................... 135,547
103,000 Sun Hung Kai Properties Ltd.... 835,296
-----------
4,386,323
-----------
RETAIL SALES--0.51%
279,000 China Everbright............... 199,324
-----------
SERVICES--0.67%
351,000 South China Morning Post....... 259,799
-----------
Total Hong Kong Common Stocks................ 8,311,341
-----------
</TABLE>
22
<PAGE>
PAINEWEBBER ASIA PACIFIC GROWTH FUND
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------- -----------
<C> <S> <C>
</TABLE>
COMMON STOCKS--(CONTINUED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------- -----------
<C> <S> <C>
INDIA--8.07%
AUTO COMPONENTS--0.35%
13,600 Bajaj Auto Ltd................. $ 138,005
-----------
BUILDING MATERIALS/CONSTRUCTION--0.08%
7,000 Associated Cement Co........... 32,541
-----------
CHEMICALS--1.35%
98,000 Reliance Industries Ltd........ 527,250
-----------
ELECTRONIC & ELECTRICAL EQUIPMENT--0.46%
29,000 Bharat Heavy Electricals
Ltd............................ 179,037
-----------
ENGINEERING/MACHINERY--0.85%
15,500 Larsen & Toubro Ltd. GDS....... 330,150
-----------
HOUSEHOLD GOODS & TEXTILES--0.82%
6,000 Hindustan Lever................ 318,051
-----------
OIL & GAS--0.52%
30,500 Bharat Petroleum Corp.*........ 203,755
-----------
OIL EXPLORATION & PRODUCTION--0.46%
7,300 Castrol India Ltd.............. 57,344
11,050 Hindustan Petroleum Corp....... 40,715
22,100 Hindustan Petroleum Corp. Class
A.............................. 81,431
-----------
179,490
-----------
PHARMACEUTICALS--0.00%
50 Ranbaxy Laboratories........... 1,002
-----------
SUPPORT SERVICES--1.53%
2,500 Infosys Technology*............ 400,138
1,000 NII Ltd........................ 49,885
3,000 NIIT Ltd....................... 149,654
-----------
599,677
-----------
TELECOMMUNICATIONS--1.22%
62,900 Mahanagar Telephone Nigam
Ltd............................ 248,354
7,500 Videsh Sanchar Nigam Ltd....... 227,626
-----------
475,980
-----------
TOBACCO--0.43%
10,500 ITC Ltd........................ 168,360
-----------
Total India Common Stocks.................... 3,153,298
-----------
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------- -----------
<C> <S> <C>
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------- -----------
<C> <S> <C>
INDONESIA--1.95%
BANKS--0.33%
5,898,500 P.T. Bank Internasional
Indonesia...................... $ 129,070
-----------
COMMUNICATIONS--0.47%
387,680 P.T. Telekomunikasi
Indonesia...................... 183,801
-----------
FOODS--0.60%
30,500 H.M. Sampoerna................. 70,744
137,000 Indofoods Sukses Mak........... 161,882
-----------
232,626
-----------
MISCELLANEOUS MANUFACTURING--0.36%
55,000 P.T. Gudang Garam.............. 141,211
-----------
TRANSPORTATION EQUIPMENT--0.19%
151,500 Astra International............ 74,590
-----------
Total Indonesia Common Stocks................ 761,298
-----------
KOREA--13.15%
BANKS--2.37%
45,382 Kookmin Bank................... 707,497
20,500 Shinhan Bank................... 217,049
-----------
924,546
-----------
COMMUNICATIONS--2.24%
300 Korea Telecom.................. 20,183
7,500 Korea Telecom ADR.............. 264,375
372 SK Telecom Co. ADS Ltd......... 429,529
12,610 SK Telecom Co. Ltd ADR......... 160,778
-----------
874,865
-----------
ELECTRICAL APPLIANCES--3.78%
8,864 Samsung Electronics Corp....... 1,477,949
-----------
ELECTRICITY & GAS--2.04%
27,200 Korea Electric Power Corp...... 795,932
-----------
IRON & STEEL--2.72%
8,760 Pohang Iron & Steel Co. Ltd.... 1,062,155
-----------
Total Korea Common Stocks.................... 5,135,447
-----------
MALAYSIA--6.13%
BANKS--0.39%
44,500 Malayan Banking Berhad......... 151,066
-----------
CHEMICALS--0.43%
128,000 Chemical Co. Malaysia Berhad... 167,074
-----------
</TABLE>
23
<PAGE>
PAINEWEBBER ASIA PACIFIC GROWTH FUND
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------- -----------
<C> <S> <C>
</TABLE>
COMMON STOCKS--(CONTINUED)
MALAYSIA--(CONCLUDED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------- -----------
<C> <S> <C>
COMMUNICATIONS--0.48%
61,500 Telekom Malaysia Berhad........ $ 189,355
-----------
CONSTRUCTION--1.38%
268,000 Gamuda Berhad.................. 539,526
-----------
ELECTRICITY & GAS--1.62%
274,000 Tenaga Nasional Berhad......... 630,921
-----------
FOODS--0.65%
484,000 IOI Corp. Berhad............... 254,737
-----------
MISCELLANEOUS MANUFACTURING--0.27%
24,000 Malaysian Pacific Industries
Berhad......................... 104,210
-----------
SERVICES--0.91%
52,000 Genting Berhad................. 193,918
77,000 Tanjong Berhad................. 162,105
-----------
356,023
-----------
Total Malaysia Common Stocks................. 2,392,912
-----------
NEW ZEALAND--0.86%
COMMUNICATIONS--0.59%
57,300 Telecom Corp. of New Zealand
Ltd.(1)........................ 230,620
-----------
CONSTRUCTION/BUILDING MATERIALS--0.27%
86,300 Fletcher Challenge Building.... 106,739
-----------
Total New Zealand Common Stocks.............. 337,359
-----------
PHILIPPINES--1.08%
BANKS--0.16%
8,200 Metropolitan Bank & Trust
Co............................. 61,347
-----------
COMMERCE/INDUSTRIAL--0.17%
265,900 Ayala Corp..................... 66,309
-----------
COMMUNICATIONS--0.21%
3,900 Philippine Long Distance
Telephone Co................... 81,210
-----------
ELECTRICITY & GAS--0.47%
67,800 Manila Electric Co. Class B.... 185,985
-----------
FOODS--0.07%
18,700 San Miguel Corp. Class B....... 27,047
-----------
Total Philippines Common Stocks.............. 421,898
-----------
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------- -----------
<C> <S> <C>
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------- -----------
<C> <S> <C>
SINGAPORE--10.35%
BANKS--3.35%
60,339 DBS Group Holdings(1).......... $ 682,001
21,250 O'Seas Chinese Banking Corp.... 159,698
61,700 United Overseas Bank Ltd....... 467,396
-----------
1,309,095
-----------
COMMUNICATIONS--1.08%
221,700 Singapore Telecommunications
Ltd............................ 421,194
-----------
ELECTRICAL APPLIANCES--0.05%
10,000 Chartered Semiconductors....... 20,167
-----------
LAND TRANSPORTATION--0.20%
23,000 Cycle & Carriage Ltd........... 78,128
-----------
MISCELLANEOUS MANUFACTURING--0.41%
18,000 Venture Manufacturing
(Singapore) Ltd................ 160,163
-----------
REAL ESTATE--1.63%
79,000 City Development Ltd........... 408,465
259,200 Wing Tai Holdings Ltd.......... 227,519
-----------
635,984
-----------
SERVICES--1.74%
39,642 Singapore Press Holdings....... 679,250
-----------
SHIPPING--0.32%
117,000 Keppel Telecom &
Transportation................. 123,802
-----------
AIR TRANSPORTATION--1.57%
58,000 Singapore International
Airlines....................... 613,720
-----------
Total Singapore Common Stocks................ 4,041,503
-----------
TAIWAN--11.50%
BANKS--1.15%
198,000 First Bank..................... 254,054
137,000 Hua Nan Bank................... 194,357
-----------
448,411
-----------
CHEMICALS--2.09%
466,499 Nan Ya Plastic Corp............ 816,226
-----------
COMMERCE/INDUSTRIAL--1.39%
51,854 Asustek Computer Inc........... 544,369
-----------
ELECTRICAL APPLIANCES--5.15%
221,450 Acer Inc....................... 422,375
207,960 Siliconware Precision
Industries Co.................. 373,699
</TABLE>
24
<PAGE>
PAINEWEBBER ASIA PACIFIC GROWTH FUND
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------- -----------
<C> <S> <C>
</TABLE>
COMMON STOCKS--(CONCLUDED)
TAIWAN--(CONCLUDED)
ELECTRICAL APPLIANCES--(CONCLUDED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------- -----------
<C> <S> <C>
273,920 Taiwan Semiconductor
Manufacturing Co. Ltd........ $ 1,217,614
-----------
2,013,688
-----------
INSURANCE--0.73%
110,400 Cathay Life Insurance.......... 285,397
-----------
IRON & STEEL--0.99%
501,900 China Steel.................... 386,077
-----------
Total Taiwan Common Stocks................... 4,494,168
-----------
THAILAND--2.44%
BANKS--0.87%
15,000 Bangkok Bank Public Co.
Ltd.(1)*....................... 34,969
187,500 Siam Commercial Bank........... 212,489
65,000 Thai Farmers Bank PLC(1)....... 91,763
-----------
339,221
-----------
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------- -----------
<C> <S> <C>
</TABLE>
THAILAND--(CONCLUDED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------- -----------
<C> <S> <C>
COMMUNICATIONS--0.78%
8,000 Advanced Info Service Public
Co. Ltd........................ $ 93,252
208,500 Telecom Asia Corp. Public Co.
Ltd.(1)*....................... 160,676
21,000 Total Access Communication
Public
Co. Ltd.*...................... 50,820
-----------
304,748
-----------
CONSTRUCTION--0.13%
2,000 Siam Cement Co................. 51,807
-----------
ELECTRICITY & GAS--0.34%
99,000 Electricity Generating Public
Co. Ltd........................ 130,786
-----------
MINING--0.32%
17,300 PTT Exploration & Production
Public
Co. Ltd........................ 126,372
-----------
Total Thailand Common Stocks................. 952,934
-----------
Total Common Stocks (cost--$32,841,394)...... 36,440,013
-----------
</TABLE>
REPURCHASE AGREEMENT--4.41%
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATE RATE
- --------------------- -------- --------
<C> <S> <C> <C> <C>
$ 1,724 Repurchase Agreement dated 10/29/99 with State Street
Bank & Trust Company, collateralized by $1,655,000 U.S.
Treasury Notes, 7.500% due 11/15/01; (value--$1,760,506);
proceeds: $1,724,611 (cost--$1,724,000)................... 11/01/99 4.250% 1,724,000
-----------
Total Investments (cost--$34,565,394)--97.70%............................................................ 38,164,013
Other assets in excess of liabilities--2.30%............................................................. 899,137
-----------
Net Assets--100.00%...................................................................................... $39,063,150
===========
</TABLE>
- -----------------
<TABLE>
<S> <C>
* Non-income producing securities
ADR American Depositary Receipt
ADS American Depositary Shares
GDR Global Depositary Receipts
GDS Global Depositary Shares
(1) Security, or portion thereof, was on loan at October 31,
1999.
</TABLE>
FORWARD FOREIGN CURRENCY CONTRACTS
<TABLE>
<CAPTION>
CONTRACT TO IN MATURITY UNREALIZED
DELIVER EXCHANGE FOR DATE DEPRECIATION
----------- ------------- -------- ------------
<S> <C> <C> <C> <C>
Hong Kong Dollars........................................... 14,000,000 USD 1,768,570 03/03/00 $(30,351)
========
</TABLE>
- -------------
<TABLE>
<S> <C>
USD United States Dollars
</TABLE>
See accompanying notes to financial statements
25
<PAGE>
PAINEWEBBER EMERGING MARKETS EQUITY FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1999
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ----------
<C> <S> <C>
COMMON STOCKS--85.82%
ARGENTINA--1.65%
BANKS--0.18%
700 Banco De Galicia Y Buenos Aires S.A. de
C.V. ADR (1).......................... $ 14,787
----------
BEVERAGES--0.17%
1,400 Quilmes Industrial S.A. ADR............. 14,613
----------
DISTRIBUTORS--0.13%
3,000 Siderar S.A. ADR........................ 11,285
----------
DIVERSIFIED INDUSTRIALS--0.43%
6,095 Perez Companc S.A. Class B.............. 36,709
----------
GAS DISTRIBUTION--0.09%
4,000 Gas Natural Ban S.A. Class B............ 7,444
----------
TELECOMMUNICATIONS--0.65%
2,800 Telecom Argentina S.A................... 15,407
1,530 Telefonica de Argentina S.A. Class B
ADR(1).................................. 39,206
----------
54,613
----------
Total Argentina Common Stocks...................... 139,451
----------
BOTSWANA--0.25%
BREWERIES, PUBS, & RESTAURANTS--0.25%
21,400 Sechaba Breweries Ltd. (2).............. 21,362
----------
BRAZIL--1.11%
BANKS--0.35%
1,300 Uniao De Bancos Brasileiros, S.A. GDR... 30,063
----------
BREWERIES, PUBS, & RESTAURANTS--0.21%
800 Companhia Brasileire De Distribuicao.... 17,500
----------
MEDIA--0.31%
1,300 Aracruz Celulose S.A. ADR............... 26,650
----------
TELECOMMUNICATIONS--0.24%
300 Telecomunicacoes Brasileiras S.A........ 14
390,000 Telecomunicacoes Brasileiras S.A. ADR... 20,259
----------
20,273
----------
Total Brazil Common Stocks......................... 94,486
----------
CHILE--2.60%
BANKS--0.31%
900 Banco Santander Chile Series A ADR...... 14,737
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ----------
<C> <S> <C>
</TABLE>
CHILE--(CONCLUDED)
BANKS--(CONCLUDED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ----------
<C> <S> <C>
600 Banco Santiago.......................... $ 11,738
----------
26,475
----------
BREWERIES, PUBS, & RESTAURANTS--0.49%
1,000 Compania Cervecerias Unidas S.A. ADR.... 21,812
1,600 Embotelladora Andina S.A. ADR........... 19,700
----------
41,512
----------
DIVERSIFIED INDUSTRIALS--0.22%
2,000 Quinenco SA ADR+........................ 18,625
----------
ELECTRICITY--0.59%
950 Chilectra S.A. ADR...................... 16,506
1,600 Empresa Nacional De Electricidad SA
ADR..................................... 20,400
600 Enersis S.A. ADR........................ 13,500
----------
50,406
----------
EXTRACTIVE INDUSTRIES--0.14%
400 Sociedad Quimica Y Minera de Chile S.A.
Series B ADR............................ 11,625
----------
RETAILERS, FOOD--0.27%
1,400 Distribucion Y Servicio D&S............. 22,838
----------
TELECOMMUNICATIONS--0.58%
2,925 Compania de Telecomunicaciones de
Chile S.A. ADR........................ 48,811
----------
Total Chile Common Stocks.......................... 220,292
----------
CHINA--0.19%
SERVICES--0.19%
10,000 Beijing Enterprise...................... 16,284
----------
CROATIA--0.25%
HEALTH/PERSONAL CARE--0.25%
1,950 Pliva D.D. GDR.......................... 20,768
----------
CZECH REPUBLIC--1.17%
BANKS--0.15%
2,600 Ceska Sporitelna GDR*................... 12,740
1 Komercni Banka AS GDR................... 8
----------
12,748
----------
</TABLE>
26
<PAGE>
PAINEWEBBER EMERGING MARKETS EQUITY FUND
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ----------
<C> <S> <C>
</TABLE>
COMMON STOCKS--(CONTINUED)
CZECH REPUBLIC--(CONCLUDED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ----------
<C> <S> <C>
ELECTRICITY--0.31%
10,330 Ceske Energeticke Zavody AS............. $ 26,747
----------
TELECOMMUNICATIONS--0.71%
250 Ceske Radiomunikace GDR*................ 7,938
3,450 SPT Telecom A.S......................... 52,061
----------
59,999
----------
Total Czech Republic Common Stocks................. 99,494
----------
EGYPT--0.19%
BANKS--0.19%
1,340 Commercial International Bank GDR....... 16,415
----------
GREECE--4.79%
BANKS--2.59%
1,810 Alpha Credit Bank....................... 138,415
1,134 National Bank of Greece................. 81,299
----------
219,714
----------
BEVERAGE/TOBACCO MANUFACTURING--0.24%
900 Hellenic Bottling Co. S.A............... 20,303
----------
COMMUNICATIONS--0.25%
1,000 Stet Hellas Telecommunications ADR*..... 21,500
----------
TELECOMMUNICATIONS--1.71%
6,090 Hellenic Telecommunications
Organization SA......................... 129,042
1,200 Panafon Hellenic Telecom S.A............ 15,868
----------
144,910
----------
Total Greece Common Stocks......................... 406,427
----------
HONG KONG--1.74%
COMMERCE/INDUSTRIAL--0.23%
92,000 Beijing Datang Power Generation
Company Ltd........................... 19,185
----------
COMMUNICATIONS--0.36%
9,000 China Telecom*.......................... 30,817
----------
GLASS & CERAMICS--0.32%
34,000 China Merchants Holdings
International........................... 26,916
----------
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ----------
<C> <S> <C>
</TABLE>
HONG KONG--(CONCLUDED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ----------
<C> <S> <C>
REAL ESTATE--0.63%
17,000 China Resources Developement
Enterprises Ltd....................... $ 21,774
18,000 New World China Land*................... 8,341
20,000 New World Infrastructure Ltd.*.......... 23,171
----------
53,286
----------
SHIPPING--0.20%
23,000 Cosco Pacific Ltd....................... 17,172
----------
Total Hong Kong Common Stocks...................... 147,376
----------
HUNGARY--1.73%
BANKS--0.61%
87 OTP Bank Limited........................ 3,850
1,090 OTP Bank Reg S GDR*..................... 48,232
----------
52,082
----------
OIL--0.28%
1,200 Moayar Olaj-Es Gazipare Reszvnytaras AG
GDR................................... 23,520
----------
UTILITIES--0.84%
2,520 Matav RT ADR............................ 71,190
----------
Total Hungary Common Stocks........................ 146,792
----------
INDIA--8.12%
BANKS--0.65%
9,600 State Bank of India..................... 54,845
----------
BUILDING MATERIALS--0.70%
2,750 Associated Cement Co.................... 12,784
12,000 Associated Cement Co. Class A........... 46,188
----------
58,972
----------
ELECTRICAL EQUIPMENT--0.66%
9,000 Bharat Heavy Electricals Ltd............ 55,563
----------
ENGINEERING VEHICLES--0.76%
4,000 Bajaj Auto Ltd.......................... 40,590
4,300 Tata Engineering & Locomotive Co........ 23,734
----------
64,324
----------
HOUSEHOLD GOODS & TEXTILES--1.58%
1,850 Hindustan Lever......................... 98,066
</TABLE>
27
<PAGE>
PAINEWEBBER EMERGING MARKETS EQUITY FUND
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ----------
<C> <S> <C>
</TABLE>
COMMON STOCKS--(CONTINUED)
INDIA--(CONCLUDED)
HOUSEHOLD GOODS & TEXTILES--(CONCLUDED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ----------
<C> <S> <C>
6,700 Reliance Industry....................... $ 36,046
----------
134,112
----------
OIL EXPLORATION & PRODUCTION--1.02%
13,000 Bharat Petroleum Corp. Ltd.............. 86,846
----------
OIL, INTEGRATED--0.07%
800 Castrol India Ltd....................... 6,284
----------
STEEL & OTHER MATERIALS--0.39%
2,000 Hindalco Industries..................... 33,310
----------
SUPPORT SERVICES--0.97%
1,650 Niit Ltd................................ 82,310
----------
82,310
----------
TELECOMMUNICATIONS--0.73%
15,700 Mahanagar Telephone Nigam Ltd........... 61,990
----------
TOBACCO--0.59%
3,100 ITC Ltd................................. 49,706
----------
Total India Common Stocks.......................... 688,262
----------
INDONESIA--1.93%
BANKS--0.25%
980,000 P.T. Bank Internasional Indonesia....... 21,444
----------
COMMUNICATIONS--0.46%
83,040 P.T. Telekomunikasi Indonesia........... 39,370
----------
FOODS--0.75%
13,000 H.M. Sampoerna.......................... 30,153
28,000 Indofoods Sukses Makmur*................ 33,086
----------
63,239
----------
MISCELLANEOUS MANUFACTURING--0.32%
10,500 P.T. Gudang Garam....................... 26,958
----------
TRANSPORTATION EQUIPMENT--0.15%
26,000 P.T. Astra International................ 12,801
----------
Total Indonesia Common Stocks...................... 163,812
----------
ISRAEL--3.49%
BANKS--1.70%
33,000 Bank Hapoalim Ltd....................... 78,479
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ----------
<C> <S> <C>
</TABLE>
ISRAEL--(CONCLUDED)
BANKS--(CONCLUDED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ----------
<C> <S> <C>
37,000 Bank Leumi.............................. $ 65,253
----------
143,732
----------
FOOD & DRUG RETAILERS--0.25%
1,650 Blue Square Israel Ltd ADR.............. 21,553
----------
PHARMACEUTICALS--0.68%
1,200 Teva Pharmaceutical Industries Ltd.,
ADS..................................... 58,050
----------
TELECOMMUNICATIONS--0.66%
710 ECI Telecommunications Ltd.............. 20,679
2,290 Partner Communication Co. Ltd*.......... 35,380
----------
56,059
----------
UTILITIES--0.20%
4,106 Bezek Israel Telecommunications......... 16,736
----------
Total Israel Common Stocks......................... 296,130
----------
KOREA--13.10%
BANKS--3.96%
11,000 Hanvit Bank............................. 40,809
6,062 Kookmin Bank............................ 94,505
19,500 Korea Exchange Bank..................... 91,038
10,300 Shinhan Bank............................ 109,054
----------
335,406
----------
CHEMICALS--0.51%
4,800 Hanwha Chemical......................... 43,418
----------
ELECTRICAL APPLIANCES--4.87%
4,000 Hyundai Electric Industries............. 66,527
2,074 Samsung Electronics Corp................ 345,811
----------
412,338
----------
ELECTRICITY & GAS--1.90%
5,500 Korea Electric Power Corp............... 160,942
----------
IRON & STEEL--0.87%
610 Pohang Iron & Steel Co. Ltd............. 73,963
----------
SECURITIES--0.08%
503 Daewoo Securities....................... 6,437
----------
SHIPPING--0.42%
4,000 Hyundai Merchant Marine................. 36,015
----------
</TABLE>
28
<PAGE>
PAINEWEBBER EMERGING MARKETS EQUITY FUND
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ----------
<C> <S> <C>
</TABLE>
COMMON STOCKS--(CONTINUED)
KOREA--(CONCLUDED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ----------
<C> <S> <C>
TELECOMMUNICATIONS--0.49%
150 Korea Telecom Corp...................... $ 10,092
900 Korea Telecom Corp. ADR*................ 31,725
----------
31,725
----------
Total Korea Common Stocks.......................... 1,110,336
----------
MALAYSIA--0.93%
ELECTRICITY & GAS--0.38%
14,000 Tenaga Nasional Berhad.................. 32,237
----------
SERVICES--0.55%
6,000 Resorts World Berhad.................... 17,210
14,000 Tanjong PLC............................. 29,474
----------
46,684
----------
Total Malaysia Common Stocks....................... 78,921
----------
MAURITIUS--0.15%
BANKS--0.15%
21,000 State Bank of Mauritius................. 12,795
----------
MEXICO--10.16%
BANKS--0.67%
22,700 Grupo Financiero Banamex*............... 56,797
----------
BEVERAGES--0.50%
17,500 Grupo Modelo S.A. de C.V................ 42,785
----------
BREWERIES, PUBS, & RESTAURANTS--0.78%
20,500 Fomento Economico Mexicano, S.A. de
C.V. Series B........................... 66,542
----------
BUILDING MATERIALS & MERCHANTS--0.92%
3,448 Cemex, S.A. de C.V...................... 77,580
----------
BUILDING & CONSTRUCTION--0.60%
22,800 Consorcio Ara, S.A. de C.V.............. 25,665
9,800 Grupo Industrial Saltillo, S.A. de
C.V..................................... 25,540
----------
51,205
----------
CONSTRUCTION/BUILDING MATERIALS--0.10%
3,350 Hylsamex S.A. de C.V.................... 8,887
----------
DIVERSIFIED INDUSTRIALS--0.56%
12,300 Alfa, S.A. de C.V. Series A............. 47,219
----------
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ----------
<C> <S> <C>
</TABLE>
MEXICO--(CONCLUDED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ----------
<C> <S> <C>
FOOD PRODUCERS--0.54%
25,053 Grupo Industrial Bimbo, S.A. de C.V..... $ 45,978
----------
MEDIA--0.93%
2,100 Grupo Televisa, S.A. de C.V............. 44,460
800 Grupo Televisa, S.A. de C.V. GDS........ 34,000
----------
78,460
----------
METALS--0.22%
1,700 Tubos De Acero de Mexico, S.A. de C.V.
ADR................................... 18,594
----------
MINING--0.17%
4,000 Grupo Mexico, S.A. de C.V. Series B..... 14,482
----------
PAPER, PACKAGING & PRINTING--0.60%
15,900 Kimberly Clark de Mexico S.A. de C.V.... 50,949
----------
RETAIL--0.16%
16,000 Controladora Commerical Mexicana........ 13,250
----------
RETAILERS, GENERAL--0.95%
52,600 Cifra, S.A. de C.V. Series C............ 80,443
----------
TELECOMMUNICATIONS--2.46%
2,440 Telefonos de Mexico, S.A. de C.V. ADR... 208,620
----------
Total Mexico Common Stocks......................... 861,791
----------
PERU--0.77%
BANKS--0.31%
45,995 Banco Continental....................... 26,037
----------
BUILDING & CONSTRUCTION--0.00%
2 Cementos Norte Pacasmayo, S.A........... 1
----------
EXTRACTIVE INDUSTRIES--0.22%
1,100 Compania De Minas Buenaventura.......... 18,700
----------
TELECOMMUNICATIONS--0.24%
1,800 Telefonica Del Peru S.A. Class B ADS.... 20,812
----------
Total Peru Common Stocks........................... 65,550
----------
PHILIPPINES--1.47%
BANKS--0.50%
5,742 Metropolitan Bank & Trust Co............ 42,958
----------
</TABLE>
29
<PAGE>
PAINEWEBBER EMERGING MARKETS EQUITY FUND
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ----------
<C> <S> <C>
</TABLE>
COMMON STOCKS--(CONTINUED)
PHILIPPINES--(CONCLUDED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ----------
<C> <S> <C>
COMMUNICATIONS--0.23%
931 Philippine Long Distance Telephone
Co...................................... $ 19,386
----------
ELECTRICITY & GAS--0.45%
13,861 Manila Electric Co. Class B............. 38,023
----------
FOODS--0.13%
7,650 San Miguel Corporation Class B.......... 11,065
----------
REAL ESTATE--0.16%
52,104 Ayala Land Inc.......................... 13,318
----------
Total Philippines Common Stocks.................... 124,750
----------
POLAND--1.53%
BANKS--0.29%
1,770 Bank Handlowy Warszawa.................. 24,899
----------
DIVERSIFIED HOLDINGS COMPANIES--0.50%
4,920 Elektrim Spolka Akcyjna S.A............. 42,560
----------
METALS & MINING--0.37%
2,540 Kghm Polska Miedz SA GDR................ 31,369
----------
UTILITIES - 0.37%
6,380 Telekomunikacja Cta Polska.............. 31,262
----------
Total Poland Common Stocks......................... 130,090
----------
RUSSIA--0.91%
ELECTRICITY--0.14%
2,100 Unified Energy System GDR............... 11,970
----------
OILS--0.77%
850 Gazprom ADR............................. 6,375
1,840 Lukoil Holdings ADR..................... 58,420
----------
64,795
----------
Total Russia Common Stocks......................... 76,765
----------
SOUTH AFRICA--8.32%
BANKS--0.82%
9,866 Amalgamated Banks of South Africa....... 40,227
8,480 Standard Bank Investment................ 28,986
----------
69,213
----------
BREWERIES, PUBS, & RESTAURANTS--0.55%
5,317 South African Brewery Ltd............... 46,561
----------
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ----------
<C> <S> <C>
</TABLE>
SOUTH AFRICA--(CONCLUDED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ----------
<C> <S> <C>
DIVERSIFIED INDUSTRIALS--1.25%
9,577 Barlow Ltd.............................. $ 46,687
27,700 Malbak Ltd. Ord......................... 20,064
5,200 Rembrandt Group Ltd..................... 38,892
----------
105,643
----------
ELECTRONIC & ELECTRICAL EQUIPMENT--0.56%
9,700 Dimension Data Holdings Ltd............. 47,050
----------
FINANCIAL SERVICES--0.76%
55,850 First Rand Ltd.......................... 64,543
----------
HOUSEHOLD GOODS & TEXTILES--0.27%
26,300 Profurn Limited......................... 22,902
----------
INSURANCE--0.48%
35,518 Sanlam Ltd.*............................ 40,757
----------
LIFE ASSURANCE--0.38%
3,488 Liberty Life Associatiom................ 32,361
----------
MINING--0.61%
1,900 De Beers Centenary...................... 51,894
----------
OIL EXPLORATION & PRODUCTION--0.77%
9,575 Sasol Ltd............................... 65,457
----------
OTHER FINANCIAL--0.27%
3,400 Fedsure Holdings Ltd.................... 22,773
----------
PAPER, PACKAGING & PRINTING--0.97%
9,800 Nampak Ltd.............................. 26,320
6,800 Sappi................................... 56,337
----------
82,657
----------
RETAILERS, GENERAL--0.63%
14,186 LA Retail Stores Ltd.................... 13,623
47,900 Metro Cash And Carry.................... 39,763
----------
53,386
----------
Total South Africa Common Stocks................... 705,197
----------
TAIWAN--12.38%
BANKS--1.77%
651 Bank Sinopac............................ 367
57,000 First Bank.............................. 73,137
</TABLE>
30
<PAGE>
PAINEWEBBER EMERGING MARKETS EQUITY FUND
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ----------
<C> <S> <C>
</TABLE>
COMMON STOCKS--(CONTINUED)
TAIWAN--(CONCLUDED)
BANKS--(CONCLUDED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ----------
<C> <S> <C>
54,000 Hua Nan Bank............................ $ 76,608
----------
150,112
----------
CHEMICALS - 1.59%
37,540 Formosa Plastic......................... 75,151
34,272 Nan Ya Plastic Corp..................... 59,965
----------
135,116
----------
COMMERCE/INDUSTRIAL--0.87%
7,011 Asustek Computer........................ 73,602
----------
ELECTRICAL APPLIANCES--5.53%
49,450 Acer Inc................................ 94,317
9,963 Ase Test Ltd............................ 30,624
23,680 Siliconware Precision Industries Co.
GDR..................................... 42,552
67,810 Taiwan Semiconductor Manufacturing
Company Ltd........................... 301,425
----------
468,918
----------
IRON & STEEL--0.50%
54,650 China Steel Corp........................ 42,039
----------
LIFE ASSURANCE--0.60%
19,600 Cathay Life Insurance................... 50,668
----------
MACHINERY/ENGINE SERVICES--0.92%
11,400 Hon Hai Precision....................... 77,989
----------
SHIPPING--0.00%
360 Evergreen Marine........................ 337
----------
TEXTILES--0.60%
37,100 Far East Textile........................ 50,761
----------
Total Taiwan Common Stocks......................... 1,049,542
----------
THAILAND--2.39%
BANKS--0.49%
7,500 Bangkok Bank Public Co. Ltd.*(1)........ 17,485
17,200 Thai Farmers Bank PCL................... 24,282
----------
41,767
----------
COMMUNICATIONS--0.86%
3,500 Advanced Information Service PCL........ 40,798
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ----------
<C> <S> <C>
</TABLE>
THAILAND--(CONCLUDED)
COMMUNICATIONS--(CONCLUDED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ----------
<C> <S> <C>
13,000 TelecomAsia Corporation PCL............. $ 10,018
9,000 Total Access Communication Public
Company Ltd........................... 21,780
----------
72,596
----------
CONSTRUCTION--0.58%
1,900 Siam Cement Co.......................... 49,216
----------
MINING--0.46%
5,300 PTT Exploration & Production Public
Company Ltd.*......................... 38,715
----------
Total Thailand Common Stocks....................... 202,294
----------
TURKEY--3.60%
BANKS--1.58%
4,073,889 Akbank.................................. 63,553
4,856,685 Yapi ve Kredi Bankasi A.S............... 70,713
----------
134,266
----------
BEVERAGE--0.06%
242,560 Erciyas Biracilik ve Malt............... 5,045
----------
BUILDING MATERIALS/CONSTRUCTION--0.13%
800,000 Akcansa Cimento Sa...................... 10,816
----------
DIVERSIFIED INDUSTRIALS--0.26%
216,000 Koc Holding AS.......................... 21,790
----------
FINANCIAL INSTITUTIONS/SERVICES--0.73%
2,076,960 Haci Omer Sabanci....................... 61,561
----------
RETAIL--0.55%
109,090 Migros Turk T.A.S....................... 47,083
----------
STEEL & OTHER MATERIALS--0.29%
1,000,000 Eregli Demir ve Celik Fabrik............ 24,960
----------
Total Turkey Common Stocks......................... 305,521
----------
UNITED KINGDOM--0.37%
MINING--0.37%
595 Anglo American Corp..................... 31,669
----------
</TABLE>
31
<PAGE>
PAINEWEBBER EMERGING MARKETS EQUITY FUND
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ----------
<C> <S> <C>
</TABLE>
COMMON STOCKS--(CONCLUDED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ----------
<C> <S> <C>
ZIMBABWE--0.53%
LEISURE & HOTELS--0.53%
312,600 Econet Wireless Holdings*............... $ 44,949
----------
Total Common Stocks (cost--$6,782,983)............. 7,277,521
----------
PREFERRED STOCKS--9.74%
BRAZIL--8.84%
BANKS--1.47%
5,620,000 Banco Bradesco S.A...................... 27,495
310,000 Banco Itau S.A.......................... 17,787
4,000 Companhia Vale Do Rio Doce.............. 79,488
----------
124,770
----------
BREWERIES, PUBS, & RESTAURANTS--0.70%
93,000 Cia Cervejaria Brahma................... 59,316
----------
BUILDING MATERIALS & MERCHANTS--0.15%
130,000 Companhia Cimento Portland Itau (CIA)... 12,820
----------
ELECTRICITY--1.28%
3,008,000 Centrais Electricas Brasileiras S.A.
(Electrobras)......................... 53,472
6,000 Companhia Paranaense De ADR............. 39,750
330,000 Eletropaulo Metropolitana -
Electricidade de Sao Paulo S.A........ 15,046
----------
108,268
----------
ENGINEERING--0.58%
1,700,000 Gerdau S.A. Siderurgia.................. 30,743
5,200 Usiminas Usi Sd Mg...................... 18,914
----------
49,657
----------
OIL EXPLORATION & PRODUCTION--1.49%
709,000 Petroleo Brasileiros S.A. (Petrobras)... 112,779
1,200 Ultrapar Participacoes S.A.............. 13,350
----------
126,129
----------
SUPPORT SERVICES--0.24%
1,428,524 Companhia Energetica de Minas Gerias
(CEMIG)............................... 20,345
----------
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ----------
<C> <S> <C>
</TABLE>
BRAZIL--(CONCLUDED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- ----------
<C> <S> <C>
TELECOMMUNICATIONS--2.93%
2,800 Embratel Participacoes S.A. ADR......... $ 36,050
5,110,000 Tele Centro Sul Part.................... 61,022
4,000 Tele Norte Leste Participacoes.......... 67,500
487,864 Telecomunicacoes de Sao Paulo S.A.
(Electrobras)........................... 45,862
732,864 Telesp Celular S.A...................... 38,295
----------
248,729
----------
RUSSIA--0.73%
OILS--0.73%
7,600 Surgutneftegaz ADR...................... 61,750
----------
THAILAND--0.17%
BANKS--0.17%
12,500 Siam Commercial Bank.................... 14,166
----------
Total Preferred Stocks (cost--$927,295)............ 825,950
----------
WARRANTS--1.28%
KOREA--0.59%
TELECOMMUNICATIONS--0.59%
43 SK Telecom, Warrants expiring
02/26/01................................ 49,650
----------
SWITZERLAND--0.38%
FINANCE-DIVERSIFIED--0.38%
500 UBS Ag, Warrants expiring 05/20/00...... 32,645
----------
THAILAND--0.31%
BANKS--0.31%
23,000 Bangkok Bank Public Co. Ltd., Warrants
expiring 10/12/00....................... 22,067
12,500 Siam Commercial Bank, Warrants expiring
05/10/02................................ 4,371
----------
26,438
----------
Total Warrants (cost--$73,404)..................... 108,733
----------
</TABLE>
32
<PAGE>
PAINEWEBBER EMERGING MARKETS EQUITY FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------- ---------- -------- -----------
<C> <S> <C> <C> <C>
REPURCHASE AGREEMENT--1.94%
$ 164 Repurchase Agreement dated 10/29/99 with
State Street Bank & Trust Company,
collateralized by $165,000 U.S. Treasury
Notes, 6.375% due 08/15/02
(value--$168,816); proceeds: $164,058
(cost--$164,000)........................... 11/01/99 4.250% $ 164,000
----------
Total Investments (cost-$7,947,682)--98.78%.................................... 8,376,204
Other assets in excess of liabilities--1.22%................................... 103,501
----------
Net Assets--100.00%............................................................ $8,479,705
==========
</TABLE>
- -------------
* Non-income producing securities
+ Securities exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be sold in transactions exempt from
registration; normally to qualified institutional buyers.
ADR American Depositary Receipts
ADS American Depositary Shares
GDR Global Depositary Receipts
GDS Global Depositary Shares
(1) Security or portion thereof, was on loan at October 31, 1999.
(2) Illiquid securities represent 0.25% of net assets.
FORWARD FOREIGN CURRENCY CONTRACTS
<TABLE>
<CAPTION>
CONTRACT TO IN MATURITY UNREALIZED
DELIVER EXCHANGE FOR DATES DEPRECIATION
----------- ------------ -------- ------------
<S> <C> <C> <C> <C>
Hong Kong Dollars........................................... 755,000 USD 94,603 01/21/00 $(2,481)
=======
</TABLE>
- -----------------
USD United States Dollars
See accompanying notes to financial statements
33
<PAGE>
PAINEWEBBER
STATEMENT OF ASSETS AND LIABILITIES OCTOBER 31, 1999
<TABLE>
<CAPTION>
GLOBAL EQUITY ASIA PACIFIC EMERGING MARKETS
FUND GROWTH FUND EQUITY FUND
------------- ------------ ----------------
<S> <C> <C> <C>
ASSETS
Investments, at value (cost--$278,165,778, $34,565,394 and
$7,947,682, respectively)................................. $326,454,192 $38,164,013 $ 8,376,204
Investments of cash collateral received for securities
loaned, at value (cost--$53,056,705, $1,802,753 and
$42,300, respectively).................................... 53,056,705 1,802,753 42,300
Cash........................................................ 3,909,801 58 309
Cash denominated in foreign currencies, at value (cost--$0,
$213,852 and $167,975, respectively)...................... -- 214,562 168,118
Receivable for investments sold............................. 21,187,042 1,719,429 53,588
Receivable for shares of beneficial interest sold........... 58,004 328,289 6,456
Dividends and interest receivable........................... 786,116 89,912 29,307
Futures variation margin receivable......................... 631,334 -- --
Deferred organizational expenses............................ -- 72,455 --
Other assets................................................ 210,964 378 88,991
------------ ----------- -----------
Total assets................................................ 406,294,158 42,391,849 8,765,273
------------ ----------- -----------
LIABILITIES
Collateral for securities loaned............................ 53,056,705 1,802,753 42,300
Due to custodian (cost--$1,894,150, $0, and $0)............. 1,902,682 -- --
Payable for investments purchased........................... 1,102,573 1,128,115 97,872
Payable for shares of beneficial interest repurchased....... 472,861 71,786 21,839
Payable to affiliates....................................... 352,388 61,845 5,220
Unrealized depreciation of foreign currency contracts....... -- 30,351 2,481
Accrued expenses and other liabilities...................... 379,187 233,849 115,856
------------ ----------- -----------
Total liabilities........................................... 57,266,396 3,328,699 285,568
------------ ----------- -----------
NET ASSETS
Beneficial interest shares of $0.001 par value outstanding
(unlimited number authorized)............................. 251,089,360 63,524,224 26,872,376
Accumulated net investment income (loss).................... (162,322) (80,408) --
Accumulated net realized gains (losses) from investments and
foreign currency.......................................... 47,947,226 (27,868,101) (18,800,220)
Net unrealized appreciation of investments and other assets
and liabilities denominated in foreign currencies......... 50,153,498 3,487,435 407,549
------------ ----------- -----------
Net assets.................................................. $349,027,762 $39,063,150 $ 8,479,705
============ =========== ===========
CLASS A:
Net assets.................................................. $235,341,247 $14,229,337 $ 5,090,304
------------ ----------- -----------
Shares outstanding.......................................... 13,147,402 1,466,051 579,240
------------ ----------- -----------
Net asset and redemption value per share.................... $17.90 $9.71 $8.79
----- ----- ------
----- ----- ------
Maximum offering price per share (net asset value plus sales
charge of 4.50% of offering price)........................ $18.74 $10.17 $9.20
----- ----- ------
----- ----- ------
CLASS B:
Net assets.................................................. $ 27,435,073 $14,589,256 $ 459,171
------------ ----------- -----------
Shares outstanding.......................................... 1,632,458 1,532,444 53,884
------------ ----------- -----------
Net asset value and offering price per share................ $16.81 $9.52 $8.52
----- ----- ------
----- ----- ------
CLASS C:
Net assets.................................................. $ 32,917,462 $10,052,075 $ 2,126,077
------------ ----------- -----------
Shares outstanding.......................................... 1,954,650 1,055,147 252,074
------------ ----------- -----------
Net asset value and offering price per share................ $16.84 $9.53 $8.43
----- ----- ------
----- ----- ------
CLASS Y:
Net assets.................................................. $ 53,333,980 $ 192,482 $ 804,153
------------ ----------- -----------
Shares outstanding.......................................... 2,912,864 19,893 90,471
------------ ----------- -----------
Net asset value, offering price and redemption value per
share..................................................... $18.31 $9.68 $8.89
----- ----- ------
----- ----- ------
</TABLE>
See accompanying notes to financial statements
34
<PAGE>
PAINEWEBBER
STATEMENT OF OPERATIONS FOR THE YEAR ENDED OCTOBER 31, 1999
<TABLE>
<CAPTION>
GLOBAL EQUITY ASIA PACIFIC EMERGING MARKETS
FUND GROWTH FUND EQUITY FUND
------------- ------------ ----------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends (net of foreign withholding taxes of $671,865,
$62,361 and $21,900, respectively)........................ $ 6,671,900 $ 731,538 $ 175,481
Interest.................................................... 1,016,282 42,507 4,442
----------- ----------- ----------
7,688,182 774,045 179,923
----------- ----------- ----------
EXPENSES:
Investment advisory and administration...................... 3,254,321 423,124 101,195
Service fees--Class A....................................... 614,556 33,043 11,746
Service and distribution fees--Class B...................... 432,119 138,262 4,765
Service and distribution fees--Class C...................... 387,973 80,943 23,923
Custody and accounting...................................... 960,425 125,793 31,536
Transfer agency and related services fees................... 374,771 58,127 19,491
Reports and notices to shareholders......................... 182,977 38,046 20,152
Legal and audit............................................. 147,810 82,784 60,824
State registration fees..................................... 81,151 98,851 22,738
Trustees' fees.............................................. 15,750 15,750 15,750
Amortization of organizational expenses..................... -- 30,226 8,801
Other expenses.............................................. 25,690 4,759 3,544
----------- ----------- ----------
6,477,543 1,129,708 324,465
Less: Fee waivers and reimbursements from adviser........... (4,310) (327) (99,354)
----------- ----------- ----------
Net expenses................................................ 6,473,233 1,129,381 225,111
----------- ----------- ----------
Net investment income (loss)................................ 1,214,949 (355,336) (45,188)
----------- ----------- ----------
REALIZED AND UNREALIZED GAINS (LOSSES) FROM INVESTMENT
TRANSACTIONS:
Net realized gains (losses) from:
Investments............................................. 46,487,900 656,105 (394,899)
Foreign currency transactions........................... (1,365,472) (63,531) (4,458)
Futures transactions.................................... 5,084,466 -- --
Net change in unrealized appreciation/depreciation of:
Investments............................................. 7,994,891 11,632,148 2,873,966
Futures................................................. (974,505) -- --
Other assets and liabilities denominated in foreign
currencies.............................................. (134,422) (62,473) (5,666)
----------- ----------- ----------
NET REALIZED AND UNREALIZED GAINS FROM INVESTMENT
TRANSACTIONS.............................................. 57,092,858 12,162,249 2,468,943
----------- ----------- ----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........ $58,307,807 $11,806,913 $2,423,755
=========== =========== ==========
</TABLE>
See accompanying notes to financial statements
35
<PAGE>
PAINEWEBBER GLOBAL EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE YEARS
ENDED OCTOBER 31,
-----------------------------
1999 1998
------------- -------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income (loss)................................ $ 1,214,949 $ (81,072)
Net realized gains (losses) from:
Investments............................................... 46,487,900 14,395,205
Foreign currency transactions............................. (1,365,472) 481,069
Futures transactions...................................... 5,084,466 4,092,682
Net change in unrealized appreciation/depreciation of:
Investments............................................... 7,994,891 934,114
Futures................................................... (974,505) 2,864,384
Other assets and liabilities denominated in foreign
currencies................................................ (134,422) 69,896
------------- -------------
Net increase in net assets resulting from operations........ 58,307,807 22,756,278
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income Class A............................... (270,090) --
Net investment income Class Y............................... (131,022) --
Net realized gains from investment transactions--Class A.... (11,886,871) (37,180,745)
Net realized gains from investment transactions--Class B.... (2,646,732) (11,285,760)
Net realized gains from investment transactions--Class C.... (2,064,240) (7,351,661)
Net realized gains from investment transactions--Class Y.... (2,546,029) (7,350,899)
------------- -------------
(19,544,984) (63,169,065)
------------- -------------
FROM BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from the sale of shares........................ 536,072,491 714,822,072
Cost of shares repurchased.................................. (640,967,908) (831,906,775)
Proceeds from dividends reinvested.......................... 18,643,467 59,838,962
------------- -------------
Net decrease in net assets from beneficial interest
transactions.............................................. (86,251,950) (57,245,741)
------------- -------------
Net decrease in net assets.................................. (47,489,127) (97,658,528)
NET ASSETS:
Beginning of year........................................... 396,516,889 494,175,417
------------- -------------
End of year (including undistributed net investment income
of $399,997 at October 31, 1998).......................... $ 349,027,762 $ 396,516,889
============= =============
</TABLE>
See accompanying notes to financial statements
36
<PAGE>
PAINEWEBBER ASIA PACIFIC GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE YEARS
ENDED OCTOBER 31,
---------------------------
1999 1998
------------ ------------
<S> <C> <C>
FROM OPERATIONS:
Net investment loss......................................... $ (355,336) $ (199,382)
Net realized gains (losses) from:
Investments............................................... 656,105 (26,226,085)
Foreign currency transactions............................. (63,531) (76,554)
Net change in unrealized appreciation/depreciation of:
Investments............................................... 11,632,148 14,069,096
Other assets and liabilities denominated in foreign
currencies............................................... (62,473) (46,985)
------------ ------------
Net increase (decrease) in net assets resulting from
operations................................................ 11,806,913 (12,479,910)
------------ ------------
FROM BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from the sale of shares........................ 21,653,386 23,242,085
Cost of shares repurchased.................................. (24,936,295) (38,524,648)
------------ ------------
Net decrease in net assets from beneficial interest
transactions.............................................. (3,282,909) (15,282,563)
------------ ------------
Net increase (decrease) in net assets....................... 8,524,004 (27,762,473)
NET ASSETS:
Beginning of year........................................... 30,539,146 58,301,619
------------ ------------
End of year................................................. $ 39,063,150 $ 30,539,146
============ ============
</TABLE>
See accompanying notes to financial statements
37
<PAGE>
PAINEWEBBER EMERGING MARKETS EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE YEARS
ENDED OCTOBER 31,
--------------------------
1999 1998
----------- ------------
<S> <C> <C>
FROM OPERATIONS:
Net investment loss......................................... $ (45,188) $ (57,683)
Net realized gains (losses) from:
Investments............................................... (394,899) (2,824,156)
Foreign currency transactions............................. (4,458) (136,681)
Net change in unrealized appreciation/depreciation of:
Investments............................................... 2,873,966 (1,564,207)
Other assets and liabilities denominated in foreign
currencies................................................ (5,666) (24,657)
----------- ------------
Net increase (decrease) in net assets resulting from
operations................................................ 2,423,755 (4,607,384)
----------- ------------
FROM BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from the sale of shares........................ 3,860,845 9,078,922
Cost of shares repurchased.................................. (5,955,453) (22,538,713)
----------- ------------
Net decrease in net assets from beneficial interest
transactions.............................................. (2,094,608) (13,459,791)
----------- ------------
Net increase (decrease) in net assets....................... 329,147 (18,067,175)
NET ASSETS:
Beginning of year........................................... 8,150,558 26,217,733
----------- ------------
End of year (including undistributed net investment income
of $4,920 at October 31, 1998)............................ $ 8,479,705 $ 8,150,558
=========== ============
</TABLE>
See accompanying notes to financial statements
38
<PAGE>
NOTES TO FINANCIAL STATEMENTS
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The PaineWebber Global Equity Fund ("Global Equity Fund"), a diversified
series of PaineWebber Investment Trust ("Investment Trust"), the PaineWebber
Asia Pacific Growth Fund ("Asia Pacific Growth Fund"), a diversified series of
PaineWebber Managed Investments Trust ("Managed Trust") and the PaineWebber
Emerging Markets Equity Fund ("Emerging Markets Equity Fund"), a diversified
series of PaineWebber Investment Trust II ("Investment Trust II") (each a
"Fund"), are registered with the Securities and Exchange Commission under the
Investment Company Act of 1940, as amended, as open-end management investment
companies. Global Equity Fund seeks long-term growth of capital by investing
primarily in U.S. and foreign equity securities. Asia Pacific Growth Fund seeks
long-term capital appreciation by investing primarily in equity securities of
companies in the Asia Pacific region, excluding Japan. Emerging Markets Equity
Fund seeks long-term capital appreciation by investing primarily in equity
securities of companies in emerging market countries. (Investment Trust,
Investment Trust II and Managed Trust are each sometimes referred to herein as a
"Trust.") Organizational costs have been deferred and are being (or, in the case
of Global Equity Fund and Emerging Markets Equity Fund, have been) amortized
using the straight-line method over a period not to exceed 60 months from the
date the Fund commenced operations.
Currently, each Fund offers Class A, Class B, Class C and Class Y shares. Each
class represents interests in the same assets of the Fund, and the classes are
identical except for differences in their sales charge structures, ongoing
service and distribution charges and certain transfer agency and related
expenses. In addition, Class B shares and all corresponding dividend reinvested
shares automatically convert to Class A shares approximately six years after
initial issuance. All classes of shares have equal voting privileges, except
that Class A, Class B and Class C shares have exclusive voting rights with
respect to their service and/or distribution plan.
The preparation of financial statements in accordance with generally accepted
accounting principles requires the Funds' management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results could differ from those estimates. The following is a
summary of significant accounting policies:
VALUATION OF INVESTMENTS--Each Fund calculates its net asset value based on
the current market value, where available, for its portfolio securities. The
Funds normally obtain market values for their securities from independent
pricing sources. Independent pricing sources may use reported last sale prices,
current market quotations or valuations from computerized "matrix" systems that
derive values based on comparable securities. Securities traded in the over-the-
counter ("OTC") market and listed on The Nasdaq Stock Market, Inc. ("Nasdaq")
normally are valued at the last sale price on Nasdaq prior to valuation. Other
OTC securities are valued at the last bid price available prior to valuation.
Securities which are listed on U.S. and foreign stock exchanges normally are
valued at the last sale price on the day the securities are valued or, lacking
any sales on such day, at the last available bid price. In cases where
securities are traded on more than one exchange, the securities are valued on
the exchange designated as the primary market by Mitchell Hutchins Asset
Management Inc. ("Mitchell Hutchins"), a wholly owned asset management
subsidiary of PaineWebber Incorporated ("PaineWebber") and investment adviser
and administrator of the Funds, or by the Fund's sub-advisor. If a market value
is not available from an independent pricing source for a particular security,
that security is valued at fair value as determined in good faith by or under
the direction of the Trust's board of trustees (the "Board"). The amortized cost
method of valuation, which approximates market value, generally is used to value
short-
39
<PAGE>
NOTES TO FINANCIAL STATEMENTS
term debt instruments with sixty days or less remaining to maturity, unless the
Board determines that this does not represent fair value. All investments quoted
in foreign currencies will be valued daily in U.S. dollars on the basis of the
foreign currency exchange rates prevailing at the time such valutaion is
determined by the Fund's custodian.
Foreign currency exchange rates are generally determined prior to the close of
regular trading on the New York Stock Exchange ("NYSE"). Occasionally, events
affecting the value of foreign investments and such exchange rates occur between
the time at which they are determined and the close of the NYSE, which will not
be reflected in the computation of the Fund's net asset value. If events
materially affecting the value of such securities or currency exchange rates
occur during such time periods, the securities will be valued at their fair
value as determined in good faith by or under the direction of the Trust's
board.
REPURCHASE AGREEMENTS--Each Fund's custodian takes possession of the
collateral pledged for investments in repurchase agreements. The underlying
collateral is valued daily on a mark-to-market basis to ensure that the value,
including accrued interest, is at least equal to the repurchase price. In the
event of default of the obligation to repurchase, the Funds have the right to
liquidate the collateral and apply the proceeds in satisfaction of the
obligation. Under certain circumstances, in the event of default or bankruptcy
by the other party to the agreement, realization and/ or retention of the
collateral may be subject to legal proceedings. The Funds occasionally
participate in joint repurchase agreement transactions with other funds managed
by Mitchell Hutchins.
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME--Investment transactions are
recorded on the trade date. Realized gains and losses from investment and
foreign exchange transactions are calculated using the identified cost method.
Dividend income is recorded on the ex-dividend date ("ex-date") (except in the
case of certain foreign dividends which are recorded as soon after the
ex-dividend date as each Fund using reasonable diligence becomes aware of such
dividends). Interest income is recorded on an accrual basis. Discounts are
accreted and premiums are amortized as adjustments to interest income and the
identified cost of investments.
Income, expenses (excluding class-specific expenses) and realized/unrealized
gains/losses are allocated proportionately to each class of shares based upon
the relative net asset value of outstanding shares (or the value of dividend-
eligible shares, as appropriate) of each class at the beginning of the day
(after adjusting for current capital share activity of the respective classes).
Class-specific expenses are charged directly to the applicable class of shares.
FOREIGN CURRENCY TRANSLATION--The books and records of each Fund are
maintained in U.S. dollars. Foreign currency amounts are translated into U.S.
dollars as follows: (1) the foreign currency market value of investment
securities and other assets and liabilities stated in foreign currencies are
translated at the exchange rates prevailing at the end of the period; and
(2) purchases, sales, income and expenses are translated at the rate of exchange
prevailing on the respective dates of such transactions. The resulting exchange
gains and losses are reflected in the Statement of Operations.
Although the net assets and the market values of each Fund's securities are
presented at the foreign exchange rates at the end of the period, the Funds do
not generally isolate the effect of fluctuations in foreign exchange rates from
the effect of the changes in market prices of securities. However, the Funds do
isolate the effect of fluctuations in foreign exchange rates when determining
the realized gain or loss upon the sale or maturity of foreign currency
denominated debt obligations pursuant to federal income tax regulations. Certain
foreign exchange gains and losses included in realized and unrealized gains and
losses are included in or are a reduction of ordinary income in accordance with
40
<PAGE>
NOTES TO FINANCIAL STATEMENTS
federal income tax regulations. Net realized foreign currency gain (loss) is
treated as ordinary income for income tax reporting purposes. Gains/losses from
translating foreign currency denominated assets and liabilities at year-end
exchange rates are included in the change in unrealized
appreciation/depreciation of other assets and liabilities denominated in foreign
currencies.
FUTURES CONTRACTS--Using financial futures contracts involves various market
risks. The maximum amount at risk from the purchase of a futures contract is the
contract value. The Funds use financial futures contracts for hedging purposes,
and in the case of Global Equity Fund, to adjust Global Equity's exposure to
U.S. and foreign equity markets in connection with a reallocation of that Fund's
assets. However, imperfect correlations between futures contracts and the
related securities or markets, or market disruptions, do not normally permit
full control of these risks at all times.
Upon entering into a financial futures contract, a Fund is required to pledge
to a broker an amount equal to a certain percentage of the contract amount. This
amount is known as the "initial margin." Subsequent payments, known as
"variation margin," are made or received by the Fund each day, depending on the
daily fluctuations in the value of the underlying financial futures contracts.
Such variation margin is recorded for financial statement purposes on a daily
basis as an unrealized gain or loss until the financial futures contract is
closed, at which time the net gain or loss is reclassified to realized.
DIVIDENDS AND DISTRIBUTIONS--Dividends and distributions to shareholders are
recorded on the ex-date. The amount of dividends and distributions are
determined in accordance with federal income tax regulations, which may differ
from generally accepted accounting principles. These "book/tax" differences are
either considered temporary or permanent in nature. To the extent these
differences are permanent in nature, such amounts are reclassified within the
capital accounts based on their federal tax-basis treatment; temporary
differences do not require reclassification.
CONCENTRATION OF RISK
Investing in securities of foreign issuers and currency transactions may
involve certain considerations and risks not typically associated with
investments in the United States. These risks include revaluation of currencies,
adverse fluctuations in foreign currency values and possible adverse political,
social and economic developments, including those particular to a specific
industry, country or region, which could cause the securities and their markets
to be less liquid and prices more volatile than those of comparable U.S.
companies. These risks are greater with respect to securities of issuers located
in emerging market countries in which each of the Funds invest. The ability of
the issuers of debt securities held by a Fund to meet their obligations may be
affected by economic and political developments in a specific industry, country
or region.
INVESTMENT ADVISER AND ADMINISTRATOR
Each Fund has an investment advisory and administration contract ("Advisory
Contract") with Mitchell Hutchins, under which Mitchell Hutchins serves as
investment adviser and administrator of the Fund. In accordance with the
Advisory Contract for the Global Equity Fund, Mitchell Hutchins receives
compensation from the Fund, computed daily and paid monthly, at an annual rate
of 0.85% of the Fund's average daily net assets up to and including $500
million, 0.83% of its average daily net assets over $500 million and up to and
including $1 billion and 0.805% of its average daily net assets over $1 billion.
In accordance with the Advisory Contract for the Asia Pacific Growth Fund,
Mitchell Hutchins receives compensation from the Fund, computed daily and paid
monthly, at an annual rate of 1.20% of the Fund's
41
<PAGE>
NOTES TO FINANCIAL STATEMENTS
average daily net assets up to and including $100 million and 1.10% of its
average daily net assets over $100 million. In accordance with the Advisory
Contract for the Emerging Markets Equity Fund, Mitchell Hutchins receives
compensation from the Fund, computed daily and paid monthly, at a rate of 1.20%
of its average daily net assets.
Mitchell Hutchins has entered into a contract with Invista Capital Management
LLC ("Invista") dated October 1, 1998 ("Invista Contract"), pursuant to which
Invista serves as investment sub-adviser for the foreign investments of Global
Equity Fund. Mitchell Hutchins allocates the Fund's investments between domestic
and foreign investments and is responsible for the day-to-day management of the
Fund's domestic investments. Under the Invista Contract, Mitchell Hutchins (not
the Fund) is obligated to pay Invista at the annual rate of 0.40% of the Fund's
average daily net assets allocated to Invista's management up to and including
$100 million, 0.29% of the Fund's average daily net assets allocated to
Invista's management in excess of $100 million up to and including
$300 million, and 0.26% of such assets in excess of $300 million.
Under a contract with Mitchell Hutchins ("Sub-Advisory Contract"), Schroder
Investment Management North America Inc. ("Schroder") serves as the sub-adviser
to the Emerging Markets Equity Fund. Under the Sub-Advisory Contract, Mitchell
Hutchins (not the Fund) pays Schroder a fee, computed daily and paid monthly, at
an annual rate of 0.70% of the Fund's average daily net assets.
Under a contract with Mitchell Hutchins ("Sub-Advisory Contract"), Schroder
serves as the sub-adviser to the Asia Pacific Growth Fund. Under the
Sub-Advisory Contract, Mitchell Hutchins (not the Fund) pays Schroder a fee,
computed daily and paid monthly, at an annual rate of 0.65% of the Fund's
average daily net assets up to and including $100 million and 0.55% of the
Fund's average daily net assets over $100 million.
At October 31, 1999 the Global Equity Fund, the Asia Pacific Growth Fund, and
the Emerging Markets Equity Fund owed Mitchell Hutchins $245,633, $38,252 and
$1,920, respectively, in investment advisory and administrative fees. Mitchell
Hutchins voluntarily waived $80,679 of its management fee and reimbursed other
expenses of $6,353 for the Emerging Markets Equity Fund for the year ended
October 31, 1999. Mitchell Hutchins also waived a portion of its investment
advisory and administration fees in connection with each Fund's investment of
cash collateral from security lending in the Mitchell Hutchins Private Money
Market Fund LLC. For the year ended October 31, 1999, Mitchell Hutchins waived
$4,310, $327, and $17 for the Global Equity Fund, the Asia Pacific Growth Fund,
and the Emerging Markets Equity Fund, respectively.
For the year ended October 31, 1999, the Global Equity Fund, the Asia Pacific
Growth Fund, and the Emerging Markets Equity Fund paid $15,409, $0, and $0,
respectively, in brokerage commissions to PaineWebber for transactions executed
on behalf of the Funds.
SERVICING AGREEMENT
The board of Global Equity Fund has approved a Servicing Agreement ("Servicing
Agreement") with Mitchell Hutchins and the Mitchell Hutchins Portfolios
(comprising, respectively, the Aggressive Portfolio, Moderate Portfolio and the
Conservative Portfolio) (each a "Portfolio") pursuant to an exemptive order from
the Securities and Exchange Commission that permits the Fund to reimburse each
Portfolio for certain expenses to the extent a Fund realizes savings from each
Portfolio. The savings to a Fund result from the elimination of separate
shareholder accounts for each
42
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Portfolio's investors, who otherwise might invest directly in the Fund. For the
year ended October 31, 1999, the Global Equity Fund incurred $9,371, under the
Servicing Agreement, which is included in other expenses on the Statement of
Operations. At October 31, 1999, Global Equity Fund owed the Portfolios $2,550
under the Servicing Agreement.
DISTRIBUTION PLAN
Mitchell Hutchins is the distributor of each Fund's shares and has appointed
PaineWebber as the exclusive dealer for the sale of those shares. Under separate
plans of service and/or distribution pertaining to Class A, Class B and Class C
shares, each Fund pays Mitchell Hutchins monthly service fees at the annual rate
of 0.25% of the average daily net assets of Class A, Class B and Class C shares
and monthly distribution fees at the annual rate of 0.75% of the average daily
net assets of Class B and Class C shares. At October 31, 1999 the Global Equity
Fund, the Asia Pacific Growth Fund and the Emerging Markets Equity Fund owed
Mitchell Hutchins $99,554, $23,063 and $3,288, respectively, in service and
distribution fees. Mitchell Hutchins voluntarily waived $12,305 of its service
and distribution fees for the Emerging Markets Equity Fund for the year ended
October 31, 1999.
Mitchell Hutchins also receives the proceeds of the initial sales charges paid
by shareholders upon the purchase of Class A shares and the contingent deferred
sales charges paid by the shareholders upon certain redemptions of Class A,
Class B and Class C shares. Mitchell Hutchins has informed the Global Equity
Fund, the Asia Pacific Growth Fund and the Emerging Markets Equity Fund that for
the year ended October 31, 1999 it had earned $124,641, $141,654 and $6,388,
respectively, in sales charges.
SECURITY LENDING
Each Fund may lend securities up to 33 1/3% of its total assets to qualified
institutions. The loans are secured at all times by cash or U.S. government
securities in an amount at least equal to the market value of the securities
loaned, plus accrued interest and dividends, determined on a daily basis and
adjusted accordingly. Each Fund will regain record ownership of loaned
securities to exercise certain beneficial rights; however, each Fund may bear
the risk of delay in recovery of, or even loss of rights in, the securities
loaned should the borrower fail financially. Each Fund receives compensation,
which is included in interest income, for lending its securities from interest
earned on the cash or U.S. government securities held as collateral, net of fee
rebates paid to the borrower plus reasonable administrative and custody fees.
Each Fund's lending agent is PaineWebber, who received compensation from the
Funds for the year ended October 31, 1999 as follows:
<TABLE>
<S> <C>
Global Equity Fund........................................................ $ 50,792
Asia Pacific Growth Fund.................................................. $ 6,955
Emerging Markets Equity Fund.............................................. $ 301
</TABLE>
At October 31, 1999, the Global Equity Fund, Asia Pacific Growth Fund and
Emerging Markets Equity Fund owed PaineWebber $4,651, $530 and $12,
respectively, in security lending fees.
For the year ended October 31, 1999, the Funds earned compensation for lending
its securities as follows:
<TABLE>
<CAPTION>
<S> <C>
Global Equity Fund........................................................ $149,361
Asia Pacific Growth Fund.................................................. $ 20,621
Emerging Markets Equity Fund.............................................. $ 887
</TABLE>
43
<PAGE>
NOTES TO FINANCIAL STATEMENTS
As of October 31, 1999, each Fund held cash and/or cash equivalents as
collateral for securities loaned as follows:
<TABLE>
<CAPTION>
MARKET
COLLATERAL FOR VALUES OF
SECURITIES SECURITIES
LOANED LOANED
-------------- -----------
<S> <C> <C>
Global Equity Fund....................................... $53,056,705 $51,398,825
Asia Pacific Growth Fund................................. $ 1,802,753 $ 1,731,162
Emerging Markets Equity Fund............................. $ 42,300 $ 42,038
</TABLE>
As of October 31, 1999 the Funds invested the collateral in the following
money market funds:
<TABLE>
<CAPTION>
NUMBER OF
SHARES
(000)
---------
<C> <S> <C>
GLOBAL EQUITY FUND
$12,282 Liquid Assets Portfolio................................... $12,281,678
40,747 MH Private Money Market Fund LLC.......................... 40,746,611
28 Prime Portfolio........................................... 28,416
-----------
Total investments of cash collateral received for securities on loan
(cost--$53,056,705).................................................... $53,056,705
===========
</TABLE>
ASIA PACIFIC GROWTH FUND
<TABLE>
<C> <S> <C>
117 Janus Investment Fund..................................... $ 117,063
376 Liquid Assets Portfolio................................... 375,779
1,310 MH Private Money Market Fund LLC.......................... 1,309,911
-----------
Total investments of cash collateral received for securities on loan
(cost--$1,802,753).................................................... $1,802,753
===========
</TABLE>
EMERGING MARKETS EQUITY FUND
<TABLE>
<C> <S> <C>
42 MH Private Money Market Fund LLC (cost--$42,300).......... $ 42,300
===========
</TABLE>
BANK LINE OF CREDIT
Each Fund may participate with other funds managed by Mitchell Hutchins in a
$200 million committed credit facility ("Facility") to be utilized for temporary
financing until settlement of sales or purchases of portfolio securities, the
repurchase or redemption of shares of each fund at the request of the
shareholders and other temporary or emergency purposes. In connection therewith,
each Fund has agreed to pay a commitment fee, pro rata, based on the relative
asset size of the funds in the Facility. Interest is charged to a fund at rates
based on prevailing market rates in effect at the time of borrowings. For the
year ended October 31, 1999, the Funds did not borrow under the Facility.
TRANSFER AGENCY AND RELATED SERVICES FEES
PaineWebber provides transfer agency related services to each Fund pursuant to
a delegation of authority from PFPC Inc., the Funds' transfer agent, and is
compensated for these services by PFPC Inc., not the Funds. For the year ended
October 31, 1999, PaineWebber received from PFPC, Inc., not the Funds,
approximately 53%, 54% and 54% of the total transfer agency and related services
fees collected by PFPC from the Global Equity Fund, Asia Pacific Growth Fund and
Emerging Markets Equity Fund, respectively.
44
<PAGE>
NOTES TO FINANCIAL STATEMENTS
INVESTMENTS IN SECURITIES
For federal income tax purposes, the cost of securities owned at October 31,
1999 was substantially the same as the cost of securities for financial
statement purposes.
At October 31, 1999, the components of net unrealized appreciation were as
follows:
<TABLE>
<CAPTION>
GLOBAL ASIA PACIFIC EMERGING
EQUITY GROWTH MARKETS
FUND FUND EQUITY FUND
------------ ------------- ------------
<S> <C> <C> <C>
Gross appreciation (investments having an excess of
value over cost)....................................... $58,233,732 $ 7,216,654 $ 1,464,230
Gross depreciation (investments having an excess of cost
over value)............................................ (9,945,318) (3,618,035) (1,035,708)
----------- ------------ -----------
Net appreciation of investments......................... $48,288,414 $ 3,598,619 $ 428,522
=========== ============ ===========
</TABLE>
For the year ended October 31, 1999, total aggregate purchases and sales of
portfolio securities, excluding short term securities, were as follows:
<TABLE>
<CAPTION>
EMERGING
GLOBAL EQUITY ASIA PACIFIC MARKETS
FUND GROWTH FUND EQUITY FUND
------------- ------------ ------------
<S> <C> <C> <C>
Purchases............................................... $260,136,639 $23,815,560 $6,416,765
Sales................................................... $370,046,438 $28,920,269 $8,112,139
</TABLE>
FEDERAL INCOME TAX STATUS
The Funds intend to distribute substantially all of their taxable income and
to comply with the other requirements of the Internal Revenue Code applicable to
regulated investment companies. Accordingly, no provision for federal income
taxes is required. In addition, by distributing during each calendar year,
substantially all of their net investment income, capital gains and certain
other amounts, if any, the Funds intend not to be subject to a federal excise
tax.
At October 31, 1999 the Funds had the following net capital loss carryforwards
available as reductions, to the extent provided in the regulations, of future
net realized capital gains which expire as follows:
<TABLE>
<CAPTION>
EMERGING
GLOBAL EQUITY ASIA PACIFIC MARKETS
FISCAL YEAR ENDING FUND GROWTH FUND EQUITY FUND
- ------------------ ------------- ------------ ------------
<S> <C> <C> <C>
2002.................................................... -- -- $ 7,735,682
2003.................................................... -- -- 7,723,267
2005.................................................... -- $ 4,547,673 --
2006.................................................... -- 22,379,279 2,795,275
2007.................................................... -- -- 308,373
---- ----------- -----------
-- $26,926,952 $18,562,597
==== =========== ===========
</TABLE>
At October 31, 1999, the effect of permanent "book/tax" reclassification
resulted in increases (decreases) to the components of net assets as follows:
<TABLE>
<CAPTION>
ACCUMULATED ACCUMULATED
NET INVESTMENT NET REALIZED BENEFICIAL
FUND INCOME (LOSS) GAINS (LOSSES) INTEREST
- ---- -------------- -------------- ------------
<S> <C> <C> <C>
Global Equity Fund...................................... $(1,376,157) $1,368,199 $ 7,958
Asia Pacific Growth Fund................................ 410,963 (14,749) (425,712)
Emerging Markets Fund................................... 40,267 4,458 (44,725)
</TABLE>
45
<PAGE>
NOTES TO FINANCIAL STATEMENTS
SHARES OF BENEFICIAL INTEREST
There is an unlimited amount of $0.001 par value shares of beneficial interest
authorized. Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS Y
-------------------------- ------------------------ ------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
GLOBAL EQUITY FUND ----------- ------------- ---------- ------------ ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FOR THE YEAR ENDED
OCTOBER 31, 1999
Shares sold........... 28,421,476 $ 494,825,105 122,855 $ 2,029,493 1,081,106 $ 17,855,027 1,215,474 $ 21,362,866
Shares repurchased.... (32,560,467) (568,014,661) (869,246) (14,272,845) (1,914,606) (31,600,728) (1,536,448) (27,079,674)
Shares converted from
Class B to
Class A.............. 1,124,691 19,785,833 (1,193,678) (19,785,833) -- -- -- --
Dividend reinvested... 697,012 11,514,629 157,538 2,459,166 127,935 1,999,640 158,271 2,670,032
----------- ------------- ---------- ------------ ---------- ------------ ---------- ------------
Net decrease.......... (2,317,288) $ (41,889,094) (1,782,531) $(29,570,019) (705,565) $(11,746,061) (162,703) $ (3,046,776)
=========== ============= ========== ============ ========== ============ ========== ============
FOR THE YEAR ENDED
OCTOBER 31, 1998
Shares sold........... 36,060,226 $ 628,537,391 171,632 $ 2,956,175 2,845,323 $ 47,554,292 1,974,996 $ 35,774,214
Shares repurchased.... (39,766,228) (701,469,147) (1,441,098) (23,820,379) (3,737,235) (62,542,179) (2,453,452) (44,075,070)
Shares converted from
Class B to
Class A.............. 887,156 15,790,653 (929,606) (15,790,653) -- -- -- --
Dividend reinvested... 2,234,439 35,103,031 688,904 10,340,457 471,391 7,080,291 458,058 7,315,183
----------- ------------- ---------- ------------ ---------- ------------ ---------- ------------
Net decrease.......... (584,407) $ (22,038,072) (1,510,168) $(26,314,400) (420,521) $ (7,907,596) (20,398) $ (985,673)
=========== ============= ========== ============ ========== ============ ========== ============
</TABLE>
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS Y
-------------------------- ------------------------ ------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
ASIA PACIFIC GROWTH FUND ----------- ------------- ---------- ------------ ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FOR THE YEAR ENDED
OCTOBER 31, 1999
Shares sold............ 1,036,280 $ 8,955,201 239,544 $ 2,161,071 1,136,400 $ 10,349,051 21,021 $ 188,063
Shares repurchased..... (1,272,336) (10,989,257) (585,637) (4,734,916) (1,003,723) (9,137,522) (8,039) (74,600)
Shares converted from
Class B to
Class A............. 12,506 111,461 (12,706) (111,461) -- -- -- --
----------- ------------- ---------- ------------ ---------- ------------ ---------- ------------
Net increase
(decrease)........... (223,550) $ (1,922,595) (358,799) $ (2,685,306) 132,677 $ 1,211,529 12,982 $ 113,463
=========== ============= ========== ============ ========== ============ ========== ============
FOR THE YEAR ENDED
OCTOBER 31, 1998+
Shares sold............ 833,285 $ 6,176,465 643,643 $ 4,984,246 1,740,391 $ 12,038,987 6,911 $ 42,387
Shares repurchased..... (1,558,123) (11,548,589) (1,308,266) (9,734,562) (2,375,214) (17,241,497) -- --
Shares converted from
Class B to Class A.... 17,787 152,282 (17,910) (152,282) -- -- -- --
----------- ------------- ---------- ------------ ---------- ------------ ---------- ------------
Net increase
(decrease)........... (707,051) $ (5,219,842) (682,533) $ (4,902,598) (634,823) $ (5,202,510) 6,911 $ 42,387
=========== ============= ========== ============ ========== ============ ========== ============
</TABLE>
- ---------------
+ Class Y shares are for the period March 25, 1998 (commencement of
operations) through October 31, 1998.
46
<PAGE>
NOTES TO FINANCIAL STATEMENTS
SHARES OF BENEFICIAL INTEREST(CONCLUDED)
There is an unlimited amount of $0.001 par value shares of beneficial interest
authorized. Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS Y
------------------------ -------------------- ------------------------ ----------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
EMERGING MARKETS EQUITY FUND ---------- ------------ -------- ---------- ---------- ------------ -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FOR THE YEAR ENDED
OCTOBER 31, 1999
Shares sold................ 148,096 $ 1,164,102 25,296 $ 195,455 283,950 $ 2,392,088 13,275 $ 109,200
Shares repurchased......... (226,551) (1,668,885) (35,460) (270,936) (439,625) (3,562,262) (56,046) (453,370)
Shares converted from
Class B to Class A....... 8,142 61,851 (8,361) (61,851) -- -- -- --
-------- ----------- -------- --------- ---------- ----------- -------- -----------
Net decrease............... (70,313) $ (442,932) (18,525) $(137,332) (155,675) $(1,170,174) (42,771) $ (344,170)
======== =========== ======== ========= ========== =========== ======== ===========
FOR THE YEAR ENDED
OCTOBER 31, 1998
Shares sold................ 65,135 $ 601,062 26,773 $ 232,787 1,042,209 $ 7,954,963 37,276 $ 290,110
Shares repurchased......... (416,028) (3,554,345) (109,930) (944,387) (1,217,647) (9,505,610) (967,273) (8,534,371)
Shares converted from
Class B to Class A....... 17,862 162,330 (18,300) (162,330) -- -- -- --
-------- ----------- -------- --------- ---------- ----------- -------- -----------
Net decrease............... (333,031) $(2,790,953) (101,457) $(873,930) (175,438) $(1,550,647) (929,997) $(8,244,261)
======== =========== ======== ========= ========== =========== ======== ===========
</TABLE>
47
<PAGE>
PAINEWEBBER GLOBAL EQUITY FUND
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding in each class
throughout each period is presented below:
<TABLE>
<CAPTION>
CLASS A
-----------------------------------------
FOR THE
FOR THE YEARS ENDED TWO MONTHS
OCTOBER 31, ENDED
---------------------------- OCTOBER 31,
1999 1998# 1997 1996
-------- -------- -------- -----------
<S> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 16.27 $ 18.37 $ 17.43 $ 16.81
-------- -------- -------- --------
Net investment income
(loss)................. 0.08@ 0.03@ 0.00 (0.02)
Net realized and
unrealized gains
(losses) from
investments and foreign
currency............... 2.38@ 0.35@ 1.52 0.64
-------- -------- -------- --------
Net increase (decrease)
from investment
operations............. 2.46 0.38 1.52 0.62
-------- -------- -------- --------
Dividends from net
investment income...... (0.02) -- -- --
Distributions from net
realized gains from
investment
transactions........... (0.81) (2.48) (0.58) --
-------- -------- -------- --------
Total dividends and
distributions to
shareholders........... (0.83) (2.48) (0.58) --
-------- -------- -------- --------
Net asset value, end of
period................. $ 17.90 $ 16.27 $ 18.37 $ 17.43
======== ======== ======== ========
Total investment
return (1)............. 15.56% 2.53% 8.87% 3.69%
======== ======== ======== ========
Ratios/Supplemental Data:
Net assets, end of period
(000's)................ $235,341 $251,680 $294,878 $307,267
Expenses to average net
assets, net of waivers
from adviser (3)....... 1.56% 1.55% 1.44% 1.53%*
Net investment income
(loss) to average net
assets, net of waivers
from adviser (3)....... 0.45% 0.17% 0.01% (0.80)%*
Portfolio turnover
rate................... 72% 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, Inc. began
overseeing the day-to-day management of the foreign portion of the Fund's
assets and Mitchell Hutchins allocates the portfolio between domestic and
foreign investments and manages the domestic portion of the Fund's assets.
@ Calculated using the average monthly shares outstanding for the period.
++ Commencement of offering of shares.
(1) Total investment return is calculated assuming a $1,000 investment on the
first day of each period reported, reinvestment of all dividends and other
distributions, if any, at net asset value on the payable dates and a sale
at net asset value on the last day of each period reported. The figures do
not include sales charges; results for each class would be lower if sales
charges were included. Total investment returns for periods of less than a
year has not been annualized.
(2) These ratios include non-recurring acquisition expenses of 0.06% and 0.00%
for Class A and Class B shares, respectively.
(3) During the year ended October 31, 1999 Mitchell Hutchins waived a portion
of its advisory and administration fees. The ratios excluding the waiver
would be the same since the fee waiver represents less than 0.005%.
48
<PAGE>
PAINEWEBBER GLOBAL EQUITY FUND
<TABLE>
<CAPTION>
CLASS A CLASS B
-------------------- -------------------------------------------------------------------
FOR THE FOR THE FOR THE PERIOD
FOR THE YEARS ENDED FOR THE YEARS ENDED TWO MONTHS YEAR AUGUST 25,
AUGUST 31, OCTOBER 31, ENDED ENDED 1995++
-------------------- -------------------------- OCTOBER 31, AUGUST 31, TO AUGUST 31,
1996 1995** 1999 1998# 1997 1996 1996 1995**
--------- --------- -------- ------- ------- ----------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period..... $ 16.12 $ 16.98 $ 15.43 $ 17.69 $ 16.93 $ 16.35 $ 15.82 $ 15.83
-------- -------- -------- ------- ------- -------- -------- --------
Net investment income
(loss).................. 0.02 0.02 (0.06)@ (0.12)@ (0.21) (0.05) (0.12) 0.00
Net realized and
unrealized gains
(losses) from
investments and foreign
currency................ 1.24 0.37 2.25@ 0.34@ 1.55 0.63 1.22 (0.01)
-------- -------- -------- ------- ------- -------- -------- --------
Net increase (decrease)
from investment
operations.............. 1.26 0.39 2.19 0.22 1.34 0.58 1.10 (0.01)
-------- -------- -------- ------- ------- -------- -------- --------
Dividends from net
investment income....... -- -- -- -- -- -- -- --
Distributions from net
realized gains from
investment
transactions............ (0.57) (1.25) (0.81) (2.48) (0.58) -- (0.57) --
-------- -------- -------- ------- ------- -------- -------- --------
Total dividends and
distributions to
shareholders............ (0.57) (1.25) (0.81) (2.48) (0.58) -- (0.57) --
-------- -------- -------- ------- ------- -------- -------- --------
Net asset value, end of
period.................. $ 16.81 $ 16.12 $ 16.81 $ 15.43 $ 17.69 $ 16.93 $ 16.35 $ 15.82
======== ======== ======== ======= ======= ======== ======== ========
Total investment
return (1).............. 8.06% 3.24% 14.63% 1.62% 8.05% 3.55% 7.18% (0.06)%
======== ======== ======== ======= ======= ======== ======== ========
Ratios/Supplemental Data:
Net assets, end of period
(000's)................. $305,218 $360,652 $ 27,435 $52,709 $87,104 $113,445 $113,235 $142,880
Expenses to average net
assets, net of waivers
from adviser (3)........ 1.48% 1.71%(2) 2.42% 2.38% 2.26% 2.34%* 2.25% 2.17%*(2)
Net investment income
(loss) to average net
assets, net of waivers
from adviser (3)........ 0.10% 0.09%(2) (0.40)% (0.74)% (0.80)% (1.61)%* (0.68)% (1.92)%*(2)
Portfolio turnover
rate.................... 33% 40% 72% 151% 86% 3% 33% 40%
</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, Inc. began
overseeing the day-to-day management of the foreign portion of the Fund's
assets and Mitchell Hutchins allocates the portfolio between domestic and
foreign investments and manages the domestic portion of the Fund's assets.
@ Calculated using the average monthly shares outstanding for the period.
++ Commencement of offering of shares.
(1) Total investment return is calculated assuming a $1,000 investment on the
first day of each period reported, reinvestment of all dividends and other
distributions, if any, at net asset value on the payable dates and a sale
at net asset value on the last day of each period reported. The figures do
not include sales charges; results for each class would be lower if sales
charges were included. Total investment returns for periods of less than a
year has not been annualized.
(2) These ratios include non-recurring acquisition expenses of 0.06% and 0.00%
for Class A and Class B shares, respectively.
(3) During the year ended October 31, 1999 Mitchell Hutchins waived a portion
of its advisory and administration fees. The ratios excluding the waiver
would be the same since the fee waiver represents less than 0.005%.
49
<PAGE>
PAINEWEBBER GLOBAL EQUITY FUND
FINANCIAL HIGHLIGHTS(CONCLUDED)
Selected data for a share of beneficial interest outstanding in each class
throughout each period is presented below:
<TABLE>
<CAPTION>
CLASS C
-----------------------------------------------
FOR THE
FOR THE YEARS ENDED TWO MONTHS
OCTOBER 31, ENDED
---------------------------------- OCTOBER 31,
1999 1998# 1997 1996
----------- ------- ------- -----------
<S> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 15.45 $ 17.69 $ 16.93 $ 16.35
------- ------- ------- -------
Net investment income
(loss)................. (0.05)@ (0.11)@ (0.23) (0.05)
Net realized and
unrealized gains from
investments
and foreign currency... 2.25@ 0.35@ 1.57 0.63
------- ------- ------- -------
Net increase from
investment
operations............. 2.20 0.24 1.34 0.58
------- ------- ------- -------
Dividends from net
investment income...... -- -- -- --
Distributions from net
realized gains from
investment
transactions........... (0.81) (2.48) (0.58) --
------- ------- ------- -------
Total dividends and
distributions to
shareholders........... (0.81) (2.48) (0.58) --
------- ------- ------- -------
Net asset value, end of
period................. $ 16.84 $ 15.45 $ 17.69 $ 16.93
======= ======= ======= =======
Total investment
return (1)............. 14.67% 1.74% 8.05% 3.55%
======= ======= ======= =======
Ratios/Supplemental Data:
Net assets, end of period
(000's)................ $32,917 $41,103 $54,510 $67,530
Expenses to average net
assets, net of waivers
from adviser (3)....... 2.34% 2.32% 2.20% 2.30%*
Net investment income
(loss) to average net
assets, net of waivers
from adviser (3)....... (0.33)% (0.65)% (0.75)% (1.57)%*
Portfolio turnover
rate................... 72% 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, Inc. began
overseeing the day-to-day management of the foreign portion of the Fund's
assets and Mitchell Hutchins allocates the portfolio between domestic and
foreign investments and manages the domestic portion of the Fund's assets.
@ 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 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 or program fees; results for each class would be
lower if sales charges or program fees were included. Total investment
returns for periods of less than a year has not been annualized.
(2) These ratios include non-recurring acquisition expenses of 0.06% and 0.06%
for Class C and Class Y shares, respectively.
(3) During the year ended October 31, 1999 Mitchell Hutchins waived a portion
of its advisory and administration fees. The ratios excluding the waiver
would be the same since the fee waiver represents less than 0.005%.
50
<PAGE>
PAINEWEBBER GLOBAL EQUITY FUND
<TABLE>
<CAPTION>
CLASS C CLASS Y
------------------- -----------------------------------------------------------
FOR THE
FOR THE YEARS ENDED FOR THE YEARS ENDED TWO MONTHS FOR THE YEARS ENDED
AUGUST 31, OCTOBER 31, ENDED AUGUST 31,
------------------- ------------------------- OCTOBER 31, -------------------
1996 1995** 1999 1998# 1997 1996 1996 1995**
-------- -------- ------- ------- ------- ----------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period..... $ 15.82 $ 16.81 $ 16.59 $ 18.63 $ 17.60 $ 16.97 $ 16.22 $ 17.03
------- ------- ------- ------- ------- ------- ------- -------
Net investment income
(loss).................. (0.13) (0.11) 0.14@ 0.09@ 0.10 (0.01) 0.07 0.07
Net realized and
unrealized gains from
investments
and foreign currency.... 1.23 0.37 2.43@ 0.35@ 1.51 0.64 1.25 0.37
------- ------- ------- ------- ------- ------- ------- -------
Net increase from
investment operations... 1.10 0.26 2.57 0.44 1.61 0.63 1.32 0.44
------- ------- ------- ------- ------- ------- ------- -------
Dividends from net
investment income....... -- -- (0.04) -- -- -- -- --
Distributions from net
realized gains from
investment
transactions............ (0.57) (1.25) (0.81) (2.48) (0.58) -- (0.57) (1.25)
------- ------- ------- ------- ------- ------- ------- -------
Total dividends and
distributions to
shareholders............ (0.57) (1.25) (0.85) (2.48) (0.58) -- (0.57) (1.25)
------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end of
period.................. $ 16.35 $ 15.82 $ 18.31 $ 16.59 $ 18.63 $ 17.60 $ 16.97 $ 16.22
======= ======= ======= ======= ======= ======= ======= =======
Total investment
return (1).............. 7.18% 2.46% 15.97% 2.86% 9.31% 3.71% 8.39% 3.54%
======= ======= ======= ======= ======= ======= ======= =======
Ratios/Supplemental Data:
Net assets, end of period
(000's)................. $66,585 $83,485 $53,334 $51,025 $57,683 $63,225 $61,736 $57,150
Expenses to average net
assets, net of waivers
from adviser (3)........ 2.27% 2.48%(2) 1.23% 1.21% 1.10% 1.18%* 1.17% 1.46%(2)
Net investment income
(loss) to average net
assets, net of waivers
from adviser (3)........ (0.70)% (0.68)%(2) 0.79% 0.50% 0.36% (0.45)%* 0.46% 0.36%(2)
Portfolio turnover
rate.................... 33% 40% 72% 151% 86% 3% 33% 40%
</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, Inc. began
overseeing the day-to-day management of the foreign portion of the Fund's
assets and Mitchell Hutchins allocates the portfolio between domestic and
foreign investments and manages the domestic portion of the Fund's assets.
@ 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 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 or program fees; results for each class would be
lower if sales charges or program fees were included. Total investment
returns for periods of less than a year has not been annualized.
(2) These ratios include non-recurring acquisition expenses of 0.06% and 0.06%
for Class C and Class Y shares, respectively.
(3) During the year ended October 31, 1999 Mitchell Hutchins waived a portion
of its advisory and administration fees. The ratios excluding the waiver
would be the same since the fee waiver represents less than 0.005%.
51
<PAGE>
PAINEWEBBER ASIA PACIFIC GROWTH FUND
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding in each class
throughout the period is presented below:
<TABLE>
<CAPTION>
CLASS A
------------------------------------
FOR THE YEARS ENDED FOR THE PERIOD
OCTOBER 31, ENDED
-------------------- OCTOBER 31,
1999 1998 1997+
--------- --------- --------------
<S> <C> <C> <C>
Net asset value,
beginning of period.... $ 6.82 $ 8.96 $ 12.50
------- ------- -------
Net investment income
(loss)................. (0.05)@ 0.00@ 0.03
Net realized and
unrealized gains
(losses) from
investments and foreign
currency............... 2.94@ (2.14)@ (3.57)
------- ------- -------
Net increase (decrease)
from investment
operations............. 2.89 (2.14) (3.54)
------- ------- -------
Net asset value, end of
period................. $ 9.71 $ 6.82 $ 8.96
======= ======= =======
Total investment return
(1).................... 42.38% (23.88)% (28.32)%
======= ======= =======
Ratios/Supplemental Data:
Net assets, end of period
(000's)................ $14,229 $11,526 $21,466
Expenses to average net
assets, net of waivers
from adviser (2)....... 2.73% 2.88% 2.33%*
Net investment income
(loss) to average net
assets, net of waivers
from adviser (2)....... (0.53)% (0.02)% 0.37%*
Portfolio turnover
rate................... 70% 59% 13%
</TABLE>
- ---------------
* Annualized
+ For the period March 25, 1997 (commencement of operations) through
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 or program fees; results for each class would be
lower if sales charges or program fees were included. Total investment
returns for periods less than a year has not been annualized.
(2) During the year ended October 31, 1999 Mitchell Hutchins waived a portion
of its advisory and administration fees. The ratios excluding the waiver
would be the same since the fee waiver represents less than 0.005%.
52
<PAGE>
PAINEWEBBER ASIA PACIFIC GROWTH FUND
<TABLE>
<CAPTION>
CLASS B CLASS C CLASS Y
-------------------------------------- -------------------------------------- ------------
FOR THE YEARS ENDED FOR THE PERIOD FOR THE YEARS ENDED FOR THE PERIOD FOR THE YEAR
OCTOBER 31, ENDED OCTOBER 31, ENDED ENDED
---------------------- OCTOBER 31, ---------------------- OCTOBER 31, OCTOBER 31,
1999 1998 1997+ 1999 1998 1997+ 1999
---------- ---------- -------------- ---------- ---------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period..... $ 6.74 $ 8.92 $ 12.50 $ 6.74 $ 8.92 $ 12.50 $ 6.79
------- ------- ------- ------- ------- ------- ------
Net investment income
(loss).................. (0.11)@ (0.06)@ (0.03) (0.10)@ (0.06)@ (0.03) 0.00@
Net realized and
unrealized gains
(losses) from
investments and foreign
currency................ 2.89@ (2.12)@ (3.55) 2.89@ (2.12)@ (3.55) 2.89@
------- ------- ------- ------- ------- ------- ------
Net increase (decrease)
from investment
operations.............. 2.78 (2.18) (3.58) 2.79 (2.18) (3.58) 2.89
------- ------- ------- ------- ------- ------- ------
Net asset value, end of
period.................. $ 9.52 $ 6.74 $ 8.92 $ 9.53 $ 6.74 $ 8.92 $ 9.68
======= ======= ======= ======= ======= ======= ======
Total investment return
(1)..................... 41.25% (24.44)% (28.64)% 41.39% (24.44)% (28.64)% 42.56%
======= ======= ======= ======= ======= ======= ======
Ratios/Supplemental Data:
Net assets, end of period
(000's)................. $14,589 $12,746 $22,949 $10,052 $ 6,220 $13,887 $ 192
Expenses to average net
assets, net of waivers
from adviser (2)........ 3.52% 3.63% 3.12%* 3.45%* 3.60% 3.10%* 2.34%
Net investment income
(loss) to average net
assets, net of waivers
from adviser (2)........ (1.34)% (0.78)% (0.43)%* (1.23)%* (0.79)% (0.42)%* (0.06)%
Portfolio turnover
rate.................... 70% 59% 13% 70% 59% 13% 70%
<CAPTION>
CLASS Y
--------------
FOR THE PERIOD
ENDED
OCTOBER 31,
1998++
--------------
<S> <C>
Net asset value,
beginning of period..... $ 8.66
-------
Net investment income
(loss).................. 0.06@
Net realized and
unrealized gains
(losses) from
investments and foreign
currency................ (1.93)@
-------
Net increase (decrease)
from investment
operations.............. (1.87)
-------
Net asset value, end of
period.................. $ 6.79
=======
Total investment return
(1)..................... (21.59)%
=======
Ratios/Supplemental Data:
Net assets, end of period
(000's)................. $ 47
Expenses to average net
assets, net of waivers
from adviser (2)........ 2.66%*
Net investment income
(loss) to average net
assets, net of waivers
from adviser (2)........ (1.46)%*
Portfolio turnover
rate.................... 59%
</TABLE>
- ---------------
* Annualized
+ For the period March 25, 1997 (commencement of operations) through
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 or program fees; results for each class would be
lower if sales charges or program fees were included. Total investment
returns for periods less than a year has not been annualized.
(2) During the year ended October 31, 1999 Mitchell Hutchins waived a portion
of its advisory and administration fees. The ratios excluding the waiver
would be the same since the fee waiver represents less than 0.005%.
53
<PAGE>
PAINEWEBBER EMERGING MARKETS EQUITY FUND
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding in each class
throughout each period is presented below:
<TABLE>
<CAPTION>
CLASS A
--------------------------------------------------------
FOR THE FOR THE YEARS
FOR THE YEARS ENDED FOUR MONTHS ENDED
OCTOBER 31, ENDED JUNE 30,
----------------------- OCTOBER 31, ------------------
1999 1998 1997*** 1996 1996 1995**
------ ------ ------- ----------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 6.52 $ 9.39 $ 9.46 $ 10.06 $ 9.73 $ 10.79
------ ------ ------ ------- ------- -------
Net investment income
(loss)................. (0.02)@ (0.01)@ (0.06) (0.13) (0.14) (0.04)
Net realized and
unrealized gains
(losses) from
investments and foreign
currency............... 2.29@ (2.86)@ (0.01) (0.47) 0.47 (0.97)
------ ------ ------ ------- ------- -------
Net increase (decrease)
from investment
operations............. 2.27 (2.87) (0.07) (0.60) 0.33 (1.01)
------ ------ ------ ------- ------- -------
Dividends from net
investment income...... -- -- -- -- -- (0.05)
------ ------ ------ ------- ------- -------
Net asset value, end of
period................. $ 8.79 $ 6.52 $ 9.39 $ 9.46 $ 10.06 $ 9.73
====== ====== ====== ======= ======= =======
Total investment return
(1).................... 34.82% (30.56)% (0.74)% (5.96)% 3.39% (9.29)%
====== ====== ====== ======= ======= =======
Ratios/Supplemental Data:
Net assets, end of period
(000's)................ $5,090 $4,237 $9,222 $14,992 $20,680 $33,043
Expenses, net of fee
waivers, to average net
assets................. 2.44% 2.44% 2.44% 2.44%* 2.44% 2.44%
Expenses, before fee
waivers, to average net
assets................. 3.56% 3.71% 3.01% 3.48%* 3.42% 2.54%
Net investment loss, net
of fee waivers, to
average net assets..... (0.31)% (0.16)% (0.40)% (1.42)%* (0.52)% (0.76)%
Net investment loss,
before fee waivers, to
average net assets..... (1.43)% (1.43)% (0.97)% (2.46)%* (1.50)% (0.86)%
Portfolio turnover
rate................... 80% 64% 87% 22% 69% 76%
</TABLE>
- -----------------
++ For the period December 5, 1995 (commencement of offering of shares) to
June 30, 1996.
@ Calculated using the average 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 Investment Management North America
Inc. 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 for each class would be lower if sales charges were included. Total
investment return for periods of less than one year has not been
annualized.
54
<PAGE>
PAINEWEBBER EMERGING MARKETS EQUITY FUND
<TABLE>
<CAPTION>
CLASS B CLASS C
---------------------------------------------------- ----------------------------------------
FOR THE FOR THE
FOR THE YEARS ENDED FOUR MONTHS FOR THE FOR THE YEARS ENDED FOUR MONTHS
OCTOBER 31, ENDED PERIOD ENDED OCTOBER 31, ENDED
------------------------- OCTOBER 31, JUNE 30, --------------------------- OCTOBER 31,
1999 1998 1997*** 1996 1996++ 1999 1998 1997*** 1996
------- ------- ------- ----------- ------------ -------- -------- ------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period..... $ 6.37 $ 9.19 $ 9.32 $ 9.94 $ 9.13 $ 6.32 $ 9.17 $ 9.32 $ 9.94
------ ------ ------ ------ ------ ------ ------ ------ ------
Net investment income
(loss).................. (0.08)@ (0.08)@ (0.10) (0.07) (0.01) (0.08)@ (0.08)@ (0.14) (0.22)
Net realized and
unrealized gains
(losses) from
investments and foreign
currency................ 2.23@ (2.74)@ (0.03) (0.55) 0.82 2.19@ (2.77)@ (0.01) (0.40)
------ ------ ------ ------ ------ ------ ------ ------ ------
Net increase (decrease)
from investment
operations.............. 2.15 (2.82) (0.13) (0.62) 0.81 2.11 (2.85) (0.15) (0.62)
------ ------ ------ ------ ------ ------ ------ ------ ------
Dividends from net
investment income....... -- -- -- -- -- -- -- -- --
------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value, end of
period.................. $ 8.52 $ 6.37 $ 9.19 $ 9.32 $ 9.94 $ 8.43 $ 6.32 $ 9.17 $ 9.32
====== ====== ====== ====== ====== ====== ====== ====== ======
Total investment return
(1)..................... 33.75% (30.69)% (1.39)% (6.24)% 8.87% 33.39% (31.08)% (1.61)% (6.24)%
====== ====== ====== ====== ====== ====== ====== ====== ======
Ratios/Supplemental Data:
Net assets, end of period
(000's)................. $ 459 $ 461 $1,598 $ 879 $ 936 $2,126 $2,575 $5,345 $7,882
Expenses, net of fee
waivers, to average net
assets.................. 3.19% 3.19% 3.19% 3.19%* 3.19%* 3.19% 3.19% 3.19% 3.19%*
Expenses, before fee
waivers, to average net
assets.................. 4.50% 4.92% 3.82% 4.23%* 4.97%* 4.43% 4.42% 3.78% 4.23%*
Net investment loss, net
of fee waivers, to
average net assets...... (1.06)% (0.99)% (1.25)% (2.12)%* (0.21)%* (1.06)% (0.96)% (1.18)% (2.16)%*
Net investment loss,
before fee waivers, to
average net assets...... (2.37)% (2.72)% (1.88)% (3.16)%* (1.99)%* (2.30)% (2.19)% (1.77)% (3.20)%*
Portfolio turnover
rate.................... 80% 64% 87% 22% 69% 80% 64% 87% 22%
<CAPTION>
CLASS C
--------------------
FOR THE YEARS
ENDED
JUNE 30,
--------------------
1996 1995**
--------- ---------
<S> <C> <C>
Net asset value,
beginning of period..... $ 9.67 $ 10.75
------- -------
Net investment income
(loss).................. (0.24) (0.17)
Net realized and
unrealized gains
(losses) from
investments and foreign
currency................ 0.51 (0.90)
------- -------
Net increase (decrease)
from investment
operations.............. 0.27 (1.07)
------- -------
Dividends from net
investment income....... -- (0.01)
------- -------
Net asset value, end of
period.................. $ 9.94 $ 9.67
======= =======
Total investment return
(1)..................... 2.79% (10.01)%
======= =======
Ratios/Supplemental Data:
Net assets, end of period
(000's)................. $11,561 $18,551
Expenses, net of fee
waivers, to average net
assets.................. 3.19% 3.19%
Expenses, before fee
waivers, to average net
assets.................. 4.17% 3.29%
Net investment loss, net
of fee waivers, to
average net assets...... (1.28)% (1.50)%
Net investment loss,
before fee waivers, to
average net assets...... (2.26)% (1.60)%
Portfolio turnover
rate.................... 69% 76%
</TABLE>
- -----------------
++ For the period December 5, 1995 (commencement of offering of shares) to
June 30, 1996.
@ Calculated using the average 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 Investment Management North America
Inc. 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 for each class would be lower if sales charges were included. Total
investment return for periods of less than one year has not been
annualized.
55
<PAGE>
PAINEWEBBER EMERGING MARKETS EQUITY FUND
FINANCIAL HIGHLIGHTS(CONCLUDED)
Selected data for a share of beneficial interest outstanding in each class
throughout each period is presented below:
<TABLE>
<CAPTION>
CLASS Y
----------------------------------------------------------
FOR THE FOR THE YEARS
FOR THE YEARS ENDED FOUR MONTHS ENDED
OCTOBER 31, ENDED JUNE 30,
------------------------- OCTOBER 31, ------------------
1999 1998 1997*** 1996 1996 1995**
------- ------- ------- ----------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 6.58 $ 9.46 $ 9.51 $ 10.11 $ 9.75 $ 10.80
------- ------- ------- ------- ------- -------
Net investment income
(loss)................. 0.00@ (0.01)@ (0.02) (0.05) (0.01) 0.01
Net realized and
unrealized gains
(losses) from
investments and foreign
currency............... 2.31@ (2.87)@ (0.03) (0.55) 0.37 (0.99)
------- ------- ------- ------- ------- -------
Net increase (decrease)
from investment
operations............. 8.89 (2.88) (0.05) (0.60) 0.36 (0.98)
------- ------- ------- ------- ------- -------
Dividends from net
investment income...... -- -- -- -- -- (0.07)
Net asset value, end of
period................. $ 8.89 $ 6.58 $ 9.46 $ 9.51 $ 10.11 $ 9.75
======= ======= ======= ======= ======= =======
Total investment return
(1).................... 35.11% (30.44)% (0.53)% (5.93)% 3.69% (9.03)%
======= ======= ======= ======= ======= =======
Ratios/Supplemental Data:
Net assets, end of period
(000's)................ $ 804 $ 877 $10,053 $11,375 $12,979 $12,332
Expenses, net of fee
waivers, to average net
assets................. 2.19% 2.19% 2.19% 2.19%* 2.19% 2.19%
Expenses, before fee
waivers, to average net
assets................. 3.46% 3.36% 2.69% 3.23%* 3.29% 2.29%
Net investment loss, net
of fee waivers, to
average net assets..... (0.03)% (0.08)% (0.15)% (1.13)%* (0.15)% (0.51)%
Net investment loss,
before fee waivers, to
average net assets..... (1.31)% (1.25)% (0.65)% (2.17)%* (1.25)% (0.61)%
Portfolio turnover
rate................... 80% 64% 87% 22% 69% 76%
</TABLE>
- -----------------
@ Calculated using the average 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 Investment Management North America
Inc. 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 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 program fees; results for each class would be lower if program
fees were included. Total investment return for periods of less than one
year has not been annualized.
56
<PAGE>
PAINEWEBBER GLOBAL EQUITY FUND
PAINEWEBBER ASIA PACIFIC GROWTH FUND
PAINEWEBBER EMERGING MARKETS EQUITY FUND
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
The Boards of Trustees and Shareholders
We have audited the accompanying statement of assets and liabilities,
including the portfolios of investments, of PaineWebber Global Equity Fund,
PaineWebber Asia Pacific Growth Fund, and PaineWebber Emerging Markets Equity
Fund (the "Funds") as of October 31, 1999, and the related statement of
operations for the year then ended, the statements of changes in net assets for
each of the two years in the period then ended, and the financial highlights for
each of the periods indicated therein. These financial statements and financial
highlights are the responsibility of the Funds' management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
investments owned at October 31, 1999, by correspondence with the custodian and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
PaineWebber Global Equity Fund, PaineWebber Asia Pacific Growth Fund, and
PaineWebber Emerging Markets Equity Fund at October 31, 1999, the results of
their operations for the year then ended, the changes in their net assets for
each of the two years in the period then ended, and the financial highlights for
each of the indicated periods, in conformity with generally accepted accounting
principles.
/s/ Ernst & Young LLP
New York, New York
December 17, 1999
57
<PAGE>
PAINEWEBBER GLOBAL EQUITY FUND
TAX INFORMATION
We are required by Subchapter M of the Internal Revenue Code of 1986, as
amended, to advise you within 60 days of the Fund's fiscal year end (October 31,
1999), as to the federal tax status of distributions received by shareholders
during such fiscal year. Accordingly, we are advising you that the distributions
paid during the fiscal year by the PaineWebber Global Equity Fund were taxable
and are derived from the following sources:
<TABLE>
<CAPTION>
Class A Class B Class C Class Y
PER SHARE DATA: -------- -------- -------- --------
<S> <C> <C> <C> <C>
Net Investment Income....................................... $0.0185 N/A N/A $0.0419
Long-term capital gains..................................... $0.8142 $0.8142 $0.8142 $0.8142
Percentage of ordinary income dividends qualifying for the
dividends received deduction available to corporate
shareholders.............................................. 2.49% 2.49% 2.49% 2.49%
</TABLE>
No distributions were paid by the PaineWebber Asia Pacific Growth Fund or the
PaineWebber Emerging Markets Equity Fund.
PaineWebber Global Equity Fund intends to make an election under Internal
Revenue Code Section 853 to pass through foreign taxes paid by the portfolio to
its shareholders. The amount of foreign source income for information reporting
purposes is $5,042,756 and the amount of foreign taxes paid is $671,866.
Dividends received by tax-exempt recipients (e.g., IRAs and Keoghs) need not
be reported as taxable income. Some retirement trusts (e.g. corporate, Keogh and
403(b)(7) plans) may need this information for their annual information
reporting.
Shareholders should not use the above information to prepare their tax
returns. Because the Fund's fiscal year is not the calendar year, another
notification will be sent in respect of calendar year 1999. The second
notification, which will reflect the amount to be used by calendar year
taxpayers on their federal income tax returns, will be made in conjunction with
Form 1099 DIV and will be mailed in January 2000. Shareholders are advised to
consult their own tax advisers with respect to the tax consequences of their
investment in the Fund.
58
<PAGE>
- --------------------------------------------------------------------------------
TRUSTEES
E. Garrett Bewkes, Jr. Meyer Feldberg
CHAIRMAN
George W. Gowen
Margo N. Alexander
Frederic V. Malek
Richard Q. Armstrong
Carl W. Schafer
Richard R. Burt
Brian M. Storms
Mary C. Farrell
PRINCIPAL OFFICERS
Margo N. Alexander T. Kirkham Barneby
PRESIDENT VICE PRESIDENT
Victoria E. Schonfeld Mark A. Tincher
VICE PRESIDENT VICE PRESIDENT
Dianne E. O'Donnell
VICE PRESIDENT AND SECRETARY
Paul H. Schubert
VICE PRESIDENT AND TREASURER
INVESTMENT ADVISER,
ADMINISTRATOR AND DISTRIBUTOR
Mitchell Hutchins Asset Management Inc.
51 West 52nd Street
New York, New York 10019
INVESTMENT SUBADVISERS
Invista Capital Management Inc.
1800 Hub Tower
699 Walnut
Des Moines, Iowa 50309
Schroder Investment Management North America Inc.
1301 Avenue of the Americas
New York, New York 10019
THIS REPORT IS NOT TO BE USED IN CONNECTION WITH THE OFFERING OF SHARES OF THE
FUNDS UNLESS ACCOMPANIED OR PRECEDED BY AN EFFECTIVE PROSPECTUS.
A PROSPECTUS CONTAINING MORE COMPLETE INFORMATION FOR ANY OF THE FUNDS LISTED ON
THE BACK COVER CAN BE OBTAINED FROM A PAINEWEBBER FINANCIAL ADVISOR OR
CORRESPONDENT FIRM. READ THE PROSPECTUS CAREFULLY BEFORE INVESTING.
<PAGE>
- ------
PaineWebber offers a family of 28 funds which encompass a diversified range of
investment goals.
BOND FUNDS
- - High Income Fund
- - Investment Grade Income Fund
- - Low Duration U.S. Government Income Fund
- - Strategic Income Fund
- - U.S. Government Income Fund
TAX-FREE BOND FUNDS
- - California Tax-Free Income Fund
- - Municipal High Income Fund
- - National Tax-Free Income Fund
- - New York Tax-Free Income Fund
STOCK FUNDS
- - Financial Services Growth Fund
- - Growth Fund
- - Growth and Income Fund
- - Mid Cap Fund
- - Small Cap Fund
- - S&P 500 Index Fund
- - Strategy Fund
- - Tax-Managed Equity Fund
- - Utility Income Fund
ASSET ALLOCATION FUNDS
- - Balanced Fund
- - Tactical Allocation Fund
GLOBAL FUNDS
- - Asia Pacific Growth Fund
- - Emerging Markets Equity Fund
- - Global Equity Fund
- - Global Income Fund
MITCHELL HUTCHINS PORTFOLIOS
- - Aggressive Portfolio
- - Moderate Portfolio
- - Conservative Portfolio
PAINEWEBBER MONEY MARKET FUND
PAINEWEBBER
-C-1999 PaineWebber Incorporated
Member SIPC
All Rights Reserved.
[GRAPHIC]PaineWebber
- -----------------------------
ANNUAL REPORT
GLOBAL EQUITY
FUND
ASIA PACIFIC
GROWTH FUND
EMERGING
MARKETS
EQUITY FUND
OCTOBER 31, 1999
