<PAGE> PAGE 1
000 B000000 08/31/96
000 C000000 0000780403
000 D000000 N
000 E000000 NF
000 F000000 Y
000 G000000 N
000 H000000 N
000 I000000 3.0.a
000 J000000 A
001 A000000 PAINEWEBBER MASTER SERIES, INC.
001 B000000 811-4448
001 C000000 2127131074
002 A000000 1285 AVENUE OF THE AMERICAS
002 B000000 NEW YORK,
002 C000000 NY
002 D010000 10019
003 000000 N
004 000000 N
005 000000 N
006 000000 N
007 A000000 Y
007 B000000 2
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007 C020200 PW BALANCED FUND (FORMERLY ASSET ALLOCATION)
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007 C010400 4
007 C010500 5
007 C010600 6
007 C010700 7
007 C010800 8
007 C010900 9
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008 A00AA01 MITCHELL HUTCHINS ASSET MANAGEMENT, INC.
008 B00AA01 A
008 C00AA01 801-13219
008 D01AA01 NEW YORK,
008 D02AA01 NY
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010 A00AA01 MITCHELL HUTCHINS ASSET MANAGEMENT, INC.
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010 C01AA01 NEW YORK,
010 C02AA01 NY
010 C03AA01 10019
011 A00AA01 PAINEWEBBER, INC.
011 B00AA01 8-16267
011 C01AA01 NEW YORK,
011 C02AA01 NY
011 C03AA01 10019
012 A00AA01 PFPC, INC.
<PAGE> PAGE 2
012 B00AA01 85-0000000
012 C01AA01 WILMINGTON,
012 C02AA01 DE
012 C03AA01 19809
013 A00AA01 PRICE WATERHOUSE
013 B01AA01 NEW YORK,
013 B02AA01 NY
013 B03AA01 10036
014 A00AA01 PAINEWEBBER, INC.
014 B00AA01 8-16267
015 A00AA01 STATE STREET BANK & TRUST CO.
015 B00AA01 C
015 C01AA01 NORTH QUINCY,
015 C02AA01 MA
015 C03AA01 02171
015 E01AA01 X
018 00AA00 Y
019 A00AA00 Y
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020 C000001 15
020 A000002 SALOMON BROTHERS, INC.
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<PAGE> PAGE 3
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<PAGE> PAGE 4
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<PAGE> PAGE 6
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<PAGE> PAGE 7
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<PAGE> PAGE 10
SIGNATURE JULIAN SLUYTERS
TITLE VP/TREASURER
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October 28, 1996
To the Board of Directors of PaineWebber Balaced Fund
In planning and performing our audit of the financial statements of
PaineWebber Balanced Fund (the Fund ) for the period ended August
31, 1996, we considered its internal control structure, including
procedures for safeguarding securities, in order to determine our
auditing procedures for the purposes of expressing our opinion on
the financial statements and to comply with the requirements of
Form N-SAR, and not to provide assurance on the internal control
structure.
The management of the Fund is responsible for establishing and
maintaining an internal control structure. In fulfilling this
responsibility, estimates and judgments by management are required to
assess the expected benefits and related costs of internal control
structure policies and procedures. Two of the objectives of an
internal control structure are to provide management with reasonable,
but not absolute, assurance that assets are appropriately safeguarded
against loss from unauthorized use or disposition and that transactions
are executed in accordance with management's authorization and recorded
properly to permit preparation of financial statements in conformity
with generally accepted accounting principles.
Because of inherent limitations in any internal control structure,
errors or irregularities may occur and not be detected. Also,
projection of any evaluation of the structure to future periods is
subject to the risk that it may become inadequate because of changes
in conditions or that the effectiveness of the design and operation
may deteriorate.
Our consideration of the internal control structure would not
necessarily disclose all matters in the internal control structure that
might be material weaknesses under standards established by the
American Institute of Certified Public Accountants. A material weakness
is a condition in which the design or operation of the specific internal
control structure elements does not reduce to a relatively low level the
risk that errors or irregularities in amounts that would be material in
relation to the financial statements being audited may occur and not be
detected within a timely period by employees in the normal course of
performing their assigned functions. However, we noted no matters
involving the internal control structure, including procedures for
safeguarding securities, that we consider to be material weaknesses as
defined above as of August 31, 1996.
This report is intended solely for the information and use of management
and the Securities and Exchange Commission.
PRICE WATERHOUSE LLP
For period ending August 31, 1996 Attachment 77C
File Number 811-
PaineWebber Master Series, Inc. - Balanced Fund
A special meeting of shareholders was held on April 15, 1996, at which the
following proposals were approved:
To vote for or against the following changes to the Fund s
fundamental investment restrictions and policies (the
enumeration below follows that used in the related proxy
statement):
Shares Shares
Voted Voted Shares
For Against Abstain
1. Modification of Fundamental
Restriction on Portfolio Diversification
for Diversified Funds: 8,648,607 160,215 813,345
2. Modification of Fundamental
Restriction on Concentration: 8,648,607 160,215 813,345
3. Modification of Fundamental
Restriction on Senior Securities and
Borrowing: 8,648,607 160,215 813,345
4. Modification of Fundamental
Restriction on Making Loans: 8,648,607 160,215 813,345
5. Modification of Fundamental
Restriction on Underwriting Securities: 8,648,607 160,215 813,345
6. Modification of Fundamental
Restriction on Real Estate Investments: 8,648,607 160,215 813,345
7. Modification of Fundamental
Restriction on Investing in Commodities: 8,648,607 160,215 813,345
8. Elimination of Fundamental Restriction
on Margin Transactions: 8,648,607 160,215 813,345
9. Elimination of Fundamental Restriction
on Short Sales: 8,648,607 160,215 813,345
10. Elimination of Fundamental Restriction
on Investments in Oil, Gas and Mineral
Leases and Programs: 8,648,607 160,215 813,345
11. Elimination of Fundamental Restriction
on Investments in Other Investment
Companies: 8,648,607 160,215 813,345
12. Elimination of Fundamental Restriction
Relating to Purchases of Securities Not
Permitted under Investment Objective: 8,648,607 160,215 813,345
In addition to the item noted above, the Fund s shareholders elected
board members. Pursuant to Instruction 2 of Sub-Item 77C of Form N-SAR,
it is not necessary to provide in this exhibit details concerning
shareholder action on this proposal since there were no solicitations
in opposition to the registrant s nominees and all of the nominees were
elected.
A more complete description of the proposal referred to above is hereby
incorporated by reference to the Fund s proxy materials dated February
28, 1996 relating to the Special Meeting of Shareholders. These
Schedule 14A materials were filed with the Securities and Exchange
Commission via EDGAR on February 28, 1996; the accession code number
was 0000950112-96-000634.
For period ending August 31,1996 Attachment 77D
File Number 811-
PaineWebber Master Series - Balanced Fund amended its non-fundamental
investment policies to permit investments in options and futures.
PaineWebber Master Series - Balanced Fund eliminated its policy of
generally not investing in stocks of issuers with market capitalization
below $300 million.
For filing period ended August 31, 1996 Exhibit 77I
File number 811-
PaineWebber Master Series-Balanced Fund
The Fund has taken actions during the period covered by this report
in an attempt to conform the nomenclature used for its share classes
with the uniform nomenclature system suggested by the Investment
Company Institute.
Shares of the Fund outstanding prior to November 10, 1995, that had been
designated Class D shares were redesignated Class C shares as of that
date.
In addition, on July 26, 1996, the Fund commenced offering a new class
of shares. These new shares carry the designation Class Y shares and
they do not have initial or contingent deferred sales charges or
ongoing distribution and service fees.
The current Prospectuses and Statements of Additional Information of the
Fund contain a complete description of the above referenced share classes
and are hereby incorporated by reference in response to this Item 77I
of Form N-SAR as follows:
The Prospectus and Statement of Additional Information included in the
Registrant's Registration Statement on Form 485APOS filed with the
Securities and Exchange Commission through EDGAR on June 28, 1996,
(Accession No. :0000950112-96-002238 is incorporated herein by
reference in response to this Sub-Item.
FORM 10f-3 FUND: PaineWebber Master Series-Balanced Fund
Record of Securities Purchased Under the Fund's Rule 10f-3 Procedures
1. Issuer: Sterling Commerce
2. Date of Purchase: 3/8/96
3. Date offering commenced: 3/8/96
4. Underwriters from whom purchased: Alex Brown
5. "Affiliated Underwriter" managing or participating in syndicate:
Paine Webber
6. Aggregate principal amount of purchase: $96,000
7. Aggregate principal amount of offering: $288,000,000
8. Purchase price (net of fees and expenses): 24
9. Initial public offering price: 24
10. Commission, spread or profit: % $0.80
11. Have the following conditions been satisfied? YES NO
a. The securities are part of an issue registered under _Y_ ___
the Securities Act of 1933 which is being offered to
the public or are "municipal securities" as defined in
Section 3(a)(29) of the Securities Exchange Act of
1934.
b. The securities were purchased prior to the end of the
end first full business day of the offering at not
more than the initial offering price (or, if a rights
offering, , the securities were purchased on or
before the fourth day preceding the day on which
the offering terminated. _Y_ ___
c. The underwriting was a firm commitment
underwriting. _Y_ ___
d. The commission, spread or profit was reasonable
and fair in relation to that being received by others
for underwriting similar securities during the same
period. _Y_ ___
e. (1) If securities are registered under the Securities
Act of 1933, the issuer of the securities and its
predecessor have been in continuous operation for
not less than three years. _Y_ ___
(2) If securities are municipal securities, the
issue of securities has received an investment
grade rating from a nationally recognized
statistical rating organization or, if the
issuer or entity supplying the revenues from
which the issue is to be paid shall have been
in continuous operation for less than three years
(including any predecessor), the issue has received
one of the three highest ratings from at least one
such rating organization. _NA_ ___
f. The amount of such securities purchased by all of
the investment companies advised by Mitchell
Hutchins did not exceed 4% of the principal amount
of the offering or $500,000 in principal amount,
whichever is greater, provided that in no event did
such amount exceed 10% of the principal amount of
the offering. _Y_ ___
g. The purchase price was less than 3% of the Fund's
total assets. _Y_ ___
h. No Affiliated Underwriter was a direct or indirect
participant in or beneficiary of the sale or, with
respect to municipal securities, no purchases were
designated as group sales or otherwise allocated to
the account of any Affiliated Underwriter. _Y_ ___
Approved: Mark Tincher Date: 4/9/96
FORM 10f-3 FUND: PaineWebber Master Series-Balanced Fund
Record of Securities Purchased Under the Fund's Rule 10f-3 Procedures
1. Issuer: Trident
2. Date of Purchase: 2/26/96
3. Date offering commenced: 2/26/96
4. Underwriters from whom purchased: Prudential Securities
5. "Affiliated Underwriter" managing or participating in syndicate:
Paine Webber
6. Aggregate principal amount of purchase: $64,000
7. Aggregate principal amount of offering: $48,000,000
8. Purchase price (net of fees and expenses): $16
9. Initial public offering price: $16
10. Commission, spread or profit: % $0.66
11. Have the following conditions been satisfied? YES NO
a. The securities are part of an issue registered under
the Securities Act of 1933 which is being offered to
the public or are "municipal securities" as defined in
Section 3(a)(29) of the Securities Exchange Act of 1934. _Y_ ___
b. The securities were purchased prior to the end of the
end first full business day of the offering at not
more than the initial offering price (or, if a rights
offering, , the securities were purchased on or
before the fourth day preceding the day on which
the offering terminated. _Y_ ___
c. The underwriting was a firm commitment
underwriting. _Y_ ___
d. The commission, spread or profit was reasonable
and fair in relation to that being received by others
for underwriting similar securities during the same
period. _Y_ ___
e. (1) If securities are registered under the Securities
Act of 1933, the issuer of the securities and its
predecessor have been in continuous operation for
not less than three years. _Y_ ___
(2) If securities are municipal securities, the issue
of securities has received an investment grade
rating from a nationally recognized statistical
rating organization or, if the issuer or entity
supplying the revenues from which the issue is to
be paid shall have been in continuous operation
for less than three years (including any predecessor),
the issue has received one of the three highest
ratings from at least one such rating organization. _NA_ ___
f. The amount of such securities purchased by all of
the investment companies advised by Mitchell
Hutchins did not exceed 4% of the principal amount
of the offering or $500,000 in principal amount,
whichever is greater, provided that in no event did
such amount exceed 10% of the principal amount of
the offering. _Y_ ___
g. The purchase price was less than 3% of the Fund's
total assets. _Y_ ___
h. No Affiliated Underwriter was a direct or indirect
participant in or beneficiary of the sale or, with
respect to municipal securities, no purchases were
designated as group sales or otherwise allocated to
the account of any Affiliated Underwriter. _Y_ ___
Approved: Mark Tincher Date: 3/4/96
FORM 10f-3 FUND: PaineWebber Master Series-Balanced Fund
Record of Securities Purchased Under the Fund's Rule 10f-3 Procedures
1. Issuer: Penske Motor Sport
2. Date of Purchase: 3/26/96 3. Date offering commenced: 3/26/96
4. Underwriters from whom purchased: First Boston
5. "Affiliated Underwriter" managing or participating in syndicate:
Paine Webber
6. Aggregate principal amount of purchase: $36,000
7. Aggregate principal amount of offering: $78,000,000
8. Purchase price (net of fees and expenses): 24
9. Initial public offering price: 24
10. Commission, spread or profit: % $0.98
11. Have the following conditions been satisfied? YES NO
a. The securities are part of an issue registered under
the Securities Act of 1933 which is being offered to
the public or are "municipal securities" as defined in
Section 3(a)(29) of the Securities Exchange Act of
1934. _Y_ ___
b. The securities were purchased prior to the end of the
end first full business day of the offering at not
more than the initial offering price (or, if a rights
offering, , the securities were purchased on or
before the fourth day preceding the day on which
the offering terminated. _Y_ ___
c. The underwriting was a firm commitment
underwriting. _Y_ ___
d. The commission, spread or profit was reasonable
and fair in relation to that being received by others
for underwriting similar securities during the same
period. _Y_ ___
e. (1) If securities are registered under the Securities
Act of 1933, the issuer of the securities and its
predecessor have been in continuous operation for
not less than three years. _Y_ ___
(2) If securities are municipal securities, the issue
of securities has received an investment grade
rating from a nationally recognized statistical
rating organization or, if the issuer or entity
supplying the revenues from which the issue is to
be paid shall have been in continuous operation for
less than three years (including any predecessor),
the issue has received one of the three highest
ratings from at least one such rating organization. _NA_ ___
f. The amount of such securities purchased by all of
the investment companies advised by Mitchell
Hutchins did not exceed 4% of the principal amount
of the offering or $500,000 in principal amount,
whichever is greater, provided that in no event did
such amount exceed 10% of the principal amount of
the offering. _Y_ ___
g. The purchase price was less than 3% of the Fund's
total assets. _Y_ ___
h. No Affiliated Underwriter was a direct or indirect
participant in or beneficiary of the sale or, with
respect to municipal securities, no purchases were
designated as group sales or otherwise allocated to
the account of any Affiliated Underwriter. _Y_ ___
Approved: Mark Tincher Date: 4/9/96
FORM 10f-3 FUND: PaineWebber Master Series-Balanced Fund
Record of Securities Purchased Under the Fund's Rule 10f-3 Procedures
1. Issuer: TWA
2. Date of Purchase: 3/18/96
3. Date offering commenced: 3/18/96
4. Underwriters from whom purchased: Alex Brown
5. "Affiliated Underwriter" managing or participating in syndicate:
Paine Webber
6. Aggregate principal amount of purchase: $750,000
7. Aggregate principal amount of offering: $175,000,000
8. Purchase price (net of fees and expenses): 50
9. Initial public offering price: 50
10. Commission, spread or profit: % $0.975
11. Have the following conditions been satisfied? YES NO
a. The securities are part of an issue registered under
the Securities Act of 1933 which is being offered to
the public or are "municipal securities" as defined in
Section 3(a)(29) of the Securities Exchange Act of
1934. _Y_ ___
b. The securities were purchased prior to the end of the
end first full business day of the offering at not
more than the initial offering price (or, if a rights
offering, , the securities were purchased on or
before the fourth day preceding the day on which
the offering terminated. _Y_ ___
c. The underwriting was a firm commitment
underwriting. _Y_ ___
d. The commission, spread or profit was reasonable
and fair in relation to that being received by others
for underwriting similar securities during the same
period. _Y_ ___
e. (1) If securities are registered under the Securities
Act of 1933, the issuer of the securities and its
predecessor have been in continuous operation for
not less than three years. _Y_ ___
(2) If securities are municipal securities, the issue
of securities has received an investment grade rating
from a nationally recognized statistical rating
organization or, if the issuer or entity supplying the
revenues from which the issue is to be paid shall
have been in continuous operation for less than
three years (including any predecessor), the issue
has received one of the three highest ratings from at
least one such rating organization. _NA_ ___
f. The amount of such securities purchased by all of
the investment companies advised by Mitchell
Hutchins did not exceed 4% of the principal amount
of the offering or $500,000 in principal amount,
whichever is greater, provided that in no event did
such amount exceed 10% of the principal amount of
the offering. _Y_ ___
g. The purchase price was less than 3% of the Fund's
total assets. _Y_ ___
h. No Affiliated Underwriter was a direct or indirect
participant in or beneficiary of the sale or, with
respect to municipal securities, no purchases were
designated as group sales or otherwise allocated to
the account of any Affiliated Underwriter. _Y_ ___
Approved: Mark Tincher Date: 4/9/96
