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PAINEWEBBER BALANCED FUND
PAINEWEBBER TACTICAL ALLOCATION FUND
SUPPLEMENT TO PROSPECTUS DATED JANUARY 1, 1997
June 26, 1997
Dear Investor:
This is a supplement to the Prospectus of the PaineWebber Balanced Fund and
the PaineWebber Tactical Allocation Fund dated January 1, 1997. The purpose of
this supplement is to notify investors of a change to an investment policy of
the Balanced Fund. The Board of Directors of the Balanced Fund has eliminated
the policy that the Fund will attempt to maintain a dollar-weighted average
maturity of three to ten years for its fixed income investments. As a result,
this Fund has no limits on the maturities of its fixed income investments.
Accordingly, the following sentence at the end of the first paragraph under
"INVESTMENT OBJECTIVES & POLICIES", in the section captioned "Balanced Fund" on
page 11 of the Prospectus, is eliminated:
The Fund attempts to maintain a dollar-weighted average maturity
for its fixed income investments - the average remaining time to
maturity of a portfolio's bonds - of three to ten years.
****
In addition, the following is eliminated in the chart on page 13 under
Balanced Fund, Fixed Income Selection:
Aims for a dollar-weighted average maturity of three to ten years.
****
This change will broaden the Fund's ability to pursue total return among bonds
with longer maturities. Mitchell Hutchins hopes that this change will enhance
the performance of the Balanced Fund; however, whenever a Fund attempts to take
advantage of greater opportunities, it must also accept increased risks. In this
case, increasing exposure to longer maturity bonds may increase the Fund's
sensitivity to changes in interest rates.
If you have any questions regarding the PaineWebber Balanced Fund or this
change to its investment policy, please call your investment executive at
PaineWebber or one of its correspondent firms. If you do not have an investment
executive, please call PaineWebber shareholder services toll-free at
800-647-1568.
