<PAGE> PAGE 1
000 B000000 08/31/98
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
007 C010100 1
007 C010200 2
007 C020200 PW BALANCED FUND (FORMERLY ASSET ALLOCATION)
007 C030200 N
007 C010300 3
007 C010400 4
007 C010500 5
007 C010600 6
007 C010700 7
007 C010800 8
007 C010900 9
007 C011000 10
008 A00AA01 MITCHELL HUTCHINS ASSET MANAGEMENT, INC.
008 B00AA01 A
008 C00AA01 801-13219
008 D01AA01 NEW YORK,
008 D02AA01 NY
008 D03AA01 10019
010 A00AA01 MITCHELL HUTCHINS ASSET MANAGEMENT, INC.
010 B00AA01 801-13219
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
019 B00AA00 69
019 C00AA00 PAINEWEBBE
020 A000001 BRIDGE TRADING
020 B000001 43-1450530
020 C000001 43
020 A000002 BEAR, STEARNS SECURITIES
020 B000002 13-3299429
020 C000002 24
020 A000003 ONEIL WILLIAM & CO
020 B000003 95-2269163
020 C000003 23
020 A000004 ESI SECURITIES CO.
020 C000004 21
020 A000005 DONALDSON, LUFKIN + JENRETTE
020 B000005 13-2741729
020 C000005 18
020 A000006 MORGAN (J.P.) SECURITIES
020 B000006 13-3224016
020 C000006 13
020 A000007 MORGAN STANLEY & CO. INC.
020 B000007 13-2655998
020 C000007 12
020 A000008 MERRILL LYNCH PIERCE FEN
020 B000008 13-5674085
020 C000008 12
020 A000009 LEHMAN BROS., INC.
020 C000009 10
020 A000010 CS FIRST BOSTON CORP
020 B000010 13-5659485
020 C000010 10
021 000000 291
022 A000001 STATE STREET BANK AND TRUST
022 B000001 04-1867445
<PAGE> PAGE 3
022 C000001 950518
022 D000001 0
022 A000002 SALOMON BROTHERS INC
022 B000002 13-3082694
022 C000002 736100
022 D000002 3062
022 A000003 UBS SECURITIES, INC
022 B000003 00-0000000
022 C000003 413195
022 D000003 0
022 A000004 DRESDNER GILTS
022 B000004 00-0000000
022 C000004 381743
022 D000004 0
022 A000005 CITICORP SECURITIES
022 B000005 00-0000000
022 C000005 346972
022 D000005 0
022 A000006 FIRST CHICAGO CAPITAL
022 B000006 00-0000000
022 C000006 321495
022 D000006 0
022 A000007 SOCIETY GENERALE
022 B000007 00-0000000
022 C000007 289825
022 D000007 0
022 A000008 GOLDMAN SACHS + CO
022 B000008 13-5108880
022 C000008 118467
022 D000008 6519
022 A000009 DAIWA
022 B000009 13-5680329
022 C000009 109588
022 D000009 0
022 A000010 MORGAN STANLEY AND CO
022 B000010 13-2655998
022 C000010 56198
022 D000010 0
023 C000000 4246921
023 D000000 591584
024 00AA00 N
025 D00AA01 0
025 D00AA02 0
025 D00AA03 0
025 D00AA04 0
025 D00AA05 0
025 D00AA06 0
025 D00AA07 0
025 D00AA08 0
026 A000000 N
026 B000000 N
<PAGE> PAGE 4
026 C000000 N
026 D000000 Y
026 E000000 N
026 F000000 N
026 G010000 N
026 G020000 N
026 H000000 N
027 000000 Y
028 A01AA00 7847
028 A02AA00 0
028 A03AA00 0
028 A04AA00 2188
028 B01AA00 4845
028 B02AA00 0
028 B03AA00 0
028 B04AA00 2792
028 C01AA00 4232
028 C02AA00 0
028 C03AA00 0
028 C04AA00 2474
028 D01AA00 5055
028 D02AA00 1563
028 D03AA00 0
028 D04AA00 3922
028 E01AA00 4051
028 E02AA00 0
028 E03AA00 0
028 E04AA00 2828
028 F01AA00 3453
028 F02AA00 0
028 F03AA00 0
028 F04AA00 2840
028 G01AA00 29483
028 G02AA00 1563
028 G03AA00 0
028 G04AA00 17044
028 H00AA00 7210
029 00AA00 Y
030 A00AA00 368
030 B00AA00 4.50
030 C00AA00 0.00
031 A00AA00 234
031 B00AA00 0
032 00AA00 0
033 00AA00 134
034 00AA00 Y
035 00AA00 31
036 A00AA00 Y
036 B00AA00 0
037 00AA00 N
038 00AA00 0
<PAGE> PAGE 5
039 00AA00 Y
040 00AA00 Y
041 00AA00 Y
042 A00AA00 0
042 B00AA00 0
042 C00AA00 0
042 D00AA00 0
042 E00AA00 0
042 F00AA00 0
042 G00AA00 0
042 H00AA00 100
043 00AA00 837
044 00AA00 0
045 00AA00 Y
046 00AA00 N
047 00AA00 Y
048 00AA00 0.000
048 A01AA00 500000
048 A02AA00 0.750
048 B01AA00 500000
048 B02AA00 0.725
048 C01AA00 500000
048 C02AA00 0.700
048 D01AA00 500000
048 D02AA00 0.675
048 E01AA00 0
048 E02AA00 0.000
048 F01AA00 0
048 F02AA00 0.000
048 G01AA00 0
048 G02AA00 0.000
048 H01AA00 0
048 H02AA00 0.000
048 I01AA00 0
048 I02AA00 0.000
048 J01AA00 0
048 J02AA00 0.000
048 K01AA00 2000000
048 K02AA00 0.650
049 00AA00 N
050 00AA00 N
051 00AA00 N
052 00AA00 N
053 A00AA00 N
054 A00AA00 Y
054 B00AA00 Y
054 C00AA00 Y
054 D00AA00 N
054 E00AA00 N
054 F00AA00 N
054 G00AA00 Y
<PAGE> PAGE 6
054 H00AA00 Y
054 I00AA00 N
054 J00AA00 Y
054 K00AA00 N
054 L00AA00 N
054 M00AA00 Y
054 N00AA00 N
054 O00AA00 Y
055 A00AA00 N
055 B00AA00 N
056 00AA00 N
057 00AA00 N
058 A00AA00 N
059 00AA00 Y
060 A00AA00 Y
060 B00AA00 Y
061 00AA00 1000
062 A00AA00 N
062 B00AA00 0.0
062 C00AA00 0.0
062 D00AA00 0.0
062 E00AA00 0.0
062 F00AA00 0.0
062 G00AA00 0.0
062 H00AA00 0.0
062 I00AA00 0.0
062 J00AA00 0.0
062 K00AA00 0.0
062 L00AA00 0.0
062 M00AA00 0.0
062 N00AA00 0.0
062 O00AA00 0.0
062 P00AA00 0.0
062 Q00AA00 0.0
062 R00AA00 0.0
063 A00AA00 0
063 B00AA00 0.0
066 A00AA00 Y
066 B00AA00 N
066 C00AA00 N
066 D00AA00 N
066 E00AA00 N
066 F00AA00 N
066 G00AA00 Y
067 00AA00 Y
068 A00AA00 N
068 B00AA00 N
069 00AA00 N
070 A01AA00 Y
070 A02AA00 Y
070 B01AA00 Y
<PAGE> PAGE 7
070 B02AA00 Y
070 C01AA00 Y
070 C02AA00 Y
070 D01AA00 Y
070 D02AA00 N
070 E01AA00 Y
070 E02AA00 N
070 F01AA00 Y
070 F02AA00 N
070 G01AA00 Y
070 G02AA00 Y
070 H01AA00 Y
070 H02AA00 N
070 I01AA00 N
070 I02AA00 N
070 J01AA00 Y
070 J02AA00 N
070 K01AA00 Y
070 K02AA00 Y
070 L01AA00 Y
070 L02AA00 Y
070 M01AA00 N
070 M02AA00 N
070 N01AA00 Y
070 N02AA00 Y
070 O01AA00 Y
070 O02AA00 N
070 P01AA00 Y
070 P02AA00 N
070 Q01AA00 Y
070 Q02AA00 N
070 R01AA00 Y
070 R02AA00 N
071 A00AA00 416580
071 B00AA00 408688
071 C00AA00 215341
071 D00AA00 190
072 A00AA00 12
072 B00AA00 5509
072 C00AA00 1641
072 D00AA00 0
072 E00AA00 0
072 F00AA00 1709
072 G00AA00 0
072 H00AA00 0
072 I00AA00 160
072 J00AA00 139
072 K00AA00 28
072 L00AA00 50
072 M00AA00 14
072 N00AA00 80
<PAGE> PAGE 8
072 O00AA00 0
072 P00AA00 0
072 Q00AA00 0
072 R00AA00 48
072 S00AA00 50
072 T00AA00 837
072 U00AA00 0
072 V00AA00 0
072 W00AA00 31
072 X00AA00 3146
072 Y00AA00 0
072 Z00AA00 4004
072AA00AA00 33245
072BB00AA00 0
072CC01AA00 0
072CC02AA00 29081
072DD01AA00 3302
072DD02AA00 365
072EE00AA00 25276
073 A01AA00 0.2200
073 A02AA00 0.1200
073 B00AA00 1.5500
073 C00AA00 0.0000
074 A00AA00 55
074 B00AA00 19929
074 C00AA00 14144
074 D00AA00 97604
074 E00AA00 3523
074 F00AA00 108025
074 G00AA00 0
074 H00AA00 54
074 I00AA00 0
074 J00AA00 1415
074 K00AA00 0
074 L00AA00 1461
074 M00AA00 24
074 N00AA00 246234
074 O00AA00 7877
074 P00AA00 234
074 Q00AA00 0
074 R01AA00 0
074 R02AA00 0
074 R03AA00 0
074 R04AA00 14580
074 S00AA00 0
074 T00AA00 223543
074 U01AA00 16179
074 U02AA00 3611
074 V01AA00 11.27
074 V02AA00 11.48
074 W00AA00 0.0000
<PAGE> PAGE 9
074 X00AA00 14382
074 Y00AA00 0
075 A00AA00 0
075 B00AA00 227902
076 00AA00 0.00
077 A000000 Y
077 B000000 Y
077 C000000 N
077 D000000 N
077 E000000 N
077 F000000 N
077 G000000 N
077 H000000 N
077 I000000 N
077 J000000 N
077 K000000 N
077 L000000 N
077 M000000 N
077 N000000 N
077 O000000 Y
077 P000000 N
077 Q010000 Y
077 Q020000 N
077 Q030000 N
078 000000 N
080 C00AA00 0
081 A00AA00 N
081 B00AA00 0
082 A00AA00 N
082 B00AA00 0
083 A00AA00 N
083 B00AA00 0
084 A00AA00 N
084 B00AA00 0
085 A00AA00 Y
085 B00AA00 N
086 A010000 0
086 A020000 0
086 B010000 0
086 B020000 0
086 C010000 0
086 C020000 0
086 D010000 0
086 D020000 0
086 E010000 0
086 E020000 0
086 F010000 0
086 F020000 0
SIGNATURE PAUL SCHUBERT
TITLE TREASURER
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000780403
<NAME> PAINEWEBBER MASTER SERIES, INC.
<SERIES>
<NUMBER> 2
<NAME> PAINEWEBBER BALANCED FUND - CLASS A
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1998
<PERIOD-START> SEP-01-1997
<PERIOD-END> AUG-31-1998
<INVESTMENTS-AT-COST> 180557
<INVESTMENTS-AT-VALUE> 186924
<RECEIVABLES> 2346
<ASSETS-OTHER> 11558
<OTHER-ITEMS-ASSETS> 45
<TOTAL-ASSETS> 200873
<PAYABLE-FOR-SECURITIES> 6426
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 12085
<TOTAL-LIABILITIES> 18511
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 153020
<SHARES-COMMON-STOCK> 16179
<SHARES-COMMON-PRIOR> 14109
<ACCUMULATED-NII-CURRENT> 933
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 22056
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 6353
<NET-ASSETS> 182362
<DIVIDEND-INCOME> 1338
<INTEREST-INCOME> 4495
<OTHER-INCOME> 0
<EXPENSES-NET> 2364
<NET-INVESTMENT-INCOME> 3469
<REALIZED-GAINS-CURRENT> 27121
<APPREC-INCREASE-CURRENT> (23724)
<NET-CHANGE-FROM-OPS> 6866
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 3302
<DISTRIBUTIONS-OF-GAINS> 21634
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1925
<NUMBER-OF-SHARES-REDEEMED> 1907
<SHARES-REINVESTED> 2053
<NET-CHANGE-IN-ASSETS> 11633
<ACCUMULATED-NII-PRIOR> 699
<ACCUMULATED-GAINS-PRIOR> 16163
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1394
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2364
<AVERAGE-NET-ASSETS> 192154
<PER-SHARE-NAV-BEGIN> 12.50
<PER-SHARE-NII> 0.23
<PER-SHARE-GAIN-APPREC> 0.31
<PER-SHARE-DIVIDEND> 0.22
<PER-SHARE-DISTRIBUTIONS> 1.55
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.27
<EXPENSE-RATIO> 1.26
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000780403
<NAME> PAINEWEBBER MASTER SERIES, INC
<SERIES>
<NUMBER> 2
<NAME> PAINEWEBBER BALANCED FUND - CLASS B
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1998
<PERIOD-START> SEP-01-1997
<PERIOD-END> AUG-31-1998
<INVESTMENTS-AT-COST> 26163
<INVESTMENTS-AT-VALUE> 27086
<RECEIVABLES> 340
<ASSETS-OTHER> 1674
<OTHER-ITEMS-ASSETS> 7
<TOTAL-ASSETS> 29107
<PAYABLE-FOR-SECURITIES> 931
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1751
<TOTAL-LIABILITIES> 2682
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 22173
<SHARES-COMMON-STOCK> 2302
<SHARES-COMMON-PRIOR> 1793
<ACCUMULATED-NII-CURRENT> 135
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 3196
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 921
<NET-ASSETS> 26425
<DIVIDEND-INCOME> 194
<INTEREST-INCOME> 651
<OTHER-INCOME> 0
<EXPENSES-NET> 517
<NET-INVESTMENT-INCOME> 328
<REALIZED-GAINS-CURRENT> 3930
<APPREC-INCREASE-CURRENT> (3438)
<NET-CHANGE-FROM-OPS> 820
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 237
<DISTRIBUTIONS-OF-GAINS> 2517
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1299
<NUMBER-OF-SHARES-REDEEMED> 1005
<SHARES-REINVESTED> 215
<NET-CHANGE-IN-ASSETS> 2370
<ACCUMULATED-NII-PRIOR> 90
<ACCUMULATED-GAINS-PRIOR> 2086
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 202
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 517
<AVERAGE-NET-ASSETS> 24438
<PER-SHARE-NAV-BEGIN> 12.70
<PER-SHARE-NII> 0.14
<PER-SHARE-GAIN-APPREC> 0.31
<PER-SHARE-DIVIDEND> 0.12
<PER-SHARE-DISTRIBUTIONS> 1.55
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.48
<EXPENSE-RATIO> 2.03
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000780403
<NAME> PAINEWEBBER MASTER SERIES, INC
<SERIES>
<NUMBER> 2
<NAME> PAINEWEBBER BALANCED FUND - CLASS C
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1998
<PERIOD-START> SEP-01-1997
<PERIOD-END> AUG-31-1998
<INVESTMENTS-AT-COST> 14437
<INVESTMENTS-AT-VALUE> 14946
<RECEIVABLES> 188
<ASSETS-OTHER> 924
<OTHER-ITEMS-ASSETS> 3
<TOTAL-ASSETS> 16061
<PAYABLE-FOR-SECURITIES> 514
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 966
<TOTAL-LIABILITIES> 1480
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 12235
<SHARES-COMMON-STOCK> 1293
<SHARES-COMMON-PRIOR> 698
<ACCUMULATED-NII-CURRENT> 75
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1764
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 508
<NET-ASSETS> 14581
<DIVIDEND-INCOME> 107
<INTEREST-INCOME> 359
<OTHER-INCOME> 0
<EXPENSES-NET> 263
<NET-INVESTMENT-INCOME> 203
<REALIZED-GAINS-CURRENT> 2169
<APPREC-INCREASE-CURRENT> (1897)
<NET-CHANGE-FROM-OPS> 475
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 127
<DISTRIBUTIONS-OF-GAINS> 1125
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 980
<NUMBER-OF-SHARES-REDEEMED> 487
<SHARES-REINVESTED> 101
<NET-CHANGE-IN-ASSETS> 1598
<ACCUMULATED-NII-PRIOR> 34
<ACCUMULATED-GAINS-PRIOR> 800
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 111
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 263
<AVERAGE-NET-ASSETS> 11270
<PER-SHARE-NAV-BEGIN> 12.52
<PER-SHARE-NII> 0.14
<PER-SHARE-GAIN-APPREC> 0.31
<PER-SHARE-DIVIDEND> 0.14
<PER-SHARE-DISTRIBUTIONS> 1.55
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.28
<EXPENSE-RATIO> 2.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000780403
<NAME> PAINEWEBBER MASTER SERIES, INC
<SERIES>
<NUMBER> 2
<NAME> PAINEWEBBER BALANCED FUND - CLASS Y
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1998
<PERIOD-START> SEP-01-1997
<PERIOD-END> AUG-31-1998
<INVESTMENTS-AT-COST> 173
<INVESTMENTS-AT-VALUE> 179
<RECEIVABLES> 3
<ASSETS-OTHER> 11
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 193
<PAYABLE-FOR-SECURITIES> 6
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 12
<TOTAL-LIABILITIES> 18
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 147
<SHARES-COMMON-STOCK> 16
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 1
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 21
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 6
<NET-ASSETS> 175
<DIVIDEND-INCOME> 1
<INTEREST-INCOME> 4
<OTHER-INCOME> 0
<EXPENSES-NET> 1
<NET-INVESTMENT-INCOME> 4
<REALIZED-GAINS-CURRENT> 26
<APPREC-INCREASE-CURRENT> (23)
<NET-CHANGE-FROM-OPS> 7
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 15
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 1
<NET-CHANGE-IN-ASSETS> 35
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2
<AVERAGE-NET-ASSETS> 94
<PER-SHARE-NAV-BEGIN> 12.55
<PER-SHARE-NII> 0.11
<PER-SHARE-GAIN-APPREC> (1.28)
<PER-SHARE-DIVIDEND> 0.11
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.27
<EXPENSE-RATIO> 0.89
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
FORM 10f-3
Registered Domestic Securities
Fund: _PaineWebber Balanced Fund
1. Issuer:. Alaska Airlines
2. Date of Purchase: 12/10/97
3. Date offering commenced: 12/16/97
4. Underwriters from whom purchased: Merrill
Lynch
5. "Affiliated Underwriter" managing or participating
in syndicate: Paine Webber
6. Aggregate principal amount of purchase: $
573,500
7. Aggregate principal amount of offering: $
111,000,000
8. Purchase price (net of fees and expenses): $
37.00
9. Initial public offering price: $ 37.00
10. Commission, spread or profit: % $__0.95___
11. Have the following conditions been satisfied?
YES
NO
a. The
securities are
part of an issue
registered
under the
Securities Act
of 1933 that is
being offered to
the public. __X___ _____
b. The
securities
were
purchased
prior to the
end of the
first day on
which any
sales are
made (of, if
a rights
offering, the
securities
were
purchased
on or before
the fourth
day
preceding
the day on
which the
offering
terminated). ___X____` ______
c. The
securities
were
purchased
at a price
not more
than the
price paid
by each
purchaser
in the
offering. ____x___ ______
d. The underwriting was a firm commitment
underwriting. ___X___ ______
e. 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. ___X____ _______
f. The
issuer of
the
securitie
s and
any
predece
ssor
have
been in
continuo
us
operatio
n for not
less
than
three
years. ____x___ ________
g. The
amount
of such
securities
purchase
d by all of
the
investme
nt
companie
s advised
by
Mitchell
Hutchins
(or the
Fund's
Sub-
Adviser, if
applicabl
e) did not
exceed
25% of
the
principal
amount
of the
offering. ____X___ ________
h. No
Affiliated
Underwriter
was a direct
or indirect
participant
in or
beneficiary
of the sale. ____X____ ________
Note: Refer to the Rule 10f-3 Procedures for the definitions of
the capitalized terms above. In particular, "Affiliated
Underwriter" is defined as Paine Webber Group Inc. and any
of its affiliates, including PaineWebber Incorporated. In the
cash of a fund advised by a Sub-Adviser, "Affiliated
Underwriter" shall also include any brokerage affiliate of the
Sub-Adviser.
Approved: Mark Tincher
Dat
e:
October 26, 1998
To the Shareholders and
Board of Directors of
PaineWebber Balanced Fund
In planning and performing our audit of the
financial statements of PaineWebber Balanced
Fund for the year ended August 31, 1998, we
considered its internal control, including control
activities for safeguarding securities, in order to
determine our auditing procedures for the purpose
of expressing our opinion on the financial
statements and to comply with the requirements of
Form N-SAR, not to provide assurance on internal
control.
The management of PaineWebber Balanced Fund
is responsible for establishing and maintaining
internal control. In fulfilling this responsibility,
estimates and judgments by management are
required to assess the expected benefits and related
costs of controls. Generally, controls that are
relevant to an audit pertain to the entity's objective
of preparing financial statements for external
purposes that are fairly presented in conformity
with generally accepted accounting principles.
Those controls include the safeguarding of assets
against unauthorized acquisition, use or
disposition.
Because of inherent limitations in internal control,
errors or fraud may occur and not be detected.
Also, projection of any evaluation of internal
control 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 internal control would not
necessarily disclose all matters in internal control
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 one
or more of the internal control components does
not reduce to a relatively low level the risk that
misstatements caused by error or fraud 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 internal control and its operation,
including controls for safeguarding securities, that
we consider to be material weaknesses as defined
above as of August 31, 1998.
This report is intended solely for the information
and use of management and the Board of Directors
of PaineWebber Balanced Fund and the Securities
and Exchange Commission.
PricewaterhouseCoopers LLP
