<PAGE>
PAINEWEBBER MONEY MARKET FUND SEMIANNUAL REPORT
October 15, 1998
Dear Shareholder,
We are pleased to present you with the semiannual report for the PaineWebber
Money Market Fund (the "Fund") for the six-month period ended August 31, 1998.
GENERAL MARKET OVERVIEW
- --------------------------------------------------------------------------------
[PICTURE]
U.S. bond market yields fell over the period, reflecting investor demand for
high-quality securities and diminishing concern over inflation. The bond
market traded in tandem with the dollar and the yield curve flattened as
long-term rates fell more than short-term rates. Rates briefly rose in April
of this year when the Federal Reserve announced it had shifted to a tightening
bias, but dropped at month-end on good employment and inflation news.
In July the stock markets became more volatile, and investors shifted some of
their assets into bonds, causing yields to fall and prices to rise. Reflecting
investors' liquidity premium, Treasury bonds made large gains and corporate
bonds were viewed as relatively less attractive.
PORTFOLIO REVIEW
- --------------------------------------------------------------------------------
[PICTURE]
We remained somewhat bullish on the fixed income markets over the six months
ended August 31, 1998, expecting interest rates to hold steady or fall
slightly. We kept the Fund's weighted average maturity slightly above its peer
group. The Fund's current yield for the seven-day period ended August 31, 1998
was 4.56% for Class A shares, 4.03% for Class B shares and 4.02% for Class C
shares. The Fund's weighted-average maturity was 64 days, and net assets
totaled $83.0 million as of August 31, 1998.
OUTLOOK
- --------------------------------------------------------------------------------
[PICTURE]
We remain bullish on short rates because of the volatility in the marketplace.
The demand for U.S. debt remains high as the "flight to quality" continues. We
think the Federal Reserve may lower short-term rates again, depending on what
happens in the U.S. stock market and in the world economies.
Because we expect interest rates to trend lower, we expect to keep the Fund's
weighted average maturity slightly above that of its peer group.
- --------------------------------------------------------------------------------
PAINEWEBBER
MONEY MARKET FUND
FUND PROFILE
[ARROW] Goal:
Principal stability
and current income
[ARROW] Portfolio Manager:
Susan P. Ryan,
Mitchell Hutchins
Asset Management Inc.
[ARROW] Total Net Assets:
$83.0 million as of
August 31, 1998
[ARROW] Dividend Payments:
Monthly
1
<PAGE>
SEMIANNUAL 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 Fund Profile on another mutual fund in the PaineWebber Family
of Funds,(1) please contact your investment executive.
Sincerely,
/s/ Margo Alexander /s/ Dennis L. McCauley
- -------------------------------- -------------------------------
MARGO ALEXANDER DENNIS L. McCAULEY
President Managing Director and
Mitchell Hutchins Asset Management Inc. Chief Investment Officer--Fixed Income
Mitchell Hutchins Asset
Management Inc.
/s/ Susan P. Ryan
- --------------------------------
SUSAN P. RYAN
Senior Vice President
Mitchell Hutchins Asset Management Inc.
(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.
This letter is intended to assist shareholders in understanding how the
Fund performed during the six-month period ended August 31, 1998, and
reflects our views at the time of writing this report. Of course, these
views may change in response to changing circumstances. We encourage you
to consult your investment executive regarding your personal investment
program.
- --------------------------------------------------------------------------------
PAINEWEBBER
MONEY MARKET
FUND
Asset Allocation,
August 31, 1998*
Commercial Paper 76.5%
Certificates of Deposit 6.3%
Short-term
Corporate Obligations 5.4%
U.S. Government
& Agency Obligations 2.4%
Bank Notes 9.4%
* Percentage of portfolio assets; all allocations are subject to change.
2
<PAGE>
PAINEWEBBER MONEY MARKET FUND
STATEMENT OF NET ASSETS AUGUST 31, 1998 (unaudited)
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
----- ----- ----- -----
<S> <C> <C> <C>
U.S. Government Agency Obligations--2.41%
$ 1,000 Federal Home Loan Bank................................ 09/01/98 5.485%* $ 999,746
1,000 Federal National Mortgage Association ................ 09/01/98 5.230* 1,000,000
-----------
Total U.S. Government Agency Obligations (cost--$1,999,746) .... 1,999,746
-----------
Bank Notes--9.35%
Domestic--9.35%
750 FCC National Bank .................................... 01/07/99 5.700 749,924
2,000 Huntington National Bank ............................. 05/03/99 6.460 2,009,779
2,000 NationsBank N.A. ..................................... 02/25/99 5.590 2,000,000
2,000 Norwest Corporation .................................. 08/31/99 5.550 1,999,426
1,000 Westpac Banking Corporation .......................... 04/23/99 5.730 999,635
-----------
Total Bank Notes (cost--$7,758,764) ............................ 7,758,764
-----------
Certificates of Deposit--6.27
Domestic--2.77%
500 Bankers Trust Corporation ............................ 09/09/98 5.950 499,995
1,800 Bankers Trust Corporation ............................ 09/01/98 5.570 to 5.690* 1,799,212
-----------
2,299,207
-----------
Yankee--3.50%
400 Credit Agricole Indosuez ............................. 02/18/99 5.650 400,000
1,500 Societe Generale ..................................... 10/07/98 to 04/16/99 5.760 to 5.770 1,499,957
1,000 Svenska Handelsbanken ................................ 04/30/99 5.820 1,000,091
-----------
2,900,048
-----------
Total Certificates of Deposit (cost--$5,199,255) ............... 5,199,255
-----------
Commercial [email protected]%
Asset Backed--Auto & Truck--2.41%
2,000 New Center Asset Trust ............................... 09/14/98 5.530 1,996,006
-----------
Asset Backed--Banking--1.18%
1,000 Atlantis One Funding Corporation ..................... 12/28/98 5.510 981,940
-----------
Asset Backed--Miscellaneous--5.57%
2,660 Asset Securitization Cooperative Corporation ......... 10/29/98 5.530 2,636,301
990 Delaware Funding Corporation ......................... 09/23/98 5.570 986,630
1,000 Triple-A One Funding Corporation ..................... 09/04/98 5.540 999,538
-----------
4,622,469
-----------
Auto & Truck--7.16%
2,000 BMW US Capital Corporation ........................... 10/09/98 5.500 1,988,389
2,000 Daimler-Benz North America Corporation ............... 12/09/98 5.470 1,969,915
2,000 Ford Motor Credit Corporation ........................ 10/22/98 5.510 1,984,388
-----------
5,942,692
-----------
Banking--6.54%
1,500 BCI Funding Corporation .............................. 09/15/98 5.520 1,496,780
2,000 Nordbanken North America Incorporated ................ 02/12/99 5.470 1,950,162
2,000 Unifunding Incorporated .............................. 11/04/98 5.510 1,980,409
-----------
5,427,351
-----------
</TABLE>
3
<PAGE>
PAINEWEBBER MONEY MARKET FUND
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
----- ----- ----- -----
<S> <C> <C> <C>
Commercial Paper@ (concluded)
Broker-Dealer--6.25%
$ 4,000 Goldman Sachs Group L.P. ............................. 09/01/98 5.830% $ 4,000,000
1,200 Merrill Lynch & Company, Incorporated ................ 11/18/98 5.500 1,185,700
-----------
5,185,700
-----------
Business Services--2.41%
2,000 Block Financial Corporation .......................... 09/01/98 5.520 2,000,000
-----------
Drugs, Health Care--6.03%
1,000 Abbott Laboratories .................................. 09/08/98 5.500 998,931
4,000 Bayer Corporation .................................... 09/01/98 5.820 4,000,000
-----------
4,998,931
-----------
Electronics--2.40%
2,000 Motorola Incorporated ................................ 09/29/98 5.510 1,991,429
-----------
Energy--4.82%
4,000 Koch Industries Incorporated ......................... 09/01/98 5.810 4,000,000
-----------
Finance-Conduit--8.67%
1,240 Commerzbank U.S. Finance Incorporated ................ 11/18/98 5.490 1,225,250
1,975 MetLife Funding Incorporated ......................... 09/29/98 5.520 1,966,521
4,000 UBS Finance (Delaware) Incorporated .................. 09/01/98 5.820 4,000,000
-----------
7,191,771
-----------
Finance-Subsidiary--2.38%
2,000 National Australia Funding (Delaware) Incorporated ... 11/23/98 5.490 1,974,685
-----------
Insurance--5.98%
3,000 General Re Corporation ............................... 10/27/98 5.500 to 5.510 2,974,302
2,000 Prudential Funding Corporation ....................... 10/06/98 5.530 1,989,247
-----------
4,963,549
-----------
Manufacturing-Diversified--2.39%
2,000 BTR Dunlop Finance Incorporated ...................... 11/12/98 5.500 1,978,000
-----------
Metals & Mining--3.11%
2,600 U.S. Borax Incorporated .............................. 09/10/98 to 11/16/98 5.500 to 5.600 2,575,938
-----------
Printing, Publishing--4.82%
4,000 Gannett Company ...................................... 09/01/98 5.800 4,000,000
-----------
Telecommunications--4.44%
2,000 BellSouth Telecommunications Incorporated ............ 09/10/98 5.500 1,997,250
1,700 Lucent Technologies Incorporated ..................... 10/29/98 5.500 1,684,936
-----------
3,682,186
-----------
Total Commercial Paper (cost--$63,512,647) ..................... 63,512,647
-----------
</TABLE>
4
<PAGE>
PAINEWEBBER MONEY MARKET FUND
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
----- ----- ----- -----
<S> <C> <C> <C>
Short-Term Corporate Obligations--5.42%
Broker-Dealer--3.61%
$ 1,500 Bear Stearns Companies, Incorporated ................. 04/05/99 to 06/14/99 5.800% $ 1,500,000
1,300 Credit Suisse First Boston ........................... 09/01/98 5.634 1,300,000
200 Lehman Brothers Holdings Incorporated ................ 11/10/98 6.590 200,230
-----------
3,000,230
-----------
Computers--0.60%
500 IBM Credit Corporation ............................... 09/01/98 5.650* 500,000
-----------
Miscellaneous--1.21%
1,000 Beta Finance Incorporated ............................ 11/16/98 5.870 1,000,000
-----------
Total Short-Term Corporate Obligations (cost--$4,500,230) ...... 4,500,230
-----------
Total Investments (cost--$82,970,642, which approximates cost
for federal income tax purposes)--100.01% .................. 82,970,642
Liabilities in excess of other assets--(0.01)% ................. (11,318)
-----------
Net Assets (applicable to 53,253,101, 17,933,345 and
11,785,518 shares of Class A, Class B and Class C,
respectively, each equivalent to $1.00 per
share)--100.00% ........................................... $82,959,324
===========
</TABLE>
- -----------------------
* Variable rate securities-maturity date reflects earlier of reset date or
maturity date. The interest rates shown are the current rates as of
August 31, 1998, and reset periodically.
@ Interest rates shown are discount rates at date of purchase.
Weighted average maturity--64 days
See accompanying notes to financial statements
5
<PAGE>
PAINEWEBBER MONEY MARKET FUND
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
For the Six
Months Ended
August 31, 1998
(unaudited)
------------------
<S> <C>
Investment income:
Interest ....................................................... $ 1,479,564
-----------
Expenses:
Investment advisory and administration ......................... 130,391
Service fees--Class A .......................................... 36,720
Service and distribution fees--Class B ......................... 54,734
Service and distribution fees--Class C ......................... 30,690
State registration fees ........................................ 36,895
Legal and audit ................................................ 36,703
Reports and notices to shareholders ............................ 34,161
Transfer agency and service fees ............................... 16,676
Directors fees ................................................. 5,250
Custody and accounting ......................................... 2,028
Other expenses ................................................. 9,069
----------
393,317
----------
Net investment income .......................................... 1,086,247
Net realized loss from investment transactions ................. (1,296)
----------
Net increase in net assets resulting from
operations ................................................... $ 1,084,951
==========
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the Six
Months Ended For the
August 31, 1998 Year Ended
(unaudited) February 28, 1998
--------------- -----------------
<S> <C> <C>
From operations:
Net investment income ................................... $ 1,086,247 $ 1,609,088
Net realized losses from investment transactions ........ (1,296) (327)
------------ ------------
Net increase in net assets resulting from operations .... 1,084,951 1,608,761
------------ ------------
Dividends to shareholders from:
Net investment income--Class A .......................... (648,630) (663,134)
Net investment income--Class B .......................... (278,794) (713,255)
Net investment income--Class C .......................... (158,823) (232,699)
------------ ------------
(1,086,247) (1,609,088)
------------ ------------
Net increase (decrease) in net assets from capital
share transactions .................................... 49,954,459 (2,693,832)
------------ ------------
Net increase (decrease) in net assets ................... 49,953,163 (2,694,159)
Net assets:
Beginning of period ..................................... 33,006,161 35,700,320
------------ ------------
End of period ........................................... $ 82,959,324 $ 33,006,161
============ ============
</TABLE>
See accompanying notes to financial statements
6
<PAGE>
NOTES TO FINANCIAL STATEMENTS (unaudited)
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
PaineWebber Master Series, Inc. ("Master Series") was incorporated in
Maryland on October 29, 1985 and is registered with the Securities and
Exchange Commission under the Investment Company Act of 1940, as amended, as
an open-end, diversified series investment company which currently offers two
series of shares: PaineWebber Money Market Fund ("Fund") and PaineWebber
Balanced Fund. The financial statements for PaineWebber Balanced Fund are not
included herein.
The Fund offers Class A, Class B and Class C 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 expenses. In addition, Class
B shares automatically convert to Class A shares approximately six years after
initial issuance. All classes of shares have equal voting privileges, except
that each class has exclusive voting rights with respect to its service and/or
distribution plan. All classes of shares may be obtained only through an
exchange of shares of the corresponding class of other PaineWebber mutual
funds.
The preparation of financial statements in accordance with generally
accepted accounting principles requires Fund 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 and Accounting for Investments--Investments are valued at
amortized cost which approximates market value. Investment transactions are
recorded on the trade date. Realized gains and losses from investment
transactions are calculated using the identified cost method. Interest income
is recorded on an accrual basis. Premiums are amortized and discounts are
accreted as adjustments to interest income and the identified cost of
investments.
Repurchase Agreements--The 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 Fund has 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 Fund may participate in
joint repurchase agreement transactions with other funds managed by Mitchell
Hutchins Asset Management Inc. ("Mitchell Hutchins"), an asset management
subsidiary of PaineWebber and investment adviser and administrator of the
Fund.
Net Investment Income and Investment Transactions--Income and expenses
(excluding class-specific expenses) are allocated proportionately to each
class of shares based upon the relative net asset value of dividend-eligible
shares of each class at the beginning of the day (after adjusting for current
capital share activity of the respective clases). Realized gains and losses
are allocated proportionately to each class of shares based upon the relative
value of shares outstanding 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.
Dividends and Distributions--Dividends and distributions to shareholders
are recorded on the ex-dividend date. 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.
7
<PAGE>
NOTES TO FINANCIAL STATEMENTS (unaudited)
CONCENTRATION OF RISK
The ability of the issuers of the debt securities held by the Fund to meet
their obligations may be affected by economic developments, including those
particular to a specific industry or region.
INVESTMENT ADVISER AND ADMINISTRATOR
The Board of Directors of Master Series has approved 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, the Fund pays Mitchell
Hutchins an investment advisory and administration fee, which is accrued daily
and paid monthly, at the annual rate of 0.50% of the Fund's average daily net
assets. At August 31, 1998, the Fund owed Mitchell Hutchins $28,906 for
investment advisory and administration fees.
DISTRIBUTION PLANS
Mitchell Hutchins is the distributor of the 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 the Class A, Class
B and Class C shares, the Fund pays Mitchell Hutchins monthly service fees at
the annual rate of 0.25% of the average daily net assets of each class of
shares and monthly distrubution fees at an annual rate of 0.50% of the average
daily net assets of Class B and Class C shares. At August 31, 1998 the Fund
owed Mitchell Hutchins $24,853 in service and distribution fees.
Mitchell Hutchins also receives the proceeds of the contingent deferred
sales charges paid upon certain redemptions of Class A, Class B and Class C
shares. Mitchell Hutchins has informed the Fund that for the six months ended
August 31, 1998, it earned $82,767 in sales charges.
TRANSFER AGENCY SERVICE FEES
PaineWebber provides transfer agency related services to the Fund pursuant
to a delegation of authority from PFPC, Inc., the Fund's transfer agent, and
is compensated for these services by PFPC, Inc., not the Fund. For the six
months ended August 31, 1998, PaineWebber received from PFPC, Inc., not the
Fund, approximately 52% of the total transfer agency and related service fees
collected by PFPC, Inc. from the Fund.
OTHER LIABILITIES
At August 31, 1998, the amounts payable for Fund shares repurchased and
dividends payable aggregated $202,131 and $49,232, respectively.
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS (unaudited)
CAPITAL STOCK
There are 10 billion shares of $0.001 par value common stock authorized for
Master Series, of which 1 billion were allocated to the Fund. Transactions in
shares of common stock, at $1.00 per share, were as follows:
<TABLE>
<CAPTION>
Class A Class B Class C
-------------------------- ------------------------ ---------------------------
For the For the For the For the For the For the
Six Months Year Six Months Year Six Months Year
Ended Ended Ended Ended Ended Ended
August 31, February 28, August 31, February 28, August 31, February 28,
1998 1998 1998 1998 1998 1998
------------ ------------ ----------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold ............................ 277,945,650 83,455,097 17,738,971 38,617,856 110,403,850 168,632,470
Shares repurchased ..................... (240,720,185) (87,554,268) (12,303,414) (38,164,045) (104,041,309) (168,978,832)
Shares converted from Class B
to Class A ........................... 2,496,485 4,719,104 (2,496,485) (4,719,104) -- --
Dividends reinvested 549,187 555,101 268,773 592,135 112,936 150,654
------------ ----------- ----------- ----------- ------------ ------------
Net increase (decrease) in shares
outstanding .......................... 40,271,137 1,175,034 3,207,845 (3,673,158) 6,475,477 (195,708)
============ =========== =========== =========== ============ ============
</TABLE>
FEDERAL TAX STATUS
The Fund intends to distribute substantially all of its 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 its net investment income, capital gains and certain
other amounts, if any, the Fund intends not to be subject to federal excise
tax.
At February 28, 1998, the Fund had capital loss carryforwards of $11,343
available as a reduction, to the extent provided in the regulations, of future
net realized gains, which will expire between February 28, 1999 and February
28, 2006. To the extent that such losses are used to offset future capital
gains, it is probable that the gains so offset will not be distributed.
9
<PAGE>
PAINEWEBBER MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
Selected data for a share of capital stock outstanding throughout each period
is presented below:
<TABLE>
<CAPTION>
Class A
------------------------------------------------------------------------------
For the
Six Months For the Years Ended
Ended -------------------------------------------------------------
August 31, February 28, February 29, February 28,
1998 -------------------- ------------ --------------------
(unaudited) 1998 1997 1996 1995 1994
----------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- -------- -------- -------- -------- --------
Net investment income ........................ 0.022 0.042 0.040 0.046 0.037 0.016
Dividends from net investment income ......... (0.022) (0.042) (0.040) (0.046) (0.037) (0.016)
--------- -------- -------- -------- -------- --------
Net asset value, end of period ............... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ======== ======== ======== ======== ========
Total investment return(1) ................... 2.18% 4.33% 4.11% 4.69% 3.95% 1.64%
========= ======== ======== ======== ======== ========
Ratios/Supplemental data:
Net assets, end of period (000's) ............ $53,253 $12,983 $11,808 $23,735 $21,042 $14,204
Expenses to average net assets ............... 1.26%* 1.41% 1.42% 1.31% 1.06% 1.72%
Net investment income to average net assets .. 4.42%* 4.29% 4.09% 4.68% 3.85% 1.70%
</TABLE>
- ------------------------------------------
* Annualized
(1) Total investment return is calculated assuming a $1,000 investment in
Fund shares on the first day of each period reported, reinvestment of all
dividends and other distributions 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 period of less than one year has not been annualized.
10
<PAGE>
PAINEWEBBER MONEY MARKET FUND
<TABLE>
<CAPTION>
Class B
-----------------------------------------------------------------
For the
Six Months For the Years Ended
Ended ------------------------------------------------
August 31, February 28, February 29, February 28,
1998 -------------- ------------ -----------------
(unaudited) 1998 1997 1996 1995 1994
----------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........... $1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $1.00
----- ------- ------- ------ ------- -----
Net investment income .......................... 0.019 0.037 0.035 0.041 0.032 0.011
Dividends from net investment income ........... (0.019) (0.037) (0.035) (0.041) (0.032) (0.011)
------ ------- ------- ------ ------- ------
Net asset value, end of period ................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ======= ======= ======= ======= ======
Total investment return(1) ..................... 1.93% 3.81% 3.60% 4.18% 3.41% 1.12%
====== ======= ======= ======= ======= ======
Ratios/Supplemental data:
Net assets, end of period (000's) .............. $17,923 $14,715 $18,389 $26,592 $39,123 $9,819
Expenses to average net assets ................. 1.85%* 1.90% 1.90% 1.79% 1.55% 2.25%
Net investment income to average net assets .... 3.82%* 3.78% 3.55% 4.17% 3.46% 1.16%
<CAPTION>
Class C
----------------------------------------------------------------------
For the
Six Months For the Years Ended
Ended -----------------------------------------------------
August 31, February 28, February 29, February 28,
1998 --------------------- ------------ ------------------
(unaudited) 1998 1997 1996 1995 1994
----------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- ------ ------- ------ ------ ------
Net investment income .......................... 0.019 0.037 0.034 0.041 0.033 0.012
Dividends from net investment income ........... (0.019) (0.037) (0.034) (0.041) (0.033) (0.012)
-------- ------ ------- ------ ------ ------
Net asset value, end of period ................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ====== ======= ====== ====== ======
Total investment return(1) ..................... 1.93% 3.78% 3.50% 4.14% 3.44% 1.19%
======== ====== ======= ====== ====== ======
Ratios/Supplemental data:
Net assets, end of period (000's) .............. $ 11,783 $5,308 $ 5,504 $5,754 $16,137 $9,430
Expenses to average net assets ................. 1.80%* 1.95% 1.99% 1.79% 1.55% 2.14%
Net investment income to average net assets .... 3.88%* 3.76% 3.47% 4.27% 3.35% 1.36%
</TABLE>
11
<PAGE>
[This Page Intentionally Left Blank]
<PAGE>
[This Page Intentionally Left Blank]
<PAGE>
[This Page Intentionally Left Blank]
<PAGE>
- --------------------------------------------------------------------------------
DIRECTORS
E. Garrett Bewkes, Jr.
Chairman
Margo N. Alexander
Richard Q. Armstrong
Richard R. Burt
Mary C. Farrell
Meyer Feldberg
George W. Gowen
Frederic V. Malek
Carl W. Schafer
PRINCIPAL OFFICERS
Margo N. Alexander
President
Victoria E. Schonfeld
Vice President
Dianne E. O'Donnell
Vice President and Secretary
Paul H. Schubert
Vice President and Treasurer
Dennis McCauley
Vice President
Susan P. Ryan
Vice President
INVESTMENT ADVISER,
ADMINISTRATOR AND DISTRIBUTOR
Mitchell Hutchins Asset Management Inc.
1285 Avenue of the Americas
New York, New York 10019
The financial information included herein is taken from the records of the Fund
without examination by independent auditors who do not express an opinion
thereon.
This report is not to be used in connection with the offering of shares of the
Fund unless accompanied or preceded by an effective prospectus.
<PAGE>
PaineWebber
(c) 1998 PaineWebber Incorporated
Member SIPC
PaineWebber
- ------------------------------
MONEY MARKET
FUND
SEMIANNUAL REPORT
AUGUST 31, 1998
