<PAGE>
PaineWebber
Money Market Fund
------------------------------------
PROSPECTUS
JUNE 30, 1999
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This prospectus offers Class A, Class B and Class C shares of PaineWebber Money
Market Fund solely through exchange for shares of the corresponding class of
other PaineWebber funds.
As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved the fund's shares or determined whether this prospectus
is complete or accurate. To state otherwise is a crime.
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PaineWebber Money Market Fund
Contents
THE FUND
<TABLE>
<S> <C> <C>
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What every investor 3 Money Market Fund
should know about 6 More About Risks and Investment
the fund Strategies
YOUR INVESTMENT
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Information for 8 Managing Your Fund Account
managing your fund -- Flexible Pricing
account -- Buying Shares
-- Selling Shares
-- Exchanging Shares
-- Pricing and Valuation
ADDITIONAL INFORMATION
- ------------------------------------------------------------------------------------------------
Additional important 13 Management
information about 13 Dividends and Taxes
the fund 14 Financial Highlights
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Where to learn Back Cover
more about PaineWebber
mutual funds
</TABLE>
The fund is not a complete or
balanced investment program.
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PaineWebber Money Market Fund
PaineWebber Money Market Fund
INVESTMENT OBJECTIVE, STRATEGIES AND RISKS
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FUND OBJECTIVE
Maximum current income consistent with liquidity and conservation of capital.
PRINCIPAL INVESTMENT STRATEGIES
The fund is a money market fund. It seeks to maintain a stable price of $1.00
per share. To do this, the fund invests in a diversified portfolio of high
quality money market instruments. Money market instruments are short-term debt
obligations and similar securities. These investments include:
commercial paper and other short-term obligations of corporations, partnerships,
trusts and other entities
U.S. government securities
certificates of deposit and other bank obligations
repurchase agreements
investment company securities
Money market instruments also include longer term bonds that have variable
interest rates or other special features that give them the financial
characteristics of short-term debt.
The fund may invest in foreign money market instruments, but only if they are
denominated in U.S. dollars.
Mitchell Hutchins Asset Management Inc., the fund's investment adviser, selects
money market instruments for the fund based on its assessment of relative values
and changes in market and economic conditions.
PRINCIPAL RISKS
An investment in the fund is not a bank deposit and is neither insured nor
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. While the fund seeks to maintain the value of your investment at $1.00
per share, it is possible to lose money by investing in the fund.
Money market instruments generally have a low risk of loss, but they are not
risk free. The fund is subject to credit risk, which is that issuers may fail,
or become less able, to make payments when due. The fund also is subject to
interest rate risk. When short-term interest rates rise, the value of the fund's
investments generally will fall, and its yield will tend to lag behind
prevailing rates.
More information about these and other risks of an investment in the fund is
provided below in 'More About Risks and Investment Strategies.' In particular,
see the following headings:
Credit Risk
Interest Rate Risk
Foreign Securities Risk
Information on the fund's recent holdings can be found in its current
annual/semi-annual reports (see back cover for information on ordering those
reports).
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PaineWebber Money Market Fund
PERFORMANCE
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RISK/RETURN BAR CHART AND TABLE
The following bar chart and table provide information about the fund's
performance and thus give some indication of the risks of an investment in the
fund.
The bar chart shows how the fund's performance has varied from year to year. The
bar chart shows Class B shares because they have the longest performance history
of any class of fund shares. The bar chart does not reflect the effect of sales
charges; if it did, the total returns shown would be lower.
The table that follows the bar chart shows the average annual returns over
several time periods for each class of the fund's shares. That table does
reflect fund sales charges.
The fund's past performance does not necessarily indicate how the fund will
perform in the future.
PAINEWEBBER MONEY MARKET FUND -- TOTAL RETURN ON CLASS B SHARES
Year Percentages
- ---- -----------
1989 8.12%
1990 6.98%
1991 4.61%
1992 1.80%
1993 1.13%
1994 2.81%
1995 4.29%
1996 3.60%
1997 3.82%
1998 3.83%
Calendar year-to-date total return as of March 31, 1999 -- 0.82%
Best quarter during years shown: 4th quarter, 1989 -- 2.31%
Worst quarter during years shown: 3rd quarter, 1993 -- 0.22%
AVERAGE ANNUAL TOTAL RETURNS
as of December 31, 1998
<TABLE>
<CAPTION>
CLASS CLASS A CLASS B* CLASS C
(INCEPTION DATE) (7/1/91) (9/26/86) (7/14/92)
--------- --------- ---------
<S> <C> <C> <C>
One Year 4.35% (1.17)% 2.86%
Five Years 4.71% 3.32% 3.65%
Ten Years N/A 3.79% N/A
Life of Class 3.96% 4.22% 3.10%
</TABLE>
- ------------
* Reflects conversion of Class B shares to Class A after six years.
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PaineWebber Money Market Fund
EXPENSES AND FEE TABLES
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FEES AND EXPENSES These tables describe the fees and expenses that you may pay
if you buy and hold shares of the fund.
SHAREHOLDER TRANSACTION EXPENSES (fees paid directly from your investment)
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Maximum Sales Charge (Load) Imposed on Purchases (as a % of offering price) None None None
Maximum Contingent Deferred Sales Charge (Load) (CDSC) (as a % of offering price) None 5% 1%
Exchange Fee None None None
ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from fund assets)
<CAPTION>
CLASS A CLASS B CLASS C
<S> <C> <C> <C>
Management Fees 0.50% 0.50% 0.50%
Distribution and/or Service (12b-1) Fees 0.25 0.75 0.75
Other Expenses 0.42 0.48 0.45
----- ----- -----
Total Annual Fund Operating Expenses 1.17% 1.73% 1.70%
----- ----- -----
----- ----- -----
</TABLE>
EXAMPLE
This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.
This example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods unless
otherwise stated. The example also assumes that your investment has a 5% return
each year and that the fund's operating expenses remain the same. Although your
actual costs may be higher or lower, based on these assumptions your costs would
be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A........................................................... $119 $ 372 $ 644 $1,420
Class B (assuming sales of all shares at end of period)........... 676 845 1,139 1,758
Class B (assuming no sales of shares)............................. 176 545 939 1,758
Class C (assuming sales of all shares at end of period)........... 273 536 923 2,009
Class C (assuming no sales of shares)............................. 173 536 923 2,009
</TABLE>
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PaineWebber Money Market Fund
MORE ABOUT RISKS
AND INVESTMENT STRATEGIES
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PRINCIPAL RISKS
The main risks of investing in the fund are described below. Other risks of
investing in the fund, along with further detail about some of the risks
described below, are discussed in the fund's Statement of Additional Information
('SAI'). Information on how you can obtain the SAI is on the back cover of this
prospectus.
Credit Risk. Credit risk is the risk that the issuer of a money market
instrument will not make principal or interest payments when they are due. Even
if an issuer does not default on a payment, a money market instrument's value
may decline if the market believes that the issuer has become less able, or less
willing, to make payments on time. Even the highest quality money market
instruments are subject to some credit risk.
Interest Rate Risk. The value of money market instruments generally can be
expected to fall when interest rates rise and to rise when interest rates fall.
Interest rate risk is the risk that interest rates will rise, so that the value
of the fund's investments will fall. In addition, the fund's yield will tend to
lag behind changes in prevailing short-term interest rates. This means that the
fund's income will tend to rise more slowly than increases in short-term
interest rates. Similarly, when short-term interest rates are falling, the
fund's income will tend to fall more slowly.
Foreign Securities Risk. Foreign securities involve risks that normally are not
associated with securities of U.S. issuers. These include risks relating to
political, social and economic developments abroad and differences between U.S.
and foreign regulatory requirements and market practices.
ADDITIONAL RISKS
Year 2000 Risk. The fund could be adversely affected by problems relating to the
inability of computer systems used by Mitchell Hutchins and the fund's other
service providers to recognize the year 2000. While year 2000-related computer
problems could have a negative effect on the fund, Mitchell Hutchins is working
to avoid these problems with respect to its own computer systems and to obtain
assurances from other service providers that they are taking similar steps.
Similarly, the issuers whose money market instruments are bought by the fund and
the trading systems used by the fund could be adversely affected by this issue.
The ability of an issuer or trading system to respond successfully to the issue
requires both technological sophistication and diligence, and there can be no
assurance that any steps taken will be sufficient to avoid an adverse impact on
the fund.
ADDITIONAL INVESTMENT STRATEGIES
Like all money market funds, the fund is subject to maturity, quality and
diversification requirements designed to help it maintain a stable price of
$1.00 per share. In addition, Mitchell Hutchins may employ a number of
professional money management techniques to respond to changing economic and
money market conditions and to shifts in fiscal and monetary policy. These
techniques include varying the composition and
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PaineWebber Money Market Fund
the weighted average maturity of the portfolio based upon its assessment of the
relative values of various money market instruments and future interest rate
patterns. Mitchell Hutchins also may seek to improve the fund's yield by
purchasing or selling securities to take advantage of yield disparities among
similar or dissimilar money market instruments that regularly occur in the money
markets.
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PaineWebber Money Market Fund
Your Investment
MANAGING YOUR FUND ACCOUNT
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FLEXIBLE PRICING
The fund offers three classes of shares -- Class A, Class B and
Class C -- solely through exchange for shares of the corresponding class of
other PaineWebber funds. No front-end sales charge is imposed when fund shares
are acquired through an exchange, and no contingent deferred sales charge is
imposed when shares of another PaineWebber fund are exchanged for the fund's
shares.
The fund and the other PaineWebber funds that use the Flexible Pricing system
have adopted plans under rule 12b-1 for their Class A, Class B and Class C
shares that allow each fund to pay service fees for services provided to
shareholders and (for Class B and Class C shares) distribution fees for the sale
of its shares. Because the 12b-1 distribution fees for Class B and Class C
shares are paid out of a fund's assets on an ongoing basis, over time they will
increase the cost of your investment and may cost you more than if you paid a
front-end sales charge.
CLASS A SHARES
Class A shares of the fund have no front-end sales charge because they are
acquired through an exchange for Class A shares of another PaineWebber fund.
Class A shares of other PaineWebber funds generally have a front-end sales
charge that is included in their offering price and is not invested in a fund.
Class A shares of the fund pay an annual 12b-1 service fee of 0.25% of average
net assets, but they pay no 12b-1 distribution fees. The ongoing expenses for
Class A shares are lower than for Class B and Class C shares.
You may have to pay a 1% contingent deferred sales charge when you sell Class A
shares of the fund if:
The front-end sales charge was waived for the Class A shares you exchanged for
fund shares because your initial purchase was $1 million or more and
You sell your Class A shares of the fund within one year of the initial purchase
date for the Class A shares that you later exchanged for fund shares.
This deferred sales charge would be 1% of the lesser of the offering price of
the Class A shares initially purchased or the net asset value of the Class A
shares of the fund at the time of sale. We will not impose the deferred sales
charge on Class A shares representing reinvestment of dividends or on
withdrawals in the first year after purchase of up to 12% of the value of your
Class A shares under the Systematic Withdrawal Plan.
Note: If you want information on the fund's Systematic Withdrawal Plan, see the
SAI or contact your PaineWebber Financial Advisor or correspondent firm.
CLASS B SHARES
Class B shares have a contingent deferred sales charge. When you initially
purchase Class B shares of a PaineWebber fund, we invest 100% of your purchase,
and no deferred sales charge is imposed when you exchange those shares for
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PaineWebber Money Market Fund
Class B shares of the fund. However, you may have to pay the deferred sales
charge when you sell your fund shares, depending on how long you own the shares.
The fund's Class B shares pay an annual 12b-1 distribution fee of 0.50% of
average net assets, as well as an annual 12b-1 service fee of 0.25% of average
net assets. If you hold your Class B shares for six years after the initial
purchase date for the original Class B shares that you later exchanged for fund
shares, they will automatically convert to Class A shares of the fund. Class A
shares have lower ongoing expenses.
You will pay a deferred sales charge if you sell Class B shares before the end
of six years (four years for fund shares acquired in certain exchanges for
Class B shares of PaineWebber Low Duration U.S. Government Income Fund). We
calculate the deferred sales charge by multiplying the lesser of the net asset
value of the Class B shares initially purchased or the net asset value of the
Class B shares of the fund at the time of sale by the percentage shown below:
SALES OF FUND SHARES ACQUIRED THROUGH AN EXCHANGE FOR SHARES OF PAINEWEBBER LOW
DURATION U.S. GOVERNMENT INCOME FUND
<TABLE>
<CAPTION>
PERCENTAGE BY WHICH THE
IF YOU SELL SHARES' NET ASSET
SHARES WITHIN: VALUE IS MULTIPLIED:
- ------------------------------ -----------------------
<S> <C>
1st year since purchase 3%
2nd year since purchase 2
3rd year since purchase 2
4th year since purchase 1
5th year since purchase None
</TABLE>
The above schedule applies only if the exchanged shares would have been subject
to the same lower deferred sales charge schedule if you sold them rather than
exchanging them for Class B shares of the fund.
SALES OF FUND SHARES ACQUIRED THROUGH AN EXCHANGE FOR SHARES OF ANY OTHER
PAINEWEBBER FUND
<TABLE>
<CAPTION>
PERCENTAGE BY WHICH THE
IF YOU SELL SHARES' NET ASSET
SHARES WITHIN: VALUE IS MULTIPLIED:
- ------------------------------ -----------------------
<S> <C>
1st year since purchase 5%
2nd year since purchase 4
3rd year since purchase 3
4th year since purchase 2
5th year since purchase 2
6th year since purchase 1
7th year since purchase None
</TABLE>
We will not impose the deferred sales charge on Class B shares representing
reinvestment of dividends or on withdrawals in any year of up to 12% of the
value of your Class B shares under the Systematic Withdrawal Plan.
To minimize your deferred sales charge, we will assume that you are selling:
First, Class B shares representing reinvested dividends, and
Second, Class B shares that you have owned the longest.
Sales Charge Waivers. You may qualify for a waiver of the deferred sales charge
on a sale of shares if:
You participate in the Systematic Withdrawal Plan;
You are older than 59 1/2 and are selling shares to take a distribution from
certain types of retirement plans;
You receive a tax-free return of an excess IRA contribution;
You receive a tax-qualified retirement plan distribution following retirement;
or
The shares are sold within one year of your death and you owned the shares
either (1) as the sole shareholder or (2) with your spouse as a joint tenant
with the right of survivorship.
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PaineWebber Money Market Fund
Note: If you think you qualify for any of these sales charge waivers, you will
need to provide documentation to PaineWebber or the fund. For more information,
you should contact your PaineWebber Financial Advisor or correspondent firm or
call 1-800-647-1568. If you want information on the Systematic Withdrawal Plan,
see the SAI or contact your PaineWebber Financial Advisor or correspondent firm.
CLASS C SHARES
Class C shares have a level load sales charge in the form of ongoing 12b-1
distribution fees. When you initially purchase Class C shares of a PaineWebber
fund, we invest 100% of your purchase in that fund's shares.
The fund's Class C shares pay an annual 12b-1 distribution fee of 0.50% of
average net assets, as well as an annual 12b-1 service fee of 0.25% of average
net assets. Class C shares do not convert to another class of shares. This means
that you will pay the 12b-1 fees for as long as you own your shares.
Class C shares also have a contingent deferred sales charge. You may have to pay
the deferred sales charge if you sell your shares within one year of the date
you initially purchased the Class C shares that you later exchanged for fund
shares. The deferred sales charge will be either 0.75% or 1.00%, depending on
the deferred sales charge that would have applied to the initially purchased
Class C shares. We calculate the deferred sales charge on sales of Class C
shares by multiplying 0.75% or 1.00% (as applicable) by the lesser of the net
asset value of the Class C shares initially purchased or the net asset value of
the Class C shares of the fund at the time of sale. We will not impose the
deferred sales charge on Class C shares representing reinvestment of dividends
or on withdrawals in the first year after purchase of up to 12% of the value of
your Class C shares under the Systematic Withdrawal Plan.
Note: If you want information on the fund's Systematic Withdrawal Plan, see the
SAI or contact your PaineWebber Financial Advisor or correspondent firm.
BUYING SHARES
If you are a PaineWebber client, or a client of a PaineWebber correspondent
firm, you can purchase fund shares by asking your Financial Advisor to exchange
shares of another PaineWebber fund for shares of the corresponding class of the
fund. Otherwise, you may acquire fund shares by writing to the funds' transfer
agent, PFPC Inc., and requesting an exchange of shares of another PaineWebber
fund for shares of the corresponding class of the fund. You must make your
exchange request to the transfer agent in writing and include:
Your name and address;
The name of the fund and class of shares you are selling to purchase shares of
Money Market Fund;
Your account number;
How much you are exchanging (by dollar amount or by number of shares to be
sold); and
A guarantee of each registered owner's signature. A signature guarantee may be
obtained from a financial institution, broker, dealer or clearing agency that
is a participant in one of the medallion programs recognized by the Securities
Transfer Agents Association. These are: Securities Transfer Agents Medallion
Program (STAMP), Stock Exchanges Medallion Program (SEMP) and the New York
Stock Exchange Medallion Signature Program (MSP). The transfer agent and the
funds will not
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PaineWebber Money Market Fund
accept signature guarantees that are not a part of these programs.
Mail the letter to:
PFPC Inc.
Attn.: PaineWebber Mutual Funds
P.O. Box 8950
Wilmington, DE 19899.
If you wish to invest in other PaineWebber funds, you can do so by:
Contacting your Financial Advisor (if you have an account at PaineWebber or at a
PaineWebber correspondent firm);
Obtaining an application from the transfer agent by calling 1-800-647-1568 and
mailing the completed application with a check to: PFPC Inc., Attn:
PaineWebber Mutual Funds, P.O. Box 8950, Wilmington, DE 19899; or
Opening an account by exchanging shares from another PaineWebber fund.
You do not have to complete an application when you make additional investments
in the same fund.
You may exchange shares of another PaineWebber fund for shares of Money Market
Fund only after the purchase has settled and the other fund has received your
payment.
The fund and Mitchell Hutchins reserve the right to reject a purchase order or
suspend the offering of shares.
MINIMUM INVESTMENTS:
<TABLE>
<CAPTION>
<S> <C>
To open an account............................ None
To add to an account.......................... None
</TABLE>
The fund may impose minimum investment requirements at any time.
SELLING SHARES
You can sell your fund shares at any time. If you own more than one class of
shares, you should specify which class you want to sell. If you do not, the fund
will assume that you want to sell shares in the following order: Class A, then
Class C and last, Class B.
If you have an account with PaineWebber or a PaineWebber correspondent firm, you
can sell shares by contacting your Financial Advisor.
If you do not have an account at PaineWebber or a correspondent firm, and you
bought your shares through the transfer agent, you can sell your shares by
writing to the fund's transfer agent. Your letter must include:
Your name and address;
The fund's name;
The fund account number;
The dollar amount or number of shares you want to sell; and
A guarantee of each registered owner's signature. (See 'Buying Shares' for
information on obtaining a signature guarantee).
Mail the letter to:
PFPC Inc.
Attn.: PaineWebber Mutual Funds
P.O. Box 8950
Wilmington, DE 19899.
Within three business days after receipt of the request, sales proceeds (less
any applicable contingent deferred sales charge) will be paid by check or
credited to the shareholder's brokerage account at the election of the
shareholder.
It costs the fund money to maintain shareholder accounts. Therefore, the fund
reserves the right to repurchase all shares in any account that has a net asset
value of less than $500. If the fund elects to do this with your account, it
will notify you that you can increase the amount invested to $500 or more within
60 days. The fund will not repurchase shares in accounts that fall below $500
solely because of a decrease in the fund's net asset value.
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PaineWebber Money Market Fund
EXCHANGING SHARES
You may exchange Class A, Class B or Class C shares of the fund for shares of
the same class of most other PaineWebber funds.
You will not pay either a front-end sales charge or a deferred sales charge when
you exchange shares. However, you may have to pay a deferred sales charge if you
later sell the shares you acquired in the exchange. Each fund will use the date
that you initially purchased the exchanged shares to determine whether you must
pay a deferred sales charge when you sell the shares in the acquired fund.
Other PaineWebber funds may have different minimum investment amounts. You may
not be able to exchange your shares if your exchange is not as large as the
minimum investment amount in that other fund.
PaineWebber Clients If you bought your shares through PaineWebber or a
correspondent firm, you may exchange your shares by placing an order with your
PaineWebber Financial Advisor.
Other Investors If you are not a PaineWebber client, you may exchange your
shares by writing to the fund's transfer agent. You must include:
Your name and address;
The name of the fund whose shares you are selling and the name of the fund
whose shares you want to buy;
Your account number;
How much you are exchanging (by dollar amount or by number of shares to be
sold); and
A guarantee of your signature. (See 'Buying Shares' for information on
obtaining a signature guarantee.)
Mail the letter to:
PFPC Inc.
Attn.: PaineWebber Mutual Funds
P.O. Box 8950
Wilmington, DE 19899.
The fund may modify or terminate the exchange privilege at any time.
PRICING AND VALUATION
The price of fund shares is based on net asset value. The net asset value is the
total value of the fund divided by the total number of shares outstanding. In
determining net asset value, the fund values its securities at their amortized
cost. This method uses a constant amortization to maturity of the difference
between the cost of the instrument to the fund and the amount due at maturity.
The fund's net asset value per share is expected to be $1.00, although this
value is not guaranteed.
The fund calculates net asset value on days that the New York Stock Exchange
(NYSE) is open. The fund calculates net asset value separately for each class as
of the close of regular trading on the NYSE (generally, 4:00 p.m., Eastern
time). The NYSE normally is not open, and the fund does not price its shares, on
national holidays and on Good Friday. If trading on the NYSE is halted for the
day before 4:00 p.m., Eastern time, the fund's net asset value per share will be
calculated as of the time trading was halted.
Your price for buying, selling or exchanging shares will be based on the net
asset value that is next calculated after the fund accepts your order. If you
place your order through PaineWebber, your PaineWebber Financial Advisor is
responsible for making sure that your order is promptly sent to the fund.
You should keep in mind that a deferred sales charge may apply when you sell
Class B or Class C shares.
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PaineWebber Money Market Fund
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
MANAGEMENT
Investment Adviser. Mitchell Hutchins Asset Management Inc. is the investment
adviser and administrator of the fund. Mitchell Hutchins is located at 1285
Avenue of the Americas, New York, New York, 10019, and is a wholly owned asset
management subsidiary of PaineWebber Incorporated, which is wholly owned by
Paine Webber Group Inc., a publicly owned financial services holding company. On
May 31, 1999, Mitchell Hutchins was adviser or sub-adviser of 33 investment
companies with 75 separate portfolios and aggregate assets of approximately
$47.7 billion.
Advisory Fees. The fund paid advisory fees to Mitchell Hutchins for the most
recent fiscal year at the annual rate of 0.50% of its average daily net assets.
DIVIDENDS AND TAXES
Dividends. The fund declares dividends daily and pays them monthly. The fund
distributes any net short-term capital gain annually, but may make more frequent
distributions if necessary to maintain its share price at $1.00.
Classes with higher expenses are expected to have lower dividends. For example,
Class B and Class C shares are expected to have lower dividends than Class A
shares.
You will receive dividends in additional shares of the same class unless you
elect to receive them in cash. Contact your Financial Advisor at PaineWebber or
one of its correspondent firms if you prefer to receive dividends in cash.
Taxes. The dividends that you receive from the fund generally are subject to
federal income tax regardless of whether you receive them in additional fund
shares or in cash. If you hold fund shares through a tax-exempt account or plan,
such as an IRA or 401(k) plan, dividends on your shares generally will not be
subject to tax.
The fund expects that its dividends will be taxed primarily as ordinary income.
The fund will tell you how you should treat its dividends for tax purposes. You
will not recognize any gain or loss on the sale or exchange of your fund shares
so long as the fund maintains a share price of $1.00.
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PaineWebber Money Market Fund
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The following financial highlights tables are intended to help you understand
the fund's financial performance for the past 5 years. Certain information
reflects financial results for a single fund share. In the tables, 'total
investment return' represents the rate that an investor would have earned on an
investment in the fund (assuming reinvestment of all dividends). The information
in the financial highlights has been audited by PricewaterhouseCoopers LLP,
independent accountants, whose report, along with the fund's financial
statements, are included in the fund's annual report to shareholders. The annual
report may be obtained without charge by calling 1-800-647-1568.
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------
FOR THE YEARS ENDED
-------------------------------------------------------------
FEBRUARY 28, FEBRUARY 29, FEBRUARY 28,
----------------------------- ------------ ------------
1999 1998 1997 1996 1995
------- ------- ------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- -------- --------
Net investment income..................................... 0.042 0.042 0.040 0.046 0.037
Dividends from net investment income...................... (0.042) (0.042) (0.040) (0.046) (0.037)
------- ------- ------- -------- --------
Net asset value, end of year.............................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- -------- --------
------- ------- ------- -------- --------
Total investment return(1)................................ 4.32% 4.33% 4.11% 4.69% 3.95%
------- ------- ------- -------- --------
------- ------- ------- -------- --------
Ratios/Supplemental data:
Net assets, end of year (000's)........................... $60,267 $12,983 $11,808 $ 23,735 $ 21,042
Expenses to average net assets............................ 1.17% 1.41% 1.42% 1.31% 1.06%
Net investment income to average net assets............... 4.29% 4.29% 4.09% 4.68% 3.85%
</TABLE>
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(1) Total investment return is calculated assuming a $1,000 investment in Fund
shares on the first day of each year 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 year reported. The figures do not
include sales charges; results for each class would be lower if sales
charges were included.
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14
<PAGE>
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PaineWebber Money Market Fund
FINANCIAL HIGHLIGHTS
(Continued)
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<TABLE>
<CAPTION>
CLASS B CLASS C
- ------------------------------------------------------------- -------------------------------------------------------------
FOR THE YEARS ENDED FOR THE YEARS ENDED
- ------------------------------------------------------------- -------------------------------------------------------------
FEBRUARY 28, FEBRUARY 29, FEBRUARY 28, FEBRUARY 28, FEBRUARY 29, FEBRUARY 28,
- ----------------------------- ------------ ------------ ----------------------------- ------------ ------------
1999 1998 1997 1996 1995 1999 1998 1997 1996 1995
- ------- ------- ------- ------------ ------------ ------- ------- ------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- ------- ------- ------- -------- -------- ------- ------- ------- -------- --------
0.037 0.037 0.035 0.041 0.032 0.037 0.037 0.034 0.041 0.033
(0.037) (0.037) (0.035) (0.041) (0.032) (0.037) (0.037) (0.034) (0.041) (0.033)
- ------- ------- ------- -------- -------- ------- ------- ------- -------- --------
$ 1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- ------- ------- ------- -------- -------- ------- ------- ------- -------- --------
- ------- ------- ------- -------- -------- ------- ------- ------- -------- --------
3.79% 3.81% 3.60% 4.18% 3.41% 3.81% 3.78% 3.50% 4.14% 3.44%
- ------- ------- ------- -------- -------- ------- ------- ------- -------- --------
- ------- ------- ------- -------- -------- ------- ------- ------- -------- --------
$18,782 $14,715 $18,389 $26,592 $39,123 $12,962 $5,308 $5,504 $5,754 $16,137
1.73% 1.90% 1.90% 1.79% 1.55% 1.70% 1.95% 1.99% 1.79% 1.55%
3.75% 3.78% 3.55% 4.17% 3.46% 3.80% 3.76% 3.47% 4.27% 3.35%
</TABLE>
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15
<PAGE>
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PaineWebber Money Market Fund
If you want more information about the fund, the following documents are
available free upon request:
ANNUAL/SEMI-ANNUAL REPORTS
Additional information about the fund's investments is available in the fund's
annual and semi-annual reports to shareholders.
STATEMENT OF ADDITIONAL INFORMATION (SAI)
The SAI provides more detailed information about the fund and is incorporated by
reference into this prospectus.
You may discuss your questions about the fund by contacting your PaineWebber
Financial Advisor. You may obtain free copies of annual and semi-annual reports
and the SAI by contacting the fund directly at 1-800-647-1568.
You may review and copy information about the fund, including shareholder
reports and the SAI, at the Public Reference Room of the Securities and Exchange
Commission. You can get text-only copies of reports and other information about
the fund:
For a fee, by writing to or calling the SEC's Public Reference Room,
Washington, D.C. 20549-6009
Telephone: 1-800-SEC-0330
Free, from the SEC's Internet website at: http://www.sec.gov
PaineWebber Master Series, Inc.
-- PaineWebber Money Market Fund
Investment Company Act File No. 811-4448
*1999 PaineWebber Incorporated
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