<PAGE> PAGE 1
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<PAGE> PAGE 2
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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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SIGNATURE PAUL SCHUBERT
TITLE TREASURER
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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<NAME> PAINEWEBBER MASTER SERIES,INC
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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<NAME> PAINEWEBBER MASTER SERIES,INC
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</TABLE>
Report of Independent Accountants
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 (the "Fund") for the year ended August 31,
1999, 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 the 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, 1999.
This report is intended solely for the information
and use of management, the Board of Trustees of
the Fund and the Securities and Exchange
Commission and is not intended to be and should
not be used by anyone other than these specified
parties.
PricewaterhouseCoopers LLP
New York, New York
October 25, 1999
To the Shareholders and Board of Directors of
PaineWebber Balanced Fund
FORM 10f-3 FUND: Painewebber Balanced
Fund
Record of Securities Purchased Under the
Fund's Rule 10f-3 Procedures
1. Issuer: Pepsi Bottling Group Inc.
2. Date of Purchase: March 30, 1999
3. Date offering commenced
March 30, 1999
4. Underwriters from whom purchased:
Merrill Lynch
5. "Affiliated Underwriter" managing or
participating in syndicate: PaineWebber
6. Aggregate principal amount of
purchase: $26,000
7. Aggregate principal amount of
offering: $100,000,000
8. Purchase price (net of fees and
expenses): $23.00
9. Initial public offering price: $23.00
10. Commission, spread or profit %
$.56
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.
X
___
b. The securities were purchased prior
to the end of the 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).
X
___
c. The underwriting was a firm
commitment underwriting.
X
___
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.
X
___
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.
X
___
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.
g. The purchase price was less than 3%
of the Fund's total assets.
X
___
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.
X
___
Approved: Mark Tincher Date: 3/11/99
FORM 10f-3 FUND: PW Balanced Fund
Record of Securities Purchased Under the
Fund's Rule 10f-3 Procedures
1. Issuer: Delphi
2. Date of Purchase:February 4, 1999
3. Date offering commenced:
February 4, 1999
4. Underwriters from whom purchased:
Morgan Stanley
5. "Affiliated Underwriter" managing or
participating in syndicate: PaineWebber
6. Aggregate principal amount of
purchase: $119,000
7. Aggregate principal amount of
offering: $1.45 billion
8. Purchase price (net of fees and
expenses): $17
9. Initial public offering price: $17
10. Commission, spread or profit:
% $.46
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.
X
___
b. The securities were purchased prior
to the end of the 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).
X
___
c. The underwriting was a firm
commitment underwriting.
X
___
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.
X
___
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.
X
___
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.
g. The purchase price was less than 3%
of the Fund's total assets.
X
___
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.
X
___
Approved: Mark Tincher Date:
