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PAINEWEBBER REGIONAL FINANCIAL GROWTH FUND INC.
Supplement to Prospectus dated August 1, 1995
The following information revises and supplements the information contained in
the Fund's Prospectus and Statement of Additional Information dated August 1,
1995:
1. At a special meeting of the Fund's shareholders to be held on December 14,
1995, the shareholders will be asked to approve (1) a change in the Fund's
concentration policy under which it invests, under normal circumstances, at
least 65% of its total assets in the equity securities of regional commercial
banks, thrifts and their holding companies to one under which it would invest,
under normal circumstances, at least 65% of its total assets in the equity
securities of financial services companies and a corresponding change in the
Fund's investment limitation governing its ability to concentrate more than 25%
of its total assets in any industry or group of industries and (2) the
elimination of the Fund's fundamental investment policy of investing only in
banks and thrifts with deposits insured by the Federal Deposit Insurance
Corporation ("FDIC") and the holding companies of such banks and thrifts.
If proposal 1 is approved, the Fund's concentration policy will be changed to
one in which the Fund would invest, under normal circumstances, at least 65% of
its total assets in the equity securities of financial services companies and a
specific provision requiring investment of more than 25% of the Fund's total
assets in financial services industries would be included in the Fund's
investment limitation which generally prohibits the Fund from investing more
than 25% of its total assets in any one industry. In addition, the Fund's board
of directors has authorized a change in the name of the Fund to PaineWebber
Financial Services Growth Fund Inc., if proposal 1 is approved.
If proposal 2 is approved, the Fund's fundamental investment policy of investing
only in banks and thrifts with deposits insured by the FDIC and the holding
companies of such banks and thrifts will be eliminated. However, if
shareholders approve proposal 2, the Fund's board of directors intends to adopt
an identical non-fundamental investment policy, so that the Fund will continue
to invest in banks and thrifts and their holding companies only if those banks
and thrifts have deposits insured by the FDIC; in the future, only board
approval would be necessary in order to eliminate this non-fundamental
investment policy.
2. For purchases of Fund shares made on or after November 10, 1995, the
following changes to the Fund's Class A, Class B and Class D shares will be in
effect:
a. Class A Shares. Class A shares of the Fund purchased without an initial
sales charge due to the sales charge waiver for purchases of $1 million or more
and held less than one year are subject to a contingent deferred sales charge
("CDSC") upon redemption. The holding period of Class A shares of the Fund
acquired through an exchange with another PaineWebber mutual fund ("PW Fund") is
calculated from the date the Class A shares of that PW Fund were initially
purchased without a sales charge. The Class A CDSC equals 1% of the lower of:
(a) the net asset value of the shares at the time of purchase or (b) the net
asset value of the shares at the time of redemption. Class A shares of the Fund
held one year or longer and Class A shares of the Fund acquired through
reinvestment of dividends or capital gains distributions are not subject to this
CDSC. The CDSC for Class
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A shares of the Fund is waived for redemptions in connection with the systematic
withdrawal plan, subject to the limitations described below.
b. Class B Shares. The description of the calculation of the CDSC for Class B
shares of the Fund has been modified slightly. The maximum CDSC for Class B
shares of the Fund equals 5% of the lower of: (a) the net asset value of the
shares at the time of purchase or (b) the net asset value of the shares at the
time of redemption. Class B shares of the Fund held six years or longer and
Class B shares acquired through reinvestment of dividends or capital gains
distributions are not subject to the CDSC. The CDSC for Class B shares of the
Fund is waived under the circumstances described in the Fund's Prospectus.
Class B shares of the Fund convert into Class A shares as described in the
Prospectus.
c. Class C Shares (Formerly Class D Shares). Effective November 10, 1995, all
Class D shares will be renamed Class C shares.
Class C shares of the Fund held less than one year will be subject to a CDSC on
redemptions. The holding period of Class C shares of the Fund acquired through
an exchange with another PW Fund will be calculated from the date the Class C
shares of that PW Fund were initially purchased. The CDSC on Class C shares
equals 1% of the lower of: (a) the net asset value of the shares at the time of
purchase or (b) the net asset value of the shares at the time of redemption.
Redemptions of Class C shares of the Fund acquired through an exchange and held
less than one year will be subject to the same CDSC that would have been imposed
on Class C shares of the PW Fund originally purchased that were subsequently
exchanged into Class C shares of the Fund. Class C shares of the Fund held one
year or longer and Class C shares of the Fund acquired through reinvestment of
dividends or capital gains distributions are not subject to the CDSC. The CDSC
for Class C shares of the Fund is waived for redemptions in connection with the
systematic withdrawal plan, subject to the limitations described below.
d. Waivers for Systematic Withdrawal Plan. Shareholders who own Class A shares
or Class C shares (formerly Class D shares) of the Fund with a value of $5,000
or more may have PaineWebber redeem a portion of their shares monthly, quarterly
or semi-annually under the systematic withdrawal plan. Shareholders who
participate in the systematic withdrawal plan must elect to have all dividends
reinvested in additional shares of the same Class. The minimum amount for all
withdrawals of Class A or Class C shares is $100. Provided that the shareholder
does not withdraw an amount exceeding 12% in the first year after purchase of
his or her "Initial Account Balance," a term that means the value of the Fund
account at the time the shareholder elects to participate in the systematic
withdrawal plan, no CDSC is imposed on such withdrawals within the first year
after purchase for (1) Class A shares purchased pursuant to the sales charge
waiver for purchases of $1 million or more and (2) Class C shares. Class A and
Class C shareholders' participation in the systematic withdrawal plan will
terminate automatically if the Initial Account Balance (plus the net asset value
on the date of purchase of Fund shares acquired after the election to
participate in the systematic withdrawal plan), less aggregate redemptions made
other than pursuant to the systematic withdrawal plan, is less than $5,000. No
changes have been made to the systematic withdrawal plan with respect to Class B
shares.
Dated:November 6, 1995
