<PAGE>
PAINEWEBBER SERIES TRUST
SUPPLEMENT TO PROSPECTUS DATED MAY 1, 1995
The following information revises and supplements the information contained in
the Trust's Prospectus and Statement of Additional Information ("SAI") dated May
1, 1995 for the Portfolios appearing below:
All Portfolios
Lending of Portfolio Securities
Effective July 21, 1995, each Portfolio (except the Money Market Portfolio)
may lend up to 10% (33-1/3% for the Government Portfolio) of the total value of
its portfolio securities to broker dealers or institutional investors that
Mitchell Hutchins Asset Management Inc. ("Mitchell Hutchins") or the applicable
sub-adviser deems qualified. Lending securities enables a Portfolio to earn
additional income, but could result in a loss or delay in recovering the
Portfolio's securities.
The Government Portfolio
At a special meeting of shareholders of the Government Portfolio to be held
September 21, 1995, the shareholders will be asked to approve (1) a sub-advisory
agreement between Mitchell Hutchins (the Portfolio's investment manager and
administrator) and Pacific Investment Management Company ("PIMCO"), (2) changing
the Portfolio's investment objective from "high current income consistent with
the preservation of capital" to "total return consisting of capital appreciation
and income" and (3) an amendment to the Portfolio's fundamental investment
limitation governing borrowing to increase permissible borrowing from 10% to 33-
1/3% of its assets and permit the use of dollar rolls. Dollar rolls are
transactions in which the Portfolio would sell mortgage-backed or other
securities for delivery in the current month and simultaneously contract to
repurchase substantially similar securities at a specified future date. None of
the proposals will be implemented unless all proposals are approved.
If all proposals are approved, the name of the Portfolio will be changed to
"Strategic Fixed Income Portfolio," the current requirement that the Portfolio
invest at least 65% of its total assets in U.S. government securities will be
eliminated and a number of investment policy changes will be implemented to,
among other things, permit the Portfolio to invest in a much broader range of
fixed income securities (including corporate debt securities, convertible
securities, mortgage-backed securities of private issuers, asset-backed
securities, foreign currency exchange-related securities and loan participations
and assignments), establish a dollar-weighted average portfolio duration of
between three to eight years, permit investment of up to 20% of the Portfolio's
total assets in securities rated below investment grade (commonly known as "junk
bonds") and increase the Portfolio's authorization to invest in illiquid
securities from 10% to 15% of its net assets.
<PAGE>
Dividend Growth Portfolio
As of August 14, 1995, the name of this Portfolio will change to "Growth
and Income Portfolio" and all of the changes noted below will take effect as
follows:
The asterisked paragraph relating to the Portfolio on Prospectus page PW 1 and
SAI page 1 will be deleted and replaced by the following:
* The Growth and Income Portfolio seeks current income and capital growth.
The Portfolio invests primarily in dividend-paying equity securities
believed by Mitchell Hutchins to have the potential for rapid earnings
growth.
The paragraphs relating to the Dividend Growth Portfolio on Prospectus page PW
10 will be deleted and replaced with the following:
The Growth and Income Portfolio, under normal circumstances, invests at least
65% of its total assets in dividend-paying equity securities (common and
preferred stock) believed by Mitchell Hutchins to have the potential for rapid
earnings growth. In managing the Portfolio, Mitchell Hutchins follows a
disciplined methodology under which stocks from a universe of approximately
2,000 medium to large capitalization companies are ranked utilizing quantitative
measures of value, earnings and price momentum in the context of Mitchell
Hutchins' economic forecast. Stocks are selected for the Portfolio based on
fundamental analysis of the highest ranking stocks. The Portfolio may invest up
to 35% of its total assets in equity securities not meeting the above criteria,
as well as convertible securities, U.S. government securities, investment grade
corporate debt securities and money market securities. The Portfolio is
permitted to invest up to 10% of its total assets in convertible securities
rated below investment grade (commonly referred to as "junk bonds"). The
Portfolio will invest in instruments other than equity securities when, in the
opinion of Mitchell Hutchins, their projected total return is equal to or
greater than that of equity securities or when such holdings might reduce the
volatility of the Portfolio. The Portfolio generally purchases equity
securities only of issuers whose market capitalizations exceed $300 million.
The Portfolio may invest up to 25% of its total assets in U.S. dollar-
denominated securities of foreign issuers that are traded on recognized U.S.
exchanges or in the U.S. OTC market.
The Asset Allocation Portfolio
As of August 14, 1995, all of the changes noted below will take effect as
follows:
The asterisked paragraph relating to the Portfolio on Prospectus page PW 1 and
SAI page 1 will be deleted and replace with the following:
* The Asset Allocation Portfolio seeks a high total return with low
volatility. This Portfolio operates as a balanced fund and invests
primarily in a combination of equity securities, investment grade debt
obligations and money market instruments, based on Mitchell Hutchins'
assessment of the optimal allocation of the Portfolio's assets.
<PAGE>
The five paragraphs relating to the Portfolio on Prospectus pages PW 12-13 will
be deleted and replaced with the following:
The Asset Allocation Portfolio operates as a balanced fund and invests primarily
in a combination of equity securities, investment grade debt obligations and
money market instruments, based on Mitchell Hutchins' assessment of the optimal
allocation of the Portfolio's assets. The Portfolio seeks to maintain a dollar-
weighted average maturity for its fixed income investments of three to ten
years. Under normal conditions, a portion of the Portfolio's assets will be
invested in each asset class, and at least 25% of the Portfolio's assets will be
invested in debt obligations, including money market instruments. Mitchell
Hutchins believes that capital market returns reflect the consensus expectations
for key economic variables, such as interest rates, profit growth and inflation,
and that superior performance can be obtained by reallocating assets from time
to time before changes in the consensus outlook have been fully discounted by
the market. To implement this strategy, Mitchell Hutchins regularly surveys
market participants and generates a consensus forecast of economic variables
affecting returns on equity, fixed income and money market investments.
Mitchell Hutchins then applies fundamental valuation techniques to the consensus
data to determine what it believes is the optimal asset allocation for the
Portfolio. Portfolio managers specializing in each asset class then select
specific securities for their allocated portions of the portfolio. Mitchell
Hutchins regularly monitors market outlooks and changes asset allocations when
there are significant changes in expected returns.
Equity Securities. In selecting equity securities for the Portfolio, Mitchell
Hutchins follows a disciplined methodology under which stocks from a universe of
approximately 2,000 medium to large capitalization (generally at least $300
million) companies are ranked utilizing quantitative measures of value, earnings
and price momentum in the context of Mitchell Hutchins' economic forecast.
Stocks are selected for the Portfolio based on fundamental analysis of the
highest ranking stocks.
Debt Securities. The Portfolio's investments in debt securities are based on
analyses of the maturity structure and the risk structure (comparing yields on
U.S. Treasury securities to yields on riskier types of debt securities). The
Portfolio may invest in a broad range of investment grade bonds, securities
issued or guaranteed by the U.S. government, its agencies or instrumentalities,
including mortgage-backed securities, and other fixed income securities.
Investment grade bonds are those assigned one of the four highest grades by
Standard & Poor's Ratings Group ("S&P") or Moody's Investors Service, Inc.
("Moody's") or comparably rated by another nationally recognized statistical
rating organization ("NRSRO") or, if unrated, are determined by Mitchell
Hutchins to be of comparable quality to such rated securities. For purposes of
determining the dollar-weighted average maturity of the Portfolio's fixed income
investments, the maturity of a mortgage-backed security is deemed to be its
effective life (i.e., the average time in which it is expected that the
principal amount of the security will be repaid), as estimated by Mitchell
Hutchins based upon scheduled principal amortization and an anticipated rate of
principal prepayments, which, in turn, is based upon past prepayment patterns,
prevailing interest rates and other factors. The effective life of a mortgage-
backed security generally is substantially shorter than its stated maturity.
The Portfolio also may invest in convertible securities rated at least at least
B by S&P or Moody's, comparably rated by another NRSRO or, if unrated,
determined by Mitchell Hutchins, provided that the Portfolio will not do so if,
as a result, more than 10% of its total assets will be invested in non-
investment grade convertible securities. Securities rated below investment
grade are commonly known as "junk bonds."
<PAGE>
Money Market Instruments. The Portfolio may invest in high-grade money market
instruments, which are debt securities with maturities of 13 months or less.
Such instruments will be chosen by Mitchell Hutchins based on its judgment of
their utility in furthering the Portfolio's investment objective. For a more
detailed description of the money market instruments in which the Portfolios
invests, see the Statement of Additional Information.
The Portfolio may invest in U.S. dollar-denominated securities of foreign
issuers that are traded on recognized U.S. exchanges or in the U.S. over-the-
counter markets.
For information about the risks of the mortgage-backed securities and below
investment grade securities in which the Portfolio may invest, as well as
information concerning other risks of the Portfolio's investments, see
"Mortgage- and Asset-Backed Securities," "Debt Securities" and other relevant
sections under "Description of Securities and Investment Techniques" in the
Prospectus.
THE REFERENCE UNDER "MANAGEMENT" TO THE ASSET ALLOCATION PORTFOLIO IN THE FOURTH
FULL PARAGRAPH ON PROSPECTUS PAGE PW 24 WILL BE DELETED AND THE FOLLOWING NEW
PARAGRAPHS INSERTED THEREAFTER:
T. Kirkham Barneby is responsible for the asset allocation decisions for the
Asset Allocation Portfolio. Mr. Barneby is a managing director and chief
investment officer -- quantitative investments of Mitchell Hutchins. Mr.
Barneby rejoined Mitchell Hutchins in 1994, after being with Vantage Global
Management for one year. During the eight years that Mr. Barneby was previously
with Mitchell Hutchins, he was senior vice president responsible for
quantitative management and asset allocation models. Before joining Mitchell
Hutchins, Mr. Barneby served as director of pension investment strategy at the
Continental Group in Stamford, Connecticut and held positions in the economics
departments at both Citibank, N.A. and Merrill Lynch.
Mark A. Tincher is responsible for the day-to-day management of the equity
portion of the Asset Allocation Portfolio. Mr. Tincher is a managing director
and chief investment officer of equity investments of Mitchell Hutchins
responsible for overseeing the management of domestic equity investments for
Mitchell Hutchins. Prior to joining Mitchell Hutchins in March 1995, Mr.
Tincher worked for Chase Manhattan Private Bank, where he was vice president and
directed the U.S. funds management and equity research area. At Chase since
1988, Mr. Tincher oversaw the management of all Chase equity funds (the Vista
Funds and Trust Investment Funds).
Dennis L. McCauley is primarily responsible for the day-to-day management of the
fixed income portion of the Asset Allocation Portfolio/ Mr. McCauley is a
managing director and chief investment officer -- fixed income of Mitchell
Hutchins responsible for overseeing all active fixed income investments,
including domestic and global taxable and tax-exempt mutual funds. Prior to
joining Mitchell Hutchins in 1994, Mr. McCauley worked for IBM Corporation,
where he was director of fixed income investments responsible for developing and
managing investment strategy for all fixed income and cash management
investments of IBM's pension fund and self-insured medical funds. Mr. McCauley
has also served as vice president of IBM Credit Corporation's mutual funds and
as a member of the Retirement Fund Investment Committee.
<PAGE>
Nirmal Singh and Craig M. Varrelman will assist Mr. McCauley in managing the
Asset Allocation Portfolio's fixed income investments. Mr. Singh is a vice
president of Mitchell Hutchins and Mr. Varrelman is a first vice president of
Mitchell Hutchins. Prior to joining Mitchell Hutchins in 1993, Mr. Singh was
with Merrill Lynch Asset Management, Inc., where he was a member of the
portfolio management team responsible for managing several diversified funds,
including mortgage-backed securities funds with assets totaling approximately $8
billion. From 1990 to 1993, Mr. Singh was a senior portfolio manager at Nomura
Mortgage Fund Management Corporation, where he was responsible for managing
approximately $3 billion in mortgage assets. From 1987 to 1990, Mr. Singh was
vice president of Lehman Brothers. Mr. Varrelman has been with Mitchell
Hutchins as a portfolio manager since 1988 and manages fixed income portfolios
with an emphasis on U.S. government securities.
Susan Messina is responsible for the day-to-day management of the portion of the
Asset Allocation Portfolio's assets invested in money market instruments. Ms.
Messina has been with Mitchell Hutchins since 1982 and is a senior vice
president of Mitchell Hutchins.
Messrs. Barneby, Tincher, McCauley, Singh and Varrelman and Ms. Messina first
assumed their responsibilities for the Asset Allocation Portfolio in July 1995.
THE FIRST AND SECOND PARAGRAPHS RELATING TO THE PORTFOLIO UNDER "SELECTION OF
INVESTMENTS BY ASSET ALLOCATION PORTFOLIO" ON SAI PAGE 5 WILL BE DELETED.
Dated: August 2, 1995
<PAGE>
PAINEWEBBER SERIES TRUST
SUPPLEMENT TO PROSPECTUS DATED MAY 1, 1995
THE FOLLOWING INFORMATION REVISES AND SUPPLEMENTS THE INFORMATION CONTAINED IN
THE TRUST'S PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION ("SAI") DATED MAY
1, 1995 FOR THE PORTFOLIOS APPEARING BELOW:
All Portfolios
Lending of Portfolio Securities
Effective July 21, 1995, each Portfolio (except the Money Market Portfolio)
may lend up to 10% (33-1/3% for the Government Portfolio) of the total value of
its portfolio securities to broker dealers or institutional investors that
Mitchell Hutchins Asset Management Inc. ("Mitchell Hutchins") or the applicable
sub-adviser deems qualified. Lending securities enables a Portfolio to earn
additional income, but could result in a loss or delay in recovering the
Portfolio's securities.
The Government Portfolio
At a special meeting of shareholders of the Government Portfolio to be held
September 21, 1995, the shareholders will be asked to approve (1) a sub-advisory
agreement between Mitchell Hutchins (the Portfolio's investment manager and
administrator) and Pacific Investment Management Company ("PIMCO"), (2) changing
the Portfolio's investment objective from "high current income consistent with
the preservation of capital" to "total return consisting of capital appreciation
and income" and (3) an amendment to the Portfolio's fundamental investment
limitation governing borrowing to increase permissible borrowing from 10% to 33-
1/3% of its assets and permit the use of dollar rolls. Dollar rolls are
transactions in which the Portfolio would sell mortgage-backed or other
securities for delivery in the current month and simultaneously contract to
repurchase substantially similar securities at a specified future date. None of
the proposals will be implemented unless all proposals are approved.
If all proposals are approved, the name of the Portfolio will be changed to
"Strategic Fixed Income Portfolio," the current requirement that the Portfolio
invest at least 65% of its total assets in U.S. government securities will be
eliminated and a number of investment policy changes will be implemented to,
among other things, permit the Portfolio to invest in a much broader range of
fixed income securities (including corporate debt securities, convertible
securities, mortgage-backed securities of private issuers, asset-backed
securities, foreign currency exchange-related securities and loan participations
and assignments), establish a dollar-weighted average portfolio duration of
between three to eight years, permit investment of up to 20% of the Portfolio's
total assets in securities rated below investment grade (commonly known as "junk
bonds") and increase the Portfolio's authorization to invest in illiquid
securities from 10% to 15% of its net assets.
<PAGE>
The Fixed Income Portfolio
Effective July 21, 1995, the Sub-Advisory Agreement with Wolf, Webb, Burk
and Campbell, Inc. was terminated due to an anticipated change in control of the
sub-adviser. Mitchell Hutchins now provides investment management for the
Portfolio pursuant to the current Investment Advisory and Administration
Contract between PaineWebber Series Trust and Mitchell Hutchins. Dennis
McCauley, a Managing Director and Chief Investment Officer - Fixed Income of
Mitchell Hutchins, is responsible for the day-to-day management of the
Portfolio. Mr. McCauley has been employed by Mitchell Hutchins since December
1994 and is responsible for overseeing all active fixed income investments,
including domestic and global taxable and tax-exempt mutual funds. Prior to
joining Mitchell Hutchins, Mr. McCauley worked for IBM Corporation where he was
Director of Fixed Income Investments responsible for developing and managing
investment strategy for all fixed income and cash management investments of
IBM's pension fund and self-insured medical funds. Mr. McCauley has also served
as Vice President of IBM Credit Corporation's mutual funds and as a member of
the Retirement Fund Investment Committee.
On July 20, 1995, the Board of Trustees approved a change of name of the
Portfolio to "High Grade Fixed Income Portfolio," which Mitchell Hutchins and
the Trust's Board of Trustees believe is more descriptive of the Portfolio's
policies. The name change will become effective when the proposed changes to
the Government Portfolio are implemented following shareholder approval.
The Balanced Portfolio
Effective July 21, 1995, shares of the Balanced Portfolio are no longer
offered to the insurance company separate accounts that fund certain variable
contracts. Also effective July 21, 1995, a separate account may no longer
exchange shares of another Portfolio for shares of the Balanced Portfolio.
It is anticipated that PaineWebber Life Insurance Company will file an
application with the Securities and Exchange Commission ("SEC") for an order to
substitute shares of the Asset Allocation Portfolio for the shares of the
Balanced Portfolio, now held by the Balanced Division of the PaineWebber Life
Variable Annuity Account, the sole shareholder of the Balanced Portfolio.
Effective upon receipt of regulatory approval, the Sub-Advisory Agreement
between Mitchell Hutchins, the investment adviser and administrator of the
Balanced Portfolio, and Provident Investment Counsel, Inc. ("PIC") will
terminate. Until such time as the order is received and the substitution
effected, PIC will continue to provide day-to-day portfolio management services
to the Balanced Portfolio.
Dividend Growth Portfolio
As of August 14, 1995, the name of this Portfolio will change to "Growth
and Income Portfolio" and all of the changes noted below will take effect as
follows:
<PAGE>
The asterisked paragraph relating to the Portfolio on Prospectus page PW 1 and
SAI page 1 will be deleted and replaced by the following:
* The Growth and Income Portfolio seeks current income and capital growth.
The Portfolio invests primarily in dividend-paying equity securities
believed by Mitchell Hutchins to have the potential for rapid earnings
growth.
The paragraphs relating to the Dividend Growth Portfolio on Prospectus page PW
14 will be deleted and replaced with the following:
The Growth and Income Portfolio, under normal circumstances, invests at least
65% of its total assets in dividend-paying equity securities (common and
preferred stock) believed by Mitchell Hutchins to have the potential for rapid
earnings growth. In managing the Portfolio, Mitchell Hutchins follows a
disciplined methodology under which stocks from a universe of approximately
2,000 medium to large capitalization companies are ranked utilizing quantitative
measures of value, earnings and price momentum in the context of Mitchell
Hutchins' economic forecast. Stocks are selected for the Portfolio based on
fundamental analysis of the highest ranking stocks. The Portfolio may invest up
to 35% of its total assets in equity securities not meeting the above criteria,
as well as convertible securities, U.S. government securities, investment grade
corporate debt securities and money market securities. The Portfolio is
permitted to invest up to 10% of its total assets in convertible securities
rated below investment grade (commonly referred to as "junk bonds"). The
Portfolio will invest in instruments other than equity securities when, in the
opinion of Mitchell Hutchins, their projected total return is equal to or
greater than that of equity securities or when such holdings might reduce the
volatility of the Portfolio. The Portfolio generally purchases equity
securities only of issuers whose market capitalizations exceed $300 million.
The Portfolio may invest up to 25% of its total assets in U.S. dollar-
denominated securities of foreign issuers that are traded on recognized U.S.
exchanges or in the U.S. OTC market.
The Asset Allocation Portfolio
As of August 14, 1995, all of the changes noted below will take effect as
follows:
The asterisked paragraph relating to the Portfolio on Prospectus page PW 1 and
SAI page 1 will be deleted and replace with the following:
* The Asset Allocation Portfolio seeks a high total return with low
volatility. This Portfolio operates as a balanced fund and invests
primarily in a combination of equity securities, investment grade debt
obligations and money market instruments, based on Mitchell Hutchins'
assessment of the optimal allocation of the Portfolio's assets.
The five paragraphs relating to the Portfolio on Prospectus pages PW 13-14 will
be deleted and replaced with the following:
The Asset Allocation Portfolio operates as a balanced fund and invests primarily
in a combination of equity securities, investment grade debt obligations and
money market instruments, based on Mitchell Hutchins' assessment of the optimal
allocation of the Portfolio's assets. The Portfolio seeks to maintain a dollar-
weighted average maturity for its fixed income investments of three to ten
years. Under normal conditions, a portion of the Portfolio's assets
<PAGE>
will be invested in each asset class, and at least 25% of the Portfolio's assets
will be invested in debt obligations, including money market instruments.
Mitchell Hutchins believes that capital market returns reflect the consensus
expectations for key economic variables, such as interest rates, profit growth
and inflation, and that superior performance can be obtained by reallocating
assets from time to time before changes in the consensus outlook have been fully
discounted by the market. To implement this strategy, Mitchell Hutchins
regularly surveys market participants and generates a consensus forecast of
economic variables affecting returns on equity, fixed income and money market
investments. Mitchell Hutchins then applies fundamental valuation techniques to
the consensus data to determine what it believes is the optimal asset allocation
for the Portfolio. Portfolio managers specializing in each asset class then
select specific securities for their allocated portions of the portfolio.
Mitchell Hutchins regularly monitors market outlooks and changes asset
allocations when there are significant changes in expected returns.
Equity Securities. In selecting equity securities for the Portfolio, Mitchell
Hutchins follows a disciplined methodology under which stocks from a universe of
approximately 2,000 medium to large capitalization (generally at least $300
million) companies are ranked utilizing quantitative measures of value, earnings
and price momentum in the context of Mitchell Hutchins' economic forecast.
Stocks are selected for the Portfolio based on fundamental analysis of the
highest ranking stocks.
Debt Securities. The Portfolio's investments in debt securities are based on
analyses of the maturity structure and the risk structure (comparing yields on
U.S. Treasury securities to yields on riskier types of debt securities). The
Portfolio may invest in a broad range of investment grade bonds, securities
issued or guaranteed by the U.S. government, its agencies or instrumentalities,
including mortgage-backed securities, and other fixed income securities.
Investment grade bonds are those assigned one of the four highest grades by
Standard & Poor's Ratings Group ("S&P") or Moody's Investors Service, Inc.
("Moody's") or comparably rated by another nationally recognized statistical
rating organization ("NRSRO") or, if unrated, are determined by Mitchell
Hutchins to be of comparable quality to such rated securities. For purposes of
determining the dollar-weighted average maturity of the Portfolio's fixed income
investments, the maturity of a mortgage-backed security is deemed to be its
effective life (i.e., the average time in which it is expected that the
principal amount of the security will be repaid), as estimated by Mitchell
Hutchins based upon scheduled principal amortization and an anticipated rate of
principal prepayments, which, in turn, is based upon past prepayment patterns,
prevailing interest rates and other factors. The effective life of a mortgage-
backed security generally is substantially shorter than its stated maturity.
The Portfolio also may invest in convertible securities rated at least at least
B by S&P or Moody's, comparably rated by another NRSRO or, if unrated,
determined by Mitchell Hutchins, provided that the Portfolio will not do so if,
as a result, more than 10% of its total assets will be invested in non-
investment grade convertible securities. Securities rated below investment
grade are commonly known as "junk bonds."
Money Market Instruments. The Portfolio may invest in high-grade money market
instruments, which are debt securities with maturities of 13 months or less.
Such instruments will be chosen by Mitchell Hutchins based on its judgment of
their utility in furthering the Portfolio's investment objective. For a more
detailed description of the money market instruments in which the Portfolio's
invests, see the Statement of Additional Information.
The Portfolio may invest in U.S. dollar-denominated securities of foreign
issuers that are traded on recognized U.S. exchanges or in the U.S. over-the-
counter markets.
<PAGE>
For information about the risks of the mortgage-backed securities and below
investment grade securities in which the Portfolio may invest, as well as
information concerning other risks of the Portfolio's investments, see
"Mortgage- and Asset-Backed Securities," "Debt Securities" and other relevant
sections under "Description of Securities and Investment Techniques" in the
Prospectus.
The reference under "Management" to the Asset Allocation Portfolio in the sixth
paragraph on Prospectus page PW 28 will be deleted and the following new
paragraphs inserted thereafter:
T. Kirkham Barneby is responsible for the asset allocation decisions for the
Asset Allocation Portfolio. Mr. Barneby is a managing director and chief
investment officer -- quantitative investments of Mitchell Hutchins. Mr.
Barneby rejoined Mitchell Hutchins in 1994, after being with Vantage Global
Management for one year. During the eight years that Mr. Barneby was previously
with Mitchell Hutchins, He was senior vice president responsible for
quantitative management and asset allocation models. Before joining Mitchell
Hutchins, Mr. Barneby served as director of pension investment strategy at the
Continental Group in Stamford, Connecticut and held positions in the economics
departments at both Citibank, N.A. and Merrill Lynch.
Mark A. Tincher is responsible for the day-to-day management of the equity
portion of the Asset Allocation Portfolio. Mr. Tincher is a managing director
and chief investment officer of equity investments of Mitchell Hutchins
responsible for overseeing the management of domestic equity investments for
Mitchell Hutchins. Prior to joining Mitchell Hutchins in March 1995, Mr.
Tincher worked for Chase Manhattan Private Bank, where he was vice president and
directed the U.S. funds management and equity research area. At Chase since
1988, Mr. Tincher oversaw the management of all Chase equity funds (the Vista
Funds and Trust Investment Funds).
Dennis L. McCauley is primarily responsible for the day-to-day management of the
fixed income portion of the Asset Allocation Portfolio/ Mr. McCauley is a
managing director and chief investment officer -- fixed income of Mitchell
Hutchins responsible for overseeing all active fixed income investments,
including domestic and global taxable and tax-exempt mutual funds. Prior to
joining Mitchell Hutchins in 1994, Mr. McCauley worked for IBM Corporation,
where he was director of fixed income investments responsible for developing and
managing investment strategy for all fixed income and cash management
investments of IBM's pension fund and self-insured medical funds. Mr. McCauley
has also served as vice president of IBM Credit Corporation's mutual funds and
as a member of the Retirement Fund Investment Committee.
Nirmal Singh and Craig M. Varrelman will assist Mr. McCauley in managing the
Asset Allocation Portfolio's fixed income investments. Mr. Singh is a vice
president of Mitchell Hutchins and Mr. Varrelman is a first vice president of
Mitchell Hutchins. Prior to joining Mitchell Hutchins in 1993, Mr. Singh was
with Merrill Lynch Asset Management, Inc., where he was a member of the
portfolio management team responsible for managing several diversified funds,
including mortgage-backed securities funds with assets totaling approximately $8
billion. From 1990 to 1993, Mr. Singh was a senior portfolio manager at Nomura
Mortgage Fund Management Corporation, where he was responsible for managing
approximately $3 billion in mortgage assets. From 1987 to 1990, Mr. Singh was
vice president of Lehman Brothers. Mr. Varrelman has been with Mitchell
Hutchins as a portfolio manager since 1988 and manages fixed income portfolios
with an emphasis on U.S. government securities.
<PAGE>
Susan Messina is responsible for the day-to-day management of the portion of the
Asset Allocation Portfolio's assets invested in money market instruments. Ms.
Messina has been with Mitchell Hutchins since 1982 and is a senior vice
president of Mitchell Hutchins.
Messrs. Barneby, Tincher, McCauley, Singh and Varrelman and Ms. Messina first
assumed their responsibilities for the Asset Allocation Portfolio in July 1995.
The first and second paragraphs relating to the Portfolio under "Selection of
Investments by Asset Allocation Portfolio" on SAI page 5 will be deleted.
Dated: August 2, 1995.
