<PAGE>
PaineWebber Life
MILESTONES
For life's important
moments and the means
to afford them
Semi-Annual Report
June 30, 1998
<PAGE>
- --------------------------------------------------------
MITCHELL HUTCHINS SERIES TRUST
SEMI-ANNUAL REPORT
JUNE 30, 1998
PAINEWEBBER INCORPORATED
114 1122 0898
<PAGE>
AUGUST 21, 1998
DEAR CONTRACT OWNER,
We are pleased to present you with the semiannual report for the Mitchell
Hutchins Series Trust for the six months ended June 30, 1998. Shares of each
Portfolio are offered only to insurance company separate accounts that fund
certain contracts. Not all Portfolios are available to all separate accounts.
INVESTMENT OVERVIEW--DOMESTIC
U.S. economic activity continued at a healthy yet noninflationary pace through
the first six months of 1998. Consumer confidence remains high, buoyed by strong
employment. Coupled with low interest rates, such confidence has continued to
support the economy.
After a strong showing in the first quarter of 1998, the bull market stalled
in the second quarter; nevertheless, the S&P 500 Index returned 17.7% for the
six months ended June 30. The overall market environment was rather choppy,
characterized by stable interest rates, benign inflation, round two of the Asian
contagion and general worries about second-quarter earnings. There was a lot of
movement but no clear trend in the market. As investors reacted day-to-day and
week-to-week to news regarding Asia, money shifted from sector to sector. This
sector rotation caused rolling corrections and produced shorter periods of
gains.
Despite the drag of lower-than-expected earnings, the market moved ahead,
fueled by cash flows into equity mutual funds and the appeal of the United
States over unsettled markets in Asia and Latin America. Investors focused on
large-capitalization growth stocks, attracted by their consistent earnings, high
liquidity and low vulnerability to the effects of the Asian financial crisis. As
a result, the large-cap category turned in the strongest performance for the
period.
Interest rates fell across the U.S. Treasury yield curve through the first
half of 1998, aided by low inflation, a budget surplus and a strong dollar. The
curve flattened as the yield of the 30-year bond fell significantly more than
the yield of the two-year note. This bullish flattening, though an historical
anomaly, stems from investor reactions to continued good news on the Federal
budget and inflation, and the still-perceived risk that the Federal Reserve
might raise short-term interest rates.
INVESTMENT OVERVIEW--GLOBAL
The European equity markets moved ahead in the first half of 1998, boosted by
persistent fund inflows, bond convergence, domestic capital and corporate
activity. The other major regions lost ground. U.K. equities suffered from the
impact of a strong pound, little helped by a further, 0.25% interest rate rise.
The U.S. market proved resilient despite the Asia threat and a host of earnings
downgrades.
Asian markets lost their first-quarter gains in the second quarter, and left
smaller markets weaker around the world. Japan announced its largest fiscal
stimulus package to date, which still did not reassure investors. The Japanese
stock market and the yen continued to decline, threatening a second round of
Asian currency devaluations.
Developed bond markets saw their bond yields hit new cyclical lows in the
first half of 1998. Bonds performed well as investors became convinced that
spillover effects of the Asia crisis would keep prices down and dampen economic
activity worldwide. The range between the best and worst performing markets was
the smallest over any six-month period since the Salomon Brothers World
Government Bond Index was established in 1985. Sweden was the top performer for
the six months ended June 30, with a gain of 7.9%. Switzerland finished last,
with a gain of 4.2% (both in U.S. dollar terms).
The emerging bond markets, as measured by the J.P. Morgan Emerging Markets
Bond Index, suffered losses as concerns grew over the depth of economic
contraction in Asia. Emerging market debt posted a 5.2% gain in the first
quarter but gave it all back and then some in the second quarter, to finish the
six months at a loss of 1.1% (in U.S.-
1
<PAGE>
dollar terms). Most countries in the Emerging Markets index recorded losses for
the second quarter (in U.S.$): Russia lost 20.5%, Peru fell 9.0%, Venezuela lost
8.3%, Brazil fell 7.4%, Argentina lost 1.3% and Mexico lost 1.1%. Only Nigeria,
the Philippines and Poland showed gains.
MONEY MARKET PORTFOLIO
We remained somewhat bullish on the fixed income markets over the six months
ended June 30, 1998, expecting interest rates to hold steady or fall slightly.
Since we did not expect major changes in rates, we kept the Portfolio's
weighted-average maturity slightly above its peer group. As of June 30, 1998,
the Portfolio's seven-day yield was 4.5% and its weighted-average maturity was
43 days. Because we expect interest rates to continue declining, we expect to
maintain the Portfolio's weighted-average maturity slightly above its peer
group.
HIGH GRADE FIXED INCOME PORTFOLIO
During the six-month period, the Portfolio benefited from its positions in
mortgage-backed securities and U.S. government agency obligations. Both sectors
performed fairly well compared to Treasurys, especially considering the high
rate of mortgage prepayments during the period. Our emphasis on lower-coupon
mortgages and other securities less sensitive to prepayment risk was appropriate
in such an environment.
We are maintaining the Fund's weightings in mortgages and agencies, although
our security selections now reflect a bias towards greater protection against
prepayment risk. While the current, high rate of mortgage prepayments is likely
to peak, risks of further acceleration will haunt the market as long as interest
rates remain low.
As interest rates fell, corporate issuance remained high and put pressure on
spreads. Announcement of the merger between AT&T and Telecommunications Inc.
(TCI) reignited interest in the cable/media sector, which became the best
performer in June. The announced merger between Citicorp and Travelers led to
more speculation in the finance sector, and to strong performance.
The Portfolio's corporate component remains heavily weighted in the finance
sector, focusing on broker-dealer paper, insurance companies and select credit
card issuers. We will continue to watch the new issue calendar. Failure by Japan
to achieve real banking reform could drive the yen even lower and further
aggravate Asian problems. This would keep U.S. rates low and corporate issuance
high.
STRATEGIC FIXED INCOME PORTFOLIO
We remained bullish on bonds during the six months ended June 30, 1998,
expecting interest rates to fall. To capture the expected price gain from
falling rates we kept the Portfolio's interest-rate sensitivity (its "duration")
at about 0.5 years above that of its benchmark, the Merrill Lynch 1-3 Year
Treasury Index (the "Index"). This strategy paid off as interest rates declined.
We focused the Portfolio's holdings on current coupon, seasoned and
collateralized mortgages, which are less prepayment sensitive--an important
attribute in a declining interest rate environment. By structuring the
Portfolio's holdings to be less prepayment sensitive, we gained the extra yield
from these mortgages while protecting the Portfolio from reinvestment risk. The
Portfolio's underweighting in corporate issues also enhanced return. As
corporate profits waned during the second quarter, yield spreads of corporate
debt to Treasurys widened. Our slight, below-investment-grade corporate exposure
detracted from performance, as did the small allocation to dollar-denominated,
emerging market debt (3.7% of net assets as of June 30, 1998).
We intend to maintain Portfolio duration about 0.5 years above the benchmark
duration, since we expect that low inflation will cause long-term interest rates
to move lower. In anticipation of an economic slowdown and a potential
steepening of the yield curve, we expect to shift the Portfolio to a greater
concentration on intermediate maturities (a "bullet" structure). We believe
mortgages remain the most prudent way to enhance yield without adding undue
risk, especially if interest-rate volatility stays low in the coming quarters.
We will focus on discount-coupon mortgages, which offer the most attractive
spreads to Treasury yields.
2
<PAGE>
GLOBAL INCOME PORTFOLIO
During the first half of 1998, the Portfolio managed a positive return in a
period characterized by losses in most markets. It did not incur material losses
in emerging-market debt--early in the second quarter we liquidated positions in
Bulgaria, Brazil and Russia and added positions in Korean sovereign eurobonds.
The Portfolio's exposure to the emerging markets was low and concentrated in
higher-quality bonds of Korea, Mexico and Poland, which outperformed the
emerging markets as a whole.
In the United States our exposure consisted primarily of intermediate-maturity
Treasury and investment-grade bonds. We avoided longer maturity bonds since they
offered historically low risk premiums. The Portfolio's European holdings
focused on intermediate maturities as well, in Germany, Holland and the United
Kingdom. The Portfolio remained underweighted in Europe compared to the Salomon
Brothers World Government Bond Index.
The Asian crisis is now clearly impacting the manufacturing sector in the U.S.
Yet the foundation for domestic demand is still strong, with unemployment at
30-year lows and consumers flush with disposable income because of the high
stock market. There seems little reason for the Federal Reserve to change
policy, so we do not expect to change our strategy.
Under the new European Central Bank, monetary policy should favor a stable
currency; we have increased the Portfolio's European currency exposure (26% of
net assets, excluding U.K. sterling, on June 30, 1998). While we may vary this
exposure depending on macro-economic developments and technical analysis, we
generally favor European currencies.
BALANCED PORTFOLIO
The Portfolio employs a disciplined, model-based approach to determine its
asset allocation by calculating expected returns for U.S. stocks, bonds and
cash. The Portfolio holds a minimum of 25% of net assets in bonds, including
cash, at all times. During the first quarter of 1998, the Portfolio was
overweighted in stocks with a 70% allocation compared to its normal 60%
allocation. On April 1, we decreased the stock allocation to 59% as the expected
return from stocks had declined. We further reduced the Portfolio's stock
allocation to 55% on July 1.
The consumer cyclical and financial services sectors comprise the Portfolio's
largest stock weightings. Financial stocks performed right in line with the S&P
500 Index; we expect to add to these positions on any signs of weakness. The
Portfolio's low weightings in healthcare and consumer staples (2.8% and 0.7% of
net assets on June 30, 1998) detracted from performance, as these two sectors
bettered the S&P 500.
At the end of June, U.S. government and agency obligations represented about
half the Portfolio's fixed-income portion, with the balance in corporate bonds
and mortgage-backed securities.
GROWTH AND INCOME PORTFOLIO
For the first time in a number of years, large-cap, higher-growth,
higher-multiple stocks outperformed traditional value stocks (companies that
appear cheap relative to their intrinsic worth) during May and June.
Financial stocks, the Portfolio's largest weighting, performed in line with
the S&P 500 Index. The Portfolio's low weightings in healthcare and consumer
staples (3.0% and 1.4% of net assets on June 30, 1998) detracted from
performance, as these two sectors bettered the S&P 500. Healthcare and consumer
staples benefited from the continuing "flight to quality" because of their
minimal exposure to overseas economies.
As of June 30, we held about 7% of assets in cash. We are looking to invest
this cash in select capital goods stocks--which we consider cheap relative to
their earnings prospects--and in financial services, oil service and energy
stocks, which we view as buying opportunities.
3
<PAGE>
GROWTH PORTFOLIO
At June 30, 1998, the Portfolio's top five sectors were technology,
media/entertainment, financial services, retail and healthcare. We expect
companies in these areas to benefit most from the stable-growth, low-inflation,
low-interest-rate environment we project for the rest of 1998. Performance was
hurt by our energy selections and by some of our technology stocks, which caused
the Portfolio to lag the S&P 500.
The Portfolio's emphasis on larger growth stocks (over $5 billion in market
capitalization) helped performance. Among our more successful picks were Dell
Corporation (1.9% of net assets on June 30, 1998) and Cisco Systems (2.1%).
During the second quarter we increased the Portfolio's positions in consumer
cyclical stocks, with our focus on the entertainment/media and retail trade
sectors. Businesses here tend to thrive under the economic conditions we are
projecting for the rest of 1998: high employment, low inflation and stable
growth and low interest rates.
Our expectation is that the current, favorable economic environment will
continue; therefore, we expect growth stocks to continue performing well,
especially the larger companies. Financial services stocks stand to benefit from
industry consolidation, and will remain an important asset class for the
Portfolio.
AGGRESSIVE GROWTH PORTFOLIO
Price gains in stocks of small- and mid-sized companies slowed moderately even
though these stocks offered some of the best opportunities during the first half
of 1998, with low price-to-earnings ratios and compelling earnings strength.
These companies derive most of their earnings domestically and have little
exposure to Asia's woes.
While mid-cap stocks suffered from investors' preferences for large-cap
stocks, the Aggressive Growth Portfolio benefited from its disciplined
investment process, which focuses on companies that demonstrate sustainable
earnings strength. Our management team found attractive investments in
technology, healthcare and consumer services, which were among the
top-performing sectors for the first half of 1998. We reduced our exposure to
software, transportation and industrial manufacturing, as such companies were
unable to meet our strict criteria for sustainable earnings growth. We moved out
of the energy sector altogether.
The Portfolio's investment process works best when the market becomes more
discriminating about the earnings strength of individual companies. Today's
environment of moderate economic growth, low inflation and decelerating earnings
among the blue chips makes our stocks all the more attractive.
GLOBAL GROWTH PORTFOLIO
Over the period, the Portfolio's European telecommunications stocks performed
exceptionally well and its auto stocks also were strong performers.
Unfortunately, the European front runners were not enough to offset the laggards
in Latin America, which hurt Portfolio performance for the six months ended June
30, 1998.
The Portfolio acquired new positions in Munchener Ruckversicherung AG (Munich
Re) and Jeronimo Martins S.A. Munich Re (1.0% of net assets as of June 30,
1998), is one of the largest reinsurance groups in the world. The company is
entering a period of higher returns and is attractively valued. Jeronimo Martins
(0.8%), a leading supermarket chain in Portugal, is rapidly expanding throughout
Brazil and Poland. During the quarter, we took profits by trimming strong
performer Credito Italiano SPA, a major regional bank in Italy.
We continue to find the most attractive investment opportunities in Europe,
which offers a benign economic environment, inexpensive growth stocks and
consolidating industries. Recent interest rate hikes in the United Kingdom hurt
insurance and engineering stocks; we now see considerable value relative to
growth prospects in these sectors.
We remain cautious about the long-term prospects of the Japanese economy; it
needs radical restructuring both on the corporate and government sides to
recover. Recent developments, such as the new banking reform plan and increased
share buybacks, are steps in the right direction. The third quarter could be key
for Japan to establish credible recovery plans.
4
<PAGE>
U.S. earnings estimates for the second half of 1998 seem overoptimistic, and
we believe they could lead to more disappointment. Considering this risk and the
high valuations, we are keeping the Portfolio underweighted in the United States
relative to its benchmark, the Morgan Stanley Capital International World Index.
Latin American companies and economies continue to post positive fundamentals.
Nonetheless, investors still fret over the impact of Asia, and redemption of
Latin American mutual fund shares continues to drive the region down. We believe
that this disconnect is a good buying opportunity, particularly in Brazil and
Mexico, where the Portfolio is overweighted relative to its benchmark.
CONCLUSION
As we move into the third quarter, our analytical models indicate that the
U.S. stock market is above fair value. While we normally would expect limited
upside potential, other indicators suggest a more optimistic outlook for market
performance through the end of the year: our projected economic growth rate of
2 1/2-3%, an inflation rate of roughly 2%, long-term interest rates around 5.5%
and money flows from U.S. investors into mutual funds and 401(k)s.
Any signs of recession or Fed tightening, however, would make us more
cautious. We think earnings growth could come in lower than expected and temper
the stock market's performance in the second half.
We remain positive on bonds despite recent volatility in the marketplace.
Demand for debt in the developed markets should remain high as the "flight to
quality" continues. Growth and inflation should remain moderate in the United
States and Europe.
Our emerging-markets strategy remains defensive while we wait for the markets
to turn around--prices are attractive both in historical terms and compared to
the developed markets. We expect Asia to remain weak. But if the yen stabilizes,
and Korea and Thailand realize benefits from restructuring, the Asian crisis
could bottom later this year.
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.
Sincerely,
[SIGNATURE]
MARGO ALEXANDER
President
Mitchell Hutchins Asset Management Inc.
5
<PAGE>
MITCHELL HUTCHINS SERIES TRUST--MONEY MARKET PORTFOLIO
PORTFOLIO OF INVESTMENTS JUNE 30, 1998(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------- -------------------------- -------------------------- ------------
<C> <S> <C> <C> <C>
U.S. GOVERNMENT AND AGENCY OBLIGATIONS--7.82%
$ 750 Federal Home Loan Bank (cost--$749,838)...... 07/08/98 to 03/26/99 5.652 to 5.760% $ 749,838
------------
BANK NOTES (DOMESTIC)--4.69%
250 FCC National Bank............................ 01/07/99 5.700 249,963
200 Westpac Banking Corp......................... 04/23/99 5.730 199,907
------------
Total Bank Notes (cost--$449,870)........................ 449,870
------------
CERTIFICATES OF DEPOSIT--3.65%
YANKEE--3.65%
100 Credit Agricole Indosuez..................... 02/18/99 5.650 100,000
250 Societe Generale............................. 03/23/99 5.690 249,930
------------
Total Certificates of Deposit (cost--$349,930)........... 349,930
------------
COMMERCIAL [email protected]%
ASSET-BACKED--7.02%
250 Atlantis One Funding Corp.................... 08/28/98 5.450 247,805
425 Preferred Receivables Funding Corp........... 07/01/98 6.250 425,000
------------
672,805
------------
AUTO & TRUCK--7.28%
400 Ford Motor Credit Corp....................... 07/22/98 5.500 398,717
300 General Motors Acceptance Corp............... 07/16/98 5.520 299,310
------------
698,027
------------
BANKING--15.09%
300 Abbey National North America................. 07/17/98 5.530 299,263
250 Bankers Trust New York Corp.................. 07/24/98 5.880* 250,000
300 BCI Funding Corp............................. 07/13/98 5.480 299,452
300 KFW International Finance Inc................ 08/07/98 5.500 298,304
300 Nordbanken North America Inc................. 07/02/98 5.460 299,954
------------
1,446,973
------------
BROKER-DEALER--7.78%
300 Credit Suisse First Boston Inc............... 04/05/99 5.711* 300,000
200 Goldman Sachs Group L.P...................... 07/16/98 5.520 199,540
250 Merrill Lynch & Co., Inc..................... 09/25/98 5.520 246,703
------------
746,243
------------
BUSINESS SERVICES--3.10%
300 Block Financial Corp......................... 09/08/98 5.510 296,832
------------
ENERGY--4.17%
400 Exxon Imperial U.S. Inc...................... 07/01/98 6.200 400,000
------------
FINANCE-CONDUIT--10.38%
400 MetLife Funding Inc.......................... 07/07/98 5.550 399,630
300 Svenska Handelsbanken Inc.................... 09/24/98 5.510 296,097
300 Toronto-Dominion Holdings USA Inc............ 07/10/98 5.460 299,591
------------
995,318
------------
FINANCE-DIVERSIFIED--3.45%
331 Associates Corp. of North America............ 07/15/98 5.500 330,292
------------
</TABLE>
6
<PAGE>
MITCHELL HUTCHINS SERIES TRUST--MONEY MARKET PORTFOLIO
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------- -------------------------- -------------------------- ------------
<C> <S> <C> <C> <C>
COMMERCIAL PAPER@--(CONCLUDED)
FINANCE-INDEPENDENT--3.12%
$ 300 National Rural Utilities Cooperative Finance
Corp....................................... 07/17/98 5.460% $ 299,272
------------
FINANCE-SUBSIDIARY--4.51%
433 Deutsche Bank Financial Inc.................. 07/07/98 5.540 432,600
------------
FOOD, BEVERAGE & TOBACCO--3.09%
296 Fortune Brands Inc........................... 07/01/98 6.150 296,000
------------
INSURANCE--4.16%
400 American General Corp........................ 07/14/98 5.510 399,204
------------
METALS & MINING--4.17%
400 Rio Tinto America Inc........................ 07/10/98 5.550 399,445
------------
Total Commercial Paper (cost--$7,413,011)................ 7,413,011
------------
SHORT-TERM CORPORATE OBLIGATIONS--6.78%
BROKER-DEALER--4.17%
400 Bear Stearns Companies Inc................... 07/08/98 to 04/05/99 5.551 to 5.800* 400,000
------------
COMPUTERS--2.61%
250 IBM Credit Corp. MTN......................... 11/10/98 5.731* 250,000
------------
Total Short-Term Corporate Obligations
(cost--$650,000)......................................... 650,000
------------
Total Investments (cost--$9,612,649)--100.26%............ 9,612,649
Liabilities in excess of other assets--(0.26)%........... (25,026)
------------
Net Assets--100.00%...................................... $9,587,623
------------
------------
</TABLE>
- -----------------
<TABLE>
<S> <C>
* Variable rate security--Maturity date reflects earlier of reset date or stated maturity. The interest rates shown are the
current rates at June 30, 1998.
@ Interest rates shown are discount rates at dates of purchase.
MTN Medium Term Note
</TABLE>
Weighted average maturity--43 days
See accompanying notes to financial statements
7
<PAGE>
MITCHELL HUTCHINS SERIES TRUST--HIGH GRADE FIXED INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS JUNE 30, 1998(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------- -------------------- ---------------------- -----------
<C> <S> <C> <C> <C>
U. S. GOVERNMENT OBLIGATIONS--5.32%
$ 200 U.S. Treasury LINCS.......................... 08/15/09 6.000% $ 203,722
45 U.S. Treasury Notes.......................... 07/31/99 5.875 45,154
80 U.S. Treasury Notes.......................... 04/30/02 6.625 82,925
75 U.S. Treasury Notes.......................... 12/31/99 7.750 77,344
-----------
Total U. S. Government Obligations (cost--$402,372)...... 409,145
-----------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION CERTIFICATES--7.66%
362 GNMA......................................... 01/15/24 7.000 367,237
208 GNMA......................................... 11/15/17 8.500 221,754
-----------
Total Government National Mortgage Association
Certificates
(cost--$558,325).......................................
588,991
-----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION CERTIFICATES--16.57%
265 FNMA......................................... 02/02/06 5.875 267,955
60 FNMA......................................... 12/01/08 6.000 58,835
370 FNMA......................................... 10/01/23 7.000 375,159
340 FNMA......................................... 07/01/09 7.500 349,134
107 FNMA......................................... 09/01/11 8.000 111,132
110 FNMA......................................... 04/01/09 7.000 112,237
-----------
Total Federal National Mortgage Association Certificates
(cost--$1,232,344)..................................... 1,274,452
-----------
COLLATERALIZED MORTGAGE OBLIGATIONS--7.33%
96 Amresco Commercial Mortgage Funding I Corp.,
Series 1997-C1, Class A1................... 06/17/29 6.730 97,898
11 CS First Boston Mortgage Securities Corp.,
Series 1995-WF1-A1......................... 12/21/27 6.452 11,293
62 FDIC REMIC Trust 1994-C1, Class 2A2.......... 09/25/25 7.850 63,027
51 FDIC REMIC Trust 1996-C1, Class 1A........... 05/25/26 6.750 51,418
180 Merrill Lynch Mortgage Investments Inc.,
Series 1996-C1, Class A1................... 04/25/28 7.150 185,875
150 Morgan Stanley Capital I, Series 1997-WF1,
Class A1+.................................. 10/15/06 6.830 154,071
-----------
Total Collateralized Mortgage Obligations
(cost--$551,640)....................................... 563,582
-----------
CORPORATE BONDS--56.89%
BANKS--9.24%
200 BankAmerica Corp............................. 06/15/04 7.625 213,997
225 JP Morgan & Company Inc...................... 09/15/04 7.625 241,898
235 MBNA Capital 1............................... 12/01/26 8.278 254,287
-----------
710,182
-----------
FINANCIAL SERVICES--5.08%
300 Commercial Credit Group Inc.................. 05/01/02 6.875 308,148
80 First Industrial LP.......................... 05/15/27 7.150 82,647
-----------
390,795
-----------
HOUSEHOLD PRODUCTS--2.96%
225 Procter & Gamble Corp........................ 01/15/26 6.450 227,962
-----------
INSURANCE--13.31%
250 American Re Corp............................. 12/15/26 7.450 279,192
250 Equitable Life+.............................. 12/01/05 6.950 259,337
225 Loews Corp................................... 12/15/06 6.750 230,107
</TABLE>
8
<PAGE>
MITCHELL HUTCHINS SERIES TRUST--HIGH GRADE FIXED INCOME PORTFOLIO
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------- -------------------- ---------------------- -----------
<C> <S> <C> <C> <C>
CORPORATE BONDS--(CONCLUDED)
INSURANCE--(CONCLUDED)
$ 250 Travelers Property Casualty Corp............. 04/15/01 6.750% $ 255,064
-----------
1,023,700
-----------
LEISURE--3.14%
225 Time Warner Inc.............................. 06/15/05 7.750 241,278
-----------
MANUFACTURING--DIVERSIFIED--2.02%
155 Tyco International Group S A................. 06/15/01 6.125 155,426
-----------
MEDIA--2.21%
150 News America Holdings Inc.................... 10/17/96 8.250 169,592
-----------
RETAIL--3.22%
250 Wal Mart Stores Inc.......................... 10/15/05 5.875 247,748
-----------
SECURITY SERVICES--3.04%
225 Lehman Brothers Holdings Inc................. 09/15/03 7.125 233,880
-----------
YANKEE BONDS--12.67%
225 ABN-AMRO Bank NV............................. 05/15/23 7.750 254,280
225 Dresdner Bank AG............................. 09/15/05 6.625 228,920
225 Societe Generale New York.................... 06/01/06 7.400 237,708
250 Toronto Dominion Bank of Ontario............. 08/15/08 6.500 253,732
-----------
974,640
-----------
Total Corporate Bonds (cost--$4,105,277)................. 4,375,203
-----------
SHORT-TERM U.S. GOVERNMENT AND AGENCY OBLIGATIONS--4.99%
250 U. S. Treasury Bills......................... 07/23/98 4.780@ 249,270
135 Federal Home Loan Mortgage Discount Notes.... 07/14/98 5.750@ 134,734
-----------
Total Short-Term U.S. Government Obligations
(cost--$384,004)....................................... 384,004
-----------
REPURCHASE AGREEMENT--0.52%
40 Repurchase Agreement dated 6/30/98 with State
Street Bank & Trust Company, collateralized
by $24,946 U.S. Treasury Bonds, 11.25% due
02/15/15 (value--$40,818); proceeds $40,006
(cost--$40,000)............................ 07/01/98 5.000 40,000
-----------
7,635,377
Total Investments (cost--$7,273,962)--99.28%.............
55,341
Other assets in excess of liabilities--0.72%.............
-----------
Net Assets--100.00%...................................... $7,690,718
-----------
-----------
</TABLE>
- -----------------
<TABLE>
<S> <C>
@ The interest rate shown is the discount rate at date of purchase.
+ Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in
transactions exempt from registration, normally to qualified institutional buyers.
REMIC Real Estate Mortgage Investment Conduit
</TABLE>
See accompanying notes to financial statements
9
<PAGE>
MITCHELL HUTCHINS SERIES TRUST--STRATEGIC FIXED INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS JUNE 30, 1998(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ----------- -------------------- ------------------- -------------
<C> <S> <C> <C> <C>
U. S. GOVERNMENT AND AGENCY OBLIGATIONS--14.27%
$ 150 Federal National Mortgage Association MTN.... 09/17/07 6.590% $ 159,032
100 Federal National Mortgage Association MTN.... 07/02/07 6.640 106,335
970 U.S. Treasury Bonds.......................... 02/15/26 6.000 1,009,104
200 U.S. Treasury Inflation Index Notes.......... 07/15/02 3.625 204,570
-------------
Total U. S. Government and Agency Obligations
(cost--$1,473,091)....................................... 1,479,041
-------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION CERTIFICATES--14.45%
165 GNMA II ARM.................................. 07/20/27 6.000 167,019
203 GNMA II ARM.................................. 09/20/25 7.000 207,941
209 GNMA II ARM.................................. 06/20/25 7.375 214,316
371 GNMA II ARM.................................. 02/20/25 6.875 379,820
451 GNMA II ARM.................................. 11/20/21 7.000 462,566
65 GNMA II ARM.................................. 05/20/25 7.375 66,629
-------------
Total Government National Mortgage Association
Certificates (cost--$1,494,120).......................... 1,498,291
-------------
FEDERAL HOME LOAN MORTGAGE CORPORATION CERTIFICATES--2.82%
300 FHLMC (cost--$291,300)....................... 06/01/28 6.000 292,687
-------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION CERTIFICATES--6.79%
700 FNMA ARM (cost--$704,375).................... 08/25/28 6.167 704,156
-------------
COLLATERALIZED MORTGAGE OBLIGATIONS--41.16%
22 Countrywide Mortgage Backed Securities Inc.
Series 1993-E, Class A1.................... 01/25/24 6.500 21,873
166 FHLMC REMIC Series 1614, Class QZ............ 11/15/23 6.500 161,576
191 FHLMC REMIC Series 1628, Class KZ............ 12/15/23 6.250 186,524
193 FNMA REMIC Series 1991-57, Class Z........... 05/25/21 6.500 191,891
307 FNMA REMIC Series 1993-112, Class ZB......... 07/25/23 7.000 316,179
96 FNMA REMIC Series 1993-163, Class ZA......... 09/25/23 7.000 99,575
142 FNMA REMIC Series 1993-96, Class PZ.......... 06/25/23 7.000 152,052
49 FNMA REMIC Series 1993-98, Class FZ.......... 07/25/22 6.003(1) 47,984
317 FNMA REMIC Series G92-40, Class ZC........... 07/25/22 7.000 318,856
235 FNMA REMIC Series G93-16, Class K............ 04/25/23 5.000 204,156
250 GMAC Commercial Mortgage Securities Inc.,
Series 1998-C1, Class A2................... 03/15/08 6.700 258,572
64 Greenwich Capital Acceptance Inc., Series
1991-B, Class A1, ARM...................... 01/25/22 7.607 65,328
197 Greenwich Capital Acceptance Inc., REMIC
Series 1992-LB6, Class A1, ARM............. 10/25/22 7.242 199,142
500 Merrill Lynch Mortgage Investors Inc., REMIC
Series 1993-I, Class A3.................... 11/15/23 6.308(1) 514,530
400 Prudential Home Mortgage Securities Corp.
REMIC Series 1993-38, Class A7............. 09/25/23 6.950 396,020
475 Residential Funding Mortgage Services, REMIC
Series 1997-S7, Class A5................... 05/25/27 7.500 477,448
674 Westam Mortgage Financial Corp., Series 14,
Class 14A.................................. 06/26/20 5.350 654,906
-------------
Total Collateralized Mortgage
Obligations (cost--$3,920,143)........................... 4,266,612
-------------
STRIPPED MORTGAGE-BACKED SECURITIES--0.22%
35 FNMA REMIC Series 1993-235, Class G*(2)
(cost--$19,402)............................ 09/25/23 6.749+ 23,346
-------------
</TABLE>
10
<PAGE>
MITCHELL HUTCHINS SERIES TRUST--STRATEGIC FIXED INCOME PORTFOLIO
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ----------- -------------------- ------------------- -------------
<C> <S> <C> <C> <C>
CORPORATE BONDS--34.95%
$ 300 Ford Motor Credit Corp....................... 11/09/98 5.660%(1) $ 299,850
250 Goldman Sachs Group L P...................... 06/15/00 6.375 251,546
200 Gulf Canada Resources Ltd.................... 08/15/99 9.000 206,016
300 Lehman Brothers Holdings Inc................. 01/12/99 5.570(1) 299,692
250 MBNA American Bank........................... 12/10/02 6.063(1) 250,050
100 National Power Corp.......................... 05/15/28 9.625 93,488
500 Noranda Inc.................................. 08/18/00 6.449(1) 504,624
200 Philip Morris Companies Inc.................. 10/15/03 8.250 216,945
300 RJR Nabisco Inc.............................. 12/01/02 8.625 310,897
250 Telecommunications Inc....................... 01/15/03 8.250 270,158
500 United Airlines Inc.......................... 02/19/15 10.850 656,475
250 Worldcom Inc................................. 01/15/04 9.375 263,438
-------------
Total Corporate Bonds (cost--$3,597,068)................... 3,623,179
-------------
FOREIGN GOVERNMENT OBLIGATIONS--3.66%
175 Federal Republic of Brazil................... 01/01/01 6.875 169,312
238 Republic of Argentina........................ 03/31/05 6.625 209,950
-------------
Total Foreign Government Obligations (cost--$388,941)...... 379,262
-------------
SHORT-TERM U.S. GOVERNMENT OBLIGATIONS--0.29%
30 U.S. Treasury Bills++ (cost--$29,869)........ 07/23/98 to 08/20/98 4.71 to 4.93@ 29,849
-------------
REPURCHASE AGREEMENT--5.01%
519 Repurchase Agreement dated 06/30/98 with
State Street
Bank & Trust Company, collateralized by
$325,000
U.S. Treasury Bonds, 11.25% due 02/15/15
(value--$531,781); proceeds: $519,072
(cost--$519,000)........................... 07/01/98 5.000 519,000
-------------
12,815,423
Total Investments (cost--$12,437,309)--123.62%.............
(2,448,330)
Liabilities in excess of other assets--(23.62)%............
-------------
Net Assets--100.00%........................................ $10,367,093
-------------
-------------
</TABLE>
- -----------------
<TABLE>
<S> <C>
* Principal Only Security--This security entitles the holder to receive principal payments from an underlying pool of
mortgages. High prepayments return principal faster than expected and cause the yield to increase. Low prepayments return
principal more slowly than expected and cause the yield to decrease.
+ Estimated yield to maturity at June 30, 1998.
++ Entire or partial amount pledged as collateral for futures transactions.
@ Interest rates shown are discount rates at dates of purchase.
ARM Adjustable Rate Mortgage--The interest rates shown are the current rates as of June 30, 1998.
MTN Medium Term Note
REMIC Real Estate Mortgage Investment Conduit
(1) Floating rate securities--The interest rates shown are the current rates as of June 30, 1998.
(2) Illiquid security represents 0.22% of net assets.
</TABLE>
FUTURES CONTRACTS
<TABLE>
<CAPTION>
NUMBER OF IN EXPIRATION UNREALIZED
CONTRACTS CONTRACTS TO RECEIVE EXCHANGE FOR DATE APPRECIATION
- ----------- --------------------------------------------- -------------------- ---------------------- --------
<C> <S> <C> <C> <C>
18 5 year U.S. Treasury Notes................... $ 1,968,609 September 98 $ 5,766
</TABLE>
See accompanying notes to financial statements
11
<PAGE>
MITCHELL HUTCHINS SERIES TRUST--GLOBAL INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS JUNE 30, 1998(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ---------- ---------------------- -------- ------------
<C> <S> <C> <C> <C>
LONG-TERM DEBT SECURITIES--91.94%
GERMANY--8.75%
6.500 to
2,290 Federal Republic of Germany.................. 09/20/01 to 11/11/04 8.250% $ 1,444,024
------------
GREECE--1.72%
9.200 to
87,600 Republic of Hellenic......................... 03/21/00 to 03/21/02 9.800 283,667
------------
HUNGARY--0.89%
16.000
to
31,460 Government of Hungary........................ 02/12/00 to 08/24/00 18.500 147,248
------------
ITALY--1.92%
475,000 Republic of Italy............................ 04/01/04 8.500 316,442
------------
JAPAN--2.77%
US$ 300 Nomura Asset Securities Corp................. 03/15/30 6.590 307,125
US$ 150 Sony Corp.................................... 03/04/03 6.125 150,317
------------
457,442
------------
KOREA--1.55%
8.750 to
US$ 275 Republic of Korea............................ 04/15/03 to 04/15/08 8.875 256,312
------------
MEXICO--0.74%
US$ 110 United Mexican States........................ 09/15/16 11.375 122,237
------------
NETHERLANDS--4.51%
6.000 to
1,360 Government of Netherlands.................... 09/15/01 to 01/15/06 8.750 743,893
------------
POLAND--2.02%
460 Republic of Poland........................... 02/12/00 14.000 121,088
US$ 320 Republic of Poland, PDI...................... 10/27/24 3.000 # 212,000
------------
333,088
------------
SPAIN--1.87%
41,700 Government of Spain.......................... 03/25/00 12.250 308,081
------------
SWEDEN--3.20%
10.250
to
3,400 Kingdom of Sweden............................ 06/15/01 to 05/05/03 13.000 526,983
------------
UNITED KINGDOM--12.18%
8.000 to
1,042 United Kingdom Gilt.......................... 07/14/00 to 12/07/15 13.000 2,008,102
------------
UNITED STATES--49.82%
308 Banc One Corp................................ 09/01/00 6.250 309,135
700 Clorox Corp.................................. 07/15/01 8.800 752,782
NZD 650 Federal National Mortgage Association........ 06/20/02 7.250 335,928
7.200 to
700 Ford Motor Credit Corp....................... 07/01/01 to 06/15/07 9.500 758,445
185 General Motor Acceptance Corp................ 01/22/03 5.875 183,277
100 Philip Morris Co., Inc....................... 07/15/05 7.000 102,849
600 U.S. Treasury Inflation Index Notes.......... 04/15/28 3.625 593,063
6.250 to
4,960 U.S. Treasury Notes.......................... 08/15/99 to 05/15/07 8.000 5,180,921
------------
8,216,400
------------
Total Long-Term Debt Securities (cost--$15,303,889)...... 15,163,919
------------
SHORT-TERM DEBT SECURITIES--3.47%
GRAND CAYMAN--2.29%
JPY 52,124 State Street Bank Time Deposit............... 07/29/98 0.330 377,316
------------
</TABLE>
12
<PAGE>
MITCHELL HUTCHINS SERIES TRUST--GLOBAL INCOME PORTFOLIO
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ---------- ---------------------- -------- ------------
<C> <S> <C> <C> <C>
SHORT-TERM DEBT SECURITIES--(CONCLUDED)
NORWAY--1.18%
1,455 Kingdom of Norway............................ 01/31/99 9.000 % $ 194,313
------------
Total Short-Term Debt Securities (cost--$567,484)........ 571,629
------------
15,735,548
Total Investments (cost--$15,871,373)--95.41%............
757,165
Other assets in excess of liabilities--4.59%.............
------------
Net Assets--100.00%...................................... $16,492,713
------------
------------
</TABLE>
- -----------------
<TABLE>
<S> <C>
* In local currency unless otherwise indicated
# Reflects rate at June 30, 1998 on step up coupon rate instrument
NZD New Zealand Dollar
PDI Past Due Interest Bond
</TABLE>
FORWARD FOREIGN CURRENCY CONTRACTS
<TABLE>
<CAPTION>
UNREALIZED
CONTRACT TO APPRECIATION
DELIVER IN EXCHANGE FOR MATURITY DATES (DEPRECIATION)
----------- --------------- ---------------------- --------------
<S> <C> <C> <C> <C>
British Pounds..................... 785,000 U.S.$ 1,292,001 07/13/98 to 08/06/98 $(17,868)
British Pounds..................... 510,500 U.S.$ 851,290 07/01/98 to 09/01/98 29
British Pounds..................... 390,000 U.S.$ 636,831 07/27/98 (13,520)
Canadian Dollars................... 525,795 U.S.$ 357,849 07/09/98 591
German Deutschemarks............... 769,000 U.S.$ 424,618 07/15/98 (1,976)
German Deutschemarks............... 171,445 U.S.$ 93,819 10/02/98 (1,289)
Netherland Guilder................. 550,000 U.S.$ 269,608 09/28/98 (1,032)
Polish Zloties..................... 754,467 U.S.$ 210,000 08/28/98 (5,158)
Swedish Kronas..................... 4,000,000 U.S.$ 515,464 07/17/98 13,351
U.S. Dollars....................... 360,999 CAD 525,795 07/09/98 (3,741)
U.S. Dollars....................... 349,136 DEM 626,000 07/15/98 (1,604)
U.S. Dollars....................... 428,890 DEM 769,000 07/15/98 (2,296)
U.S. Dollars....................... 529,006 DEM 941,445 07/20/98 to 10/02/98 (6,266)
U.S. Dollars....................... 690,979 GBP 425,000 07/13/98 to 08/06/98 18,644
U.S. Dollars....................... 513,402 GBP 310,500 07/01/98 5,041
U.S. Dollars....................... 276,507 NLG 550,000 09/28/98 (5,867)
U.S. Dollars....................... 164,160 PLN 592,124 08/28/98 5,649
--------------
$(17,312)
--------------
--------------
</TABLE>
CURRENCY TYPE ABBREVIATIONS:
CAD --Canadian Dollars
DEM--German Deutschemarks
GBP --British Pounds
NLG --Netherland Guilder
PLN --Polish Zloties
See accompanying notes to financial statements
13
<PAGE>
MITCHELL HUTCHINS SERIES TRUST--BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS JUNE 30, 1998(UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------- ---------
<C> <S> <C> <C>
COMMON STOCKS--54.56%
AIRLINES--2.32%
2,500 Alaska Air Group Inc. .......... $ 136,406
3,400 AMR Corp.*...................... 283,050
1,800 UAL Corp.*...................... 140,400
3,200 US Airways Group, Inc.*......... 253,600
---------
813,456
---------
APPAREL, TEXTILES--0.33%
3,500 Westpoint Stevens Inc.*......... 115,500
---------
BANKS--2.08%
2,500 BankAmerica Corp. .............. 216,094
2,000 BB & T Corp. ................... 135,250
5,000 Chase Manhattan Corp. .......... 377,500
---------
728,844
---------
COMPUTER HARDWARE--2.66%
1,500 CHS Electronics Inc.*........... 26,813
4,100 Cisco Systems Inc.*............. 377,456
7,200 Compaq Computer Corp. .......... 204,300
2,300 Dell Computer Corp.*............ 213,469
5,400 Interface Inc. ................. 109,012
---------
931,050
---------
COMPUTER SOFTWARE--2.39%
1,500 BMC Software Inc.*.............. 77,906
5,800 Cadence Design Systems Inc.*.... 181,250
1,500 Compuware Corp.*................ 76,688
3,150 Networks Associated Inc.*....... 150,806
2,600 Peoplesoft Inc.*................ 122,200
7,800 Sterling Software Inc.*......... 230,587
---------
839,437
---------
CONSUMER DURABLES--0.65%
4,700 Furniture Brands International
Inc.*......................... 131,894
2,800 HON Industries Inc. ............ 95,200
---------
227,094
---------
DEFENSE/AEROSPACE--1.99%
1,100 Allied-Signal Inc. ............. 48,813
2,600 Boeing Co....................... 115,862
4,500 Cordant Technologies Inc. ...... 207,562
1,300 Lockheed Martin Corp. .......... 137,637
2,600 Lucasvarity PLC, ADR............ 103,513
1,600 Precision Castparts Corp. ...... 85,400
---------
698,787
---------
DIVERSIFIED RETAIL--2.63%
5,800 Dayton Hudson Corp. ............ 281,300
3,500 Family Dollar Stores Inc. ...... 64,750
4,500 Federated Department Stores,
Inc.*......................... 242,156
4,800 Fred Meyer Inc.*................ 204,000
3,200 Proffitts Inc.*................. 129,200
---------
921,406
---------
DRUGS & MEDICINE--3.40%
5,900 American Home Products Corp. ... 305,325
NUMBER OF
SHARES VALUE
- ----------- ---------
DRUGS & MEDICINE--(CONCLUDED)
4,100 Amerisource Health Corp.*....... $ 269,319
2,700 ICN Pharmaceuticals Inc. ....... 123,356
3,200 Schering-Plough Corp. .......... 293,200
4,300 Watson Pharmaceuticals Inc.*.... 200,756
---------
1,191,956
---------
ELECTRIC UTILITIES--1.36%
2,600 AES Corp.*...................... 136,662
2,100 Consolidated Edison Inc. ....... 96,731
3,100 Energy East Corp. .............. 129,038
3,000 Utilicorp United Inc. .......... 113,063
---------
475,494
---------
ELECTRICAL EQUIPMENT--1.74%
1,000 Honeywell Inc. ................. 83,563
2,900 Johnson Controls Inc. .......... 165,844
10,600 Mettler Toledo International
Inc.*......................... 212,662
3,900 SCI Systems Inc.*............... 146,737
---------
608,806
---------
ENERGY RESERVES & PRODUCTION--0.99%
2,100 Royal Dutch Petroleum Co. ...... 115,106
3,900 Texaco Inc. .................... 232,782
---------
347,888
---------
ENVIRONMENTAL SERVICES--0.38%
2,700 USA Waste Services Inc.*........ 133,313
---------
FINANCIAL SERVICES--0.25%
2,300 CIT Group Inc. ................. 86,250
---------
FOREST PRODUCTS, PAPER--0.48%
3,800 Fort James Corp. ............... 169,100
---------
FOOD RETAIL--0.29%
2,500 Safeway Inc.*................... 101,719
---------
FREIGHT, AIR, SEA & LAND--0.29%
2,900 Airbourne Freight Corp. ........ 101,319
---------
GAS UTILITY--0.38%
1,350 Columbia Gas System Inc. ....... 75,094
2,300 MCN Energy Group Inc. .......... 57,212
---------
132,306
---------
HEAVY MACHINERY--0.62%
3,400 Agco Corp. ..................... 69,913
2,800 Deere & Co. .................... 148,050
---------
217,963
---------
HOTELS--0.29%
3,600 Hilton Hotels Corp. ............ 102,600
---------
HOUSEHOLD PRODUCTS--0.30%
3,800 Viad Corp. ..................... 105,450
---------
INDUSTRIAL PARTS--2.80%
1,750 American Standard Companies
Inc.*......................... 78,203
</TABLE>
14
<PAGE>
MITCHELL HUTCHINS SERIES TRUST--BALANCED PORTFOLIO
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------- ---------
<C> <S> <C> <C>
COMMON STOCKS--(CONTINUED)
INDUSTRIAL PARTS--(CONCLUDED)
3,200 Black & Decker Corp. ........... $ 195,200
3,000 Crane Co. ...................... 145,687
3,900 Ingersoll Rand Co. ............. 171,844
3,000 Parker-Hannifin Corp. .......... 114,375
3,000 United Technologies Corp. ...... 277,500
---------
982,809
---------
INDUSTRIAL SERVICES/SUPPLIES--0.81%
4,500 Tyco International Ltd. ........ 283,500
---------
INFORMATION & COMPUTER SERVICES--0.34%
3,100 Valassis Communications Inc.*... 119,544
---------
LIFE INSURANCE--1.85%
3,900 Conseco Inc. ................... 182,325
4,300 Protective Life Corp. .......... 157,756
4,400 Reliastar Financial Corp. ...... 211,200
1,700 SunAmerica Inc. ................ 97,644
---------
648,925
---------
LONG DISTANCE & PHONE COMPANIES--0.92%
4,000 Bell Atlantic Corp. ............ 182,500
2,900 WorldCom Inc.*.................. 140,469
---------
322,969
---------
MEDIA--0.05%
600 Young & Rubicam Inc.*........... 19,200
---------
MEDICAL PROVIDERS--2.77%
8,300 HEALTHSOUTH Corp.*.............. 221,506
6,500 Lincare Holdings Inc.*.......... 273,406
4,700 Phycor Inc.*.................... 77,844
5,600 Tenet Healthcare Corp.*......... 175,000
3,000 Wellpoint Health Networks
Inc.*......................... 222,000
---------
969,756
---------
MINING & METALS--1.05%
3,400 Ispat International N.V.*....... 63,750
3,500 Martin Marietta Materials ...... 157,500
7,300 Wyman Gordon Co.*............... 145,544
---------
366,794
---------
MOTOR VEHICLES--1.42%
3,100 Borg Warner Automotive Inc. .... 148,994
4,300 Chrysler Corp. ................. 242,412
2,100 Lear Corp.*..................... 107,756
---------
499,162
---------
OIL REFINING--1.47%
1,600 British Petroleum PLC, ADR...... 141,200
3,000 Coastal Corp. .................. 209,437
4,800 USX-Marathon Group.............. 164,700
---------
515,337
---------
OIL SERVICES--0.82%
300 Camco International Inc. ....... 23,362
1,300 Ensco International Inc. ....... 22,588
NUMBER OF
SHARES VALUE
- ----------- ---------
OIL SERVICES--(CONCLUDED)
2,600 EVI Weatherford Inc.*........... $ 96,525
2,100 Schlumberger Ltd. .............. 143,456
---------
285,931
---------
OTHER INSURANCE--4.61%
4,100 ACE Ltd. ....................... 159,900
1,800 Allstate Corp. ................. 164,812
2,150 Ambac Inc. ..................... 125,775
1,800 American International Group
Inc. ......................... 262,800
2,300 CIGNA Corp. .................... 158,700
3,100 Everest Reinsurance Holdings
Inc. ......................... 119,156
2,100 Exel Ltd........................ 163,406
2,000 Fremont General Corp. .......... 108,375
1,300 Loews Corp. .................... 113,263
5,300 Old Republic International
Corp. ........................ 155,356
1,500 Orion Capital Corp. ............ 83,813
---------
1,615,356
---------
PUBLISHING--1.05%
3,100 Meredith Corp. ................. 145,506
2,800 New York Times Co., Class A..... 221,900
---------
367,406
---------
RAILROADS--0.41%
3,500 Trinity Industries Inc. ........ 145,250
---------
REAL PROPERTY--1.79%
2,600 Chelsea GCA Realty Inc. ........ 104,000
3,200 Crescent Real Estate Equities... 107,600
3,000 Equity Residential Properties
Trust......................... 142,312
3,100 LaFarge Corp.*.................. 121,869
2,150 Starwood Lodging Corp. ......... 103,872
1,200 Vornado Realty Trust............ 47,625
---------
627,278
---------
SECURITIES & ASSET MANAGEMENT--1.72%
2,300 Lehman Brothers Holdings
Inc. ......................... 178,394
3,500 Morgan Stanley, Dean Witter,
Discover & Co. (1)............ 319,812
1,700 Travelers Group Inc. ........... 103,063
---------
601,269
---------
SEMICONDUCTOR--0.56%
5,000 Applied Materials Inc.*......... 147,500
4,500 Integrated Process Equipment
Corp.*........................ 50,625
---------
198,125
---------
SPECIALTY RETAIL--2.59%
3,000 99 Cents Only Stores*........... 124,500
5,700 Claire's Stores Inc. ........... 116,850
5,325 Dollar General Corp. ........... 210,671
6,900 Office Depot Inc.*.............. 217,781
4,100 Staples, Inc.*.................. 118,644
3,700 Zale Corp.*..................... 117,706
---------
906,152
---------
</TABLE>
15
<PAGE>
MITCHELL HUTCHINS SERIES TRUST--BALANCED PORTFOLIO
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------- ---------
<C> <S> <C> <C>
THRIFT--1.25%
4,625 Ahmanson, H F & Co. ............ $ 328,375
2,900 Greenpoint Financial Corp. ..... 109,113
---------
437,488
---------
TOBACCO--0.46%
4,100 Phillip Morris Companies
Inc. ......................... 161,438
---------
Total Common Stocks (cost--$14,625,914)...... 19,123,427
---------
NUMBER OF
SHARES VALUE
- ----------- ---------
PREFERRED STOCKS--1.76%
ENERGY RESERVES & PRODUCTION--0.52%
3,000 Devon Financing Trust+.......... $ 183,375
---------
LONG DISTANCE & PHONE COMPANIES--0.30%
1,250 ICG Communications Inc.+........ 103,594
---------
MOTOR VEHICLES--0.64%
3,000 Federal Mogul Financing
Trust+........................ 222,375
---------
THRIFT--0.30%
2,000 Tosco Financing Trust+.......... 107,000
---------
Total Preferred Stock (cost--$462,500)....... 616,344
---------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES
- --------- ---------- --------
<C> <S> <C> <C> <C>
U.S. GOVERNMENT AND AGENCY OBLIGATIONS--18.86%
$ 185 Federal Home Loan
Mortgage Corp..... 03/18/08 6.220 % 185,870
420 Federal National
Mortgage
Association MTN... 01/22/03 5.700 417,239
300 Federal National
Mortgage
Association MTN... 11/21/07 6.550 304,562
2,000 U.S. Treasury
Bills............. 07/16/98 4.760 @ 1,996,033
1,566 U.S. Treasury
Bonds............. 02/15/21 7.875 1,987,353
09/30/99
1,708 U.S. Treasury to 5.500 to
Notes............. 02/15/08 7.125 1,719,653
-----------
Total U.S. Government and Agency
Obligations
(cost--$6,583,269)............ 6,610,710
-----------
MORTGAGE BACKED SECURITIES--9.66%
FEDERAL NATIONAL MORTGAGE ASSOCIATION--5.17%
470 FNMA................ 03/15/01 5.625 469,558
130 FNMA................ 01/01/26 7.500 133,841
104 FNMA................ 02/01/25 9.000 110,955
57 FNMA................ 02/01/25 9.500 61,908
1,040 FNMA TBA............ TBA 6.500 1,035,443
-----------
Total Federal National Mortgage
Association
(cost--$1,806,197)............ 1,811,705
-----------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION--1.78%
585 GNMA
(cost--$616,934)... 11/15/17 8.500 623,995
-----------
COLLATERALIZED MORTGAGE OBLIGATIONS--2.71%
110 Amresco Commercial
Mortgage Funding I
Corp. Series
1997-C1, Class
A1................ 06/17/29 6.730 112,582
11 CS First Boston
Mortgage
Securities Corp.,
Series 1995-WF1,
Class A........... 12/21/27 6.452 11,293
99 CS First Boston
Mortgage
Securities Corp.,
Series 1997-2,
Class A+.......... 06/25/20 7.500 101,709
70 DLJ Mortgage
Acceptance Corp.,
Series 1997-CF1,
Class A1A......... 05/15/06 7.400 73,814
76 FDIC REMIC Series
1996-C1 Class
1A................ 05/25/26 6.750 77,127
75 FDIC REMIC Trust
1994-C1, Class
2A2............... 09/25/25 7.850 75,633
105 FNMA REMIC Series
1996-M4 Class A... 03/17/17 7.750 107,789
71 FNMA REMIC Series
1996-M6 Class E... 09/17/19 7.750 71,582
94 GMAC Commercial
Mortgage Security,
Series 1996-C1,
Class A2A......... 09/15/03 6.790 96,448
</TABLE>
16
<PAGE>
MITCHELL HUTCHINS SERIES TRUST--BALANCED PORTFOLIO
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------- ---------- -------- -----------
<C> <S> <C> <C> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS--(CONCLUDED)
$ 108 Merrill Lynch
Mortgage
Investments Inc.,
Series 1996-C1,
Class A1.......... 04/25/28 7.150 % $ 111,525
107 Morgan Stanley
Capital I Inc.,
Series 1997-WF1,
Class A1+......... 10/15/06 6.830 110,738
-----------
Total Collateralized Mortgage
Obligations
(cost--$933,093).............. 950,240
-----------
Total Mortgage Backed Securities
(cost--$3,356,224)............ 3,385,940
-----------
CORPORATE BONDS--15.85%
250 ABN-AMRO Bank NV.... 12/01/26 7.300 257,876
225 American Re
Corp. ............ 12/15/26 7.450 251,273
175 BT Institutional
Capital Trust
A+................ 12/01/26 8.090 189,226
125 Canadian Imperial
Bank Commerce..... 08/01/00 6.200 125,979
125 Equitable Life+..... 12/01/05 6.950 129,668
250 Ford Motor Credit
Corp. ............ 01/25/01 5.750 248,534
975 General Motors
Acceptance
Corp. ............ 01/22/03 5.875 965,918
415 International Bank
For Reconstruction
& Development..... 03/17/03 5.625 414,670
280 Lehman Brothers
Holdings Inc. .... 09/15/03 7.125 291,051
225 Loews Corp. ........ 12/15/06 6.750 230,107
150 Lumbermans Mutual
Casualty Co.+..... 07/01/26 9.150 180,213
350 News America
Holdings Inc. .... 10/17/96 8.250 395,715
150 Occidental Petroleum
Corp. ............ 04/01/03 6.400 151,014
150 Phillip Morris
Companies Inc. ... 01/15/27 7.750 162,484
125 Royal Caribbean
Cruises Ltd. ..... 10/15/27 7.500 131,909
765 Sony Corp. ......... 03/04/03 6.125 766,619
280 Tyco International
Group S A......... 06/15/01 6.125 280,769
220 U.S. West Capital
Funding Inc. ..... 07/15/08 6.375 219,028
150 W.R. Berkley Capital
Trust............. 12/15/45 8.197 161,840
-----------
Total Corporate Bonds
(cost--$5,385,800)............ 5,553,893
-----------
CONVERTIBLE BONDS--1.09%
150 Converse Technology
Inc. ............. 07/01/05 4.500 152,250
200 Omnicare Inc.+...... 12/01/07 5.000 230,750
-----------
Total Convertible Bonds
(cost--$350,000).............. 383,000
-----------
REPURCHASE AGREEMENT--0.56%
195 Repurchase Agreement
dated 6/30/98,
with State Street
Bank & Trust
Company,
collateralized by
$121,613 U.S.
Treasury Bonds,
11.25% due
02/15/15
(value--$198,989);
proceeds: $195,027
(cost--$195,000)... 07/01/98 5.000 195,000
-----------
Total Investments
(cost--$30,958,707)--102.34%... 35,868,314
Liabilities in excess of other
assets--(2.34)%................. (819,155)
-----------
Net Assets--100.00%............. $35,049,159
-----------
-----------
</TABLE>
- -----------------
<TABLE>
<S> <C>
* Non-income producing security
+ Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in
transactions exempt from registration, normally to qualified institutional buyers.
@ Interest rate shown is the discount rate at date of purchase.
ADR American Depositary Receipt
MTN Medium Term Note
REMIC Real Estate Mortgage Investment Conduit
TBA To Be Assigned--Securities are purchased on a forward commitment with an approximate (generally +/- 1.0%) principal
amount and no defined maturity date. The actual principal amount and maturity date will be determined upon settlement
when the specific mortgage pools are assigned.
(1) Security, or a portion thereof, was on loan at June 30, 1998.
</TABLE>
See accompanying notes to financial statements
17
<PAGE>
MITCHELL HUTCHINS SERIES TRUST--GROWTH AND INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS JUNE 30, 1998(UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
COMMON STOCKS--94.72%
AIRLINES--2.76%
1,400 Alaska Air Group Inc.................................................................... $ 76,387
3,600 AMR Corp.*.............................................................................. 299,700
1,500 UAL Corp.*.............................................................................. 117,000
2,500 USAir Group, Inc........................................................................ 198,125
-----------
691,212
-----------
APPAREL, RETAIL--1.31%
13,600 TJX Companies, Inc...................................................................... 328,100
-----------
APPAREL, TEXTILES--0.86%
2,000 Warnaco Group Inc., Class A............................................................. 84,875
4,000 Westpoint Stevens Inc.*................................................................. 132,000
-----------
216,875
-----------
BANKS--8.39%
10,000 Banc One Corp........................................................................... 558,125
3,400 Bank of New York Co. Inc................................................................ 206,337
4,000 BankAmerica Corp........................................................................ 345,750
1,700 BB & T Corp............................................................................. 114,963
6,344 Chase Manhattan Corp.................................................................... 478,972
3,800 Norwest Corp............................................................................ 142,025
6,000 US Bancorp of Oregon, Inc............................................................... 258,000
-----------
2,104,172
-----------
CHEMICALS--0.77%
2,600 DuPont (E.I.) de Nemours & Co........................................................... 194,025
-----------
COMPUTER HARDWARE--5.12%
2,100 CHS Electronics Inc.*................................................................... 37,537
4,350 Cisco Systems, Inc.*.................................................................... 400,472
9,600 Compaq Computer Corp.................................................................... 272,400
4,800 Dell Computer Corp.*.................................................................... 445,500
6,400 Interface Inc........................................................................... 129,200
-----------
1,285,109
-----------
COMPUTER SOFTWARE--3.62%
3,000 Autodesk, Inc........................................................................... 115,875
1,500 BMC Software Inc.*...................................................................... 77,906
6,300 Cadence Design Systems Inc.*............................................................ 196,875
1,500 Compuware Corp.*........................................................................ 76,688
2,550 Networks Associated Inc.*............................................................... 122,081
3,000 Peoplesoft Inc.*........................................................................ 141,000
6,000 Sterling Software Inc.*................................................................. 177,375
-----------
907,800
-----------
CONSUMER DURABLES--1.38%
4,000 Furniture Brands International Inc.*.................................................... 112,250
4,000 HON Industries Inc...................................................................... 136,000
4,000 Miller Herman Inc....................................................................... 97,250
-----------
345,500
-----------
DEFENSE/AEROSPACE--4.32%
4,550 AAR Corp................................................................................ 134,509
3,400 Allied-Signal, Inc...................................................................... 150,875
4,000 Boeing Co............................................................................... 178,250
3,400 Cordant Technologies Inc................................................................ 156,825
2,500 Lockheed Martin Corp.................................................................... 264,688
NUMBER OF
SHARES VALUE
- --------- -----------
DEFENSE/AEROSPACE--(CONCLUDED)
1,620 Lucasvarity PLC, ADR.................................................................... $ 64,496
2,500 Precision Castparts Corp................................................................ 133,438
-----------
1,083,081
-----------
DIVERSIFIED RETAIL--3.61%
7,000 Dayton Hudson Corp...................................................................... 339,500
3,700 Family Dollar Stores Inc................................................................ 68,450
3,800 Federated Department Stores, Inc.*...................................................... 204,487
4,400 Fred Meyer Inc.*........................................................................ 187,000
2,600 Proffitts Inc.*......................................................................... 104,975
-----------
904,412
-----------
DRUGS & MEDICINE--6.75%
4,200 American Home Products Corp............................................................. 217,350
2,700 Amerisource Health Corp.*............................................................... 177,356
2,100 Bristol-Myers Squibb Co................................................................. 241,369
4,350 ICN Pharmaceuticals Inc................................................................. 198,741
5,000 Pharmacia & Upjohn Inc.................................................................. 230,625
4,600 Schering-Plough Corp.................................................................... 421,475
4,400 Watson Pharmaceuticals, Inc.*........................................................... 205,425
-----------
1,692,341
-----------
ELECTRIC UTILITIES--1.99%
3,000 AES Corp.*.............................................................................. 157,687
3,000 Consolidated Edison Inc................................................................. 138,188
2,600 Energy East Corp........................................................................ 108,225
2,500 Utilicorp United Inc.................................................................... 94,219
-----------
498,319
-----------
ELECTRICAL EQUIPMENT--2.35%
800 Honeywell Inc........................................................................... 66,850
3,200 Johnson Controls Inc.................................................................... 183,000
7,600 Mettler Toledo International Inc.*...................................................... 152,475
5,000 SCI Systems Inc.*....................................................................... 188,125
-----------
590,450
-----------
ENERGY RESERVES & PRODUCTION--1.74%
3,600 Royal Dutch Petroleum Co................................................................ 197,325
4,000 Texaco, Inc............................................................................. 238,750
-----------
436,075
-----------
ENVIRONMENTAL SERVICES--0.81%
3,300 Republic Services Inc................................................................... 79,200
2,500 USA Waste Services Inc.*................................................................ 123,438
-----------
202,638
-----------
FINANCIAL SERVICES--1.48%
1,000 American Express Co..................................................................... 114,000
2,500 CIT Group Inc........................................................................... 93,750
1,800 General Electric Co..................................................................... 163,800
-----------
371,550
-----------
FOREST PRODUCTS, PAPER--1.30%
5,000 Fort James Corp......................................................................... 222,500
</TABLE>
18
<PAGE>
MITCHELL HUTCHINS SERIES TRUST--GROWTH AND INCOME PORTFOLIO
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
COMMON STOCKS--(CONTINUED)
FOREST PRODUCTS, PAPER--(CONCLUDED)
1,600 United Stationers Inc.*................................................................. $ 103,600
-----------
326,100
-----------
FOOD RETAIL--1.19%
3,000 Kroger Co.*............................................................................. 128,625
4,200 Safeway Inc.*........................................................................... 170,887
-----------
299,512
-----------
FREIGHT, AIR, SEA & LAND--0.47%
3,400 Airbourne Freight Corp.................................................................. 118,788
-----------
GAS UTILITY--1.65%
4,350 Columbia Gas System, Inc................................................................ 241,969
2,000 K N Energy Inc.......................................................................... 108,375
2,600 MCN Energy Group Inc.................................................................... 64,675
-----------
415,019
-----------
HEAVY MACHINERY--1.51%
2,900 Agco Corp............................................................................... 59,631
3,300 Case Corp............................................................................... 159,225
3,000 Deere & Co.............................................................................. 158,625
-----------
377,481
-----------
HOTELS--0.26%
2,300 Hilton Hotels Corp...................................................................... 65,550
-----------
INDUSTRIAL PARTS--4.32%
2,700 American Standard Companies Inc.*....................................................... 120,656
2,500 Black & Decker Corp..................................................................... 152,500
3,450 Crane Co................................................................................ 167,541
4,900 Ingersoll Rand Co....................................................................... 215,906
2,700 Parker-Hannifin Corp.................................................................... 102,938
3,500 United Technologies Corp................................................................ 323,750
-----------
1,083,291
-----------
INDUSTRIAL SERVICES/SUPPLIES--1.51%
6,000 Tyco International Ltd.................................................................. 378,000
-----------
INFORMATION & COMPUTER SERVICES--0.40%
2,600 Valassis Communications Inc.*........................................................... 100,263
-----------
LEISURE--0.38%
3,400 Viad Corp............................................................................... 94,350
-----------
LIFE INSURANCE--2.49%
4,500 Conseco Inc............................................................................. 210,375
3,200 Protective Life Corp.................................................................... 117,400
4,600 ReliaStar Financial Corp................................................................ 220,800
1,300 SunAmerica Inc.......................................................................... 74,669
-----------
623,244
-----------
LONG DISTANCE & PHONE COMPANIES--1.58%
3,400 Bell Atlantic Corp...................................................................... 155,125
2,400 SBC Communications, Inc................................................................. 96,000
3,000 WorldCom, Inc.*......................................................................... 145,312
-----------
396,437
-----------
NUMBER OF
SHARES VALUE
- --------- -----------
MEDIA--0.06%
500 Young & Rubicam Inc.*................................................................... $ 16,000
-----------
MEDICAL PROVIDERS--2.96%
5,100 HEALTHSOUTH Corp.*...................................................................... 136,106
4,600 Lincare Holdings Inc.*.................................................................. 193,487
6,800 Phycor Inc.*............................................................................ 112,625
4,650 Tenet Healthcare Corp.*................................................................. 145,313
2,100 Wellpoint Health Networks Inc.*......................................................... 155,400
-----------
742,931
-----------
MINING & METALS--0.99%
3,100 Ispat International N.V.*............................................................... 58,125
2,700 Martin Marietta Materials............................................................... 121,500
3,400 Wyman Gordon Co.*....................................................................... 67,788
-----------
247,413
-----------
MOTOR VEHICLES--1.80%
3,400 Borg Warner Automotive Inc.............................................................. 163,412
3,000 Chrysler Corp........................................................................... 169,125
2,300 Lear Corp.*............................................................................. 118,019
-----------
450,556
-----------
OIL REFINING--2.40%
2,000 British Petroleum PLC, ADR.............................................................. 176,500
2,300 Coastal Corp............................................................................ 160,569
4,200 USX-Marathon Group...................................................................... 144,112
4,000 YPF Sociedad Anonima (Series D) ADR..................................................... 120,250
-----------
601,431
-----------
OIL SERVICES--1.35%
1,300 Camco International Inc................................................................. 101,237
2,200 Ensco International Inc................................................................. 38,225
1,200 EVI Weatherford Inc.*................................................................... 44,550
1,000 Halliburton Co.......................................................................... 44,563
1,600 Schlumberger Ltd........................................................................ 109,300
-----------
337,875
-----------
OTHER INSURANCE--6.65%
5,200 ACE Ltd................................................................................. 202,800
2,500 Allstate Corp........................................................................... 228,906
2,250 Ambac Inc............................................................................... 131,625
2,000 American International Group Inc........................................................ 292,000
2,700 CIGNA Corp.............................................................................. 186,300
2,600 Everest Reinsurance Holdings Inc........................................................ 99,937
1,700 Exel Ltd................................................................................ 132,281
1,700 Fremont General Corp.................................................................... 92,119
1,200 Loews Corp.............................................................................. 104,550
4,050 Old Republic International Corp......................................................... 118,716
1,400 Orion Capital Corp...................................................................... 78,225
-----------
1,667,459
-----------
PUBLISHING--1.21%
2,600 Meredith Corp........................................................................... 122,037
2,300 New York Times Co., Class A............................................................. 182,275
-----------
304,312
-----------
</TABLE>
19
<PAGE>
MITCHELL HUTCHINS SERIES TRUST--GROWTH AND INCOME PORTFOLIO
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
COMMON STOCKS--(CONCLUDED)
RAILROADS--0.41%
2,500 Trinity Industries Inc.................................................................. $ 103,750
-----------
REAL PROPERTY--2.05%
1,000 Cabot Industrial Trust.................................................................. 21,375
1,500 Chelsea GCA Realty Inc.................................................................. 60,000
2,937 Equity Residential Properties Trust..................................................... 139,324
2,500 Lafarge Corp.*.......................................................................... 98,281
3,050 Starwood Lodging Corp................................................................... 147,353
1,200 Vornado Reality Trust................................................................... 47,625
-----------
513,958
-----------
RESTAURANTS--0.51%
3,300 Outback Steakhouse Inc.................................................................. 128,700
-----------
SECURITIES & ASSET MANAGEMENT--2.31%
1,000 Lehman Brothers Holdings Inc............................................................ 77,563
3,900 Morgan Stanley, Dean Witter, Discover & Co.............................................. 356,362
2,400 Travelers Group Inc..................................................................... 145,500
-----------
579,425
-----------
SEMICONDUCTOR--1.01%
6,300 Applied Materials Inc.*................................................................. 185,850
6,000 Integrated Process Equipment Corp.*..................................................... 67,500
-----------
253,350
-----------
SPECIALTY RETAIL--3.94%
3,500 99 Cents Only Stores*................................................................... 145,250
5,100 Claire's Stores Inc..................................................................... 104,550
6,327 Dollar General Corp..................................................................... 250,312
5,800 Office Depot Inc.*...................................................................... 183,063
NUMBER OF
SHARES VALUE
- --------- -----------
SPECIALTY RETAIL--(CONCLUDED)
4,000 Office Max Inc.......................................................................... $ 66,000
4,300 Staples, Inc.*.......................................................................... 124,431
3,600 Zale Corp.*............................................................................. 114,525
-----------
988,131
-----------
THRIFT--1.65%
4,555 Ahmanson, H F & Co...................................................................... 323,405
2,400 Greenpoint Financial Corp............................................................... 90,300
-----------
413,705
-----------
TOBACCO--1.10%
7,000 Phillip Morris Co. Inc.................................................................. 275,625
-----------
Total Common Stocks (cost--$17,147,932)............................................................ 23,754,315
-----------
PREFERRED STOCK--2.36%
AGRICULTURE, FOOD & BEVERAGE--0.25%
1,000 Ralston Purina Co....................................................................... 63,500
-----------
ENERGY RESERVES & PRODUCTION--0.49%
2,000 Devon Financing Trust+.................................................................. 122,250
-----------
LONG DISTANCE & PHONE COMPANIES--0.41%
1,250 ICG Communications Inc.+................................................................ 103,594
-----------
MOTOR VEHICLES--0.89%
3,000 Federal Mogul Financing Trust+.......................................................... 222,375
-----------
THRIFT--0.32%
1,500 Tosco Financing Trust+.................................................................. 80,250
-----------
Total Preferred Stock (cost--$449,438)............................................................. 591,969
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES
- --------- -------------------- --------------
CONVERTIBLE BONDS--1.15%
<C> <S> <C> <C> <C>
$ 20 Bell Atlantic Financial.......................... 04/01/03 5.750 % 20,475
150 Converse Technology Inc.......................... 07/01/05 4.500 152,250
100 Omnicare Inc..................................... 12/01/07 5.000 115,375
-----------
Total Convertible Bonds (cost--$279,000).................... 288,100
-----------
SHORT-TERM U.S. GOVERNMENT OBLIGATIONS--1.59%
400 U.S. Treasury Bills (cost--$398,820)............. 07/23/98 4.830@ 398,820
-----------
</TABLE>
20
<PAGE>
MITCHELL HUTCHINS SERIES TRUST--GROWTH AND INCOME PORTFOLIO
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATE RATE VALUE
- --------- -------------------- -------------- -----------
<C> <S> <C> <C> <C>
REPURCHASE AGREEMENT--0.30%
$ 75 Repurchase agreement 06/30/98, with State Street
Bank & Trust, collateralized by $46,774 U.S.
Treasury Bonds, 11.250% due 02/15/15
(value--$76,534); proceeds: $75,010
(cost--$75,000)................................ 07/01/98 5.000% $ 75,000
-----------
Total Investments (cost--$18,341,190)--100.12%.............. 25,108,204
Liabilities in excess of other assets--(0.12)%.............. (30,699)
-----------
Net Assets--100.00%......................................... $25,077,505
-----------
-----------
</TABLE>
- -----------------
<TABLE>
<S> <C>
* Non-Income producing security
+ Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in
transactions exempt from registration, normally to qualified institutional buyers.
@ Interest rate shown is discount rate at date of purchase.
ADR American Depositary Receipt
</TABLE>
See accompanying notes to financial statements
21
<PAGE>
MITCHELL HUTCHINS SERIES TRUST--GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS JUNE 30, 1998(UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------ -------------
<C> <S> <C>
COMMON STOCKS--95.28%
AIRLINES--1.92%
3,600 AMR Corp.*...................................................................... $ 299,700
8,700 Alaska Air Group Inc............................................................ 474,694
-------------
774,394
-------------
APPAREL, RETAIL--0.48%
8,000 TJX Companies, Inc. ............................................................ 193,000
-------------
APPAREL, TEXTILES--0.52%
5,000 Warnaco Group Inc. Class A ..................................................... 212,188
-------------
BANKS--1.95%
3,600 Banc One Corp................................................................... 200,925
2,200 Chase Manhattan Corp............................................................ 166,100
2,250 Fifth Third Bancorp............................................................. 141,750
4,000 Mellon Bank Corp. .............................................................. 278,500
-------------
787,275
-------------
CHEMICALS--1.66%
10,500 Cytec Industries Inc.*.......................................................... 464,625
5,600 Sealed Air Corp.*............................................................... 205,800
-------------
670,425
-------------
COMPUTER HARDWARE--5.77%
9,000 Cisco Systems Inc.*............................................................. 828,562
9,800 Compaq Computer Corp............................................................ 278,075
8,400 Dell Computer Corp.*............................................................ 779,100
10,000 EMC Corp.*...................................................................... 448,125
-------------
2,333,862
-------------
COMPUTER SOFTWARE--6.91%
5,000 Autodesk, Inc................................................................... 193,125
6,600 BMC Software Inc.*.............................................................. 342,788
10,000 Cadence Design Systems Inc.*.................................................... 312,500
4,400 Compuware Corp.*................................................................ 224,950
3,000 Microsoft Corp.*................................................................ 325,125
6,750 Network Associates Inc.*........................................................ 323,156
12,000 Peoplesoft Inc.*................................................................ 564,000
10,500 Sterling Commerce Inc.*......................................................... 509,250
-------------
2,794,894
-------------
CONSUMER DURABLES--0.25%
3,000 HON Industries Inc. ............................................................ 101,625
-------------
DEFENSE/AEROSPACE--0.66%
5,000 Precision Castparts Corp. ...................................................... 266,875
-------------
DIVERSIFIED RETAIL--4.22%
8,500 Costco Co. Inc.*................................................................ 536,031
5,000 Dayton Hudson Corp. ............................................................ 242,500
3,300 Federated Department Stores, Inc.*.............................................. 177,581
8,800 Proffitts Inc.*................................................................. 355,300
6,500 Wal Mart Stores, Inc. .......................................................... 394,875
-------------
1,706,287
-------------
DRUGS & MEDICINE--4.09%
4,000 Schering-Plough Corp. .......................................................... 366,500
3,300 Warner Lambert Co. ............................................................. 228,938
NUMBER OF
SHARES VALUE
- ------------ -------------
DRUGS & MEDICINE--(CONCLUDED)
22,700 Watson Pharmaceuticals, Inc.*................................................... $ 1,059,806
-------------
1,655,244
-------------
ELECTRICAL EQUIPMENT--1.61%
3,000 Lucent Technologies Inc......................................................... 249,563
5,000 SCI Systems Inc.*............................................................... 188,125
3,000 Tellabs, Inc.*.................................................................. 214,875
-------------
652,563
-------------
ENTERTAINMENT--5.80%
11,000 Carnival Corp................................................................... 435,875
20,000 Cinar Films Inc.*............................................................... 390,000
6,000 Premier Parks Inc.*............................................................. 399,750
9,000 Time Warner Inc................................................................. 768,937
6,000 Viacom, Inc. Class B*........................................................... 349,500
-------------
2,344,062
-------------
ENVIRONMENTAL SERVICES--2.15%
16,500 Republic Industries Inc.*....................................................... 412,500
9,800 Republic Services Inc.* ........................................................ 235,200
4,500 USA Waste Services Inc.*........................................................ 222,187
-------------
869,887
-------------
FINANCIAL SERVICES--5.74%
4,000 American Express Co............................................................. 456,000
3,200 Associates First Capital Corp................................................... 246,000
6,000 CIT Group, Inc.................................................................. 225,000
8,000 Federal Home Loan Mortgage Corp. ............................................... 376,500
5,500 Federal National Mortgage Association........................................... 334,125
7,000 MBNA Corp....................................................................... 231,000
9,250 SLM Holding Corp................................................................ 453,250
-------------
2,321,875
-------------
FOOD RETAIL--1.93%
3,000 Kroger Co.*..................................................................... 128,625
16,000 Safeway Inc.*................................................................... 651,000
-------------
779,625
-------------
HOTELS--0.28%
10,000 Extended Stay America Inc.*..................................................... 112,500
-------------
INDUSTRIAL PARTS--2.22%
6,000 Illinois Tool Works, Inc. ...................................................... 400,125
5,000 Ingersoll Rand Co. ............................................................. 220,312
3,000 United Technologies Corp. ...................................................... 277,500
-------------
897,937
-------------
INDUSTRIAL SERVICES/SUPPLIES--2.11%
11,800 Cendant Corp.*.................................................................. 246,325
9,626 Tyco International Ltd. ........................................................ 606,438
-------------
852,763
-------------
INFORMATION & COMPUTER SERVICES--6.66%
1,800 America Online Inc.*............................................................ 190,800
22,000 HBO & Co. ...................................................................... 776,875
13,000 Keane Inc.*..................................................................... 729,625
</TABLE>
22
<PAGE>
MITCHELL HUTCHINS SERIES TRUST--GROWTH PORTFOLIO
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------ -------------
<C> <S> <C>
COMMON STOCKS--(CONCLUDED)
INFORMATION & COMPUTER SERVICES--(CONCLUDED)
4,400 Omnicom Group................................................................... $ 219,450
11,800 Paychex, Inc.................................................................... 480,112
25,000 Princeton Video Image Inc.*(2).................................................. 104,000
5,000 Valassis Communications Inc.*................................................... 192,813
-------------
2,693,675
-------------
LIFE INSURANCE--1.22%
5,000 Conseco Inc. ................................................................... 233,750
4,500 SunAmerica Inc. ................................................................ 258,469
-------------
492,219
-------------
LONG DISTANCE & PHONE COMPANIES--3.72%
13,000 Teleport Communications Group Inc.*............................................. 703,625
16,500 WorldCom Inc.*.................................................................. 799,219
-------------
1,502,844
-------------
MANUFACTURING--GENERAL--0.45%
9,000 Mettler-Toledo International Inc.*.............................................. 180,563
-------------
MEDIA--8.91%
3,300 Chancellor Media Corp.*......................................................... 163,866
8,000 Clear Channel Communications*................................................... 873,000
8,000 Comcast Corp. Class A*.......................................................... 324,750
7,500 Getty Images Inc.*.............................................................. 166,875
12,000 Liberty Media Group, Series A*.................................................. 465,750
27,000 Outdoor Systems Inc.*........................................................... 756,000
12,272 Tele-Communications, Inc. Class A*.............................................. 471,705
10,000 USA Networks Inc.*.............................................................. 251,250
4,000 Young & Rubicam Inc.*........................................................... 128,000
-------------
3,601,196
-------------
MEDICAL PRODUCTS--0.93%
5,300 Guidant Corp. .................................................................. 377,956
-------------
MEDICAL PROVIDERS--1.16%
7,600 Phycor Inc.*.................................................................... 125,400
8,000 Service Corp. International..................................................... 343,000
-------------
468,400
-------------
MINING & METALS--0.26%
5,500 Ispat International N.V.*....................................................... 103,469
-------------
MOTOR VEHICLES--0.63%
5,000 Lear Corp.*..................................................................... 256,563
-------------
OIL SERVICES--3.78%
5,000 BJ Services Co.*................................................................ 145,313
3,500 Camco International Inc. ....................................................... 273,437
5,000 Ensco International Inc. ....................................................... 86,875
6,000 EVI Weatherford Inc.*........................................................... 222,750
12,000 Global Industries Inc.*......................................................... 202,500
5,500 Global Marine Inc.*............................................................. 102,781
6,500 Halliburton Co. ................................................................ 290,062
NUMBER OF
SHARES VALUE
- ------------ -------------
OIL SERVICES--(CONCLUDED)
3,000 Schlumberger Ltd. .............................................................. $ 204,938
-------------
1,528,656
-------------
OTHER INSURANCE--2.31%
3,300 Allstate Corp. ................................................................. 302,156
3,000 American International Group Inc................................................ 438,000
5,000 Everest Reinsurance Holdings Inc. .............................................. 192,188
-------------
932,344
-------------
PUBLISHING--1.40%
3,000 Gannett Inc..................................................................... 213,187
12,500 The News Corp. Ltd., ADR........................................................ 352,344
-------------
565,531
-------------
REAL PROPERTY--0.52%
3,500 Masco Corp. .................................................................... 211,750
-------------
SECURITIES & ASSET MANAGEMENT--2.80%
5,500 Franklin Resources Inc. ........................................................ 297,000
2,500 Morgan Stanley, Dean Witter, Discover & Co. .................................... 228,437
10,000 Travelers Group Inc. ........................................................... 606,250
-------------
1,131,687
-------------
SEMICONDUCTOR--1.06%
6,500 Altera Corp.*................................................................... 191,750
8,000 Applied Materials, Inc.*........................................................ 236,500
-------------
428,250
-------------
SPECIALTY RETAIL--7.34%
5,000 99 Cents Only Stores*........................................................... 207,500
6,000 Barnes & Noble Inc.*............................................................ 224,625
3,300 Borders Group Inc.*............................................................. 122,100
3,300 CDW Computer Centers Inc.*...................................................... 165,000
12,500 General Nutrition Companies, Inc.*.............................................. 389,062
8,000 Home Depot Inc.................................................................. 664,500
6,000 Lowe's Companies Inc............................................................ 243,375
4,000 Office Depot Inc.*.............................................................. 126,250
20,000 Staples, Inc.*.................................................................. 578,750
6,000 Walgreen Co..................................................................... 247,875
-------------
2,969,037
-------------
THRIFT--1.37%
12,500 Capstar Broadcasting Corp.*..................................................... 314,063
8,000 Dime Bancorp Inc. New........................................................... 239,500
-------------
553,563
-------------
WIRELESS TELECOMMUNICATIONS--0.49%
13,700 Smartalk Teleservices Inc.*(1).................................................. 199,506
-------------
Total Common Stocks (cost--$24,586,029)........................................................ 38,524,490
-------------
</TABLE>
23
<PAGE>
MITCHELL HUTCHINS SERIES TRUST--GROWTH PORTFOLIO
<TABLE>
<CAPTION>
PRINCIPAL MATURITY INTEREST
AMOUNT (000) DATES RATES VALUE
- ------------ ---------------------- --------------- -------------
<C> <S> <C> <C> <C>
SHORT-TERM U.S. GOVERNMENT OBLIGATIONS--2.47%
4.610 to
$1,000 U.S. Treasury Bills (cost--$997,600)... 07/16/98 to 07/23/98 4.760%@ $ 997,600
-------------
REPURCHASE AGREEMENT--2.03%
820 Repurchase Agreement dated 06/30/98
with State Street Bank & Trust
Company, collateralized by $511,398
U.S. Treasury Bonds, 11.250% due
02/15/15 (value--$836,775); proceeds:
$820,114 (cost--$820,000)............ 07/01/98 5.000 820,000
-------------
Total Investments (cost--$26,403,629)--99.78%......... 40,342,090
89,049
Other assets in excess of liabilities--0.22%..........
-------------
Net Assets--100.00%................................... $ 40,431,139
-------------
-------------
</TABLE>
- -----------------
<TABLE>
<S> <C>
* Non-Income producing security
@ Interest rates shown are discount rates at dates of purchase.
ADR American Depositary Receipt
(1) Security, or portion thereof, was on loan at June 30, 1998.
(2) Illiquid security representing 0.26% of net assets.
</TABLE>
See accompanying notes to financial statements
24
<PAGE>
MITCHELL HUTCHINS SERIES TRUST--AGGRESSIVE GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS JUNE 30, 1998(UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------- -------------
<C> <S> <C>
COMMON STOCKS--95.50%
AGRICULTURE, FOOD & BEVERAGE--1.65%
7,800 Interstate Bakeries Corp. ...................................... $ 258,863
4,200 Smithfield Foods Inc.* ......................................... 128,100
-------------
386,963
-------------
AIRLINES--1.58%
8,100 America West Holding Corp.* .................................... 231,356
3,600 Northwest Airlines Corp.* ...................................... 138,825
-------------
370,181
-------------
APPAREL, RETAIL--3.07%
6,450 Buckle Inc.* ................................................... 190,275
22,000 TJX Companies, Inc. ............................................ 530,750
-------------
721,025
-------------
APPAREL, TEXTILES--1.22%
1,100 Liz Claiborne, Inc. ............................................ 57,475
8,500 Nautica Enterprises Inc.* ...................................... 227,906
-------------
285,381
-------------
CHEMICALS--2.38%
8,900 Lyondell Petrochemical Co. ..................................... 270,894
3,400 Tredegar Industries Inc. ....................................... 288,575
-------------
559,469
-------------
COMPUTER HARDWARE--2.41%
9,100 Apple Computer, Inc.* .......................................... 261,056
10,800 Unisys Corp.* .................................................. 305,100
-------------
566,156
-------------
COMPUTER SOFTWARE--10.37%
5,900 Autodesk, Inc. ................................................. 227,888
8,400 BMC Software Inc.* ............................................. 436,275
2,500 Cadence Design Systems, Inc.* .................................. 78,125
4,950 Citrix Systems Inc.* ........................................... 338,456
8,000 Compuware Corp.* ............................................... 409,000
8,400 Learning Company Inc.*(1) ...................................... 248,850
3,750 Networks Associates, Inc.* ..................................... 179,531
11,000 Peoplesoft Inc.* ............................................... 517,000
-------------
2,435,125
-------------
CONSTRUCTION, REAL PROPERTY--1.19%
5,500 Fluor Corp. .................................................... 280,500
-------------
CONSUMER DURABLES--7.33%
11,200 Ethan Allen Interiors Inc. ..................................... 559,300
10,300 Furniture Brands International Inc. * .......................... 289,044
11,600 Miller Herman Inc. ............................................. 282,025
9,000 Mohawk Industries Inc.* ........................................ 285,187
12,750 Pier 1 Imports Inc. ............................................ 304,406
-------------
1,719,962
-------------
ELECTRICAL EQUIPMENT--4.59%
1,900 Amphenol Corp. ................................................. 74,100
6,800 Avid Technology Inc.* .......................................... 227,800
5,500 Comverse Technology Inc.* ...................................... 285,312
2,800 Sanmina Corp. * ................................................ 121,450
2,300 SCI Systems Inc. ............................................... 86,538
6,300 Tekelec Inc.* .................................................. 281,925
-------------
1,077,125
-------------
ELECTRICAL POWER--0.99%
5,900 Kuhlman Corp. .................................................. $ 233,419
-------------
NUMBER OF
SHARES VALUE
- ------------- -------------
FINANCIAL SERVICES--4.32%
10,700 Americredit Corp.* ............................................. 381,856
5,100 Capital One Financial Corp. .................................... 633,356
-------------
1,015,212
-------------
FOREST PRODUCTS, PAPER--1.35%
4,900 United Stationers Inc.* ........................................ 317,275
-------------
FOOD RETAIL--1.21%
4,700 Whole Foods Market Inc.* ....................................... 284,350
-------------
FREIGHT, AIR, SEA & LAND--2.62%
8,800 Airborne Freight Corp. ......................................... 307,450
7,000 Expeditores International Washington Inc. ...................... 308,000
-------------
615,450
-------------
HEAVY MACHINERY--2.14%
6,300 McDermott International, Inc. .................................. 216,956
2,200 NACCO Industries Inc. .......................................... 284,350
-------------
501,306
-------------
HOTELS--0.93%
2,800 Anchor Gaming* ................................................. 217,350
-------------
HOUSEHOLD PRODUCTS--0.95%
7,100 Accustaff Inc.* ................................................ 221,875
-------------
INDUSTRIAL PARTS--2.00%
1,500 Crane Co. ...................................................... 72,844
8,000 Danaher Corp. .................................................. 293,500
1,600 SPX Corp.* ..................................................... 103,000
-------------
469,344
-------------
INDUSTRIAL SERVICES/SUPPLIES--0.89%
3,750 Robert Half International Inc.* ................................ 209,531
-------------
INFORMATION & COMPUTER SERVICES--6.11%
8,900 A. C. Nielson Corp.* ........................................... 224,725
18,400 HBO & Co. ...................................................... 648,600
4,400 Keane Inc.* .................................................... 246,400
2,000 Yahoo Inc. (1).................................................. 315,000
-------------
1,434,725
-------------
LIFE INSURANCE--2.79%
11,400 SunAmerica Inc. ................................................ 654,787
-------------
MANUFACTURING--GENERAL--1.05%
5,000 Quintiles Transnational Corp.* ................................. 245,938
-------------
MEDICAL PRODUCTS--1.95%
4,500 Allegiance Corp. ............................................... 230,625
6,600 Arterial Vascular Engineering Inc.* ............................ 227,414
-------------
458,039
-------------
MEDICAL PROVIDERS--2.73%
6,100 Integrated Health Services, Inc. ............................... 228,750
9,800 Lincare Holdings Inc. * ........................................ 412,212
-------------
640,962
-------------
MINING & METALS--1.07%
20,200 Bethlehem Steel Corp.* ......................................... 251,238
-------------
</TABLE>
25
<PAGE>
MITCHELL HUTCHINS SERIES TRUST--AGGRESSIVE GROWTH PORTFOLIO
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------- -------------
<C> <S> <C>
COMMON STOCKS--(CONCLUDED)
MOTOR VEHICLES--3.67%
2,500 Arvin Industries Inc. .......................................... $ 90,781
4,300 Federal Mogul Corp.* ........................................... 290,250
5,800 Fleetwood Enterprises Inc. ..................................... 232,000
8,600 Navistar International Corp.* .................................. 248,325
-------------
861,356
-------------
OIL SERVICES--1.28%
15,200 Varco International Inc. ....................................... 301,150
-------------
OTHER INSURANCE--3.48%
7,600 Fidelity National Financial Inc. ............................... 302,575
3,000 First American Financial Corp. ................................. 270,000
3,800 Mercury General Corp. .......................................... 244,862
-------------
817,437
-------------
PUBLISHING--1.00%
9,100 Harte Hanks Communications ..................................... 234,894
-------------
REAL PROPERTY--3.51%
3,500 Fairfield Communities Inc. ..................................... 67,156
6,800 Southdown, Inc. ................................................ 485,350
5,000 USG Corp.* ..................................................... 270,625
-------------
823,131
-------------
NUMBER OF
SHARES VALUE
- ------------- -------------
RESTAURANTS--2.84%
10,300 Bob Evans Farms Inc. ........................................... $ 218,231
6,820 CKE Restaurants, Inc. .......................................... 281,325
9,900 Foodmaker Inc.* ................................................ 167,063
-------------
666,619
-------------
SECURITIES & ASSET MANAGEMENT--0.68%
2,820 Bear Stearns Co. Inc. .......................................... 160,388
-------------
SEMICONDUCTOR--2.60%
19,800 Vitesse Semiconductor Corp. .................................... 611,325
-------------
SPECIALTY RETAIL--6.56%
5,700 Bed, Bath & Beyond Inc.* ....................................... 295,331
7,000 Best Buy Company Inc.* ......................................... 252,875
9,900 Dollar Tree Stores Inc.* ....................................... 402,188
7,600 General Nutrition Companies, Inc.* ............................. 236,550
8,200 Transport World Entertainment Corp.* ........................... 353,625
-------------
1,540,569
-------------
TOBACCO--0.99%
6,200 Universal Corp. ................................................ 231,725
-------------
Total Common Stocks (cost--$14,903,170).......................................... 22,421,282
-------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATE RATE
- --------- -------- --------
COMMERCIAL PAPER--3.17%
FINANCIAL SERVICES--3.17%
<C> <S> <C> <C> <C>
$745 Merrill Lynch & Company Inc. (cost--$745,000)..... 07/01/98 6.100%@ 745,000
-----------
</TABLE>
<TABLE>
<C> <S> <C> <C> <C>
Total Investments (cost--$15,648,170)--98.67%................. 23,166,282
312,333
Other assets in excess of liabilities--1.33%..................
-----------
Net Assets--100.00%........................................... $23,478,615
-----------
-----------
</TABLE>
- -------------
<TABLE>
<S> <C>
* Non-Income producing security
@ Interest rate shown is discount rate at date of purchase.
(1) Security, or a portion thereof, was on loan at June 30, 1998.
</TABLE>
See accompanying notes to financial statements
26
<PAGE>
PAINEWEBBER SERIES TRUST--GLOBAL GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS JUNE 30, 1998(UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
COMMON STOCKS--99.46%
AUSTRALIA--0.71%
BEVERAGES--0.71%
23,025 Coca Cola Amatil Ltd. ................................. $ 149,831
-----------
AUSTRIA--0.52%
ENGINEERING & CONSTRUCTION--0.52%
877 VA Technologie AG ..................................... 109,215
-----------
BRAZIL--1.68%
BANKS--0.46%
3,284 Uniao de Banco Brasileiro S.A. GDR .................... 96,878
-----------
TELECOMMUNICATIONS--1.22%
2,367 Telecomunicacoes Brasileiras S.A. (Telebras) ADR ...... 258,447
-----------
Total Brazil Common Stocks........................................ 355,325
-----------
CROATIA--0.31%
PHARMACEUTICAL--0.31%
4,116 Pliva D.D. GDR ........................................ 65,856
-----------
FINLAND--4.91%
ELECTRONIC EQUIPMENT--1.76%
5,075 Nokia Ab Oy* .......................................... 373,608
-----------
FINANCIAL SERVICES--0.92%
29,483 Merita Ltd. ........................................... 194,723
-----------
MULTI-LINE INSURANCE--1.95%
8,735 Sampo Insurance Co. Ltd.* ............................. 414,355
-----------
TELECOMMUNICATIONS--0.28%
1,264 Helsingin Puhelin ..................................... 58,806
-----------
Total Finland Common Stocks....................................... 1,041,492
-----------
FRANCE--14.89%
AUTO PARTS--0.29%
1,072 Michelin (Class B) .................................... 61,883
-----------
AUTOMOBILES--1.15%
4,296 Renault S.A.* ......................................... 244,371
-----------
BANKS--0.96%
979 Societe Generale ...................................... 203,550
-----------
COMPUTER SOFTWARE & SERVICES--1.35%
1,825 Cap Gemini S.A. ....................................... 286,774
-----------
ELECTRONICS--1.52%
4,046 Schneider S.A. ........................................ 322,639
-----------
ENGINEERING & CONSTRUCTION--0.49%
628 Suez Lyonnaise des Eaux S.A. .......................... 103,356
-----------
MACHINERY (DIVERSIFIED)--0.59%
3,803 Alstom ................................................ 125,180
-----------
NUMBER OF
SHARES VALUE
- --------- -----------
FRANCE--(CONCLUDED)
MULTI-LINE INSURANCE--2.32%
4,377 AXA UAP ............................................... $ 492,310
-----------
OIL--2.45%
3,162 Total S.A. (Class B) .................................. 411,091
765 Elf Aquitaine.......................................... 107,556
-----------
518,647
-----------
OIL EQUIPMENT & SERVICES--1.42%
4,937 Coflexip S.A. ADR ..................................... 301,774
-----------
PHARMACEUTICAL--1.37%
5,140 Rhone Poulenc S.A. .................................... 289,915
-----------
RETAIL--0.98%
327 Carrefour S.A. ........................................ 206,887
-----------
Total France Common Stocks........................................ 3,157,286
-----------
GERMANY--8.68%
AUTOMOBILES--1.34%
2,044 Daimler-Benz AG ....................................... 201,176
86 Volkswagen AG ......................................... 83,117
-----------
284,293
-----------
BANKS--1.07%
2,683 Bayerische Vereinsbank AG ............................. 227,619
-----------
CONGLOMERATES--1.55%
919 Preussag AG ........................................... 329,188
-----------
INSURANCE--1.04%
442 Munchener Ruckvers AG ................................. 219,597
-----------
MACHINERY (DIVERSIFIED)--2.90%
5,971 Mannesmann AG ......................................... 614,167
-----------
MEDICAL PRODUCTS & SUPPLIES--0.78%
2,652 Fresenius Medical Care AG* ............................ 166,168
-----------
Total Germany Common Stocks....................................... 1,841,032
-----------
GREECE--0.15%
BANKS--0.15%
100 Alpha Credit Bank ..................................... 8,116
981 National Bank Greece S.A. ............................. 24,716
-----------
32,832
-----------
HONG KONG--1.43%
FINANCIAL SERVICES--0.77%
6,684 HSBC Holdings PLC ..................................... 163,477
-----------
HARDWARE & TOOLS--0.36%
20,500 Johnson Electric Holdings ............................. 75,936
-----------
MANUFACTURED HOUSING--0.16%
18,000 Cheung Kong Infrastucture ............................. 34,034
-----------
</TABLE>
27
<PAGE>
PAINEWEBBER SERIES TRUST--GLOBAL GROWTH PORTFOLIO
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
COMMON STOCKS--(CONTINUED)
HONG KONG--(CONCLUDED)
RETAIL--0.14%
150,000 Giordano International Ltd. ........................... $ 30,395
-----------
Total Hong Kong Common Stocks..................................... 303,842
-----------
INDONESIA--0.03%
AUTOMOBILES--0.03%
84,000 P.T. Astra International Inc. ......................... 5,734
-----------
ISRAEL--2.57%
COMPUTER SOFTWARE & SERVICES--0.88%
2,692 Comverse Technology Inc.* ............................. 139,647
2,409 Tecnomatix Technologies Ltd.* ......................... 48,180
-----------
187,827
-----------
PHARMACEUTICAL--0.67%
4,047 Teva Pharmaceutical Industries Ltd. ADS ............... 142,404
-----------
TELECOMMUNICATIONS--1.02%
5,696 ECI Telecommunications Ltd. ........................... 215,736
-----------
Total Israel Common Stocks........................................ 545,967
-----------
ITALY--3.93%
BANKS--0.73%
29,689 Credito Italiano SPA .................................. 155,484
-----------
CONGLOMERATES--0.82%
140,064 Montedison SPA* ....................................... 173,823
-----------
HOUSEHOLD FURNITURE & APPLIANCES--1.13%
9,198 Industrie Natuzzi SPA ADR ............................. 239,148
-----------
OIL EQUIPMENT & SERVICES--0.45%
18,512 Saipem SPA* ........................................... 95,126
-----------
TELECOMMUNICATIONS--0.80%
27,806 Telecom Italia Mobilare SPA ........................... 170,115
-----------
Total Italy Common Stocks......................................... 833,696
-----------
JAPAN--4.38%
AUTOMOBILES--0.34%
2,000 Honda Motor Co. ....................................... 71,454
-----------
CHEMICALS--0.33%
4,000 Shin Etsu Chemical Co. Ltd.* .......................... 69,429
-----------
COMPUTER SOFTWARE & SERVICES--0.68%
4 NTT Data Corp. (1) .................................... 144,934
-----------
ELECTRONICS--1.83%
4,500 Sony Corp. ............................................ 388,913
-----------
ELECTRONIC COMPONENTS & INSTRUMENTATION--0.23%
5,000 Minebea Co. Ltd. ...................................... 49,939
-----------
NUMBER OF
SHARES VALUE
- --------- -----------
JAPAN--(CONCLUDED)
PHOTOGRAPHY & IMAGING--0.97%
9,000 Canon Inc. ............................................ $ 205,034
-----------
Total Japan Common Stocks......................................... 929,703
-----------
KAZAKHSTAN--0.11%
BEVERAGES--0.11%
117,648 Efes Sinai Yatirim .................................... 23,857
-----------
KOREA--0.57%
ELECTRONICS--0.19%
1,429 Samsung Display Devices ............................... 39,030
-----------
MACHINERY (DIVERSIFIED)--0.31%
3,134 Hyundai Heavy Industries .............................. 66,195
-----------
STEEL--0.07%
450 Pohang Iron & Steel Co. ............................... 14,751
-----------
Total Korea Common Stocks......................................... 119,976
-----------
MEXICO--1.17%
BANKS--0.48%
14,198 Grupo Financiero Bancomer S.A.
ADR*+ (1) ........................................... 101,161
-----------
FOOD--0.13%
12,472 Gruma S.A. de C.V. (Series B)* ........................ 27,177
-----------
TELECOMMUNICATIONS--0.56%
3,427 Grupo Carso S.A. de C.V. (Series A) ................... 14,188
12,694 Grupo Carso, S.A. de C.V. ADR ......................... 104,598
-----------
118,786
-----------
Total Mexico Common Stocks........................................ 247,124
-----------
NETHERLANDS--5.98%
ELECTRONICS--1.29%
3,262 Philips Electronic N.V. ............................... 274,408
-----------
FINANCIAL SERVICES--2.69%
8,697 ING Groep N.V. ........................................ 569,888
-----------
OIL EQUIPMENT & SERVICES--0.98%
3,682 IHC Caland N.V. ....................................... 207,398
-----------
STEEL--1.02%
11,558 Ispat International N.V.* (Class A) ................... 216,713
-----------
Total Netherlands Common Stocks................................... 1,268,407
-----------
NORWAY--0.60%
BANKS--0.23%
9,487 Den Norske Bank ....................................... 49,759
-----------
OIL EQUIPMENT & SERVICES--0.37%
2,480 Petroleum Geo-Service* ................................ 77,333
-----------
Total Norway Common Stocks........................................ 127,092
-----------
</TABLE>
28
<PAGE>
PAINEWEBBER SERIES TRUST--GLOBAL GROWTH PORTFOLIO
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
COMMON STOCKS--(CONTINUED)
PANAMA--1.03%
BANKS--0.23%
1,564 Banco Latinoamericano de Exportaciones S.A. (Class
E) .................................................. $ 48,093
-----------
BEVERAGES--0.80%
5,424 Panamerican Beverages Inc. (Class A) .................. 170,517
-----------
Total Panama Common Stocks........................................ 218,610
-----------
PERU--0.21%
TELECOMMUNICATIONS--0.21%
2,197 Telefonica Del Peru S.A. ADR .......................... 44,901
-----------
PHILIPPINES--0.37%
BANKS--0.20%
7,100 Metropolitan Bank & Trust Co.* ........................ 41,715
-----------
BEVERAGES--0.17%
27,900 San Miguel Corp. (Class B) (1) ........................ 36,798
-----------
Total Philippines Common Stocks................................... 78,513
-----------
PORTUGAL--2.00%
BANKS--0.81%
6,027 Banco Commercial Portugues S.A. ....................... 171,244
-----------
RETAIL--FOOD CHAINS--0.78%
3,437 Jeronimo Martins S.A. ................................. 165,222
-----------
TELECOMMUNICATIONS--0.41%
492 Telecel--Comunicacaoes Pessoais S.A.* ................. 87,419
-----------
Total Portugal Common Stocks...................................... 423,885
-----------
SOUTH AFRICA--0.27%
COMPUTER SOFTWARE & SERVICES--0.27%
10,479 Dimension Data Holdings Ltd.* ......................... 56,548
-----------
SPAIN--2.86%
BANKS--1.05%
9,904 Argentaria Corp BC S.A. ............................... 222,170
-----------
OIL & GAS--1.81%
6,991 Repsol S.A. ........................................... 385,223
-----------
Total Spain Common Stocks......................................... 607,393
-----------
SWEDEN--2.78%
AUTO PARTS--1.32%
8,759 Autoliv Inc. SDR ...................................... 280,033
-----------
PHARMACEUTICAL--1.15%
5,271 Pharmacia & Upjohn Inc. ............................... 243,125
-----------
TELECOMMUNICATIONS--0.31%
2,258 Ericsson LM ........................................... 65,962
-----------
Total Sweden Common Stocks........................................ 589,120
-----------
NUMBER OF
SHARES VALUE
- --------- -----------
SWITZERLAND--2.65%
ELECTRICAL EQUIPMENT--1.03%
147 ABB AG ................................................ $ 217,447
-----------
MULTI-LINE INSURANCE--0.69%
230 Zurich Versicherungs AG ............................... 147,025
-----------
PHARMACEUTICAL--0.93%
119 Novartis AG ........................................... 198,346
-----------
Total Switzerland Common Stocks................................... 562,818
-----------
TAIWAN--0.65%
ELECTRONIC COMPONENTS & INSTRUMENTATION--0.65%
8,212 Taiwan Semiconductor Manufacturing Co. Ltd. ADR (1) ... 138,577
-----------
UNITED KINGDOM--10.82%
BANKS--0.56%
10,611 Bank Of Scotland PLC .................................. 118,882
-----------
DEFENSE/AEROSPACE--1.22%
64,773 Lucasvarity PLC ....................................... 257,401
-----------
ENGINEERING & CONSTRUCTION--0.69%
24,656 Fki PLC ............................................... 71,838
22,782 Senior Engineering PLC ................................ 74,937
-----------
146,775
-----------
INSURANCE--0.50%
11,119 United Assurance Group PLC ............................ 105,452
-----------
LEISURE--2.26%
36,369 Airtours PLC .......................................... 272,657
11,189 Granada Group PLC ..................................... 205,878
-----------
478,535
-----------
MACHINERY (DIVERSIFIED)--2.54%
26,943 Siebe PLC ............................................. 538,491
-----------
METALS--1.04%
24,627 Johnson Matthey PLC ................................... 221,224
-----------
MULTI-LINE INSURANCE--1.39%
5,250 Commercial Union PLC .................................. 98,003
19,040 Royal & Sun Alliance Insurance
Group PLC* .......................................... 196,946
-----------
294,949
-----------
PUBLISHING--0.41%
9,647 Reed International PLC ................................ 87,303
-----------
RAILROADS--0.21%
1,842 Railtrack Group PLC ................................... 45,180
-----------
Total United Kingdom Common Stocks................................ 2,294,192
-----------
</TABLE>
29
<PAGE>
PAINEWEBBER SERIES TRUST--GLOBAL GROWTH PORTFOLIO
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------- -----------
<C> <S> <C>
COMMON STOCKS--(CONCLUDED)
UNITED STATES--23.20%
BANKS--1.36%
1,935 Citicorp .............................................. $ 288,799
-----------
CHEMICALS--0.74%
2,103 DuPont (E.I.) de Nemours & Co.* ....................... 156,936
-----------
CHEMICALS (DIVERSIFIED)--0.25%
993 Avery Dennison Corp. .................................. 53,374
-----------
COMPUTER SOFTWARE & SERVICES--2.76%
5,082 EMC Corp.* ............................................ 227,737
6,444 First Data Corp. ...................................... 214,666
1,250 International Business Machines ....................... 143,515
-----------
585,918
-----------
COMPUTER SYSTEMS--0.28%
1,352 Sun Microsystems Inc.* ................................ 58,727
-----------
CONGLOMERATES--2.36%
11,271 Allied-Signal Inc. .................................... 500,151
-----------
ELECTRICAL EQUIPMENT--1.05%
5,754 Harman International Industries Inc. .................. 221,529
-----------
ELECTRONICS--2.27%
1,675 Intel Corp. ........................................... 124,159
2,286 Motorola Inc. ......................................... 120,158
16,872 Sensormatic Electronics Corp. ......................... 236,208
-----------
480,525
-----------
ELECTRONICS COMPONENT & INSTRUMENTS--0.92%
5,727 Thermo Electron Corp.* ................................ 195,792
-----------
FINANCIAL SERVICES--2.58%
3,119 Morgan Stanley Dean Witter & Co. ...................... 284,999
4,328 Travelers Group Inc. .................................. 262,385
-----------
547,384
-----------
INDUSTRIAL SERVICES & SUPPLIES--0.65%
4,414 Ecolab Inc. ........................................... 136,834
-----------
OFFICE EQUIPMENT & SUPPLIES--0.63%
3,101 Zebra Technologies Corp. (Class A)* ................... 132,568
-----------
OIL EQUIPMENT & SERVICES--0.68%
2,116 Schlumberger Ltd. ..................................... 144,549
-----------
PHARMACEUTICAL--1.89%
4,527 R.P. Scherer Corp.* ................................... 401,205
-----------
NUMBER OF
SHARES VALUE
- --------- -----------
UNITED STATES--(CONCLUDED)
RETAIL--1.18%
4,107 Sears Roebuck & Co. ................................... $ 250,784
-----------
TELECOMMUNICATIONS--3.60%
10,821 Airtouch Communications Inc.* ......................... 632,352
3,301 SBC Communications, Inc. .............................. 132,040
-----------
764,392
-----------
Total United States Common Stocks................................. 4,919,467
-----------
Total Common Stocks (cost--$17,288,115)........................... 21,092,291
-----------
PREFERRED STOCKS--0.96%
BRAZIL--0.69%
TELECOMMUNICATIONS--0.69%
1,084,900 Telerj Celular S.A. ................................... 64,528
1,084,900 Telerj Tel Rio Jan .................................... 81,610
-----------
Total Brazil Preferred Stocks..................................... 146,138
-----------
GERMANY--0.27%
MEDICAL PRODUCTS & SUPPLIES--0.27%
1,235 Fresenius Medical Care AG* ............................ 57,181
-----------
Total Preferred Stocks (cost--$277,067)........................... 203,319
-----------
NUMBER OF
RIGHTS
- ---------
RIGHTS--0.00%
BRAZIL--0.00%
TELECOMMUNICATIONS--0.00%
9,784 Telerj Tel Rio Jan; expiring 07/13/98.................. 0
-----------
GREECE--0.00%
BANKS--0.00%
110 Alpha Credit; expiring 07/24/98........................ 196
-----------
Total Rights (cost--$0)........................................... 196
-----------
Total Investments (cost--$17,565,182)--100.42%.................... 21,295,806
(88,760)
Liabilities in excess of other assets--(0.42)%....................
-----------
Net Assets--100.00%............................................... $21,207,046
-----------
-----------
</TABLE>
- -----------------
<TABLE>
<S> <C>
* Non-income producing security.
+ Security exempt from registration under Rule 144A of the Securities Act of 1933. The securities may be resold in
transactions exempt from registration, normally to qualified institutional buyers.
ADR American Depository Receipt
ADS American Depository Shares
GDR Global Depository Receipt
SDR Special Drawing Rights
(1) Security, or a portion thereof, was on loan at June 30, 1998.
</TABLE>
See accompanying notes to financial statements
30
<PAGE>
(This page has been left blank intentionally.)
31
<PAGE>
MITCHELL HUTCHINS SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998(UNAUDITED)
<TABLE>
<CAPTION>
HIGH GRADE
MONEY MARKET FIXED INCOME
PORTFOLIO PORTFOLIO
------------ ------------
<S> <C> <C>
ASSETS
Investments, at value (cost--$9,612,649;
$7,273,962; $12,437,309; $15,871,373;
$30,958,707; $18,341,190; $26,403,629;
$15,648,170 and $17,565,182,
respectively)......................... $ 9,612,649 $ 7,635,377
Investments of cash collateral received
for securities loaned, at value
(cost--$0; $0; $0; $0; $313,500; $0;
$187,500; $487,400 and $358,771,
respectively)......................... -- --
Cash (including cash denominated in
foreign currencies)................... 837 1,596
Dividends and interest receivable....... 43,679 75,825
Receivable for investments sold......... -- --
Unrealized appreciation of forward
foreign currency contracts............ -- --
Other assets............................ -- 978
------------ ------------
Total assets............................ 9,657,165 7,713,776
------------ ------------
LIABILITIES
Dividends payable....................... 38,758 --
Payable to affiliates................... 4,011 3,179
Payable for investments purchased....... -- --
Payable for reverse repurchase
agreement............................. -- --
Collateral for securities loaned........ -- --
Payable for shares of beneficial
interest repurchased.................. -- --
Unrealized depreciation of forward
foreign currency contracts............ -- --
Accrued expenses and other
liabilities........................... 26,773 19,879
------------ ------------
Total liabilities....................... 69,542 23,058
------------ ------------
NET ASSETS
Beneficial interest shares of $0.001 par
value outstanding--9,596,423; 795,633;
934,296; 1,488,505; 2,770,939;
1,604,904; 2,220,203; 1,485,144; and
1,238,345, respectively (unlimited
amount authorized).................... 9,598,034 7,165,505
Accumulated net investment income
(loss)................................ -- 219,000
Accumulated net realized gains (losses)
from investment transactions.......... (10,411) (55,202)
Net unrealized appreciation/depreciation
of investments and other assets and
liabilities denominated in foreign
currencies............................ -- 361,415
------------ ------------
Net assets.............................. $ 9,587,623 $ 7,690,718
------------ ------------
------------ ------------
Net asset value, offering price and
redemption value per share............ $1.00 $9.67
------------ ------------
------------ ------------
</TABLE>
32
<PAGE>
<TABLE>
<CAPTION>
STRATEGIC GLOBAL GROWTH AGGRESSIVE GLOBAL
FIXED INCOME INCOME BALANCED AND INCOME GROWTH GROWTH GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at value (cost--$9,612,649;
$7,273,962; $12,437,309; $15,871,373;
$30,958,707; $18,341,190; $26,403,629;
$15,648,170 and $17,565,182,
respectively)......................... $12,815,423 $15,735,548 $35,868,314 $25,108,204 $40,342,090 $23,166,282 $21,295,806
Investments of cash collateral received
for securities loaned, at value
(cost--$0; $0; $0; $0; $313,500; $0;
$187,500; $487,400 and $358,771,
respectively)......................... -- -- 313,500 -- 187,500 487,400 358,771
Cash (including cash denominated in
foreign currencies)................... -- 357 6,107 4,428 1,209 1,103 134,383
Dividends and interest receivable....... 142,565 384,582 220,491 16,624 12,382 3,973 68,509
Receivable for investments sold......... -- 975,876 121,816 132,255 566,443 579,837 105,199
Unrealized appreciation of forward
foreign currency contracts............ -- 43,305 -- -- -- -- --
Other assets............................ 3,558 20,063 1,276 322 19,745 1,175 28,236
------------ ----------- ----------- ----------- ----------- ----------- -----------
Total assets............................ 12,961,546 17,159,731 36,531,504 25,261,833 41,129,369 24,239,770 21,990,904
------------ ----------- ----------- ----------- ----------- ----------- -----------
LIABILITIES
Dividends payable....................... -- -- -- -- -- -- --
Payable to affiliates................... 4,272 10,354 21,417 14,194 23,852 14,965 13,166
Payable for investments purchased....... 1,939,540 504,648 1,121,222 154,679 453,486 227,414 165,188
Payable for reverse repurchase
agreement............................. 613,000 -- -- -- -- -- --
Collateral for securities loaned........ -- -- 313,500 -- 187,500 487,400 358,771
Payable for shares of beneficial
interest repurchased.................. -- 9,099 -- -- -- -- 86,179
Unrealized depreciation of forward
foreign currency contracts............ -- 60,617 -- -- -- -- --
Accrued expenses and other
liabilities........................... 37,641 82,300 36,206 15,455 33,392 31,376 160,554
------------ ----------- ----------- ----------- ----------- ----------- -----------
Total liabilities....................... 2,594,453 667,018 1,492,345 184,328 698,230 761,155 783,858
------------ ----------- ----------- ----------- ----------- ----------- -----------
NET ASSETS
Beneficial interest shares of $0.001 par
value outstanding--9,596,423; 795,633;
934,296; 1,488,505; 2,770,939;
1,604,904; 2,220,203; 1,485,144; and
1,238,345, respectively (unlimited
amount authorized).................... 9,721,478 16,422,899 26,186,638 16,739,071 22,826,705 14,024,627 15,660,920
Accumulated net investment income
(loss)................................ 305,927 368,948 393,621 58,204 (52,714) (80,565) 84,249
Accumulated net realized gains (losses)
from investment transactions.......... (44,187) (143,860) 3,549,293 1,513,216 3,718,687 2,016,441 1,732,766
Net unrealized appreciation/depreciation
of investments and other assets and
liabilities denominated in foreign
currencies............................ 383,875 (155,274) 4,909,607 6,767,014 13,938,461 7,518,112 3,729,112
------------ ----------- ----------- ----------- ----------- ----------- -----------
Net assets.............................. $10,367,093 $16,492,713 $35,039,159 $25,077,505 $40,431,139 $23,478,615 $21,207,046
------------ ----------- ----------- ----------- ----------- ----------- -----------
------------ ----------- ----------- ----------- ----------- ----------- -----------
Net asset value, offering price and
redemption value per share............ $11.10 $11.08 $12.65 $15.63 $18.21 $15.81 $17.13
------------ ----------- ----------- ----------- ----------- ----------- -----------
------------ ----------- ----------- ----------- ----------- ----------- -----------
</TABLE>
See accompanying notes to financial statements
33
<PAGE>
MITCHELL HUTCHINS SERIES TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998(UNAUDITED)
<TABLE>
<CAPTION>
HIGH GRADE
MONEY MARKET FIXED INCOME
PORTFOLIO PORTFOLIO
------------ ------------
<S> <C> <C>
INVESTMENT INCOME:
Interest (net of foreign withholding
taxes, if any)........................ $ 263,983 $ 265,150
Dividends (net of foreign withholding
taxes, if any)........................ -- --
------------ ------------
263,983 265,150
------------ ------------
EXPENSES:
Investment advisory and
administration........................ 23,109 19,416
Legal and audit......................... 11,604 13,761
Reports and notices to shareholders..... 5,688 4,298
Trustees' fees.......................... 3,750 3,750
Transfer agency fees and related service
expenses.............................. 750 750
Custody and accounting.................. 475 3,364
Interest expense........................ -- --
Other expenses.......................... 267 1,120
------------ ------------
45,643 46,459
------------ ------------
Net investment income (loss)............ 218,340 218,691
------------ ------------
REALIZED AND UNREALIZED GAINS (LOSSES)
FROM INVESTMENTS:
Net realized gains (losses) from:
Investments......................... -- 6,812
Foreign currency transactions....... -- --
Futures and options contracts....... -- --
Net change in unrealized
appreciation/depreciation of:
Investments......................... -- 78,262
Other assets, liabilities and
forward contracts denominated in
foreign currencies.................... -- --
------------ ------------
Net realized and unrealized gains
(losses) from investment activities... -- 85,074
------------ ------------
Net increase in net assets resulting
from operations....................... $ 218,340 $ 303,765
------------ ------------
------------ ------------
</TABLE>
34
<PAGE>
<TABLE>
<CAPTION>
STRATEGIC GLOBAL GROWTH AND AGGRESSIVE GLOBAL
FIXED INCOME INCOME BALANCED INCOME GROWTH GROWTH GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest (net of foreign withholding
taxes, if any)........................ $ 360,557 $ 650,213 $ 425,706 $ 25,408 $ 90,103 $ 22,541 $ 6,381
Dividends (net of foreign withholding
taxes, if any)........................ -- -- 135,924 159,462 60,997 32,229 230,906
------------ ----------- ----------- ----------- ----------- ----------- -----------
360,557 650,213 561,630 184,870 151,100 54,770 237,287
------------ ----------- ----------- ----------- ----------- ----------- -----------
EXPENSES:
Investment advisory and
administration........................ 22,735 66,415 131,097 84,066 148,210 92,821 81,265
Legal and audit......................... 5,923 18,100 6,699 20,058 21,310 15,733 15,076
Reports and notices to shareholders..... 4,873 13,172 8,122 7,914 14,009 9,206 10,028
Trustees' fees.......................... 3,750 3,750 3,750 3,750 3,750 3,750 3,750
Transfer agency fees and related service
expenses.............................. 750 750 750 750 750 750 750
Custody and accounting.................. 3,702 42,125 9,707 5,747 13,194 8,089 24,668
Interest expense........................ 4,747 -- -- -- -- -- --
Other expenses.......................... 136 1,567 523 1,588 1,374 4,129 534
------------ ----------- ----------- ----------- ----------- ----------- -----------
46,616 145,879 160,648 123,873 202,597 134,478 136,071
------------ ----------- ----------- ----------- ----------- ----------- -----------
Net investment income (loss)............ 313,941 504,334 400,982 60,997 (51,497) (79,708) 101,216
------------ ----------- ----------- ----------- ----------- ----------- -----------
REALIZED AND UNREALIZED GAINS (LOSSES)
FROM INVESTMENTS:
Net realized gains (losses) from:
Investments......................... 82,325 59,232 3,562,017 1,524,359 3,521,445 2,017,207 1,856,099
Foreign currency transactions....... (331) (190,619) -- -- -- -- (16,546)
Futures and options contracts....... (8,543) -- -- -- -- -- --
Net change in unrealized
appreciation/depreciation of:
Investments......................... 47,509 236,690 (64,648) 1,552,276 2,613,755 2,008,754 1,496,633
Other assets, liabilities and
forward contracts denominated in
foreign currencies.................... 4,718 (138,664) -- -- -- -- 611
------------ ----------- ----------- ----------- ----------- ----------- -----------
Net realized and unrealized gains
(losses) from investment activities... 125,678 (33,361) 3,497,369 3,076,635 6,135,200 4,025,961 3,336,797
------------ ----------- ----------- ----------- ----------- ----------- -----------
Net increase in net assets resulting
from operations....................... $ 439,619 $ 470,973 $ 3,898,351 $ 3,137,632 $ 6,083,703 $ 3,946,253 $ 3,438,013
------------ ----------- ----------- ----------- ----------- ----------- -----------
------------ ----------- ----------- ----------- ----------- ----------- -----------
</TABLE>
See accompanying notes to financial statements
35
<PAGE>
MITCHELL HUTCHINS SERIES TRUST
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO
--------------------------------
FOR THE SIX
MONTHS ENDED FOR THE YEAR
JUNE 30, 1998 ENDED
(UNAUDITED) DECEMBER 31, 1997
------------- -----------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income.......................................................................... $ 218,340 $ 498,216
Net realized gains from investments............................................................ -- --
------------- -----------------
Net increase in net assets resulting from operations........................................... 218,340 498,216
------------- -----------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income.......................................................................... (218,340) (498,216)
------------- -----------------
FROM BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from the sale of shares........................................................... 3,873,277 6,100,044
Cost of shares repurchased..................................................................... (3,411,487) (9,982,269)
Proceeds from dividends reinvested............................................................. 219,941 500,956
------------- -----------------
Net increase (decrease) in net assets from beneficial interest transactions.................... 681,731 (3,381,269)
------------- -----------------
Net increase (decrease) in net assets.......................................................... 681,731 (3,381,269)
NET ASSETS:
Beginning of period............................................................................ 8,905,892 12,287,161
------------- -----------------
End of period.................................................................................. $ 9,587,623 $ 8,905,892
------------- -----------------
------------- -----------------
</TABLE>
See accompanying notes to financial statements
36
<PAGE>
MITCHELL HUTCHINS SERIES TRUST
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
HIGH GRADE FIXED
INCOME PORTFOLIO
--------------------------------
FOR THE SIX
MONTHS ENDED FOR THE YEAR
JUNE 30, 1998 ENDED
(UNAUDITED) DECEMBER 31, 1997
------------- -----------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income.......................................................................... $ 218,691 $ 440,240
Net realized gains (losses) from investments................................................... 6,812 (11,692)
Net change in unrealized appreciation/depreciation of investments.............................. 78,262 200,578
------------- -----------------
Net increase in net assets resulting from operations........................................... 303,765 629,126
------------- -----------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income.......................................................................... -- (437,176)
------------- -----------------
FROM BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from the sale of shares........................................................... 433,917 1,050,596
Cost of shares repurchased..................................................................... (829,001) (2,251,336)
Proceeds from dividends reinvested............................................................. 437,176 451,613
------------- -----------------
Net increase (decrease) in net assets from beneficial interest transactions.................... 42,092 (749,127)
------------- -----------------
Net increase (decrease) in net assets.......................................................... 345,857 (557,177)
NET ASSETS:
Beginning of period............................................................................ 7,344,861 7,902,038
------------- -----------------
End of period (including undistributed net investment income of $219,000 and $309,
respectively)................................................................................ $ 7,690,718 $ 7,344,861
------------- -----------------
------------- -----------------
</TABLE>
See accompanying notes to financial statements
37
<PAGE>
MITCHELL HUTCHINS SERIES TRUST
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
STRATEGIC FIXED INCOME PORTFOLIO
--------------------------------
FOR THE SIX
MONTHS ENDED FOR THE YEAR
JUNE 30, 1998 ENDED
(UNAUDITED) DECEMBER 31, 1997
------------- -----------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income.......................................................................... $ 313,941 $ 643,796
Net realized gains (losses) from:
Investments.................................................................................. 82,325 101,982
Foreign currency transactions................................................................ (331) 5,398
Futures and options contracts................................................................ (8,543) 46,052
Net change in unrealized appreciation/depreciation of:
Investments and futures contracts............................................................ 47,509 281,528
Other assets and liabilities denominated in foreign currencies............................... 4,718 20,451
------------- -----------------
Net increase in net assets resulting from operations........................................... 439,619 1,099,207
------------- -----------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income.......................................................................... -- (647,827)
------------- -----------------
FROM BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from the sale of shares........................................................... 537,109 1,378,003
Cost of shares repurchased..................................................................... (1,148,288) (3,360,480)
Proceeds from dividends reinvested............................................................. 647,827 732,890
------------- -----------------
Net increase (decrease) in net assets from beneficial interest transactions.................... 36,648 (1,249,587)
------------- -----------------
Net increase (decrease) in net assets.......................................................... 476,267 (798,207)
NET ASSETS:
Beginning of period............................................................................ 9,890,826 10,689,033
------------- -----------------
End of period (including accumulated net investment income of $305,927 at June 30, 1998)....... $10,367,093 $ 9,890,826
------------- -----------------
------------- -----------------
</TABLE>
See accompanying notes to financial statements
38
<PAGE>
MITCHELL HUTCHINS SERIES TRUST
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
GLOBAL INCOME PORTFOLIO
--------------------------------
FOR THE SIX
MONTHS ENDED FOR THE YEAR
JUNE 30, 1998 ENDED
(UNAUDITED) DECEMBER 31, 1997
------------- -----------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income................... $ 504,334 $ 1,401,942
Net realized gains (losses) from:
Investments........................... 59,232 20,580
Foreign currency transactions......... (190,619) (198,473)
Net change in unrealized
appreciation/depreciation of:
Investments........................... 236,690 (700,944)
Other assets, liabilities and forward
contracts denominated in foreign
currencies........................... (138,664) 168,816
------------- -----------------
Net increase in net assets resulting
from operations....................... 470,973 691,921
------------- -----------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income................... (7,498) (1,167,799)
Net realized gains from investments..... (12,446) (20,607)
------------- -----------------
(19,944) (1,188,406)
------------- -----------------
FROM BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from the sale of shares.... 77,248 542,568
Cost of shares repurchased.............. (2,961,446) (8,439,544)
Proceeds from dividends reinvested...... 1,195,367 1,687,811
------------- -----------------
Net decrease in net assets from
beneficial interest transactions...... (1,688,831) (6,209,165)
------------- -----------------
Net decrease in net assets.............. (1,237,802) (6,705,650)
NET ASSETS:
Beginning of period..................... 17,730,515 24,436,165
------------- -----------------
End of period (including accumulated net
investment income of $368,948 at June
30, 1998)............................. $16,492,713 $ 17,730,515
------------- -----------------
------------- -----------------
</TABLE>
See accompanying notes to financial statements
39
<PAGE>
MITCHELL HUTCHINS SERIES TRUST
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
BALANCED PORTFOLIO
--------------------------------
FOR THE SIX
MONTHS ENDED FOR THE YEAR
JUNE 30, 1998 ENDED
(UNAUDITED) DECEMBER 31, 1997
------------- -----------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income.......................................................................... $ 400,982 $ 684,260
Net realized gains from investments............................................................ 3,562,017 5,140,177
Net change in unrealized appreciation/depreciation of investments.............................. (64,648) 1,635,208
------------- -----------------
Net increase in net assets resulting from operations........................................... 3,898,351 7,459,645
------------- -----------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income.......................................................................... -- (697,200)
Net realized gains from investments............................................................ -- (5,137,670)
------------- -----------------
-- (5,834,870)
------------- -----------------
FROM BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from the sale of shares........................................................... 901,119 1,683,192
Cost of shares repurchased..................................................................... (3,801,306) (8,416,342)
Proceeds from dividends reinvested............................................................. 5,829,680 4,095,996
------------- -----------------
Net increase (decrease) in net assets from beneficial interest transactions.................... 2,929,493 (2,637,154)
------------- -----------------
Net increase (decrease) in net assets.......................................................... 6,827,846 (1,012,379)
NET ASSETS:
Beginning of period............................................................................ 28,211,314 29,223,693
------------- -----------------
End of period (including accumulated net investment income of $393,621 at June 30, 1998)....... $35,039,159 $ 28,211,314
------------- -----------------
------------- -----------------
</TABLE>
See accompanying notes to financial statements
40
<PAGE>
MITCHELL HUTCHINS SERIES TRUST
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
GROWTH AND INCOME PORTFOLIO
--------------------------------
FOR THE SIX
MONTHS ENDED FOR THE YEAR
JUNE 30, 1998 ENDED
(UNAUDITED) DECEMBER 31, 1997
------------- -----------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income.......................................................................... $ 60,997 $ 131,129
Net realized gains from investments............................................................ 1,524,359 3,316,804
Net change in unrealized appreciation/depreciation of investments.............................. 1,552,276 2,030,467
------------- -----------------
Net increase in net assets resulting from operations........................................... 3,137,632 5,478,400
------------- -----------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income.......................................................................... -- (140,484)
Net realized gains from investments............................................................ -- (3,320,316)
------------- -----------------
-- (3,460,800)
------------- -----------------
FROM BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from the sale of shares........................................................... 3,146,287 4,349,726
Cost of shares repurchased..................................................................... (3,157,541) (4,943,405)
Proceeds from dividends reinvested............................................................. 3,457,938 2,549,024
------------- -----------------
Net increase in net assets from beneficial interest transactions............................... 3,446,684 1,955,345
------------- -----------------
Net increase in net assets..................................................................... 6,584,316 3,972,945
NET ASSETS:
Beginning of period............................................................................ 18,493,189 14,520,244
------------- -----------------
End of period (including accumulated net investment income of $58,204 at June 30, 1998)........ $25,077,505 $ 18,493,189
------------- -----------------
------------- -----------------
</TABLE>
See accompanying notes to financial statements
41
<PAGE>
MITCHELL HUTCHINS SERIES TRUST
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
GROWTH PORTFOLIO
------------------------------------
FOR THE SIX
MONTHS ENDED FOR THE YEAR
JUNE 30, 1998 ENDED
(UNAUDITED) DECEMBER 31, 1997
----------------- -----------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income (loss).............................................................. $ (51,497) $ 50,977
Net realized gains from investments....................................................... 3,521,445 9,230,218
Net change in unrealized appreciation/depreciation of investments......................... 2,613,755 (3,534,653)
----------------- -----------------
Net increase in net assets resulting from operations...................................... 6,083,703 5,746,542
----------------- -----------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income..................................................................... -- (52,637)
Net realized gains from investments....................................................... -- (8,882,354)
----------------- -----------------
-- (8,934,991)
----------------- -----------------
FROM BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from the sale of shares...................................................... 813,726 1,988,470
Cost of shares repurchased................................................................ (5,987,036) (11,457,385)
Proceeds from dividends reinvested........................................................ 8,934,991 6,886,405
----------------- -----------------
Net increase (decrease) in net assets from beneficial interest transactions............... 3,761,681 (2,582,510)
----------------- -----------------
Net increase (decrease) in net assets..................................................... 9,845,384 (5,770,959)
NET ASSETS:
Beginning of period....................................................................... 30,585,755 36,356,714
----------------- -----------------
End of period............................................................................. $ 40,431,139 $ 30,585,755
----------------- -----------------
----------------- -----------------
</TABLE>
See accompanying notes to financial statements
42
<PAGE>
MITCHELL HUTCHINS SERIES TRUST
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
AGGRESSIVE GROWTH PORTFOLIO
--------------------------------
FOR THE SIX
MONTHS ENDED FOR THE YEAR
JUNE 30, 1998 ENDED
(UNAUDITED) DECEMBER 31, 1997
------------- -----------------
<S> <C> <C>
FROM OPERATIONS:
Net investment loss............................................................................ $ (79,708) $ (126,975)
Net realized gains from investments............................................................ 2,017,207 3,516,947
Net change in unrealized appreciation/depreciation of investments.............................. 2,008,754 559,895
------------- -----------------
Net increase in net assets resulting from operations........................................... 3,946,253 3,949,867
------------- -----------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gains from investments............................................................ -- (3,393,138)
------------- -----------------
FROM BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from the sale of shares........................................................... 853,143 2,796,889
Cost of shares repurchased..................................................................... (3,786,822) (5,035,609)
Proceeds from dividends reinvested............................................................. 3,389,606 1,591,309
------------- -----------------
Net increase (decrease) in net assets from beneficial interest transactions.................... 455,927 (647,411)
------------- -----------------
Net increase (decrease) in net assets.......................................................... 4,402,180 (90,682)
NET ASSETS:
Beginning of period............................................................................ 19,076,435 19,167,117
------------- -----------------
End of period.................................................................................. $23,478,615 $ 19,076,435
------------- -----------------
------------- -----------------
</TABLE>
See accompanying notes to financial statements
43
<PAGE>
MITCHELL HUTCHINS SERIES TRUST
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
GLOBAL GROWTH PORTFOLIO
--------------------------------
FOR THE SIX
MONTHS ENDED FOR THE YEAR
JUNE 30, 1998 ENDED
(UNAUDITED) DECEMBER 31, 1997
------------- -----------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income.......................................................................... $ 101,216 $ 62,332
Net realized gains (losses) from:
Investments.................................................................................. 1,856,099 2,956,869
Foreign currency transactions................................................................ (16,546) (75,763)
Net change in unrealized appreciation/depreciation of:
Investments.................................................................................. 1,496,633 (1,172,619)
Other assets and liabilities denominated in foreign currencies............................... 611 (1,827)
------------- -----------------
Net increase in net assets resulting from operations........................................... 3,438,013 1,768,992
------------- -----------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income.......................................................................... -- (61,882)
Net realized gains from investments............................................................ -- (89,918)
------------- -----------------
-- (151,800)
------------- -----------------
FROM BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from the sale of shares........................................................... 222,058 1,143,962
Cost of shares repurchased..................................................................... (3,819,596) (7,389,928)
Proceeds from dividends reinvested............................................................. 151,800 142,283
------------- -----------------
Net decrease in net assets from beneficial interest transactions............................... (3,445,738) (6,103,683)
------------- -----------------
Net decrease in net assets..................................................................... (7,725) (4,486,491)
NET ASSETS:
Beginning of period............................................................................ 21,214,771 25,701,262
------------- -----------------
End of period (including accumulated net investment income of $84,249 at June 30, 1998)........ $21,207,046 $ 21,214,771
------------- -----------------
------------- -----------------
</TABLE>
See accompanying notes to financial statements
44
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Mitchell Hutchins Series Trust (the "Fund"), formerly PaineWebber Series Trust
(the name change was approved by Fund's board of trustees on November 19, 1997),
is organized under Massachusetts law by a Declaration of Trust dated November
21, 1986 and is registered with the Securities and Exchange Commission under the
Investment Company Act of 1940, as amended, as an open-end management investment
company.
As of June 30, 1998 the Fund has thirteen series of shares available for
investment, each having its own investment objectives and policies: the Money
Market Portfolio, the High Grade Fixed Income Portfolio, the Strategic Fixed
Income Portfolio, the Strategic Income Portfolio, the Global Income Portfolio,
the High Income Portfolio, the Balanced Portfolio, the Growth and Income
Portfolio, the Tactical Allocation Portfolio, the Growth Portfolio, the
Aggressive Growth Portfolio, the Small Cap Portfolio and the Global Growth
Portfolio, (collectively referred to as the "Portfolios"). At June 30, 1998, the
Tactical Allocation Portfolio, the Small Cap Portfolio, the Strategic Income
Portfolio and the High Income Portfolio had no shares outstanding.
All series of shares are diversified except Global Income Portfolio and
Strategic Fixed Income Portfolio. Shares of each series of the Fund are offered
only to insurance company separate accounts which fund certain variable
contracts.
The preparation of financial statements in accordance with generally accepted
accounting principles requires the Fund's 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 OF INVESTMENTS--Securities that are listed on U.S. and foreign stock
exchanges are valued at the last sale price on the day the securities are being
valued or, lacking any sales on such day, at the last available bid price. In
cases where securities are traded on more than one exchange, the securities are
generally valued on the exchange designated by Mitchell Hutchins Asset
Management Inc. ("Mitchell Hutchins"), the portfolios' adviser and a wholly
owned asset management subsidiary of PaineWebber Incorporated ("PaineWebber"),
or by the applicable sub-adviser, as the primary market for each Portfolio.
Securities traded in the over-the-counter ("OTC") market and listed on The
Nasdaq Stock Market, Inc. ("Nasdaq") are valued at the last trade price on
Nasdaq prior to the time of valuation; other OTC securities (other than
short-term debt securities described below) are valued at the last quoted bid
price available in the OTC market prior to the time of valuation. When market
quotations are unavailable, valuations are based upon appraisals received from a
pricing service using a computerized matrix system or appraisals derived from
information concerning the security or similar securities received from
recognized dealers in those securities. The amortized cost method of valuation,
which approximates market value, is used to value short-term debt obligations
with sixty days or less remaining to maturity, including all investments of the
Money Market Portfolio, unless the Fund's board of trustees determines that this
does not represent fair value. Securities and assets for which market quotations
are not readily available (including restricted securities subject to
limitations as to their sale) are valued at fair value as determined in good
faith by or under the direction of the Fund's board of trustees.
All investments quoted in foreign currencies are valued daily in U.S. dollars
on the basis of the foreign currency exchange rate prevailing at the time such
valuation is determined by the Fund's custodians, unless the board of trustees
determines that this does not represent fair value. Foreign currency exchange
rates are generally determined prior to the close of the New York Stock Exchange
("NYSE"). Occasionally, events affecting the value of foreign investments and
such exchange rates occur between the time at which they are determined and the
close of the NYSE, which will not be reflected in a computation of the
Portfolios' net asset values. If events materially affecting the value of such
investments or currency exchange rates occur during such time period, the
securities may be valued at their fair value as determined in good faith by or
under the direction of the Fund's board of trustees.
REPURCHASE AGREEMENTS--Each Portfolio'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,
45
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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. Each Portfolio may participate
in joint repurchase agreement transactions with other funds managed by Mitchell
Hutchins.
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME--Investment transactions are
recorded on the trade date. Realized gains and losses from investment
transactions are calculated using the identified cost basis. Dividend income and
other distributions are recorded on the ex-dividend date ("ex-date") (except for
certain dividends from foreign securities that are recorded as soon after the
ex-date as the respective Portfolios, using reasonable diligence, become aware
of such dividends). Interest income is recorded on an accrual basis. Premiums
are amortized (with the exception of Global Income Portfolio) and discounts are
accreted as adjustments to interest income and the identified cost of
investments.
FOREIGN CURRENCY TRANSLATION--The books and records of the Portfolios are
maintained in U.S. dollars as follows: (1) the foreign currency market value of
investment securities and other assets and liabilities stated in foreign
currencies are translated at the exchange rates prevailing at the end of the
period; and (2) purchases, sales, income and expenses are translated at the rate
of exchange prevailing on the respective dates of such transactions. The
resulting exchange gains and losses are included in the Statement of Operations.
Although the net assets and the market values of the Portfolios' securities
are presented at the foreign exchange rates at the end of the period, the
Portfolios do not generally isolate the effect of fluctuations in foreign
exchange rates from the effects of fluctuations in the market price of
securities. However, the Portfolios do isolate the effect of fluctuations in
foreign exchange rates when determining the realized gain or loss upon the sale
or maturity of foreign currency-denominated debt obligations pursuant to federal
income tax regulations. Certain foreign exchange gains and losses included in
realized and unrealized gains and losses are included in or are a reduction of
ordinary income for income tax reporting purposes. Net realized foreign currency
gain (loss) is treated as ordinary income for income tax reporting purposes.
Gains/losses from translating foreign currency-denominated assets and
liabilities at the year-end exchange rates are included in the change in
unrealized appreciation/depreciation of other assets and liabilities denominated
in foreign currencies.
FORWARD FOREIGN CURRENCY CONTRACTS--Certain Portfolios may enter into forward
foreign currency exchange contracts ("forward contracts") in connection with
planned purchases or sales of securities or to hedge the U.S. dollar value of
portfolio securities denominated in a particular currency. These Portfolios may
also engage in cross-hedging by using forward contracts in one currency to hedge
fluctuations in the value of securities denominated in a different currency if
Mitchell Hutchins, or the applicable sub-adviser, anticipates that there is a
correlation between the two currencies. Forward contracts may also be used to
shift a Portfolio's exposure to foreign currency fluctuations from one country
to another.
These Portfolios have no specific limitation on the percentage of assets which
may be committed to such contracts; however, the value of all forward contracts
will not exceed the total market value of a Portfolio's total assets. The
Portfolios may enter into forward contracts or maintain a net exposure to
forward contracts only if (1) the consummation of the contracts would not
obligate the Portfolio to deliver an amount of foreign currency in excess of the
value of the positions being hedged by such contracts or (2) the Portfolios
maintain cash or liquid securities in a segregated account in an amount not less
than the value of the Portfolio's total assets committed to the consummation of
the forward contracts and not covered as provided in (1) above, as
marked-to-market daily.
Risks may arise upon entering into forward contracts from the potential
inability of counterparties to meet the terms of their contracts and from
unanticipated movements in the value of foreign currencies relative to the U.S.
dollar.
46
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
Fluctuations in the value of forward contracts are recorded for financial
reporting purposes as unrealized gains or losses by the Portfolios. Realized
gains and losses include net gains or losses recognized by the Portfolios on
contracts which have matured.
OPTION WRITING--Certain Portfolios may write (sell) put and call options in
order to gain exposure to or protect against changes in the markets. When a
Portfolio writes a call or a put option, an amount equal to the premium received
by the Portfolio is included in the Portfolio's Statement of Assets and
Liabilities as a liability. The amount of the liability is subsequently
marked-to-market to reflect the current market value of the option written. If
an option which the Portfolio has written either expires on its stipulated
expiration date or the Portfolio enters into a closing purchase transaction, the
Portfolio realizes a gain (or loss if the cost of a closing purchase transaction
exceeds the premium received when the option was written) without regard to any
unrealized gain or loss on the underlying security, and the liability related to
such option is extinguished. If a call option which the Portfolio has written is
exercised, the Portfolio realizes a capital gain or loss (long-term or
short-term, depending on the holding period of the underlying security) from the
sale of the underlying security and the proceeds from the sale are increased by
the premium originally received. If a put option which the Portfolio has written
is exercised, the amount of the premium originally received reduces the cost of
the security which the Portfolio purchases upon exercise of the option.
FUTURES CONTRACTS--Strategic Fixed Income Portfolio is the only Portfolio
currently engaged in futures contracts as an alternative investment for
traditional Treasury securities. Using financial futures contracts involves
various market risks. The maximum amount at risk from the purchase of a futures
contract is the contract value. Each of the portfolios are subject to a number
of guidelines which reduce the risk by seeking to ensure that financial futures
contracts are used for hedging purposes or to manage the average duration of a
portfolio and not for leverage. However, imperfect correlations between future
contracts and the portfolio securities being hedged, or market disruption, do
not normally permit full control of these risks at all times.
Upon entering into a financial futures contract, a Portfolio is required to
pledge to a broker an amount equal to a certain percentage of the contract
amount. This amount is known as the "initial margin." Subsequent payments known
as "variation margin," are made or received by the Portfolio each day, depending
on the daily fluctuations in the value of the underlying financial futures
contracts. Such variation margin is recorded for financial statement purposes on
a daily basis as an unrealized gain or loss until the financial futures contract
is closed, at which time the net gain or loss is reclassified to realized.
REVERSE REPURCHASE AGREEMENTS--Each of the Portfolios may enter into reverse
repurchase agreements with qualified third party broker-dealers as determined
by, and under the direction of, the Portfolios' board of trustees. Interest on
the value of reverse repurchase agreements issued and outstanding is based upon
competitive market rates at the time of issuance. At the time the Portfolio
enters into a reverse repurchase agreement, it establishes and maintains a
segregated account with the Portfolio's custodian containing liquid securities
having a value not less than the repurchase price, including accrued interest,
of the reverse repurchase agreement.
For the six months ended June 30, 1998, the Strategic Fixed Income Portfolio
is the only Portfolio which engaged in reverse repurchase agreements. The
average monthly balance of reverse repurchase agreements outstanding during the
year ended June 30, 1998 was $169,536 at a weighted average interest rate of
5.60%.
DIVIDENDS AND DISTRIBUTIONS--Dividends and distributions to shareholders are
recorded on the ex-date. The amount of 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.
47
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
CONCENTRATION OF RISK
Investing in securities of foreign issuers and currency transactions may
involve certain considerations and risks not typically associated with
investments in the United States. These risks include revaluation of currencies,
adverse fluctuations in foreign currency values and possible adverse political,
social and economic developments, including those particular to a specific
industry, country or region, which could cause the securities and their markets
to be less liquid and prices more volatile than those of comparable U.S.
companies and U.S. government securities. These risks are greater with respect
to securities of issuers located in emerging market countries in which certain
portfolios are authorized to invest. The ability of the issuers of debt
securities held by the Fund to meet their obligations may be affected by
economic and political developments particular to a specific industry, country
or region.
Small cap companies may be more vulnerable than larger companies to adverse
business or economic developments. Small cap companies may also have limited
product lines, markets or financial resources, and may be dependent on a
relatively small management group. Securities of such companies may be less
liquid and more volatile than securities of larger companies or the market
averages in general and, therefore, may involve greater risk than investing in
larger companies. In addition, small cap companies may not be well-known to the
investing public, may not have institutional ownership and may have only
cyclical, static or moderate growth prospects.
The ability of the issuers of debt securities held by the Portfolios to meet
their obligations may be affected by economic and political developments
particular to a specific industry, country or region.
INVESTMENT ADVISER AND ADMINISTRATOR
The Fund's board of trustees has approved an investment advisory and
administration contract with Mitchell Hutchins, under which Mitchell Hutchins
serves as investment adviser and administrator of the Fund and each Portfolio.
Mitchell Hutchins receives compensation from the Fund, computed daily and
payable monthly, as follows:
<TABLE>
<CAPTION>
ANNUAL RATE
AS A PERCENTAGE OF
EACH PORTFOLIO'S
AVERAGE DAILY NET ASSETS
---------------------------
<S> <C>
Money Market Portfolio.............................................................. 0.50%
High Grade Fixed Income Portfolio................................................... 0.50
Strategic Fixed Income Portfolio.................................................... 0.50
Strategic Income Portfolio.......................................................... 0.75
Global Income Portfolio............................................................. 0.75
High Income Portfolio............................................................... 0.50
Balanced Portfolio.................................................................. 0.75
Growth and Income Portfolio......................................................... 0.70
Tactical Allocation Portfolio....................................................... 0.50
Growth Portfolio.................................................................... 0.75
Aggressive Growth Portfolio......................................................... 0.80
Small Cap Portfolio................................................................. 1.00
Global Growth Portfolio............................................................. 0.75
</TABLE>
Under separate contracts, Mitchell Hutchins pays GE Investment Management
Incorporated, Pacific Investment Management Company and Nicholas-Applegate
Capital Management to serve as the sub-advisers of the Global Growth Portfolio,
the Strategic Fixed Income Portfolio and the Aggressive Growth Portfolio,
respectively. Mitchell Hutchins (not the Portfolios) pays the sub-advisers a
fee, computed daily and paid monthly, at an annual rate of 0.29%, 0.25% and
0.50%, respectively, of each Portfolio's average daily net assets.
During the six months ended June 30, 1998, the Growth and Income Portfolio and
the Growth Portfolio paid $432 and $1,986, respectively, in brokerage
commissions to PaineWebber for transactions executed on behalf of these
Portfolios.
48
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
SECURITIES LENDING
Each Portfolio may lend securities up to 33 1/3% of its total assets to
qualified institutions. The loans are secured at all times by cash or U.S.
government securities in an amount at least equal to the market value of the
securities loaned, plus accrued interest and dividends, determined on a daily
basis and adjusted accordingly. The Portfolios will regain record ownership of
loaned securities to exercise certain beneficial rights; however, the Portfolios
may bear the risk of delay in recovery of, or even loss of rights in, the
securities loaned should the borrower fail financially. The Portfolios receive
compensation, which is included in interest income, for lending their securities
from interest earned on the cash or U.S. government securities held as
collateral, net of fee rebates paid to the borrower plus reasonable
administrative and custody fees. PaineWebber, the Portfolios' lending agent,
received compensation from the following Portfolios for the six months ended
June 30, 1998 as follows:
<TABLE>
<CAPTION>
<S> <C>
Global Income Portfolio............................................................................ $ 171
Balanced Portfolio................................................................................. $ 1,460
Growth and Income Portfolio........................................................................ $ 697
Growth Portfolio................................................................................... $ 2,746
Aggressive Growth Portfolio........................................................................ $ 169
Global Growth Portfolio............................................................................ $ 946
</TABLE>
As of June 30, 1998 the Portfolios held cash as collateral and market values
of securities loaned as follows:
<TABLE>
<CAPTION>
COLLATERAL MARKET VALUE
FOR OF
SECURITIES SECURITIES
LOANED LOANED
------------ ------------
<S> <C> <C>
Agressive Growth Portfolio..................................................... $ 487,400 $ 490,875
Balanced Portfolio............................................................. $ 313,500 $ 319,812
Growth Portfolio............................................................... $ 187,500 $ 182,031
Global Growth Portfolio........................................................ $ 358,771 $ 339,613
</TABLE>
As of June 30, 1998 the Funds invested the above collateral in the following
money market funds:
<TABLE>
<CAPTION>
NUMBER OF
SHARES
- -----------
<C> <S> <C>
AGGRESSIVE
GROWTH
FUND
487,400 Liquid Assets Portfolio............................................................. $ 487,400
----------
----------
</TABLE>
BALANCED FUND
<TABLE>
<C> <S> <C>
178,667 Liquid Assets Portfolio.................................................. $ 178,667
134,833 Prime Portfolio.......................................................... 134,833
---------
$ 313,500
---------
---------
</TABLE>
GROWTH FUND
<TABLE>
<C> <S> <C>
184,079 Liquid Assets Portfolio.................................................. $ 184,079
1,350 Prime Portfolio.......................................................... 1,350
150 TempCash Portfolio....................................................... 150
1,920 TempFund Portfolio....................................................... 1,921
---------
$ 187,500
---------
---------
</TABLE>
49
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
GLOBAL GROWTH FUND
<TABLE>
<C> <S> <C>
163,716 Liquid Assets Portfolio.................................................. $ 163,716
194,222 Prime Portfolio.......................................................... 194,222
28 TempCash Portfolio....................................................... 28
805 TempFund Portfolio....................................................... 805
---------
$ 358,771
---------
---------
</TABLE>
BANK LINE OF CREDIT
Each of the Portfolios may participate with other funds managed by Mitchell
Hutchins in a $200 million committed credit facility ("Facility") to be utilized
for temporary financing until the settlement of sales or purchases of portfolio
securities, the repurchase or redemption of shares of the Portfolios at the
request of the shareholders and other temporary or emergency purposes. In
connection therewith, the Portfolios have agreed to pay commitment fees, pro
rata, based on the relative asset size of the funds in the Facility. Interest is
charged to the Portfolios at rates based on prevailing market rates in effect at
the time of borrowings. For the period ended June 30, 1998, the Portfolios did
not borrow under the Facility.
INVESTMENTS IN SECURITIES
For the six months ended June 30, 1998, aggregate purchases and sales of
portfolio securities, excluding short-term securities, were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
------------- -------------
<S> <C> <C>
High Grade Fixed Income Portfolio............................................. $ 2,812,732 $ 3,294,043
Strategic Fixed Income Portfolio.............................................. $ 11,353,084 $ 10,246,873
Global Income Portfolio....................................................... $ 8,930,325 $ 9,439,501
Balanced Portfolio............................................................ $ 33,288,909 $ 36,493,667
Growth and Income Portfolio................................................... $ 7,242,643 $ 7,550,201
Growth Portfolio.............................................................. $ 10,455,885 $ 13,810,343
Aggressive Growth Portfolio................................................... $ 7,080,290 $ 10,329,223
Global Growth Portfolio....................................................... $ 7,173,934 $ 9,949,860
</TABLE>
At June 30, 1998, the components of net unrealized appreciation (depreciation)
of investments were as follows:
<TABLE>
<CAPTION>
NET
UNREALIZED
GROSS GROSS APPRECIATION
APPRECIATION DEPRECIATION (DEPRECIATION)
------------- ------------ -------------
<S> <C> <C> <C>
High Grade Fixed Income Portfolio.............................. $ 364,713 $ (3,299) $ 361,414
Strategic Fixed Income Portfolio............................... $ 398,059 $ (19,925) $ 378,134
Global Income Portfolio........................................ $ 170,942 $ (306,767) $ (135,825)
Balanced Portfolio............................................. $ 5,294,701 $ (385,094) $ 4,909,607
Growth and Income Portfolio.................................... $ 7,244,497 $ (477,483) $ 6,767,014
Growth Portfolio............................................... $ 14,777,752 $ (839,291) $ 13,938,461
Aggressive Growth Portfolio.................................... $ 7,762,150 $ (244,038) $ 7,518,112
Global Growth Portfolio........................................ $ 4,936,826 $ (1,206,203) $ 3,730,623
</TABLE>
For federal income tax purposes, the cost of securities owned at June 30, 1998
was substantially the same as the cost of securities for financial statement
purposes.
FEDERAL INCOME TAX STATUS
Each of the Portfolios intends to distribute 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.
50
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
At December 31, 1997, the following Portfolios had capital loss carryforwards
available as reductions, to the extent provided in the regulations, of any
future net gains realized before the end of the fiscal years indicated below:
<TABLE>
<CAPTION>
HIGH GRADE STRATEGIC
MONEY FIXED FIXED
MARKET INCOME INCOME
PORTFOLIO PORTFOLIO PORTFOLIO
----------- ----------- ---------
<S> <C> <C> <C>
2002...................................................................... $ 10,411 $ 11,787 --
2003...................................................................... -- -- --
2004...................................................................... -- -- $ 116,575
2005...................................................................... -- 50,227 --
----------- ----------- ---------
$ 10,411 $ 62,014 $ 116,575
----------- ----------- ---------
----------- ----------- ---------
</TABLE>
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.
SHARES OF BENEFICIAL INTEREST
There was an unlimited amount of $0.001 par value shares of beneficial
interest authorized. Transactions in shares of beneficial interest for each of
the Portfolios were as follows:
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED JUNE 30, 1998
------------------------------------------------------------------------------------------------------------------
GROWTH
MONEY HIGH GRADE STRATEGIC GLOBAL AND AGGRESSIVE GLOBAL
MARKET FIXED INCOME FIXED INCOME INCOME BALANCED INCOME GROWTH GROWTH GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ------------ ------------ --------- --------- --------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold.... 3,873,277 46,029 49,465 7,040 76,132 208,477 50,013 56,720 13,292
Shares
redeemed..... (3,411,487) (87,471) (105,565) (269,079) (310,618) (206,971) (355,322) (250,198) (235,855)
Reinvestment of
dividends.... 219,941 46,807 60,545 110,435 514,535 252,588 568,745 255,434 10,312
----------- ------------ ------------ --------- --------- --------- ---------- ---------- ---------
Net increase
(decrease) in
shares
outstanding... 681,731 5,365 4,445 (151,604) 280,049 254,094 263,436 61,956 (212,251)
----------- ------------ ------------ --------- --------- --------- ---------- ---------- ---------
----------- ------------ ------------ --------- --------- --------- ---------- ---------- ---------
</TABLE>
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1997
------------------------------------------------------------------------------------------------------------------
GROWTH
MONEY HIGH GRADE STRATEGIC GLOBAL AND AGGRESSIVE GLOBAL
MARKET FIXED INCOME FIXED INCOME INCOME BALANCED INCOME GROWTH GROWTH GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ------------ ------------ --------- --------- --------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold.... 6,100,044 112,751 128,208 48,364 132,366 305,770 109,171 191,122 77,628
Shares
redeemed..... (9,982,269) (240,926) (317,619) (754,708) (688,789) (349,095) (633,224) (356,820) (507,945)
Reinvestment of
dividends.... 500,956 49,957 72,277 152,314 378,119 210,259 400,838 124,554 10,446
----------- ------------ ------------ --------- --------- --------- ---------- ---------- ---------
Net increase
(decrease) in
shares
outstanding... (3,381,269) (78,218) (117,134) (554,030) (178,304) 166,934 (123,215) (41,144) (419,871)
----------- ------------ ------------ --------- --------- --------- ---------- ---------- ---------
----------- ------------ ------------ --------- --------- --------- ---------- ---------- ---------
</TABLE>
51
<PAGE>
MITCHELL HUTCHINS SERIES TRUST
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO
--------------------------------------------------------------------
FOR THE SIX
MONTHS ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, 1998 -----------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------- --------- --------- --------- --------- ---------
<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..................................... 0.02 0.04 0.04 0.05 0.03 0.02
------------- --------- --------- --------- --------- ---------
Dividends from net investment income...................... (0.02) (0.04) (0.04) (0.05) (0.03) (0.02)
------------- --------- --------- --------- --------- ---------
Net asset value, end of period............................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------- --------- --------- --------- --------- ---------
------------- --------- --------- --------- --------- ---------
Total investment return (1)............................... 2.34% 4.53% 4.32% 5.22% 3.43% 2.45%
------------- --------- --------- --------- --------- ---------
------------- --------- --------- --------- --------- ---------
Ratios/Supplemental Data:
Net assets, end of period (000's)......................... $ 9,588 $ 8,906 $ 12,287 $ 21,974 $ 25,042 $ 15,468
Expenses to average net assets............................ 0.98%* 1.22% 1.17% 0.79% 0.88% 0.86%
Net investment income to average net assets............... 4.68%* 4.43% 4.27% 5.23% 3.56% 2.43%
</TABLE>
- -----------------
<TABLE>
<S> <C>
* Annualized
(1) Total investment return is calculated assuming a $1,000 investment on the first day of each period reported, reinvestment
of all dividends 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 additional contract level charges; results would be lower if such charges were
included. Total investment return for periods less than one year has not been annualized.
</TABLE>
52
<PAGE>
MITCHELL HUTCHINS SERIES TRUST
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
HIGH GRADE FIXED INCOME PORTFOLIO
------------------------------------------------------------------
FOR THE PERIOD
FOR THE SIX NOVEMBER 8,
MONTHS ENDED FOR THE YEARS ENDED DECEMBER 31, 1993+
JUNE 30, 1998 ---------------------------------- TO DECEMBER
(UNAUDITED) 1997 1996 1995 1994 31, 1993
------------- ------- ------- ------- ------- --------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period......... $ 9.29 $ 9.10 $ 9.49 $ 8.71 $ 9.61 $10.00
------------- ------- ------- ------- ------- -------
Net investment income........................ 0.27 0.55 0.50 0.56 0.26 0.02
Net realized and unrealized gains (losses)
from investments............................ 0.11 0.19 (0.63) 0.79 (0.89) (0.39)
------------- ------- ------- ------- ------- -------
Net increase (decrease) from investment
operations.................................. 0.38 0.74 0.13 1.35 (0.63) (0.37)
------------- ------- ------- ------- ------- -------
Dividends from net investment income......... -- (0.55) (0.52) (0.57) (0.27) (0.02)
------------- ------- ------- ------- ------- -------
Net asset value, end of period............... $ 9.67 $ 9.29 $ 9.10 $ 9.49 $ 8.71 $ 9.61
------------- ------- ------- ------- ------- -------
------------- ------- ------- ------- ------- -------
Total investment return (1).................. 4.09% 8.13% 1.41% 15.44% (6.56)% (3.73)%
------------- ------- ------- ------- ------- -------
------------- ------- ------- ------- ------- -------
Ratios/Supplemental Data:
Net assets, end of period (000's)............ $ 7,691 $ 7,345 $ 7,902 $ 9,147 $ 7,638 $1,480
Expenses to average net assets**............. 1.20%* 1.43% 1.62% 1.01% 1.56% 0.00%
Net investment income to average net
assets**.................................... 5.63%* 5.54% 5.04% 5.56% 4.61% 3.90%*
Portfolio turnover rate...................... 37% 95% 282% 136% 36% 0%
</TABLE>
- -----------------
<TABLE>
<S> <C>
+ Commencement of operations
* Annualized
** During the period ended December 31, 1993, Mitchell Hutchins agreed to reimburse the Portfolio for all of its operating
expenses and waived all of its advisory fees. If such reimbursements and waivers had not been made, the annualized ratio
of expenses to average net assets and the annualized ratio of net investment loss to average net assets would have been
23.52% and (19.62)%, respectively.
(1) Total investment return is calculated assuming a $1,000 investment on the first day of each period reported, reinvestment
of all dividends and other distributions, if any, 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 additional contract level charges; results would be
lower if such charges were included. Total investment returns for periods of less than one year have not been annualized.
</TABLE>
53
<PAGE>
MITCHELL HUTCHINS SERIES TRUST
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
STRATEGIC FIXED INCOME PORTFOLIO
----------------------------------------------------------------
FOR THE SIX
MONTHS ENDED
JUNE 30, FOR THE YEARS ENDED DECEMBER 31,
1998 -------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------ ------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period......... $ 10.64 $ 10.21 $ 10.61 $ 10.34 $ 11.93 $ 11.58
------------ ------- -------- -------- -------- ---------
Net investment income........................ 0.33 0.69 0.70 0.88 0.85 0.87
Net realized and unrealized gains (losses)
from investments, futures and options....... 0.13 0.44 (1.09) 1.03 (1.49) 0.48
------------ ------- -------- -------- -------- ---------
Net increase (decrease) from investment
operations.................................. 0.46 1.13 0.39 1.91 (0.64) 1.35
------------ ------- -------- -------- -------- ---------
Dividends from net investment income......... -- (0.70) (0.70) (0.88) (0.85) (0.87)
Distributions from net realized gains from
investments................................. -- -- (0.09) (0.76) (0.10) (0.13)
------------ ------- -------- -------- -------- ---------
Total dividends and other distributions...... -- (0.70) (0.79) (1.64) (0.95) (1.00)
------------ ------- -------- -------- -------- ---------
Net asset value, end of period............... $ 11.10 $ 10.64 $ 10.21 $ 10.61 $ 10.34 $ 11.93
------------ ------- -------- -------- -------- ---------
------------ ------- -------- -------- -------- ---------
Total investment return (1).................. 4.32% 11.00% 3.79% 18.51% (5.34)% 11.66%
------------ ------- -------- -------- -------- ---------
------------ ------- -------- -------- -------- ---------
Ratios/Supplemental Data:
Net assets, end of period (000's)............ $ 10,367 $ 9,891 $ 10,689 $ 13,741 $ 17,020 $ 22,354
Expenses to average net assets............... 0.89%*+ 1.00% 1.52% 0.99% 0.89% 0.79%
Net investment income to average net
assets...................................... 5.98%* 6.04% 5.88% 6.35% 6.64% 6.13%
Portfolio turnover rate...................... 97% 175% 317% 234% 54% 8%
</TABLE>
- -----------------
<TABLE>
<S> <C>
* Annualized
+ Includes 0.09% of interest expenses related to the reverse repurchase agreements during the period.
(1) Total investment return is calculated assuming a $1,000 investment on the first day of each period reported, reinvestment
of all dividends and other distributions, if any, 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 additional contract level charges; results would be
lower if such charges were included. Total investment return for periods less than one year has not been annualized.
</TABLE>
54
<PAGE>
MITCHELL HUTCHINS SERIES TRUST
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
GLOBAL INCOME PORTFOLIO
-----------------------------------------------------------------
FOR THE SIX
MONTHS ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, 1998 --------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.... $ 10.81 $ 11.14 $ 11.20 $ 10.88 $ 11.72 $ 11.17
------------- -------- -------- -------- -------- ---------
Net investment income (loss)............ 0.34 0.75 0.87 (0.05) 0.97 0.96
Net realized and unrealized gains
(losses) from investments and foreign
currency............................... (0.05) (0.36) (0.13) 1.52 (1.60) 0.90
------------- -------- -------- -------- -------- ---------
Net increase (decrease) from investment
operations............................. 0.29 0.39 0.74 1.47 (0.63) 1.86
------------- -------- -------- -------- -------- ---------
Dividends from net investment income.... (0.01) (0.71) (0.79) (1.15) (0.21) (0.94)
Distributions in excess of net
investment income...................... -- -- -- -- -- (0.16)
Distributions from net realized gains
from investments....................... (0.01) (0.01) (0.01) -- -- (0.21)
------------- -------- -------- -------- -------- ---------
Total dividends and other
distributions.......................... (0.02) (0.72) (0.80) (1.15) (0.21) (1.31)
------------- -------- -------- -------- -------- ---------
Net asset value, end of period.......... $ 11.08 $ 10.81 $ 11.14 $ 11.20 $ 10.88 $ 11.72
------------- -------- -------- -------- -------- ---------
------------- -------- -------- -------- -------- ---------
Total investment return (1)............. 2.62% 3.50% 6.62% 13.58% (5.56)% 16.65%
------------- -------- -------- -------- -------- ---------
------------- -------- -------- -------- -------- ---------
Ratios/Supplemental Data:
Net assets, end of period (000's)....... $ 16,493 $ 17,730 $ 24,436 $ 35,700 $ 52,688 $ 64,610
Expenses to average net assets.......... 1.65%* 1.52% 1.56% 1.19% 1.17% 0.98%
Net investment income to average net
assets................................. 5.70%* 6.34% 6.56% 7.21% 7.23% 7.47%
Portfolio turnover rate................. 57% 142% 134% 160% 97% 69%
</TABLE>
- -----------------
<TABLE>
<S> <C>
* Annualized
(1) Total investment return is calculated assuming a $1,000 investment on the first day of each period reported, reinvestment
of all dividends and other distributions, if any, 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 additional contract level charges; results would be
lower if such charges were included. Total investment return for periods less than one year has not been annualized.
</TABLE>
55
<PAGE>
MITCHELL HUTCHINS SERIES TRUST
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
BALANCED PORTFOLIO+
-----------------------------------------------------------------
FOR THE SIX
MONTHS ENDED
JUNE 30, FOR THE YEARS ENDED DECEMBER 31,
1998 --------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------ -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.... $ 11.33 $ 10.95 $ 10.70 $ 9.54 $ 11.95 $ 11.63
------------ -------- -------- -------- -------- ---------
Net investment income................... 0.15 0.28 0.29 0.35 0.30 0.33
Net realized and unrealized gains
(losses) from investments.............. 1.17 2.44 1.49 1.88 (1.44) 1.48
------------ -------- -------- -------- -------- ---------
Net increase (decrease) from investment
operations............................. 1.32 2.72 1.78 2.23 (1.14) 1.81
------------ -------- -------- -------- -------- ---------
Dividends from net investment income.... -- (0.28) (0.28) (0.35) (0.30) (0.33)
Distributions from net realized gains
from investments....................... -- (2.06) (1.25) (0.72) (0.97) (1.16)
------------ -------- -------- -------- -------- ---------
Total dividends and other
distributions.......................... -- (2.34) (1.53) (1.07) (1.27) (1.49)
------------ -------- -------- -------- -------- ---------
Net asset value, end of period.......... $ 12.65 $ 11.33 $ 10.95 $ 10.70 $ 9.54 $ 11.95
------------ -------- -------- -------- -------- ---------
------------ -------- -------- -------- -------- ---------
Total investment return (1)............. 11.65% 24.86% 16.82% 23.27% (9.59)% 15.76%
------------ -------- -------- -------- -------- ---------
------------ -------- -------- -------- -------- ---------
Ratios/Supplemental Data:
Net assets, end of period (000's)....... $ 35,039 $ 28,211 $ 29,224 $ 23,413 $ 23,263 $ 33,367
Expenses to average net assets.......... 0.92%* 1.19% 1.24% 1.09% 1.03% 0.95%
Net investment income to average net
assets................................. 2.29%* 2.06% 2.29% 2.88% 2.30% 2.27%
Portfolio turnover rate................. 97% 169% 235% 171% 112% 60%
</TABLE>
- -----------------
<TABLE>
<S> <C>
* Annualized
+ Prior to the close of business on January 26, 1996, the Balanced Portfolio was known as the Asset Allocation Portfolio.
(1) Total investment return is calculated assuming a $1,000 investment on the first day of each period reported, reinvestment
of all dividends and other distributions, if any, 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 additional contract level charges; results would be
lower if such charges were included. Total investment returns for periods less than one year have not been annualized.
</TABLE>
56
<PAGE>
MITCHELL HUTCHINS SERIES TRUST
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
GROWTH AND INCOME PORTFOLIO
-----------------------------------------------------------------
FOR THE SIX
MONTHS ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, 1998 --------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.... $ 13.69 $ 12.27 $ 11.83 $ 9.16 $ 9.87 $ 10.26
------------- -------- -------- -------- -------- --------
Net investment income................... 0.04 0.10 0.06 0.10 0.10 0.16
Net realized and unrealized gains
(losses) from investments.............. 1.90 3.88 2.53 2.70 (0.71) (0.39)
------------- -------- -------- -------- -------- --------
Net increase (decrease) from investment
operations............................. 1.94 3.98 2.59 2.80 (0.61) (0.23)
------------- -------- -------- -------- -------- --------
Dividends from net investment income.... -- (0.10) (0.06) (0.10) (0.10) (0.16)
Distributions from net realized gains
from investments....................... -- (2.46) (2.09) (0.03) -- --
------------- -------- -------- -------- -------- --------
Total dividends and other
distributions.......................... -- (2.56) (2.15) (0.13) (0.10) (0.16)
------------- -------- -------- -------- -------- --------
Net asset value, end of period.......... $ 15.63 $ 13.69 $ 12.27 $ 11.83 $ 9.16 $ 9.87
------------- -------- -------- -------- -------- --------
------------- -------- -------- -------- -------- --------
Total investment return (1)............. 14.17% 32.45% 22.12% 30.52% (6.18)% (2.26)%
------------- -------- -------- -------- -------- --------
------------- -------- -------- -------- -------- --------
Ratios/Supplemental Data:
Net assets, end of period (000's)....... $ 25,078 $ 18,493 $ 14,520 $ 14,797 $ 12,872 $ 16,281
Expenses to average net assets.......... 1.03%* 1.04% 1.58% 1.37% 1.35% 1.12%
Net investment income to average net
assets................................. 0.51%* 0.71% 0.49% 0.94% 1.06% 1.37%
Portfolio turnover rate................. 31% 92% 99% 134% 150% 52%
</TABLE>
- -----------------
<TABLE>
<S> <C>
* Annualized
(1) Total investment return is calculated assuming a $1,000 investment on the first day of each period reported, reinvestment
of all dividends and other distributions, if any, 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 additional contract level charges; results would be
lower if such charges were included. Total investment return for periods less than one year has not been annualized.
</TABLE>
57
<PAGE>
MITCHELL HUTCHINS SERIES TRUST
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
GROWTH PORTFOLIO
-----------------------------------------------------------------
FOR THE SIX
MONTHS ENDED
JUNE 30, FOR THE YEARS ENDED DECEMBER 31,
1998 --------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------ -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.... $ 15.63 $ 17.48 $ 17.57 $ 14.56 $ 18.06 $ 15.68
------------ -------- -------- -------- -------- ---------
Net investment income (loss)............ (0.02) 0.03 (0.06) 0.04 0.01 0.00
Net realized and unrealized gains
(losses) from investments.............. 2.60 2.69 3.29 4.68 (2.13) 3.08
------------ -------- -------- -------- -------- ---------
Net increase (decrease) from investment
operations............................. 2.58 2.72 3.23 4.72 (2.12) 3.08
------------ -------- -------- -------- -------- ---------
Dividends from net investment income.... -- (0.03) -- (0.08) (0.01) --
Distributions from net realized gains
from investments....................... -- (4.54) (3.32) (1.63) (1.37) (0.70)
------------ -------- -------- -------- -------- ---------
Total dividends and other
distributions.......................... -- (4.57) (3.32) (1.71) (1.38) (0.70)
------------ -------- -------- -------- -------- ---------
Net asset value, end of period.......... $ 18.21 $ 15.63 $ 17.48 $ 17.57 $ 14.56 $ 18.06
------------ -------- -------- -------- -------- ---------
------------ -------- -------- -------- -------- ---------
Total investment return (1)............. 16.51% 15.41% 18.70% 32.50% (11.65)% 19.61%
------------ -------- -------- -------- -------- ---------
------------ -------- -------- -------- -------- ---------
Ratios/Supplemental Data:
Net assets, end of period (000's)....... $ 40,431 $ 30,586 $ 36,357 $ 42,784 $ 39,135 $ 51,696
Expenses to average net assets.......... 1.03%* 1.05% 1.14% 1.02% 1.00% 0.92%
Net investment income (loss) to average
net assets............................. (0.27)%* 0.12% (0.29)% 0.23% 0.04% 0.00%
Portfolio turnover rate................. 28% 89% 53% 41% 27% 35%
</TABLE>
- -----------------
<TABLE>
<S> <C>
* Annualized
(1) Total investment return is calculated assuming a $1,000 investment on the first day of each period reported, reinvestment
of all dividends and other distributions, if any, 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 additional contract level charges; results would be
lower if such charges were included. Total investment returns for periods less than one year have not been annualized.
</TABLE>
58
<PAGE>
MITCHELL HUTCHINS SERIES TRUST
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
AGGRESSIVE GROWTH PORTFOLIO
-------------------------------------------------------------------------------
FOR THE PERIOD
FOR THE SIX NOVEMBER 2,
MONTHS ENDED FOR THE YEARS ENDED DECEMBER 31, 1993+
JUNE 30, 1998 -------------------------------------------- TO DECEMBER
(UNAUDITED) 1997 1996 1995 1994 31, 1993
------------- -------- -------- -------- -------- --------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period........................... $ 13.40 $ 13.09 $ 11.34 $ 9.65 $ 9.95 $ 10.00
------------- -------- -------- -------- -------- -------
Net investment income (loss)...... (0.05) (0.09) (0.10) 0.03 0.01 0.01
Net realized and unrealized gains
(losses) from investments........ 2.46 2.78 2.93 2.00 (0.30) (0.05)
------------- -------- -------- -------- -------- -------
Net increase (decrease) from
investment operations............ 2.41 2.69 2.83 2.03 (0.29) (0.04)
------------- -------- -------- -------- -------- -------
Dividends from net investment
income........................... -- -- -- (0.02) (0.01) (0.01)
Distributions from net realized
gains from investments........... -- (2.38) (1.08) (0.32) -- --
------------- -------- -------- -------- -------- -------
Total dividends and other
distributions.................... -- (2.38) (1.08) (0.34) (0.01) (0.01)
------------- -------- -------- -------- -------- -------
Net asset value, end of period.... $ 15.81 $ 13.40 $ 13.09 $ 11.34 $ 9.65 $ 9.95
------------- -------- -------- -------- -------- -------
------------- -------- -------- -------- -------- -------
Total investment return (1)....... 17.99% 20.76% 25.23% 21.04% (2.90)% (0.36)%
------------- -------- -------- -------- -------- -------
------------- -------- -------- -------- -------- -------
Ratios/Supplemental Data:
Net assets, end of period
(000's).......................... $ 23,479 $ 19,076 $ 19,167 $ 17,660 $ 13,600 $ 2,814
Expenses to average net
assets**......................... 1.16%* 1.18% 1.52% 1.29% 1.59% 0.00%
Net investment income (loss) to
average net assets**............. (0.69)%* (0.59)% (0.74)% 0.23% 0.07% 3.31%*
Portfolio turnover rate........... 32% 89% 115% 119% 90% 0%
</TABLE>
- -----------------
<TABLE>
<S> <C>
+ Commencement of operations
* Annualized
** During the period ended December 31, 1993, Mitchell Hutchins agreed to reimburse the Portfolio for all of its operating
expenses and waived all of its advisory fees. If such reimbursements and waivers had not been made, the annualized ratio
of expenses to average net assets and the annualized ratio of net investment loss to average net assets would have been
12.28% and (8.97)%, respectively.
(1) Total investment return is calculated assuming a $1,000 investment on the first day of each period reported, reinvestment
of all dividends and other distributions, if any, 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 additional contract level charges; results would be
lower if such charges were included. Total investment returns for periods of less than one year have not been annualized.
</TABLE>
59
<PAGE>
MITCHELL HUTCHINS SERIES TRUST
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
GLOBAL GROWTH PORTFOLIO
-----------------------------------------------------------------
FOR THE SIX
MONTHS ENDED
JUNE 30, FOR THE YEARS ENDED DECEMBER 31,
1998 --------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period............................ $ 14.62 $ 13.74 $ 12.00 $ 12.44 $ 14.97 $ 11.10
------------ -------- -------- -------- -------- --------
Net investment income (loss)....... 0.08 0.04 0.07 0.01 (0.03) 0.03
Net realized and unrealized gains
(losses) from investments and
foreign currency.................. 2.43 0.94 1.75 (0.45) (1.76) 4.42
------------ -------- -------- -------- -------- --------
Net increase (decrease) from
investment operations............. 2.51 0.98 1.82 (0.44) (1.79) 4.45
------------ -------- -------- -------- -------- --------
Dividends from net investment
income............................ -- (0.04) (0.08) -- (0.01) --
Distributions from net realized
gains from investments............ -- (0.06) -- -- (0.73) (0.58)
------------ -------- -------- -------- -------- --------
Total dividends and other
distributions..................... -- (0.10) (0.08) 0.00 (0.74) (0.58)
------------ -------- -------- -------- -------- --------
Net asset value, end of period..... $ 17.13 $ 14.62 $ 13.74 $ 12.00 $ 12.44 $ 14.97
------------ -------- -------- -------- -------- --------
------------ -------- -------- -------- -------- --------
Total investment return (1)........ 17.17% 7.16% 15.14% (3.54)% (11.94)% 40.02%
------------ -------- -------- -------- -------- --------
------------ -------- -------- -------- -------- --------
Ratios/Supplemental Data:
Net assets, end of period
(000's)........................... $ 21,207 $ 21,215 $ 25,701 $ 28,507 $ 40,493 $ 38,035
Expenses to average net assets..... 1.26%* 1.07% 1.10% 1.96% 1.48% 1.40%
Net investment income (loss) to
average net assets................ 0.93%* 0.26% 0.46% 0.10% (0.13)% 0.38%
Portfolio turnover rate............ 33% 81% 44% 157% 175% 267%
</TABLE>
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<TABLE>
<S> <C>
* Annualized
(1) Total investment return is calculated assuming a $1,000 investment on the first day of each period reported, reinvestment
of all dividends and other distributions, if any, 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 additional contract level charges; results would be
lower if such charges were included. Total investment return for periods less than one year has not been annualized.
</TABLE>
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