MITCHELL HUTCHINS SERIES TRUST--GROWTH PORTFOLIO
SUPPLEMENT TO PROSPECTUS DATED MAY 1, 2000
October 10, 2000
Dear Investor,
This supplement to the Prospectus dated May 1, 2000 for Mitchell Hutchins
Series Trust--Growth Portfolio describes important changes affecting your fund.
These changes were proposed by Mitchell Hutchins Asset Management Inc.
("Mitchell Hutchins") and approved by your fund's board as in the best interests
of fund shareholders. If you have any questions about these changes, you should
contact your Financial Advisor.
The purpose of this supplement is to notify you of
o New investment management arrangements for the fund,
including the appointment of Alliance Capital
Management L.P. ("Alliance Capital") as sub-adviser,
effective October 10, 2000, and
o Related changes in the fund's investment strategies
and portfolio manager.
More information about the new investment management arrangements and
related investment strategy and portfolio manager changes is set out below.
Shareholders of the fund will be asked to approve its new investment management
arrangements at a meeting expected to be held in January or February 2001.
NEW INVESTMENT MANAGEMENT ARRANGEMENTS
On October 6, 2000, the board of trustees for Mitchell Hutchins Series
Trust terminated the existing Investment Advisory and Administration Contract
("Old Advisory Contract") with Mitchell Hutchins Asset Management Inc.
("Mitchell Hutchins") relating to the fund and approved new interim investment
management arrangements that became effective on October 10, 2000.
These new investment management arrangements for the fund consist of a new
Interim Investment Management and Administration Contract ("Interim Management
Contract") with Mitchell Hutchins and an Interim Sub-Advisory Contract with
Alliance Capital. Under the Interim Management Contract, Mitchell Hutchins'
primary portfolio management responsibility is to identify appropriate
sub-advisers to manage the MHST funds' assets and to supervise and monitor the
performance of those sub-advisers and make recommendations about the retention
or replacement of sub-advisers. These new interim contracts terminate
automatically 150 days after their effective dates. The fees payable by the fund
to Mitchell Hutchins under the Interim Management Contract are identical to the
fees under the Old Advisory Contract. Mitchell Hutchins (not the fund) pays
Alliance Capital for its services under the Interim Sub-Advisory Contract.
These arrangements and some related changes in the fund's investment
strategies are described in greater detail in the revisions to the fund's
Prospectus set out below.
AS A RESULT OF THESE CHANGES, THE PROSPECTUS DATED MAY 1, 2000 IS REVISED AS
FOLLOWS:
THE SECTION CAPTIONED "PRINCIPAL INVESTMENT STRATEGIES" ON P. 3 OF THE
PROSPECTUS IS REPLACED IN ITS ENTIRETY BY THE FOLLOWING:
PRINCIPAL INVESTMENT STRATEGIES
The fund invests primarily in stocks of companies that
its sub-adviser believes have substantial potential
for capital growth.
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The fund generally invests in larger capitalization
companies but has the flexibility to invest in
companies having any market capitalization. Some of
the fund's investments may be in U.S. dollar
denominated securities of foreign issuers, and the
fund also may invest in bonds. The fund may (but is
not required to) use derivatives as part of its
investment strategy or to help manage portfolio risks.
The fund's manager, Mitchell Hutchins Asset Management
Inc., has appointed Alliance Capital Management L.P.
("Alliance Capital") to serve as sub-adviser for the
fund's investments. In deciding which securities to
buy and sell for the fund, Alliance Capital will
generally consider, among other things, a company's
strength in fundamentals, its potential for earnings
growth over time, and the current price of its
securities relative to their perceived worth.
THE SECTION AT P. 7 OF THE PROSPECTUS CAPTIONED "INVESTMENT ADVISER" IS RETITLED
"INVESTMENT MANAGER AND SUB-ADVISER" AND IS REPLACED IN ITS ENTIRETY WITH THE
FOLLOWING:
Mitchell Hutchins Asset Management Inc. is the fund's
manager and administrator. Mitchell Hutchins is
located at 51 West 52nd Street, New York, New York,
10019-6114, and is a wholly owned asset management
subsidiary of PaineWebber Incorporated, which is
wholly owned by Paine Webber Group Inc. ("PW Group"),
a publicly owned financial services holding company.
On August 31, 2000, Mitchell Hutchins was adviser or
sub-adviser of 31 investment companies with 75
separate portfolios and aggregate assets of
approximately $57.7 billion.
On July 12, 2000, PW Group and UBS AG ("UBS")
announced that they had entered into an agreement and
plan of merger under which PW Group will merge into a
wholly owned subsidiary of UBS. If all required
approvals are obtained and the required conditions are
satisfied, PW Group and UBS expect to complete the
transaction in November 2000. UBS, with headquarters
in Zurich, Switzerland, is an internationally
diversified organization with operations in many areas
of the financial services industry.
Alliance Capital Management L.P. ("Alliance Capital"),
located at 1345 Avenue of the Americas, New York, New
York 10105, is the fund's sub-adviser. Alliance
Capital is a leading global investment management firm
with approximately $388 billion in assets under
management at June 30, 2000.1 Alliance Capital manages
retirement assets for many of the largest U.S. public
and private employee benefit plans, for public
employee retirement funds, and for foundations,
pension funds, endowments, bank, insurance companies
and high net worth individuals worldwide. Alliance
Capital is also one of the largest mutual fund
sponsors, with a diverse family of globally
distributed mutual fund portfolios and approximately
6.1 million shareholder accounts.
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1 The combined (pro forma) assets under management of Alliance Capital and
Sanford C. Bernstein, Inc., the assets and liabilities of which Alliance
Capital acquired on October 2, 2000, totaled approximately $470 billion as of
June 30, 2000.
2
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THE SECTION AT P. 7 OF THE PROSPECTUS CAPTIONED "PORTFOLIO MANAGER" IS
REPLACED IN ITS ENTIRETY BY THE FOLLOWING:
PORTFOLIO MANAGER
Tyler J. Smith, a senior vice president and portfolio
manager at Alliance Capital, is primarily responsible
for the day-to-day management of the fund's
investments and has held his fund responsibilities
since October 10, 2000. Mr. Smith joined Alliance
Capital in 1993 from Equitable Capital. He has 37
years of investment experience and is currently
responsible for the common stock portfolio of the EQ
Advisors Trust, the Alliance Growth Fund, and several
single client portfolios. Prior to joining The
Equitable as an analyst in 1970, Mr. Smith spent five
years managing investment portfolios for Smith
Barney's private client group. He also served as a
general partner of a small private investment
partnership. A member of the New York Society of
Security Analysts and a Chartered Financial Analyst,
Mr. Smith received a bachelor's degree in economics
from Williams College.
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