<PAGE>
MITCHELL HUTCHINS SERIES TRUST--GLOBAL EQUITY PORTFOLIO
SEMIANNUAL REPORT
August 15, 2000
Dear Contract Owner,
We are pleased to present you with the semiannual report for Mitchell Hutchins
Series Trust--Global Equity Portfolio for the six-month period ended June 30,
2000.
MARKET REVIEW
--------------------------------------------------------------------------------
U.S. STOCK MARKET
[GRAPHIC]
The first six months of 2000 produced a wild ride for the U.S. equity market.
Investors seemed to change their focus daily while technology stocks, in
particular, rode a roller coaster. Early in the year, value-oriented, cyclical
stocks rewarded investors and the NASDAQ continued its torrid increase before a
correction knocked down stock prices in general through May. Rising interest
rates and overpriced stock valuations contributed to the decline, but
performance recovered somewhat in June. For the period, the S&P 500 declined
0.43% and the NASDAQ was down 2.54%, which includes a 13.27% dip in the second
quarter.
While growth stocks suffered, value stocks also shared in the decline as the
Russell 1000 Value Index declined 4.23% during the period. Pockets of strength,
such as utilities and mid-caps, shone through the general decline. With growth
expected now to slow to an annual rate of 3.5% by year-end and Federal Reserve
belt-tightening looking like it is nearing an end, the markets may stabilize as
the Federal Reserve takes either no more action this year or produces one more
preventative rate increase.
INTERNATIONAL STOCK MARKETS
The decline of U.S. technology stocks during the period carried over to portions
of the world economy, driving European stocks down in May and acutely affecting
Asian economies. Measured by the Morgan Stanley Capital International World
Index, stocks were down worldwide 2.41% over the first six months of the year,
with the MSCI Asia Pacific Index showing a steep 6.67% decline and the Morgan
Stanley EAFE Index falling 3.95% (all returns in U.S. dollar terms).
Economic growth in Japan showed signs of improvement during the period. However,
domestic wholesale prices also rose for four consecutive months, and the Bank of
Japan responded by raising interest rates above zero for the first time in
years. Emerging Asian countries, including South Korea and Taiwan, continued to
exhibit signs of growth. Latin America joined other emerging markets struggling
because of the NASDAQ's performance, but signs of encouragement also became
evident during the period. Mexico's election of Vicente Fox in the country's
presidential contest was both democratic and peaceful, fueling hope for the
future. Brazil's economic atmosphere has become more stable, with falling
interest rates, attractive valuations and reasonable growth rates.
Europe, however, continues to lead the way with a continued strong economy and a
euro that is now recovering from its low in May against the U.S. dollar.
Germany's market, which had performed well a year ago despite a faltering
economy, is slowing now. France, Sweden and the United Kingdom, however, have
fared well and Europe's economy looks as if it is on firm ground with
sustainable growth and low interest rates.
1
<PAGE>
SEMIANNUAL REPORT
PORTFOLIO REVIEW
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS, PERIODS ENDED 6/30/00
<TABLE>
<CAPTION>
6 Months 1 Year 5 Years 10 Years Inception*
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class H -2.47% 10.78% 10.55% 6.19% 7.40%
Class I -2.67% N/A N/A N/A N/A
MSCI World Index -2.41% 12.53% 17.53% 12.52% 11.16%
------------------------------------------------------------------------------------------------------
</TABLE>
* Inception: since commencement of issuance on May 4, 1987 for Class H shares
and August 5, 1999 for Class I shares. Index performance is shown as of
inception of oldest share class.
The investment return and the principal value of an investment in the Portfolio
will fluctuate, so that an investor's shares, when redeemed, may be worth more
or less than their original cost. Returns for periods of less than one year are
not annualized. Past performance is no guarantee of future performance. Figures
assume reinvestment of all dividends and capital gains distributions, if any, at
net asset value on the payable dates and do not include sales charges. In
addition, for the fiscal year ended December 31, 1999, and the period from
January 1, 2000 through February 29, 2000, the Portfolio's adviser voluntarily
waived payment of certain fees for Class I shares. Without this waiver
performance would have been lower. Performance relates to the Portfolio and does
not reflect separate account charges applicable to variable annuity contracts.
PORTFOLIO HIGHLIGHTS
The euro's weakness against the U.S. dollar, Japan's market downturn after a
strong 1999 and the U.S. market's correction, despite underweighting in the
Portfolio, were key factors holding back the Portfolio's six-month performance
as of June 30, 2000.
We increased our exposure to U.S. securities in May, adding to our exposure of
financials, oil and pharmaceuticals stocks. We also added to our weighting of
European securities by buying financials and adding to technology stocks when
they presented value. Weighting of Japan stocks was reduced, leaving us neutral
against the benchmark, and we reduced our position of other Asian securities,
rebalancing the Portfolio toward beneficiaries of domestic financial strength.
Our portfolio strategy in recent months has leaned toward more diversification,
as the market correction was strongest in technology, media and
telecommunications stocks. Information technology hardware remains our largest
overweight position, as the sector shows continued growth and reasonable
valuations. Individual portfolio holdings in France, Germany, Sweden and the
United Kingdom also fared well, as stock selection played a key role in this
performance. The Netherlands reported the largest negative attribution to
performance during the period.
2
<PAGE>
MITCHELL HUTCHINS SERIES TRUST--GLOBAL EQUITY PORTFOLIO
SEMIANNUAL REPORT
MARKET OUTLOOK
--------------------------------------------------------------------------------
Interest rate hikes in the U.S. may have finally cooled the economy as we now
forecast growth (real domestic gross product) to slow to 3.5% for the year. With
lower growth, inflation fears should also be eased, although another bump in
gasoline prices or the tight labor market could always accelerate inflation
again. The Federal Reserve Board may also not be finished raising the Fed Funds
rate, which stood at 6.50% at the end of the period, but we believe any hike in
the near term may end the upward trend for a while.
As the U.S. economy steers toward a soft landing, equity markets are likely to
continue on an uncertain path for the remainder of 2000. Upbeat news, however,
including expected positive earnings reports and moderate economic growth, may
bode well for the markets through the election season.
The outlook for Europe remains positive. The euro is trading at attractive
values, helping industrial production growth. European consumer confidence is
high due to tax reform in Germany that may spread to other parts of Europe.
Although Asia remains sluggish we cannot rule out fiscal stimulus, especially
from Japan's government, to help increase consumption. We believe opportunities
will continue to present themselves in Latin America as interest rates are
reduced.
CURRENT STRATEGY AND OUTLOOK
After underweighting U.S. securities, the Portfolio's managers have now
increased our holdings in this area near the neutral point. We believe that
barring unforeseen inflationary pressures, the U.S. market will begin to
stabilize. The percentage of U.K.-based holdings has also been increased, while
Japan is now underweighted.
In the United States, sectors that should benefit in the coming months will best
adapt to a slowing economy and growth abroad. These groups include: consumer
cyclicals, especially retail, where value exists and a strong back-to-school
season is forecast; capital goods, especially those with exposure to foreign
markets, where growth and interest rates are favorable; and technology, which
presents opportunities when bought on weakness.
3
<PAGE>
SEMIANNUAL REPORT
PORTFOLIO STATISTICS
<TABLE>
<CAPTION>
ASSET ALLOCATION* 6/30/00 12/31/99
-----------------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. 43.1% 34.7%
International 56.9 65.3
-----------------------------------------------------------------------------------------------------
Total 100.0 100.0
<CAPTION>
TOP FIVE COUNTRIES* 6/30/00 12/31/99
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
United States 43.1% United States 34.7%
United Kingdom 13.4 Japan 11.2
France 10.5 Netherlands 9.5
Japan 8.2 France 9.1
Netherlands 6.9 United Kingdom 9.1
-----------------------------------------------------------------------------------------------------
Total 82.1 Total 73.6
<CAPTION>
TOP TEN STOCKS* 6/30/00 12/31/99
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Aventis 2.1% Fujitsu 2.0%
Philips Electronics 1.7 Kon KPN 1.9
Ericsson 1.7 Ericsson 1.8
Alcatel 1.7 Philips Electronics 1.8
ING Groep 1.6 Cap Gemini 1.6
BP Amoco 1.6 Getronics 1.5
Total Fina 1.6 Vnu 1.5
AXA 1.5 Alcatel 1.4
JDS Uniphase 1.3 Nokia 1.4
Diageo 1.3 Yamada Denki 1.4
-----------------------------------------------------------------------------------------------------
Total 16.1 Total 16.3
<CAPTION>
PORTFOLIO CHARACTERISTICS* 6/30/00 12/31/99
-----------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Assets ($mm) $10.7 $13.4
Number of Securities 149 167
Stocks 88.1% 98.6%
Cash 13.0% 1.4%
Other Liabilities in Excess of Assets -1.1% 0.0%
-----------------------------------------------------------------------------------------------------
<CAPTION>
TOP FIVE SECTORS* 6/30/00 12/31/99
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Technology 19.9% Technology 17.1%
Financial Services 18.8 Consumer Cyclical 16.3
Utilities 12.3 Financial Services 15.9
Consumer Cyclical 10.6 Utilities 10.5
Energy 7.9 Capital Goods 5.8
-----------------------------------------------------------------------------------------------------
Total 69.5 Total 65.6
</TABLE>
* Weightings represent percentages of net assets as of the dates indicated. The
Portfolio is actively managed and its composition will vary over time.
4
<PAGE>
MITCHELL HUTCHINS SERIES TRUST--GLOBAL EQUITY PORTFOLIO
SEMIANNUAL REPORT
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,
/S/ Margo Alexander /s/ Brian M. Storms
--------------------- ---------------------
MARGO ALEXANDER BRIAN M. STORMS
Chairman and President and
Chief Executive Officer Chief Executive Officer
Mitchell Hutchins Mitchell Hutchins
Asset Management Inc. Asset Management /inc.
This letter is intended to assist shareholders in understanding how the
Portfolio performed during the six-month period ended June 30, 2000, and
reflects our views at the time of its writing. Of course, these views may change
in response to changing circumstances.
5
<PAGE>
MITCHELL HUTCHINS SERIES TRUST--GLOBAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
---------- ---------
<S> <C>
COMMON STOCKS--88.06%
AUSTRALIA--1.78%
BANKS--0.65%
4,134 National Australia Bank, Ltd. ........................ $ 68,973
------------
MEDIA--1.13%
2,000 News Corp. Ltd. ADR(1) ............................... 109,000
1,600 Publishing & Broadcasting Ltd. ....................... 12,296
------------
121,296
------------
Total Australia Common Stocks ................................... 190,269
------------
AUSTRIA--0.39%
ENERGY SOURCES--0.39%
478 OMV AG ............................................... 41,528
------------
CANADA--1.06%
BANKS--0.54%
1,136 Royal Bank of Canada
Montreal Quebec .................................... 58,143
------------
MINING & METALS--0.52%
1,010 Potash Corp. of Saskatchewan Inc. .................... 55,740
------------
Total Canada Common Stocks ...................................... 113,883
------------
FINLAND--1.54%
ELECTRICAL EQUIPMENT--1.26%
2,628 Nokia OYJ ............................................ 134,104
------------
LONG DISTANCE & PHONE COMPANIES--0.28%
400 Elisa Communications-A Shares ........................ 18,330
121 Helsingin Puhelin OYJ-Series E ....................... 11,852
------------
30,182
------------
Total Finland Common Stocks ..................................... 164,286
------------
FRANCE--10.47%
BANKS--0.88%
980 BNP Paribas .......................................... 94,309
------------
BUILDING MATERIALS & COMPONENTS--0.43%
596 Lafarge .............................................. 46,317
------------
CHEMICALS--0.44%
2,830 Rhodia Inc. S.A. ..................................... 47,552
------------
COMPUTER-BUSINESS SERVICES--0.30%
185 Cap Gemini ........................................... 32,586
------------
ENERGY SOURCES--1.56%
1,088 Total Fina Elf S.A. .................................. 166,818
------------
FINANCIAL SERVICES--0.66%
400 Suez Lyonnaise Des Eaux S.A. ......................... 70,075
------------
HEALTH & PERSONAL CARE--2.06%
3,023 Aventis FP ........................................... 220,639
------------
INDUSTRIAL SERVICES & SUPPLIES--0.99%
1,200 Vivendi .............................................. 105,914
------------
FRANCE--(CONCLUDED)
INSURANCE--1.49%
1,010 AXA .................................................. 159,101
------------
WIRELESS TELECOMMUNICATIONS--1.66%
2,700 Alcatel .............................................. 177,087
------------
Total France Common Stocks ...................................... 1,120,398
------------
GERMANY--1.94%
BANKS--0.77%
1,000 Deutsche Bank AG ..................................... 82,295
------------
DIVERSIFIED INDUSTRIALS--1.17%
830 Siemens AG ........................................... 125,200
------------
Total Germany Common Stocks ..................................... 207,495
------------
GREECE--0.41%
WIRELESS TELECOMMUNICATIONS--0.41%
3,639 Hellenic Telecommunications
Organization ADR ................................... 44,350
------------
IRELAND--0.73%
BANKS--0.73%
12,488 Bank of Ireland ...................................... 78,248
------------
ISRAEL--0.57%
ELECTRICAL EQUIPMENT--0.57%
660 Orbotech Ltd.* ....................................... 61,297
------------
JAPAN--8.21%
APPAREL, RETAIL--0.39%
100 Fast Retailing Co Ltd ................................ 41,845
------------
BANKS--0.52%
7,000 Sanwa Bank Ltd ....................................... 55,813
------------
COMPUTER HARDWARE--1.17%
4,000 NEC Corp. ............................................ 125,536
------------
DATA PROCESSING & REPRODUCTION--0.56%
1,200 Canon Inc. ........................................... 59,714
------------
DRUGS & MEDICINE--0.33%
1,000 Taisho Pharmaceutical Co. Ltd ........................ 35,814
------------
ELECTRICAL & ELECTRONICS--0.70%
800 Sony Corp. ........................................... 74,643
------------
ELECTRONIC COMPONENTS--1.70%
2,000 Fujitsu Ltd .......................................... 69,176
10,000 Toshiba Corp. ........................................ 112,813
------------
181,989
------------
FINANCIAL SERVICES--0.62%
200 Acom Co Ltd .......................................... 16,814
5,000 Nikko Securities Co. Ltd. ............................ 49,479
------------
66,293
------------
</TABLE>
6
<PAGE>
MITCHELL HUTCHINS SERIES TRUST--GLOBAL EQUITY PORTFOLIO
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
---------- ----------
<S> <C>
COMMON STOCKS--(CONTINUED)
JAPAN--(CONCLUDED)
HEALTH & PERSONAL CARE--0.31%
500 Takeda Chemical Industries ........................... $ 32,798
------------
LONG DISTANCE & PHONE COMPANIES--0.82%
5 DDI Corp. ............................................ 48,066
3 Nippon Telephone & Telegraph Co. ..................... 39,866
------------
87,932
------------
MERCHANDISING--0.84%
1,000 Yamada Denki Co. ..................................... 89,628
------------
WIRELESS TELECOMMUNICATIONS--0.25%
1 NTT Docomo Inc. ...................................... 27,049
------------
Total Japan Common Stocks ....................................... 879,054
------------
ITALY--0.53%
BANKS--0.53%
3,200 San Paolo-IMI SPA .................................... 56,793
------------
KOREA--1.00%
ELECTRICAL EQUIPMENT--0.56%
180 Samsung Electronic ................................... 59,568
------------
WIRELESS TELECOMMUNICATIONS--0.44%
979 Korea Telecom Corp. .................................. 47,359
------------
Total Korea Common Stocks ....................................... 106,927
------------
NETHERLANDS--6.87%
BANKS--1.56%
2,470 ING Groep N.V. ....................................... 166,954
------------
COMPUTER-BUSINESS SERVICES--0.89%
6,150 Getronics N.V. ....................................... 94,823
------------
FOOD & HOUSEHOLD PRODUCTS--0.30%
700 Unilever N.V. ........................................ 32,111
------------
FOOD RETAIL--0.32%
712 Koninklijke Numico N.V. .............................. 33,783
------------
FOREST PRODUCTS, PAPER--0.77%
2,877 Buhrmann N.V. ........................................ 82,263
------------
PUBLISHING--0.40%
840 Vnu N.V. ............................................. 43,386
------------
SEMICONDUCTOR--1.71%
3,884 Koninklijke Philips Electronics N.V. ................. 183,178
------------
WIRELESS TELECOMMUNICATIONS--0.92%
2,208 Kon KPN N.V. ......................................... 98,759
------------
Total Netherlands Common Stocks ................................. 735,257
------------
NEW ZEALAND--0.81%
WIRELESS TELECOMMUNICATIONS--0.81%
24,819 Telecom Corp. of New Zealand Ltd. .................... 86,737
------------
NORWAY--0.46%
OIL SERVICES--0.46%
2,900 Petroleum Geo Services ASA ........................... 49,513
------------
PORTUGAL--0.80%
RAILROADS--0.80%
9,885 Brisa Auto Estrada ................................... 85,124
------------
SPAIN--0.61%
LONG DISTANCE & PHONE COMPANIES--0.14%
700 Telefonica S.A. ...................................... 15,037
------------
WIRELESS TELECOMMUNICATIONS--0.47%
2,700 Telecomunicacoes De Sao Paulo ........................ 49,950
------------
Total Spain Common Stocks ....................................... 64,987
------------
SWEDEN--3.79%
BANKS--1.19%
16,864 Nordic Baltic Holding AB ............................. 127,149
------------
FINANCIAL SERVICES--0.93%
7,310 Investor AB-B Shares ................................. 99,870
------------
WIRELESS TELECOMMUNICATIONS--1.67%
9,004 Ericsson LM B Shares ................................. 178,141
------------
Total Sweden Common Stocks ...................................... 405,160
------------
SWITZERLAND--2.63%
BANKS--0.78%
572 UBS AG ............................................... 83,803
------------
HEALTH & PERSONAL CARE--0.90%
61 Novartis AG Ltd ...................................... 96,625
------------
INSURANCE--0.95%
205 Zurich Allied AG ..................................... 101,287
------------
Total Switzerland Common Stocks ................................. 281,715
------------
UNITED KINGDOM--13.38%
AEROSPACE & DEFENSE--0.42%
12,800 Rolls-Royce PLC ...................................... 45,417
------------
BEVERAGES & TOBACCO--1.33%
15,863 Diageo PLC ........................................... 142,334
------------
BROADCASTING & PUBLISHING--0.77%
5,715 United News & Media PLC .............................. 82,150
------------
BUILDING MATERIALS & COMPONENTS--0.43%
3,500 RMC Group PLC ........................................ 45,544
------------
BUSINESS & PUBLIC SERVICES--0.41%
3,000 WPP Group PLC ........................................ 43,804
------------
DRUGS & MEDICINE--0.98%
3,600 Glaxo Wellcome PLC ................................... 104,967
------------
ELECTRONIC COMPONENTS--0.36%
5,700 Spirent PLC .......................................... 38,337
------------
</TABLE>
7
<PAGE>
MITCHELL HUTCHINS SERIES TRUST--GLOBAL EQUITY PORTFOLIO
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
---------- ---------
<S> <C>
COMMON STOCKS--(CONTINUED)
UNITED KINGDOM--(CONCLUDED)
FINANCIAL SERVICES--0.96%
6,409 Amvescap PLC ......................................... $ 102,793
------------
FOOD & HOUSEHOLD PRODUCTS--0.82%
5,015 Reckitt Benckiser PLC ................................ 56,152
5,300 Unilever PLC ......................................... 32,078
------------
88,230
------------
GAS UTILITY--0.30%
5,050 BG Group ............................................. 32,628
------------
HEALTH & PERSONAL CARE--0.62%
1,429 Astrazeneca PLC ...................................... 66,427
------------
INSURANCE--0.94%
15,500 Royal & Sun Alliance Insurance Group ................. 100,614
------------
LEISURE & TOURISM--0.47%
3,921 Carlton Communications PLC ........................... 50,429
------------
MEDIA--0.42%
15,140 Aegis Group PLC ...................................... 44,557
------------
MULTI-INDUSTRY--0.11%
3,515 Cookson Group PLC .................................... 11,727
------------
OIL REFINING--1.56%
17,400 BP Amoco PLC ......................................... 166,919
------------
WIRELESS TELECOMMUNICATIONS--2.48%
6,200 British Telecommunications PLC ....................... 80,116
5,000 Cable & Wireless PLC ................................. 84,658
24,827 Vodafone Group ....................................... 100,300
------------
265,074
------------
Total United Kingdom Common Stocks .............................. 1,431,951
------------
UNITED STATES--30.08%
AIRLINES--0.28%
604 Delta Air Lines, Inc. ................................ 30,540
------------
BANKS--1.64%
2,292 Chase Manhattan Corp. ................................ 105,575
1,154 Citigroup, Inc. ...................................... 69,529
------------
175,104
------------
CHEMICALS--0.43%
1,521 Dow Chemical Co. ..................................... 45,915
------------
COMPUTER HARDWARE--1.85%
1,930 Cisco Systems Inc.* .................................. 122,676
1,528 Dell Computer Corp.* ................................. 75,349
------------
198,025
------------
COMPUTER SOFTWARE--2.45%
801 BMC Software, Inc.* .................................. 29,224
735 IBM Corp. ............................................ 80,528
1,338 Microsoft Corp.* ..................................... 107,040
UNITED STATES--(CONTINUED)
COMPUTER SOFTWARE--(CONCLUDED)
3,104 Unisys Corp.* ........................................ 45,202
------------
261,994
------------
CONSTRUCTION--0.25%
1,126 Centex Corp. ......................................... 26,461
------------
CONSUMER DURABLES--0.24%
557 Whirlpool Corp. ...................................... 25,970
------------
DEFENSE & AEROSPACE--0.65%
1,081 Boeing Co. ........................................... 45,199
573 TRW Inc. ............................................. 24,854
------------
70,053
------------
DIVERSIFIED RETAIL--1.20%
1,609 Federated Department Stores, Inc.* ................... 54,304
1,287 Target Corp. ......................................... 74,646
------------
128,950
------------
DRUGS & MEDICINE--1.84%
2,073 Pfizer, Inc. ......................................... 99,504
1,927 Schering-Plough Corp. ................................ 97,313
------------
196,817
------------
ELECTRIC UTILITIES--0.29%
191 Duke Energy Corp. .................................... 10,768
1,046 Energy East Corp. .................................... 19,939
------------
30,707
------------
ELECTRICAL EQUIPMENT--0.94%
602 Honeywell, Inc. ...................................... 20,280
403 Johnson Controls, Inc. ............................... 20,679
2,070 Motorola, Inc. ....................................... 60,159
------------
101,118
------------
ELECTRICAL POWER--0.26%
470 Emerson Electric Co. ................................. 28,376
------------
ENERGY RESERVES & PRODUCTION--2.80%
658 Chevron Corp. ........................................ 55,807
1,630 Exxon Mobil Corp. .................................... 127,955
616 Phillips Petroleum Co. ............................... 31,224
1,368 Royal Dutch Petroleum Co., ADR ....................... 84,217
------------
299,203
------------
ENTERTAINMENT--0.31%
483 Viacom, Inc., Class B* ............................... 32,935
------------
FINANCIAL SERVICES--0.73%
700 Federal Home Loan Mortgage Corp. ..................... 28,350
1,112 MBNA Corp. ........................................... 30,163
219 Providian Financial Corp. ............................ 19,710
------------
78,223
------------
</TABLE>
8
<PAGE>
MITCHELL HUTCHINS SERIES TRUST--GLOBAL EQUITY PORTFOLIO
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
---------- ----------
<S> <C>
COMMON STOCKS--(CONCLUDED)
UNITED STATES--(CONTINUED)
FOREST PRODUCTS, PAPER--0.80%
644 Georgia-Pacific Corp. ................................ $ 16,905
462 International Paper Co. .............................. 13,773
1,268 Weyerhaeuser Co. ..................................... 54,524
------------
85,202
------------
GAS UTILITY--0.51%
1,064 El Paso Energy Corp. ................................. 54,197
------------
INDUSTRIAL PARTS--1.40%
619 Ingersoll Rand Co. ................................... 24,915
1,931 Mettler-Toledo International Inc.* ADR ............... 77,240
804 United Technologies Corp. ............................ 47,335
------------
149,490
------------
INDUSTRIAL SERVICES & SUPPLIES--0.39%
883 Tyco International Ltd., ADR ......................... 41,832
------------
INFORMATION & COMPUTER SERVICES--0.13%
258 America Online Inc.* ................................. 13,610
------------
LONG DISTANCE & PHONE COMPANIES--0.81%
1,881 WorldCom Inc.* ....................................... 86,291
------------
MEDIA--0.23%
615 Comcast Corp., Class A ............................... 24,908
------------
MEDICAL PRODUCTS--0.35%
527 Baxter International, Inc. ........................... 37,055
------------
MINING & METALS--0.47%
1,734 Alcoa, Inc. .......................................... 50,286
------------
MOTOR VEHICLES--1.23%
965 Borg Warner Automotive, Inc. ......................... 33,896
561 Delphi Automotive Systems Corp. ...................... 8,169
1,600 Ford Motor Co. ....................................... 68,806
1,046 Lear Corp.* .......................................... 20,920
------------
131,791
------------
OIL REFINING--0.34%
600 Conoco, Inc. ......................................... 14,738
785 Tosco Corp. .......................................... 22,225
------------
36,963
------------
OIL SERVICES--0.77%
1,296 Halliburton Co. ...................................... 61,155
400 Transocean Sedco Forex, Inc. ......................... 21,375
------------
82,530
------------
OTHER INSURANCE--0.43%
845 AMBAC Financial Group Inc. ........................... 46,317
------------
UNITED STATES--(CONCLUDED)
PUBLISHING--0.80%
1,059 Knight Ridder, Inc. .................................. 56,326
734 New York Times Co., Class A .......................... 28,993
------------
85,319
------------
SECURITIES & ASSET MANAGEMENT--1.33%
1,422 AXA Financial Inc. ................................... 48,348
1,126 Morgan Stanley Dean Witter & Co. ..................... 93,739
------------
142,087
------------
SEMICONDUCTOR--3.55%
886 Applied Materials, Inc.* ............................. 80,294
1,458 Atmel Corp.* ......................................... 53,764
580 Intel Corp. .......................................... 77,539
1,197 JDS Uniphase Corp.* .................................. 143,490
339 Vitesse Semiconductor Corp.* ......................... 24,937
------------
380,024
------------
SPECIALTY RETAIL--0.38%
842 Circuit City Stores, Inc. ............................ 27,944
800 Staples, Inc.* ....................................... 12,300
------------
40,244
------------
Total United States Common Stocks ............................... 3,218,537
------------
Total Common Stocks (cost--$8,256,795) .......................... 9,423,509
------------
</TABLE>
9
<PAGE>
MITCHELL HUTCHINS SERIES TRUST--GLOBAL EQUITY PORTFOLIO
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) MATURITY DATES INTEREST RATES VALUE
----------- -------------- -------------- --------
<S> <C> <C> <C>
U.S. GOVERNMENT AND AGENCY [email protected]%
$1,190 Federal Farm Credit Bank Discount Note .............................. 07/03/00 6.570% $ 1,189,566
200 United States Treasury Bills++ ...................................... 08/10/00 5.940 198,680
-----------
Total U.S. Government and Agency Obligations (cost--$1,388,246) ................ 1,388,246
-----------
Total Investments (cost--$9,645,041)--101.04% .................................. 10,811,755
Liabilities in excess of other assets--(1.04)% ................................. (110,779)
-----------
Net Assets--100.00% ............................................................ $10,700,976
===========
</TABLE>
---------------------------
@ Interest rate shown is the discount rate at date of purchase.
* Non-income producing security.
++ Entire principal amount pledged as collateral for futures transactions.
ADR American Depositary Receipt.
(1) Security, or a portion thereof, was on loan at June 30, 2000.
FUTURES CONTRACTS
<TABLE>
<CAPTION>
UNREALIZED
NUMBER OF IN EXPIRATION APPRECIATION/
CONTRACTS OUTSTANDING FUTURE CONTRACTS EXCHANGE FOR DATE DEPRECIATION
--------- ---------------------------------------------------- ------------- ---------- -------------
<C> <S> <C> <C> <C>
2 CAC40 Ten Euro (France) $125,413 Jul 2000 $ (2,764)
1 DAX Index (Germany) 176,258 Sep 2000 1,447
4 FTSE Index (United Kingdom) 394,445 Sep 2000 (2,617)
1 IBEX Plus (Spain) 100,340 Jul 2000 (9,893)
3 OMX Index (Sweden) 46,285 Jul 2000 (11,179)
6 S&P Mini (United States) 443,115 Sep 2000 0
1 SFE 48,289 Sep 2000 (3,715)
2 Topix Index (Japan) 299,438 Sep 2000 379
---------
$(28,342)
=========
</TABLE>
See accompanying notes to financial statements
10
<PAGE>
MITCHELL HUTCHINS SERIES TRUST--GLOBAL EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C>
ASSETS
Investments, at value (cost--$9,645,041) ................................................................... $ 10,811,755
Investment of cash collateral received for securities loaned, at value (cost--$102,600) .................... 102,600
Cash (including cash denominated in foreign currencies at value with a cost of $23,421) .................... 23,334
Receivable for investments sold ............................................................................ 48,131
Dividends receivable ....................................................................................... 18,109
Futures variation margin receivable ........................................................................ 3,776
Other assets ............................................................................................... 14,704
-------------
Total assets ............................................................................................... 11,022,409
-------------
LIABILITIES
Collateral for securities loaned ........................................................................... 102,600
Payable for investments purchased .......................................................................... 136,567
Payable to investment adviser and administrator ............................................................ 7,335
Accrued expenses and other liabilities ..................................................................... 74,931
-------------
Total liabilities .......................................................................................... 321,433
-------------
NET ASSETS
Beneficial interest shares of $0.001 par value ............................................................. 8,553,544
Overdistributed net investment income ...................................................................... (5,080)
Accumulated net realized gains from investments and foreign currency transactions .......................... 1,014,324
Net unrealized appreciation of investments and other assets and liabilities
denominated in foreign currencies .......................................................................... 1,138,188
-------------
Net assets ................................................................................................. $ 10,700,976
=============
CLASS H
Net assets ................................................................................................. $ 10,063,940
-------------
Shares outstanding ......................................................................................... 708,817
-------------
Net asset value, offering price and redemption value per share ............................................. $14.20
======
CLASS I
Net assets ................................................................................................. $ 637,036
-------------
Shares outstanding ......................................................................................... 44,973
-------------
Net asset value, offering price and redemption value per share ............................................. $14.16
=======
</TABLE>
See accompanying notes to financial statements
11
<PAGE>
MITCHELL HUTCHINS SERIES TRUST--GLOBAL EQUITY PORTFOLIO
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS ENDED
JUNE 30, 2000
(UNAUDITED)
-----------------
<S> <C>
INVESTMENT INCOME:
Dividends (net of foreign withholding taxes of $14,019) .................................................... $ 91,932
Interest ................................................................................................... 44,150
-------------
136,082
-------------
EXPENSES:
Investment advisory and administration ..................................................................... 45,358
Legal and audit ............................................................................................ 19,631
Reports and notices to shareholders ........................................................................ 13,905
Custody and accounting ..................................................................................... 16,216
Trustees' fees ............................................................................................. 3,750
Transfer agency fees and related service expenses .......................................................... 1,500
Distribution fees--Class I ................................................................................. 677
Other expenses ............................................................................................. 904
-------------
101,941
Less: Fee waivers and reimbursements from investment adviser ............................................... (228)
-------------
Net expenses ............................................................................................... 101,713
-------------
Net investment income ...................................................................................... 34,369
-------------
REALIZED AND UNREALIZED GAINS (LOSSES) FROM INVESTMENTS:
Net realized gains (losses) from:
Investments ............................................................................................ 1,229,566
Futures transactions ................................................................................... (21,851)
Foreign currency transactions .......................................................................... (161,103)
Net change in unrealized appreciation/depreciation of:
Investments ............................................................................................ (1,362,681)
Futures ................................................................................................ (36,480)
Other assets, liabilities and forward contracts denominated in foreign currencies ...................... (133)
-------------
NET REALIZED AND UNREALIZED LOSSES FROM INVESTMENT ACTIVITIES .............................................. (352,682)
-------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ....................................................... $ (318,313)
=============
</TABLE>
See accompanying notes to financial statements
12
<PAGE>
MITCHELL HUTCHINS SERIES TRUST--GLOBAL EQUITY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE
SIX MONTH FOR THE YEAR
ENDED ENDED
JUNE 30, 2000 DECEMBER 31,
(UNAUDITED) 1999
--------------- --------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income ..................................................................... $ 34,369 $ 19,681
Net realized gains from investments, futures and foreign currency transactions ............ 1,046,612 1,277,803
Net change in unrealized appreciation/depreciation of investments, futures and
other assets and liabilities
denominated in foreign currencies ..................................................... (1,399,294) 1,029,416
------------- -------------
Net increase (decrease) in net assets resulting from operations ........................... (318,313) 2,326,900
------------- -------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income--Class H ............................................................ (104,192) (50,861)
Net investment income--Class I ............................................................ (4,746) (245)
Net realized gains from investments--Class H .............................................. (1,144,750) (7,692)
Net realized gains from investments--Class I .............................................. (52,147) (37)
------------- -------------
Total dividends and distributions to shareholders ......................................... (1,305,835) (58,835)
------------- -------------
FROM BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from the sale of shares ...................................................... 547,813 503,375
Cost of shares repurchased ................................................................ (2,930,915) (8,543,750)
Proceeds from dividends reinvested ........................................................ 1,305,835 3,375,487
------------- -------------
Net decrease in net assets from beneficial interest transactions .......................... (1,077,267) (4,664,888)
------------- -------------
Net decrease in net assets ................................................................ (2,701,415) (2,396,823)
NET ASSETS:
Beginning of period ....................................................................... 13,402,391 15,799,214
------------- -------------
End of period (including undistributed net investment income of $69,489 at
December 31, 1999) ....................................................................... $ 10,700,976 $ 13,402,391
============= =============
</TABLE>
See accompanying notes to financial statements
13
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Mitchell Hutchins Series Trust--Global Equity Portfolio (the "Portfolio")
(formerly Mitchell Hutchins Series Trust--Global Growth Portfolio) is a
diversified portfolio of Mitchell Hutchins Series Trust (the "Fund"), which 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. The Fund operates as a series company currently offering thirteen
portfolios. Shares of the Portfolio are offered to insurance company separate
accounts which fund certain variable contracts.
Currently, the Portfolio offers Class H and Class I shares. Each class
represents interests in the same assets of the Portfolio, and the classes are
identical except for differences in their distribution charges. Both classes
have equal voting privileges except that Class Ihas exclusive voting rights with
respect to its distribution plan. Class H has no distribution plan.
The Fund accounts separately for the assets, liabilities and operations for
each Portfolio. Expenses directly attributable to each Portfolio are charged to
that Portfolio's operations, and expenses which are applicable to all Portfolios
are allocated among them on a pro rata basis.
The preparation of financial statements in accordance with accounting
principles generally accepted in the United States 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--The Portfolio calculates its net asset value based
on the current market value for its portfolio securities. The Portfolio normally
obtains market values for its securities from independent pricing sources.
Independent pricing sources may use reported last sale prices, current market
quotations or valuations from computerized "matrix" systems that derive values
based on comparable securities. Securities traded in the over-the-counter
("OTC") market and listed on The Nasdaq Stock Market, Inc. ("Nasdaq") normally
are valued at the last sale price on Nasdaq prior to valuation. Other OTC
securities are valued at the last bid price available prior to valuation.
Securities which are listed on U.S. and foreign stock exchanges normally are
valued at the last sale price on the day the securities are 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 valued on
the exchange designated as the primary market by Mitchell Hutchins Asset
Management Inc. ("Mitchell Hutchins"), a wholly owned asset management
subsidiary of PaineWebber Incorporated ("PaineWebber"), a wholly owned
subsidiary of Paine Webber Group Inc. ("PW Group") and investment adviser and
administrator of the Portfolio, or by the Portfolio's sub-adviser, Invista
Capital Management, LLC ("Invista") (for foreign investments only). If a market
value is not available from an independent pricing source for a particular
security, that security is valued at fair value as determined in good faith by
or under the direction of the Fund's board of trustees (the "board"). The
amortized cost method of valuation, which approximates market value, generally
is used to value short-term debt instruments with sixty days or less remaining
to maturity, unless the board determines that this does not represent fair
value. All investments quoted in foreign currencies will be valued daily in U.S.
dollars on the basis of the foreign currency exchange rates prevailing at the
time such valuation is determined by the Portfolio's custodian.
14
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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 the computation of the Portfolio's net asset value. If events materially
affecting the value of such securities or currency exchange rates occur during
such time periods, the securities will be valued at their fair value as
determined in good faith by or under the direction of the board.
REPURCHASE AGREEMENTS--The 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,
including accrued interest, is at least equal to the repurchase price. In the
event of default of the obligation to repurchase, the Portfolio 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. The 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 and foreign exchange transactions are calculated using the
identified cost basis. Dividend income is recorded on the ex-dividend date
("ex-date") (except in the case of certain foreign dividends which are recorded
as soon after the ex-dividend date as using reasonable diligence, the adviser
and sub-adviser who become aware of such dividends).
Income, expenses (excluding class-specific expenses) and realized/unrealized
gains/losses are allocated proportionately to each class of shares based upon
the relative net asset value of outstanding shares (or the value of dividend-
eligible shares, as appropriate) of each class at the beginning of the day
(after adjusting for current capital share activity of the respective classes).
Class-specific expenses are charged directly to the applicable class of shares.
FOREIGN CURRENCY TRANSLATIONS--The books and records of the Portfolio are
maintained in U.S. dollars. Foreign currency amounts are translated into 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 Portfolio securities are
presented at the foreign exchange rates at the end of the period, the Portfolio
does not generally isolate the effects of fluctuations in foreign exchange rates
from the effects of fluctuations in the market prices of securities. However,
the Portfolio does 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 (other than
investments) 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.
15
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
FUTURES CONTRACTS--Upon entering into a financial futures contract, the
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.
Using financial futures contracts involves various market risks. The maximum
amount at risk from the purchase of a futures contract is the contract value.
The Portfolio uses financial futures contracts for hedging purposes and to
adjust exposure to U.S. and foreign equity markets in connection with a
reallocation of the Portfolio's assets. However, imperfect correlations between
futures contracts and the related securities or markets, or market disruptions,
do not normally permit full control of these risks at all times.
DIVIDENDS AND DISTRIBUTION--Dividends and distributions to shareholders are
recorded on the ex-date. The amount of dividends and distributions is 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.
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 the
Portfolio is authorized to invest. The ability of the issuers of debt securities
held by the Portfolio to meet its obligations may be affected by economic and
political developments particular to a specific industry, country or region.
INVESTMENT ADVISER AND ADMINISTRATOR
The board has approved an investment advisory and administration contract
with Mitchell Hutchins, under which Mitchell Hutchins serves as investment
adviser and administrator of the Portfolio. In accordance with the Advisory
Contract, the Portfolio pays Mitchell Hutchins an investment advisory and
administration fee, which is computed daily and payable monthly, at an annual
rate of 0.75% of the Portfolio's average daily net assets.
Mitchell Hutchins has entered into a contract with Invista dated November 1,
1998 ("Invista Contract"), pursuant to which Invista serves as investment
sub-adviser for the foreign investments of the Portfolio. Mitchell Hutchins
allocates the Portfolio's investments between domestic and foreign and is
responsible for the day-to-day management of the Portfolio's domestic
investments. Under the Invista Contract, Mitchell Hutchins (not the Portfolio)
is obligated to pay Invista at the annual rate of 0.29% of the proportion of the
Portfolio's average daily net assets allocated to foreign investments. At June
30, 2000, the Portfolio owed Mitchell Hutchins $6,858 in investment advisory and
administration fees. Mitchell Hutchins waived a portion of its investment
advisory and administration fees in connection with the Fund's investment of
cash collateral from securities lending transactions in Mitchell Hutchins
Private Money Market
16
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
Fund LLC. For the six months ended June 30, 2000, Mitchell Hutchins waived $28
in investment advisory and administration fees.
For the six month ended June 30, 2000, the Portfolio paid $393 in brokerage
commissions to PaineWebber for transactions executed on behalf of the Portfolio.
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 the fourth quarter of 2000. UBS, with headquarters in Zurich,
Switzerland, is an internationally diversified organization with operations in
many areas of the financial services industry.
DISTRIBUTION PLAN
Class I shares are offered to insurance company separate accounts where the
related insurance companies receive payments for their services in connection
with the distribution of the Portfolio's Class I shares. Under the plan of
distribution, the Portfolio pays Mitchell Hutchins a monthly distribution fee at
the annual rate of 0.25% of the average daily net assets of Class I shares.
Mitchell Hutchins pays the entire distribution fee to the insurance companies.
For the period January 1, 2000 to February 29, 2000, Mitchell Hutchins
voluntarily waived $200 of the distribution fee on Class I shares. At June 30,
2000, the Portfolio owed Mitchell Hutchins $477 in distribution fees.
SECURITIES LENDING
The 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 Portfolio will regain record ownership of
loaned securities to exercise certain beneficial rights; however, the Portfolio
may bear the risk of delay in recovery of, or even loss of rights in, the
securities loaned should the borrower fail financially. The Portfolio receives
compensation, which is included in interest income, for lending its 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 Portfolio's lending agent,
received $52 in compensation from the Portfolio for the six month ended June 30,
2000.
For the six months ended June 30, 2000, the Portfolio earned $157 in
compensation net of fees, rebates and expenses, from securities lending
transactions.
At June 30, 2000, the Portfolio's custodian held cash having an aggregate
value of $102,600 as collateral for portfolio securities loaned having a market
value of $103,550. The cash collateral was invested in the following money
market funds:
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
---------- -------
<S> <C>
23,554 AIM Liquid Assets Portfolio .............................................................. $ 23,554
11,500 AIM Prime Portfolio ...................................................................... 11,500
67,546 Mitchell Hutchins Private Money Market Fund LLC .......................................... 67,546
--------
Total investments of cash collateral received for securities on loan (cost--$102,600) .... $102,600
========
</TABLE>
17
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
BANK LINE OF CREDIT
The Portfolio 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 Portfolio at the
request of the shareholders and other temporary or emergency purposes. In
connection therewith, the Portfolio has agreed to pay a commitment fee, pro
rata, based on the relative asset size of the funds in the Facility. Interest is
charged to the Portfolio at rates based on prevailing market rates in effect at
the time of borrowings. For the six months ended June 30, 2000, the Portfolio
did not borrow under the Facility.
INVESTMENTS IN SECURITIES
For federal income tax purposes, the cost of securities owned at June 30,
2000 was substantially the same as the cost of securities for financial
statement purposes.
At June 30, 2000, the components of net unrealized appreciation of
investments were as follows:
<TABLE>
<CAPTION>
<S> <C>
Gross appreciation (investments having an excess of value over cost) .................. $1,875,110
Gross depreciation (investments having an excess of cost over value) .................. (708,396)
-----------
Net unrealized appreciation of investment ............................................. $1,166,714
===========
</TABLE>
For the six months ended June 30, 2000, aggregate purchases and sales of
portfolio securities, excluding short-term securities, were $4,323,861 and
$7,823,318, respectively.
FEDERAL TAX STATUS
The Portfolio intends to distribute all of its taxable income and to comply
with the requirements of the Internal Revenue Code applicable to regulated
investment companies. Accordingly, no provision for federal income taxes is
required.
SHARES OF BENEFICIAL INTEREST
There is an unlimited number of $0.001 par value shares of beneficial
interest authorized. Transactions in shares of beneficial interest for the
Portfolio were as follows:
<TABLE>
<CAPTION>
CLASS H CLASS I*
FOR THE SIX MONTHS ENDED ----------------- ------------------
JUNE 30, 2000 SHARES AMOUNT SHARES AMOUNT
----------------- ------------------
<S> <C> <C> <C> <C>
Shares sold................................................. 15,255 $ 239,505 20,298 $308,308
Shares repurchased.......................................... (194,970) (2,881,828) (3,128) (49,087)
Dividends reinvested........................................ 85,427 1,248,942 3,897 56,893
--------- ----------- --------- ---------
Net increase (decrease)..................................... (94,288) $(1,393,381) 21,067 $316,114
========= =========== ========= =========
<CAPTION>
CLASS H CLASS I*
FOR THE YEAR ENDED ----------------- ------------------
DECEMBER 31, 1999 SHARES AMOUNT SHARES AMOUNT
----------------- ------------------
<S> <C> <C> <C> <C>
Shares sold................................................ 9,331 $ 130,061 24,637 $373,314
Shares repurchased......................................... (598,923) (8,532,202) (750) (11,548)
Dividends reinvested....................................... 242,799 3,375,204 19 283
--------- ------------ --------- --------
Net increase (decrease).................................... (346,793) $(5,026,937) 23,906 $362,049
========= ============ ========= ========
</TABLE>
* Class I shares commenced operations on August 5, 1999.
18
<PAGE>
MITCHELL HUTCHINS SERIES TRUST--GLOBAL EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
CLASS H CLASS I
---------------------------------------------------------- ----------------------
FOR THE
FOR THE FOR THE PERIOD
SIX MONTHS SIX MONTHS AUGUST 5,
ENDED ENDED 1999+
JUNE 30, FOR THE YEARS ENDED DECEMBER 31, JUNE 30, THROUGH
2000 -------------------------------------------- 2000 DECEMBER 31,
(UNAUDITED) 1999 1998 1997 1996 1995 (UNAUDITED) 1999
----------- ------- ------- ------- ------ ----- ------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period..........$ 16.21 $ 13.74 $ 14.62 $ 13.74 $ 12.00 $ 12.44 $ 16.20 $ 14.43
-------- -------- -------- -------- -------- -------- -------- ---------
Net investment income (loss) 0.05 (0.03) 0.08 0.04 0.07 0.01 0.02 0.01
Net realized and unrealized gains (losses) from
investments, futures and foreign currency
transactions................................ (0.40) 2.56 1.92 0.94 1.75 (0.45) (0.40) 1.82
-------- -------- -------- -------- -------- -------- -------- ---------
Net increase (decrease) from investment
operations.................................... (0.35) 2.53 2.00 0.98 1.82 (0.44) (0.38) 1.83
-------- -------- -------- -------- -------- -------- -------- ---------
Dividends from net investment income.......... (0.14) (0.05) -- (0.04) (0.08) -- (0.14) (0.05)
Distributions from net realized gains from
investments................................... (1.52) (0.01) (2.88) (0.06) -- -- (1.52) (0.01)
--------- -------- -------- -------- --------- --------- -------- ---------
Total dividends and other distributions....... (1.66) (0.06) (2.88) (0.10) (0.08) 0.00 (1.66) (0.06)
--------- -------- -------- -------- --------- --------- -------- ---------
Net asset value, end of period................$ 14.20 $ 16.21 $ 13.74 $ 14.62 $ 13.74 $ 12.00 $ 14.16 $ 16.20
========= ======== ======== ======== ========= ========= ======== =========
Total investment return(1).................... (2.47)% 18.47% 13.50% 7.16% 15.14% (3.54)% (2.67)% 12.74%
========= ======== ======== ======== ========= ========= ======== =========
Ratios/Supplemental Data:
Net assets, end of period (000's).............$ 10,064 $ 13,015 $ 15,799 $ 21,215 $ 25,701 $ 28,507 $ 637 $ 387
Expenses to average net assets, net of waivers... 1.66%* 1.85% 1.33% 1.07% 1.10% 1.96% 1.90%*(2) 2.00%*(2)
Net investment income (loss) to average net
assets, net of waivers........................ 0.58%* 0.13% 0.46% 0.26% 0.46% 0.10% 0.34%*(3) (0.64)%*(3)
Portfolio turnover rate....................... 40% 63% 154% 81% 44% 157% 40% 63%
</TABLE>
----------------------------
+ Commencement of issuance of shares.
* 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. The figures do not include
additional contract level charges; results would be lower if such charges
were included. Total investment return for periods of less than one year has
not been annualized.
(2) For the six months ended June 30, 2000 the ratio excluding the waiver would
have been 1.96%. For the period August 5, 1999 through December 31, 1999 the
ratio excluding the waiver would have been 2.25%.
(3) For the six months ended June 30, 2000 the ratio excluding the waiver would
have been 0.28%. For the period August 5, 1999 through December 31, 1999 the
ratio excluding the waiver would have been (0.89)%.
19
<PAGE>
----------------------------------------
SEMIANNUAL REPORT
MITCHELL
HUTCHINS SERIES
TRUST
GLOBAL EQUITY
PORTFOLIO
JUNE 30, 2000
-C- 2000 PaineWebber Incorporated
All rights reserved.
Member SIPC
