<PAGE>
PAINEWEBBER/
KIDDER, PEABODY
MUNICIPAL
MONEY MARKET
SERIES
SEMI-ANNUAL REPORT
April 30, 1995
<PAGE>
- --------------------------------------------------------------------------------
June 15, 1995
Dear Shareholder,
During the six months ended April 30, 1995, the United States economy exhibited
steady growth. In a series of monetary tightenings that began early in 1994, the
Federal Reserve Board raised the benchmark Federal Funds rate, the rate banks
charge each other for overnight borrowing, six times in 1994 for a total
increase of 2.5%. These increases were implemented to moderate economic
expansion and forestall inflation, and were followed by another 0.5% increase on
February 1, 1995, bringing the Federal Funds rate to 6.0%.
Productivity gains in the workplace and the increased competitiveness of United
States corporations in the global marketplace contributed to the low inflation
and steady growth which characterized the economy during the six months ended
April 30, 1995. Unemployment continued to decline, personal income exhibited an
upward trend and measures of consumer confidence continued to register positive
readings. However, side effects of higher interest rates, including a decline in
single family housing starts, crept into economic data during the latter half of
1994. As we move through the second quarter of 1995, the economy remains
healthy -- although it is not yet clear what the full impact of higher interest
rates will be on economic growth.
At a special meeting of shareholders that took place on April 13, 1995,
shareholders approved the appointment of PaineWebber Incorporated
('PaineWebber') as investment adviser and administrator of the Series and
Mitchell Hutchins Asset Management Inc. ('Mitchell Hutchins') as the Series'
sub-adviser and sub-administrator. Mitchell Hutchins, a wholly owned investment
management subsidiary of PaineWebber, provides investment advisory and portfolio
management services to individuals, pension and endowment funds, trusts and
institutions. As of April 30, 1995, Mitchell Hutchins was adviser or sub-adviser
to 42 investment companies with 77 separate portfolios and aggregate assets of
approximately $27 billion.
Gregory W. Serbe and Debbie Vermann are jointly responsible for the day-to-day
management of the New York Fund. Mr. Serbe is also responsible for the
day-to-day management of the Connecticut and New Jersey Funds. Mr. Serbe is a
Managing Director of Mitchell Hutchins responsible for overseeing tax exempt
investments. Ms. Vermann is a portfolio manager at Mitchell Hutchins.
PORTFOLIO REVIEW
During the six months ended April 30, 1995, the Series performance was enhanced
by the Federal Funds rate increases. As of April 30, 1995, the current 7-day
average yield for the Connecticut, New Jersey and New York Funds comprising the
Series were 2.90%, 3.04% and 3.23%, respectively. During the period, the
weighted average maturity of each Fund was relatively short. As of April 30,
1995, the weighted average maturity was 18 days for the Connecticut Fund; 25
days for the New Jersey Fund; and 30 days for the New York Fund. A shorter
weighted average maturity benefits the Funds by enabling them to have more cash
available to invest as rates trend upward.
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<PAGE>
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Going forward, the Funds in the Series will maintain a neutral weighted average
maturity as short-term rates find stability during uncertain economic times. The
Federal Reserve Board appears to have engineered a 'soft landing' -- a slowdown
in economic growth without a decline into recession. However, if inflation
becomes problematic, further increases in short-term interest rates could be
possible. Investment decisions in the portfolios will continue to be dominated
by credit quality and liquidity. Although we are interested in maintaining
higher yields, we will not do so by sacrificing the Series' emphasis on
security, quality and liquidity.
We value you as a shareholder and as a client, and thank you for your continued
support. We welcome any comments or questions you may have.
Sincerely,
<TABLE>
<S> <C>
FRANK P.L. MINARD GREGORY W. SERBE
FRANK P.L. MINARD GREGORY W. SERBE
Chairman, Managing Director,
Mitchell Hutchins Asset Management Inc. Mitchell Hutchins Asset Management Inc.
DEBBIE VERMANN
DEBBIE VERMANN
Portfolio Manager,
PaineWebber/Kidder, Peabody Municipal Money
Market, New York Series
</TABLE>
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2
<PAGE>
PAINEWEBBER/KIDDER, PEABODY MUNICIPAL MONEY MARKET SERIES -- CONNECTICUT SERIES
- --------------------------------------------------------------------------------
Statement of Net Assets
April 30, 1995 (unaudited)
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INVESTMENTS IN MUNICIPAL SECURITIES -- 98.89%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
- --------- --------------------- -------------- -----------
<S> <C> <C> <C> <C>
$ 300 Connecticut Development Authority -- Industrial
Development (Shelton Inn Limited Partnership)...... @ 4.500% $ 300,000
1,100 Connecticut Development Authority -- Industrial
Development Revenue Shw Incorporated............... @ 4.600 1,100,000
800 Connecticut Development Authority -- Pollution
Control Revenue (Connecticut Light and Power
Company Project A) Refunding....................... @ 4.650 800,000
1,000 Connecticut Development Authority Health Care Corp.
(Independent Living Project)....................... @ 4.650 1,000,000
300 Connecticut Development Authority Revenue -- Various
Solid Waste B (Exeter Project B)................... @ 4.600 300,000
800 Connecticut Economic Recovery Notes Series B......... @ 4.750 800,000
700 Connecticut Health and Educational Facilities
Authority -- Revenue (Charlotte Hungerford
Hospital) Series B................................. @ 4.650 700,000
1,500 Connecticut Health and Educational Facilities
Authority -- Revenue (Kent School) Series A........ @ 4.200 1,500,000
900 Connecticut Health and Educational Facilities
Authority -- Revenue Series M Yale University Tax
Exempt Commercial Paper............................ 05/09/95 to 05/22/95 3.850 to 4.600 900,000
900 Connecticut Health and Educational Facilities
Authority -- Revenue Series O Yale University Tax
Exempt Commercial Paper............................ 05/08/95 3.700 900,000
550 Connecticut Health and Educational Facilities
Authority -- Revenue Updates (Windham Community
Memorial Hospital) Tax Exempt Commercial Paper..... @ 4.000 550,000
500 Connecticut Health and Educational Facilities
Authority -- Bridgeport Hospital Series B.......... @ 4.150 500,000
1,000 Connecticut Housing Finance Authority -- Housing
Finance Program Series C Tax Exempt Commercial
Paper.............................................. 05/05/95 to 05/19/95 3.950 to 4.000 1,000,000
800 Connecticut Municipal Electric Energy Cooperative Tax
Exempt Commercial Paper............................ 05/01/95 3.750 800,000
1,000 Connecticut Special Assessment -- Unemployment
Compensation Advance Fund Revenue Series B......... @ 4.700 1,000,000
1,105 Connecticut Special Tax Obligation Revenue -- Second
Lien Transportation Series 1....................... @ 4.800 1,105,000
850 Bristol Bond Anticipation Notes...................... 05/18/95 3.690 850,073
1,100 Darien Bond Anticipation Notes....................... 06/20/95 3.750 1,100,065
700 Easton Bond Anticipation Notes....................... 06/14/95 3.570 700,056
150 Enfield General Obligation Notes..................... 06/15/95 6.700 150,576
700 Puerto Rico Commonwealth -- Government Development
Bank............................................... @ 4.550 700,000
700 Puerto Rico Commonwealth -- Highway And
Transportation Authority Revenue Series X.......... @ 4.150 700,000
</TABLE>
3
<PAGE>
PAINEWEBBER/KIDDER, PEABODY MUNICIPAL MONEY MARKET SERIES -- CONNECTICUT SERIES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENTS IN MUNICIPAL SECURITIES -- (CONCLUDED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
- --------- --------------------- -------------- -----------
<S> <C> <C> <C> <C>
$ 600 Puerto Rico Commonwealth Industrial Medical and
Environmental Pollution Control Facilities
Financing Authority Revenue (Formerly Higher
Education Intermediate American University
Project)........................................... 05/04/95 3.900% $ 600,000
362 Shelton Bond Anticipation Notes...................... 08/15/95 4.500 362,362
1,000 Stamford Housing Authority Revenue -- Multi Modal
Morgan Street Project.............................. @ 4.750 1,000,000
300 Stonington Bond Anticipation Notes................... 09/14/95 4.170 300,068
1,255 Westport Bond Anticipation Notes..................... 06/14/95 3.520 1,255,027
-----------
TOTAL INVESTMENTS (cost -- $20,973,227 which approximates cost
for federal income tax purposes) -- 98.89%..................... 20,973,227
Other assets in excess of liabilities -- 1.11%................... 235,440
-----------
NET ASSETS (applicable to 21,206,203 shares of beneficial
interest at $1.00 per share) -- 100.00%........................ $21,208,667
-----------
-----------
</TABLE>
- ------------
@ Variable rate demand notes are payable on demand; the interest rates shown are
the current rates as of April 30, 1995 and reset periodically.
Weighted average maturity -- 18 days
See accompanying notes to financial statements
4
<PAGE>
PAINEWEBBER/KIDDER, PEABODY MUNICIPAL MONEY MARKET SERIES -- NEW JERSEY SERIES
- --------------------------------------------------------------------------------
Statement of Net Assets
April 30, 1995 (unaudited)
- --------------------------------------------------------------------------------
INVESTMENTS IN MUNICIPAL SECURITIES -- 99.00%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
- --------- --------------------- -------------- -----------
<S> <C> <C> <C> <C>
$ 1,400 New Jersey Economic and Industrial Development
Authority -- (Burmah Castrol Incorporated)..... @ 4.550% $ 1,400,000
1,400 New Jersey Economic and Industrial Development
Authority -- (Fujinon Incorporated Project).... @ 4.550 1,400,000
1,000 New Jersey Economic and Industrial Development
Authority -- (Genlyte Camden).................. @ 5.000 1,000,000
300 New Jersey Economic and Industrial Development
Authority -- (Toys-R-Us Incorporated).......... @ 4.400 300,000
300 New Jersey Economic and Industrial Development
Authority -- Weekly Refunding (Genlyte
Camden)........................................ @ 5.000 300,000
400 New Jersey Economic Development Authority -- (400
International Drive Partners).................. @ 4.850 400,000
275 New Jersey Economic Development Authority --
(Brach/Jersey Ave Project)..................... @ 4.550 275,000
1,000 New Jersey Economic Development Authority --
(Chambers Cogeneration Project) Tax Exempt
Commercial Paper............................... 06/07/95 4.000 1,000,000
300 New Jersey Economic Development Authority --
(Church and Dwight Company Project)............ @ 4.600 300,000
1,447 New Jersey Economic Development Authority --
(Curtiss Wright Flight)........................ @ 4.400 1,447,000
700 New Jersey Economic Development Authority --
(Keystone Project) Tax Exempt Commercial
Paper.......................................... 05/17/95 3.850 700,000
600 New Jersey Economic Development Authority -- (W.
Y. Plastic Products Corporation Project)....... @ 4.750 600,000
1,000 New Jersey Economic Development Authority --
Economic Growth Series I....................... @ 4.500 1,000,000
700 New Jersey Economic Development Authority --
Bears Series A................................. @ 4.750 700,000
1,500 New Jersey Economic Development Authority --
Pollution Control (Exxon Project) Tax Exempt
Commercial Paper............................... 05/08/95 to 05/12/95 3.750 1,500,000
700 New Jersey Economic Development Authority --
Series G....................................... @ 4.750 700,000
5,600 New Jersey Tax and Revenue Anticipation Notes --
Tax Exempt Commercial Paper.................... 05/04/95 to 05/18/95 3.750 to 3.900 5,600,000
120 Chatham Borough General Improvement Bonds........ 03/01/96 5.400 120,867
1,000 Essex County General Obligation Bonds............ 08/22/95 5.000 1,002,433
500 Montvale Tax Anticipation Notes.................. 01/09/96 4.400 500,163
500 North Brunswick Township Bond Anticipation
Notes.......................................... 08/16/95 4.500 500,502
3,750 Port Authority of New York and New Jersey -- Tax
Exempt Commercial Paper........................ 05/01/95 to 06/09/95 3.750 to 4.000 3,750,000
400 Port Authority of New York and New Jersey --
Special Obligation Revenue Versatile Structure
Series 1....................................... @ 4.950 400,000
200 Port Authority of New York and New Jersey --
Special Obligation Revenue Versatile Structure
Series 2....................................... @ 4.800 200,000
</TABLE>
5
<PAGE>
PAINEWEBBER/KIDDER, PEABODY MUNICIPAL MONEY MARKET SERIES -- NEW JERSEY SERIES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENTS IN MUNICIPAL SECURITIES -- (CONCLUDED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
- --------- --------------------- -------------- -----------
<S> <C> <C> <C> <C>
$ 1,100 Puerto Rico Commonwealth -- General Obligation
Bonds.......................................... 07/01/95 9.375% $ 1,154,027
1,300 Puerto Rico Commonwealth -- Government
Development Bank............................... @ 4.550 1,300,000
1,500 Puerto Rico Industrial Tourist Educational
Medical and Environmental
Control -- (International American University
of Puerto Rico) Tax Exempt Commercial Paper.... @ 3.650 1,500,000
1,200 Puerto Rico Public Finance Corporation -- Series
B.............................................. 07/01/95 6.350 1,204,150
500 Somerset County Bond Anticipation Notes.......... 06/01/95 6.350 500,870
500 Union County Pollution Control Finance
Authority -- (Exxon)........................... @ 4.850 500,000
-----------
TOTAL INVESTMENTS (cost -- $31,255,012 which approximates
cost for federal income tax purposes) -- 99.00%............ 31,255,012
Other assets in excess of liabilities -- 1.00%............... 299,897
-----------
NET ASSETS (applicable to 31,555,358 shares of beneficial
interest at $1.00 per share) -- 100.00%.................... $31,554,909
-----------
-----------
</TABLE>
- ------------
@ Variable rate demand notes are payable on demand; the interest rates shown are
the current rates as of April 30, 1995 and reset periodically.
Weighted average maturity -- 25 days
See accompanying notes to financial statements
6
<PAGE>
PAINEWEBBER/KIDDER, PEABODY MUNICIPAL MONEY MARKET SERIES -- NEW YORK SERIES
- --------------------------------------------------------------------------------
Statement of Net Assets
April 30, 1995 (unaudited)
- --------------------------------------------------------------------------------
INVESTMENTS IN MUNICIPAL SECURITIES -- 99.36%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
- --------- --------------------- -------------- -----------
<S> <C> <C> <C> <C>
$ 1,500 Massapequa, New York Union Free School District Tax
Anticipation Notes................................. 06/30/95 4.500% $ 1,500,550
1,300 Metropolitan Transportation Authority Commuter
Facility Series 1991............................... @ 4.550 1,300,000
1,070 Nassau County, New York Bond Anticipation Notes...... 08/15/95 4.750 1,070,716
100 Nassau County, New York Industrial Development
Authority Civic Facility (Cold Spring Harbor
Lab)............................................... @ 4.900 100,000
1,700 New York City Housing Development Corp.
(East 96th Street Project Series A)................ @ 4.300 1,700,000
2,200 New York City Housing Development Corp. Series 93-A
(Columbus Garden Project).......................... @ 4.600 2,200,000
1,000 New York City Industrial Development Authority
(JFK Fieldhouse Associates Project)................ @ 4.400 1,000,000
1,500 New York City Industrial Development Authority
(LaGuardia Associates Project)..................... @ 4.400 1,500,000
1,500 New York City Industrial Development Authority
(Stroheam & Roman Inc.)............................ @ 4.350 1,500,000
1,700 New York City Multi-Family Housing Development Corp.
(East 17th Street Project Series A)................ @ 5.000 1,700,000
2,800 New York City Municipal Water Finance Authority...... 05/04/95 to 05/11/95 4.000 to 4.200 2,800,000
1,000 New York City Revenue Anticipation Notes Series B.... 06/30/95 4.750 1,000,684
300 New York City Series A4.............................. @ 5.150 300,000
300 New York City Series B1 Sub-Series B4................ @ 4.950 300,000
300 New York City Sub-Series A4.......................... @ 5.000 300,000
400 New York City Trust for Cultural Resources
(Solomon R. Guggenheim Series 1990B)............... @ 4.850 400,000
400 New York State Dormitory Authority................... 05/22/95 3.800 400,000
500 New York State Dormitory Authority
(Cornell University Series 1990B).................. @ 4.850 500,000
1,500 New York State Dormitory Authority
(Masonic Hall Asylum).............................. @ 4.300 1,500,000
2,000 New York State Dormitory Authority Memorial (Sloan
Kettering Cancer Center Series A).................. @ 4.500 2,000,000
1,300 New York State Dormitory Authority
(Metropolitian Museum of Art)...................... @ 4.500 1,300,000
2,400 New York State Dormitory Authority
(Oxford University Press Inc.)..................... @ 5.350 2,400,000
1,600 New York State Dormitory Authority
(St. Francis Center at the Knolls)................. @ 5.050 1,600,000
1,200 New York State Energy Research & Development
Authority.......................................... 05/15/95 4.500 1,200,000
1,000 New York State Energy Research & Development
Authority (Central Hudson Gas & Electric).......... @ 4.100 1,000,000
2,000 New York State Energy Research & Development (LILCO
Project Series A).................................. 03/01/96 4.700 2,000,000
1,500 New York State Energy Research & Development (LILCO
Project Series B).................................. 03/01/96 4.700 1,500,000
1,400 New York State Energy Research & Development
Corporation (New York State Electric & Gas)........ 05/08/95 to 05/10/95 3.800 to 4.300 1,400,000
</TABLE>
7
<PAGE>
PAINEWEBBER/KIDDER, PEABODY MUNICIPAL MONEY MARKET SERIES -- NEW YORK SERIES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENTS IN MUNICIPAL SECURITIES -- (CONCLUDED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
- --------- --------------------- -------------- -----------
<S> <C> <C> <C> <C>
$ 500 New York State Energy Research & Development
Authority (Niagra Mohawk Power Corp.).............. @ 4.950% $ 500,000
2,900 New York State Local Government Assistance Corp.
Series A........................................... @ 4.500 2,900,000
1,000 New York State Power Authority....................... 03/01/96 4.400 1,000,000
1,900 North Hempstead, New York Solid Waste Management
Authority Series 1993-A............................ @ 4.500 1,900,000
1,800 State of New York.................................... 05/01/95 to 06/09/95 3.750 to 4.000 1,800,000
600 St. Lawrence County Industrial Development Authority
(Reynolds Metal Series 85)......................... @ 5.100 600,000
100 Suffolk County Industrial Development Agency
(Phototronixs Corp., Facility)..................... @ 5.050 100,000
2,000 Triborough Bridge & Tunnel Authority Convention
Center Project Series D (Pre-refunded with U.S.
Government Securities to 07/01/95 @ 102)........... @ 9.000 2,057,798
1,000 Westchester County, New York Tax Anticipation
Notes.............................................. 12/14/95 5.000 1,003,009
1,000 Yonkers, New York Industrial Development Agency
(Consumers Union Facility)......................... @ 4.450 1,000,000
-----------
TOTAL INVESTMENTS (cost -- $48,332,757, which approximates cost
for federal income tax purposes) -- 99.36%..................... 48,332,757
Other assets in excess of liabilities -- 0.64%................... 310,150
-----------
NET ASSETS (applicable to 48,644,828 shares of beneficial
interest at $1.00 per share)................................... $48,642,907
-----------
-----------
</TABLE>
- ------------
@ Variable rate demand notes are payable on demand; the interest rates shown are
the current rates as of April 30, 1995 and reset periodically.
Weighted average maturity -- 30 days
See accompanying notes to financial statements
8
<PAGE>
PAINEWEBBER/KIDDER, PEABODY MUNICIPAL MONEY MARKET SERIES
- --------------------------------------------------------------------------------
Statement of Operations
For the Six Months Ended April 30, 1995 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Connecticut New Jersey New York
Series Series Series
----------- ---------- ----------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest........................................................... $ 447,176 $612,952 $1,035,647
----------- ---------- ----------
EXPENSES:
Investment advisory and administration............................. 62,542 84,556 145,068
Distribution fees.................................................. 15,010 20,293 34,816
Custody and accounting............................................. 14,100 15,380 16,340
Transfer agency fees............................................... 6,700 8,650 10,050
Reports and notices to shareholders................................ 6,050 8,850 9,050
Legal and audit.................................................... 4,700 5,060 4,300
Amortization of organization expenses.............................. 3,800 3,800 3,800
Federal and state registration fees................................ 2,050 2,150 3,900
Trustees' fees and expenses........................................ 1,850 1,850 1,850
Other expenses..................................................... 1,294 1,320 1,390
----------- ---------- ----------
118,096 151,909 230,564
----------- ---------- ----------
NET INVESTMENT INCOME................................................... 329,080 461,043 805,083
NET REALIZED GAINS (LOSSES) FROM INVESTMENT TRANSACTIONS................ 2,464 (449) (1,481)
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS......... (1,254) -- (198)
----------- ---------- ----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.................... $ 330,290 $460,594 $ 803,404
----------- ---------- ----------
----------- ---------- ----------
</TABLE>
See accompanying notes to financial statements
9
<PAGE>
PAINEWEBBER/KIDDER, PEABODY MUNICIPAL MONEY MARKET SERIES -- CONNECTICUT SERIES
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Six
Months
Ended For the Year
April 30, 1995 Ended
(unaudited) October 31, 1994
-------------- ----------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income.................................................... $ 329,080 $ 519,464
Net realized gains (losses) from investment transactions................. 2,464 (4,008)
Net change in unrealized appreciation (depreciation) of investments...... (1,254) 724
-------------- ----------------
Net increase in net assets resulting from operations..................... 330,290 516,180
-------------- ----------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income.................................................... (329,080) (519,464)
-------------- ----------------
FROM BENEFICIAL TRANSACTIONS:
Net decrease in net assets from transactions in shares of beneficial
interest............................................................... (4,564,721) (2,170,701)
-------------- ----------------
Contribution to capital from predecessor adviser.............................. 8,906 --
-------------- ----------------
Net decrease in net assets............................................... (4,554,605) (2,173,985)
NET ASSETS:
Beginning of period...................................................... 25,763,272 27,937,257
-------------- ----------------
End of period............................................................ $ 21,208,667 $ 25,763,272
-------------- ----------------
-------------- ----------------
</TABLE>
See accompanying notes to financial statements
10
<PAGE>
PAINEWEBBER/KIDDER, PEABODY MUNICIPAL MONEY MARKET SERIES -- NEW JERSEY SERIES
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Six
Months
Ended For the Year
April 30, 1995 Ended
(unaudited) October 31, 1994
-------------- ----------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income.................................................... $ 461,043 $ 718,975
Net realized losses from investment transactions......................... (449) (18,801)
Net change in unrealized appreciation (depreciation) of investments...... -- (140)
-------------- ----------------
Net increase in net assets resulting from operations..................... 460,594 700,034
-------------- ----------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income.................................................... (461,043) (718,975)
-------------- ----------------
FROM BENEFICIAL TRANSACTIONS:
Net decrease in net assets from transactions in shares of beneficial
interest............................................................... (447,169) (4,473,284)
-------------- ----------------
Contribution to capital from predecessor adviser.............................. 21,521 --
-------------- ----------------
Net decrease in net assets............................................... (426,097) (4,492,225)
NET ASSETS:
Beginning of period...................................................... 31,981,006 36,473,231
-------------- ----------------
End of period............................................................ $ 31,554,909 $ 31,981,006
-------------- ----------------
-------------- ----------------
</TABLE>
See accompanying notes to financial statements
11
<PAGE>
PAINEWEBBER/KIDDER, PEABODY MUNICIPAL MONEY MARKET SERIES -- NEW YORK SERIES
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Six
Months
Ended For the Year
April 30, 1995 Ended
(unaudited) October 31, 1994
-------------- ----------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income.................................................... $ 805,083 $ 1,282,758
Net realized losses from investment transactions......................... (1,481) (20,824)
Net change in unrealized appreciation (depreciation) of investments...... (198) (67)
-------------- ----------------
Net increase in net assets resulting from operations..................... 803,404 1,261,867
-------------- ----------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income.................................................... (805,083) (1,282,758)
-------------- ----------------
FROM BENEFICIAL TRANSACTIONS:
Net increase (decrease) in net assets from transactions in shares of
beneficial interest.................................................... (14,295,800) 10,730,298
-------------- ----------------
Contribution to capital from predecessor adviser.............................. 44,335 --
-------------- ----------------
Net increase (decrease) in net assets.................................... (14,253,144) 10,709,407
NET ASSETS:
Beginning of period...................................................... 62,896,051 52,186,644
-------------- ----------------
End of period............................................................ $ 48,642,907 $ 62,896,051
-------------- ----------------
-------------- ----------------
</TABLE>
See accompanying notes to financial statements
12
<PAGE>
PAINEWEBBER/KIDDER, PEABODY MUNICIPAL MONEY MARKET SERIES
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited)
- --------------------------------------------------------------------------------
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
PaineWebber/Kidder, Peabody Municipal Money Market Series (the 'Trust') was
organized as a Massachusetts business trust on September 14, 1990, and is
registered with the Securities and Exchange Commission under the Investment
Company Act of 1940, as amended ('1940 Act'), as an open-end, non-diversified
management investment company. The Trust currently offers three no-load series
of shares: the Connecticut Series, the New Jersey Series, and the New York
Series (collectively the 'Funds').
Valuation and Accounting for Investments -- Investments are valued at amortized
cost which approximates market value. Investment transactions are accounted for
on the trade date. Realized gains and losses from investment transactions are
calculated using the identified cost method. Interest income is recorded on an
accrual basis. Premiums are amortized and discounts are accreted as adjustments
to interest income and the identified cost of securities.
Each Fund follows an investment policy of investing primarily in municipal
obligations of one state. Economic changes affecting the state and certain of
its public bodies and municipalities may affect the ability of issuers within
the state to pay interest on, or repay principal of, municipal obligations held
by each Fund.
Federal Tax Status -- Each Fund 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. In addition, by distributing during each
calendar year substantially all of its net investment income, capital gains and
certain other amounts, if any, each Fund intends not to be subject to a federal
excise tax. At October 31, 1994, the Connecticut, New Jersey and New York Series
had net capital loss carryforwards of $8,906, $21,522 and $44,775, respectively.
These loss carryforwards are available as a reduction, to the extent provided in
the regulations, of future net realized capital gains, and will expire for each
Series between October 31, 1999 and October 31, 2002.
Dividends and Distributions -- Each Fund declares dividends on a daily basis
from net investment income. Dividends from net investment income and
distributions from realized gains from investment transactions have been
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. Net capital gains, if any, will be
distributed annually, but each Fund may make more frequent distributions of such
gains if necessary to maintain its net asset value per share at $1.00 or to
avoid income or excise taxes.
INVESTMENT ADVISER AND ADMINISTRATOR
The Trust's investment adviser and administrator receives compensation from the
Funds, accrued daily and paid monthly at the annual rate of 0.50% of each Fund's
average daily net assets.
13
<PAGE>
PAINEWEBBER/KIDDER, PEABODY MUNICIPAL MONEY MARKET SERIES
- --------------------------------------------------------------------------------
Notes to Financial Statements -- (continued)
- --------------------------------------------------------------------------------
At a special meeting of shareholders that took place on April 13, 1995,
shareholders approved the appointment of PaineWebber Incorporated
('PaineWebber') as investment adviser and administrator of the Fund and Mitchell
Hutchins Asset Management Inc. ('Mitchell Hutchins') as the Funds' sub-adviser
and sub-administrator. The Funds pay the same fee for investment advisory and
administration services to PaineWebber as previously paid to Kidder Peabody
Asset Management, Inc. ('KPAM'), as described in the Funds' Prospectus.
PaineWebber (not the Funds) pays Mitchell Hutchins a fee for sub-advisory and
sub-administration services at the annual rate of 20% of the fee received by
PaineWebber from the Funds. PaineWebber and Mitchell Hutchins continue to manage
the Funds in accordance with the Funds' investment objective, policies and
restrictions as stated in the Prospectus. At April 30, 1995, the Funds owed
PaineWebber $9,074, $13,627, and $22,863 in investment advisory and
administration fees for Connecticut, New Jersey and New York Series,
respectively.
Investment advisory functions for the Funds were previously transferred from
KPAM to Mitchell Hutchins on an interim basis as a result of an asset purchase
transaction by and among Kidder, Peabody Group Inc., its parent, General
Electric Company, and Paine Webber Group Inc. That period commenced on January
30, 1995 and ended April 13, 1995.
In compliance with applicable state securities laws, PaineWebber, the Funds'
investment adviser, will reimburse the Funds, if and to the extent that the
aggregate operating expenses in any fiscal year, exclusive of taxes, interest,
brokerage fees, distribution fees and extraordinary expenses, exceed limitations
imposed by various state regulations. Currently, the most restrictive limitation
is 2.5% on the first $30 million of average daily net assets, 2.0% of the next
$70 million and 1.5% of average daily net assets in excess of $100 million. For
the six months ended April 30, 1995, no reimbursements were required pursuant to
the above limitation.
DISTRIBUTION PLAN
Since January 30, 1995, PaineWebber has been serving as the exclusive
distributor of the Funds' shares. For its services, which include payment of
sales commissions to registered representatives and various other promotional
and sales related expenses, PaineWebber receives from each Fund a distribution
fee accrued daily and paid monthly at the annual rate of 0.12% of the Fund's
average daily net assets. At April 30, 1995, $2,178, $3,270, and $5,478 were
payable to PaineWebber for these services for Connecticut, New Jersey and New
York Series, respectively.
OTHER LIABILITIES
At April 30, 1995, the amount payable for dividends was $20,027, $31,526 and
$54,440 for Connecticut, New Jersey and New York Series, respectively.
14
<PAGE>
PAINEWEBBER/KIDDER, PEABODY MUNICIPAL MONEY MARKET SERIES
- --------------------------------------------------------------------------------
Notes to Financial Statements -- (continued)
- --------------------------------------------------------------------------------
SHARES OF BENEFICIAL INTEREST
There is an unlimited number of shares of beneficial interest authorized.
Transactions in shares of beneficial interest, at $1.00 per share were as
follows:
<TABLE>
<CAPTION>
For the For the
Six Months Ended Year Ended
Connecticut Series April 30, 1995 October 31, 1994
- ---------------------------------------------------------------- ---------------- ----------------
<S> <C> <C>
Shares sold..................................................... 40,365,422 83,745,065
Shares repurchased.............................................. (45,226,316) (86,418,169)
Dividends reinvested in additional Fund shares.................. 296,173 502,403
---------------- ----------------
Net decrease in shares outstanding.............................. (4,564,721) (2,170,701)
---------------- ----------------
---------------- ----------------
</TABLE>
<TABLE>
<CAPTION>
For the For the
Six Months Ended Year Ended
New Jersey Series April 30, 1995 October 31, 1994
- ---------------------------------------------------------------- ---------------- ----------------
<S> <C> <C>
Shares sold..................................................... 87,643,369 186,667,852
Shares repurchased.............................................. (88,508,820) (191,842,500)
Dividends reinvested in additional Fund shares.................. 418,282 701,364
---------------- ----------------
Net decrease in shares outstanding.............................. (447,169) (4,473,284)
---------------- ----------------
---------------- ----------------
</TABLE>
<TABLE>
<CAPTION>
For the For the
Six Months Ended Year Ended
New York Series April 30, 1995 October 31, 1994
- ---------------------------------------------------------------- ---------------- ----------------
<S> <C> <C>
Shares sold..................................................... 113,592,228 300,275,419
Shares repurchased.............................................. (128,612,077) (290,793,335)
Dividends reinvested in additional Fund shares.................. 724,049 1,248,214
---------------- ----------------
Net increase (decrease) in shares outstanding................... (14,295,800) 10,730,298
---------------- ----------------
---------------- ----------------
</TABLE>
15
<PAGE>
PAINEWEBBER/KIDDER, PEABODY MUNICIPAL MONEY MARKET SERIES -- CONNECTICUT SERIES
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
For the Six For the Period
Months Ended For the Years Ended October 31, November 6, 1990+
April 30, 1995 -------------------------------- to
(unaudited) 1994 1993 1992 October 31, 1991
-------------- ------ ------ ------ -----------------
<S> <C> <C> <C> <C> <C>
Net asset value:
Beginning of period....................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------ ------ ------ -------
Net investment income......................... 0.013 0.017 0.015 0.022 0.040
Dividends from net investment income.......... (0.013) (0.017) (0.015) (0.022) (0.040)
------- ------ ------ ------ -------
Net asset value:
End of period............................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------ ------ ------ -------
------- ------ ------ ------ -------
Total investment return (1)................... 1.32% 1.74% 1.49% 2.25% 4.04%
------- ------ ------ ------ -------
------- ------ ------ ------ -------
Ratios/Supplemental data:
Net assets, end of period (000's)......... $21,209 $25,763 $27,937 $28,063 $40,078
Ratio of expenses to average net
assets**................................ 0.95%* 0.90% 0.97% 0.86% 0.36%*
Ratio of net investment income to average
net assets**............................ 2.63%* 1.71% 1.47% 2.28% 3.96%*
</TABLE>
- ------------
* Annualized.
+ Commencement of issuance of shares.
(1) Total return is calculated assuming a $1,000 investment on the first day of
each period reported, reinvestment of all dividends and capital gain
distributions at net asset value on the payable date, and a sale at net
asset value on the last day of each period reported. Total return
information for periods less than one year has not been annualized.
** For the period November 6, 1990 to October 31, 1991, the predecessor adviser
waived and/or reimbursed the Fund for a portion of its operating expenses.
If such fee waivers and/or expense reimbursements had not been made, the
annualized ratio of expenses to average net assets and the annualized ratio
of net investment income to average net assets would have been 0.82% and
3.50%, respectively.
16
<PAGE>
PAINEWEBBER/KIDDER, PEABODY MUNICIPAL MONEY MARKET SERIES -- NEW JERSEY SERIES
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
For the Six For the Period
Months Ended For the Years Ended October 31, February 1, 1991+
April 30, 1995 -------------------------------- to
(unaudited) 1994 1993 1992 October 31, 1991
-------------- ------ ------ ------ -----------------
<S> <C> <C> <C> <C> <C>
Net asset value:
Beginning of period........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------ ------ ------ -------
Net investment income.......................... 0.014 0.018 0.016 0.025 0.032
Dividends from net investment income........... (0.014) (0.018) (0.016) (0.025) (0.032)
------- ------ ------ ------ -------
Net asset value:
End of period.............................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------ ------ ------ -------
------- ------ ------ ------ -------
Total investment return (1).................... 1.37% 1.76% 1.65% 2.49% 3.19%
------- ------ ------ ------ -------
------- ------ ------ ------ -------
Ratios/Supplemental data:
Net assets, end of period (000's).......... $31,555 $31,981 $36,473 $27,625 $41,504
Ratio of expenses to average net
assets**................................. 0.90%* 0.85% 0.93% 0.86% 0.27%*
Ratio of net investment income to average
net assets**............................. 2.72%* 1.74% 1.63% 2.51% 4.20%*
</TABLE>
- ------------
* Annualized.
+ Commencement of issuance of shares.
(1) Total return is calculated assuming a $1,000 investment on the first day of
each period reported, reinvestment of all dividends and capital gain
distributions at net asset value on the payable date, and a sale at net
asset value on the last day of each period reported. Total return
information for periods less than one year has not been annualized.
** For the period February 1, 1991 to October 31, 1991, the predecessor adviser
waived and/or reimbursed the Fund for a portion of its operating expenses.
If such fee waivers and/or expense reimbursements had not been made, the
annualized ratio of expenses to average net assets and the annualized ratio
of net investment income to average net assets would have been 0.83% and
3.64%, respectively.
17
<PAGE>
PAINEWEBBER/KIDDER, PEABODY MUNICIPAL MONEY MARKET SERIES -- NEW YORK SERIES
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
For the Six For the Period
Months Ended For the Years Ended October 31, February 1, 1991+
April 30, 1995 -------------------------------- to
(unaudited) 1994 1993 1992 October 31, 1991
-------------- ------ ------ ------ -----------------
<S> <C> <C> <C> <C> <C>
Net asset value:
Beginning of period........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------ ------ ------ -------
Net investment income.......................... 0.014 0.018 0.015 0.023 0.030
Dividends from net investment income........... (0.014) (0.018) (0.015) (0.023) (0.030)
------- ------ ------ ------ -------
Net asset value:
End of period.............................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------ ------ ------ -------
------- ------ ------ ------ -------
Total investment return (1).................... 1.37% 1.81% 1.52% 2.28% 3.06%
------- ------ ------ ------ -------
------- ------ ------ ------ -------
Ratios/Supplemental data:
Net assets, end of period (000's).......... $48,643 $62,896 $52,187 $39,277 $38,725
Ratio of expenses to average net
assets**................................. 0.80%* 0.78% 0.88% 0.84% 0.26%*
Ratio of net investment income to average
net assets**............................. 2.78%* 1.79% 1.50% 2.24% 4.00%*
</TABLE>
- ------------
* Annualized.
+ Commencement of issuance of shares.
(1) Total return is calculated assuming a $1,000 investment on the first day of
each period reported, reinvestment of all dividends and capital gain
distributions at net asset value on the payable date, and a sale at net
asset value on the last day of each period reported. Total return
information for periods less than one year has not been annualized.
** For the period February 1, 1991 to October 31, 1991, the predecessor adviser
waived and/or reimbursed the Fund for a portion of its operating expenses.
If such fee waivers and/or expense reimbursements had not been made, the
annualized ratio of expenses to average net assets and the annualized ratio
of net investment income to average net assets would have been 0.83% and
3.43%, respectively.
18
<PAGE>
PAINEWEBBER/KIDDER, PEABODY MUNICIPAL MONEY MARKET SERIES
- --------------------------------------------------------------------------------
Shareholder Information
- --------------------------------------------------------------------------------
A special meeting of shareholders of PaineWebber/Kidder, Peabody Municipal Money
Market Series ('Fund') was held on April 13, 1995. At the meeting David J.
Beaubien, William W. Hewitt, Jr., Thomas R. Jordan, Frank P.L. Minard and Carl
W. Schafer were elected as directors to serve without limit in time, subject to
resignation, retirement or removal. The selection of Deloitte & Touche LLP as
the Fund's independent accountants was ratified.
The votes were as follows:
<TABLE>
<CAPTION>
ALL SERIES VOTING AS A SINGLE SERIES
---------------------------------------------
SHARES VOTED FOR SHARES WITHHOLD AUTHORITY
---------------- -------------------------
<S> <C> <C>
David J. Beaubien................................................. 65,392,812 4,541,460
William W. Hewitt, Jr............................................. 65,392,812 4,541,460
Thomas R. Jordan.................................................. 65,392,812 4,541,460
Frank P.L. Minard................................................. 65,392,812 4,541,460
Carl W. Schafer................................................... 65,392,812 4,541,460
</TABLE>
<TABLE>
<CAPTION>
ALL SERIES VOTING AS A SINGLE SERIES
-------------------------------------------------
SHARES SHARES SHARES
VOTED FOR VOTED AGAINST WITHHOLD AUTHORITY
---------- ------------- ------------------
<S> <C> <C> <C>
Ratification of the selection of Deloitte & Touche LLP....... 64,348,845 3,459,852 2,125,575
</TABLE>
In addition the following agreements were approved for each Series of the Fund
(Connecticut Series, New Jersey Series and New York Series):
1) An interim investment advisory agreement between each Series and Mitchell
Hutchins Asset Management Inc. ('Mitchell Hutchins') containing substantially
the same terms, conditions and fees as the previous investment advisory
agreement with Kidder Peabody Asset Management, Inc. ('KPAM')
<TABLE>
<CAPTION>
SHARES SHARES SHARES
VOTED FOR VOTED AGAINST WITHHOLD AUTHORITY
---------- ------------- ------------------
<S> <C> <C> <C>
Connecticut Series........................................... 14,204,866 42,408 433,167
New Jersey Series............................................ 17,082,309 3,066,227 735,050
New York Series.............................................. 33,977,145 96,317 296,782
</TABLE>
2) A new investment advisory and administration agreement between the Fund and
PaineWebber Incorporated ('PaineWebber') containing the same fees and
substantively similar material terms
19
<PAGE>
PAINEWEBBER/KIDDER, PEABODY MUNICIPAL MONEY MARKET SERIES
- --------------------------------------------------------------------------------
Shareholder Information -- (concluded)
- --------------------------------------------------------------------------------
and conditions as the previous investment advisory agreement with KPAM to
commence on the termination of the interim agreement; and
<TABLE>
<CAPTION>
SHARES SHARES SHARES
VOTED FOR VOTED AGAINST WITHHOLD AUTHORITY
---------- ------------- ------------------
<S> <C> <C> <C>
Connecticut Series........................................... 14,204,866 42,408 433,167
New Jersey Series............................................ 17,101,508 3,053,014 729,065
New York Series.............................................. 33,054,060 102,698 1,213,486
</TABLE>
3) A new sub-advisory and sub-administration agreement between PaineWebber and
Mitchell Hutchins to commence on the termination of the interim agreement.
<TABLE>
<CAPTION>
SHARES SHARES SHARES
VOTED FOR VOTED AGAINST WITHHOLD AUTHORITY
---------- ------------- ------------------
<S> <C> <C> <C>
Connecticut Series........................................... 14,166,703 32,074 481,664
New Jersey Series............................................ 16,928,770 3,203,833 750,984
New York Series.............................................. 33,967,342 102,698 300,203
</TABLE>
Broker non-votes and abstentions are included within the 'Shares Withhold
Authority' totals.
20
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
21
<PAGE>
--------------------------------------
TRUSTEES
David J. Beaubien
William W. Hewitt, Jr.
Thomas R. Jordan
Frank P.L. Minard
Carl W. Schafer
--------------------------------------
OFFICERS
Frank P.L. Minard
President
Victoria E. Schonfeld
Vice President
Dianne E. O'Donnell
Vice President and Secretary
Julian F. Sluyters
Vice President and Treasurer
Gregory W. Serbe
Vice President
--------------------------------------
INVESTMENT ADVISER,
ADMINISTRATOR AND
DISTRIBUTOR
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
--------------------------------------
SUB-ADVISER AND
SUB-ADMINISTRATOR
Mitchell Hutchins Asset Management
Inc.
1285 Avenue of the Americas
New York, New York 10019
--------------------------------------
This report is not to be used in
connection with the offering of
shares of the Fund unless accompanied
or preceded by an effective prospectus.
The financial information included
herein is taken from the records of
the Funds without examination by
independent accountants who do not
express an opinion thereon.
'c' 1995 PaineWebber Incorporated
['Recycled' Logo]
STATEMENT OF DIFFERENCES
The copyright symbol shall be expressed as 'c'
