<PAGE>
Liquid Institutional Reserves
Money Market Fund
Government Securities Fund
Treasury Securities Fund
------------------------------------
PROSPECTUS
SEPTEMBER 1, 1999
------------------------------------
This prospectus offers two classes of shares for each money market fund.
Institutional shares are offered primarily to institutional investors and
Financial Intermediary shares are offered to banks and other financial
intermediaries for the benefit of their customers.
Not FDIC insured. May lose value. No bank guarantee.
As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved the funds' shares or determined whether this prospectus
is complete or accurate. To state otherwise is a crime.
<PAGE>
- --------------------------------------------------------------------------------
------------------------------
Liquid Institutional Reserves
Money Market Fund Government Securities Fund Treasury Securities Fund
Contents
THE FUNDS
<TABLE>
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------
What every investor 3 Money Market Fund
should know about 6 Government Securities Fund
the funds 9 Treasury Securities Fund
12 More About Risks and
Investment Strategies
YOUR INVESTMENT
- ---------------------------------------------------------------------------------------------------------
Information for 13 Managing Your Fund Account
managing your fund -- Buying Shares
account -- Selling Shares
-- Exchanging Shares
-- Pricing and Valuation
ADDITIONAL INFORMATION
- ---------------------------------------------------------------------------------------------------------
Additional important 16 Management
information about the funds 17 Dividends and Taxes
18 Financial Highlights
- ---------------------------------------------------------------------------------------------------------
Where to learn more Back Cover
about the funds
</TABLE>
The funds are not complete or
balanced investment programs.
---------------
- --------------------------------------------------------------------------------
2
<PAGE>
- --------------------------------------------------------------------------------
------------------------------
Liquid Institutional Reserves Money Market Fund
Money Market Fund
INVESTMENT OBJECTIVE, STRATEGIES AND RISKS
- --------------------------------------------------------------------------------
FUND OBJECTIVE
High current income to the extent consistent with the preservation of capital
and the maintenance of liquidity through investments in a diversified portfolio
of high quality, short-term, U.S. dollar-denominated money market instruments.
PRINCIPAL INVESTMENT STRATEGIES
The fund is a money market fund and seeks to maintain a stable price of $1.00
per share. The fund invests in a diversified portfolio of high quality money
market instruments of governmental and private issuers.
Money market instruments are short-term debt obligations and similar securities.
They also include longer term bonds that have variable interest rates or other
special features that give them the financial characteristics of short-term
debt. The fund may invest in foreign money market instruments only if they are
denominated in U.S. dollars.
PaineWebber Incorporated, the fund's investment adviser, has appointed Mitchell
Hutchins Asset Management Inc. to serve as the fund's sub-adviser. Mitchell
Hutchins selects money market instruments for the fund based on its assessment
of relative values and changes in market and economic conditions.
PRINCIPAL RISKS
An investment in the fund is not a bank deposit and is neither insured nor
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. While the fund seeks to maintain the value of your investment at $1.00
per share, it is possible to lose money by investing in the fund.
Money market instruments generally have a low risk of loss, but they are not
risk-free. The fund is subject to credit risk, which is the risk that issuers
may fail, or become less able, to make payments when due. The fund also is
subject to interest rate risk. When short-term interest rates rise, the value of
the fund's investments generally will fall, and its yield will tend to lag
behind prevailing rates.
More information about these and other risks of an investment in the fund is
provided below in 'More About Risks and Investment Strategies.' In particular,
see the following headings:
Credit Risk
Interest Rate Risk
Foreign Securities Risk
Information on the fund's recent holdings can be found in its current
annual/semi-annual reports (see back cover for information on ordering those
reports).
---------------
- --------------------------------------------------------------------------------
3
<PAGE>
- --------------------------------------------------------------------------------
------------------------------
Liquid Institutional Reserves Money Market Fund
PERFORMANCE
- --------------------------------------------------------------------------------
RISK/RETURN BAR CHART AND TABLE
The following bar chart and table provide information about the fund's
performance and thus give some indication of the risks of an investment in the
fund.
The bar chart shows how the fund's performance has varied from year to year. The
bar chart shows Institutional shares because they have the longer performance
history. The table that follows the bar chart shows the average annual returns
over several time periods for the fund's shares.
The fund's past performance does not necessarily indicate how the fund will
perform in the future.
TOTAL RETURN ON INSTITUTIONAL SHARES (1992 IS THE FUND'S FIRST FULL CALENDAR
YEAR OF OPERATIONS)
[GRAPH]
<TABLE>
<CAPTION>
PERCENTAGES
-----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
N/A N/A N/A 3.54% 2.98% 4.02% 5.76% 5.32% 5.47% 5.43%
<CAPTION>
CALENDAR YEAR
-------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
</TABLE>
Total return January 1 to June 30, 1999 -- 2.39%
Best quarter during years shown: 2nd quarter, 1995 -- 1.44%
Worst quarter during years shown: 2nd quarter, 1993 -- 0.72%
AVERAGE ANNUAL TOTAL RETURNS
as of December 31, 1998
<TABLE>
<CAPTION>
INSTITUTIONAL SHARES*
(INCEPTION DATE) (6/3/91)
- ---------------- --------
<S> <C>
One Year........................................ 5.43%
Five Years...................................... 5.20%
Life of Class................................... 4.70%
</TABLE>
- ------------
* Because no Financial Intermediary shares were outstanding for a full calendar
year, average annual total return for Financial Intermediary shares is not
included in the table. Performance for Financial Intermediary shares would be
lower because of the 0.25% shareholder servicing fee paid by those shares.
---------------
- --------------------------------------------------------------------------------
4
<PAGE>
- --------------------------------------------------------------------------------
------------------------------
Liquid Institutional Reserves Money Market Fund
EXPENSES AND FEE TABLES
- --------------------------------------------------------------------------------
FEES AND EXPENSES These tables describe the fees and expenses that you may pay
if you buy and hold shares of the fund.
SHAREHOLDER TRANSACTION EXPENSES (fees paid directly from your investment)
<TABLE>
<S> <C>
Maximum Sales Charge (Load) Imposed on Purchases (as a % of
offering price)............................................. None
Maximum Contingent Deferred Sales Charge (Load) (as a % of
offering price)............................................. None
</TABLE>
ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from fund assets)
<TABLE>
<CAPTION>
FINANCIAL
INSTITUTIONAL INTERMEDIARY
SHARES SHARES
---------------- ----------------
<S> <C> <C> <C> <C>
Management Fees..................................... 0.25% 0.25%
Distribution and/or Service (12b-1) Fees............ 0.00% 0.00%
Other Expenses
Shareholder Servicing Fee...................... 0.00% 0.25%
Miscellaneous Expenses......................... 0.06% 0.06%
0.06% 0.31%
----- -----
Total Annual Fund Operating Expenses................ 0.31% 0.56%
----- -----
----- -----
Expense Reimbursement*.............................. 0.03% 0.03%
----- -----
Net Expenses*....................................... 0.28% 0.53%
----- -----
----- -----
</TABLE>
- ------------
* The fund and PaineWebber have entered into an expense reimbursement agreement.
PaineWebber has agreed to reimburse the fund to the extent that the fund's
expenses through the end of the current fiscal year, April 30, 2000, otherwise
would exceed the 'Net Expenses' rates for each class as shown above. The fund
has agreed to repay PaineWebber for those reimbursed expenses if it can do so
over the following three years without causing the fund's expenses in any of
those years to exceed those 'Net Expenses' rates.
EXAMPLE
This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.
This example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same, except for the one year period when
the fund's expenses are lower due to its reimbursement agreement with
PaineWebber. Although your actual costs may be higher or lower, based on these
assumptions your costs would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Institutional Shares..................... $29 $ 97 $171 $390
Financial Intermediary Shares............ 54 176 310 699
</TABLE>
---------------
- --------------------------------------------------------------------------------
5
<PAGE>
- --------------------------------------------------------------------------------
------------------------------
Liquid Institutional Reserves Government Securities Fund
Government Securities Fund
INVESTMENT OBJECTIVE, STRATEGIES AND RISKS
- --------------------------------------------------------------------------------
FUND OBJECTIVE
High current income to the extent consistent with the preservation of capital
and the maintenance of liquidity through investments in a diversified portfolio
of high quality, short-term, U.S. dollar-denominated money market instruments.
PRINCIPAL INVESTMENT STRATEGIES
The fund is a money market fund and seeks to maintain a stable price of $1.00
per share. The fund invests in a diversified portfolio of high quality, U.S.
government money market instruments that pay income that is generally exempt
from state and local income tax in the maximum number of states.
Money market instruments are short-term debt obligations and similar securities.
They also include longer term bonds that have variable interest rates or other
special features that give them the financial characteristics of short-term
debt.
PaineWebber Incorporated, the fund's investment adviser, has appointed Mitchell
Hutchins Asset Management Inc. to serve as the fund's sub-adviser. Mitchell
Hutchins selects money market instruments for the fund based on its assessment
of relative values and changes in market and economic conditions.
PRINCIPAL RISKS
An investment in the fund is not a bank deposit and is neither insured nor
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. While the fund seeks to maintain the value of your investment at $1.00
per share, it is possible to lose money by investing in the fund.
Money market instruments generally have a low risk of loss, but they are not
risk-free. The fund is subject to credit risk, which is the risk that issuers
may fail, or become less able, to make payments when due. The fund also is
subject to interest rate risk. When short-term interest rates rise, the value of
the fund's investments generally will fall, and its yield will tend to lag
behind prevailing rates.
More information about these and other risks of an investment in the fund is
provided below in 'More About Risks and Investment Strategies.' In particular,
see the following headings:
Credit Risk
Interest Rate Risk
Information on the fund's recent holdings can be found in its current
annual/semi-annual reports (see back cover for information on ordering those
reports).
---------------
- --------------------------------------------------------------------------------
6
<PAGE>
- --------------------------------------------------------------------------------
------------------------------
Liquid Institutional Reserves Government Securities Fund
PERFORMANCE
- --------------------------------------------------------------------------------
RISK/RETURN BAR CHART AND TABLE
The following bar chart and table provide information about the fund's
performance and thus give some indication of the risks of an investment in the
fund.
The bar chart shows how the fund's performance has varied from year to year. The
bar chart shows Institutional shares because they have the longer performance
history. The table that follows the bar chart shows the average annual returns
over several time periods for the fund's shares.
The fund's past performance does not necessarily indicate how the fund will
perform in the future.
TOTAL RETURN ON INSTITUTIONAL SHARES (1992 IS THE FUND'S FIRST FULL CALENDAR
YEAR OF OPERATIONS)
[GRAPH]
<TABLE>
<CAPTION>
PERCENTAGES
-----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
N/A N/A N/A 3.53% 2.94% 3.93% 5.57% 5.17% 5.30% 5.24%
<CAPTION>
CALENDAR YEAR
-------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
</TABLE>
Total return January 1 to June 30, 1999 -- 2.31%
Best quarter during years shown: 2nd quarter, 1995 -- 1.39%
Worst quarter during years shown: 2nd quarter and 4th quarter, 1993 -- 0.72%
AVERAGE ANNUAL TOTAL RETURNS
as of December 31, 1998
<TABLE>
<CAPTION>
INSTITUTIONAL SHARES*
(INCEPTION DATE) (6/3/91)
- ---------------- --------
<S> <C>
One Year................................................ 5.24%
Five Years.............................................. 5.04%
Life of Class........................................... 4.52%
</TABLE>
- ------------
* Because no Financial Intermediary shares were outstanding for a full calendar
year, average annual total return for Financial Intermediary shares is not
included in the table. Performance for Financial Intermediary shares would be
lower because of the 0.25% shareholder servicing fee paid by those shares.
---------------
- --------------------------------------------------------------------------------
7
<PAGE>
- --------------------------------------------------------------------------------
------------------------------
Liquid Institutional Reserves Government Securities Fund
EXPENSES AND FEE TABLES
- --------------------------------------------------------------------------------
FEES AND EXPENSES These tables describe the fees and expenses that you may pay
if you buy and hold shares of the fund.
SHAREHOLDER TRANSACTION EXPENSES (fees paid directly from your investment)
<TABLE>
<S> <C>
Maximum Sales Charge (Load) Imposed on Purchases (as a % of
offering price)........................................... None
Maximum Contingent Deferred Sales Charge (Load) (as a % of
offering price)........................................... None
</TABLE>
ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from fund assets)
<TABLE>
<CAPTION>
FINANCIAL
INSTITUTIONAL INTERMEDIARY
SHARES SHARES
------------- -------------
<S> <C> <C> <C> <C>
Management Fees............................................ 0.25% 0.25%
Distribution and/or Service (12b-1) Fees................... 0.00% 0.00%
Other Expenses
Shareholder Servicing Fee............................. 0.00% 0.25%
Miscellaneous Expenses*............................... 0.08% 0.08%
0.08% 0.33%
---- ----
Total Annual Fund Operating Expenses....................... 0.33% 0.58%
---- ----
---- ----
Expense Reimbursement*..................................... 0.04% 0.04%
---- ----
Net Expenses*.............................................. 0.29% 0.54%
---- ----
---- ----
</TABLE>
- ------------
* The fund and PaineWebber have entered into an expense reimbursement agreement.
PaineWebber has agreed to reimburse the fund to the extent that the fund's
expenses through the end of the current fiscal year, April 30, 2000, otherwise
would exceed the 'Net Expenses' rates for each class as shown above. The fund
has agreed to repay PaineWebber for those reimbursed expenses if it can do so
over the following three years without causing the fund's expenses in any of
those years to exceed those 'Net Expenses' rates.
EXAMPLE
This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.
This example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same, except for the one year period when
the fund's expenses are lower due to its reimbursement agreement with
PaineWebber. Although your actual costs may be higher or lower, based on these
assumptions your costs would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Institutional Shares..................... $30 $102 $181 $414
Financial Intermediary Shares............ 55 182 320 722
</TABLE>
---------------
- --------------------------------------------------------------------------------
8
<PAGE>
- --------------------------------------------------------------------------------
------------------------------
Liquid Institutional Reserves Treasury Securities Fund
Treasury Securities Fund
INVESTMENT OBJECTIVE, STRATEGIES AND RISKS
- --------------------------------------------------------------------------------
FUND OBJECTIVE
High current income to the extent consistent with the preservation of capital
and the maintenance of liquidity through investments in a diversified portfolio
of high quality, short-term, U.S. dollar-denominated money market investments.
PRINCIPAL INVESTMENT STRATEGIES
The fund is a money market fund and seeks to maintain a stable price of $1.00
per share. The fund invests in U.S. Treasury money market instruments that are
supported by the full faith and credit of the United States. These investments
pay income that is generally exempt from state and local income tax.
Money market instruments are short-term debt obligations and similar securities.
They also include longer term bonds that have variable interest rates or other
special features that give them the financial characteristics of short-term
debt.
PaineWebber Incorporated, the fund's investment adviser, has appointed Mitchell
Hutchins Asset Management Inc. to serve as the fund's sub-adviser. Mitchell
Hutchins selects money market instruments for the fund based on its assessment
of relative values and changes in market and economic conditions.
PRINCIPAL RISKS
An investment in the fund is not a bank deposit and is neither insured nor
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. While the fund seeks to maintain the value of your investment at $1.00
per share, it is possible to lose money by investing in the fund.
Money market instruments generally have a low risk of loss, but they are not
risk-free. The fund is subject to credit risk, which is the risk that issuers
may fail, or become less able, to make payments when due. The fund also is
subject to interest rate risk. When short-term interest rates rise, the value of
the fund's investments generally will fall, and its yield will tend to lag
behind prevailing rates.
More information about these and other risks of an investment in the fund is
provided below in 'More About Risks and Investment Strategies.' In particular,
see the following headings:
Credit Risk
Interest Rate Risk
Information on the fund's recent holdings can be found in its current
annual/semi-annual reports (see back cover for information on ordering those
reports).
---------------
- --------------------------------------------------------------------------------
9
<PAGE>
- --------------------------------------------------------------------------------
------------------------------
Liquid Institutional Reserves Treasury Securities Fund
PERFORMANCE
- --------------------------------------------------------------------------------
RISK/RETURN BAR CHART AND TABLE
The following bar chart and table provide information about the fund's
performance and thus give some indication of the risks of an investment in the
fund.
The bar chart shows how the fund's performance has varied from year to year. The
bar chart shows Institutional shares because they have the longer performance
history. The table that follows the bar chart shows the average annual returns
over several time periods for the fund's shares.
The fund's past performance does not necessarily indicate how the fund will
perform in the future.
TOTAL RETURN ON INSTITUTIONAL SHARES (1992 IS THE FUND'S FIRST FULL CALENDAR
YEAR OF OPERATIONS)
[GRAPH]
<TABLE>
<CAPTION>
PERCENTAGES
-----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
N/A N/A N/A 3.34% 2.72% 3.93% 5.47% 4.97% 5.16% 4.94%
<CAPTION>
CALENDAR YEAR
-------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
</TABLE>
Total return January 1 to June 30, 1999 -- 2.15%
Best quarter during years shown: 2nd quarter, 1995 -- 1.38%
Worst quarter during years shown: 1st quarter, 1993 -- 0.65%
AVERAGE ANNUAL TOTAL RETURNS*
as of December 31, 1998
<TABLE>
<CAPTION>
INSTITUTIONAL SHARES
(INCEPTION DATE) (12/6/91)
- ---------------- ---------
<S> <C>
One Year................................................ 4.94%
Five Years.............................................. 4.89%
Life of Class........................................... 4.35%
</TABLE>
- ------------
* No Financial Intermediary shares were outstanding prior to December 31, 1998.
Performance for Financial Intermediary shares would be lower because of the
0.25% shareholder servicing fee paid by those shares.
---------------
- --------------------------------------------------------------------------------
10
<PAGE>
- --------------------------------------------------------------------------------
------------------------------
Liquid Institutional Reserves Treasury Securities Fund
EXPENSES AND FEE TABLES
- --------------------------------------------------------------------------------
FEES AND EXPENSES These tables describe the fees and expenses that you may pay
if you buy and hold shares of the fund.
SHAREHOLDER TRANSACTION EXPENSES (fees paid directly from your investment)
<TABLE>
<S> <C>
Maximum Sales Charge (Load) Imposed on Purchases (as a % of
offering price)............................................. None
Maximum Contingent Deferred Sales Charge (Load) (as a % of
offering price)............................................. None
</TABLE>
ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from fund assets)
<TABLE>
<CAPTION>
FINANCIAL
INSTITUTIONAL INTERMEDIARY
SHARES SHARES
----------------------------- ---------------------------
<S> <C> <C> <C> <C>
Management Fees..................................... 0.25% 0.25%
Distribution and/or Service (12b-1) Fees............ 0.00% 0.00%
Other Expenses
Shareholder Servicing Fee...................... 0.00% 0.25%
Miscellaneous Expenses*........................ 0.08% 0.08%
0.08% 0.33%
----- -----
Total Annual Fund Operating Expenses................ 0.33% 0.58%
----- -----
----- -----
Expense Reimbursement*.............................. 0.04% 0.04%
Net Expenses*....................................... 0.29% 0.54%
----- -----
----- -----
</TABLE>
- ------------
* The fund and PaineWebber have entered into an expense reimbursement agreement.
PaineWebber has agreed to reimburse the fund to the extent that the fund's
expenses through the end of the current fiscal year, April 30, 2000, otherwise
would exceed the 'Net Expenses' rates for each class as shown above. The fund
has agreed to repay PaineWebber for those reimbursed expenses if it can do so
over the following three years without causing the fund's expenses in any of
those years to exceed those 'Net Expenses' rates.
EXAMPLE
This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds.
This example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same, except for the one year period when
the fund's expenses are lower due to its reimbursement agreement with
PaineWebber. Although your actual costs may be higher or lower, based on these
assumptions your costs would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Institutional Shares..................... $30 $102 $181 $414
Financial Intermediary Shares............ 55 182 320 722
</TABLE>
---------------
- --------------------------------------------------------------------------------
11
<PAGE>
- --------------------------------------------------------------------------------
------------------------------
Liquid Institutional Reserves
Money Market Fund Government Securities Fund Treasury Securities Fund
MORE ABOUT RISKS
AND INVESTMENT STRATEGIES
- --------------------------------------------------------------------------------
PRINCIPAL RISKS
The main risks of investing in one or more of the funds are described below. Not
all these risks apply to each fund. You can find a list of the main risks that
apply to a particular fund by looking under the 'Investment Objective,
Strategies and Risks' heading for that fund.
Other risks of investing in a fund, along with further detail about some of the
risks described below, are discussed in the funds' Statement of Additional
Information ('SAI'). Information on how you can obtain the SAI is on the back
cover of this prospectus.
Credit Risk. Credit risk is the risk that the issuer of a money market
instrument will not make principal or interest payments when they are due. Even
if an issuer does not default on a payment, a money market instrument's value
may decline if the market believes that the issuer has become less able, or less
willing, to make payments on time. Even the highest quality money market
instruments are subject to some credit risk.
Interest Rate Risk. The value of money market instruments generally can be
expected to fall when short-term interest rates rise and to rise when short-term
interest rates fall. Interest rate risk is the risk that interest rates will
rise, so that the value of a fund's investments will fall. Also, a fund's yield
will tend to lag behind changes in prevailing short-term interest rates. This
means that a fund's income will tend to rise more slowly than increases in
short-term interest rates. Similarly, when short-term interest rates are
falling, a fund's income will tend to fall more slowly.
Foreign Securities Risk. Foreign securities involve risks that normally are not
associated with securities of U.S. issuers. These include risks relating to
political, social and economic developments abroad and differences between U.S.
and foreign regulatory requirements and market practices.
ADDITIONAL RISKS
Year 2000 Risk. The funds could be adversely affected by problems relating to
the inability of computer systems used by Mitchell Hutchins and the fund's other
service providers to recognize the year 2000. While year 2000-related computer
problems could have a negative effect on the funds, Mitchell Hutchins is working
to avoid these problems with respect to its own computer systems and to obtain
assurances from other service providers that they are taking similar steps.
Similarly, the issuers whose money market instruments are bought by the funds
and the trading systems used by the funds could be adversely affected by this
issue. The ability of an issuer or trading system to respond successfully to the
issue requires both technological sophistication and diligence, and there can be
no assurance that any steps taken will be sufficient to avoid an adverse impact
on the funds.
ADDITIONAL INVESTMENT STRATEGIES
Like all money market funds, the funds are subject to maturity, quality and
diversification requirements designed to help them maintain a stable price of
$1.00 per share. In addition, Mitchell Hutchins may employ a number of
professional money management techniques to respond to changing economic and
money market conditions and to shifts in fiscal and monetary policy. These
techniques include varying a fund's composition and weighted average maturity
based upon its assessment of the relative values of various money market
instruments and future interest rate patterns. Mitchell Hutchins also may buy or
sell money market instruments to take advantage of yield differences.
Each fund may invest to a limited extent in shares of similar money market funds
that, for Government Securities Fund and Treasury Securities Fund, have like tax
characteristics.
---------------
- --------------------------------------------------------------------------------
12
<PAGE>
- --------------------------------------------------------------------------------
------------------------------
Liquid Institutional Reserves
Money Market Fund Government Securities Fund Treasury Securities Fund
MANAGING YOUR FUND ACCOUNT
- --------------------------------------------------------------------------------
BUYING SHARES
The funds accept the settlement of purchase orders only in available federal
funds. Federal funds are funds deposited by a commercial bank in an account at a
Federal Reserve Bank that can be transferred to a similar account of another
bank in one day and thus may be made immediately available to a fund through its
custodian.
Each fund offers two separate classes of shares -- Institutional shares and
Financial Intermediary shares -- as an economical and convenient means for
institutions to invest short-term funds that they hold for their own account or
hold or manage for others.
You may purchase Institutional shares if you are an institutional investor.
PaineWebber Incorporated, the distributor of the fund's shares may, in its
discretion, make Institutional shares available to individuals or other
entities.
You may purchase Financial Intermediary shares only if you are a bank or other
financial intermediary buying the shares for the benefit of your customers.
Financial Intermediary shares bear special fees at the annual rate of 0.25% of
average net assets for services that these financial intermediaries provide to
the beneficial owners of the Financial Intermediary shares.
Unless you specify otherwise, all shares purchased will be Institutional shares.
You may buy fund shares by calling the funds' transfer agent, First Data
Investor Services Group, Inc., at 1-888-LIR-FUND and speaking to a
representative. You may also buy fund shares by contacting your Financial
Advisor at PaineWebber or its correspondent firms, who are then responsible for
sending the order to the transfer agent. The availability of fund shares to
customers of PaineWebber's correspondent firms may vary depending on the
arrangements between PaineWebber and those firms.
You buy shares at the net asset value next determined after receipt and
acceptance of your purchase order by the transfer agent, subject to a fund
receiving payment the same day. Your purchase order will be effective only if
you wire payment in federal funds on the same business day that you place your
order, and your wire must actually be credited to the funds' bank account by a
Federal Reserve Bank that day. Otherwise, the order will be rejected. A business
day is any day that the funds' custodian, the funds' transfer agent and
PaineWebber are open for business. Each fund effects orders to purchase its
shares each business day at the net asset value determined as of
2:30 p.m. (Eastern time) for Money Market Fund
noon (Eastern time) for Government Securities Fund and Treasury Securities Fund
The funds and PaineWebber reserve the right to reject a purchase order or
suspend the offering of fund shares. PaineWebber may return without notice money
wired to a fund where the investor fails to place a corresponding share purchase
order.
WIRE INSTRUCTIONS
Instruct your bank to transfer federal funds by wire to:
Mitchell Hutchins Institutional Funds
c/o The Bank of New York
CR DDA A/C #8900337516
FFC PW A/C # _____________________________________________________________
[insert PaineWebber account name and account number]
LIR _________________________________________________________________ Fund
[insert Money Market, Government or Treasury]
ABA #021000018
PaineWebber or your bank may impose a service charge for wire transfers.
MINIMUM INVESTMENTS:
Money Market Fund and Government Securities Fund (or a combination of both):
---------------
- --------------------------------------------------------------------------------
13
<PAGE>
- --------------------------------------------------------------------------------
------------------------------
Liquid Institutional Reserves
Money Market Fund Government Securities Fund Treasury Securities Fund
<TABLE>
<S> <C>
To open an account.... $1,000,000
To add to an
account............. None
</TABLE>
Treasury Securities Fund:
<TABLE>
<S> <C>
To open an account.... $ 250,000
To add to an
account............. None
</TABLE>
PaineWebber may waive these minimums. A fund may change its minimum investment
requirements at any time.
Financial intermediaries may establish different minimums for their customers
who purchase Financial Intermediary shares through them, provided that the
aggregate amounts purchased meet the above minimums. You may obtain additional
information about these minimums from your financial intermediary.
REMOTE TRADE ENTRY
The funds may offer an electronic trade order entry (RTE) capability to eligible
institutional investors who meet certain conditions. For more information on
this option, contact your Financial Advisor or the transfer agent at
1-888-LIR-FUND.
SELLING SHARES
You may sell your shares by calling the transfer agent at 1-888-LIR-FUND and
speaking with a representative. You also may sell your shares by contacting your
Financial Advisor or correspondent firm (if you previously designated them to
give instructions to the transfer agent on your behalf); they are then
responsible for sending the order to the transfer agent. The funds accept sell
orders each business day up until
2:30 p.m., Eastern time, for Money Market Fund
noon, Eastern time, for Government Securities Fund and Treasury Securities Fund
Your sales proceeds will be paid in federal funds wired to one or more accounts
you have designated, normally on the business day the sale order is accepted. If
you sell all the shares you own, dividends accrued for the month to date will be
paid in federal funds and wired at the same time to the bank account(s) that you
designate.
Your bank account may not receive the proceeds in a timely manner if a Federal
Reserve Bank is experiencing delay in transfer of funds. Neither the funds,
PaineWebber nor the transfer agent is responsible for the performance of your
bank or any of its intermediaries.
The transfer agent will process your orders to sell shares only if you have on
file with it a properly completed account application, with a signature
guaranteed or other authentication acceptable to the transfer agent. The account
application requires you to designate the bank account(s) or PaineWebber account
for wiring sales proceeds. You must submit any change in the designated
account(s) for sale proceeds in a form acceptable to the transfer agent. The
transfer agent will not place the sales order if the information you provide
does not correspond to the information on your application.
If you have additional questions on selling shares, you should contact your
Financial Advisor or call the transfer agent at 1-888-LIR-FUND.
EXCHANGING SHARES
You may exchange shares of a fund for shares of the same class of another fund
or Mitchell Hutchins LIR Select Money Fund. LIR Select Money Fund has a
$10,000,000 minimum for initial purchases and a $100,000 minimum for subsequent
purchases. These minimums apply to initial and subsequent purchases made through
an exchange of shares. All exchanges are based on the next determined net asset
value per share.
Exchange orders are accepted up until noon, Eastern time (2:30 p.m., Eastern
time, for exchanges from Money Market Fund into Mitchell Hutchins LIR Select
Money Fund). Exchange orders received after these times will not be effected,
and you will have to place an exchange order before these times on the following
business day if you still wish to effect an exchange. If you exchange all your
fund shares, the dividends accrued on those shares for the month to date also
will be invested in the shares of the other fund into which the exchange is
made.
You can place an exchange order by calling the transfer agent at 1-888-LIR-FUND
and speaking with a representative. You also can place an
---------------
- --------------------------------------------------------------------------------
14
<PAGE>
- --------------------------------------------------------------------------------
------------------------------
Liquid Institutional Reserves
Money Market Fund Government Securities Fund Treasury Securities Fund
exchange order through a PaineWebber Financial Advisor or correspondent firm (if
you previously designated them to give instructions to the transfer agent on
your behalf), who is then responsible for sending the order to the transfer
agent.
Shareholders making their initial purchase of another fund through an exchange
should allow more time and must provide the transfer agent with a properly
completed account application for the new fund. These exchange orders should be
received by the transfer agent at least one half hour before the previously
mentioned deadlines to allow the transfer agent sufficient time to establish an
account in the new fund in the investor's name. Otherwise the transfer agent may
not be able to effect the exchange.
Exchange transactions must meet the minimum initial investment of the new fund.
There is no minimum for subsequent exchanges between fund accounts once they
have been activated except as noted above.
A fund may modify or terminate the exchange privilege at any time.
ADDITIONAL INFORMATION ABOUT YOUR ACCOUNT
Financial Intermediary Shares. Financial intermediaries purchasing or holding
shares for their customer accounts may charge those customers for cash
management and other services provided in connection with their accounts. These
charges may include account maintenance fees, compensating balance requirements
or fees based on account transactions, assets or income. The dividends payable
to the financial intermediaries' customers, who are the beneficial owners of the
shares, will be lower than those on Institutional shares by the amount of the
fees paid by the fund for shareholder services. A customer should consider the
terms of his account with a financial intermediary before purchasing shares.
A financial intermediary buying or selling shares for its customers is
responsible for transmitting orders to the transfer agent in accordance with its
customer agreements and the procedures noted above.
Institutional Shares. PaineWebber or Mitchell Hutchins (not the fund) may pay
shareholder servicing fees to financial institutions that make Institutional
shares available to their customers. The amount of these fees will be negotiated
between PaineWebber and the financial institution.
PRICING AND VALUATION
The price of fund shares is based on net asset value and is determined
separately for each class of shares. The net asset value is the total value of a
fund divided by the total number of shares outstanding. In determining net asset
value, each fund values its securities at their amortized cost. This method uses
a constant amortization to maturity of the difference between the cost of the
instrument to the fund and the amount due at maturity. Each fund's net asset
value per share is expected to be $1.00 per share, although this value is not
guaranteed.
The net asset value per share for Money Market Fund is determined twice each
Business Day at
noon (Eastern time) and
2:30 p.m. (Eastern time)
The net asset value per share for Government Securities Fund and Treasury
Securities Fund is determined once each Business Day at
noon (Eastern time)
Your price for buying or selling shares will be the net asset value that is next
calculated after a fund accepts your order.
---------------
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15
<PAGE>
- --------------------------------------------------------------------------------
------------------------------
Liquid Institutional Reserves
Money Market Fund Government Securities Fund Treasury Securities Fund
MANAGEMENT
- --------------------------------------------------------------------------------
INVESTMENT ADVISER AND SUB-ADVISER
PaineWebber is the investment adviser and administrator of the funds and
distributor of their shares. Mitchell Hutchins Asset Management Inc. is each
fund's sub-adviser and sub-administrator. PaineWebber and Mitchell Hutchins are
located at 1285 Avenue of the Americas, New York, New York, 10019. Mitchell
Hutchins is a wholly owned asset management subsidiary of PaineWebber, which is
wholly owned by Paine Webber Group Inc., a publicly owned financial services
holding company. On July 31, 1999, PaineWebber or Mitchell Hutchins was the
adviser or sub-adviser of 33 investment companies with 75 separate portfolios
and aggregate assets of approximately $48.0 billion.
ADVISORY FEES
The funds paid advisory and administration fees to PaineWebber for the most
recent fiscal year ended April 30, 1999 at the following annual rates based on
average net assets.
<TABLE>
<S> <C>
Money Market Fund........... 0.20%
Government Securities
Fund...................... 0.20%
Treasury Securities Fund.... 0.20%
</TABLE>
These fees reflect a waiver by PaineWebber of 0.05% of the 0.25% contract rate
for each fund's advisory and administrative fees. That fee waiver is no longer
in effect.
OTHER INFORMATION. Money Market Fund and Government Securities Fund will
maintain a rating from one or more rating agencies that provide ratings on money
market funds. There can be no assurance that either fund will maintain any
particular rating or maintain it with a particular rating agency.
---------------
- --------------------------------------------------------------------------------
16
<PAGE>
- --------------------------------------------------------------------------------
------------------------------
Liquid Institutional Reserves
Money Market Fund Government Securities Fund Treasury Securities Fund
DIVIDENDS AND TAXES
- --------------------------------------------------------------------------------
DIVIDENDS
Each fund declares dividends daily and pays them monthly. Dividends are paid on
the last business day of a month or upon the sale of all the fund shares in a
shareholder's account.
Each fund distributes any net short-term capital gain annually and anticipates
that any short-term capital gain distribution would be declared during the month
of December in a given year. A fund may make more frequent distributions if
necessary to maintain its share price at $1.00.
Shares earn dividends on the day they are purchased but do not earn dividends on
the day they are sold.
Dividends on Financial Intermediary shares of a fund will be lower than
dividends on its Institutional shares because of the higher expenses borne by
Financial Intermediary shares.
You will receive dividends in additional shares of the same class unless you
elect to have the dividends transmitted by federal funds wire to either a
designated bank account or PaineWebber account. You must notify the transfer
agent in writing in a form acceptable to the transfer agent at least two
business days prior to the end of the month if you wish to change this election
for a particular monthly dividend.
TAXES
The dividends that you receive from a fund generally are subject to federal
income tax regardless of whether you receive them in additional fund shares or
in cash. Shareholders not subject to tax on their income will not be required to
pay tax on amounts distributed to them. The funds' dividends will not qualify
for the dividends-received deduction for corporations.
Some states and localities do not tax dividends that are attributable to
interest on U.S. Treasury securities and certain other government securities.
The funds expect that their dividends will be taxed as ordinary income. Each
fund will tell you how you should treat its dividends for tax purposes. You
should not recognize any capital gain on the sale of your shares in a fund so
long as the fund maintains a share price of $1.00.
---------------
- --------------------------------------------------------------------------------
17
<PAGE>
- --------------------------------------------------------------------------------
------------------------------
Liquid Institutional Reserves
Money Market Fund Government Securities Fund Treasury Securities Fund
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The following financial highlights tables are intended to help you understand
the funds' financial performance for the past 5 years. Certain information
reflects financial results for a single fund share. In the tables, 'total
investment return' represents the rate that an investor would have earned on an
investment in the fund (assuming reinvestment of all dividends). Financial
Intermediary shares were not outstanding during the fiscal year ended April 30,
1999 for Government Securities Fund or Treasury Securities Fund and were
outstanding for only limited periods of time prior to that fiscal year for Money
Market Fund and Government Securities Fund.
The information in the financial highlights for the fiscal years ended
April 30, 1999, 1998, 1997 and 1996 has been audited by Ernst & Young LLP,
independent auditors, whose reports, along with the funds' financial statements,
are included in the funds' annual report to shareholders. The annual report may
be obtained without charge by calling 1-888-LIR-FUND. The financial information
for the fiscal periods ended April 30, 1995 was audited by another independent
accounting firm, whose report thereon was unqualified.
---------------
- --------------------------------------------------------------------------------
18
<PAGE>
- --------------------------------------------------------------------------------
------------------------------
Liquid Institutional Reserves Money Market Fund
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY MARKET FUND
------------------------------------------------------------------------------------------------------
INSTITUTIONAL SHARES FINANCIAL INTERMEDIARY SHARES**
----------------------------------------------------------- ----------------------------------------
FOR THE PERIOD
FOR THE JANUARY 14, FOR THE
FOR THE YEARS ENDED APRIL 30, YEAR ENDED 1998'D' TO YEAR ENDED
----------------------------------------------------------- APRIL 30, APRIL 30, APRIL 30,
1999 1998 1997 1996 1995'D'D' 1999 1998 1995'D'D'
---- ---- ---- ---- --------- ---- ---- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of
period............... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- -------- -------- ------- ------- ------
Net investment
income............... 0.051 0.054 0.052 0.055 0.048 0.048 0.015 0.027
Net realized losses
from investment
transactions......... -- -- -- -- (0.008) -- -- --
---------- ---------- ---------- -------- -------- ------- ------- ------
Net increase from
investment
operations........... 0.051 0.054 0.052 0.055 0.040 0.048 0.015 0.027
---------- ---------- ---------- -------- -------- ------- ------- ------
Dividends from net
investment income.... (0.051) (0.054) (0.052) (0.055) (0.048) (0.048) (0.015) (0.027)
---------- ---------- ---------- -------- -------- ------- ------- ------
Contribution to capital
from predecessor
adviser(1)........... -- -- -- -- 0.008 -- -- --
---------- ---------- ---------- -------- -------- ------- ------- ------
Net asset value, end of
period............... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- -------- -------- ------- ------- ------
---------- ---------- ---------- -------- -------- ------- ------- ------
Total investment
return(2)............ 5.22% 5.52% 5.33% 5.61% 4.91% 4.96% 1.51% 3.10%
---------- ---------- ---------- -------- -------- ------- ------- ------
---------- ---------- ---------- -------- -------- ------- ------- ------
Ratios/Supplemental
Data:
Net assets, end of
period (000's)....... $2,036,379 $1,591,789 $1,246,799 $421,878 $220,844 $12,002 $16,302 --
Expenses to average net
assets net of
waivers/reimbursements
from adviser......... 0.26% 0.29% 0.25% 0.31% 0.35% 0.51% 0.54%* 0.60%
Expenses to average net
assets before
waivers/reimbursements
from adviser......... 0.31% 0.34% 0.30% 0.37% 0.37% 0.56% 0.59%* 0.62%
Net investment income
to average net assets
net of
waivers/reimbursements
from adviser......... 5.07% 5.38% 5.24% 5.47% 4.68% 4.82% 5.13%* 4.17%
Net investment income
to average net assets
before
waivers/reimbursements
from adviser......... 5.02% 5.33% 5.19% 5.41% 4.66% 4.77% 5.07%* 4.15%
</TABLE>
- ------------
'D' Issuance of shares.
'D'D' Sub-advisory functions for the Fund were transferred from Kidder Peabody
Asset Management, Inc. to Mitchell Hutchins on January 30, 1995.
* Annualized
** For the period May 1, 1997 to January 13, 1998, for the years ended April
30, 1996 and 1997 and for the period December 24, 1994 to April 30, 1995
there were no outstanding Financial Intermediary Shares. Any further
subscriptions of such shares would be at $1.00 per share.
(1) Kidder Peabody Asset Management, Inc., the Fund's predecessor investment
adviser and administrator, purchased certain of the Fund's variable rate
securities on July 6, 1994 at prices equal to the securities' amortized cost
plus accrued and unpaid interest. Since the purchases were made at prices
above the securities' current fair value, the Fund recorded a contribution
to capital.
(2) Total investment return is calculated assuming a $1,000 investment on the
first day of each period reported, reinvestment of all dividends at net
asset value on the payable dates, and a sale at net asset value on the last
day of each period reported. Total investment return for periods of less
than one year has not been annualized.
---------------
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19
<PAGE>
- --------------------------------------------------------------------------------
------------------------------
Liquid Institutional Reserves Government Securities Fund
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GOVERNMENT SECURITIES FUND
-------------------------------------------------------------------------------------
FINANCIAL
INTERMEDIARY
SHARES**
INSTITUTIONAL SHARES ------------------------------
---------------------------------------------------- FOR THE PERIOD
FOR THE YEARS ENDED APRIL 30, JULY 12, 1994'D'
---------------------------------------------------- TO
1999 1998 1997 1996 1995'D'D' APRIL 30, 1995'D'D'
---- ---- ---- ---- --------- ------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period...... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- ------- ------- -------
Net investment income..................... 0.049 0.052 0.051 0.053 0.048 0.032
Net realized gains (losses) from
investment transactions................. -- -- -- 0.001 (0.008) --
-------- -------- -------- ------- ------- -------
Net increase from investment operations... 0.049 0.052 0.051 0.054 0.040 0.032
-------- -------- -------- ------- ------- -------
Dividends from net investment income...... (0.049) (0.052) (0.051) (0.054) (0.047) (0.032)
-------- -------- -------- ------- ------- -------
Contribution to capital from predecessor
advisor(1).............................. -- -- -- -- 0.007 --
-------- -------- -------- ------- ------- -------
Net asset value, end of period............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- ------- ------- -------
-------- -------- -------- ------- ------- -------
Total investment return(2)................ 5.04% 5.32% 5.20% 5.50% 4.61% 3.31%
-------- -------- -------- ------- ------- -------
-------- -------- -------- ------- ------- -------
Ratios/Supplemental Data:
Net assets, end of period (000's)......... $138,783 $100,140 $106,843 $43,770 $54,903 --
Expenses to average net assets net of
waivers/reimbursements from adviser..... 0.28% 0.30% 0.30% 0.32% 0.35% 0.60%*
Expenses to average net assets before
waivers/reimbursements from adviser..... 0.33% 0.59% 0.53% 0.56% 0.47% 0.72%*
Net investment income to average net
assets net of waivers/reimbursements
from adviser............................ 4.90% 5.21% 5.09% 5.52% 4.75% 4.58%*
Net investment income to average net
assets before waivers/reimbursements
from adviser............................ 4.85% 4.91% 4.86% 5.28% 4.63% 4.46%*
</TABLE>
- ------------
'D' Commencement of issuance of shares.
'D'D' Sub-advisory functions for the Fund were transferred from Kidder Peabody
Asset Management, Inc. to Mitchell Hutchins on January 30, 1995.
* Annualized
** For the years ended April 30, 1999, 1998 and 1997 and for the period March
22, 1995 to April 30, 1996 there were no outstanding Financial Intermediary
Shares. Any further subscriptions of such shares would be at $1.00 per
share.
(1) Kidder Peabody Asset Management, Inc., the Fund's predecessor investment
adviser and administrator, purchased certain of the Fund's variable rate
securities on July 6, 1994 at prices equal to the securities' amortized cost
plus accrued and unpaid interest. Since the purchases were made at prices
above the securities' current fair value, the Fund recorded a contribution
to capital.
(2) Total investment return is calculated assuming a $1,000 investment on the
first day of each period reported, reinvestment of all dividends at net
asset value on the payable dates, and a sale at net asset value on the last
day of each period reported. Total investment return for periods of less
than one year has not been annualized.
---------------
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20
<PAGE>
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------------------------------
Liquid Institutional Reserves Treasury Securities Fund
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY SECURITIES FUND
-----------------------------------------------------
INSTITUTIONAL SHARES
-----------------------------------------------------
FOR THE YEARS ENDED APRIL 30,
-----------------------------------------------------
1999 1998 1997 1996 1995'D'D'
---- ---- ---- ---- ---------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year.......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Net investment income....................................... 0.046 0.051 0.049 0.048 0.049
Net realized gains (losses) from investment transactions.... -- -- -- 0.003 (0.002)
-------- -------- -------- -------- --------
Net increase from investment operations..................... 0.046 0.051 0.049 0.051 0.047
-------- -------- -------- -------- --------
Dividends from net investment income........................ (0.046) (0.051) (0.049) (0.051) (0.047)
-------- -------- -------- -------- --------
Net asset value, end of year................................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Total investment return(1).................................. 4.68% 5.23% 5.02% 5.23% 4.75%
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Ratios/Supplemental Data:
Net assets, end of year (000's)............................. $179,227 $179,708 $ 65,893 $ 19,624 $ 23,762
Expenses to average net assets net of waivers/reimbursements
from adviser.............................................. 0.28% 0.30% 0.30% 0.32% 0.22%
Expenses to average net assets before waivers/reimbursements
from adviser.............................................. 0.33% 0.47% 0.72% 0.94% 0.84%
Net investment income to average net assets net of
waivers/reimbursements from adviser....................... 4.57% 5.09% 4.97% 5.71% 5.51%
Net investment income to average net assets before
waivers/reimbursements from adviser....................... 4.52% 4.92% 4.56% 5.09% 4.89%
</TABLE>
- ------------
'D'D' Sub-advisory functions for the Fund were transferred from Kidder Peabody
Asset Management, Inc. to Mitchell Hutchins on January 30, 1995.
(1) Total investment return is calculated assuming a $1,000 investment on the
first day of each period reported, reinvestment of all dividends at net
asset value on the payable dates, and a sale at net asset value on the last
day of each period reported.
---------------
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21
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
<TABLE>
<S> <C> <C>
TICKER SYMBOL: Institutional Shares --
Money Market Fund LIRXX
Government Securities
Fund LIGXX
Treasury Securities Fund LISXX
</TABLE>
If you want more information about the funds, the following documents are
available free upon request:
ANNUAL/SEMI-ANNUAL REPORTS
Additional information about the funds' investments is available in the funds'
annual and semi-annual reports to shareholders.
STATEMENT OF ADDITIONAL INFORMATION (SAI)
The SAI provides more detailed information about the fund and is incorporated by
reference into this prospectus.
You may discuss your questions about a fund by contacting your PaineWebber
Financial Advisor. You may obtain free copies of annual and semi-annual reports
and the SAI by contacting the funds directly at 1-888-LIR-FUND.
You may review and copy information about the funds, including shareholder
reports and the SAI, at the Public Reference Room of the Securities and Exchange
Commission. You can get text-only copies of reports and other information about
the funds and information about the operations of the SEC's Public Reference
Room:
For a fee, by writing to or calling the
SEC's Public Reference Room,
Washington, D.C. 20549-6009
Telephone: 1-800-SEC-0330
Free, from the SEC's Internet website at:
http://www.sec.gov
Liquid Institutional Reserves
-- Money Market Fund
-- Government Securities Fund
-- Treasury Securities Fund
Investment Company Act File No. 811-06281
'c' 1999 PaineWebber Incorporated
LIQUID INSTITUTIONAL RESERVES
Prospectus
- ------------------------------------------------------------------
MONEY MARKET FUND
GOVERNMENT SECURITIES FUND
TREASURY SECURITIES FUND
September 1, 1999
STATEMENT OF DIFFERENCES
------------------------
The copyright symbol shall be expressed as................................. 'c'
The dagger symbol shall be expressed as.................................... 'D'
The double dagger symbol shall be expressed as............................. 'DD'
