<PAGE>
PAINEWEBBER AND MITCHELL
HUTCHINS/KIDDER, PEABODY
MUTUAL FUNDS
PAINEWEBBER OFFERS A FAMILY OF 35 MUTUAL FUNDS WHICH ENCOMPASS A DIVERSIFIED
RANGE OF INVESTMENT GOALS. INVESTORS MAY EXCHANGE THEIR FUND SHARES WITH OTHER
FUNDS WITHIN THE FAMILY.
INCOME FUNDS
o MH/KP ADJUSTABLE RATE GOVERNMENT FUND
o MH/KP GLOBAL INCOME FUND
o MH/KP GOVERNMENT INCOME FUND
o MH/KP INTERMEDIATE FIXED INCOME FUND
o PW GLOBAL INCOME FUND
o PW HIGH INCOME FUND
o PW INVESTMENT GRADE INCOME FUND
o PW SHORT-TERM U.S. GOVERNMENT INCOME FUND
o PW SHORT-TERM U.S. GOVERNMENT INCOME FUND FOR CREDIT UNIONS
o PW STRATEGIC INCOME FUND
o PW U.S. GOVERNMENT INCOME FUND
TAX-FREE INCOME FUNDS
o MH/KP MUNICIPAL BOND FUND
o PW CALIFORNIA TAX-FREE INCOME FUND
o PW MUNICIPAL HIGH INCOME FUND
o PW NATIONAL TAX-FREE INCOME FUND
o PW NEW YORK TAX-FREE INCOME FUND
GROWTH FUNDS
o MH/KP EMERGING MARKETS EQUITY FUND
o MH/KP GLOBAL EQUITY FUND
o MH/KP SMALL CAP GROWTH FUND
o PW ATLAS GLOBAL GROWTH FUND
o PW BLUE CHIP GROWTH FUND
o PW CAPITAL APPRECIATION FUND
o PW COMMUNICATIONS & TECHNOLOGY GROWTH FUND
o PW EUROPE GROWTH FUND
o PW GROWTH FUND
o PW REGIONAL FINANCIAL GROWTH FUND
o PW SMALL CAP VALUE FUND
GROWTH AND INCOME FUNDS
o MH/KP ASSET ALLOCATION FUND
o MH/KP EQUITY INCOME FUND
o PW ASSET ALLOCATION FUND
o PW GROWTH AND INCOME FUND
o PW GLOBAL ENERGY FUND
o PW GLOBAL GROWTH AND INCOME FUND
o PW UTILITY INCOME FUND
PAINEWEBBER MONEY MARKET FUND
- ------------------
(COPYRIGHT)1995 PAINEWEBBER INCORPORATED
PRINTED ON
RECYCLED PAPER
MITCHELL HUTCHINS/
KIDDER, PEABODY
GLOBAL EQUITY FUND
SEMI-ANNUAL REPORT
February 28, 1995
<PAGE>
- --------------------------------------------------------------------------------
April 15, 1995
Dear Shareholder,
During the six months ended February 28, 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, which were implemented to moderate
economic expansion and forestall inflation, triggered stock and bond market
volatility throughout most of 1994. The Federal Reserve tightened another 0.5%
on February 1, 1995, increasing 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
February 28, 1995. Unemployment continued to decline, and retail sales remained
brisk, sparked by strengthened consumer confidence and an upward trend in
personal income. 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 into the second quarter of 1995, the economy
remains healthy--although it is not yet clear what impact higher interest rates
will have on growth.
Effective February 13, 1995, 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., the investment management for the Fund was transferred
to Mitchell Hutchins Asset Management Inc. ('Mitchell Hutchins'). Mitchell
Hutchins' appointment as the Fund's investment adviser and administrator was
approved by shareholders on April 13, 1995. Mitchell Hutchins, a wholly owned
investment management subsidiary of PaineWebber Incorporated, provides
investment advisory and portfolio management services to individuals, pension
and endowment funds, trusts and institutions. As of February 28, 1995, Mitchell
Hutchins was adviser or subadviser to 42 investment companies with 77 separate
portfolios and aggregate assets of approximately $22 billion. Although the name
has been changed to Mitchell Hutchins/Kidder, Peabody Global Equity Fund, the
investment objective remains the same: to seek long-term capital growth by
investing primarily in foreign equity securities. GE Investment Management
Incorporated ('GEIM') remains as the Fund's sub-adviser and Ralph Layman of GEIM
remains the Fund's portfolio manager, responsible for the day-to-day management
of the Fund.
PORTFOLIO REVIEW
During the six months ended February 28, 1995, Fund performance was hampered by
the poor showing of many of the dollar-earning companies in the portfolio, and
the Fund's weightings in the Mexican and Italian equity markets. The Fund's
total return for the period without deducting sales charges was (8.67)% for
Class A shares, (9.01)% for Class B shares and (8.52)% for Class C shares. The
Fund's total return for this period after deducting the maximum applicable sales
charges was (13.94)% for Class A shares, (9.01)% for Class B shares and (8.52)%
for Class C shares. In
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
comparison, the MSCI World Index returned (3.23)% during the period. The World
Index performance was largely driven by local currency, in particular the weak
dollar.
Because several companies in the portfolio derive a significant portion of their
revenue in U.S. dollars, the Fund declined during the period with the dollar's
continuing weakness relative to the Yen, Deutschemark and other major
currencies. Examples of global companies held in the portfolio whose earnings
were impacted by the dollar's decline include Nestle (2.0% of net assets as of
February 28, 1995), Total (2.2)% and Canon (1.2)%. The weakness of the dollar
has had a significant impact in Europe, where equity markets have fallen due to
the expectation of lower corporate earnings and growth estimates. The German
equity market provides a good illustration of this phenomenon. When the
Deutschemark rose versus the dollar during the period, German stocks sold off,
as exports account for 30% of the German GDP and have been the main driver of
recent growth. Other factors exerting pressure on the Fund's total return were
the disappointing performances of the Mexican and Italian markets. As of
February 28, 1995, 1.7% of the Fund's net assets were invested in Mexico and
2.1% in Italy. The Mexican Government's decision in December 1994 to devalue its
currency triggered a financial crisis and led to steep declines in the Mexican
stock market. In Italy, the perception of instability at the highest levels of
government has continued to cloud investor confidence, and Italian equities
remain at depressed levels.
During the six months ended February 28, 1995, the Fund added OMV (0.5% of net
assets as of February 28, 1995) to its holdings. OMV is an Austrian energy
company involved in the distribution and storage of natural gas for Central and
Western Europe. Natural gas demand in this region continues to grow at a rate of
5% per year, and we believe pricing will continue to improve. The Fund reduced
its position in Astra, the Swedish pharmaceutical company (1.7)%, due to
long-term concern over its product portfolio. While sales of Losec, the
company's star drug, continue to grow at double digit rates around the world, we
are concerned that the current line of products will not be able to compensate
for the eventual slowing of Losec growth. The Fund has reduced the size of its
position in Astra from a 'top ten' to a 'core' holding. In Japan, the perceived
impact of the Yen's appreciation depressed shares of the country's most globally
competitive and reasonably priced blue chip stocks. However, we believe the
companies we own, like Murata (0.7)% and Suzuki (1.8)%, have unique competitive
advantages and should outperform in the long run.
OUTLOOK
1995 has begun with violent swings in currencies. We believe that the currency
chaos experienced in the first months of the year could push world economies
toward slower growth. Countries with weakening currencies, including the U.S.,
Italy, Sweden, Spain and Mexico, should experience improving trade balances, but
lower than expected growth. European countries with weakening currencies and
onerous public sector deficits might experience 'stagflation' as inflation
builds and weak economic conditions continue. Those countries that witnessed
strong upward moves in currencies such as Germany, Japan and Switzerland are
likely to be impacted by lower growth as well. Both Germany and Japan owe their
recent economic turnarounds to strong export growth, which might be curbed in
the near future by their appreciating currencies. In the coming months, our
investment strategy will be to seek quality companies with solid growth
fundamentals whose prices have fallen due to market turbulence and negative
sentiment. We remain committed to our
- --------------------------------------------------------------------------------
2
<PAGE>
- --------------------------------------------------------------------------------
stock picking discipline, and stand ready to take advantage of opportunities
afforded by volatile markets.
Thank you for your participation in the Mitchell Hutchins/Kidder, Peabody Global
Equity Fund. We value you as a shareholder and as a client and welcome any
comments or questions you may have.
Sincerely,
/s/ FRANK P.L. MINARD /s/ RALPH R. LAYMAN
FRANK P.L. MINARD RALPH R. LAYMAN
Chairman, Portfolio Manager,
Mitchell Hutchins Asset Management Mitchell Hutchins/Kidder, Peabody
Inc. Global Equity Fund
- --------------------------------------------------------------------------------
3
<PAGE>
MITCHELL HUTCHINS/KIDDER, PEABODY GLOBAL EQUITY FUND
- --------------------------------------------------------------------------------
Recent Performance Results (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOTAL RETURN1
--------------------------------
NET ASSET VALUE 12 MONTHS 6 MONTHS
--------------------------------- ------------- -------------
2/28/95 8/31/94 2/28/94 ENDED 2/28/95 ENDED 2/28/95
<S> <C> <C> <C> <C> <C>
Class A Shares $14.26 $16.98 $16.61 -6.64% -8.67%
Class B Shares 14.05 16.81 16.50 -7.30 -9.01
Class C Shares 14.33 17.03 16.64 -6.38 -8.52
</TABLE>
PERFORMANCE SUMMARY CLASS A SHARES
<TABLE>
<CAPTION>
NET ASSET VALUE
----------------------- CAPITAL GAINS DIVIDENDS TOTAL
PERIOD COVERED BEGINNING ENDING DISTRIBUTED PAID RETURN\1\
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
11/14/91-12/31/91 $ 12.00 $12.29 -- -- 2.42%
1992 12.29 12.45 $ 0.2410 -- 3.26
1993 12.45 16.07 0.2100 -- 30.77
1994 16.07 14.43 1.2530 -- -2.35
01/01/95-02/28/95 14.43 14.26 -- -- -1.18
Total: $ 1.7040 $ 0.0000
CUMULATIVE TOTAL RETURN AS OF 2/28/95: 33.45%
</TABLE>
PERFORMANCE SUMMARY CLASS B SHARES
<TABLE>
<CAPTION>
NET ASSET VALUE
----------------------- CAPITAL GAINS DIVIDENDS TOTAL
PERIOD COVERED BEGINNING ENDING DISTRIBUTED PAID RETURN\1\
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
05/10/93-12/31/93 $ 13.80 $15.99 $ 0.2100 -- 17.39%
1994 15.99 14.23 1.2530 -- -3.12
01/01/95-02/28/95 14.23 14.05 -- -- -1.26
Total: $ 1.4630 $ 0.0000
CUMULATIVE TOTAL RETURN AS OF 2/28/95: 12.30%
</TABLE>
PERFORMANCE SUMMARY CLASS C SHARES
<TABLE>
<CAPTION>
NET ASSET VALUE
----------------------- CAPITAL GAINS DIVIDENDS TOTAL
PERIOD COVERED BEGINNING ENDING DISTRIBUTED PAID RETURN\1\
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
05/10/93-12/31/93 $ 13.80 $16.10 $ 0.2100 -- 18.19%
1994 16.10 14.49 1.2530 -- -2.16
01/01/95-02/28/95 14.49 14.33 -- -- -1.10
Total: $ 1.4630 $ 0.0000
CUMULATIVE TOTAL RETURN AS OF 2/28/95: 14.36%
</TABLE>
\1\ Figures assume reinvestment of all dividends and capital gains distributions
at net asset value on the payable date, and do not include sales charges;
results would be lower if sales charges were included.
AVERAGE ANNUAL RETURN
<TABLE>
<CAPTION>
% RETURN WITHOUT SALES CHARGE % RETURN WITH SALES CHARGE
-------------------------------- -----------------------------------------
CLASS CLASS
-------------------------------- -----------------------------------------
A* B** C*** A* B** C***
<S> <C> <C> <C> <C> <C> <C>
Twelve Months Ended 3/31/95 0.46% -0.25% 0.72% -5.33% -0.25% 0.72%
Five Years Ended 3/31/95 N/A N/A N/A N/A N/A N/A
Commencement of Operations+
Through 3/31/95 10.10 8.35 9.44 8.19 8.35 9.44
</TABLE>
* Maximum sales charge for Class A shares is 5.75% of the public offering
price. Class A shares bear ongoing 12b-1 service fees.
** Class B shares are sold without initial or contingent deferred sales
charges, but bear ongoing 12b-1 distribution and service fees.
*** Class C shares are sold without initial or contingent deferred sales charges
and are available exclusively to PaineWebber employees.
+ Commencement of operations dates are November 14, 1991, May 10, 1993 and May
10, 1993 for Class A, Class B and Class C, respectively.
The data above represent past performance of the Fund's shares, which is no
guarantee of future results. The investment return and principal value of an
investment in the Fund will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
- --------------------------------------------------------------------------------
4
<PAGE>
MITCHELL HUTCHINS/KIDDER, PEABODY GLOBAL EQUITY FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
February 28, 1995
- --------------------------------------------------------------------------------
COMMON STOCKS--90.67%
- ------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------- ------------
<C> <S> <C>
UNITED STATES--24.05%
- -------------------------------------------------------
AUTOMOTIVE--2.04%
94,134 Chrysler Corp............ $ 4,094,829
------------
BANKING--1.23%
38,380 J.P. Morgan & Co.,
Inc...................... 2,475,510
------------
COMMERCIAL SERVICES--1.89%
69,081 Ecolab, Inc.............. 1,597,498
31,795 First Financial
Management Corp.......... 2,197,829
------------
3,795,327
------------
COMPUTER SYSTEMS--2.04%
40,723 International Business
Machines Corp............ 3,064,406
28,350 Zebra Technologies Corp.
Class A.................. 1,031,231
------------
4,095,637
------------
CONGLOMERATES--DIVERSIFIED--2.36%
124,654 Allied Signal, Inc....... 4,736,852
------------
CONSUMER PRODUCTS--4.42%
49,114 Colgate-Palmolive Co..... 3,167,853
129,615 Fruit of the Loom, Inc.
Class A.................. 3,029,751
95,581 Toys 'R' Us Inc.*........ 2,664,320
------------
8,861,924
------------
DRUGS & MEDICAL PRODUCTS--2.30%
133,462 Sunrise Medical, Inc.*... 4,604,439
------------
ELECTRONICS & ELECTRICAL
EQUIPMENT--1.38%
34,661 Intel Corp............... 2,764,215
------------
ENVIRONMENTAL SERVICES--1.56%
227,941 Wheelabrator
Technologies, Inc........ 3,134,189
------------
FINANCIAL SERVICES--3.07%
246,786 Countrywide Credit
Industries, Inc.......... 4,010,272
55,108 Travelers, Inc........... 2,142,324
------------
6,152,596
------------
FOREST PRODUCTS & PAPER--1.76%
46,333 International Paper
Co....................... 3,538,683
------------
Total United States Common Stocks....... 48,254,201
------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------- ------------
<C> <S> <C>
ARGENTINA--0.45%
- -------------------------------------------------------
OIL & GAS--0.03%
7,703 Transportadora de Gas del
Sur S.A. ADR............. $ 66,438
------------
TELECOMMUNICATIONS--0.42%
23,279 Telecom Argentina STET--
France Telecom S.A.
ADR...................... 832,224
------------
Total Argentina Common Stocks........... 898,662
------------
AUSTRALIA--2.68%
- -------------------------------------------------------
FOODS--1.27%
1,063,724 Burns, Philp & Co.,
Ltd. .................... 2,552,498
------------
TRANSPORTATION--1.41%
298,683 Brambles Industries
Ltd...................... 2,831,578
------------
Total Australia Common Stocks........... 5,384,076
------------
AUSTRIA--1.60%
- -------------------------------------------------------
ENGINEERING & CONSTRUCTION--1.07%
19,928 VA Technologie AG*....... 2,142,088
------------
OIL & GAS--0.53%
11,079 OMV AG................... 1,074,712
------------
Total Austria Common Stocks............. 3,216,800
------------
DENMARK--2.08%
- -------------------------------------------------------
BANKING--0.82%
28,752 Den Danske Bank A/S...... 1,657,405
------------
COMMERCIAL SERVICES--1.26%
81,660 ISS International Service
System A/S 'B'........... 2,522,763
------------
Total Denmark Common Stocks............. 4,180,168
------------
FRANCE--9.84%
- -------------------------------------------------------
AUTOMOTIVE--2.23%
93,612 Valeo SA................. 4,481,183
------------
BANKING--1.36%
61,435 Banque Nationale de
Paris.................... 2,725,253
------------
OIL & GAS--4.42%
175,249 Coflexip SA ADR.......... 4,425,037
80,302 Compagnie Francaise de
Petroleum Total Class
B........................ 4,442,172
------------
8,867,209
------------
</TABLE>
5
<PAGE>
MITCHELL HUTCHINS/KIDDER, PEABODY GLOBAL EQUITY FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCKS--(continued)
- ------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------- ------------
RETAIL/GROCERY--1.83%
<C> <S> <C>
8,966 Carrefour SA............. $ 3,662,625
------------
Total France Common Stocks.............. 19,736,270
------------
GERMANY--4.92%
- -------------------------------------------------------
DRUGS & MEDICAL PRODUCTS--1.09%
5,592 Gehe AG.................. 2,182,965
------------
RETAIL--1.25%
7,523 AVA Allgemeine
Handelsgesellschaft der
Verbraucher AG........... 2,505,428
------------
UTILITY--2.58%
14,396 Veba AG.................. 5,179,911
------------
Total Germany Common Stocks............. 9,868,304
------------
HONG KONG--5.92%
- -------------------------------------------------------
BROADCAST--1.36%
723,600 Television Broadcasts
Ltd. .................... 2,723,503
------------
CONGLOMERATES--DIVERSIFIED--1.58%
748,800 Hutchison Whampoa
Ltd. .................... 3,176,698
------------
INSURANCE--0.49%
1,514,000 National Mutual Asia
Ltd. .................... 979,111
------------
RETAIL--2.49%
8,088,000 Giordano Holdings
Ltd. .................... 4,995,176
------------
Total Hong Kong Common Stocks........... 11,874,488
------------
INDONESIA--0.48%
- -------------------------------------------------------
AUTOMOTIVE--0.48%
572,000 P.T. Astra
International............ 967,742
------------
ITALY--2.07%
- -------------------------------------------------------
BANKING--0.46%
44,785 Istituto Mobiliare
Italiano SPA............. 244,404
40,047 Istituto Mobiliare
Italiano SPA ADR......... 675,793
------------
920,197
------------
TELECOMMUNICATIONS--1.61%
804,600 Stet-Societa Finanziaria
Telefonica SPA........... 2,236,474
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------- ------------
<C> <S> <C>
430,422 Stet-Societa Finanziaria
Telefonica SPA
(non-convertible savings
shares).................. $ 989,906
------------
3,226,380
------------
Total Italy Common Stocks............... 4,146,577
------------
JAPAN--10.56%
- -------------------------------------------------------
AUTOMOTIVE--1.82%
388,000 Suzuki Motor Co., Ltd.... 3,656,397
------------
ELECTRONICS & ELECTRICAL
EQUIPMENT--4.95%
168,000 Canon Inc................ 2,505,256
91,000 Hoshiden Corp............ 1,460,674
42,000 Murata Manufacturing Co.,
Ltd...................... 1,387,459
62,000 Omron Corp............... 969,502
68,000 Secom Co., Ltd........... 3,605,447
------------
9,928,338
------------
TELECOMMUNICATIONS--1.74%
470 DDI Corp................. 3,489,774
------------
TRUCK & LEASING--2.05%
462,000 Nippon Express Co.,
Ltd. .................... 4,114,534
------------
Total Japan Common Stocks............... 21,189,043
------------
MALAYSIA--2.29%
- -------------------------------------------------------
BANKING--1.05%
228,000 AMMB Holdings Berhad..... 2,116,983
------------
TELECOMMUNICATIONS--1.24%
354,000 Telekom Malaysia
Berhad................... 2,482,507
------------
Total Malaysia Common Stocks............ 4,599,490
------------
MEXICO--1.72%
- -------------------------------------------------------
FINANCIAL SERVICES--0.23%
129,654 Grupo Financiero
Bancomer, S.A. de C.V.
ADR+..................... 453,789
------------
HOLDING COMPANY--0.11%
30,533 Grupo Carso, S.A. de C.V.
ADR*+.................... 213,731
------------
IRON/STEEL--0.06%
32,580 Grupo Simec, S.A. de C.V.
ADR *.................... 130,320
------------
</TABLE>
6
<PAGE>
MITCHELL HUTCHINS/KIDDER, PEABODY GLOBAL EQUITY FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCKS--(continued)
- ------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------- ------------
TELECOMMUNICATIONS--1.32%
<C> <S> <C>
716,030 Telefonos de Mexico S.A.,
Class L.................. $ 985,812
60,262 Telefonos de Mexico S.A.,
Class L ADR.............. 1,664,738
------------
2,650,550
------------
Total Mexico Common Stocks.............. 3,448,390
------------
NEW ZEALAND--0.52%
- -------------------------------------------------------
HOUSEHOLD APPLIANCES--0.52%
408,248 Fisher & Paykel
Industries Ltd. ......... 1,047,851
------------
NORWAY--2.31%
- -------------------------------------------------------
COMMERCIAL SERVICES--2.31%
207,232 Petroleum
Geo-Services*............ 4,627,221
------------
SOUTH AFRICA--1.05%
- -------------------------------------------------------
IRON/STEEL--1.05%
1,967,683 Iscor Ltd. .............. 2,083,134
149,400 Iscor Ltd. Rights........ 16,007
------------
Total South Africa Common Stocks........ 2,099,141
------------
SWEDEN--2.98%
- -------------------------------------------------------
DRUGS & MEDICAL PRODUCTS--2.38%
82,205 Arjo AB.................. 1,435,876
135,045 Astra AB 'B'............. 3,344,751
------------
4,780,627
------------
TRANSPORTATION--0.60%
76,644 Linjebuss AB 'A' Free.... 1,208,005
------------
Total Sweden Common Stocks.............. 5,988,632
------------
SWITZERLAND--8.28%
- -------------------------------------------------------
DRUGS & MEDICAL PRODUCTS--2.64%
956 Roche Holding AG......... 5,307,234
------------
ELECTRONICS & ELECTRICAL
EQUIPMENT--2.47%
5,676 BBC Brown Boveri Ltd. ... 4,957,869
------------
FOODS--1.97%
4,083 Nestle SA-Registered..... 3,953,854
------------
<CAPTION>
NUMBER OF
SHARES VALUE
- ------------- ------------
<C> <S> <C>
TRANSPORTATION--1.20%
2,631 Danzas Holding AG........ $ 2,400,547
------------
Total Switzerland Common Stocks......... 16,619,504
------------
THAILAND--0.90%
- -------------------------------------------------------
BANKING--0.89%
215,230 Thai Farmers Bank,
Ltd. .................... 1,777,762
------------
CONSUMER PRODUCTS--0.01%
950 International Cosmetics
Ltd. .................... 13,332
------------
Total Thailand Common Stocks............ 1,791,094
------------
UNITED KINGDOM--5.97%
- -------------------------------------------------------
BUILDING MATERIALS--1.42%
614,965 BPB Industries PLC....... 2,858,151
------------
DRUGS & MEDICAL PRODUCTS--1.49%
1,063,421 Medeva PLC............... 2,980,610
------------
ENVIRONMENTAL SERVICES--1.33%
354,175 Waste Management
International PLC........ 1,794,711
83,562 Waste Management
International PLC, ADR... 877,401
------------
2,672,112
------------
HEALTHCARE--1.19%
803,327 Takare PLC............... 2,391,536
------------
LEISURE--0.54%
164,441 Airtours PLC............. 1,089,763
------------
Total United Kingdom Common Stocks...... 11,992,172
------------
Total Common Stocks
(cost--$163,386,850).................. 181,929,826
------------
PREFERRED STOCK--3.34%
- -------------------------------------------------------
AUSTRIA--1.06%
- -------------------------------------------------------
BANKING--1.06%
35,083 Creditanstalt-Bankverein... 2,129,133
------------
GERMANY--2.28%
- -------------------------------------------------------
COMPUTER SYSTEMS--2.28%
5,540 SAP AG................... 4,584,014
------------
Total Preferred Stocks
(cost--$3,052,852).................... 6,713,147
------------
</TABLE>
7
<PAGE>
MITCHELL HUTCHINS/KIDDER, PEABODY GLOBAL EQUITY FUND
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. GOVERNMENT OBLIGATIONS--9.86%
- ------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------- -------- -------- ------------
<S> <C> <C> <C> <C>
$8,600 Federal Farm Credit Bank Discount
Notes.............................. 03/14/95 5.890 % $ 8,581,708
1,800 Federal Home Loan Mortgage Corp.
Discount Notes..................... 03/01/95 5.950 1,800,000
1,800 Federal Home Loan Mortgage Corp.
Discount Notes..................... 03/02/95 5.780 1,799,711
7,600 Federal National Mortgage
Association Discount Notes......... 03/07/95 5.860 7,592,578
------------
Total U.S. Government Obligations
(cost--$19,773,997)............................ 19,773,997
------------
<CAPTION>
- ------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS--2.87%
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
5,750 Repurchase Agreement dated 2/28/95,
with State Street Bank and Trust
Company, collateralized by
$5,505,000 U.S. Treasury Notes,
8.875% due 02/15/99;
proceeds:$5,750,958................ 03/01/95 6.00 % $ 5,750,000
------------
Total Repurchase Agreements
(cost--$5,750,000)............................. 5,750,000
------------
TOTAL INVESTMENTS
(cost--$191,963,699)--106.74%.................. $214,166,970
Liabilities in excess of other
assets--(6.74%)................................ (13,532,351)
------------
NET ASSETS--100.00%............................ $200,634,619
------------
------------
</TABLE>
- ------------
* Non-income producing security.
+ Security restricted as to resale.
ADR--American Depository Receipts
- ---------------------------------------------------------------------------
FORWARD FOREIGN CURRENCY CONTRACTS
- ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
CONTRACTS UNREALIZED
TO IN EXCHANGE MATURITY APPRECIATION
DELIVER FOR DATES (DEPRECIATION)
------- ------------ -------- --------------
<S> <C> <C> <C> <C>
U.S. Dollars........ 850,726 ATS8,798,206 03/06/95 $3,593
U.S. Dollars........ 198,755 ATS2,033,461 03/06/95 (1,302)
Hong Kong Dollars... 85,380 US$ 11,042 03/01/95 (1)
New Zealand
Dollars............ 50,285 US$ 31,755 03/01/95 (114)
New Zealand
Dollars............ 77,639 US$ 49,037 03/02/95 (167)
New Zealand
Dollars............ 460,809 US$ 291,830 03/03/95 (209)
------
$1,800
------
------
</TABLE>
- ------------
CURRENCY TYPE ABBREVIATIONS:
ATS--Austrian Schillings CHF--Swiss Francs HKD--Hong Kong Dollar NZD--New
Zealand Dollar
See accompanying notes to financial statements.
8
<PAGE>
MITCHELL HUTCHINS/KIDDER, PEABODY GLOBAL EQUITY FUND
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
February 28, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value (cost--$191,963,699)....................................... $214,166,970
Cash denominated in foreign currencies, at value (cost--$708,496).............................. 698,024
Receivable for investments sold................................................................ 1,157,375
Dividends and interest receivable (cost--$340,862)............................................. 353,552
Receivable for shares of beneficial interest sold.............................................. 220,371
Receivable from transfer agent................................................................. 188,130
Unrealized appreciation on forward foreign currency contracts.................................. 2,291
Other assets................................................................................... 137,850
------------
Total assets............................................................................... 216,924,563
------------
LIABILITIES
Payable to custodian........................................................................... 11,625,034
Payable for investments purchased.............................................................. 2,306,528
Payable for shares of beneficial interest repurchased.......................................... 1,948,094
Unrealized depreciation on forward foreign currency contracts.................................. 491
Payable to affiliates.......................................................................... 209,767
Accrued expenses and other liabilities......................................................... 200,030
------------
Total liabilities.......................................................................... 16,289,944
------------
NET ASSETS
Beneficial interest shares of $0.001 par value outstanding (unlimited amount authorized)....... 179,169,400
Accumulated undistributed net investment income................................................ 25,316
Accumulated net realized losses from investment and foreign currency activities................ (773,514)
Net unrealized appreciation of investments, other assets, liabilities and forward contracts
denominated in foreign currencies............................................................. 22,213,417
------------
Net assets................................................................................. $200,634,619
------------
------------
CLASS A:
Net assets..................................................................................... $145,103,774
------------
Shares outstanding............................................................................. 10,173,570
------------
Net asset value and redemption value per share................................................. $14.26
------------
------------
Maximum offering price per share (net asset value plus sales charge of 5.75% of offering
price)........................................................................................ $15.13
------------
------------
CLASS B:
Net assets..................................................................................... $ 27,483,775
------------
Shares outstanding............................................................................. 1,955,883
------------
Net asset value, offering price and redemption value per share................................. $14.05
------------
------------
CLASS C:
Net assets..................................................................................... $ 28,047,070
------------
Shares outstanding............................................................................. 1,956,969
------------
Net asset value, offering price and redemption value per share................................. $14.33
------------
------------
</TABLE>
See accompanying notes to financial statements.
9
<PAGE>
MITCHELL HUTCHINS/KIDDER, PEABODY GLOBAL EQUITY FUND
- --------------------------------------------------------------------------------
Statement of Operations
For the Six Months Ended February 28, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of foreign withholding taxes)............ $1,296,296
Interest and discounts earned........................... 242,208
----------
1,538,504
----------
EXPENSES:
Investment advisory..................................... 1,128,151
Distribution fees--Class B.............................. 101,036
Service fees--Class A................................... 208,129
Service fees--Class B................................... 49,764
Custody and accounting fees............................. 158,630
Transfer agency fees.................................... 74,643
Reports and notices to shareholders..................... 40,925
Amortization of organizational expenses................. 30,262
Federal and state registration fees..................... 16,486
Legal and audit fees.................................... 13,536
Trustees' fees and expenses............................. 4,989
----------
1,826,551
----------
NET INVESTMENT LOSS........................................ (288,047)
----------
REALIZED AND UNREALIZED GAINS (LOSSES) FROM INVESTMENT AND
FOREIGN CURRENCY ACTIVITIES:
Net realized gains (losses) from:
Investment activities................................ (3,655,729)
Foreign currency activities.......................... 2,622,172
Net change in unrealized appreciation/depreciation of:
Investments.......................................... (19,872,401)
Other assets, liabilities and forward contracts
denominated in foreign currencies................... 3,757
----------
NET REALIZED AND UNREALIZED LOSSES FROM INVESTMENT AND
FOREIGN CURRENCY ACTIVITIES.............................. (20,902,201)
----------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS....... $(21,190,248)
----------
----------
</TABLE>
See accompanying notes to financial statements.
10
<PAGE>
MITCHELL HUTCHINS/KIDDER, PEABODY GLOBAL EQUITY FUND
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Six Year
Months Ended Ended
February 28, August 31,
1995 1994
------------ ------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income (loss)................... $ (288,047 ) $ 33,457
Net realized gains (losses) from investment
activities................................... (3,655,729 ) 19,733,100
Net realized gains (losses) from foreign
currency activities.......................... 2,622,172 (22,678 )
Net changes in unrealized
appreciation/depreciation of investments,
other assets, liabilities and forward
contracts denominated in foreign
currencies................................... (19,868,644 ) 17,509,713
------------ ------------
Net increase (decrease) in net assets resulting
from operations.............................. (21,190,248 ) 37,253,592
------------ ------------
Net investment income included in prices of
shares sold and redeemed..................... -- 1,018
------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized short-term gains from investment
activities--Class A.......................... (2,549,751 ) (1,858,584 )
Net realized short-term gains from investment
activities--Class B.......................... (475,944 ) (230,113 )
Net realized short-term gains from investment
activities--Class C.......................... (487,977 ) (260,619 )
Net realized long-term gains from investment
activities--Class A.......................... (10,332,659 ) (580,807 )
Net realized long-term gains from investment
activities--Class B.......................... (1,928,726 ) (71,910 )
Net realized long-term gains from investment
activities--Class C.......................... (1,977,490 ) (81,444 )
------------ ------------
(17,752,547 ) (3,083,477 )
------------ ------------
FROM BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from the sale of shares........... 24,460,567 78,480,740
Cost of shares repurchased..................... (48,085,104 ) (56,319,218 )
Proceeds from dividends reinvested............. 17,482,084 3,031,120
------------ ------------
Net increase (decrease) in net assets derived
from beneficial interest transactions........ (6,142,453 ) 25,192,642
------------ ------------
Net increase (decrease) in net assets.......... (45,085,248 ) 59,363,775
NET ASSETS:
Beginning of period............................ 245,719,867 186,356,092
------------ ------------
End of period (including undistributed net
investment income of $25,316 and $422,782,
respectively)................................ $200,634,619 $245,719,867
------------ ------------
------------ ------------
</TABLE>
See accompanying notes to financial statements.
11
<PAGE>
MITCHELL HUTCHINS/KIDDER, PEABODY GLOBAL EQUITY FUND
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Mitchell Hutchins/Kidder, Peabody Global Equity Fund (formerly Kidder,
Peabody Global Equity Fund) (the 'Fund') is registered with the Securities and
Exchange Commission under the Investment Company Act of 1940, as amended, as an
open-end, diversified investment company.
Organizational Matters--On May 10, 1993, the Fund adopted the Choice
Pricing SystemSM. Prior to May 10, 1993, the Fund issued only Class A shares;
subsequent to that date the Fund issued Class A, Class B and Class C shares.
Each class represents interests in the same assets of the Fund and the classes
are identical except for differences in their sales charge structure and ongoing
service and distribution charges. All classes of shares have equal rights as to
voting privileges, except that each class has exclusive voting rights with
respect to its distribution plan.
Organization costs are being amortized evenly over a sixty month period.
Prepaid registration fees are charged to income as the related shares are
issued.
Valuation of Investments--Securities listed on national securities
exchanges are valued at the last sale price as of the close of business on the
day the securities are being valued, or lacking any sales, at the mean between
closing bid and asked prices. Over-the-counter securities are valued on the
basis of the last sale, if available, or on the basis of the bid price at the
close of business on each day, or, if market quotations for those securities are
not readily available, at fair value, as determined in good faith by the Fund's
Trustees. Short-term obligations with maturities of 60 days or less are valued
at amortized cost.
Investment Transactions and Investment Income--Investment transactions are
recorded as of the trade date. Realized gains and losses on sales of investments
and foreign exchange transactions are calculated using the identified cost
method. Dividend income is recorded on the ex-dividend date. Interest income is
recorded on an accrual basis. Discounts are accreted and premiums are amortized
on straight line basis as adjustments to interest income and the identified cost
of investments.
Income, expenses (excluding class-specific expenses) and
realized/unrealized gains/losses are allocated proportionately to each class of
shares based upon the relative net asset value of outstanding shares (or the
value of dividend-eligible shares, as appropriate) of each class at the
beginning of the day (after adjusting for current capital share activity of the
respective classes). Class-specific expenses are charged directly to the
applicable class of shares.
12
<PAGE>
MITCHELL HUTCHINS/KIDDER, PEABODY GLOBAL EQUITY FUND
- --------------------------------------------------------------------------------
Notes to Financial Statements-- (continued)
- --------------------------------------------------------------------------------
Foreign Currency Translation--The Fund's financial statements are
maintained in U.S. dollars. Foreign currency amounts are translated into U.S.
dollars on the following basis:
(1) Market value of investment securities, other assets and
liabilities--at the closing rate of exchange.
(2) Purchases and sales of investment securities, income and
expenses--at the rate of exchange prevailing on the respective dates of
such transactions.
The Fund does not isolate that portion of the results of operations
resulting from changes in the foreign exchange rates from the fluctuations
arising from changes in the market prices of securities held at fiscal year end.
However, the Fund does isolate the effect of changes in foreign exchange rates
from the fluctuations arising from changes in the market prices of portfolio
securities sold during the fiscal year.
Realized currency gain/loss on investment transactions includes realized
foreign exchange gains and losses from the sale of portfolio securities, sales
of foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, the difference between the amounts
of dividends, interest and foreign withholding taxes recorded on the Fund's
books and the U.S. dollar equivalent of the amounts received or paid. Gains and
losses from translating foreign currency-denominated assets and liabilities at
year-end exchange rates are included in change in unrealized appreciation due to
translation of foreign denominated assets and liabilities.
Foreign security and currency transactions may involve certain risks not
typically associated with domestic transactions as a result of other factors
including the possibility of political and economic instability and the level of
governmental supervision and regulation of foreign securities markets.
Forward Foreign Currency Contracts--The Fund is authorized to enter into
forward foreign currency exchange contracts in connection with planned purchases
or sales of securities or to hedge the U.S. dollar value of portfolio securities
denominated in a particular currency.
A forward currency contract is a commitment to purchase or sell foreign
currency at a future date at a negotiated exchange rate. Generally, the Fund
will enter into such forward contracts on the transaction's trade date with a
contracted date coinciding with the settlement date of the underlying security.
Certain risks may arise upon entering into these contracts from the potential
inability of counterparties to meet the terms of their contracts and from
unanticipated movements in the value of foreign currencies relative to the U.S.
dollar. During the period between the forward currency contract's trade date and
settlement date movements in the value of foreign currencies relative to the
U.S. dollar are recognized as unrealized gains or losses. On a daily basis the
Fund records an unrealized gain or loss to recognize the U.S. dollar value of
the foreign currency contract at the end of each day's trading. Should the
underlying security fail to settle within the contracted period the
13
<PAGE>
MITCHELL HUTCHINS/KIDDER, PEABODY GLOBAL EQUITY FUND
- --------------------------------------------------------------------------------
Notes to Financial Statements-- (continued)
- --------------------------------------------------------------------------------
forward currency contract is renegotiated at a new exchange rate. The gain or
loss resulting from the difference between the original and renegotiated
settlement values is recognized and included in realized transaction gain/loss.
Repurchase Agreements--The Fund's custodian takes possession of the
collateral pledged for investments in repurchase agreements. The underlying
collateral is valued daily on a mark-to-market basis to ensure that the value,
including accrued interest, is at least equal to the repurchase price. In the
event of default of the obligation to repurchase, the Fund has the right to
liquidate the collateral and apply the proceeds in satisfaction of the
obligation. Under certain circumstances, in the event of default or bankruptcy
by the other party to the agreement, realization and/or retention of the
collateral may be subject to legal proceedings. The value of the collateral must
be a minimum of 100% of the market value of the securities being loaned,
allowing for minor variations arising from marking to market of such collateral.
If the issuer defaults or if bankruptcy or regulatory proceedings are commenced
with respect to the issuer, the realization of the proceeds may be delayed or
limited.
Federal Tax Status--The 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, the Fund intends not to be subject to a federal
excise tax.
Dividends and Distributions--Dividends and distributions to shareholders
are recorded on ex-dividend date. The Fund declares dividends from net
investment income annually. Net capital gains, if any, will be distributed at
least annually, but the Fund may make more frequent distributions of such gains,
if necessary, to avoid income or excise taxes.
INVESTMENT ADVISER AND ADMINISTRATOR
The Fund has entered into an Investment Advisory and Administrative
Contract with Mitchell Hutchins Asset Management Inc. ('Mitchell Hutchins'), a
wholly owned subsidiary of PaineWebber Incorporated. Mitchell Hutchins serves as
the Fund's investment adviser and administrator and receives a fee, accrued
daily and paid monthly, at the annual rate of 1.00% of the Fund's average daily
net assets. Mitchell Hutchins in turn employs GE Investment Management
Incorporated ('GEIM'), a wholly owned subsidiary of General Electric Company
('GE'), as the Fund's sub-adviser, in which capacity GEIM receives from Mitchell
Hutchins (not the Fund) a fee, paid monthly, calculated and accrued daily at the
annual rate of .70% of the Fund's average daily net assets. At February 28,
1995, the Fund owed Kidder Peabody Asset Management, Inc. ('KPAM'), the Fund's
predecessor investment adviser and administrator, $67,344 in investment advisory
and administration fees.
14
<PAGE>
MITCHELL HUTCHINS/KIDDER, PEABODY GLOBAL EQUITY FUND
- --------------------------------------------------------------------------------
Notes to Financial Statements-- (continued)
- --------------------------------------------------------------------------------
At a special meeting of shareholders that took place on April 13, 1995,
Mitchell Hutchins was appointed as investment adviser and administrator of the
Fund and GEIM was appointed as the Fund's sub-adviser. The Fund pays the same
fee for investment advisory and administration services to Mitchell Hutchins as
previously paid to KPAM, as described in the Fund's prospectus. Mitchell
Hutchins and GEIM continue to manage the Fund in accordance with the Fund's
investment objective, policies and restrictions as stated in the Fund's
prospectus.
Investment advisory functions for the Fund 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, GE, and Paine
Webber Group Inc. ('PW Group'). That period began on February 13, 1995 and ended
on April 13, 1995.
In compliance with applicable state securities laws, Mitchell Hutchins will
reimburse the Fund 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 limitations applicable to the Fund
is 2.5% of the first $30 million of average daily net assets, 2.0% of the next
$70 million and 1.5% of any excess over $100 million. No expense reimbursement
was required for the six months ended February 28, 1995.
DISTRIBUTION PLANS
Effective February 13, 1995, Mitchell Hutchins serves as the exclusive
distributor of the Fund's shares. Under separate plans of distribution, Class A
shares are sold subject to a front-end sales load and bear a service fee of
0.25% per annum of average class net assets. Class B shares are sold at net
asset value without a sales load and bear a distribution fee of 0.75% per annum
and a service fee of 0.25% per annum of average class net assets. The Fund pays
Mitchell Hutchins the service and distribution fees monthly. For these services
for the period ended February 13, 1995, Kidder, Peabody & Co. Incorporated, the
Fund's predecessor distributor, earned $330,637 in fees. At February 28, 1995,
$28,292 was payable to Mitchell Hutchins for the period from February 13 to
February 28, 1995. Mitchell Hutchins also receives the proceeds of any front-end
sales loads with respect to the purchase of Class A shares.
15
<PAGE>
MITCHELL HUTCHINS/KIDDER, PEABODY GLOBAL EQUITY FUND
- --------------------------------------------------------------------------------
Notes to Financial Statements--(concluded)
- --------------------------------------------------------------------------------
INVESTMENTS IN SECURITIES
For federal income tax purposes, the cost of securities owned at February
28, 1995 was substantially the same as the cost of securities for financial
statement purposes.
At February 28, 1995, the components of the net unrealized appreciation of
investments were as follows:
<TABLE>
<S> <C>
Gross appreciation (investments having an excess of value over cost)...... $40,109,125
Gross depreciation (investments having an excess of cost
over value)............................................................. (17,905,854)
-----------
Net unrealized appreciation of investments................................ $22,203,271
-----------
-----------
</TABLE>
For the six months ended February 28, 1995, total aggregate purchases and
sales of portfolio securities, excluding short-term securities, were as follows:
<TABLE>
<S> <C>
Purchases................................................................. $37,941,577
Sales..................................................................... $69,993,499
</TABLE>
BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number
of shares of beneficial interest, par value $.001 per share. Transactions in
shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
------------------------- ----------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ------------ --------- ----------- -------- -----------
<S> <C> <C> <C> <C> <C> <C>
Six months ended February 28, 1995:
Shares sold......................... 785,130 $ 12,750,893 232,017 $ 3,741,367 482,574 $ 7,968,307
Dividends and distributions
reinvested in additional
Fund shares....................... 884,650 12,668,188 168,250 2,377,378 169,482 2,436,518
Shares repurchased.................. (2,421,673) (37,397,415) (338,660) (5,145,444) (361,856) (5,542,245)
---------- ------------ --------- ----------- -------- -----------
Net increase (decrease)............... (751,893) $(11,978,334) 61,607 $ 973,301 290,200 $ 4,862,580
---------- ------------ --------- ----------- -------- -----------
---------- ------------ --------- ----------- -------- -----------
Year ended August 31, 1994:
Shares sold......................... 2,764,374 $ 43,492,060 1,520,043 $23,745,336 707,025 $11,244,362
Dividends and distributions
reinvested in additional
Fund shares....................... 149,182 2,394,380 18,552 296,272 21,173 340,468
Shares repurchased.................. (2,738,250) (44,032,678) (388,843) (6,218,957) (372,775) (6,067,583)
---------- ------------ --------- ----------- -------- -----------
Net increase.......................... 175,306 $ 1,853,762 1,149,752 $17,822,651 355,423 $ 5,517,247
---------- ------------ --------- ----------- -------- -----------
---------- ------------ --------- ----------- -------- -----------
</TABLE>
16
<PAGE>
MITCHELL HUTCHINS/KIDDER, PEABODY GLOBAL EQUITY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
Class A
----------------------------------------------------------
For the Six For the Years Ended For the Period
Months Ended August 31, November 14, 1991+
February 28, -------------------- to August 31,
1995 1994 1993 1992
------------ -------- -------- ------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period..................... $ 16.98 $ 14.55 $ 12.87 $ 12.00
Income (loss) from investment operations:
Net investment income (loss)........................... (0.02) 0.01 0.03 0.09
Net realized and unrealized gains (losses) from
investment and foreign currency activities........... (1.44) 2.63 1.89 0.78
------------ -------- -------- ----------
Total income (loss) from investment operations........... (1.46) 2.64 1.92 0.87
------------ -------- -------- ----------
Dividends and distributions:
Dividends from net investment income................... -- -- (0.08) --
Distributions from net realized gains.................. (1.26) (0.21) (0.16) --
------------ -------- -------- ----------
Total dividends and distributions...................... (1.26) (0.21) (0.24) --
------------ -------- -------- ----------
Net asset value, end of period........................... $ 14.26 $ 16.98 $ 14.55 $ 12.87
------------ -------- -------- ----------
------------ -------- -------- ----------
Total return (1)......................................... (8.67)% 18.23% 15.24% 7.25%
------------ -------- -------- ----------
------------ -------- -------- ----------
Ratios/Supplemental data:
Net assets, end of period (000's)........................ $145,104 $185,493 $156,451 $113,070
Ratios of expenses to average net assets................. 1.65%* 1.58% 1.53% 1.68%*
Ratio of net investment income (loss) to average
net assets............................................. (0.28)%* 0.07% 0.22% 0.93%*
Portfolio turnover....................................... 32.45% 50.73% 56.35% 30.32%
</TABLE>
- ------------------
* Annualized
+ Commencement of offering of shares.
(1) Total return is calculated assuming a $1,000 investment in Fund shares on
the first day of each period reported, reinvestment of all dividends and
capital gain distributions at net value on the payable date, and a sale at
net asset value on the last day of each period reported. The figures do not
include sales charges; results of Class A would be lower if sales charges
were included. Total returns for periods less than one year are not
annualized.
17
<PAGE>
MITCHELL HUTCHINS/KIDDER, PEABODY GLOBAL EQUITY FUND
- --------------------------------------------------------------------------------
Financial Highlights--(continued)
- --------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
Class B
-------------------------------------------
For the
For the Six For the Period
Months Ended Year Ended May 10, 1993+
February 28, August 31, to August 31,
1995 1994 1993
------------ ---------- -------------
<S> <C> <C> <C>
Net asset value, beginning of period.................................... $ 16.81 $ 14.52 $ 13.80
Income (loss) from investment operations:
Net investment income (loss).......................................... 0.04 (0.07) (0.02)
Net realized and unrealized gains (losses) from investment and foreign
currency activities................................................. (1.55) 2.57 0.74
------------ ---------- -------------
Total income (loss) from investment operations.......................... (1.51) 2.50 0.72
------------ ---------- -------------
Dividends and distributions:
Dividends from net investment income.................................. -- -- --
Distributions from net realized gains................................. (1.25) (0.21) --
------------ ---------- -------------
Total dividends and distributions..................................... (1.25) (0.21) --
------------ ---------- -------------
Net asset value, end of period.......................................... $ 14.05 $ 16.81 $ 14.52
------------ ---------- -------------
------------ ---------- -------------
Total return (1)........................................................ (9.01)% 17.29% 5.22%
------------ ---------- -------------
------------ ---------- -------------
Ratios/Supplemental data:
Net assets, end of period (000's)....................................... $ 27,484 $ 31,837 $10,807
Ratios of expenses to average net assets................................ 2.40%* 2.33% 2.28%*
Ratio of net investment income (loss) to average
net assets............................................................ (1.03)%* (0.68)% (0.53)%*
Portfolio turnover...................................................... 32.45% 50.73% 56.35%
</TABLE>
- ------------------
* Annualized
+ Commencement of offering of shares.
(1) Total return is calculated assuming a $1,000 investment in Fund shares on
the first day of each period reported, reinvestment of all dividends and
capital gain distributions at net value on the payable date, and a sale at
net asset value on the last day of each period reported. Total returns for
periods less than one year are not annualized.
18
<PAGE>
MITCHELL HUTCHINS/KIDDER, PEABODY GLOBAL EQUITY FUND
- --------------------------------------------------------------------------------
Financial Highlights--(concluded)
- --------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
Class C
-------------------------------------------
For the
For the Six For the Period
Months Ended Year Ended May 10, 1993+
February 28, August 31, to August 31,
1995 1994 1993
------------ ---------- -------------
<S> <C> <C> <C>
Net asset value, beginning of period.................................... $ 17.03 $ 14.56 $ 13.80
Income (loss) from investment operations:
Net investment income (loss).......................................... 0.00 0.05 0.02
Net realized and unrealized gains (losses) from
investment and foreign currency activities.......................... (1.45) 2.63 0.74
------------ ---------- -------------
Total income (loss) from investment operations.......................... (1.45) 2.68 0.76
------------ ---------- -------------
Dividends and distributions:
Dividends from net investment income.................................. -- -- --
Distributions from net realized gains................................. (1.25) (0.21) --
------------ ---------- -------------
Total distributions................................................... (1.25) (0.21) --
------------ ---------- -------------
Net asset value, end of period.......................................... $ 14.33 $ 17.03 $ 14.56
------------ ---------- -------------
------------ ---------- -------------
Total return (1)........................................................ (8.52)% 18.49% 5.51%
------------ ---------- -------------
------------ ---------- -------------
Ratios/Supplemental data:
Net assets, end of period (000's)....................................... $ 28,047 $ 28,390 $19,098
Ratios of expenses to average net assets................................ 1.40%* 1.33% 1.28%*
Ratio of net investment income (loss) to average
net assets............................................................ (0.03)%* 0.32% 0.47%*
Portfolio turnover...................................................... 32.45% 50.73% 56.35%
</TABLE>
- ------------------
* Annualized
+ Commencement of offering of shares.
(1) Total return is calculated assuming a $1,000 investment in Fund shares on
the first day of each period reported, reinvestment of all dividends and
capital gain distributions at net value on the payable date, and a sale at
net asset value on the last day of each period reported. Total returns for
periods less than one year are not annualized.
19
<PAGE>
MITCHELL HUTCHINS/KIDDER, PEABODY GLOBAL EQUITY FUND
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Report of Independent Auditors
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The Board of Trustees and Shareholders,
Mitchell Hutchins/Kidder, Peabody Global Equity Fund
(one of the portfolios constituting the Mitchell Hutchins/
Kidder, Peabody Investment Trust):
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of Mitchell Hutchins/Kidder, Peabody
Global Equity Fund as of February 28, 1995, and the related statements of
operations and of changes in net assets and the financial highlights for each of
the periods presented. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of the securities owned as of
February 28, 1995, by correspondence with the custodian and brokers; where
replies were not received from brokers, we performed other auditing procedures.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements and financial highlights present
fairly in all material respects, the financial position of Mitchell
Hutchins/Kidder, Peabody Global Equity Fund as of February 28, 1995, the results
of its operations, the changes in its net assets and the financial highlights
for each of the periods presented in conformity with generally accepted
accounting principles.
Deloitte & Touche LLP
New York, New York
April 21, 1995
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TRUSTEES
David J. Beaubien
William W. Hewitt, Jr.
Thomas R. Jordan
Frank P.L. Minard
Carl W. Schafer
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PRINCIPAL 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
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INVESTMENT ADVISER,
ADMINISTRATOR AND
DISTRIBUTOR
Mitchell Hutchins Asset Management Inc.
1285 Avenue of the Americas
New York, New York 10019
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INVESTMENT SUB-ADVISER
GE Investment Management Incorporated
3003 Summer Street
Stamford, Connecticut 06904
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A Prospectus containing more complete information for any of the funds listed on
the back cover can be obtained from a PaineWebber investment executive or
correspondent firm. Read the prospectus carefully before investing.
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.
