<PAGE>
PAINEWEBBER MUTUAL FUNDS
PAINEWEBBER OFFERS A FAMILY OF 22 MUTUAL
FUNDS WHICH ENCOMPASS A DIVERSIFIED RANGE
OF INVESTMENT GOALS. INVESTORS MAY EXCHANGE
THEIR FUND SHARES WITH OTHER FUNDS WITHIN
THE FAMILY FOR A $5 EXCHANGE FEE.
INCOME FUNDS
o GLOBAL INCOME FUND
o HIGH INCOME FUND
o INVESTMENT GRADE INCOME FUND
o LOW DURATION U.S. GOVERNMENT INCOME FUND
o STRATEGIC INCOME FUND
o U.S. GOVERNMENT INCOME FUND
TAX-FREE INCOME FUNDS
o CALIFORNIA TAX-FREE INCOME FUND
o MUNICIPAL HIGH INCOME FUND
o NATIONAL TAX-FREE INCOME FUND
o NEW YORK TAX-FREE INCOME FUND
GROWTH FUNDS
o CAPITAL APPRECIATION FUND
o EMERGING MARKETS EQUITY FUND
o FINANCIAL SERVICES GROWTH FUND
o GLOBAL EQUITY FUND
o GROWTH FUND
o SMALL CAP GROWTH FUND
o SMALL CAP VALUE FUND
GROWTH AND INCOME FUNDS
o BALANCED FUND
o GROWTH AND INCOME FUND
o TACTICAL ALLOCATION FUND
o UTILITY INCOME FUND
PAINEWEBBER MONEY MARKET FUND
---------------------------------
(COPYRIGHT)1996 PAINEWEBBER INCORPORATED
[LOGO] PRINTED ON
RECYCLED PAPER
PAINEWEBBER
GLOBAL EQUITY FUND
SEMI-ANNUAL REPORT
February 29, 1996
<PAGE>
- --------------------------------------------------------------------------------
April 16, 1996
Dear Shareholder,
PaineWebber Global Equity Fund's total return for the six months ended
February 29, 1996, without deducting sales charges, was 4.40% for Class A
shares, 3.97% for Class B shares, 3.97% for Class C shares and 4.50% for Class Y
shares. If the effects of maximum sales charges are taken into account, the
Fund's total return for the six months was -0.30% for Class A shares, -1.03% for
Class B shares, 2.97% for Class C shares and 4.50% for Class Y shares. In
comparison, the Morgan Stanley Capital World Index (the 'Index') was up 10.35%
for the same time period.
The primary driver of the Fund's performance versus the benchmark was the
portfolio's underweighted position in the U.S. stock market (26.3% of net assets
as of February 29, 1996). 1995 will be remembered for the strong performance of
the U.S. stock market, which easily outdistanced most overseas markets. While
the U.S. enjoyed a record stock market ride, the rest of the world's markets
positioned themselves for a recovery. In addition, with the exception of
Indonesia, most emerging markets were relatively weak during the period,
although performance improved considerably during the first quarter of 1996. The
Fund's exposure in Austria (4.1%) also affected performance, as the market was
one of the few that showed negative performance over the period. The six-month
period was also marked by a rally in the dollar against the yen (up 7.3%). In
contrast, the dollar was almost flat versus the European currencies. The dollar
rally hurt the Fund's performance relative to its peer group as the Fund's
equity positions are not hedged. However, the Fund is positioned in many
companies that are global, which should benefit from the dollar rally in the
medium- to long-term because of the potential positive impact on earnings.
Another positive for the Fund has been the recovery of the French market
(up 8.8%) following the post election weakness (9.5% of net assets were invested
in French securities on February 29, 1996). The slowdown in Europe has paved the
way for interest rate cuts and the equity markets have begun to respond
favorably. Additionally, the Fund's underweighted position in Japan (13.0% of
net assets on February 29, 1996), which was only up 2.7% during the six-month
period, contributed positively to performance. The Fund continues to be
underweighted in Japan for two reasons. First, GE Investment Management Inc.
('GEIM'), the Fund's sub-adviser, does not think that the financial sector
(one-third of the Nikkei Index) is one that poses a favorable risk/reward ratio.
Although there have been hints that the government is willing to acknowledge the
asset problems in the sector, restructuring still has not taken a tangible form.
Second, GEIM is skeptical about the potential long-term growth rates of many
domestically oriented companies, because the artificial trade barriers that have
protected them for years are slowly deteriorating. The Fund continues to invest
in globally competitive companies with attractive valuations.
Equity markets, particularly the U.S., have been driven by low interest
rates, sustained economic growth and strong flows into equity mutual funds. Our
investment process, which targets growth stocks at a reasonable price, was out
of favor during the six-month period. GEIM tends to look for companies which
have value the market is overlooking with a catalyst to unlock that value over a
3-5 year time horizon. These stocks occasionally suffer due to disappointments
and the
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
market may overlook their potential during strong bull-market runs. Money across
the globe has been chasing stocks that have risen the most (momentum stocks) and
are the most liquid, not necessarily those offering the best value. Despite the
Fund's recent underperformance, GEIM believes their investment process is sound,
and will continue to invest in companies that have good value characteristics
relative to their growth rate.
OUTLOOK
The U.S. economy seems to be muddling through a soft landing. Given that
1996 is an election year, monetary policy is likely to remain in a relatively
neutral mode as long as there are no signs of a serious deterioration in
inflation trends. Clearly, this should help support equities. On the other hand,
earnings momentum appears to be slowing and surprises are likely to be on the
downside. Although GEIM is not negative on the U.S. market, they are still
finding better values in foreign stock markets. Of course, no one can predict
the flow of funds consistently, and if the flood of money into the U.S. equity
market continues the market will keep rising. GEIM will continue to look for
select opportunities in the U.S. market, but under current valuations, additions
to U.S. holdings will be limited.
The European economies have slowed down more sharply than expected, and
interest rates have been inching lower, underpinning the bond and equity
markets. We anticipate that lower rates will eventually stimulate a mild
recovery, but fiscal restraint and corporate restructuring will be a mitigating
factor. GEIM continues to find good value in continental Europe, where
restructuring opportunities abound. GEIM is finding a number of 'bargains' among
large globally competitive European countries that look quite inexpensive
relative to their potential growth rates. Deficit reduction in the region is
beginning to take shape, which is a long-term positive for these economies,
however in the short-run it will hurt consumer confidence in an environment
where restructuring and downsizing are gathering pace.
Stimulatory effects of the yen weakness seen in the second half of 1995 are
beginning to flow through to the Japanese economy. However, GEIM expects that
the recovery will be quite modest in light of the bank bailout and stretched
government finances. Additionally, many of the potential beneficiaries of the
yen weakness (the exporters) have actually redeployed production to South East
Asia, which limits the upside from the currency moves. Despite this, GEIM still
finds many of the globally competitive export companies with proprietary
products and niche strategies attractive, for example Canon (1.4% of net assets
as of February 29, 1996).
Given GEIM's investment style, looking for undervalued growth
opportunities, they are finding more attractive investments in non-U.S. markets.
As always, GEIM continues to focus on stocks that should be able to deliver
consistent growth at a reasonable price, regardless of the economic environment.
GEIM remains committed to their stock picking discipline, ready to take
advantage of investment opportunities offered by volatile markets.
- --------------------------------------------------------------------------------
2
<PAGE>
- --------------------------------------------------------------------------------
We value you as a shareholder and as a client, and thank you for your
continued support. We welcome any comments or questions you may have.
Sincerely,
/s/MARGO ALEXANDER /s/RALPH R. LAYMAN
MARGO ALEXANDER RALPH R. LAYMAN
President, Portfolio Manager,
Mitchell Hutchins Asset Management Inc. PaineWebber Global Equity Fund
- --------------------------------------------------------------------------------
3
<PAGE>
PAINEWEBBER GLOBAL EQUITY FUND
- --------------------------------------------------------------------------------
Performance Results (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOTAL RETURN(1)
NET ASSET VALUE -------------------------------
------------------------------ 12 MONTHS 6 MONTHS
02/29/96 08/31/95 02/28/95 ENDED 02/29/96 ENDED 02/29/96
<S> <C> <C> <C> <C> <C>
Class A Shares $ 16.24 $ 16.12 $ 14.26 18.02% 4.40%
Class B Shares(2) 15.86 15.82 N/A N/A 3.97
Class C Shares(3) 15.86 15.82 14.05 17.07 3.97
</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)
1995 14.43 15.81 0.5743 -- 13.54
01/01/96-02/29/96 15.81 16.24 -- -- 2.72
Total: $ 2.2783 $0.0000
CUMULATIVE TOTAL RETURN AS OF 02/29/96: 57.45%
</TABLE>
PERFORMANCE SUMMARY CLASS B SHARES(2)
<TABLE>
<CAPTION>
NET ASSET VALUE
------------------- CAPITAL GAINS DIVIDENDS TOTAL
PERIOD COVERED BEGINNING ENDING DISTRIBUTED PAID RETURN(1)
<S> <C> <C> <C> <C> <C>
08/25/95-12/31/95 $ 15.83 $15.46 $ 0.5743 -- 1.29%
01/01/96-02/29/96 15.46 15.86 -- -- 2.59
Total: $ 0.5743 $0.0000
CUMULATIVE TOTAL RETURN AS OF 02/29/96: 3.91%
</TABLE>
PERFORMANCE SUMMARY CLASS C SHARES(3)
<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)
1995 14.23 15.46 0.5743 -- 12.67
01/01/96-02/29/96 15.46 15.86 -- -- 2.59
Total: $ 2.0373 $0.0000
CUMULATIVE TOTAL RETURN AS OF 02/29/96: 31.47%
</TABLE>
AVERAGE ANNUAL RETURN
<TABLE>
<CAPTION>
% RETURN WITHOUT % RETURN WITH SALES
SALES CHARGE CHARGE
--------------------- ---------------------
CLASS CLASS
--------------------- ---------------------
A* B** C*** A* B** C***
<S> <C> <C> <C> <C> <C> <C>
Twelve Months Ended
03/31/96 16.52% N/A 15.68% 11.25% N/A 14.68%
Five Years Ended 03/31/96 N/A N/A N/A N/A N/A N/A
Commencement of Operations+
Through 03/31/96 11.42 N/A 10.82 10.26 N/A 10.82
</TABLE>
(footnotes on following page)
4
<PAGE>
PAINEWEBBER GLOBAL EQUITY FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(footnotes from previous page)
<TABLE>
<S> <C>
1 Figures assume reinvestment of all dividends and capital gains distributions, if any, at net asset value on
the payable date and do not include sales charges; results for each class would be lower if sales charges
were included.
2 Formerly Class E shares
3 Formerly Class B shares
* Maximum sales charge for Class A shares is 4.50% of the public offering price. Class A shares bear ongoing
12b-1 service fees.
** Maximum contingent deferred sales charge for Class B shares is 5% and is reduced to 0% after 6 years. Class B
shares bear ongoing 12b-1 distribution and service fees.
*** Maximum contingent deferred sales charge for Class C shares is 1% and is reduced to 0% after 1 year. Class C
shares bear ongoing 12b-1 distribution and service fees.
+ Commencement of operation dates are November 14, 1991, August 25, 1995 and May 10, 1993 for Class A, Class B
and Class C shares, respectively.
Note: The Fund offers Class Y (formerly Class C) shares to the Trustee of the PaineWebber Savings Investment Plan
and to INSIGHT participants. For the six months ended February 29, 1996, and since inception, May 10, 1993
through February 29, 1996, Class Y shares have a total return of 4.50% and 35.27%, respectively. For the
twelve months ended March 31, 1996 and for the period since inception through March 31, 1996, Class Y shares
have an average annual return of 16.85% and 11.94%, respectively.
The 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. The data above represent past performance of the Fund's
shares, which is no guarantee of future results.
</TABLE>
- --------------------------------------------------------------------------------
5
<PAGE>
PAINEWEBBER GLOBAL EQUITY FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
February 29, 1996 (unaudited)
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
- ------------- ------------
COMMON STOCKS--95.98%
AUSTRALIA--1.81%
FOOD--1.81%
4,741,957 Burns Philip & Company, Ltd..................... $ 10,585,211
------------
AUSTRIA--4.05%
BANKING--0.81%
80,616 Creditanstalt Bankverein........................ 4,749,687
------------
CONSTRUCTION--0.53%
45,280 Flughafen Wein AG*.............................. 3,097,079
------------
OIL & GAS--0.82%
51,758 OMV AG.......................................... 4,832,049
------------
TECHNOLOGY--1.89%
87,572 VA Technologie AG............................... 11,081,524
------------
Total Austria Common Stocks.................................... 23,760,339
------------
DENMARK--1.63%
SERVICES--0.50%
114,211 ISS (Series) B.................................. 2,914,674
------------
TELECOMMUNICATIONS--1.13%
112,695 Tele Danmark AS Series B........................ 6,624,684
------------
Total Denmark Common Stocks.................................... 9,539,358
------------
FRANCE--9.51%
AUTOMOTIVE--1.90%
201,789 Valeo SA*....................................... 11,131,088
------------
BANKING--0.87%
132,666 Banque Nationale de Paris....................... 5,133,216
------------
CAPITAL GOODS--0.92%
64,386 Technip SA/Compagnie Francaise.................. 5,391,371
------------
ENERGY--2.75%
243,890 Total SA (Class B).............................. 16,100,602
------------
FOOD--1.57%
13,643 Carrefour SA.................................... 9,212,280
------------
PRODUCERS' GOODS--1.50%
498,686 Coflexip SA ADR................................. 8,789,341
------------
Total France Common Stocks..................................... 55,757,898
------------
GERMANY--4.76%
ENERGY--2.41%
300,594 Veba AG......................................... 14,148,486
------------
PHARMACEUTICAL--1.29%
11,448 Gehe AG......................................... 6,408,450
2,112 Gehe (new) AG*.................................. 1,156,414
------------
7,564,864
------------
6
<PAGE>
PAINEWEBBER GLOBAL EQUITY FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
- ------------- ------------
COMMON STOCKS--(continued)
GERMANY--(concluded)
TECHNOLOGY--1.06%
39,344 SAP AG.......................................... $ 6,181,787
------------
Total Germany Common Stocks.................................... 27,895,137
------------
HONG KONG--6.22%
BROADCAST--1.37%
2,117,600 Television Broadcasting Ltd..................... 8,053,065
------------
CONGLOMERATE--1.36%
1,252,700 Hutchison Whampoa Ltd........................... 7,939,865
------------
INSURANCE--0.82%
4,968,000 National Mutual Asia Ltd........................ 4,819,620
------------
RETAIL--1.60%
8,785,000 Giordano Holdings Ltd........................... 9,374,879
------------
UTILITIES--1.07%
3,407,100 Consolidated Electric Power Asia *.............. 6,280,145
------------
Total Hong Kong Common Stocks.................................. 36,467,574
------------
INDONESIA--0.62%
AUTOMOTIVE--0.62%
2,178,872 Astra International............................. 3,621,264
------------
ITALY--2.52%
BANKING--0.60%
387,658 IMI............................................. 2,724,117
38,029 IMI ADR......................................... 803,363
------------
3,527,480
------------
TELECOMMUNICATIONS--1.92%
1,299,573 Stet Di Risp*................................... 3,969,817
1,087,746 Stet Di Risp Non-Convertible.................... 2,471,119
2,629,184 Telecom Italia Mobilare*........................ 4,817,148
------------
11,258,084
------------
Total Italy Common Stocks...................................... 14,785,564
------------
JAPAN--12.97%
AUTOMOTIVE--2.27%
1,135,000 Suzuki Motor Corporation, Ltd................... 13,283,696
------------
ELECTRONICS--5.40%
445,000 Canon Incorporated.............................. 8,172,130
233,000 Murata Manufacturing Company, Ltd............... 7,670,964
148,000 Omron Corporation............................... 3,267,139
201,000 Secom Company, Ltd.............................. 12,546,363
------------
31,656,596
------------
7
<PAGE>
PAINEWEBBER GLOBAL EQUITY FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
- ------------- ------------
COMMON STOCKS--(continued)
JAPAN--(concluded)
EQUIPMENT--1.64%
162,000 Rohm Company.................................... $ 9,634,140
------------
FINANCIAL SERVICES--0.85%
230,900 Credit Saison Company........................... 4,987,326
------------
FOOD--0.96%
101,000 Ito-Yokado Company.............................. 5,650,887
------------
TELECOMMUNICATIONS--1.85%
1,478 DDI Corporation................................. 10,842,933
------------
Total Japan Common Stocks...................................... 76,055,578
------------
KOREA--0.88%
ELECTRIC UTILITY--0.88%
141,889 Korea Electric Power Corporation*............... 5,167,512
------------
MALAYSIA--1.01%
BANKING--0.78%
378,200 AMMB Holdings Berhad............................ 4,563,690
------------
TELECOMMUNICATIONS--0.23%
157,000 Telekom Malaysia................................ 1,349,252
------------
Total Malaysia Common Stocks................................... 5,912,942
------------
MEXICO--2.67%
BANKING--0.48%
374,159 Grupo Financiero Bancomer, ADR * +.............. 2,806,192
------------
MEDIA--0.58%
137,787 Grupo Televisa S.A. de C.V. ADR................. 3,375,782
------------
TELECOMMUNICATIONS--1.61%
922,860 Grupo Carso S.A. de C.V.* (Series A)............ 5,820,056
282,609 Grupo Carso S.A. de C.V. ADR * +................ 3,621,634
------------
9,441,690
------------
Total Mexico Common Stocks..................................... 15,623,664
------------
NETHERLANDS--2.52%
ENTERTAINMENT--0.52%
52,575 Polygram........................................ 3,065,784
------------
FINANCIAL SERVICES--1.50%
132,281 Internationale Nederlanden Groep N.V............ 8,782,308
------------
FOOD PROCESSING--0.50%
33,217 Nutricia Verenigde Bedrijven*................... 2,935,719
------------
Total Netherlands Common Stocks................................ 14,783,811
------------
NORWAY--1.54%
COMMERCIAL SERVICES--1.54%
406,639 Petroleum Geo-Service *......................... 9,050,395
------------
8
<PAGE>
PAINEWEBBER GLOBAL EQUITY FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
- ------------- ------------
COMMON STOCKS--(continued)
PAKISTAN--0.01%
BANKING--0.01%
340 Bank of Punjab *................................ $ 297
38,200 Bank Commerce Al Hab............................ 41,684
100 Prime Commercial Bank........................... 68
795 Soneri Bank..................................... 744
1,350 Union Bank Ltd. ................................ 723
------------
Total Pakistan Common Stocks................................... 43,516
------------
PHILLIPPINES--0.61%
BREWERY--0.61%
979,200 San Miguel Corporation.......................... 3,575,362
------------
SOUTH AFRICA--1.20%
MINING--1.20%
8,286,293 South African Iron & Steel/Iscor................ 7,018,474
------------
SPAIN--0.79%
OIL & GAS--0.79%
126,131 Repsol SA....................................... 4,606,780
------------
SWEDEN--1.89%
AUTOMOTIVE MANUFACTURING--1.02%
125,106 Autoliv Ab 'B' Free............................. 5,984,426
------------
PHARMACEUTICAL--0.87%
111,820 Astra Ab 'B' Free............................... 5,117,052
------------
Total Sweden Common Stocks..................................... 11,101,478
------------
SWITZERLAND--6.27%
EQUIPMENT--2.10%
10,295 BBC Brown Boveri Ltd. .......................... 12,330,987
------------
FOOD--1.57%
8,410 Nestle SA--Registered........................... 9,203,370
------------
INSURANCE--1.00%
5,595 Schw Ruckversicher.............................. 5,833,472
------------
PHARMACEUTICAL--1.60%
1,206 Roche Holdings AG............................... 9,375,194
------------
Total Switzerland Common Stocks................................ 36,743,023
------------
THAILAND--0.83%
BANKING--0.83%
459,130 Thai Farmers Bank Ltd. ......................... 4,880,874
------------
9
<PAGE>
PAINEWEBBER GLOBAL EQUITY FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
- ------------- ------------
COMMON STOCKS--(continued)
UNITED KINGDOM--5.42%
BROADCASTING--1.78%
660,403 Reed International.............................. $ 10,397,856
------------
BUILDING MATERIALS & PAPER PACKAGING--0.98%
1,176,000 BPB Industries.................................. 5,766,472
------------
DRUGS--1.07%
1,674,045 Medeva plc...................................... 6,259,071
------------
ENTERTAINMENT--1.23%
289,624 Thorn EMI plc................................... 7,220,629
------------
HEALTHCARE--0.36%
829,462 Takare plc...................................... 2,109,879
------------
Total United Kingdom Common Stocks............................. 31,753,907
------------
UNITED STATES--26.25%
BANKS--1.91%
143,168 Citicorp........................................ 11,167,104
------------
BUSINESS MACHINES--0.80%
38,306 International Business Machines Corporation..... 4,697,273
------------
CHEMICALS--4.29%
244,365 Airgas, Incorporated*........................... 8,797,140
239,980 Allied Signal, Incorporated..................... 13,348,888
55,928 Avery Dennison Corporation...................... 3,013,121
------------
25,159,149
------------
ELECTRONICS--3.13%
66,272 Intel Corporation............................... 3,897,622
135,670 Motorola Incorporated........................... 7,360,097
339,522 Sensormatic Electronics Corporation............. 7,087,522
------------
18,345,241
------------
ELECTRONIC EQUIPMENT--0.68%
112,454 UCAR International Incorporated *............... 3,992,117
------------
HEALTH (NON-DRUG)--1.08%
408,294 Sunrise Medical, Incorporated *................. 6,328,557
------------
INSURANCE--1.62%
141,975 The Travelers Group, Incorporated............... 9,494,578
------------
MORTGAGE FINANCING--0.81%
224,767 Countrywide Credit Industries, Incorporated..... 4,720,107
------------
MOTOR VEHICLES--0.82%
85,549 Chrysler Corporation............................ 4,822,825
------------
PAPER--0.99%
162,935 International Paper Company..................... 5,804,559
------------
POLLUTION CONTROL--1.21%
444,975 Wheelabrator Technologies, Incorporated......... 7,063,978
------------
10
<PAGE>
PAINEWEBBER GLOBAL EQUITY FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
- ------------- ------------
COMMON STOCKS--(concluded)
UNITED STATES--(concluded)
PRODUCERS' GOODS--0.96%
80,676 Tyco International, Ltd......................... $ 2,914,421
88,759 Zebra Technologies Corporation (Class A)........ 2,729,339
------------
5,643,760
------------
RETAIL (ALL OTHER)--1.07%
262,028 Toys 'R' Us, Incorporated *..................... 6,255,919
------------
SERVICES--4.26%
323,229 Ecolab, Incorporated............................ 9,818,081
143,164 First Data Corporation.......................... 9,914,107
135,514 Medaphis Corporation............................ 5,268,107
------------
25,000,295
------------
SOAPS, HARDWARES--2.62%
196,225 Colgate-Palmolive Company....................... 15,354,606
------------
Total United States Common Stocks.............................. 153,850,068
------------
TOTAL COMMON STOCKS (cost--$517,158,905)....................... 562,579,729
------------
PREFERRED STOCKS--1.15%
BRAZIL--1.15%
FOOD--0.58%
259,149,025 Ceval Alimentos SA.............................. 3,420,936
------------
MACHINERY--0.57%
12,735,202 Brasmotor....................................... 3,349,327
------------
Total Brazil Preferred Stocks.................................. 6,770,263
------------
TOTAL PREFERRED STOCKS (cost--$7,033,865)...................... 6,770,263
------------
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATE RATE
- --------- -------- --------
REPURCHASE AGREEMENT--2.05%
$11,990 Repurchase Agreement dated 02/29/96
with State Street Bank & Trust
Company, collateralized by
$12,235,580 U.S. Treasury Bonds,
9.250%, due 02/15/16; proceeds:
$11,991,732 (cost--$11,990,000).... 03/01/96 5.200% 11,990,000
------------
TOTAL INVESTMENTS
(cost--$536,182,770)--99.18%................... 581,339,992
Other assets in excess of liabilities--0.82%... 4,803,996
------------
NET ASSETS--100.00%............................ $586,143,988
------------
------------
- ------------
* Non-income producing security
+ Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
ADR American Depositary Receipt
See accompanying notes to financial statements
11
<PAGE>
PAINEWEBBER GLOBAL EQUITY FUND
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
February 29, 1996 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value
(cost--$536,182,770)................................... $581,339,992
Cash denominated in foreign currencies, at value
(cost--$103,236)....................................... 103,087
Cash.................................................... 31,210
Receivable for investments sold......................... 4,947,391
Dividends and interest receivable....................... 1,047,033
Receivable for shares of beneficial interest sold....... 329,955
Deferred organizational costs........................... 49,725
Other assets............................................ 218,205
------------
Total assets........................................ 588,066,598
------------
LIABILITIES
Payable for shares of beneficial interest repurchased... 1,378,424
Payable to affiliate.................................... 398,090
Accrued expenses and other liabilities.................. 146,096
------------
Total liabilities................................... 1,922,610
------------
NET ASSETS
Beneficial interest shares of $0.001 par value
outstanding (unlimited amount authorized).............. 562,910,741
Accumulated net investment loss......................... (2,528,633)
Accumulated net realized losses from investment and
foreign currency transactions.......................... (19,175,291)
Net unrealized appreciation of investments and other
assets and liabilities denominated in
foreign currencies.................................... 44,937,171
------------
Net assets.......................................... $586,143,988
------------
------------
CLASS A:
Net assets.............................................. $330,230,990
------------
Shares outstanding...................................... 20,336,884
------------
Net asset value and redemption value per share.......... $16.24
------------
------------
Maximum offering price per share (net asset value plus
sales charge of 4.50% of offering price)............... $17.00
------------
------------
CLASS B:
Net assets.............................................. $123,991,228
------------
Shares outstanding...................................... 7,816,852
------------
Net asset value and offering price per share............ $15.86
------------
------------
CLASS C:
Net assets.............................................. $ 71,575,309
------------
Shares outstanding...................................... 4,512,558
------------
Net asset value and offering price per share............ $15.86
------------
------------
CLASS Y:
Net assets.............................................. $ 60,346,461
------------
Shares outstanding...................................... 3,688,152
------------
Net asset value, offering price and redemption value per
share................................................... $16.36
------------
------------
</TABLE>
See accompanying notes to financial statements
12
<PAGE>
PAINEWEBBER GLOBAL EQUITY FUND
- --------------------------------------------------------------------------------
Statement of Operations
February 29, 1996 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of foreign withholding taxes).............. $2,294,406
Interest.................................................. 363,148
----------
2,657,554
----------
EXPENSES:
Investment advisory and administration fees............... 2,540,043
Service fees--Class A..................................... 422,950
Service and distribution fees--Class B.................... 648,446
Service and distribution fees--Class C.................... 379,651
Transfer agency fees and expenses......................... 402,380
Custody and accounting.................................... 214,927
Reports and notices to shareholders....................... 74,812
Amortization of organizational expenses................... 32,290
Legal and audit........................................... 21,702
Trustees' fees and expenses............................... 5,000
Other expenses............................................ 663
----------
4,742,864
----------
NET INVESTMENT LOSS....................................... (2,085,310)
----------
REALIZED AND UNREALIZED GAINS (LOSSES) FROM INVESTMENT
TRANSACTIONS:
Net realized gains (losses) from:
Investment transactions................................. 25,280,937
Foreign currency transactions........................... (288,054)
Net change in unrealized appreciation/depreciation of:
Investments............................................. 1,786,470
Other assets and liabilities denominated in
foreign currencies.................................... (302,405)
----------
NET REALIZED AND UNREALIZED GAINS FROM INVESTMENT
TRANSACTIONS.............................................. 26,476,948
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........ $24,391,638
----------
----------
</TABLE>
See accompanying notes to financial statements
13
<PAGE>
PAINEWEBBER GLOBAL EQUITY FUND
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Six
Months Ended For the
February 29, Year Ended
1996 August 31,
(unaudited) 1995
------------ ------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income (loss).................... $(2,085,310) $ 15,770
Net realized gains from investment
transactions.................................. 25,280,937 16,774,940
Net realized losses from foreign currency
transactions.................................. (288,054) (521,164)
Net change in unrealized
appreciation/depreciation of:
Investments................................... 1,786,470 (12,104,719)
Other assets and liabilities denominated in
foreign currencies.......................... (302,405) (766,274)
------------ ------------
Net increase in net assets resulting from
operations.................................... 24,391,638 3,398,553
------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gains from investment
transactions--Class A......................... (11,751,371) (12,882,410)
Net realized gains from investment
transactions--Class B......................... (4,530,984) --
Net realized gains from investment
transactions--Class C......................... (2,643,433) (2,404,670)
Net realized gains from investment
transactions--Class Y......................... (1,956,458) (2,465,467)
------------ ------------
(20,882,246) (17,752,547)
------------ ------------
FROM BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from the sale of shares............ 43,863,752 33,293,582
Proceeds from the acquisition of PaineWebber
Atlas Global Growth Fund, PaineWebber Europe
Growth Fund and PaineWebber Global Growth and
Income Fund (net of reorganization costs)..... -- 445,647,023
Cost of shares repurchased...................... (125,264,687) (83,619,851)
Proceeds from dividends reinvested.............. 19,869,011 17,479,893
------------ ------------
Net increase (decrease) in net assets derived
from beneficial interest transactions......... (61,531,924) 412,800,647
------------ ------------
Net increase (decrease) in net assets........... (58,022,532) 398,446,653
NET ASSETS:
Beginning of period............................. 644,166,520 245,719,867
------------ ------------
End of period................................... $586,143,988 $644,166,520
------------ ------------
------------ ------------
</TABLE>
See accompanying notes to financial statements
14
<PAGE>
PAINEWEBBER GLOBAL EQUITY FUND
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited)
- --------------------------------------------------------------------------------
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
PaineWebber Global Equity Fund (formerly Mitchell Hutchins/Kidder, Peabody
Global Equity Fund) (the 'Fund') is a series of PaineWebber Investment Trust
(formerly Mitchell Hutchins/Kidder, Peabody Investment Trust) (the 'Trust') and
is registered with the Securities and Exchange Commission under the Investment
Company Act of 1940, as amended, as a diversified, open-end management
investment company.
Currently, the Fund offers Class A, Class B (formerly Class E), Class C
(formerly Class B) and Class Y (formerly Class C) shares. Effective November 10,
1995, the Fund began using industry standardized nomenclatures and Class B,
Class C and Class E shares were renamed Class C, Class Y and Class B shares,
respectively. Each class represents interests in the same assets of the Fund and
the classes are identical except for differences in their sales charge
structures, ongoing service and distribution charges and certain transfer agency
expenses. In addition, Class B shares and all corresponding dividend reinvested
shares automatically convert to Class A shares approximately six years after
initial issuance. All classes of shares have equal voting privileges, except
that each class has exclusive voting rights with respect to its service and/or
distribution plan. Organizational costs have been deferred and are being
amortized using the straight-line method over a period not to exceed 60 months
from the date the Fund commenced operations.
At the meeting held on December 13, 1995, the Trust's board of trustees elected
to change the Fund's fiscal year end from August 31 to October 31.
The preparation of financial statements in accordance with generally accepted
accounting principles requires the Trust's management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results could differ from those estimates.
Valuation of Investments--Securities which are listed on U.S. and foreign stock
exchanges are valued at the last sale price on the day the securities are being
valued or, lacking any sales on such day, at the last available bid price. In
cases where securities are traded on more than one exchange, the securities are
generally valued on the exchange designated by Mitchell Hutchins Asset
Management Inc. ('Mitchell Hutchins'), a wholly owned subsidiary of PaineWebber
Incorporated ('PaineWebber') and investment adviser and administrator of the
Fund, and GE Investment Management Incorporated ('GEIM') the sub-adviser to the
Fund, as the primary market. Securities traded in the over-the-counter ('OTC')
market and listed on the Nasdaq are valued at the last trade price on Nasdaq
prior to the time of valuation; other OTC securities are valued at the last bid
price available in the OTC market prior to the time of valuation. The amortized
cost method of valuation, which approximates market value, is used to value
short-term debt instruments with sixty days or less remaining to maturity unless
the Trust's board of trustees determines that this does not represent fair
value. Securities and assets for which market quotations are not readily
available
15
<PAGE>
PAINEWEBBER GLOBAL EQUITY FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(including restricted securities subject to limitations as to their sale) are
valued at fair value as determined in good faith by or under the direction of
the Trust's board of trustees.
All investments quoted in foreign currencies are valued daily in U.S. dollars on
the basis of the foreign currency exchange rates prevailing at the time such
valuation is determined by the Fund's custodian. Foreign currency exchange rates
are generally determined prior to the close of the New York Stock Exchange
('NYSE'). Occasionally, events affecting the value of foreign investments and
such exchange rates occur between the time at which they are determined and the
close of the NYSE, which will not be reflected in a computation of the Fund's
net asset value. If events materially affecting the value of such investments or
currency exchange rates occur during such time period, the investments are
valued at their fair value as determined in good faith by or under the direction
of the Trust's board of trustees.
Investment Transactions and Investment Income--Investment transactions are
recorded on the trade date. Realized gains and losses from investment and
foreign exchange transactions are calculated using the identified cost method.
Dividend income is recorded on the ex-dividend date (except in the case of
certain foreign dividends which are recorded as soon after the ex-dividend date
as the Fund becomes aware of such dividend). Interest income is recorded on an
accrual basis.
Income, expenses (excluding class-specific expenses) and realized/unrealized
gains/losses are allocated proportionately to each class of shares based upon
the relative net asset value of outstanding shares (or the value of
dividend-eligible shares, as appropriate) of each class at the beginning of the
day (after adjusting for current capital share activity of the respective
classes). Class-specific expenses are charged directly to the applicable class
of shares.
Foreign Currency Translation--The books and records of the Fund 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 exchange rates prevailing at the end of the
period.
(2) purchases and sales of investment securities, income and
expenses--at the exchange rates prevailing on the respective dates
of such transactions.
Although the net assets and the market values of the Fund are presented at the
foreign exchange rates at the end of the period, the Fund does not generally
isolate the effect of fluctuations in foreign exchange rates from the effect of
the changes in market prices of securities. However, the Fund does isolate the
effect of fluctuations in foreign exchange rates when determining the realized
gain or loss upon the sale or maturity of foreign currency denominated debt
obligations.
Realized currency gain/loss on investment transactions includes realized foreign
exchange gains/losses from the sale of portfolio securities, sales of foreign
currencies, currency gains/losses
16
<PAGE>
PAINEWEBBER GLOBAL EQUITY FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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/losses from translating foreign currency denominated
assets and liabilities at year-end exchange rates are included in change in
unrealized appreciation/depreciation of other assets and liabilities denominated
in foreign currencies.
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 Fund occasionally participates in joint repurchase
agreement transactions with other funds managed by Mitchell Hutchins.
Dividends and Distributions--Dividends and distributions to shareholders are
recorded on the ex-dividend date. The amount of dividends and distributions are
determined in accordance with federal income tax regulations, which may differ
from generally accepted accounting principles. These 'book/tax' differences are
either considered temporary or permanent in nature. To the extent these
differences are permanent in nature, such amounts are reclassified within the
capital accounts based on their federal tax-basis treatment; temporary
differences do not require reclassification. Dividends and distributions which
exceed net investment income and net realized capital gains for financial
reporting purposes but not for tax purposes are reported as dividends in excess
of net investment income or distributions in excess of net realized capital
gains. To the extent they exceed net investment income and net realized capital
gains for tax purposes, they are reported as distributions of paid-in-capital.
CONCENTRATION OF RISK
Investing in securities of foreign issuers and currency transactions may involve
certain considerations and risks not typically associated with investments in
the United States. These risks include revaluation of currencies, adverse
fluctuations in foreign currency values and possible adverse political, social
and economic developments, including those particular to a specific industry,
country or region, which could cause the securities and their markets to be less
liquid and prices more volatile than those of comparable U.S. companies and U.S.
government securities. These risks are greater with respect to securities of
issuers located in emerging market countries in which the Fund is authorized to
invest. The ability of the issuers of debt securities held by the Fund to meet
their obligations may be affected by economic and political developments in a
specific industry, country or region.
17
<PAGE>
PAINEWEBBER GLOBAL EQUITY FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ACQUISITIONS
Acquisition of PaineWebber Atlas Global Growth Fund, PaineWebber Europe Growth
Fund and PaineWebber Global Growth and Income Fund--Effective as of the close of
business on August 25, 1995 (the 'Merger Date'), the Fund acquired all of the
assets and assumed all of the liabilities of PaineWebber Atlas Global Growth
Fund ('Atlas Global Growth Fund'), PaineWebber Europe Growth Fund ('Europe
Growth Fund') and PaineWebber Global Growth and Income Fund ('Global Growth and
Income Fund') in separate tax-free exchanges for shares of the Fund. The
acquisitions were accomplished by tax-free exchanges of 7,902,877 Class A,
2,541,127 Class C, 1,725,341 Class Y and 6,112,274 Class B shares of the Fund
for 9,177,350 Class A, 2,959,973 Class D, 1,998,736 Class C and 7,167,207 Class
B shares of Atlas Global Growth Fund; 3,216,438 Class A, 524,746 Class C and
1,513,866 Class B shares of the Fund for 5,956,503 Class A, 968,150 Class D and
2,809,436 Class B shares of Europe Growth Fund; and 2,441,269 Class A, 427,147
Class C and 1,443,399 Class B shares of the Fund for 3,949,615 Class A, 687,169
Class D and 2,326,782 Class B shares of Global Growth and Income Fund
outstanding on the Merger Date. Atlas Global Growth Fund's net assets at that
date, valued at $292,492,539, including accumulated net realized losses of
$36,390,411 and net unrealized appreciation of investments of $7,998,273, Europe
Growth Fund's net assets at that date, valued at $84,167,218, including net
unrealized appreciation of investments of $4,572,497, and Global Growth and
Income Fund's net assets at that date, valued at $68,987,395 including
accumulated net realized losses of $3,541,154 and net unrealized appreciation of
investments of $1,671,268, were combined with those of the Fund. All shares were
exchanged at net asset value. Accordingly, no shareholder had any gain or loss
as a result of the exchange. The Fund's statement of operations and financial
highlights do not include the operations of Atlas Global Growth Fund, Europe
Growth Fund and Global Growth and Income Fund prior to the Merger Date.
INVESTMENT ADVISER AND ADMINISTRATOR
The Trust's board of trustees has approved an investment advisory and
administration contract ('Advisory Contract') with Mitchell Hutchins, under
which Mitchell Hutchins serves as investment adviser and administrator of the
Fund. In accordance with the Advisory Contract, Mitchell Hutchins receives
compensation from the Fund, computed daily and paid monthly, at an annual rate
of 0.85% of the Fund's average daily net assets up to and including $500
million, 0.83% of its average daily net assets over $500 million and up to and
including $1 billion and 0.805% of its average daily net assets over $1 billion.
Under a separate contract with Mitchell Hutchins ('Sub-Advisory Contract'), GEIM
serves as the Fund's sub-adviser. Under the Sub-Advisory Contract, Mitchell
Hutchins (not the Fund) will pay GEIM a fee, accrued daily and paid monthly, at
an annual rate of 0.31% of the Fund's average daily net assets up to and
including $500 million, 0.29% of the Fund's average daily net assets over
18
<PAGE>
PAINEWEBBER GLOBAL EQUITY FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
$500 million and up to and including $1 billion and 0.265% of the Fund's average
daily net assets over $1 billion.
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. For the six months ended
February 29, 1996, no reimbursements were required pursuant to the above
limitation.
DISTRIBUTION PLANS
Mitchell Hutchins is the distributor of the Fund's shares and has appointed
PaineWebber as the exclusive dealer for the sale of those shares. Under separate
plans of distribution pertaining to Class A, Class B (formerly Class E) and
Class C (formerly Class B) shares, the Fund pays Mitchell Hutchins monthly
service fees at the annual rate 0.25% of the average daily net assets of Class
A, Class B and Class C shares and monthly distribution fees at the annual rate
of 0.75% of the average daily net assets of Class B and Class C shares.
Mitchell Hutchins also receives the proceeds of the initial sales charges paid
by the shareholders upon the purchase of Class A shares and the contingent
deferred sales charges paid by the shareholders upon certain redemptions of
Class B and Class C shares. Mitchell Hutchins has informed the Fund that for the
six months ended February 29, 1996, it had earned approximately $419,000 in
sales charges.
INVESTMENTS IN SECURITIES
For federal income tax purposes, the cost of securities owned at February 29,
1996 was substantially the same as the cost of securities for financial
statement purposes.
At February 29, 1996, 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)................................................ $ 62,862,664
Gross depreciation (investments having an excess of cost
over value)............................................... (17,705,442)
------------
Net unrealized appreciation of investments.................. $ 45,157,222
------------
------------
</TABLE>
For the six months ended February 29, 1996, aggregate purchases and sales of
portfolio securities, excluding short-term securities, were $81,475,871 and
$154,738,898, respectively.
19
<PAGE>
PAINEWEBBER GLOBAL EQUITY FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BENEFICIAL INTEREST
At February 29, 1996, there was an unlimited amount of $0.001 par value shares
of beneficial interest authorized. Transactions in shares of beneficial interest
were as follows:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS Y
------------------------- ------------------------- ------------------------- ---------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES
---------- ------------ ---------- ------------ ---------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Six months ended
February 29, 1996:
Shares sold............. 431,161 $ 6,928,712 677,749 $ 10,645,203 1,366,794 $ 21,487,517 295,240
Shares repurchased...... (3,232,633) (51,958,034) (2,103,631) (33,078,756) (2,295,213) (36,130,160) (252,395)
Shares converted from
Class B to Class A.... 58,969 952,514 (60,202) (952,514) -- -- --
Dividends reinvested.... 707,938 11,206,643 270,717 4,190,705 163,102 2,524,812 122,137
---------- ------------ ---------- ------------ ---------- ------------ ---------
Net increase
(decrease).............. (2,034,565) $(32,870,165) (1,215,367) $(19,195,362) (765,317) $(12,117,831) 164,982
---------- ------------ ---------- ------------ ---------- ------------ ---------
---------- ------------ ---------- ------------ ---------- ------------ ---------
Year ended August 31,
1995:
Shares sold............. 940,218 $ 15,179,015 9,954 $ 157,526 559,864 $ 8,885,221 553,290
Shares issued in
connection with the
acquisition of
PaineWebber Atlas
Global Growth Fund,
PaineWebber Europe
Growth Fund and
PaineWebber Global
Growth and Income
Fund.................. 13,560,584 218,770,418 9,069,539 143,575,469 3,493,020 55,291,061 1,725,341
Shares repurchased...... (3,939,313) (60,869,557) (47,274) (747,123) (837,535) (12,930,296) (591,713)
Dividends reinvested.... 884,497 12,665,998 -- -- 168,250 2,377,378 169,483
---------- ------------ ---------- ------------ ---------- ------------ ---------
Net increase............. 11,445,986 $185,745,874 9,032,219 $142,985,872 3,383,599 $ 53,623,364 1,856,401
---------- ------------ ---------- ------------ ---------- ------------ ---------
---------- ------------ ---------- ------------ ---------- ------------ ---------
<CAPTION>
AMOUNT
-----------
<S> <C>
Six months ended
February 29, 1996:
Shares sold............. $ 4,802,320
Shares repurchased...... (4,097,737)
Shares converted from
Class B to Class A.... --
Dividends reinvested.... 1,946,851
-----------
Net increase
(decrease).............. $ 2,651,434
-----------
-----------
Year ended August 31,
1995:
Shares sold............. $ 9,071,820
Shares issued in
connection with the
acquisition of
PaineWebber Atlas
Global Growth Fund,
PaineWebber Europe
Growth Fund and
PaineWebber Global
Growth and Income
Fund.................. 28,010,075
Shares repurchased...... (9,072,875)
Dividends reinvested.... 2,436,517
-----------
Net increase............. $30,445,537
-----------
-----------
</TABLE>
20
<PAGE>
PAINEWEBBER GLOBAL EQUITY FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FEDERAL TAXES
The Fund intends to distribute substantially 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.
The Fund has a net capital loss carryforward of approximately $39,653,000 as of
August 31, 1995, pursuant to the reorganizations on August 25, 1995 with Atlas
Global Growth Fund, Europe Growth Fund and Global Growth and Income Fund. In the
year of merger, utilization of the capital loss carryforward is limited by the
Internal Revenue Code; therefore, the entire amount was not available as of
August 31, 1995. In subsequent years, this carryforward loss is available as a
reduction, to the extent provided in the regulations, of future net realized
capital gains and will expire by August 31, 2002.
In accordance with U.S. Treasury regulations, the Fund has elected to defer
approximately $421,756 of realized foreign currency losses arising after October
31, 1994. Such losses have been treated for tax purposes as arising on September
1, 1995.
21
<PAGE>
PAINEWEBBER 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 --------------------------------------------------------
Months For the Period
Ended For the Years Ended November 14,
February 29, August 31, 1991+ to
1996 -------------------------------------- August 31,
(unaudited) 1995 1994 1993 1992
------------ -------- -------- -------- --------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period...................... $ 16.12 $ 16.98 $ 14.55 $ 12.87 $ 12.00
------------ -------- -------- -------- --------------
Net investment income
(loss)...................... (0.04) 0.02 0.01 0.03 0.09
Net realized and unrealized
gains (losses) from
investment and foreign
currency transactions....... 0.73 0.37 2.63 1.89 0.78
------------ -------- -------- -------- --------------
Total income (loss) from
investment operations....... 0.69 0.39 2.64 1.92 0.87
------------ -------- -------- -------- --------------
Dividends from net investment
income...................... -- -- -- (0.08) --
Distributions from net
realized gains from
investments................. (0.57) (1.25) (0.21) (0.16) --
------------ -------- -------- -------- --------------
Total dividends and
distributions............... (0.57) (1.25) (0.21) (0.24) --
------------ -------- -------- -------- --------------
Net asset value, end of
period...................... $ 16.24 $ 16.12 $ 16.98 $ 14.55 $ 12.87
------------ -------- -------- -------- --------------
------------ -------- -------- -------- --------------
Total investment return (1)... 4.40% 3.24% 18.23% 15.24% 7.25%
------------ -------- -------- -------- --------------
------------ -------- -------- -------- --------------
Ratios/Supplemental data:
Net assets, end of period
(000's)..................... $330,231 $360,652 $185,493 $156,451 $113,070
Expenses to average net
assets...................... 1.35%* 1.71%(2) 1.58% 1.53% 1.68%*
Net investment income (loss)
to average net assets....... (0.46)%* 0.09%(2) 0.07% 0.22% 0.93%*
Portfolio turnover............ 14% 40% 51% 56% 30%
Average commission rate paid
per share of common stock
investments purchased/sold
(3)......................... $ 0.0153 -- -- -- --
</TABLE>
- ------------------
<TABLE>
<S> <C>
* Annualized
** Formerly Class E
*** Formerly Class B
**** Formerly Class C
+ Commencement of operations
++ Commencement of offering of shares
(1) Total investment return is calculated assuming a $1,000 investment on the
first day of each period reported, reinvestment of all dividends and
capital gain distributions, if any, at net asset value on the payable
dates and a sale at net asset value on the last day of each period
reported. The figures do not include sales charges; results for each
class (except Class Y) would be lower if sales charges were included.
Total investment returns for periods of less than one year have not been
annualized.
(2) These ratios include non-recurring reorganization expenses of 0.06%,
0.00%, 0.06% and 0.06% for Class A, Class B, Class C and Class Y shares,
respectively.
(3) Disclosure effective for fiscal years beginning on or after September 1,
1995.
</TABLE>
22
<PAGE>
PAINEWEBBER GLOBAL EQUITY FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class C***
------------------------------------------------------
Class B** For the
-------------------------------- Period
For the Six For the Period For the Six May 10,
Months Ended August 25, Months Ended For the Years Ended 1993++
February 29, 1995++ February 29, August 31, to August
1996 to August 31, 1996 ------------------------- 31,
(unaudited) 1995 (unaudited) 1995 1994 1993
------------ --------------- ------------- ------------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period...................... $ 15.82 $ 15.83 $ 15.82 $ 16.81 $ 14.52 $ 13.80
------------ --------------- ------------- ------------- ---------- -----------
Net investment income
(loss)...................... (0.10) 0.00 (0.11) (0.11) (0.07) (0.02)
Net realized and unrealized
gains (losses) from
investment and foreign
currency transactions....... 0.71 (0.01) 0.72 0.37 2.57 0.74
------------ --------------- ------------- ------------- ---------- -----------
Total income (loss) from
investment operations....... 0.61 (0.01) 0.61 0.26 2.50 0.72
------------ --------------- ------------- ------------- ---------- -----------
Dividends from net investment
income...................... -- -- -- -- -- --
Distributions from net
realized gains from
investments................. (0.57) -- (0.57) (1.25) (0.21) --
------------ --------------- ------------- ------------- ---------- -----------
Total dividends and
distributions............... (0.57) -- (0.57) (1.25) (0.21) --
------------ --------------- ------------- ------------- ---------- -----------
Net asset value, end of
period...................... $ 15.86 $ 15.82 $ 15.86 $ 15.82 $ 16.81 $ 14.52
------------ --------------- ------------- ------------- ---------- -----------
------------ --------------- ------------- ------------- ---------- -----------
Total investment return (1)... 3.97% (0.06)% 3.97% 2.46% 17.29% 5.22%
------------ --------------- ------------- ------------- ---------- -----------
------------ --------------- ------------- ------------- ---------- -----------
Ratios/Supplemental data:
Net assets, end of period
(000's)..................... $123,991 $142,880 $71,575 $83,485 $31,837 $10,807
Expenses to average net
assets...................... 2.10%* 2.17%*(2) 2.10%* 2.48%(2) 2.33% 2.28%*
Net investment income (loss)
to average net assets....... (1.21)%* (1.92)%*(2) (1.21)%* (0.68)%(2) (0.68)% (0.53)%*
Portfolio turnover............ 14% 40% 14% 40% 51% 56%
Average commission rate paid
per share of common stock
investments purchased/sold
(3)......................... $ 0.0153 -- $0.0153 -- -- --
<CAPTION>
Class Y****
------------------------------------------------------
For the
Period
For the Six May 10,
Months Ended For the Years Ended 1993++
February 29, August 31, to August
1996 -------------------------- 31,
(unaudited) 1995 1994 1993
------------ -------------- ---------- -----------
<S> <C> <C> <C> <S>
Net asset value, beginning of
period...................... $ 16.22 $ 17.03 $ 14.56 $ 13.80
------------ -------------- ---------- -----------
Net investment income
(loss)...................... (0.02) 0.07 0.05 0.02
Net realized and unrealized
gains (losses) from
investment and foreign
currency transactions....... 0.73 0.37 2.63 0.74
------------ -------------- ---------- -----------
Total income (loss) from
investment operations....... 0.71 0.44 2.68 0.76
------------ -------------- ---------- -----------
Dividends from net investment
income...................... -- -- -- --
Distributions from net
realized gains from
investments................. (0.57) (1.25) (0.21) --
------------ -------------- ---------- -----------
Total dividends and
distributions............... (0.57) (1.25) (0.21) --
------------ -------------- ---------- -----------
Net asset value, end of
period...................... $ 16.36 $ 16.22 $ 17.03 $ 14.56
------------ -------------- ---------- -----------
------------ -------------- ---------- -----------
Total investment return (1)... 4.50% 3.54% 18.49% 5.51%
------------ -------------- ---------- -----------
------------ -------------- ---------- -----------
Ratios/Supplemental data:
Net assets, end of period
(000's)..................... $ 60,346 $57,150 $28,390 $19,098
Expenses to average net
assets...................... 1.12%* 1.46%(2) 1.33% 1.28%*
Net investment income (loss)
to average net assets....... (0.23)%* 0.36%(2) 0.32% 0.47%*
Portfolio turnover............ 14% 40% 51% 56%
Average commission rate paid
per share of common stock
investments purchased/sold
(3)......................... $ 0.0153 -- -- --
</TABLE>
23
<PAGE>
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<PAGE>
- ------------------------------------------------------
TRUSTEES
Margo N. Alexander
Richard Q. Armstrong
E. Garrett Bewkes, Jr.
Richard Burt
Mary C. Farrell
Meyer Feldberg
George W. Gowen
Frederic V. Malek
Carl W. Schafer
John R. Torell III
- ------------------------------------------------------
OFFICERS
Margo N. Alexander
President
Victoria E. Schonfeld
Vice President
Dianne E. O'Donnell
Vice President and Secretary
Julian F. Sluyters
Vice President and Treasurer
- ------------------------------------------------------
INVESTMENT ADVISER,
ADMINISTRATOR AND
DISTRIBUTOR
Mitchell Hutchins Asset Management Inc.
1285 Avenue of the Americas
New York, New York 10019
- ------------------------------------------------------
INVESTMENT SUB-ADVISER
GE Investment Management Incorporated
3003 Summer Street
Stamford, Connecticut 06904
- ------------------------------------------------------
This report is not to be used in connection with the offering of shares of the
Fund unless accompanied or preceded by an effective prospectus.
The financial information included herein is taken from the records of the Fund
without examination by independent auditors who do not express an opinion
thereon.
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.
