PAINEWEBBER GLOBAL EQUITY FUND
(A PORTFOLIO OF PAINEWEBBER INVESTMENT TRUST)
GLOBAL SMALL CAP FUND INC.
51 WEST 52ND STREET
NEW YORK, NEW YORK 10019-6114
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information relates specifically to the
proposed Reorganization whereby PaineWebber Global Equity Fund ("Global
Equity"), a portfolio of PaineWebber Investment Trust, would acquire all of the
assets of Global Small Cap Fund Inc. ("Global Small Cap") in exchange solely for
shares of Global Equity and the assumption by Global Equity of all of Global
Small Cap's liabilities. This Statement of Additional Information consists of
this cover page, the PRO FORMA financial statements of Global Equity (giving
effect to the Reorganization) for the nine months ended July 31, 1999, and the
following described documents, each of which is incorporated by reference
herein:
(1) The Statement of Additional Information of Global Equity, dated
March 1, 1999.
(2) The Annual Report to Shareholders of Global Equity for the fiscal year
ended October 31, 1998.
(3) The Annual Report to Shareholders of Global Small Cap for the fiscal
year ended July 31, 1999.
(4) The Semi-Annual Report to Shareholders of Global Equity for the six
months ended April 30, 1999.
This Statement of Additional Information is not a prospectus and should be
read only in conjunction with the Proxy Statement/Prospectus dated November 19,
1999, relating to the above-referenced matter. A copy of the Proxy
Statement/Prospectus may be obtained without charge by calling toll-free
1-800-647-1568. This Statement of Additional Information is dated November 19,
1999.
<PAGE>
<TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Portfolio of Investments
July 31, 1999
- --------------------------------------------------------------------------------
Number of Shares
in all Funds
- ------------------------
COMMON STOCKS - Global Global Combined
Equity Small Cap
<S> <C> <C> <C> <C>
Australia -
Banks -
621,000 Australia & New Zealand Banking Group
Ltd. $4,369,087 0 $4,369,087
246,000 National Australia Bank, Ltd. 3,756,914 0 3,756,914
Computer Software & Services -
59,245 Computershare Ltd. 0 701,792 701,792
Engineering Services -
242,348 Pacific BBA Ltd. 0 1,067,637 1,067,637
0
Insurance -
381,000 QBE Insurance Group Ltd. 1,434,766 0 1,434,766
Oil-
287,986 Novus Petroleum 0 332,679 332,679
Retail - Specialty -
118,215 Spotless Group 0 345,645 345,645
=====================================
Total Australia Common Stocks 9,560,767 2,447,753 12,008,520
=====================================
Austria -
Banks -
47,900 Bank of Austria AG 2,548,848 0 2,548,848
Energy Sources -
27,600 OMV AG 2,362,119 0 2,362,119
Materials & Commodities -
66,000 RHI AG 1,691,033 0 1,691,033
=====================================
Total Austria Common Stocks 6,602,000 0 6,602,000
=====================================
Belgium -
Telecommunications -
3,465 Telinfo S.A. 0 366,979 366,979
=====================================
Total Belgium Common Stocks 0 366,979 366,979
=====================================
Canada -
Banks -
88,200 Royal Bank of Canada 3,820,653 0 3,820,653
Household Products -
27,571 Intertape Polymer Group Inc 0 768,759 768,759
Multi
Industry -
90,000 Imasco Ltd. 2,437,762 0 2,437,762
<PAGE>
Pharmaceutical -
18,186 Biovail Corporation International* 0 1,021,826 1,021,826
Specialized Services -
7,075 Trojan Technologies Inc.* 0 126,583 126,583
=====================================
Total Canada Common Stocks 6,258,415 1,917,168 8,175,583
=====================================
Chile -
Beverages -
6,000 Vina Concha Y Toro SA ADR* 0 220,125 220,125
=====================================
Total Chile Common Stocks 0 220,125 220,125
=====================================
Denmark -
Food & Household Products -
80,300 Danisco A/S 3,577,557 0 3,577,557
=====================================
Total Denmark Common Stocks 3,577,557 0 3,577,557
=====================================
Finland -
Banks -
760,889 Merita OYJ "A" Shares PLC 4,110,696 0 4,110,696
Broadcasting -
81,733 Rapala Normark Corp. 0 612,066 612,066
Chemicals -
209,000 Kemira OY 1,330,350 0 1,330,350
Electronics -
124,906 Perlos Corp 0 1,773,197 1,773,197
Electrical & Electronics -
31,732 Nokia OYJ "A" 2,749,699 0 2,749,699
Shares
Forest Products, Paper -
79,400 UPM - Kymmene OY 2,675,677 0 2,675,677
Household Products -
552 Hackman 0 10,925 10,925
Telecommunications -
37,482 Teleste Corp 0 330,810 330,810
=====================================
Total Finland Common Stocks 10,866,422 2,726,998 13,593,420
=====================================
France -
Aerospace & Military Technology -
87,000 Lagardere S.C.A. 3,432,518 0 3,432,518
Automobiles -
30,900 Montupet 0 1,011,539 1,011,539
Beverages & Tobacco -
52,600 Seita 3,030,220 0 3,030,220
Building Materials & Components -
36,300 Lafarge 3,937,742 0 3,937,742
Chemicals -
60,000 Rhodia 1,373,623 0 1,373,623
Computer Software & Services -
5,541 Transiciel 0 617,673 617,673
S.A.
<PAGE>
Energy Sources -
23,602 Elf Aquitaine 4,039,908 0 4,039,908
Health & Personal Care -
25,000 Rhone Poulenc S.A.* 1,222,247 0 1,222,247
Recreation & Other Consumer Goods -
53,000 BIC 2,863,320 0 2,863,320
=====================================
Total France Common Stocks 19,899,578 1,629,212 21,528,790
=====================================
Germany -
Computer Software & Services -
20,267 Fortunecity 0 301,375 301,375
Health & Personal Care -
106,000 Hoechst AG 4,467,914 0 4,467,914
Media -
8,520 Id Media 0 301,697 301,697
Motor Vehicles -
40,600 DaimlerChrysler AG 3,088,149 0 3,088,149
Telecommunications -
1,897 Adva AG 0 132,926 132,926
=====================================
Total Germany Common Stocks 7,556,063 735,998 8,292,061
=====================================
Greece -
Wireless Telecommunications -
386,000 Hellenic Telecommunications ADR 3,898,600 0 3,898,600
=====================================
Total Greece Common Stocks 3,898,600 0 3,898,600
=====================================
Hong Kong -
Consumer Goods -
198,000 Li & Fung 0 553,571 553,571
Ltd.
Food -
809,000 Four Seasons Mercantile Holdings 0 302,270 302,270
Insurance -
688,000 Pacific 0 518,553 518,553
Century
Retail - Apparel -
602,000 Giordano International Limited 0 515,783 515,783
=====================================
Total Hong Kong Common Stocks 0 1,890,177 1,890,177
=====================================
India -
Computer Software & Services -
26,200 Pentafour 0 751,248 751,248
Software* #
27,400 Satyam Computer 0 1,061,869 1,061,869
=====================================
0 1,813,117 1,813,117
=====================================
Ireland -
Airlines -
15,000 Ryanair Holdgs PLC 0 780,000 780,000
Banks -
495,150 Bank Of Ireland 4,661,462 0 4,661,462
Telecommunications -
42,958 Esat Telecom Group PLC* 0 1,739,799 1,739,799
<PAGE>
Transportation -
29,551 Irish Continental Group PLC 0 363,557 363,557
Wireless Telecommunications -
222,000 Bord Telecom Eirea 1,097,230 0 1,097,230
=====================================
Total Ireland Common Stocks 5,758,692 2,883,356 8,642,048
=====================================
Israel -
Computer Software & Services -
11,259 Check Point Software Tech Ltd 0 770,538 770,538
Electrical & Electronics -
115,295 ECI Telecommunications Ltd. 3,912,824 0 3,912,824
Electrical
Equipment -
42,600 Orbotech 2,268,450 0 2,268,450
Ltd.*
Electronics -
21,372 Orbotech 0 1,138,059 1,138,059
Ltd.*
=====================================
Total Israel Common Stocks 6,181,274 1,908,597 8,089,871
=====================================
Italy -
Machinery ( Diversified) -
199,425 Riva Finanziaria 0 554,697 554,697
Miscellaneous -
111,555 STA Azionaria 0 745,885 745,885
Motor Vehicle -
175,811 Ducati Motor 0 550,142 550,142
Holdings
Publishing -
35,915 Class Editore 0 297,769 297,769
471,463 Poligrafici Editor S.P.A. 0 1,041,022 1,041,022
Wireless Telecommunications -
791,000 Telecom Italia SPA 4,315,681 0 4,315,681
=====================================
Total Italy Common Stocks 4,315,681 3,189,515 7,505,196
=====================================
Japan -
Banks -
308,000 Sanwa Bank 3,374,312 0 3,374,312
Beverages & Tobacco -
261 Japan Tobacco Inc 3,141,698 0 3,141,698
Chemicals -
7,500 Fujimi Inc.* 0 399,058 399,058
Computer Software & Services -
27,000 Catena Corporation 0 308,518 308,518
Data Processing & Reproduction -
100,000 Canon Inc. 3,166,296 0 3,166,296
Electronic Components -
106,000 Fujitsu 3,180,601 0 3,180,601
Financial Services -
41,000 Takefuji 4,924,506 0 4,924,506
Corp.
Health & Personal Care -
55,000 Takeda Chemical Industries 2,983,994 0 2,983,994
92,000 Terumo Corp. 2,299,097 0 2,299,097
Merchandising -
37,400 Yamada Denki Co. 2,260,735 0 2,260,735
<PAGE>
Motor Vehicles -
52,000 Honda Motor Co. 2,254,263 0 2,254,263
91,000 Mitsubishi Motor 460,378 0 460,378
=====================================
Total Japan Common Stocks 28,045,880 707,576 28,753,456
=====================================
Korea -
Banks -
48,000 Housing and Commercial Bank 1,172,580 0 1,172,580
101,000 Shinhan Bank 923,141 0 923,141
Electronic Components, Instruments -
85,827 Dae Duck Electronics Co.* 0 1,112,506 1,112,506
Machinery ( Diversified) -
57,929 Medison Co.* 0 789,394 789,394
Textiles -
180,000 Younggone Corp. 0 478,604 478,604
Wireless Telecommunications -
49,000 Korea Telecom 1,803,812 0 1,803,812
=====================================
Total Korea Common Stocks 3,899,533 2,380,504 6,280,037
=====================================
Mexico -
Broadcasting -
100,000 Tv Azteca S A De C 0 450,000 450,000
V
Multi
Industry -
86,893 Desc S.A. De C.V. 1,851,907 0 1,851,907
=====================================
Total Mexico Common Stocks 1,851,907 450,000 2,301,907
=====================================
Netherlands -
Appliance & Household Durables -
54,072 Koninklijke Philips Electronics 5,521,423 5,521,423
N.V.
Business & Public Services -
182,307 Vedior N.V. CVA 3,071,755 3,071,755
Computer-business Services -
40,000 Getronics NV 1,645,353 1,645,353
Computer Software & Services -
34,705 Devote Nv 0 519,784 519,784
22,768 ICT Automatisering N.V. 0 557,780 557,780
Consumer Goods -
23,302 Airspray N.V. 0 600,776 600,776
Forest Products, Paper -
19,700 Benckiser 1,238,160 0 1,238,160
N.V.
137,000 Buhrmann N.V. 2,784,690 0 2,784,690
Human Resources -
42,223 Unique Intl 0 1,009,553 1,009,553
Nv
Machinery & Engineering Services -
68,500 New Holland N.V. 1,027,500 0 1,027,500
Multi-industry -
21,130 Aalberts Industrie 0 365,069 365,069
<PAGE>
Wireless Telecommunications -
83,500 Kon KPN N.V. 3,814,319 0 3,814,319
=====================================
Total Netherlands Common Stocks 19,103,200 3,052,962 22,156,162
=====================================
New Zealand -
Wireless Telecommunications -
896,000 Telecom Corp. of New Zealand Ltd. 4,062,572 0 4,062,572
=====================================
Total Netherlands Common Stocks 4,062,572 0 4,062,572
=====================================
Norway -
Multi
Industry -
256,000 Orkla ASA 3,887,023 0 3,887,023
Telecommunications -
30,477 Netcom Asa* 0 1,000,017 1,000,017
=====================================
Total Norway Common Stocks 3,887,023 1,000,017 4,887,040
=====================================
Portugal -
Transport - Road & Rail -
74,000 Brisa Auto Estrada 2,917,238 0 2,917,238
=====================================
2,917,238 0 2,917,238
=====================================
Singapore -
Communication Equipment -
433,000 Datacraft 0 2,061,080 2,061,080
Asia
Electronic Equipment -
267,000 Idt Hldgs 0 606,090 606,090
Sing
=====================================
Total Singapore Common Stocks 0 2,667,170 2,667,170
=====================================
South Africa -
Energy Sources -
233,000 Sasol Ltd. 1,731,667 0 1,731,667
=====================================
Total South Africa Common Stocks 1,731,667 0 1,731,667
=====================================
Spain -
Banks -
58,734 Banco De Valencia* 0 507,067 507,067
Computer Software & Services -
19,290 Meta4 Nv 0 323,992 323,992
Telecommunications -
133,000 Indra Sistemas Sa 0 1,334,619 1,334,619
=====================================
Total Spain Common Stocks 0 2,165,678 2,165,678
=====================================
Sweden -
Auto Parts -
43,800 Garphyttan 0 538,818 538,818
Banks -
369,000 Svenska Handelsbanken Series A 4,876,434 0 4,876,434
Beverages & Tobacco -
1,134,000 Swedish Match AB 4,419,868 0 4,419,868
Computer Software & Services -
13,296 Framtidsfabriken AB 0 390,287 390,287
23,178 Ibs AB 0 450,280 450,280
104,713 Mandator AB 0 695,094 695,094
<PAGE>
132,584 Sigma Ab 0 1,025,442 1,025,442
Hotels -
120,000 Scandic Hotels AB 0 1,315,437 1,315,437
Industrial Parts -
65,068 Autoliv, Inc. 2,242,850 0 2,242,850
Multi
Industry -
218,000 Trelleborg AB 1,832,111 0 1,832,111
Wireless Telecommunications -
183,562 Ericsson LM B 5,980,711 0 5,980,711
Shares
=====================================
Total Sweden Common Stocks 19,351,974 4,415,358 23,767,332
=====================================
Switzerland -
Banks -
13,600 UBS AG 4,142,618 0 4,142,618
451 BK Sarasin & Cie 0 800,985 800,985
Electrical
Equipment -
9,652 Gretag Imaging Holdings* 0 1,002,654 1,002,654
Chemicals -
6,000 Clariant 2,879,164 0 2,879,164
Health & Personal Care -
2,954 Novartis AG 4,264,403 0 4,264,403
Life Insurance -
484 Helvetia Patria Holdings 0 418,444 418,444
Manufacturing -
17,000 Mettler Toledo International Inc.* 0 491,937 491,937
=====================================
Total Switzerland Common Stocks 11,286,185 2,714,020 14,000,205
=====================================
Thailand -
Food -
78,000 Pizza Public Co 0 230,614 230,614
Ltd.
=====================================
0 230,614 230,614
=====================================
United Kingdom -
Aerospace & Military Technology -
178,000 Smiths Industries 2,501,163 2,501,163
PLC
Beverages & Tobacco -
448,000 Diageo PLC 4,552,484 4,552,484
Broadcasting & Publishing -
488,000 United News & Media PLC 5,314,862 5,314,862
Business & Public Services -
323,000 Securicor PLC 3,075,482 3,075,482
319,000 WPP Group PLC 2,864,200 2,864,200
Computer Software & Services -
116,611 Autonomy Corp.* 845,430 845,430
398,557 Synstar 864,270 864,270
Employment -
97,311 Select Appointments Holdings 0 1,241,194 1,241,194
Financial Services -
459,000 Amvescap PLC 4,255,118 0 4,255,118
Food & Household Products -
330,000 Reckitt & Colman 4,687,796 0 4,687,796
PLC
Health & Personal Care -
104,936 Astrazeneca PLC 3,827,962 0 3,827,962
<PAGE>
Leisure & Tourism -
392,000 Carlton Communications PLC 3,195,633 0 3,195,633
Manufacturing -
68,633 Weir Group 0 302,555 302,555
Multi
Industry -
233,000 Charter PLC 1,329,234 0 1,329,234
970,000 Cookson Group PLC 3,552,900 0 3,552,900
865,104 Tomkins PLC 4,023,955 0 4,023,955
Publishing -
72,637 Dorling Kindersley 0 439,106 439,106
Retail -
354,265 Electron Boutique 0 568,416 568,416
Telecommunications -
185,810 Kingston Commerce Hull 0 924,507 924,507
=====================================
Total United Kingdom Common Stocks 43,180,789 5,185,478 48,366,267
=====================================
United States -
Airlines -
17,700 Delta Air Lines, 1,055,363 0 1,055,363
Inc.
Alcohol -
8,000 Anheuser-Busch Companies, Inc. 631,500 0 631,500
Apparel, Retail -
80,000 TJX Companies, Inc. 2,645,000 0 2,645,000
Apparel, Textiles -
23,600 Westpoint Stevens Inc. 643,100 0 643,100
Banks -
67,800 Bank of New York Co. Inc. 2,504,363 0 2,504,363
74,400 Mellon Bank Corp. 2,511,000 0 2,511,000
38,700 The Chase Manhattan Corp. 2,975,062 0 2,975,062
Cable -
20,000 JDS Uniphase Corporation* 1,807,500 0 1,807,500
Computer Hardware -
48,400 Cisco Systems, 3,006,850 0 3,006,850
Inc.*
52,400 Dell Computer 2,141,850 0 2,141,850
Corp.*
21,600 International Business Machines 2,714,850 0 2,714,850
Computer Software -
25,200 Autodesk, 667,800 0 667,800
Inc.
10,000 BMC Software, Inc.* 538,750 0 538,750
20,100 Compuware Corp.* 557,775 0 557,775
22,100 Microsoft Corp.* 1,896,456 0 1,896,456
34,900 Sterling Software Inc.* 861,594 0 861,594
70,000 Unisys Corp.* 2,856,875 0 2,856,875
Computer Software & Services -
35,000 Accrue Software Incorporated 0 424,375 424,375
50,000 Cognizant Technology Solutions* 0 1,343,750 1,343,750
5,400 Documentum Inc.* 0 81,337 81,337
39,024 Fundtech Limited 0 985,356 985,356
10,000 High Speed Access Corporation 0 346,875 346,875
18,750 Medical Manager Corp. 0 1,190,625 1,190,625
33,919 Softworks 0 246,973 246,973
Inc.*
63,891 Tecnomatix Technologies Ltd.* 0 1,213,929 1,213,929
Computer Services -
20,000 Zebra Technologies Corp. 0 938,750 938,750
Consumer Durables -
14,100 Maytag Corp. 981,713 0 981,713
<PAGE>
Defense/ Aerospace -
41,100 Allied Signal, Inc. 2,658,656 0 2,658,656
Diversified Retail -
40,000 Dayton Hudson Corp. 2,587,500 0 2,587,500
55,300 Family Dollar Stores Inc. 1,157,844 0 1,157,844
40,200 Federated Department Stores, Inc.* 2,062,762 0 2,062,762
15,700 Wal Mart Stores, 663,325 0 663,325
Inc.
Drugs & Medicine -
83,400 Amerisource Health Corp.* 1,551,200 784,000 2,335,200
21,400 Biogen Inc.* 1,472,587 0 1,472,587
16,932 Cardinal Health, 1,155,609 0 1,155,609
Inc.
31,700 Schering-Plough 1,553,300 0 1,553,300
Corp.
25,400 Warner Lambert Co. 1,676,400 0 1,676,400
Electric Utilities -
22,800 Consolidated Edison Co. of New York, Inc. 991,800 0 991,800
29,600 Energy East Corp. 752,950 0 752,950
22,500 Utilicorp United 535,781 0 535,781
Inc.
Electronics -
53,392 DII Group Inc. * 0 1,978,841 1,978,841
Electronic Components, Instruments -
10,000 Globespan Semiconductor Inc. 0 507,500 507,500
Employment -
15,000 Interim Services 0 316,875 316,875
Inc.*
Energy Reserves & Production -
10,300 Atlantic Richfield 927,644 0 927,644
Co.
16,000 Mobil Corp. 1,636,000 0 1,636,000
36,900 Royal Dutch Petroleum Co. ADR 2,250,900 0 2,250,900
Engineering & Construction -
14,000 Jacobs Engineering Group Inc. * 0 481,250 481,250
Financial -
54,200 Medallion Financial Corp. 0 1,063,675 1,063,675
20,100 Profit Recovery Group International Inc.* 0 1,035,150 1,035,150
34,000 Radian Group Inc. 0 1,753,125 1,753,125
Financial Services -
27,600 Associates First Capital Corp. 1,057,425 0 1,057,425
16,500 Marsh & McLennan Co., Inc. 1,254,000 0 1,254,000
Food Retail -
20,000 Food Lion 238,750 0 238,750
Inc.
83,800 Kroger Co.* 2,204,987 0 2,204,987
Forest Products, Paper -
12,100 Champion International Corp. 626,175 0 626,175
38,000 Fort James Corp. 1,387,000 0 1,387,000
20,400 Georgia-Pacific 916,725 0 916,725
Corp.
17,900 Weyerhaeuser Co. 1,157,906 0 1,157,906
Gas Utility -
25,200 Columbia Energy Group 1,499,400 0 1,499,400
Household Products -
21,300 Avon Products, Inc. 969,150 0 969,150
Industrial Parts -
15,700 American Standard Companies Inc.* 691,781 0 691,781
41,000 Ingersoll Rand Co. 2,636,813 0 2,636,813
7,600 SPX Corp.* 646,000 0 646,000
<PAGE>
44,000 United Technologies Corp. 2,934,250 0 2,934,250
Information & Computer Services -
4,700 Computer Sciences Corp.* 302,563 0 302,563
19,800 Valassis Communications Inc.* 737,550 0 737,550
Instruments-scientific -
48,200 Mettler Toledo International Inc.* 1,394,788 0 1,394,788
Leisure -
12,300 Eastman Kodak Co. 850,238 0 850,238
37,400 Hasbro, Inc. 972,400 0 972,400
Life Insurance -
20,900 American General Corp. 1,617,137 0 1,617,137
16,100 Equitable Companies Inc. 1,034,425 0 1,034,425
30,000 Lincoln National 1,500,000 0 1,500,000
Corp.
23,600 Protective Life 842,225 0 842,225
Corp.
Long Distance & Phone Companies -
18,450 AT&T Corp. 958,247 0 958,247
40,000 BellSouth Corp. 1,920,000 0 1,920,000
28,550 Century Telephone Enterprises, 1,220,512 0 1,220,512
Inc.
28,500 GTE Corp. 2,100,094 0 2,100,094
20,000 MCI WorldCom, Inc.* 1,650,000 0 1,650,000
60,490 SBC Communications, Inc. 3,459,272 0 3,459,272
Marketing & Advertising -
10,578 Catalina Marketing Corp.* 0 1,012,844 1,012,844
Media -
34,600 Comcast Corp., Class A 1,332,100 0 1,332,100
29,200 Viacom, Inc., 1,224,575 0 1,224,575
Class B*
Medical Products -
32,000 St. Jude Medical, Inc.* 1,190,000 0 1,190,000
30,000 Tyco International 2,930,625 0 2,930,625
Ltd.
Medical Products & Supplies
20,143 Henry Schein Incorporated 0 443,146 443,146
Medical Providers -
13,400 Wellpoint Health Networks, Inc.* 1,100,475 0 1,100,475
Mining & Metals -
15,900 Martin Marietta Materials Inc. 865,556 0 865,556
Motor Vehicles -
27,600 Borg Warner Automotive, Inc. 1,402,425 0 1,402,425
12,720 Delphi Automotive Systems Corp. 228,960 0 228,960
40,000 Ford Motor 1,945,000 0 1,945,000
Co.
18,200 General Motors 1,109,062 0 1,109,062
Corp.
Oil Refining -
26,900 Coastal Corp. 1,064,231 0 1,064,231
20,700 USX-Marathon Group 628,763 0 628,763
Other Insurance -
9,700 ACE Ltd. 225,525 0 225,525
17,200 Ambac Financial Group Inc. 956,750 0 956,750
15,571 American International Group, Inc. 1,808,182 0 1,808,182
34,300 Travelers Property Casualty Corp. 1,354,850 0 1,354,850
Publishing
14,100 Knight Ridder, Inc. 756,113 0 756,113
<PAGE>
Real Property -
21,600 Lafarge Corp. ADR 668,250 0 668,250
Restaurants -
24,000 Brinker International Inc.* 669,000 0 669,000
30,150 Outback Steakhouse Inc.* 1,006,256 0 1,006,256
Retail - Specialty -
20,000 Barnes & Noble 0 451,250 451,250
Inc.*
35,000 Hines Horticulture Inc.* 0 293,125 293,125
Securities & Asset Management -
16,800 Morgan Stanley Dean Witter Discover & Co. 1,514,100 0 1,514,100
Semiconductor -
47,000 Applied Materials, Inc.* 3,381,062 0 3,381,062
17,000 Atmel Corp.* 506,813 0 506,813
19,300 Intel Corp. 1,331,700 0 1,331,700
20,900 Vitesse Semiconductor Corp.* 1,334,987 0 1,334,987
Specialized Services -
30,000 International Telecomm Data Systems Inc.* 0 281,250 281,250
13,322 Sunrise Assisted Living Inc.* 0 402,158 402,158
Specialty Retail -
30,300 Home Depot, Inc. 1,933,519 0 1,933,519
79,600 Office Depot Inc.* 1,492,500 0 1,492,500
34,650 Staples Inc.* 1,000,519 0 1,000,519
33,100 Williams Sonoma 1,239,181 0 1,239,181
Inc.*
10,700 Zale Corp.* 428,000 0 428,000
Telecommunications -
78,768 Tti Team Telecome 0 866,448 866,448
Thrift -
33,600 Greenpoint Financial Corp. 1,087,800 0 1,087,800
Tobacco -
40,000 Philip Morris Co., 1,490,000 0 1,490,000
Inc.
=====================================
Total United States Common Stocks 132,618,351 18,442,607 151,060,958
=====================================
=====================================
Total Common Stocks (cost - $303,031,850, 356,411,368 65,140,979 421,552,347
$52,039,792)
=====================================
Principal
Amount Short Term Interest Maturity
Rates Dates
4,000 United States Treasury Bills 4.46% 10/21/99 3,959,860 0 3,959,860
6,189,000 Societe Generale Repo 5.05 8/2/99 6,189,000 0 6,189,000
=====================================
Total U.S. Government & Repurchase Agreement 10,148,860 0 10,148,860
(cost - $10,148,860)
=====================================
Total Investments (cost - $365,220,502) , 366,560,228 65,140,979 431,701,207
99.59%
Assets in excess Liabilities 0.41% 825,519 934,413 1,759,932
=====================================
Net Assets 100.00%
$367,385,747 $66,075,392 $433,461,139
=====================================
* Non-income producing security.
# Illiquid security.
ADR American Depository Receipt
<PAGE>
Futures Contracts
Unrealized Unrealized Unrealized
Number of Outstanding Future In Expiration Appreciation Appreciation Appreciation
Contracts Contracts Exchange for Dates (Depreciation) (Depreciation) (Depreciation)
- ------------------------ ---------------------- -------------------------------------------------
61 CAC40 Ten Euro $2,843,836 Aug-99 ($34,004) 0 ($34,004)
(France)
25 DAX Index (Germany) $3,425,265 Sep-99 (331922) 0 (331,922)
72 FTSE Index (United $7,290,736 Sep-99 (427649) 0 (427,649)
Kingdom)
8 Hang Seng Index $684,102 Aug-99 28,575 0 28,575
(Hong Kong)
13 IBEX Plus (Spain) $1,302,236 Aug-99 (123,134) 0 (123,134)
7 MIB 30 Index $1,225,524 Sep-99 (157,508) 0 (157,508)
(Italy)
95 OMX Index (Sweden) $1,069,407 Aug-99 7,610 0 7,610
29 S & P 500 (United $9,655,550 Sep-99 438,200 0 438,200
States)
13 SPI Futures $634,365 Sep-99 (14,691) 0 (14,691)
(Australia)
53 Topix Index $6,757,440 Sep-99 88,564 0 88,564
(Japan)
==============================================
$(525,959) $0 $(525,959)
==============================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------- ------------------------------------------------
PRO FORMA STATEMENT OF ASSETS AND LIABILITIES Global Combined
As of July 31, 1999 Global Small Global Equity
Equity Cap Global Small Cap
- -------------------------------------------------------- --------------- ----------------- -----------------
ASSETS
<S> <C> <C> <C>
Investments in securities, at value (cost -
$313,180,710; $52,039,792 and $365,220,502)............ $ 366,560,228 $ 65,140,979 $ 431,701,207
Investment of cash collateral received for securities
loaned(cost - $23,246,462; $1,720,750 and $24,967,212). 23,249,575 1,720,750 24,970,325
Cash and cash denominated in foreign securities, at
value (cost - $2,066,023; $261,379 and $2,327,402)..... 2,055,126 271,543 2,326,669
Receivable for investments sold.......................... 0 2,086,242 2,086,242
Receivable for shares of beneficial interest sold........ 64,452 0 64,452
Dividends and interest receivable........................ 1,258,378 160,707 1,419,085
Futures variation margin receivable...................... 374,376 0 374,376
Deferred organizational costs............................ 0 0 0
Other assets............................................. 228,440 1,080 229,520
-------------- ---------------- -----------------
Total assets.............. 393,790,575 69,381,301 463,171,876
-------------- ---------------- -----------------
LIABILITIES
Payable for investments purchased........................ 1,560,810 1,321,695 2,882,505
Payable for shares of beneficial interest repurchased.... 737,522 0 737,522
Payable for cash collateral.............................. 23,246,462 1,720,750 24,967,212
Payable to affiliate..................................... 0 55,981 55,981
Payable futures variation margin......................... 0 0
Accrued expenses and other liabilities .................. 860,034 207,483 1,067,517
-------------- ---------------- -----------------
Total liabilities.......... 26,404,828 3,305,909 29,710,737
-------------- ---------------- -----------------
NET ASSETS
Beneficial interest shares of $0.001 par value
outstanding (unlimited amount authorized).............. 267,219,930 50,737,990 317,957,920
Undistributed net investment income...................... 276,640 (90,525) 186,115
Accumulated net realized losses from investment and 0
foreign currency transactions.......................... 47,040,755 2,428,060 49,468,815
Net unrealized appreciation of investments and assets 0
and liabilities denominated in foreign currencies...... 52,848,421 12,999,867 65,848,288
-------------- ---------------- =================
Net assets ............... $ 367,385,747 $ 66,075,392 $ 433,461,139
============== ================ =================
CLASS A :
Net assets............................................ $ 237,053,217 $ 66,075,392 $ 303,128,609
-------------- ---------------- -----------------
Shares outstanding.................................... 13,167,559 3,801,667 16,838,414
-------------- ---------------- -----------------
Net asset and redemption value per share.............. $18.00 $17.38 $18.00
============== ================ =================
Maximum offering price per share (net asset value
plus sales charge of 4.50% of offering price)....... $18.85 $18.85
============== =================
CLASS B :
Net assets............................................ $ 38,045,802 $ 38,045,802
-------------- -----------------
Shares outstanding.................................... 2,246,402 2,246,402
-------------- -----------------
Net asset value, offering price and redemption
value per share..................................... $16.94 $16.94
============== =================
CLASS C :
Net assets............................................ $ 36,963,218 $ 36,963,218
-------------- -----------------
Shares outstanding.................................... 2,178,774 2,178,774
-------------- -----------------
Net asset value, offering price and redemption value
per share........................................... $16.97 $16.97
============== =================
CLASS Y :
Net assets............................................ $ 55,323,510 $ 55,323,510
-------------- -----------------
Shares outstanding.................................... 3,007,781 3,007,781
-------------- -----------------
Net asset value, offering price and redemption value
per share........................................... $18.39 $18.39
============== =================
See accompanying notes to pro forma financial statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------ -----------
PRO FORMA STATEMENT OF OPERATIONS
For the Twelve Months Ended July 31, 1999 (unaudited)
- ------------------------------------------------------------------------------------------------ -----------
Global Global
Equity Small Cap Adjustment Combined
INVESTMENT INCOME:
<S> <C> <C> <C> <C>
Dividends................................ $6,544,302 $505,064 0 $7,049,366
Interest................................. 1,240,850 76,169 0 1,317,019
----------- ---------- ---------- ----------
7,785,152 581,233 0 8,366,385
=========== ========== ---------- ==========
EXPENSES:
Investment advisory and administration 3,337,157 606,639 (90,996) (a) 3,852,800
fees...................................
Service fees - Class A................... 621,013 0 151,660 (b) 772,673
Service and distribution fees - Class B.. 491,667 0 0 491,667
Service and distribution fees - Class C.. 408,242 0 0 408,242
Transfer agency fees and expenses........ 358,501 11,300 0 369,801
Custody and accounting................... 1,001,577 106,501 0 1,108,078
Reports and notices to shareholders...... 290,253 41,625 (30,000) (c) 301,878
Legal and audit.......................... 207,694 60,006 (60,006) (c) 207,694
Amortization of organizational expenses.. 0 7,955 (7,955) (d) 0
State registration fees.................. 51,862 0 0 51,862
Trustees' fees and expenses.............. 16,060 10,500 (10,500) (c) 16,060
Other expenses........................... 36,475 21,788 0 58,263
----------- ---------- ------------- -----------
6,820,501 866,314 (47,797) 7,639,018
Less: Fee waiver from advisor............... (742) (852) (1,594)
----------- ---------- ----------
6,819,759 865,462 7,637,424
----------- ---------- ----------
Net investment income (loss)............. 965,393 (284,229) 728,961
----------- ---------- ----------
REALIZED AND UNREALIZED GAINS (LOSSES)
FROM INVESTMENT TRANSACTIONS:
Net realized gains (losses) from:
Investment transactions................ 21,384,510 2,428,411 23,812,921
Foreign currency transactions.......... 1,924,329 (108,630) 1,815,699
Futures transactions................... 5,992,441 0 5,992,441
Net change in unrealized appreciation/
depreciation of:
Investments............................ (81,269,841) (5,560,639) (86,830,480)
Futures................................ (3,390,343) (101,172) (3,491,515)
Assets and liabilitiesdenominated
in foreign currencies.................. 2,925 0 2,925
----------- ---------- ----------
Net realized and unrealized............. (55,355,979) (3,342,030) (58,698,009)
losses from investment transactions: ----------- ---------- ----------
Net decrease in net assets resulting
from operations....................... ($54,390,586) ($3,626,259) ($57,969,048)
============ ============ ============
------------
(a) Reflects decrease in fees resulting from the lower fee schedule of Global Equity Fund.
(b) Reflects increase in service fee
for Class A share assets for Global Small Cap shareholders previously not subject to Rule 12B-1 Fees.
(c) Reflects the anticipated savings of the merger.
(d) Reflects write-off of unamortized organizational expenses.
See accompanying notes to pro forma financial statements
</TABLE>
<PAGE>
Notes To Pro Forma Combined Financial Statements (Unaudited)
Basis of Presentation:
Subject to the approval of the Plan of Reorganization by the shareholders of
Global Small Cap Fund, Inc. ("Global Small Cap"), PaineWebber Global Equity Fund
("Global Equity") would acquire the assets of Global Small Cap in exchange
solely for the assumption by Global Equity of Global Small Cap's liabilities and
Class A shares of Global Equity that correspond to the outstanding shares of
Global Small Cap. The number of shares to be received would be based on the
relative net asset value of Global Equity's Class A shares on the effective date
of the Plan of Reorganization and Global Small Cap will be terminated as soon as
practicable thereafter.
The pro forma combined financial statements reflect the financial position of
Global Small Cap and Global Equity at July 31, 1999 and the combined results of
operations of Global Small Cap and Global Equity for the year ended July 31,
1999.
As a result of the Plan of Reorganization, the investment advisory and
administration agreement fee will decrease due to the lower fee schedule of
Global Equity. As a closed end fund, Global Small Cap currently pays no Rule
12b-1 distribution or service fees, however, the Class A shares that Global
Small Cap shareholders would receive in the Plan of Reorganization are subject
to an annual Rule 12b-1 distribution and service fee of average net assets
attributable to Class A. Other fixed expenses will be reduced due to the
elimination of duplicative expenses. In addition, the pro forma combined
statement of assets and liabilities has not been adjusted as a result of the
proposed transaction because such adjustment would not be material. It is
estimated that the cost of approximately $150,000 associated with the merger
will be charged to each Fund based on the net assets on the date of
reorganization. These costs are not included in the pro forma statement of
operations since they are not recurring.
The pro forma combined financial statements are presented for the information of
the reader and may not necessarily be representative of what the actual combined
financial statements would have been had the Plan of Reorganization occurred at
July 31, 1999. The pro forma combined financial statements should be read in
conjunction with the historical financial statements of the constituent Funds
included in or incorporated by reference in the applicable statement of
additional information.
