Rule 497(e)
33 Act File No. 33-39659
40 Act File No. 811-6292
PAINEWEBBER TACTICAL ALLOCATION FUND
SUPPLEMENT TO STATEMENT OF ADDITIONAL INFORMATION
July 26, 2000
Dear Investor,
The purpose of this supplement is to revise the fifth full paragraph on
page 3 of the Statement of Additional Information dated December 10, 1999 to add
disclosure about the fund's ability to invest in securities issued by government
agencies or repurchase agreements collateralized by U.S. government securities
for its cash investments. The paragraph, as revised, reads as follows:
For its bond investments, Tactical Allocation Fund seeks to invest
in U.S. Treasury notes having five years remaining until maturity at
the beginning of the calendar year when the investment is made.
However, if those instruments are not available at favorable prices,
the fund may invest in U.S. Treasury notes with either remaining
maturities as close as possible to five years or overall durations
that are as close as possible to the duration of five-year U.S.
Treasury notes.
Similarly, for its cash investments, Tactical Allocation Fund seeks
to invest in U.S. Treasury bills with remaining maturities of 30
days. However, if those instruments are not available at favorable
prices, the fund may invest in U.S. Treasury bills that have either
remaining maturities as close as possible to 30 days or overall
durations that are as close as possible to the duration of 30-day
U.S. Treasury bills. The fund may hold U.S. Treasury bills that
mature prior to the first business day of the following month when
Mitchell Hutchins determines the monthly asset allocation of the
fund's assets based on Tactical Allocation Model's recommendation.
If, in Mitchell Hutchins' judgment, it is not practicable to
reinvest the proceeds in U.S. Treasury bills, Mitchell Hutchins may
invest the fund's cash assets in securities with remaining
maturities of 30 days or less that are issued or guaranteed by U.S.
government agencies or instrumentalities and in repurchase
agreements collateralized by securities issued or guaranteed by the
U.S. government, its agencies or instrumentalities.
