Report of Independent Auditors
To the Shareholders and
Board of Trustees of
PaineWebber Tactical Allocation Fund
In planning and performing our audit of the financial
statements of PaineWebber Tactical Allocation Fund for the
year ended August 31, 2000, we considered its internal control,
including control activities for safeguarding securities, to
determine our auditing procedures for the purpose of
expressing our opinion on the financial statements and to
comply with the requirements of Form N-SAR, and not to
provide assurance on internal control.
The management of PaineWebber Tactical Allocation Fund is
responsible for establishing and maintaining internal control.
In fulfilling this responsibility, estimates and judgments by
management are required to assess the expected benefits and
related costs of control. Generally, internal controls that are
relevant to an audit pertain to the entitys objective of preparing
financial statements for external purposes that are fairly
presented in conformity with accounting principles generally
accepted in the United States. Those internal controls include
the safeguarding of assets against unauthorized acquisition, use,
or disposition.
Because of inherent limitations in internal control,
misstatements due to errors or fraud may occur and not be
detected. Also, projections of any evaluation of internal control
to future periods are subject to the risk that internal control may
become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may
deteriorate.
Our consideration of internal control would not necessarily
disclose all matters in internal control that might be material
weaknesses under standards established by the American
Institute of Certified Public Accountants. A material weakness
is a condition in which the design or operation of one or more
of the specific internal control components does not reduce to a
relatively low level the risk that errors or fraud in amounts that
would be material in relation to the financial statements being
audited may occur and not be detected within a timely period
by employees in the normal course of performing their assigned
functions. However, we noted no matters involving internal
control, including control activities for safeguarding securities,
and its operation that we consider to be material weaknesses as
defined above at August 31, 2000.
This report is intended solely for the information and use of the
Board of Trustees and management of PaineWebber Tactical
Allocation Fund, and the Securities and Exchange Commission
and is not intended to be and should not be used by anyone
other than these specified parties.
ERNST
& YOUNG LLP
October 17, 2000
