May 18, 1999
PaineWebber Growth and Income Fund
PaineWebber Small Cap Fund
PaineWebber Growth Fund
Supplement to the
Prospectus
Dated November 30, 1998
Dear Investor,
This is a supplement to the Prospectus of PaineWebber Growth and Income
Fund ("Fund"):
THE FOLLOWING REPLACES THE INFORMATION CONCERNING THE FUND IN THE "INVESTMENT
OBJECTIVES & POLICIES" SECTION ON PROSPECTUS P. 9:
The investment objective of Growth and Income Fund is current income and capital
growth. The Fund seeks to achieve the capital growth portion of its objective by
investing, under normal circumstances, at least 65% of its total assets in
equity securities believed by Mitchell Hutchins to have the potential for rapid
earnings growth. The Fund seeks to achieve the income portion of its objective
by investing, under normal circumstances, at least 65% of its total assets in
income-producing securities, which may include dividend-paying equity
securities, bonds and money market instruments.
The Fund may invest up to 10% in convertible bonds rated below investment
grade. Up to 25% of the Fund's total assets may be invested in U.S.
dollar-denominated equity securities and bonds of foreign issuers that are
traded on recognized U.S. exchanges or in the U.S. over-the-counter ("OTC")
market.
THE FOLLOWING REPLACES THE INFORMATION IN THE FIRST PARAGRAPH CONCERNING THE
FUND IN THE "INVESTMENT PHILOSOPHY & PROCESS" SECTION ON PROSPECTUS P.10:
In seeking to balance capital growth with current income, Mitchell Hutchins
follows a disciplined investment process that relies on the Mitchell Hutchins
Equity Research Team and the Mitchell Hutchins Factor Valuation Model.
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This is a supplement to the Prospectus of PaineWebber Small Cap Fund
("Fund"):
THE FOLLOWING REPLACES THE INFORMATION IN THE FIRST PARAGRAPH CONCERNING THE
FUND IN THE "INVESTMENT OBJECTIVES & POLICIES" SECTION ON PROSPECTUS P. 9:
SMALL CAP FUND
The investment objective of Small Cap Fund is long-term capital appreciation.
The Fund seeks to achieve this objective by investing, under normal conditions,
at least 65% of its total assets in equity securities of small cap companies.
Mitchell Hutchins defines small cap companies as those companies with market
capitalizations of up to $1.5 billion at the time of purchase.
* * * *
This is a supplement to the Prospectus of PaineWebber Growth Fund:
THE FOLLOWING REPLACES ANY PRIOR SUPPLEMENTS RELATING TO THE INFORMATION
CONTAINED UNDER THE FOLLOWING HEADING IN THE "MANAGEMENT" SECTION ON PROSPECTUS
P. 27:
GROWTH FUND. Ellen R. Harris has been primarily responsible for the day-to-day
portfolio management of Growth Fund since its inception. Ms. Harris is a
managing director of Mitchell Hutchins. Prior to joining Mitchell Hutchins in
1983 as a portfolio manager, Ms. Harris served as a vice president and
portfolio manager at the predecessor to American Capital Management.
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