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MITCHELL HUTCHINS/KIDDER, PEABODY SMALL CAP GROWTH FUND
SUPPLEMENT TO PROSPECTUS DATED NOVEMBER 28, 1994, AS SUPPLEMENTED
AUGUST 18, 1995
The following information revises the information contained in the Fund's
Prospectus:
1. Effective November 1, 1995, the name of the Fund was changed to "PaineWebber
Small Cap Growth Fund."
2. For purchases of Fund shares made on or after November 10, 1995, the
following changes to the Fund's Class A, Class B and Class C shares will be in
effect:
a. Class A Shares. Class A shares of the Fund purchased without an initial
sales charge due to the sales charge waiver for purchases of $1 million or more
and held less than one year are subject to a contingent deferred sales charge
("CDSC") upon redemption. The holding period of Class A shares of the Fund
acquired through an exchange with another PaineWebber mutual fund ("PW Fund") is
calculated from the date the Class A shares of that PW Fund were initially
purchased without a sales charge. The Class A CDSC equals 1% of the lower of:
(a) the net asset value of the shares at the time of purchase or (b) the net
asset value of the shares at the time of redemption. Class A shares of the Fund
held one year or longer and Class A shares of the Fund acquired through
reinvestment of dividends or capital gains distributions are not subject to this
CDSC. The CDSC for Class A shares of the Fund is waived for redemptions in
connection with the systematic withdrawal plan, subject to the limitations
described below.
b. Class C Shares (Formerly Class B Shares). Effective November 10, 1995, all
Class B shares will be renamed Class C shares.
Class C shares of the Fund held less than one year are subject to a CDSC on
redemptions. The holding period of Class C shares of the Fund acquired through
an exchange with another PW Fund is calculated from the date the Class C shares
of that PW Fund were initially purchased without a sales charge. The CDSC on
Class C shares equals 1% of the lower of: (a) the net asset value of the shares
at the time of purchase or (b) the net asset value of the shares at the time of
redemption. Redemptions of Class C shares of the Fund acquired through an
exchange and held less than one year will be subject to the same CDSC that would
have been imposed on Class C shares of the PW Fund originally purchased that
were subsequently exchanged into Class C shares of the Fund. Class C shares of
the Fund held one year or longer and Class C shares of the Fund acquired through
reinvestment of dividends or capital gains distributions are not subject to the
CDSC. The CDSC for Class C shares of the Fund is waived for redemptions in
connection with the systematic withdrawal plan, subject to the limitations
described below.
c. Class Y Shares (Formerly Class C Shares). Effective November 10, 1995, all
Class C shares will be renamed Class Y shares.
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Class Y shares are no longer available for purchase by (1) former employees of
Kidder, Peabody & Co. Incorporated ("Kidder, Peabody") and their associated
accounts; (2) directors or trustees of any former Kidder, Peabody fund; or (3)
employee benefit plans of Kidder, Peabody. Investors in category (1) or (2)
above may purchase Class A shares, and the initial sales charge on Class A
shares is waived for such purchases. Dividends on Class Y shares held by these
shareholders may be reinvested in additional Class Y shares, but they will not
be permitted to make any other new purchases.
d. Waivers for Systematic Withdrawal Plan. Shareholders who own Class A or Class
C shares (formerly Class D shares) of the Fund with a value of $5,000 or more
may have PaineWebber redeem a portion of their shares monthly, quarterly or
semi-annually under the systematic withdrawal plan. Shareholders who participate
in the systematic withdrawal plan must elect to have all dividends reinvested in
additional shares of the same Class. The minimum amount for all withdrawals of
Class A or Class C shares is $100. Provided that the shareholder does not
withdraw an amount exceeding 12% in the first year after purchase of his or her
"Initial Account Balance," a term that means the value of the Fund account at
the time the shareholder elects to participate in the systematic withdrawal
plan, no CDSC is imposed on such withdrawals within the first year after
purchase for (1) Class A shares purchased pursuant to the sales charge waiver
for purchases of $1 million or more and (2) Class C shares. Class A and Class C
shareholders' participation in the systematic withdrawal plan will terminate
automatically if the Initial Account Balance (plus the net asset value on the
date of purchase of Fund shares acquired after the election to participate in
the systematic withdrawal plan) less aggregate redemptions made other than
pursuant to the systematic withdrawal plan, is less than $5,000.
Dated: November 6, 1995
This Prospectus Supplement does not replace any prior supplements to the Fund's
Prospectus.
