NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
fluctuations in foreign currency values and possible adverse political, social and economic developments, including
those particular to a specific industry, country or region, which could cause the securities and their markets to be
less liquid and prices more volatile than those of comparable U.S. companies and U.S. government securities.
These risks are greater with respect to securities of issuers located in emerging market countries in which the
Fund is authorized to invest. The ability of the issuers of debt securities held by the Fund to meet their obligations
may be affected by economic and political developments particular to specific industry, country or region.
INVESTMENT ADVISER AND ADMINISTRATOR
The Fund has an Investment Advisory and Administration Contract ("Advisory Contract") with Mitchell Hutchins.
In accordance with the Advisory Contract, the Fund pays Mitchell Hutchins an investment advisory and
administration fee, which is accrued weekly and paid monthly, at the annual rate of 1.00% of the Fund's average
weekly net assets.
The Fund may lend up to 33 1/3% of its total assets to qualified institutions. The loans are secured at all times by
cash or U.S. government securities in an amount at least equal to the market value of the securities loaned, plus
accrued interest, determined on a daily basis and adjusted accordingly. The Fund will retain record ownership of
loaned securities to exercise certain beneficial rights, however, the Fund may bear the risk of delay in recovery of,
or even loss of rights in, the securities loaned should the borrower fail financially. The Fund receives
compensation, which is included in interest income, for lending its securities from interest earned on the cash or
U.S. government securities held as collateral, net of fee rebates paid to the borrower plus reasonable
administrative and custody fees. The Fund's lending agent is PaineWebber, who received $9,432 from the Fund
for the six