Section 240.14a-101 Schedule 14A.
Information required in proxy statement.
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12

MANAGED HIGH YIELD FUND INC.
.................................................................
(Name of Registrant as Specified In Its Charter)

.................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11

(1) Title of each class of securities to which transaction
applies:

............................................................

(2) Aggregate number of securities to which transaction
applies:

.......................................................

(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the amount
on which the filing fee is calculated and state how it was
determined):

.......................................................

(4) Proposed maximum aggregate value of transaction:

.......................................................

(5) Total fee paid:

.......................................................

[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

.......................................................

(2) Form, Schedule or Registration Statement No.:

.......................................................

(3) Filing Party:

.......................................................

(4) Date Filed:

.......................................................

MANAGED HIGH YIELD FUND INC.
---------------------
NOTICE OF
ANNUAL MEETING OF SHAREHOLDERS
NOVEMBER 19, 1998
---------------------

TO THE SHAREHOLDERS:

The annual meeting of shareholders of Managed High Yield Fund Inc. ('Fund')
will be held on November 19, 1998 at 10:00 a.m., Eastern time, at 1285 Avenue of
the Americas, 14th Floor, New York, New York 10019 for the following purposes:

(1) To elect nine (9) directors to serve until the annual meeting of
shareholders in 1999, or until their successors are elected and qualified;

(2) To ratify the selection of Ernst & Young LLP as the Fund's
independent auditors for the fiscal year ending July 31, 1999; and

(3) To transact such other business as may properly come before the
meeting or any adjournment thereof.

You are entitled to vote at the meeting and any adjournments thereof if you
owned Fund shares at the close of business on September 18, 1998. If you attend
the meeting, you may vote your shares in person. IF YOU DO NOT EXPECT TO ATTEND
THE MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN
THE ENCLOSED POSTAGE PAID ENVELOPE.

By order of the board of directors,

DIANNE E. O'DONNELL
Secretary

September 29, 1998
1285 Avenue of the Americas
New York, New York 10019

YOUR VOTE IS IMPORTANT
NO MATTER HOW MANY SHARES YOU OWN

PLEASE INDICATE YOUR VOTING INSTRUCTIONS ON THE ENCLOSED PROXY CARD,
DATE AND SIGN IT, AND RETURN IT IN THE ENVELOPE PROVIDED. If you sign, date
and return the proxy card but give no voting instructions, your shares will
be voted 'FOR' the nominees for director named in the attached proxy
statement and 'FOR' all other proposals noticed above. IN ORDER TO AVOID THE
ADDITIONAL EXPENSE TO THE FUND OF FURTHER SOLICITATION, WE ASK YOUR
COOPERATION IN MAILING IN YOUR PROXY CARD PROMPTLY.

INSTRUCTIONS FOR SIGNING PROXY CARDS

The following general guidelines for signing proxy cards may be of
assistance to you and avoid the time and expense to the Fund in validating your
vote if you fail to sign your proxy card properly.

1. INDIVIDUAL ACCOUNTS: Sign your name exactly as it appears in the
registration on the proxy card.

2. JOINT ACCOUNTS: Either party may sign, but the name of the party signing
should conform exactly to the name shown in the registration on the proxy card.

3. ALL OTHER ACCOUNTS: The capacity of the individual signing the proxy
card should be indicated unless it is reflected in the form of registration. For
example:

REGISTRATION VALID SIGNATURE
- ------------------------------------------------------ -------------------------------

Corporate Accounts

(1) ABC Corp........................................ ABC Corp.
John Doe, Treasurer

(2) ABC Corp........................................ John Doe, Treasurer

(3) ABC Corp. c/o John Doe, Treasurer............... John Doe

(4) ABC Corp. Profit Sharing Plan................... John Doe, Trustee

Partnership Accounts

(1) The XYZ Partnership............................. Jane B. Smith, Partner

(2) Smith and Jones, Limited Partnership............ Jane B. Smith, General Partner

Trust Accounts

(1) ABC Trust Account............................... Jane B. Doe, Trustee

(2) Jane B. Doe, Trustee u/t/d 12/18/78............. Jane B. Doe

Custodial or Estate Accounts

(1) John B. Smith, Cust. f/b/o John B.
Smith, Jr. UGMA/UTMA............................ John B. Smith

(2) Estate of John B. Smith......................... John B. Smith, Jr.
Executor

MANAGED HIGH YIELD FUND INC.
1285 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019

------------------------

PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON NOVEMBER 19, 1998

------------------------

This statement is furnished to the shareholders of Managed High Yield Fund
Inc. ('Fund') in connection with the board of directors' solicitation of proxies
to be used at the annual meeting of the shareholders of the Fund to be held on
November 19, 1998, or any adjournment or adjournments thereof. This proxy
statement and the related proxy card will first be mailed to shareholders on or
about October 1, 1998.

A majority of the shares outstanding on September 18, 1998, represented in
person or by proxy, must be present for the transaction of business at the
meeting. In the event that a quorum is not present at the annual meeting, or if
a quorum is present at the annual meeting but sufficient votes to approve any of
the proposals are not received, the persons named as proxies may propose one or
more adjournments of the annual meeting to permit further solicitation of
proxies. Any such adjournment will require the affirmative vote of a majority of
those shares represented at the annual meeting in person or by proxy. The
persons named as proxies will vote those proxies which they are entitled to vote
FOR any such proposal in favor of such an adjournment, and will vote those
proxies required to be voted AGAINST any such proposal against such adjournment.
A shareholder vote may be taken on one or more of the proposals in this proxy
statement prior to any such adjournment if sufficient votes have been received
and it is otherwise appropriate.

Broker non-votes are shares held in street name for which the broker
indicates that instructions have not been received from the beneficial owners or
other persons entitled to vote and for which the broker does not have
discretionary voting authority. Abstentions and broker non-votes will be counted
as shares present for purposes of determining whether a quorum is present but
will not be voted for or against any adjournment or proposal. Accordingly,
abstentions and broker non-votes effectively will be a vote against adjournment
but will have no effect on Proposals 1 and 2, for which the required vote is a
plurality and majority, respectively, of the votes cast.

The individuals named as proxies on the enclosed proxy card will vote in
accordance with your direction as indicated thereon if your proxy card is
received properly executed by you or by your duly appointed agent or
attorney-in-fact. If you give no voting instructions, your shares will be voted
FOR the nine nominees for directors named herein and FOR the remaining proposals
described in this proxy statement. You may revoke any proxy card by giving
another proxy or by letter or telegram revoking the initial proxy. To be
effective, your revocation must be received by the Fund prior to the meeting and
must indicate your name and account number. In addition, if you attend the
meeting in person you may, if you wish, vote by ballot at the meeting, thereby
cancelling any proxy previously given.

As of the record date, September 18, 1998, the Fund had 6,031,667 shares of
common stock outstanding. The solicitation of proxies, the cost of which will be
borne by the Fund, will be made primarily by mail but also may include telephone
or oral communications by regular employees of Mitchell Hutchins Asset
Management Inc. ('Mitchell Hutchins') or PaineWebber Incorporated
('PaineWebber'), who will not receive any compensation therefor from the Fund.
Management does not know of any person who owns beneficially 5% or more of the
shares of the Fund. Each full share of the Fund outstanding is entitled to one

vote and each fractional share of the Fund outstanding is entitled to a
proportionate share of one vote for such purposes.

The Fund's annual report containing financial statements for the fiscal
year ended July 31, 1998, is being mailed concurrently to shareholders with this
proxy statement.

Mitchell Hutchins serves as the Fund's investment adviser and
administrator. Mitchell Hutchins is a wholly owned asset management subsidiary
of PaineWebber, which is a wholly owned subsidiary of Paine Webber Group Inc.
('PW Group'), a publicly held financial services holding company. PaineWebber
may from time to time act as a dealer and secondary market-maker in connection
with over-the-counter secondary market sales of the Fund's common stock. The
principal business address of each of Mitchell Hutchins, PaineWebber and PW
Group is 1285 Avenue of the Americas, New York, New York 10019.

PROPOSAL 1. ELECTION OF DIRECTORS

Proposal 1 relates to the election of directors of the Fund. Management
proposes the election of the nine nominees named in the table below. Each
nominee, including those who are not 'interested persons' of the Fund as that
term is defined by the Investment Company Act of 1940 ('1940 Act') ('Independent
Directors'), has indicated his or her willingness to serve if elected. If
elected, each nominee will hold office until the next annual meeting of
shareholders or until his or her successor is elected and qualified. Unless you
give contrary instructions on the enclosed proxy card, your shares will be voted
FOR the election of the nine nominees. If any of the nominees should withdraw or
otherwise become unavailable for election, your shares will be voted FOR such
other nominee or nominees as management may recommend.

Mr. Bewkes has served as a director from the Fund's inception except for a
brief period during 1993. Messrs. Armstrong and Burt have served as directors of
the Fund since 1995. Each of the other directors was first elected to the board
on April 11, 1996. Directors will be elected by the affirmative vote of the
holders of a plurality of the votes cast for the election of directors, present
in person or by proxy and entitled to vote thereon, provided a quorum is
present. If each of the nine nominees is elected, they will constitute the
entire board of directors of the Fund. None of the directors and executive
officers (20 persons) beneficially owned any shares of the Fund on August 31,
1998.

PRESENT POSITION WITH THE SHARES OWNED
FUND; BUSINESS EXPERIENCE DURING BENEFICIALLY ON
NOMINEE; AGE PAST FIVE YEARS; OTHER DIRECTORSHIPS AUGUST 31, 1998**
- -------------------------------- ------------------------------------------------------------- ------------------

Margo N. Alexander*; 51 Director and president. Mrs. Alexander is president, chief --
executive officer and a director of Mitchell Hutchins (since
January 1995) and an executive vice president and a director
of PaineWebber (since March 1984). Mrs. Alexander is
president and a director or trustee of 32 investment
companies for which Mitchell Hutchins, PaineWebber or their
affiliates serve as investment adviser.

Richard Q. Armstrong; 63 Director. Mr. Armstrong is chairman and principal of R.Q.A. --
Enterprises (management consulting firm) (since April 1991
and principal occupation since March 1995). Mr. Armstrong was
chairman of the board, chief executive officer and co-owner
of Adirondack Beverages (producer and distributor of soft
drinks and sparkling/still waters) (October 1993-March 1995).
He was a partner of The New England Consulting Group
(management consulting

firm) (December 1992-September 1993). He was managing
director of LVMH U.S. Corporation (U.S. subsidiary of the
French luxury goods conglomerate, Louis Vuitton Moet
Hennessey Corporation) (1987-1991) and chairman of its wine
and spirits subsidiary, Schieffelin & Somerset Company
(1987-1991). Mr. Armstrong is a director or trustee of 31
investment companies for which Mitchell Hutchins, PaineWebber
or their affiliates serve as investment adviser.

E. Garrett Bewkes, Jr.*; 72 Director and chairman of the board of directors. Mr. Bewkes --
is a director of PW Group (holding company of PaineWebber and
Mitchell Hutchins). Prior to December 1995, he was a
consultant to PW Group. Prior to 1988, he was chairman of the
board, president and chief executive officer of American
Bakeries Company. Mr. Bewkes is also a director of Interstate
Bakeries Corporation. Mr. Bewkes is a director or trustee of
34 investment companies for which Mitchell Hutchins,
PaineWebber or their affiliates serve as investment adviser.

Richard R. Burt; 51 Director. Mr. Burt is chairman of IEP Advisors, Inc. --
(international investments and consulting firm) (since March
1994) and a partner of McKinsey & Company (management
consulting firm) (since 1991). He is also a director of
Archer-Daniels-Midland Co. (agricultural commodities),
Hollinger International Co. (publishing), Homestake Mining
Corp., Powerhouse Technologies Inc. and Wierton Steel Corp.
He was the chief negotiator in the Strategic Arms Reduction
Talks with the former Soviet Union (1989-1991) and the U.S.
Ambassador to the Federal Republic of Germany (1985-1989).
Mr. Burt is a director or trustee of 31 investment companies
for which Mitchell Hutchins, PaineWebber or their affiliates
serve as investment adviser.

Mary C. Farrell*; 48 Director. Ms. Farrell is a managing director, senior --
investment strategist and member of the Investment Policy
Committee of PaineWebber. Ms. Farrell joined PaineWebber in
1982. She is a member of the Financial Women's Association
and Women's Economic Roundtable and appears as a regular
panelist on Wall $treet Week with Louis Rukeyser. She also
serves on the Board of Overseers of New York University's
Stern School of Business. Ms. Farrell is a director or
trustee of 31 investment companies for which Mitchell
Hutchins, PaineWebber or their affiliates serve as investment
adviser.

Meyer Feldberg; 56 Director. Mr. Feldberg is Dean and Professor of Management of --
the Graduate School of Business, Columbia University. Prior
to 1989, he was president of the Illinois Institute of
Technology. Dean Feldberg is also a director of Primedia
Inc., Federated Department Stores, Inc. and Revlon, Inc. Dean
Feldberg is a director or trustee of 33

investment companies for which Mitchell Hutchins, PaineWebber
or their affiliates serve as investment adviser.

George W. Gowen; 69 Director. Mr. Gowen is a partner in the law firm of --
Dunnington, Bartholow & Miller. Prior to May 1994, he was a
partner in the law firm of Fryer, Ross & Gowen. Mr. Gowen is
a director or trustee of 31 investment companies for which
Mitchell Hutchins, PaineWebber or their affiliates serve as
investment adviser.

Frederic V. Malek; 61 Director. Mr. Malek is chairman of Thayer Capital Partners --
(merchant bank). From January 1992 to November 1992, he was
campaign manager of Bush-Quayle '92. From 1990 to 1992, he
was vice chairman and, from 1989 to 1990, he was president of
Northwest Airlines Inc., NWA Inc. (holding company of
Northwest Airlines Inc.) and Wings Holdings Inc. (holding
company of NWA Inc.). Prior to 1989, he was employed by the
Marriott Corporation (hotels, restaurants, airline catering
and contract feeding), where he most recently was an
executive vice president and president of Marriott Hotels and
Resorts. Mr. Malek is also a director of American Management
Systems, Inc. (management consulting and computer related
services), Automatic Data Processing, Inc., CB Commercial
Group, Inc. (real estate services), Choice Hotels
International (hotel and hotel franchising), FPL Group, Inc.
(electric services), Manor Care, Inc. (health care) and
Northwest Airlines Inc. Mr. Malek is a director or trustee of
31 investment companies for which Mitchell Hutchins,
PaineWebber or their affiliates serve as investment adviser.

Carl W. Schafer; 62 Director. Mr. Schafer is president of the Atlantic Founda- --
tion (charitable foundation supporting mainly oceanographic
exploration and research). He is a director of Base Ten
Systems, Inc. (software), Roadway Express, Inc. (trucking),
The Guardian Group of Mutual Funds, the Harding, Loevner
Funds, Evans Systems, Inc. (motor fuels, convenience store
and diversified company), Electronic Clearing House, Inc.
(financial transactions processing), Frontier Oil Corporation
and Nutraceutix, Inc. (biotechnology company). Prior to
January 1993, he was chairman of the Investment Advisory
Committee of the Howard Hughes Medical Institute. Mr. Schafer
is a director or trustee of 31 investment companies for which
Mitchell Hutchins, PaineWebber or their affiliates serve as
investment adviser.

- ------------
* Mrs. Alexander, Mr. Bewkes and Ms. Farrell are 'interested persons' of the
Fund, as defined in the 1940 Act, by virtue of their positions with Mitchell
Hutchins, PaineWebber and/or PW Group.

** Unless otherwise stated, as of the date indicated, each director had sole
voting and investment power of shares owned.

The board of directors of the Fund met six times during the fiscal year
ended July 31, 1998. Each of the directors attended 75% or more of the board
meetings during the last fiscal year. The Audit and Contract Review Committee
('ACR Committee') of the board currently consists of Messrs. Armstrong, Burt,
Feldberg, Gowen, Malek and Schafer. The ACR Committee has established a
sub-committee that periodically reviews the contractual and audit arrangements
for the Fund and reports back to the full ACR Committee. Messrs. Burt, Feldberg
and Schafer are members of this sub-committee. Each member of the Fund's ACR
Committee is also a member of a similar committee established by the boards of
other investment companies for which Mitchell Hutchins or PaineWebber serves as
investment adviser and also may be a member of a sub-committee established by
another fund's audit and contract review committee. The duties of the ACR
Committee are: (a) to review the financial and accounting policies of the Fund,
including internal accounting control procedures, and to review reports prepared
by the Fund's independent auditors, including reports on the Fund's financial
statements; (b) to review and recommend approval or disapproval of audit and
non-audit services and the fees charged for such services; (c) to evaluate the
independence of the independent auditors and to recommend whether to retain such
independent auditors for the next fiscal year; and (d) to report to the board
and make such recommendations as it deems necessary. The ACR Committee and the
related sub-committee each met once during the fiscal year ended July 31, 1998.
Each member of the ACR Committee and sub-committee attended those meetings.

The board does not have a standing nominating or compensation committee.
The Fund pays the Independent Directors $1,000 annually and $150 for each board
meeting and for each separate meeting of a board committee. The chairmen of the
audit and contract review committees of individual funds within the PaineWebber
fund complex receive additional compensation aggregating $15,000 annually from
the relevant funds. Directors of the Fund who are 'interested persons' as
defined in the 1940 Act receive no compensation from the Fund. Directors are
reimbursed for any expenses incurred in attending meetings. Each director will
be subject to mandatory retirement at the end of the year in which he or she
becomes 72 years old. The board has waived this requirement with respect to Mr.
Bewkes for the next year. The table below includes certain information relating
to the compensation of the Fund's directors.

COMPENSATION TABLE'D'

TOTAL
AGGREGATE COMPENSATION
COMPENSATION FROM THE
NAME OF FROM FUND AND THE
PERSON, POSITION THE FUND* FUND COMPLEX**
- ------------------------------------------------------------------------------- ------------ --------------

Richard Q. Armstrong, Director................................................. $1,900 $ 94,885
Richard R. Burt, Director...................................................... $1,750 $ 87,085
Meyer Feldberg, Director....................................................... $2,658 $117,853
George W. Gowen, Director...................................................... $1,750 $101,567
Federic V. Malek, Director..................................................... $1,900 $ 95,845
Carl W. Schafer, Director...................................................... $1,900 $ 94,885

- ------------
'D' Only independent members of the board are compensated by the Fund and
identified above; directors who are 'interested persons,' as defined by the
1940 Act, do not receive compensation.

* Represents fees paid to each director during the fiscal year ended July 31,
1998.

(footnotes continued on next page)

(footnotes continued from previous page)

** Represents total compensation paid to each director by 29 investment
companies for which Mitchell Hutchins or PaineWebber served as investment
adviser during the twelve months ended December 31, 1997; no fund within the
complex has a bonus, pension, profit sharing or retirement plan.

PROPOSAL 2. RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS

The Fund's financial statements for the fiscal year ended July 31, 1998,
were audited by Ernst & Young LLP ('Ernst & Young'), independent auditors. In
addition, Ernst & Young prepares the Fund's federal and state annual income tax
returns.

The board of directors of the Fund has selected Ernst & Young as the
independent auditors for the Fund for the fiscal year ending July 31, 1999,
subject to ratification by shareholders of the Fund at the annual meeting. Ernst
& Young has been the Fund's independent auditors since its inception in
December 1993. The ratification of Ernst & Young as independent auditors is to
be voted upon at the annual meeting, and it is intended that the persons named
in the accompanying proxy will vote FOR such ratification unless contrary
instructions are given. Ernst & Young has informed the Fund that it has no
material direct or indirect financial interest in the Fund. The affirmative vote
of the holders of a majority of the shares of the Fund cast at the annual
meeting is required for ratification, provided a quorum is present.

Representatives of Ernst & Young are not expected to be present at the
meeting but have been given the opportunity to make a statement if they so
desire and will be available should any matter arise requiring their presence.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE 'FOR' PROPOSAL 2.

EXECUTIVE OFFICERS

Officers of the Fund are appointed by the directors and serve at the
pleasure of the board. None of the Fund's officers currently receives any
compensation from the Fund. The executive officers of the Fund, in addition to
Mrs. Alexander (about whom information is given previously), are:

LAWRENCE CHINSKY, age 29, vice president and assistant treasurer of
the Fund (appointed September 1998). Mr. Chinsky is an assistant vice
president and investment monitoring officer of the mutual fund finance
department of Mitchell Hutchins. Prior to August 1997, he was a securities
compliance examiner with the Office of Compliance, Inspections and
Examinations in the New York Regional Office of the United States
Securities and Exchange Commission. Mr. Chinsky is vice president and
assistant treasurer of 32 investment companies for which Mitchell Hutchins,
PaineWebber or their affiliates serve as investment adviser.

JOHN J. LEE, age 30, vice president and assistant treasurer of the
Fund (appointed May 1998). Mr. Lee is a vice president and a manager of the
mutual fund finance department of Mitchell Hutchins. Prior to September
1997, he was an audit manager in the financial services practice of Ernst &
Young LLP. Mr. Lee is a vice president and assistant treasurer of 32
investment companies for which Mitchell Hutchins, PaineWebber or their
affiliates serve as investment adviser.

THOMAS J. LIBASSI, age 39, vice president of the Fund (appointed
September 1994). Mr. Libassi is a senior vice president and portfolio
manager of Mitchell Hutchins. Prior to May 1994, he was a vice president of
Keystone Custodian Funds Inc. with portfolio management responsibility. Mr.
Libassi is a

vice president of six investment companies for which Mitchell Hutchins,
PaineWebber or their affiliates serve as investment adviser.

DENNIS MCCAULEY, age 51, vice president of the Fund (appointed January
1998). Mr. McCauley is a managing director and chief investment
officer -- fixed income of Mitchell Hutchins. Prior to December 1994, he
was director of fixed income investments of IBM Corporation. Mr. McCauley
is a vice president of 22 investment companies for which Mitchell Hutchins,
PaineWebber or their affiliates serve as investment adviser.

ANN E. MORAN, age 41, vice president and assistant treasurer of the
Fund (appointed June 1993). Ms. Moran is a vice president and a manager of
the mutual fund finance department of Mitchell Hutchins. Ms. Moran is a
vice president and assistant treasurer of 32 investment companies for which
Mitchell Hutchins, PaineWebber or their affiliates serve as investment
adviser.

DIANNE E. O'DONNELL, age 46, vice president and secretary of the Fund
(appointed June 1993). Ms. O'Donnell is a senior vice president and deputy
general counsel of Mitchell Hutchins. Ms. O'Donnell is a vice president and
secretary of 31 investment companies and a vice president and assistant
secretary of one investment company for which Mitchell Hutchins,
PaineWebber or their affiliates serve as investment adviser.

EMIL POLITO, age 37, vice president of the Fund (appointed September
1996). Mr. Polito is a senior vice president and director of operations and
control for Mitchell Hutchins. Mr. Polito is a vice president of 32
investment companies for which Mitchell Hutchins, PaineWebber or their
affiliates serve as investment adviser.

VICTORIA E. SCHONFELD, age 47, vice president of the Fund (appointed
May 1994). Ms. Schonfeld is a managing director and general counsel of
Mitchell Hutchins. Prior to May 1994, she was a partner in the law firm of
Arnold & Porter. Ms. Schonfeld is a vice president of 31 investment
companies and a vice president and secretary of one investment company for
which Mitchell Hutchins, PaineWebber or their affiliates serve as
investment adviser.

PAUL H. SCHUBERT, age 35, vice president (appointed September 1994)
and treasurer of the Fund (appointed May 1997). Mr. Schubert is a senior
vice president and the director of the mutual fund finance department of
Mitchell Hutchins. From August 1992 to August 1994, he was a vice president
at BlackRock Financial Management L.P. Mr. Schubert is a vice president and
treasurer of 32 investment companies for which Mitchell Hutchins,
PaineWebber or their affiliates serve as investment adviser.

BARNEY A. TAGLIALATELA, age 37, vice president and assistant treasurer
of the Fund (appointed May 1997). Mr. Taglialatela is a vice president and
a manager of the mutual fund finance department of Mitchell Hutchins. Prior
to February 1995, he was a manager of the mutual fund finance division of
Kidder Peabody Asset Management, Inc. Mr. Taglialatela is a vice president
and assistant treasurer of 32 investment companies for which Mitchell
Hutchins, PaineWebber or their affiliates serve as investment adviser.

KEITH A. WELLER, age 37, vice president and assistant secretary of the
Fund (appointed September 1995). Mr. Weller is a first vice president and
associate general counsel of Mitchell Hutchins. Prior to joining Mitchell
Hutchins in June 1995, he was an attorney with the law firm of Brown &
Wood. Mr. Weller is a vice president and assistant secretary of 31
investment companies for which Mitchell Hutchins, PaineWebber or their
affiliates serve as investment adviser.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

An initial report under Section 16(a) of the Securities Exchange Act of
1934 was not timely filed for Mr. Lee. This delayed report did not involve any
transactions in shares of the Fund's common stock but related to his election as
an officer. The Fund is not aware of any outstanding report required to be filed
pursuant to Section 16(a).

SHAREHOLDER PROPOSALS

Any shareholder who wishes to submit proposals to be considered at the
Fund's 1999 annual meeting of shareholders should send such proposals to the
Fund at 1285 Avenue of the Americas, New York, New York 10019. In order to be
included in the Fund's proxy materials for that meeting, shareholder proposals
must be received by the Fund by June 1, 1999 and must satisfy the other
requirements of the federal securities laws. If the Fund does not receive a
shareholder proposal by August 15, 1999, the individuals appointed as proxies
will be authorized to vote for or against that proposal in their discretion.

OTHER BUSINESS

Management knows of no business to be presented to the meeting other than
the matters set forth in this proxy statement, but should any other matter
requiring a vote of shareholders arise, the proxies will vote thereon according
to their best judgment in the interest of the Fund.

By order of the board of directors,

DIANNE E. O'DONNELL
Secretary

September 29, 1998

IT IS IMPORTANT THAT YOU EXECUTE AND RETURN YOUR PROXY PROMPTLY.

- -------------------------
MANAGED HIGH
YIELD FUND INC.
- -------------------------

-------------------------
MANAGED HIGH
YIELD FUND INC.
-------------------------

PROXY
STATEMENT

-----------------
NOTICE OF
ANNUAL MEETING
TO BE HELD ON
NOVEMBER 19, 1998
AND
PROXY STATEMENT
-----------------

APPENDIX I

PROXY

MANAGED HIGH YIELD FUND INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS - NOVEMBER 19, 1998

The undersigned hereby appoints as proxies ANDREW NOVAK and EVELYN CHIEFFO and
each of them (with power of substitution) to vote for the undersigned all shares
of common stock of the undersigned at the aforesaid meeting and any adjournment
thereof with all the power the undersigned would have if personally present. The
shares represented by this proxy will be voted as instructed. UNLESS INDICATED
TO THE CONTRARY, THIS PROXY SHALL BE DEEMED TO GRANT AUTHORITY TO VOTE 'FOR' ALL
PROPOSALS. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
MANAGED HIGH YIELD FUND INC.

YOUR VOTE IS IMPORTANT

Please date and sign this proxy on the reverse side and return it in the
enclosed envelope to PFPC Inc., P.O. Box 9426, Wilmington, DE 19809-9938. PFPC
Inc. has been engaged to forward the enclosed proxy material and to tabulate
proxies by mail.

PLEASE INDICATE YOUR VOTE BY AN 'X' IN THE APPROPRIATE BOX BELOW. THE BOARD OF
DIRECTORS RECOMMENDS A VOTE 'FOR'

FOR FOR ALL
ALL OR EXCEPT OR WITHHOLD

1. ELECTION OF DIRECTORS [ ] [ ] [ ]
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S NAME
IN THE LIST BELOW AND MARK CENTER BOX TO RIGHT.)
Margo N. Alexander, Richard Q. Armstrong, E. Garrett Bewkes, Jr.,
Richard R. Burt, Mary C. Farrell, Meyer Feldberg, George W. Gowen,
Frederic V. Malek, Carl W. Schafer.

CONTINUED AND TO BE SIGNED ON REVERSE SIDE

FOR AGAINST ABSTAIN

2. To ratify the selection of Ernst & Young LLP as the Fund's [ ] [ ] [ ]
independent auditors for the fiscal year ending July 31, 1999.

This proxy will not be voted unless it is dated and signed exactly as
instructed below.

If shares are held by an
individual, sign your name
exactly as it appears on this
card. If shares are held
jointly, either party may
sign, but the name of the
party signing should conform
exactly to the name shown on
this proxy card. If shares
are held by a corporation,
partnership or similar
account, the name and the
capacity of the individual
signing the proxy card should
be indicated unless it is
reflected in the form of
registration. For example:
'ABC Corp., John Doe,
Treasurer.'

Sign exactly as name appears
hereon.
______________________ (L.S.)
______________________ (L.S.)
Date _________________ , 1998

STATEMENT OF DIFFERENCES
------------------------

The dagger symbol shall be expressed as................................ 'D'