N-CSR/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR/A

CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES

< td width="100%" colspan="9" valign="top" style="padding:0in 0in 0in 0in;width:100.0%;">

Investment Company Act file number			811-06637
The UBS Funds
(Exact name of registrant as specified in charter)
One North Wacker Drive, Chicago, IL					60606-2807
(Address of principal executive offices)					(Zip code)
Mark F. Kemper, Esq. UBS Global Asset Management One North Wacker Drive Chicago, IL 60606-2807
(Name and address of agent for service)
Copy to: Bruce Leto, Esq. Stradley Ronon Stevens & Young, LLP 2600 One Commerce Square Philadelphia, PA 19103-7 098
Registrant’s telephone number, including area code:				212-821-3000
Date of fiscal year end:	June 30
Date of reporting period:		June 30, 2009

EXPLANATORY NOTE:  This Form N-CSR/A for The UBS Funds (the “Registrant”) is being filed solely to reflect changes to the annual report for the UBS Dynamic Alpha Fund.  The annual report for the other portfolios of the Registrant are contained in the Form N-CSR filed on September 8, 2009 (Accession Number 0001104659-09-053553) and are not amended or modified in any way by this Form N-CSR/A.  This Form N-CSR/A also updates Item 11 “Controls and Procedures” with respect to UBS Dynamic Alpha Fund as required.  Other than the aforementioned amendment, no other information or disclosures contained in the Registrant’s Form N-CSR filed on September 8, 2009 is being amended by this Form N-CSR/A.

Item 1.  Reports to Stockholders.

The UBS Funds

Annual Report

June 30, 2009

Table of contents
President's letter	1
Markets in review	2
Portfolio Managers' commentary and portfolios of investments
UBS Dynamic Alpha Fund	4
UBS Global Allocation Fund	34
UBS Global Frontier Fund	49
UBS Global Equity Fund	61
UBS International Equity Fund	70
UBS U.S. Equity Alpha Fund	82
UBS U.S. Large Cap Equity Fund	92
UBS U.S. Large Cap Growth Fund	101
UBS U.S. Large Cap Value Equity Fund	109
UBS U.S. Mid Cap Growth Equity Fund	117
UBS U.S. Small Cap Growth Fund	125
UBS Absolute Return Bond Fund	133
UBS Global Bond Fund	147
UBS High Yield Fund	159
UBS U.S. Bond Fund	172
Explanation of expense disclosure	185
Statements of assets and liabilities	190
Statements of operations	198
Statements of changes in net assets	202
Financial highlights	208
Notes to financial statements	238
Report of independent registered public accounting firm	283
General information	284
Board approval of investment advisory agreements	285
Trustee and Officer information	290
Federal tax information	299

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President's letter

August 17, 2009

Dear valued investor,

At UBS Global Asset Management, conviction in our process and philosophy is the driving force that has guided us for more than 25 years. From time to time, we are reminded, however, that conviction can also be a double-edged sword.

Against a turbulent market backdrop, the temptation for the average investor to make emotion-based decisions is strong, and is one of the key factors sabotaging long-term financial goals. By remaining firmly grounded in our process, we avoid the temptations that have historically derailed investors over the long term. However, it is during these times—including the 12 months covered by this report—when conviction in our views may cause some investors to wonder if we've lost our way.

While following our convictions isn't always the popular path to take, it is, in our opinion, one of the most important ways we add value in our clients' portfolios. In fact, in more recent months, we have started to see our views rewarded, which, in turn, has generated improved performance in a number of our Funds.

Of course, this doesn't guarantee the Funds' future performance. But we do believe these results make a strong statement supporting our investment discipline. That said, while it is gratifying to see our clients with fortitude, patience and long-term investment horizons begin to be rewarded for our convictions, it is also sobering to know that there are others, who, finding it difficult to stay the duration, may not benefit from our unwavering approach.

Going forward, we will continue to look at ways to deliver the best of our capabilities to our clients, whether it's by implementing an additional layer of insight in our process, or by continuing to build up our investment teams by acquiring the type of talent that we believe will enable us to lead the way in the years ahead. To that end, we welcomed John Dugenske to UBS Global Asset Management as Head of North American Fixed Income in January 2009. John's extensive fixed income experience in portfolio management, trading, research and risk management is a strong complement to the high-caliber expertise we have added to the Fixed Income team over the past year.

While we can't predict with any certainty how the markets will behave, we can maintain the disciplined approach that we believe is in the best interests of our valued clients: Investing according to our convictions in pursuit of long-term returns that will help clients meet their financial goals. It's what we demand from ourselves, and what we believe our clients have come to expect from us.

Thank you for your continued support.

Kai R. Sotorp
President
UBS Funds
Head—Americas
UBS Global Asset Management (Americas) Inc.

1

Markets in review

Global economic growth remains weak

The twelve-month reporting period was marked by some of the most challenging economic and market conditions in a generation. Looking back, the US economy, as measured by gross domestic product ("GDP"), declined 0.5% in the third quarter of 2008. However, the bursting of the housing bubble, a severe credit crunch, lower business and consumer spending and surging unemployment caused the US economy to decline significantly more during the next six months. GDP contracted 5.4% during the fourth quarter of 2008—the worst quarterly reading since 1982.

The economy has remained weak thus far in 2009, as first quarter GDP growth declined 6.4%. While the economy continued to contract during the second quarter, it was at a more modest pace. The advance estimate for GDP showed a decline of 1.0%, due, in part, to smaller declines in exports and business spending. Following the conclusion of the reporting period, signs of recovery were seen to be emerging. The Federal Reserve Board issued a statement on August 12, 2009 acknowledging that the economy had stabilized, and indicating that it would take steps toward more normal policy. In the statement, the Federal Reserve Board wrote that they expect the US economy to remain weak for a time, noting that "economic activity is leveling out," and adding that "conditions in financial markets have improved further in recent weeks".

Economic growth outside the US was also poor during the reporting period. According to forecasts by the Organization for Economic Cooperation and Development (OECD), world economic growth is expected to contract 2.2% in 2009. From a regional perspective, Eurozone GDP declined 4.8% during the first quarter, while Japan's economy shrank 14.2% over the same period. However, as 2009 progressed, there were hopes that the recession in the global economy was nearing a bottom. Accordingly, the OECD forecasts a rebound in world economic growth, projecting a 2.3% expansion in 2010.

Despite a strong finish, global equities perform poorly

In the equity markets, the reporting period was a study in contrasts. During the first eight months of the period, stock prices in the US and abroad fell sharply. This was due to a number of factors, including the rapidly weakening global economy, turmoil in the financial markets, frozen credit conditions, a lack of liquidity and plunging corporate profits. However, after reaching a 12-year low on March 9, 2009, stock prices in the US rallied sharply given expectations that the worst of the global recession may be over. From its March low through June 30, 2009, the S&P 500 Index⁽¹⁾ gained more than 35%. However, this was not enough to overcome the market's earlier weakness, and the S&P 500 Index declined 26.21% during the 12 months ended June 30, 2009.

The international equity markets delivered similar results. During the first eight months of the reporting period, both the equities of international developed markets (as measured by the MSCI EAFE Index (net)⁽²⁾) and emerging markets (as measured by the MSCI Emerging Markets Free (EMF) Index⁽³⁾) were extremely weak. An impressive rally that began in mid-March wasn't enough to make up for the severity of the earlier decline, however, and international developed equity markets fell 30.96%, while emerging markets equities declined 26.86% during the reporting period as a whole.

⁽¹⁾  The S&P 500 Index is an unmanaged, weighted index composed of 500 widely held common stocks varying in composition, and is not available for direct investment. Investors should note that indices do not reflect the deduction of fees, expenses or taxes.

⁽²⁾  The MSCI EAFE Index (net) is an index of stocks from 21 countries designed to measure the investment returns of developed economies outside of North America. Dividends are reinvested after the deduction of withholding tax, using tax rates applicable to Luxembourg holding companies, as Luxembourg applies the highest rates. Investors should note that indices do not reflect the deduction of fees and expenses.

⁽³⁾  The MSCI Emerging Markets Free (EMF) Index is a market capitalization-weighted index composed of companies representative of the market structure of 25 emerging market countries in Europe, Latin America, and the Pacific Basin. The MSCI Emerging Markets Free (EMF) Index excludes closed markets and those shares in otherwise free markets that are not purchasable by foreigners. Investors should note that indices do not reflect the deduction of fees, expenses or taxes.

2

Markets in review

Bonds significantly outperform stocks

The extreme shift in market sentiment was also evident in the fixed income markets. During much of the first half of the reporting period, heightened risk caused US investors to flock to the safety of short-term Treasury securities, causing their yields to fall and their prices to rise. In contrast, the spread sectors (that is, non-Treasury sectors) performed poorly. However, as the reporting period progressed, risk aversion abated and investors shunned Treasuries in favor of what we viewed as attractively valued and higher yielding spread sectors. During the 12 months ended June 30, 2009, the overall US bond market, as measured by the Barclays Capital US Aggregate Index,⁽⁴⁾ returned 6.05%.

Turning to the riskier fixed income asset classes, high yield bonds and emerging markets debt generated extremely strong performance during the second half of the reporting period. However, poor performance early in the period caused high yield bonds to deliver a negative return during the 12 months ended June 30, 2009 with the Merrill Lynch US High Yield Cash Pay Constrained Index⁽⁵⁾ declining 3.15%. In contrast, the J.P. Morgan Emerging Markets Bond Index Global (EMBI Global)⁽⁶⁾ gained a modest 2.24% over the same period.

⁽⁴⁾  The Barclays Capital US Aggregate Index (formerly known as the Lehman Brothers US Aggregate Index) is an unmanaged index of the USD-denominated, investment-grade, fixed-rate, taxable bond market of SEC-registered securities. The index includes bonds from the treasury, government-related, corporate, mortgage-backed, asset-backed and commercial mortgage-backed sectors. US agency hybrid adjustable rate mortgage (ARM) securities were added to the Index on April 1, 2007. Investors should note that indices do not reflect the deduction of fees, expenses or taxes.

⁽⁵⁾  The Merrill Lynch US High Yield Cash Pay Constrained Index is the index of publicly placed non-convertible, coupon-bearing US domestic debt with a term to maturity of at least one year. The index is market weighted, so that larger bond issuers have a greater effect on the index's return. However, the representation of any single bond issue is restricted to a maximum of 2% of the total index. Investors should note that indices do not reflect the deduction of fees, expenses or taxes.

⁽⁶⁾  The J.P. Morgan Emerging Markets Bond Index Global (EMBI Global) is an unmanaged index which tracks total returns for US-dollar-denominated debt instruments issued by emerging market sovereign and quasi-sovereign entities: Brady bonds, loans, Eurobonds. Investors should note that indices do not reflect the deduction of fees, expenses or taxes.

3

UBS Dynamic Alpha Fund

Portfolio performance

For the 12 months ended June 30, 2009, Class A shares of UBS Dynamic Alpha Fund (the "Fund") declined 14.31% (Class A shares declined 18.99% after the deduction of the maximum sales charge), while Class Y shares declined 13.99%. For purposes of comparison, the Merrill Lynch US Treasury 1-5 Year Index returned 5.48% over the same time period, the MSCI World Free Index (net) declined 29.50% and the US Consumer Price Index (CPI) declined 1.43%. (Class Y shares have lower expenses than other share classes of the Fund. Returns for all share classes over various time periods are shown on page 6; please note that these returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares, while the Index returns do not reflect the deduction of fees and expenses.) For a detailed commentary on the market environment in general during the reporting period, see page 2.

The Fund's negative performance was due primarily to market allocation, while currency positioning and security selection were positive for the reporting period.

Portfolio performance summary

What worked

•  The Fund's currency strategy made a significant contribution to performance. During the second half of 2008, the Fund maintained an anti-carry trade position, emphasizing lower-risk currencies at the expense of high-volatility currencies. (A carry trade is a strategy in which an investor sells a currency with a relatively low interest rate, and uses the funds to purchase a different currency yielding a higher interest rate.) When the carry trade unwound, the Fund's positioning produced some of the largest contributions to Fund performance during the reporting period.

•  The Fund was allocated to lower-yielding, "safe-haven" currencies, such as the Japanese yen, Swiss franc and Swedish krona. Conversely, the Fund had a short position in high-yielding currencies like the euro, British pound, Australian dollar and Canadian dollar, which our research indicated were overvalued. This left the Fund well-positioned during the turbulence of the credit crisis, when sentiment worsened and investors sought to reduce their riskier asset positions. The result was a rapid and sharp unwinding of carry trade positions.

•  In addition, the Fund held a long position in the US dollar, which had weakened to the point that we viewed it as deeply undervalued. The Fund benefited when the US dollar rebounded in late 2008, and investors moved into currencies considered "safe havens."

•  Between September and November of 2008, the Fund's currency exposures made large gains. As valuation returned to what we viewed as normal levels, we progressively cut back the Fund's currency risks. By the end of December, the Fund's forward-looking currency risk was below normal levels, reflecting our view that the opportunity set had diminished.

•  Security selection was positive for the 12-month period. The Fund's allocation to global bonds benefited performance, as did exposure to both UK and European ex-UK equities following a surge in performance during the reporting period.

4

UBS Dynamic Alpha Fund

What didn't work

•  Market allocation hindered performance during the first six months of 2009. The Fund maintained a long exposure to global equities during the 12-month period, reflecting our belief that stocks were largely undervalued. While this positioning detracted from returns during the market declines of 2008, the Fund's long position in equities has been a strong driver of relative performance since the market low of March 2009.

•  Our research indicated that world equity market prices reflected what we viewed as an excessively pessimistic long-term outlook. We believed US equities, in particular, were trading below our estimate of fair value as 2008 ended. Our conviction led us to increase global equity exposure—particularly within the US—during the fourth quarter of 2008. As world markets rallied in the second quarter of 2009, the US led the way. While it was not enough to overcome the Fund's underperformance earlier in the quarter, the decision to take a long position—based on our time-tested valuation research—made a significant contribution to Fund returns.

•  A short position in global sovereign bonds generated negative results. Our valuation models registered significant overvaluation of most sovereign bond markets, and so the Fund maintained a short position in these securities. However, the second half of 2008 saw a massive flight to quality as investors moved into "safe-haven" assets and away from comparatively riskier asset classes. Government bonds benefited from this market turbulence, and the Fund's results were hampered by its short position in this asset class.

•  The Fund's position in high yield bonds underperformed during the period. During the second half of 2008, as we increased the Fund's exposure to equities, we also added to our position in noninvestment grade credit. Our research pointed to attractive valuations in the sector. We believed that the markets were pricing in a default rate far in excess of what our research deemed justified. High yield bonds posted a negative return during that time, however, as spreads widened substantially during the credit crisis.

•  The high yield market rallied strongly following its low of early March 2009, and spreads have narrowed considerably as a result. We believe the market has moved strongly ahead of economic reality, and we have more recently reduced the Fund's position in high yield debt.

This letter is intended to assist shareholders in understanding how the Fund performed during the 12 months ended June 30, 2009. The views and opinions in the letter were current as of August 17, 2009. They are not guarantees of performance or investment results and should not be taken as investment advice. Investment decisions reflect a variety of factors, and we reserve the right to change our views about individual securities, sectors and markets at any time. As a result, the views expressed should not be relied upon as a forecast of the Fund's future investment intent. We encourage you to consult your financial advisor regarding your personal investment program. Mutual funds are sold by prospectus only. You should read it carefully and consider a fund's investment objectives, risks, charges, expenses and other important information contained in the prospectus before investing. Prospectuses for most of our funds can be obtained from your financial advisor, by calling UBS Funds at 800-647 1568 or by visiting our Web site at www.ubs.com

5

UBS Dynamic Alpha Fund

Average annual total returns for periods ended 06/30/09 (unaudited)

		1 year			Inception(1)
Before deducting	Class A(2)		(14.31	)%		(1.42	)%
maximum sales charge	Class B(3)		(14.98	)		(2.18	)
	Class C(4)		(14.98	)		(2.17	)
	Class Y(5)		(13.99	)		(1.11	)
After deducting maximum	Class A(2)		(18.99	)		(2.67	)
sales charge	Class B(3)		(17.68	)		(2.43	)
	Class C(4)		(15.52	)		(2.17	)
Merrill Lynch US Treasury 1-5 Year Index(6)			5.48			4.75
MSCI World Free Index (net)(7)			(29.50	)		(1.76	)
US Consumer Price Index (CPI)(8)			(1.43	)		2.83

The annualized gross and net expense ratios, respectively, for each class of shares as in the October 28, 2008 prospectuses were as follows: Class A—1.27% and 1.27%; Class B—2.06% and 2.06%; Class C—2.04% and 2.04%; Class Y—0.98% and 0.98%. Net expenses reflect fee waivers and/or expense reimbursements, if any, pursuant to an agreement that is in effect to cap the expenses. The Trust, with respect to the Fund, and the Advisor have entered into a written agreement pursuant to which the Advisor has agreed to waive a portion of its management fees and/or to reimburse expenses (excluding interest expense, security loan fees, dividend expense for securities sold short and expenses incurred through investment in other investment companies) to the extent necessary so that the Fund's ordinary operating expenses (excluding interest expense, securities loan fee, dividend expense for securities sold short and expenses i ncurred through investment in other investment companies), through the fiscal year ending June 30, 2009, do not exceed 1.35% for Class A shares, 2.10% for Class B shares, 2.10% for Class C shares and 1.10% for Class Y shares. Pursuant to the written agreement, the Advisor is entitled to be reimbursed for any fees it waives and expenses it reimburses for a period of three years following such fee waivers and expense reimbursements, to the extent that such reimbursement of the Advisor by the Fund will not cause the Fund to exceed any applicable expense limit that is in place for the Fund.

⁽¹⁾  Inception date of all share classes of UBS Dynamic Alpha Fund is January 27, 2005. Inception date of the indices, for the purpose of this illustration, is January 31, 2005.

⁽²⁾  Maximum sales charge for Class A shares is 5.5%. Class A shares bear ongoing 12b-1 service fees.

⁽³⁾  Maximum contingent deferred sales charge for Class B shares is 5% imposed on redemptions and is reduced to 0% after a maximum of six years. Class B shares bear ongoing 12b-1 service and distribution fees.

⁽⁴⁾  Maximum contingent deferred sales charge for Class C shares is 1% imposed on redemptions and is reduced to 0% after one year. Class C shares bear ongoing 12b-1 service and distribution fees.

⁽⁵⁾  The Fund offers Class Y shares to a limited group of eligible investors, including certain qualifying retirement plans. Class Y shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees.

⁽⁶⁾  The Merrill Lynch US Treasury 1-5 Year Index is an unmanaged index tracking US Treasury securities with maturities between 1 and 5 years. Investors should note that indices do not reflect the deduction of fees, expenses or taxes.

⁽⁷⁾  The MSCI World Free Index (net) is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets. As of June 2007, the index consisted of 23 developed market country indices. Dividends are reinvested after deduction of withholding tax, using tax rates applicable to Luxembourg holding companies, as Luxembourg applies the highest rates. Had US tax rates been applied, the performance of the index would be different. The index excludes closed markets and those shares in otherwise free markets that are not purchasable by foreigners. Investors should note that indices do not reflect the deduction of fees and expenses.

⁽⁸⁾  The US Consumer Price Index (CPI) produces monthly data on changes in the prices paid by urban consumers for a representative basket of goods and services. The Index is calculated by the Bureau of Labor Statistics. Investors should note that indices do not reflect the deduction of fees, expenses or taxes.

If an investor sells or exchanges shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged will be deducted at the time of the transaction, except as noted otherwise in the prospectus.

Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://www.ubs.com.

6

UBS Dynamic Alpha Fund

Illustration of an assumed investment of $10,000 in Class A shares (adjusted for 5.50% maximum

sales charge) and $5,000,000 in Class Y shares (unaudited)

The following two graphs depict the performance of UBS Dynamic Alpha Fund Class A and Class Y shares versus the Merrill Lynch US Treasury 1-5 Year Index, the MSCI World Free Index (net), and the US Consumer Price Index (CPI) from January 27, 2005, which is the inception date of the two classes, through June 30, 2009. The performance of Class B and Class C shares will vary based upon the different class specific expenses and sales charges. No adjustment has been made for any income taxes payable by shareholders on income dividends and capital gain distributions. Past performance is no guarantee of future results. Share price and returns will vary with market conditions; investors may realize a gain or loss upon redemption.

UBS Dynamic Alpha Fund Class A vs. Merrill Lynch US Treasury 1-5 Year Index,
MSCI World Free Index (net), and US Consumer Price Index (CPI)

Wealth value with dividends reinvested

The Fund's growth of an assumed $10,000 investment is adjusted for the maximum sales charge of 5.50%.

Indices are started on January 31, 2005.

UBS Dynamic Alpha Fund Class Y vs. Merrill Lynch US Treasury 1-5 Year Index,
MSCI World Free Index (net), and US Consumer Price Index (CPI)

Wealth value with dividends reinvested

Indices are started on January 31, 2005.

Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://www.ubs.com.

7

UBS Dynamic Alpha Fund

Top ten equity holdings (unaudited)*⁽¹⁾

As of June 30, 2009

	Percentage of net assets
Vodafone Group PLC		1.4	%
Apple, Inc.		1.2
Total SA		1.0
Express Scripts, Inc.		1.0
Allergan, Inc.		0.9
Nestle SA		0.9
Google, Inc., Class A		0.8
GlaxoSmithKline PLC		0.8
QUALCOMM, Inc.		0.8
Southwestern Energy Co.		0.7
Total		9.5	%

Top ten long-term fixed income

holdings (unaudited)⁽¹⁾

As of June 30, 2009

	Percentage of net assets
GS Mortgage Securities Corp. II, Series 2007-GG10, Class A2, 5.778%, due 08/10/45		0.4	%
Federal National Mortgage Association, 5.250%, due 08/01/12		0.3
Merrill Auto Trust Securitization, Series 2007-1, Class A4, 0.379%, due 12/15/13		0.3
Boise Cascade LLC, 7.125%, due 10/15/14		0.3
GS Mortgage Securities Corp. II, Series 2007-GG10, Class A4, 5.993%, due 08/10/45		0.3
Banc of America Large Loan, Inc., Series 2005-MIB1, Class A2, 0.529%, due 03/15/22		0.2
Tennessee Valley Authority, 5.880%, due 04/01/36		0.2
Bear Stearns Commercial Mortgage Securities Trust, Series 2005-PWR7, Class A2, 4.945%, due 02/11/41		0.2
Hellas Telecommunications Luxembourg III, 8.500%, due 10/15/13		0.2
Banc of America Commercial Mortgage, Inc., Series 2004-4, Class A3, 4.128%, due 07/10/42		0.2
Total		2.6	%

Country exposure, top five (unaudited)⁽¹⁾

As of June 30, 2009

	Percentage of net assets
United States		37.7	%
United Kingdom		10.9
Switzerland		2.6
France		2.3
Netherlands		2.2
Total		55.7	%

*  Only long positions are considered for top ten holdings.

⁽¹⁾  Figures represent the direct investments of the UBS Dynamic Alpha Fund. Figures could be different if a breakdown of the underlying investment companies was included.

8

UBS Dynamic Alpha Fund

Industry diversification (unaudited)⁽¹⁾

As a percentage of net assets as of June 30, 2009

Common stocks
Aerospace & defense	1.23	%
Air freight & logistics	1.35
Airlines	0.31
Auto components	0.31
Automobiles	0.55
Beverages	1.39
Biotechnology	0.59
Building products	0.65
Capital markets	1.27
Chemicals	2.05
Commercial banks	2.99
Commercial services & supplies	1.09
Communications equipment	1.98
Computers & peripherals	2.19
Construction & engineering	0.39
Construction materials	0.24
Consumer finance	0.12
Distributors	0.18
Diversified consumer services	0.68
Diversified financial services	2.10
Diversified telecommunication services	0.30
Electric utilities	1.25
Electrical equipment	0.59
Electronic equipment, instruments & components	0.69
Energy equipment & services	1.60
Food & staples retailing	0.66
Food products	2.11
Health care equipment & supplies	2.44
Health care providers & services	2.59
Hotels, restaurants & leisure	2.78
Household durables	0.53
Household products	0.99
Independent power producers & energy traders	0.14
Industrial conglomerates	0.43
Insurance	1.78
Internet & catalog retail	0.68
Internet software & services	0.83
IT services	2.27
Life sciences tools & services	0.59
Machinery	1.95
Media	1.28
Metals & mining	1.26
Multiline retail	0.74
Multi-utilities	0.97
Office electronics	0.20
Oil, gas & consumable fuels	5.65
Paper & forest products	0.03
Personal products	0.33
Pharmaceuticals	3.39
Professional services	0.36
Real estate investment trusts (REITs)	0.25
Real estate management & development	0.43
Road & rail	1.27
Semiconductors & semiconductor equipment	0.91	%
Software	3.81
Specialty retail	2.15
Textiles, apparel & luxury goods	0.36
Tobacco	0.19
Trading companies & distributors	0.91
Wireless telecommunication services	2.43
Total common stocks	73.78
Bonds Corporate bonds
Agriculture	0.09
Beverages	0.04
Chemicals	0.11
Commercial banks	0.09
Computers & peripherals	0.06
Diversified financial services	0.28
Electric utilities	0.15
Food & staples retailing	0.05
Health care providers & services	0.09
Independent power producers & energy traders	0.21
Insurance	0.09
Media	0.15
Metals & mining	0.10
Oil, gas & consumable fuels	0.31
Paper & forest products	0.31
Pharmaceuticals	0.10
Pipelines	0.10
Road & rail	0.05
Telecommunications	0.10
Total corporate bonds	2.48
Asset-backed securities	2.16
Collateralized debt obligations	0.32
Commercial mortgage-backed securities	1.98
Mortgage & agency debt securities	0.85
Municipal bond	0.09
Total bonds	7.88
Rights	0.03
Warrant	0.00
Investment companies
UBS Opportunistic Emerging Markets Debt Relationship Fund	2.94
UBS U.S. Equity Alpha Relationship Fund	11.61
Total investment companies	14.55
Short-term investment	0.47
Options purchased	0.34
Investment of cash collateral from securities loaned	1.25
Total investments before investments sold short	98.30
Investments sold short Common stocks
Aerospace & defense	(0.79	)
Air freight & logistics	(0.65	)
Airlines	(0.13	)
Beverages	(0.19	)

9

UBS Dynamic Alpha Fund

Industry diversification (unaudited)⁽¹⁾

As a percentage of net assets as of June 30, 2009

Biotechnology	(0.21	)%
Capital markets	(0.14	)
Commercial banks	(0.26	)
Communications equipment	(0.17	)
Computers & peripherals	(0.29	)
Diversified financial services	(0.12	)
Diversified telecommunication services	(0.24	)
Electric utilities	(0.33	)
Electrical equipment	(0.24	)
Electronic equipment, instruments & components	(0.11	)
Energy equipment & services	(0.11	)
Food & staples retailing	(0.49	)
Food products	(0.74	)
Health care equipment & supplies	(0.56	)
Health care providers & services	(0.13	)
Hotels, restaurants & leisure	(0.28	)
Household durables	(0.10	)
Household products	(0.34	)
Independent power producers & energy traders	(0.10	)
Insurance	(0.33	)
Internet & catalog retail	(0.05	)
Internet software & services	(0.03	)
IT services	(0.25	)
Leisure equipment & products	(0.07	)%
Life sciences tools & services	(0.28	)
Machinery	(0.82	)
Media	(0.32	)
Metals & mining	(0.03	)
Multiline retail	(0.10	)
Multi-utilities	(0.89	)
Oil, gas & consumable fuels	(1.42	)
Pharmaceuticals	(1.11	)
Road & rail	(0.17	)
Semiconductors & semiconductor equipment	(0.46	)
Software	(0.88	)
Specialty retail	(0.75	)
Textiles, apparel & luxury goods	(0.07	)
Thrifts & mortgage finance	(0.04	)
Tobacco	(0.08	)
Trading companies & distributors	(0.32	)
Water utilities	(0.14	)
Total investments sold short	(15.33	)
Total investments, net of investments sold short	82.97
Cash and other assets, less liabilities	17.03
Net assets	100.00	%

⁽¹⁾  Figures represent the industry breakdown of direct investments of the UBS Dynamic Alpha Fund. Figures would be different if a breakdown of the underlying investment companies' industry diversification was included.

10

UBS Dynamic Alpha Fund—Portfolio of investments

June 30, 2009

Security description	Shares		Value
Common stocks—73.78%
Australia—0.38%
AMP Ltd.		195,573	$	766,312
BHP Billiton Ltd.		37,853		1,037,453
Incitec Pivot Ltd.		280,000		532,812
Total Australia common stocks				2,336,577
Belgium—0.56%
Anheuser-Busch InBev NV		77,750		2,814,748
Colruyt SA		2,622		598,359
Total Belgium common stocks				3,413,107
Bermuda—0.48%
Accenture Ltd., Class A(1)		24,900		833,154
Covidien PLC(1)		36,100		1,351,584
Seadrill Ltd.		52,600		755,805
Total Bermuda common stocks				2,940,543
Brazil—0.24%
Itau Unibanco Banco Multiplo SA ADR		67,600		1,070,108
Vale SA ADR		22,900		403,727
Total Brazil common stocks				1,473,835
Canada—0.17%
Kinross Gold Corp.		18,900		344,478
Potash Corp. of Saskatchewan, Inc.		5,400		502,470
Teck Resources Ltd., Class B*		10,900		173,834
Total Canada common stocks				1,020,782
Cayman Islands—0.20%
Seagate Technology(1)		60,100		628,646
Subsea 7, Inc.*		61,000		625,337
Total Cayman Islands common stocks				1,253,983
China—0.93%
Belle International Holdings Ltd.		817,000		717,262
China Life Insurance Co., Ltd., H Shares		67,000		247,386
China Resources Land Ltd.		292,000		642,888
China South Locomotive and Rolling Stock Corp., H Shares		932,000		549,443
China Zhongwang Holdings Ltd.*		498,400		684,250
Hong Kong Exchanges and Clearing Ltd.		49,600		769,516
Industrial & Commercial Bank of China, H Shares		928,000		644,468
Shangri-La Asia Ltd.		246,000		367,871
Sun Hung Kai Properties Ltd.		60,000		746,825
Suntech Power Holdings Co. Ltd. ADR*(2)		20,500		366,130
Total China common stocks				5,736,039

Security description	Shares		Value
Denmark—0.18%
Novo Nordisk A/S, Class B		11,035	$	599,775
Vestas Wind Systems A/S*		7,018		504,509
Total Denmark common stocks				1,104,284
Finland—0.59%
Nokia Oyj		187,416		2,735,088
Sampo Oyj, Class A		36,046		680,204
UPM-Kymmene Oyj		22,691		197,760
Total Finland common stocks				3,613,052
France—2.27%
Air France-KLM(2)		32,164		412,359
Alstom SA(2)		6,014		355,947
BNP Paribas		49,405		3,206,082
Cie Generale de Geophysique-Veritas*		30,394		548,696
Nexans SA		7,995		426,188
PPR		5,946		486,534
Remy Cointreau SA		9,642		349,555
Sanofi-Aventis SA		17,601		1,035,136
Societe Generale		14,866		811,081
Total SA		110,866		6,007,234
Veolia Environnement		10,055		297,054
Total France common stocks				13,935,866
Germany—1.85%
Allianz SE		10,876		1,005,723
BASF SE		10,072		401,736
Bayerische Motoren Werke AG		32,519		1,228,148
Daimler AG		16,892		611,186
Deutsche Boerse AG		5,954		462,768
Deutsche Post AG		189,131		2,471,992
E.ON AG		11,614		412,232
Fresenius Medical Care AG & Co. KGaA ADR		20,700		931,500
GEA Group AG		28,002		424,787
Henkel AG & Co KGaA, Preference shares		92,620		2,893,866
Solarworld AG(2)		9,784		231,049
United Internet AG*		25,754		302,518
Total Germany common stocks				11,377,505
Greece—0.24%
National Bank of Greece SA*		39,000		1,068,529
Public Power Corp. SA*		19,000		391,046
Total Greece common stocks				1,459,575
Guernsey—0.11%
Resolution Ltd.*		467,787		686,175
India—0.20%
ICICI Bank Ltd. ADR		42,300		1,247,850

11

UBS Dynamic Alpha Fund—Portfolio of investments

June 30, 2009

Security description	Shares		Value
Common stocks—(continued)
Ireland—0.24%
CRH PLC		64,551	$	1,479,907
Italy—0.14%
Intesa Sanpaolo SpA*		68,075		220,711
Saipem SpA		25,332		618,367
Total Italy common stocks				839,078
Japan—2.03%
Asahi Glass Co., Ltd..		89,000		710,245
Canon, Inc.(2)		37,300		1,214,002
Fanuc Ltd.		8,000		638,325
Fast Retailing Co., Ltd.		4,200		547,026
Hosiden Corp.		17,700		224,146
Ibiden Co. Ltd.		8,100		226,267
Komatsu Ltd.		38,300		587,800
Mitsubishi Corp.		37,800		694,204
Mitsubishi UFJ Financial Group, Inc.		93,300		573,533
Mitsui Fudosan Co., Ltd.		35,000		606,369
Mizuho Financial Group, Inc.(2)		77,400		180,016
Nintendo Co., Ltd.		2,900		798,092
Nippon Electric Glass Co., Ltd..		92,000		1,025,500
Nippon Steel Corp.		81,000		308,915
Nomura Holdings, Inc.		150,200		1,258,394
Shin-Etsu Chemical Co., Ltd.		11,000		508,037
Takeda Pharmaceutical Co., Ltd..		5,200		202,054
Tokyu Land Corp.		147,000		664,009
Toyota Motor Corp.		39,800		1,504,611
Total Japan common stocks				12,471,545
Luxembourg—0.11%
ArcelorMittal		20,698		679,758
Netherlands—2.05%
ASML Holding NV		18,642		404,350
ASML Holding NV, Class G		47,600		1,030,540
Heineken NV		43,051		1,599,520
Hunter Douglas NV		12,921		528,124
Koninklijke Philips Electronics NV		40,400		744,168
Ordina NV*		72,267		283,557
Qiagen NV*(2)		44,500		827,255
Royal Dutch Shell PLC, Class A		61,002		1,527,746
Royal Dutch Shell PLC, Class B		123,893		3,127,848
TNT NV		63,234		1,231,640
TomTom NV*(2)		70,431		856,496
Wolters Kluwer NV		26,026		455,404
Total Netherlands common stocks				12,616,648
Norway—0.06%
Telenor ASA*		46,800		361,288
Russia—0.26%
Gazprom OAO ADR		77,927		1,578,022
Singapore—0.08%
Golden Agri-Resources Ltd.(2)		1,985,000		519,298

Security description	Shares		Value
Spain—0.82%
Banco Santander SA		156,773	$	1,891,934
Gamesa Corp. Tecnologica SA		13,172		250,066
Iberdrola SA(2)		61,954		503,853
Inditex SA(2)		11,419		548,768
Red Electrica Corp. SA		9,517		430,587
Tecnicas Reunidas SA		7,021		331,331
Telefonica SA		46,411		1,052,369
Total Spain common stocks				5,008,908
Sweden—0.63%
Assa Abloy AB, Class B		195,738		2,728,354
Nordea Bank AB		95,205		755,390
Telefonaktiebolaget LM Ericsson, Class B		37,772		369,458
Total Sweden common stocks				3,853,202
Switzerland—2.56%
Alcon, Inc.		29,700		3,448,764
Julius Baer Holding AG		16,444		641,151
Nestle SA		133,279		5,030,104
Novartis AG		38,887		1,579,920
Roche Holding AG		12,336		1,737,677
Swatch Group AG		19,400		636,102
Syngenta AG		2,007		466,054
Xstrata PLC		127,332		1,404,336
Zurich Financial Services AG		4,297		760,611
Total Switzerland common stocks				15,704,719
United Kingdom—10.61%
31 Group PLC		81,740		327,045
Aberdeen Asset Management PLC		70,594		144,034
Anglo American PLC		55,950		1,632,663
Associated British Foods PLC		46,664		586,106
AstraZeneca PLC		43,766		1,927,340
Autonomy Corp. PLC*		28,886		684,444
Aviva PLC		352,592		1,992,478
BAE Systems PLC		158,784		886,338
Balfour Beatty PLC		64,539		328,556
Barclays PLC		150,883		702,773
BG Group PLC		66,365		1,115,061
BP PLC		500,852		3,963,321
British Airways PLC*		249,521		513,880
British Land Co. PLC		46,336		292,231
British Sky Broadcasting Group PLC		90,443		678,480
Brixton PLC		49,040		32,881
Cadbury PLC		96,284		822,494
Carnival PLC		26,314		698,247
Cattles PLC(3)		404,007		45,729
Centrica PLC		193,706		711,813
Compass Group PLC		69,388		391,000
Daily Mail & General Trust (Non-voting), Class A		93,600		438,225
DSG International PLC		1,317,889		500,463

12

UBS Dynamic Alpha Fund—Portfolio of investments

June 30, 2009

Security description	Shares		Value
Common stocks—(continued)
United Kingdom—(concluded)
Electrocomponents PLC		124,486	$	288,937
Entertainment Rights PLC*		458,314		0
Friends Provident Group PLC		716,594		776,639
GlaxoSmithKline PLC		268,678		4,731,304
HMV Group PLC(2)		322,847		600,227
Home Retail Group PLC		110,427		473,606
HSBC Holdings PLC		242,323		2,011,674
IMI PLC		83,745		430,638
International Power PLC		86,766		340,653
ITV PLC		507,169		292,740
John Wood Group PLC		48,883		215,495
Kesa Electricals PLC		126,913		232,539
Kingfisher PLC		284,600		834,325
Ladbrokes PLC		448,540		1,366,246
Leaf Clean Energy Co.*		233,146		370,147
Lloyds Banking Group PLC		616,126		709,068
Logica PLC		590,185		768,693
Monitise PLC*		682,286		74,403
Northern Foods PLC		288,302		247,107
Pearson PLC		195,404		1,962,752
Premier Farnell PLC		191,789		398,637
Prudential PLC		404,035		2,749,201
Psion PLC		148,288		165,320
Reckitt Benckiser Group PLC		16,383		746,640
Reed Elsevier PLC		223,637		1,667,501
Regus PLC		256,535		274,782
Rio Tinto PLC		27,800		967,805
Royal Bank of Scotland Group PLC*		384,611		244,584
Sage Group PLC		1,126,114		3,307,230
Standard Chartered PLC		94,821		1,785,915
STV Group PLC*		63,794		65,579
Taylor Wimpey PLC*		473,619		261,508
Tomkins PLC		123,615		302,075
Unilever PLC		130,075		3,052,319
Vodafone Group PLC		4,324,595		8,359,328
William Hill PLC		336,449		1,095,517
Wolseley PLC*		171,656		3,281,641
Yule Catto & Co. PLC		145,813		256,776
Total United Kingdom common stocks				65,125,153
United States—45.79%
ACE Ltd.(1)		24,800		1,096,904
Activision Blizzard, Inc.*		57,300		723,699
Adobe Systems, Inc.*		64,600		1,828,180
Advance Auto Parts, Inc.(1)		19,800		821,502
Aetna, Inc.		36,700		919,335
Aflac, Inc.(1)		22,000		683,980
Air Products & Chemicals, Inc.		10,700		691,113
Allergan, Inc.(1)		116,800		5,557,344
Amazon.com, Inc.*		43,800		3,664,308
American Electric Power Co., Inc.(1)		63,500		1,834,515

Security description	Shares		Value
United States—(continued)
American Tower Corp., Class A*		118,100	$	3,723,693
Amphenol Corp., Class A		66,700		2,110,388
Anadarko Petroleum Corp.(1)		13,500		612,765
Apple, Inc.*(1)		49,800		7,093,014
Arch Coal, Inc.(1)		11,300		173,681
Associated Banc-Corp.(1)		9,300		116,250
AT&T, Inc.(1)		17,800		442,152
Atmel Corp.*		305,100		1,138,023
Autodesk, Inc.*(1)		31,600		599,768
Avon Products, Inc.(1)		12,200		314,516
Baker Hughes, Inc.(1)		22,900		834,476
Bank of New York Mellon Corp.(1)		21,700		636,027
Baxter International, Inc.(1)		31,300		1,657,648
Becton Dickinson and Co.(1)		6,400		456,384
BioMarin Pharmaceutical, Inc.*		48,400		755,524
BlackRock, Inc.		9,900		1,736,658
BorgWarner, Inc.(1)		28,200		963,030
Broadcom Corp., Class A*(1)		29,300		726,347
Bucyrus International, Inc.		24,800		708,288
Burlington Northern Santa Fe Corp.(1)		53,000		3,897,620
C.H. Robinson Worldwide, Inc.		27,900		1,454,985
C.R. Bard, Inc.		27,700		2,062,265
Carnival Corp.(1)		40,300		1,038,531
Central European Distribution Corp.*(2)		60,800		1,615,456
Cephalon, Inc.*(1)		9,000		509,850
Cisco Systems, Inc.*		173,300		3,230,312
Citrix Systems, Inc.*(1)		33,700		1,074,693
City National Corp.(1)		9,600		353,568
CME Group, Inc.		12,800		3,982,208
Coach, Inc.(1)		59,200		1,591,296
Coca-Cola Co.(1)		5,700		273,543
Cognizant Technology Solutions Corp., Class A*		101,300		2,704,710
Colgate-Palmolive Co.		32,700		2,313,198
Comcast Corp., Class A(1)		56,500		818,685
Concur Technologies, Inc.*(2)		42,600		1,324,008
ConocoPhillips(1)		7,400		311,244
Constellation Brands, Inc., Class A*(1)		75,700		959,876
Continental Resources, Inc.*(2)		68,700		1,906,425
Covance, Inc.*		16,700		821,640
Danaher Corp.(1)		13,900		858,186
Darden Restaurants, Inc.		52,000		1,714,960
DaVita, Inc.*(1)		42,200		2,087,212
DeVry, Inc.		30,800		1,541,232
Digital Realty Trust, Inc.		33,500		1,200,975
Discover Financial Services(1)		68,300		701,441
Dr. Pepper Snapple Group, Inc.*(1)		12,800		271,232
Dun & Bradstreet Corp.		20,100		1,632,321
Dynegy, Inc., Class A*(1)		250,900		569,543
Ecolab, Inc.		86,400		3,368,736

13

UBS Dynamic Alpha Fund—Portfolio of investments

June 30, 2009

Security description	Shares		Value
Common stocks—(continued)
United States—(continued)
EnergySolutions, Inc.		151,200	$	1,391,040
ENSCO International, Inc.(1)		11,200		390,544
EOG Resources, Inc.(1)		18,900		1,283,688
Estee Lauder Cos., Inc., Class A(1)		51,600		1,685,772
Exelon Corp.(1)		59,600		3,052,116
Expeditors International Washington, Inc.		18,700		623,458
Express Scripts, Inc.*		85,300		5,864,376
Exxon Mobil Corp.		24,900		1,740,759
F5 Networks, Inc.*		13,800		477,342
FedEx Corp.(1)		44,800		2,491,776
Fiserv, Inc.*		27,700		1,265,890
Flowers Foods, Inc.		44,600		974,064
Fortune Brands, Inc.(1)		33,500		1,163,790
GameStop Corp., Class A*		56,500		1,243,565
General Dynamics Corp.(1)		61,100		3,384,329
General Electric Co.(1)		136,600		1,600,952
Genzyme Corp.*(1)		41,700		2,321,439
Google, Inc., Class A*		11,400		4,806,126
Halliburton Co.(1)		49,800		1,030,860
Henry Schein, Inc.*		34,800		1,668,660
Hess Corp.(1)		6,100		327,875
Hewlett-Packard Co.(1)		16,400		633,860
Home Depot, Inc.(1)		77,100		1,821,873
Idexx Laboratories, Inc.*(2)		17,100		790,020
Illinois Tool Works, Inc.(1)		79,300		2,961,062
Immucor, Inc.*		86,000		1,183,360
Intel Corp.(1)		34,500		570,975
IntercontinentalExchange, Inc.*		35,100		4,009,824
International Game Technology		202,000		3,211,800
Interpublic Group of Cos., Inc.*(1)		53,200		268,660
Intersil Corp., Class A(1)		31,500		395,955
Intuit, Inc.*(1)		56,200		1,582,592
JC Penney Co., Inc.(1)		15,200		436,392
Johnson & Johnson(1)		18,800		1,067,840
Johnson Controls, Inc.(1)		44,200		960,024
Joy Global, Inc.		20,700		739,404
JPMorgan Chase & Co.(1)		7,500		255,825
Kellogg Co.		35,500		1,653,235
Kimberly-Clark Corp.(1)		5,100		267,393
Kla-Tencor Corp.(1)		14,600		368,650
Kohl's Corp.*(1)		15,400		658,350
Kroger Co.(1)		21,300		469,665
L-3 Communications Holdings, Inc.(1)		7,900		548,102
Laboratory Corp. of America Holdings*		21,400		1,450,706
LKQ Corp.*		66,100		1,087,345
Lowe's Cos., Inc.(1)		30,400		590,064
Macy's, Inc.(1)		77,000		905,520
Marathon Oil Corp.(1)		14,600		439,898
Marvell Technology Group Ltd.*(1)		57,400		668,136

Security description	Shares		Value
United States—(continued)
Masco Corp.(1)		49,500	$	474,210
MasterCard, Inc., Class A		21,600		3,613,896
McDonald's Corp.		34,100		1,960,409
MDU Resources Group, Inc.(1)		50,700		961,779
Medco Health Solutions, Inc.*(1)		66,100		3,014,821
Medtronic, Inc.(1)		14,300		498,927
Merck & Co., Inc.(1)		21,700		606,732
MetroPCS Communications, Inc.*		54,800		729,388
Micros Systems, Inc.*		34,800		881,136
Microsoft Corp.(1)		110,100		2,617,077
Millipore Corp.*(1)		8,800		617,848
Monsanto Co.(1)		33,600		2,497,824
Monster Worldwide, Inc.*		48,400		571,604
Morgan Stanley(1)		15,400		439,054
MSC Industrial Direct Co., Class A		47,500		1,685,300
MSCI, Inc., Class A*		80,700		1,972,308
Nasdaq OMX Group, Inc.*		34,700		739,457
National Oilwell Varco, Inc.*		17,900		584,614
National Semiconductor Corp.(1)		29,600		371,480
NCR Corp.*		118,800		1,405,404
NetApp, Inc.*		71,600		1,411,952
Newell Rubbermaid, Inc.(1)		25,800		268,578
Newfield Exploration Co.*		38,700		1,264,329
NiSource, Inc.(1)		88,100		1,027,246
Noble Corp.(1)		11,400		344,850
Nordstrom, Inc.(1)		19,200		381,888
Northrop Grumman Corp.(1)		28,500		1,301,880
Omnicom Group, Inc.(1)		30,700		969,506
Oracle Corp.		96,100		2,058,462
O'Reilly Automotive, Inc.*		40,200		1,530,816
PACCAR, Inc.(1)		52,900		1,719,779
Pall Corp.(1)		23,900		634,784
Parker Hannifin Corp.		21,800		936,528
Peabody Energy Corp.(1)		11,100		334,776
Pepco Holdings, Inc.(1)		82,500		1,108,800
PepsiCo, Inc.(1)		11,300		621,048
Pfizer, Inc.(1)		62,600		939,000
Philip Morris International, Inc.(1)		27,500		1,199,550
Praxair, Inc.		37,600		2,672,232
Principal Financial Group, Inc.(1)		10,600		199,704
Pulte Homes, Inc.(1)		19,800		174,834
QUALCOMM, Inc.		100,300		4,533,560
Quanta Services, Inc.*		89,200		2,063,196
Regal-Beloit Corp.		22,000		873,840
Republic Services, Inc.		85,790		2,094,134
Roper Industries, Inc.		14,000		634,340
Ryder System, Inc.(1)		26,500		739,880
Salesforce.com, Inc.*		48,900		1,866,513
SBA Communications Corp., Class A*		61,800		1,516,572
Schlumberger Ltd.		25,200		1,363,572
Sempra Energy(1)		58,700		2,913,281
Sherwin-Williams Co.		37,400		2,010,250
Smith International, Inc.		32,700		842,025

14

UBS Dynamic Alpha Fund—Portfolio of investments

June 30, 2009

Security description	Shares		Value
Common stocks—(concluded)
United States—(concluded)
Solera Holdings, Inc.*		122,100	$	3,101,340
Southwest Airlines Co.(1)		140,600		946,238
Southwestern Energy Co.*		113,000		4,390,050
Sprint Nextel Corp.*(1)		126,700		609,427
SPX Corp.		15,100		739,447
Starbucks Corp.*(1)		57,000		791,730
Starent Networks Corp.*(2)		31,700		773,797
Stericycle, Inc.*		28,200		1,453,146
Strayer Education, Inc.		12,000		2,617,320
Stryker Corp.		42,300		1,681,002
Sunoco, Inc.(1)		7,000		162,400
SUPERVALU, Inc.(1)		18,200		235,690
Sysco Corp.(1)		120,900		2,717,832
Target Corp.(1)		41,300		1,630,111
TD Ameritrade Holding Corp.*		151,400		2,655,556
Teradata Corp.*		90,800		2,127,444
Terra Industries, Inc.		27,300		661,206
Tetra Tech, Inc.*		37,700		1,080,105
Thermo Fisher Scientific, Inc.*		33,800		1,378,026
Time Warner Cable, Inc.		2		63
Ultra Petroleum Corp.*(1)		30,500		1,189,500
Union Pacific Corp.		60,500		3,149,630
United Technologies Corp.		27,600		1,434,096
Urban Outfitters, Inc.*		57,800		1,206,286
Valero Energy Corp.(1)		15,300		258,417
Viacom, Inc., Class B*(1)		12,400		281,480
Visa, Inc., Class A		69,900		4,351,974
VMware, Inc., Class A*(1)		33,200		905,364
Weatherford International Ltd.*		70,600		1,380,936
Wells Fargo & Co.(1)		32,600		790,876
Williams Cos., Inc.(1)		12,300		192,003
WMS Industries, Inc.*		128,000		4,033,280
Wyeth(1)		18,400		835,176
Wynn Resorts Ltd.*(2)		11,800		416,540
XTO Energy, Inc.		73,500		2,803,290
Zimmer Holdings, Inc.*		42,700		1,819,020
Total United States common stocks				281,189,185
Total common stocks (cost $451,447,241)				453,025,884
	Face amount
Bonds—7.88%
Corporate bonds—2.48%
Australia—0.05%
Rio Tinto Finance USA Ltd., 8.950%, due 05/01/14	$	270,000		300,036
Canada—0.03%
Suncor Energy, Inc., 6.100%, due 06/01/18		153,000		153,813

Security description	Face amount		Value
Germany—0.05%
Muenchener Rueckversicherungs AG, 6.750%, due 06/21/23(4)	EUR	210,000	$	285,761
Luxembourg—0.18%
Hellas Telecommunications Luxembourg III, 8.500%, due 10/15/13	EUR	1,497,000		1,113,035
Sweden—0.05%
Vattenfall AB, 6.875%, due 04/15/39	GBP	180,000		329,752
United Kingdom—0.34%
Anglo American Capital PLC, 9.375%, due 04/08/14(5)	$	270,000		293,288
Barclays Bank PLC, 6.750%, due 05/22/19		300,000		297,532
British Telecommunications PLC, 6.500%, due 07/07/15	EUR	210,000		299,842
National Grid Gas PLC, 6.000%, due 05/13/38	GBP	180,000		289,260
Scottish & Southern Energy PLC, 6.250%, due 08/27/38		180,000		299,346
Tesco PLC, 5.125%, due 04/10/47	EUR	300,000		331,023
WPP PLC, 4.375%, due 12/05/13		210,000		270,285
Total United Kingdom corporate bonds				2,080,576
United States—1.78%
Aetna, Inc., 6.625%, due 06/15/36	$	270,000		245,443
Altria Group, Inc., 9.250%, due 08/06/19		270,000		303,186
Anadarko Petroleum Corp., 5.950%, due 09/15/16		300,000		295,987
Anheuser-Busch Cos., Inc., 5.000%, due 03/01/19		270,000		246,339
Axcan Intermediate Holdings, Inc., 12.750%, due 03/01/16		600,000		607,500
Bank of America Corp., 5.750%, due 12/01/17		300,000		267,128
Bear Stearns Cos. LLC, 6.400%, due 10/02/17		300,000		300,532
Boise Cascade LLC, 7.125%, due 10/15/14		3,190,000		1,682,726
Cellu Tissue Holdings, Inc., 11.500%, due 06/01/14(5)		300,000		294,750
Exelon Generation Co. LLC, 6.200%, due 10/01/17		300,000		298,610
International Business Machines Corp., 7.625%, due 10/15/18		300,000		358,583
Kinder Morgan Energy Partners LP, 6.000%, due 02/01/17		300,000		297,620

15

UBS Dynamic Alpha Fund—Portfolio of investments

June 30, 2009

Security description	Face amount		Value
Bonds—(continued)
Corporate bonds—(concluded)
United States—(concluded)
MetLife, Inc., 6.500%, due 12/15/32	$	270,000	$	260,135
Momentive Performance Materials, Inc., 11.500%, due 12/01/16		2,480,000		694,400
Norfolk Southern Corp., 7.700%, due 05/15/17		270,000		295,932
Nustar Logistics, 7.650%, due 04/15/18		330,000		320,337
Pacific Bell Telephone Co., 6.625%, due 10/15/34		300,000		286,214
Plains All American Pipeline LP, 8.750%, due 05/01/19		275,000		312,055
Reynolds American, Inc., 7.250%, due 06/01/13		270,000		277,656
Tennessee Valley Authority, 5.880%, due 04/01/36		1,200,000		1,277,174
Time Warner Cable, Inc., 8.250%, due 04/01/19		270,000		306,347
Truvo Subsidiary Corp., 8.500%, due 12/01/14	EUR	1,050,000		390,343
Valero Energy Corp., 6.625%, due 06/15/37	$	900,000		767,808
Wachovia Corp., 5.750%, due 06/15/17		300,000		295,968
WellPoint, Inc., 7.000%, due 02/15/19		300,000		310,130
Total United States corporate bonds				10,992,903
Total corporate bonds (cost $19,156,431)				15,255,876
Asset-backed securities—2.16%
United States—2.16%
ACE Securities Corp., Series 2006-NC1, Class A2B, 0.464%, due 12/25/35(4)		60,596		59,015
American Express Credit Account Master Trust, Series 2006-1, Class C, 0.599%, due 12/15/13(4)		325,000		295,527
Ameriquest Mortgage Securities, Inc., Series 2005-R6, Class A2, 0.514%, due 08/25/35(4)		121,808		103,048
Argent Securities, Inc., Series 2006-M3, Class A2A, 0.364%, due 10/25/36(4)		2,843		2,795
Asset Backed Funding Certificates , Series 2006-OPT3, Class A3A, 0.374%, due 11/25/36(4)		83,440		79,758
Bank of America Credit Card Trust, Series 2007-B1, Class B1, 0.399%, due 06/15/12(4)		300,000		295,314

Security description	Face amount		Value
United States—(continued)
Series 2007-B4, Class B4, 0.409%, due 09/15/12(4)	$	163,000	$	159,190
Chase Issuance Trust, Series 2009-A3, Class A3, 2.400%, due 06/17/13		650,000		645,350
Citibank Credit Card Issuance Trust, Series 2007-B1, Class B1, 1.267%, due 04/02/12(4)		123,000		120,708
Series 2008-C6, Class C6, 6.300%, due 06/20/14		200,000		188,994
Countrywide Asset-Backed Certificates, Series 2006-20, Class 2A1, 0.364%, due 04/25/47(4)		141,744		132,429
Series 2005-7, Class 3AV3, 0.724%, due 11/25/35(4)		271,833		260,063
Series 2006-S9, Class A5, 5.871%, due 08/25/36(4)		1,335,575		481,364
First Franklin Mortgage Loan Asset Backed Certificates, Series 2006-FF15, Class A3, 0.364%, due 11/25/36(4)		184,671		173,915
Series 2006-FFA, Class A3, 0.434%, due 09/25/26(4)		4,330,015		441,103
Series 2006-FFB, Class A2, 0.444%, due 12/25/26(4)		1,794,362		302,654
GSAMP Trust, Series 2005-S1, Class B1, 6.708%, due 12/25/34(6)		186,756		0
Home Equity Asset Trust, Series 2006-3, Class 2A3, 0.494%, due 07/25/36(4)		566,843		412,248
Home Equity Mortgage Trust, Series 2006-6, Class 2A1, 0.414%, due 03/25/37(4)		2,646,827		127,517
Series 2006-3, Class A1, 5.472%, due 09/25/36(4)		1,133,636		113,364
Series 2006-5, Class A1, 5.500%, due 01/25/37(6)		1,995,685		257,836
Series 2006-4, Class A1, 5.671%, due 11/25/36(6)		2,088,796		198,372
JP Morgan Mortgage Acquisition Corp., Series 2006-CH1, Class A2, 0.364%, due 07/25/36(4)		33,390		31,636
MBNA Credit Card Master Note Trust, Series 2005-A11, Class A11, 0.359%, due 05/15/13(4)		600,000		589,964
Series 2006-B1, Class B1, 0.539%, due 07/15/15(4)		275,000		241,430
Series 2002-C1, Class C1, 6.800%, due 07/15/14		550,000		534,496

16

UBS Dynamic Alpha Fund—Portfolio of investments

June 30, 2009

Security description	Face amount		Value
Bonds—(continued)
Asset-backed securities—(concluded)
United States—(continued)
MBNA Master Credit Card Trust, Series 2000-H, Class C, 1.519%, due 01/15/13(4)	$	325,000	$	309,039
Series 2001-B, Class C, 7.250%, due 08/15/13		300,000		299,223
Merrill Auto Trust Securitization, Series 2007-1, Class A4, 0.379%, due 12/15/13(4)		2,000,000		1,919,946
Merrill Lynch First Franklin Mortgage Loan Trust, Series 2007-A, Class A1, 1.414%, due 10/25/27(4)		585,980		541,219
Merrill Lynch Mortgage Investors, Inc., Series 2006-AHL1, Class A2A, 0.364%, due 05/25/37(4)		76,464		74,975
Series 2006-FF1, Class A2A, 0.384%, due 08/25/36(4)		70,257		69,849
Series 2006-SL2, Class A, 0.464%, due 05/25/37(4)		4,550,617		561,148
Series 2004-SL2, Class B4, 7.439%, due 06/25/35(4),(7),(8)		357,112		112,633
Morgan Stanley ABS Capital I, Series 2006-HE6, Class A2A, 0.354%, due 09/25/36(4)		56,158		54,555
Morgan Stanley Mortgage Loan Trust, Series 2006-10SL, Class A1, 0.444%, due 08/25/36(4)		2,171,150		65,134
Series 2006-14SL, Class A1, 0.474%, due 11/25/36(4)		1,652,501		310,524
Nomura Asset Acceptance Corp., Series 2006-S4, Class A1, 0.484%, due 08/25/36(4)		1,782,022		258,217
Popular ABS Mortgage Pass-Through Trust, Series 2006-E, Class A1, 0.404%, due 01/25/37(4)		50,521		43,989
Renaissance Home Equity Loan Trust, Series 2006-4, Class AV1, 0.384%, due 01/25/37(4)		341,643		325,038
Series 2005-3, Class AF3, 4.814%, due 11/25/35(6)		78,996		75,512
Residential Asset Securities Corp., Series 2006-KS2, Class A3, 0.504%, due 03/25/35(4)		563,202		419,513
Series 2005-KS11, Class AI3, 0.514%, due 12/25/35(4)		92,204		74,493

Security description	Face amount		Value
United States—(concluded)
SACO I Trust, Series 2006-5, Class 1A, 0.464%, due 04/25/36(4)	$	1,495,907	$	177,185
Series 2006-5, Class 2A1, 0.464%, due 05/25/36(4)		2,760,248		404,083
Series 2006-3, Class A1, 0.494%, due 04/25/36(4)		2,668,644		397,792
Saxon Asset Securities Trust, Series 2005-3, Class A2C, 0.594%, due 11/25/35(4)		228,115		215,114
Soundview Home Equity Loan Trust, Series 2006-EQ2, Class A1, 0.394%, due 01/25/37(4)		34,659		33,788
Series 2006-OPT3, Class 2A2, 0.424%, due 06/25/36(4)		42,595		39,874
Structured Asset Investment Loan Trust, Series 2006-BNC3, Class A2, 0.354%, due 09/25/36(4)		119,905		115,204
Series 2005-7, Class A4, 0.504%, due 08/25/35(4)		148,860		145,343
Total asset-backed securities (cost $32,615,333)				13,291,480
Collateralized debt obligations—0.32%
Cayman Islands—0.07%
Avenue CLO Fund Ltd., Series 2006-4I, Class SUB, due 11/07/18(7),(9)		2,625,000		26,250
Series 2007-5I, Class SUB, due 04/25/19(7),(9)		2,200,000		22,000
Babson CLO Ltd., Series 2007-1A, Class INC, due 01/18/21(7),(8),(9)		1,500,000		150
Callidus Debt Partners Fund Ltd., Series 5A, Class INC, due 11/20/20(7),(8),(9)		2,000,000		10,000
Emerson Place CLO Ltd., Series 2006-1A, Class SUB, due 01/15/19(7),(8),(9)		2,750,000		55,000
FM Leveraged Capital Fund II, due 11/20/20(7),(8),(9)		5,300,000		53,000
GSC Partners CDO Fund Ltd., Series 2007-8A, Class SUB, due 04/17/21(7),(8),(9)		1,500,000		150
GSC Partners CDO Fund V Ltd., due 11/20/16(7),(8),(9)		650,000		6,500
Harbourview CLO VI Ltd., Series 6A, Class SUB, due 12/27/19(7),(8),(9)		1,200,000		120

17

UBS Dynamic Alpha Fund—Portfolio of investments

June 30, 2009

Security description	Face amount		Value
Bonds—(continued)
Collateralized debt obligations—(concluded)
Cayman Islands—(concluded)
LNR CDO Ltd., Series 2006-1A, Class FFX, 7.592%, due 05/28/43(7),(8)	$	8,000,000	$	240,000
Logan CDO Ltd., Series III-A, Class E, 16.192%, due 07/05/57(4),(7),(8)		2,000,000		0
Total Cayman Islands collateralized debt obligations				413,170
Ireland—0.09%
Avoca CLO I BV, Series VI-A, Class M, due 01/16/23(7),(8),(9)	EUR	2,000,000		84,171
Eurocredit CDO BV, Series VI-X, Class SUB, due 01/16/22(7),(9)		4,500,000		458,942
Total Ireland collateralized debt obligations				543,113
Luxembourg—0.01%
Ashwell Rated SA, due 12/22/77(3),(7),(8),(9)	GBP	1,400,000		23,033
GSC European CDO SA, Series I-RA, Class SUB, due 12/15/22(7),(8),(9)	EUR	2,400,000		33,668
Total Luxembourg collateralized debt obligations				56,701
Netherlands—0.06%
Ares Euro CLO BV, Series 2007-1A, Class G1, 1.000%, due 05/15/24(4),(5)	EUR	1,400,000		78,560
Cadogan Square CLO BV, Series 3A, Class M, 10.072%, due 01/17/23(4),(7),(8)		2,000,000		28,057
Grosvenor Place CLO BV, Series II-A, Class SUB, 7.500%, due 03/28/23(7),(8)		3,250,000		91,185
Harbourmaster CLO Ltd., Series 7A, Class C, 12.000%, due 09/22/22(7),(8)		3,000,000		42,086
Highlander Euro CDO, Series 2006-2CA, Class F1, due 12/14/22(7),(8),(9)		3,000,000		21,043
Queen Street CLO, Series 2006-1A, Class F, due 04/15/23(7),(8),(9)		1,900,000		106,616
Total Netherlands collateralized debt obligations				367,547
United States—0.09%
Cent CDO Ltd., Series 2006-12A, Class INC, due 11/18/20(7),(9)	$	2,000,000		100,000

Security description	Face amount		Value
United States—(concluded)
GoldenTree Loan Opportunities III Ltd., Series 2007-3A, Class SUB, due 05/01/22(7),(8),(9)	$	2,600,000	$	208,000
OHA Park Avenue CLO Ltd., Series 2007-1A, Class SUB, due 03/14/22(7),(8),(9)		2,400,000		168,000
Regent's Park CDO BV, Series 1A, Class F, due 01/26/23(7),(8),(9)	EUR	2,000,000		84,171
Shasta CLO I Ltd., due 04/20/21(7),(8),(9)	$	6,000,000		0
Total United States collateralized debt obligations				560,171
Total collateralized debt obligations (cost $77,078,613)				1,940,702
Commercial mortgage-backed securities—1.98%
United States—1.98%
Banc of America Commercial Mortgage, Inc., Series 2004-4, Class A3, 4.128%, due 07/10/42		1,046,090		1,043,645
Series 2006-6, Class A2, 5.309%, due 10/10/45		325,000		299,400
Series 2006-6, Class A4, 5.356%, due 10/10/45		800,000		630,134
Series 2007-4, Class AM, 6.002%, due 02/10/51(4)		650,000		324,416
Banc of America Large Loan, Inc., Series 2005-MIB1, Class A2, 0.529%, due 03/15/22(4),(5)		2,000,000		1,491,134
Bear Stearns Commercial Mortgage Securities Trust, Series 2005-PWR7, Class A2, 4.945%, due 02/11/41		1,135,902		1,125,265
Citigroup Commercial Mortgage Trust, Series 2007-C6, Class AM, 5.888%, due 12/10/49(4)		650,000		349,765
Citigroup/Deutsche Bank Commercial Mortgage Trust, Series 2006-CD3, Class A2, 5.560%, due 10/15/48		400,000		373,923
Greenwich Capital Commercial Funding Corp., Series 2007-GG9, Class A2, 5.381%, due 03/10/39		700,000		657,243
Series 2007-GG9, Class AM, 5.475%, due 03/10/39		1,200,000		634,411
Series 2006-RR1, Class A1, 5.961%, due 03/18/49(4),(5)		750,000		90,000

18

UBS Dynamic Alpha Fund—Portfolio of investments

June 30, 2009

Security description	Face amount		Value
Bonds—(continued)
Commercial mortgage-backed securities—(concluded)
United States—(concluded)
GS Mortgage Securities Corp. II, Series 2006-CC1, Class A, 5.507%, due 03/21/46(4),(7),(8)	$	364,721	$	54,708
Series 2006-GG6, Class AM, 5.622%, due 04/10/38(4)		600,000		347,599
Series 2007-GKK1, Class A1, 5.701%, due 12/20/49(4),(7),(8)		475,000		95,000
Series 2007-GG10, Class A2, 5.778%, due 08/10/45(4)		2,850,000		2,643,918
Series 2007-GG10, Class A4, 5.993%, due 08/10/45(4)		2,150,000		1,624,691
Wachovia Bank Commercial Mortgage Trust, Series 2006-C23, Class AM, 5.466%, due 01/15/45(4)		600,000		342,693
Total commercial mortgage-backed securities (cost $12,134,859)				12,127,945
Mortgage & agency debt securities—0.85%
United States—0.85%
Adjustable Rate Mortgage Trust, Series 2005-4, Class CB4, 5.048%, due 08/25/35(4),(5)		980,130		4,901
American Home Mortgage Investment Trust, Series 2006-3, Class 4A, 0.504%, due 11/25/35(4)		3,065,277		594,051
Banc of America Alternative Loan Trust, Series 2006-9, Class B2, 6.250%, due 01/25/37		859,665		21,664
Bear Stearns Alt-A Trust, Series 2006-4, Class 3B2, 6.176%, due 07/25/36(4)		5,906,376		76,502
Citicorp Mortgage Securities, Inc., Series 2006-3, Class B1, 5.945%, due 06/25/36(4)		335,558		23,489
Citigroup Mortgage Loan Trust, Inc., Series 2005-WF2, Class AV2, 0.554%, due 08/25/35(4)		139,401		123,249
Series 2006-AR6, Class 1B1, 6.057%, due 08/25/36(4)		3,980,400		109,461
Countrywide Alternative Loan Trust, Series 2006-45T1, Class M1, 6.000%, due 02/25/37		638,040		29,280
Series 2006-26CB, Class M1, 6.500%, due 09/25/36		1,218,718		50,862
Credit Suisse Mortgage Capital Certificates, Series 2006-4, Class CB1, 5.730%, due 05/25/36(4)		689,517		10,343
Series 2006-7, Class B1, 6.214%, due 08/25/36(4)		738,740		11,081

Security description	Face amount		Value
United States—(concluded)
Federal Home Loan Bank, 5.625%, due 06/13/16	$	300,000	$	288,838
Federal National Mortgage Association,† 4.625%, due 05/01/13		600,000		609,114
5.250%, due 08/01/12		2,000,000		2,078,199
GSR Mortgage Loan Trust, Series 2006-5F, Class B1, 6.166%, due 06/25/36(4)		965,388		57,923
Harborview Mortgage Loan Trust, Series 2005-3, Class 2A1A, 0.553%, due 06/19/35(4)		281,264		131,705
IndyMac INDA Mortgage Loan Trust, Series 2007-AR1, Class B1, 5.756%, due 03/25/37(4)		447,840		11,196
IndyMac INDX Mortgage Loan Trust, Series 2006-AR25, Class B1, 5.949%, due 09/25/36(4)		2,583,666		141,357
Residential Accredit Loans, Inc., Series 2006-QS5, Class M1, 6.000%, due 05/25/36		1,654,651		40,476
Residential Funding Mortgage Securities I, Series 2006-SA4, Class M1, 6.134%, due 11/25/36(4)		1,888,866		4,722
Structured Adjustable Rate Mortgage Loan Trust, Series 2005-7, Class B11, 4.749%, due 04/25/35(4)		1,686,372		75,887
Series 2007-1, Class B1II, 6.285%, due 02/25/37(4)		2,010,420		114,855
Series 2006-7, Class B1II, 6.405%, due 08/25/36(4)		2,491,764		229,567
WaMu Mortgage Pass-Through Certificates, Series 2006-AR16, Class LB1, 5.585%, due 12/25/36(4)		474,255		24,612
Series 2006-AR16, Class 3B1, 5.680%, due 12/25/36(4)		1,297,640		50,725
Series 2007-HY1, Class 3B1, 5.876%, due 02/25/37(4)		1,757,005		80,652
Wells Fargo Mortgage Backed Securities Trust, Series 2006-18, Class B1, 6.000%, due 12/26/36		1,272,408		184,412
Series 2007-3, Class CRB1, 6.000%, due 04/25/37		540,605		22,381
Series 2006-AR12, Class 2B1, 6.099%, due 09/25/36(4)		373,052		13,989
Total mortgage & agency debt securities (cost $10,192,994)				5,215,493

19

UBS Dynamic Alpha Fund—Portfolio of investments

June 30, 2009

Security description	Face amount		Value
Bonds—(concluded)
Municipal bond—0.09%
California—0.09%
State of California General Obligation Bonds, 7.550%, due 04/01/39 (cost $539,400)	$	600,000	$	548,352
Total bonds (cost $151,717,630)				48,379,848
	Number of rights
Rights—0.03%
Singapore—0.01%
Golden Agri-Resources Ltd., expires 07/16/09*(3)		337,450		46,344
United Kingdom—0.02%
Rio Tinto PLC, expires 07/01/09*		14,595		167,602
Total rights (cost $111,131)				213,946
	Number of warrants
Warrant—0.00%
Singapore—0.00%
Golden Agri-Resources Ltd., strike @ SGD 0.01, expires 12/31/49*(3),(7)(cost $0)		134,980		0
	Units
Investment companies—14.55%
UBS Opportunistic Emerging Markets Debt Relationship Fund*(10)		1,441,688		18,034,797
UBS U.S. Equity Alpha Relationship Fund*(10)		8,730,130		71,305,087
Total investment companies (cost $89,352,655)				89,339,884
Short-term investment—0.47%
Investment company—0.47%
UBS Cash Management Prime Relationship Fund, 0.384%(10),(11)(cost $2,893,375)		2,893,375		2,893,375

Security description	Number of Contracts		Value
Options purchased—0.34%
Call options—0.28%
1 Year Euro-Dollar Mid Curve, strike @ USD 98.13, expires July 2009*		350	$	107,188
1 Year Euro-Dollar Mid Curve, strike @ USD 98.50, expires July 2009*		350		10,938
10 Year US Treasury Futures, strike @ USD 115.00, expires July 2009*		150		300,000
30 Day Fed Fund Futures, strike @ USD 99.63, expires November 2009*		258		139,761
30 Day Fed Fund Futures, strike @ USD 99.88, expires November 2009*		258		2,688
30 Year US Treasury Futures, strike @ USD 119.00, expires July 2009*		150		241,406
30 Year US Treasury Futures, strike @ USD 125.00, expires August 2009*		150		89,063
30 Year US Treasury Futures, strike @ USD 115.00, expires August 2009*		150		726,562
5 Year US Treasury Futures, strike @ USD 116.50, expires August 2009*		120		47,813
90 Day Euro-Dollar Interest Rate Futures, strike @ USD 99.38, expires September 2009*		150		23,437
Put options—0.06%
30 Year US Treasury Futures, strike @ USD 115.00, expires August 2009*		150		222,656
30 Year US Treasury Futures, strike @ USD 105.00, expires August 2009*		150		18,750
90 Day Euro-Dollar Interest Rate Futures, strike @ USD 96.00, expires March 2011*		161		129,806
Total options purchased (cost $2,658,104)				2,060,068

20

UBS Dynamic Alpha Fund—Portfolio of investments

June 30, 2009

Security description	Shares			Value
Investment of cash collateral from securities loaned—1.25%
UBS Private Money Market Fund LLC, 0.488%(10),(11)(cost $7,699,401)		7,699,401		$	7,699,401
Total investments before investments sold short—98.30% (cost $705,879,537)					603,612,406
Investments sold short—(15.33)%
Common stocks—(15.33)%
United States—(15.33)%
Abbott Laboratories		(11,100	)		(522,144	)
Adobe Systems, Inc.		(28,900	)		(817,870	)
Advanced Micro Devices, Inc.		(145,200	)		(561,924	)
Akamai Technologies, Inc.		(9,800	)		(187,964	)
Alliant Energy Corp.		(72,100	)		(1,883,973	)
Altera Corp.		(45,900	)		(747,252	)
Altria Group, Inc.		(30,700	)		(503,173	)
American Water Works Co., Inc.		(36,200	)		(691,782	)
Aqua America, Inc.		(11,100	)		(198,690	)
Archer-Daniels-Midland Co. NPV		(16,500	)		(441,705	)
AutoZone, Inc.		(5,100	)		(770,661	)
Bank of America Corp.		(36,200	)		(477,840	)
Best Buy Co., Inc.		(30,200	)		(1,011,398	)
Biogen Idec, Inc.		(6,900	)		(311,535	)
BMC Software, Inc.		(69,100	)		(2,334,889	)
Boston Scientific Corp.		(95,300	)		(966,342	)
Bristol-Myers Squibb Co.		(51,500	)		(1,045,965	)
Brown-Forman Corp., Class B		(27,500	)		(1,181,950	)
Bucyrus International, Inc.		(6,700	)		(191,352	)
C.H. Robinson Worldwide, Inc.		(40,800	)		(2,127,720	)
Calpine Corp.		(18,500	)		(206,275	)
Campbell Soup Co.		(23,100	)		(679,602	)
Caterpillar, Inc.		(18,300	)		(604,632	)
Celgene Corp.		(11,900	)		(569,296	)
Centerpoint Energy, Inc.		(22,600	)		(250,408	)
CenturyTel, Inc.		(12,600	)		(386,820	)
Charles River Laboratories International, Inc.		(21,600	)		(729,000	)
Charles Schwab Corp.		(28,800	)		(505,152	)
Chesapeake Energy Corp.		(16,800	)		(333,144	)
Chevron Corp.		(18,400	)		(1,219,000	)
Chubb Corp.		(7,100	)		(283,148	)
Cisco Systems, Inc.		(34,000	)		(633,760	)
Clorox Co.		(22,200	)		(1,239,426	)
CME Group, Inc.		(700	)		(217,777	)
Cognizant Technology Solutions Corp., Class A		(9,300	)		(248,310	)
Colgate-Palmolive Co.		(12,500	)		(884,250	)
Computer Sciences Corp.		(5,300	)		(234,790	)

Security description	Shares			Value
United States—(continued)
Compuware Corp.		(31,400	)	$	(215,404	)
CONSOL Energy, Inc.		(11,700	)		(397,332	)
Consolidated Edison, Inc.		(38,100	)		(1,425,702	)
Continental Airlines, Inc., Class B		(39,100	)		(346,426	)
Corning, Inc.		(42,300	)		(679,338	)
Covance, Inc.		(13,700	)		(674,040	)
Cummins, Inc.		(41,800	)		(1,471,778	)
Deere & Co.		(21,300	)		(850,935	)
Delta Air Lines, Inc.		(76,800	)		(444,672	)
Devon Energy Corp.		(23,000	)		(1,253,500	)
DISH Network Corp., Class A		(37,686	)		(610,890	)
Dollar Tree, Inc.		(8,200	)		(345,220	)
DreamWorks Animation SKG, Inc., Class A		(23,100	)		(637,329	)
Eli Lilly & Co.		(50,100	)		(1,735,464	)
EMC Corp.		(37,300	)		(488,630	)
Emerson Electric Co.		(24,900	)		(806,760	)
EQT Corp.		(48,500	)		(1,693,135	)
Expeditors International Washington, Inc.		(54,400	)		(1,813,696	)
Express Scripts, Inc.		(9,200	)		(632,500	)
Exxon Mobil Corp.		(27,100	)		(1,894,561	)
Family Dollar Stores, Inc.		(8,600	)		(243,380	)
Flowers Foods, Inc.		(32,500	)		(709,800	)
Forest Laboratories, Inc.		(68,600	)		(1,722,546	)
Freeport-McMoRan Copper & Gold, Inc.		(3,800	)		(190,418	)
GameStop Corp., Class A		(22,300	)		(490,823	)
Gap, Inc.		(63,500	)		(1,041,400	)
General Mills, Inc.		(5,400	)		(302,508	)
Goldman Sachs Group, Inc.		(2,300	)		(339,112	)
Goodrich Corp.		(25,400	)		(1,269,238	)
Hasbro, Inc.		(18,000	)		(436,320	)
Hershey Co.		(30,900	)		(1,112,400	)
Honeywell International, Inc.		(16,500	)		(518,100	)
Hormell Foods Corp.		(11,500	)		(397,210	)
Hospira, Inc.		(9,800	)		(377,496	)
Hudson City Bancorp, Inc.		(19,700	)		(261,813	)
Ingersoll-Rand Co., Ltd., Class A		(13,300	)		(277,970	)
International Business Machines Corp.		(5,100	)		(532,542	)
Intuitive Surgical, Inc.		(2,800	)		(458,248	)
ITT Industries, Inc.		(26,400	)		(1,174,800	)
Joy Global, Inc.		(14,000	)		(500,080	)
Kellogg Co.		(19,500	)		(908,115	)
Lamar Advertising Co., Class A		(47,300	)		(722,271	)
Linear Technology Corp.		(12,800	)		(298,880	)
Lockheed Martin Corp.		(13,000	)		(1,048,450	)
McAfee, Inc.		(9,900	)		(417,681	)
McDonald's Corp.		(18,300	)		(1,052,067	)
MEMC Electronic Materials, Inc.		(17,900	)		(318,799	)
Microchip Technology, Inc.		(14,100	)		(317,955	)
Mylan, Inc.		(26,600	)		(347,130	)

21

UBS Dynamic Alpha Fund—Portfolio of investments

June 30, 2009

Security description	Shares			Value
Investments sold short—(concluded)
Common stocks—(concluded)
United States—(continued)
Navistar International Corp.		(7,100	)	$	(309,560	)
NetFlix, Inc.		(6,700	)		(276,978	)
NIKE, Inc., Class B		(8,600	)		(445,308	)
Novell, Inc.		(130,300	)		(590,259	)
NSTAR		(41,300	)		(1,326,143	)
Occidental Petroleum Corp.		(9,000	)		(592,290	)
O'Reilly Automotive, Inc.		(7,300	)		(277,984	)
Parker Hannifin Corp.		(18,300	)		(786,168	)
Paychex, Inc.		(9,100	)		(229,320	)
Pioneer Natural Resources Co.		(8,300	)		(211,650	)
PNC Financial Services Group, Inc.		(17,000	)		(659,770	)
Prudential Financial, Inc.		(20,800	)		(774,176	)
Public Service Enterprise Group, Inc.		(17,400	)		(567,762	)
QLogic Corp.		(39,700	)		(503,396	)
Quest Diagnostics Inc.		(3,500	)		(197,505	)
Quicksilver Resources, Inc.		(65,200	)		(605,708	)
Qwest Communications International, Inc.		(82,500	)		(342,375	)
Raytheon Co.		(18,800	)		(835,284	)
Red Hat, Inc.		(13,000	)		(261,690	)
Regions Financial Corp.		(48,500	)		(195,940	)
Rockwell Automation, Inc.		(21,600	)		(693,792	)
RRI Energy, Inc.		(91,400	)		(457,914	)
Safeway, Inc.		(11,600	)		(236,292	)
Schlumberger Ltd.		(12,400	)		(670,964	)
Sherwin-Williams Co.		(4,800	)		(258,000	)
Southern Co.		(44,100	)		(1,374,156	)
Spectra Energy Corp.		(32,100	)		(543,132	)
St. Jude Medical, Inc.		(18,900	)		(776,790	)
Stanley Works		(18,000	)		(609,120	)
Stryker Corp.		(21,000	)		(834,540	)
Synopsys, Inc.		(12,700	)		(247,777	)
Tellabs, Inc.		(69,800	)		(399,954	)
Texas Instruments, Inc.		(29,300	)		(624,090	)
Thermo Fisher Scientific, Inc.		(7,100	)		(289,467	)
Tiffany & Co.		(20,300	)		(514,808	)
Time Warner Cable, Inc.		(2	)		(61	)
TJX Cos., Inc.		(8,200	)		(257,972	)
Travelers Cos., Inc.		(22,200	)		(911,088	)
Union Pacific Corp.		(19,600	)		(1,020,376	)
US Bancorp		(41,500	)		(743,680	)
Verizon Communications, Inc.		(25,000	)		(768,250	)
Vertex Pharmaceuticals, Inc.		(11,200	)		(399,168	)
Visa, Inc., Class A		(12,400	)		(772,024	)
Walgreen Co.		(51,400	)		(1,511,160	)
Wal-Mart Stores, Inc.		(25,800	)		(1,249,752	)
Watson Pharmaceuticals, Inc.		(43,900	)		(1,478,991	)
Western Union Co.		(45,700	)		(749,480	)
WW Grainger, Inc.		(24,000	)		(1,965,120	)

Security description	Shares			Value
United States—(concluded)
Xcel Energy, Inc.		(37,700	)	$	(694,057	)
Yum! Brands, Inc.		(20,000	)		(666,800	)
Total investments sold short (proceeds $93,570,462)					(94,113,824	)
Total investments, net of investments sold short—82.97%					509,498,582
Cash and other assets, less liabilities—17.03%					104,554,902
Net assets—100.00%				$	614,053,484

22

UBS Dynamic Alpha Fund—Portfolio of investments

June 30, 2009

Notes to portfolio of investments

Aggregate cost for federal income tax purposes was $737,384,819; and net unrealized depreciation consisted of:

Gross unrealized appreciation	$	32,566,801
Gross unrealized depreciation		(166,339,214	)
Net unrealized depreciation of investments	$	(133,772,413	)

*  Non-income producing security.

†  On September 7, 2008, the Federal Housing Finance Agency placed the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation into conservatorship, and the US Treasury guaranteed the debt issued by those organizations.

⁽¹⁾  All or a portion of these securities have been delivered to cover open short positions.

⁽²⁾  Security, or portion thereof, was on loan at June 30, 2009.

⁽³⁾  Security is being fair valued by a valuation committee under the direction of the Board of Trustees. At June 30, 2009, the value of these securities amounted to $115,106 or 0.02% of net assets.

⁽⁴⁾  Floating rate security—The interest rates shown are the current rates as of June 30, 2009.

⁽⁵⁾  Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities are considered liquid, unless noted otherwise, and may be resold in transactions exempt from registration, normally to qualified institutional buyers. At June 30, 2009, the value of these securities amounted to $2,252,633 or 0.37% of net assets.

⁽⁶⁾  Step bond—Coupon rate increases in increments to maturity. Rate disclosed is as of June 30, 2009. Maturity date disclosed is the ultimate maturity date.

⁽⁷⁾  Security is illiquid. At June 30, 2009, these securities amounted to $2,124,483 or 0.35% of net assets.

⁽⁸⁾  Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities, which represent 0.25% of net assets as of June 30, 2009, are considered illiquid and restricted. (See restricted securities table below for more information.)

Restricted securities	Acquisition dates	Acquisition cost		Acquisition cost as a percentage of net assets			06/30/09 Market value		06/30/09 Market value as a percentage of net assets
Ashwell Rated SA, due 12/22/77	01/29/07	$	1,290,100		0.21	%	$	23,033		0.00	%(a)
Avoca CLO I BV, Series VI-A, Class M, due 01/16/23	10/19/06		2,525,500		0.41			84,171		0.01
Babson CLO Ltd., Series 2007-1A, Class INC, due 01/18/21	02/02/07		1,437,269		0.23			150		0.00	(a)
Cadogan Square CLO BV, Series 3A, Class M, 10.072%, due 01/17/23	12/01/06		2,554,585		0.42			28,057		0.00	(a)
Callidus Debt Partners Fund Ltd., Series 5A, Class INC, due 11/20/20	11/01/06		1,918,036		0.31			10,000		0.00	(a)
Emerson Place CLO Ltd., Series 2006-1A, Class SUB, due 01/15/19	11/03/06		2,508,693		0.41			55,000		0.01
FM Leveraged Capital Fund II, due 11/20/20	10/31/06		5,300,000		0.86			53,000		0.01
GoldenTree Loan Opportunities III Ltd., Series 2007-3A, Class SUB, due 05/1/22	02/27/07		2,600,000		0.42			208,000		0.03
Grosvenor Place CLO BV, Series II-A, Class SUB, 7.500%, due 03/28/23	12/15/06		4,209,456		0.69			91,185		0.02

23

UBS Dynamic Alpha Fund—Portfolio of investments

June 30, 2009

Restricted securities—(concluded)

	Acquisition dates	Acquisition cost		Acquisition cost as a percentage of net assets			06/30/09 Market value		06/30/09 Market value as a percentage of net assets
GS Mortgage Securities Corp. II, Series 2006-CC1, Class A, 5.507%, due 03/21/46	05/02/08	$	255,523		0.04	%	$	54,708		0.01	%
Series 2007-GKK1, Class A1, 5.701%, due 12/20/49	05/02/08		265,423		0.04			95,000		0.02
GSC European CDO SA, Series I-RA, Class SUB, due 12/15/22	12/01/06		2,400,000		0.39			33,668		0.01
GSC Partners CDO Fund Ltd., Series 2007-8A, Class SUB, due 04/17/21	02/28/07		1,410,001		0.23			150		0.00	(a)
GSC Partners CDO Fund V Ltd., due 11/20/16	02/07/07		610,202		0.10			6,500		0.00	(a)
Harbourmaster CLO Ltd., Series 7A, Class C, 12.000%, due 09/22/22	10/31/06		3,668,375		0.60			42,086		0.01
Harbourview CLO VI Ltd., Series 6A, Class SUB, due 12/27/19	10/20/06		1,141,394		0.19			120		0.00	(a)
Highlander Euro CDO, Series 2006-2CA, Class F1, due 12/14/22	11/28/06		2,924,142		0.48			21,043		0.00	(a)
LNR CDO Ltd., Series 2006-1A, Class FFX, 7.592%, due 05/28/43	11/03/06		8,135,931		1.32			240,000		0.04
Logan CDO Ltd., Series III-A, Class E, 16.192%, due 07/5/57	06/08/07		2,000,000		0.33			0		0.00
Merrill Lynch Mortgage Investors, Inc., Series 2004-SL2, Class B4, 7.439%, due 06/25/35	06/13/08		19,904		0.00			112,633		0.02
OHA Park Avenue CLO Ltd., Series 2007-1A, Class SUB, due 03/14/22	02/26/07		2,400,000		0.39			168,000		0.03
Queen Street CLO, Series 2006-1A, Class F, due 04/15/23	12/12/06		1,900,000		0.31			106,616		0.02
Regent's Park CDO BV, Series 1A, Class F, due 01/26/23	09/25/06		2,551,500		0.42			84,171		0.01
Shasta CLO I Ltd., due 04/20/21	12/20/06		5,815,342		0.95			0		0.00
		$	59,841,376		9.75	%	$	1,517,291		0.25	%

^(a)  Amount represents less than 0.005%.

⁽⁹⁾  This security is the equity tranche of a collateralized debt obligation. The Fund receives periodic payments, which may vary, from the issuer of this security.

⁽¹⁰⁾  Investment in affiliated mutual fund.

⁽¹¹⁾  The rate shown reflects the yield at June 30, 2009.

ABS  Asset-backed securities

ADR  American depositary receipt

CDO  Collateralized debt obligations

CLO  Collateralized loan obligations

24

UBS Dynamic Alpha Fund—Portfolio of investments

June 30, 2009

GS  Goldman Sachs

GSAMP  Goldman Sachs Mortgage Securities Corp.

GSR  Goldman Sachs Residential

Preference
shares  A special type of equity investment that shares in the earnings of the company, has limited voting rights, and may have a dividend preference. Preference shares may also have liquidation preference.

Currency type abbreviations:

EUR  Euro

GBP  Great Britain Pound

SGD  Singapore Dollar

USD  United States Dollar

Forward foreign currency contracts

UBS Dynamic Alpha Fund had the following open forward foreign currency contracts as of June 30, 2009:

	Contracts to deliver		In exchange for		Maturity dates	Unrealized appreciation/ (depreciation)
Australian Dollar		4,740,000	USD	3,730,828	09/02/09	$	(71,031	)
Canadian Dollar		11,190,000	USD	9,898,275	09/02/09		274,483
Euro		82,565,000	USD	114,814,345	09/02/09		(1,010,864	)
Great Britain Pound		47,735,000	USD	75,722,672	09/02/09		(2,805,858	)
Japanese Yen		1,575,000,000	USD	16,656,091	09/02/09		295,135
Latvian Lat		4,135,000	EUR	5,576,534	07/07/09		(405,127	)
Swedish Krona		18,400,000	USD	2,366,599	09/02/09		(18,162	)
Swiss Franc		6,770,000	USD	6,210,155	09/02/09		(25,320	)
Swiss Franc		21,756,906	USD	20,126,899	09/02/09		87,811
United States Dollar		381,663	AUD	475,000	09/02/09		(675	)
United States Dollar		9,930,012	CAD	11,190,000	09/02/09		(306,220	)
United States Dollar		18,156,614	GBP	11,345,000	09/02/09		506,970
United States Dollar		3,227,526	JPY	311,800,000	09/02/09		11,424
United States Dollar		6,398,110	KRW	8,124,000,000	09/03/09		(907	)
United States Dollar		6,736,290	MXN	89,980,000	09/02/09		34,280
United States Dollar		16,618,847	MYR	58,269,000	09/03/09		(77,324	)
United States Dollar		44,287,783	SEK	336,410,000	09/02/09		(686,828	)
United States Dollar		20,077,857	TWD	644,700,000	09/03/09		(206,058	)
Net unrealized depreciation on forward foreign currency contracts						$	(4,404,271	)

Currency type abbreviations:

AUD  Australian Dollar

CAD  Canadian Dollar

EUR  Euro

GBP  Great Britain Pound

JPY  Japanese Yen

KRW  Korean Won

MXN  Mexican Peso

MYR  Malaysian Ringgit

SEK  Swedish Krona

TWD  New Taiwan Dollar

USD  United States Dollar

25

UBS Dynamic Alpha Fund—Portfolio of investments

June 30, 2009

Futures contracts

UBS Dynamic Alpha Fund had the following open futures contracts as of June 30, 2009:

	Expiration dates	Cost/ (proceeds)			Value			Unrealized appreciation/ (depreciation)
US treasury futures buy contracts:
US Long Bond, 45 contracts (USD)	September 2009	$	5,164,621		$	5,326,172		$	161,551
10 Year US Treasury Notes, 453 contracts (USD)	September 2009		52,707,990			52,668,328			(39,662	)
US treasury futures sell contracts:
US Long Bond, 120 contracts (USD)	September 2009		(13,961,252	)		(14,203,125	)		(241,873	)
2 Year US Treasury Notes, 150 contracts (USD)	September 2009		(32,437,263	)		(32,432,812	)		4,451
5 Year US Treasury Notes, 635 contracts (USD)	September 2009		(72,987,809	)		(72,846,406	)		141,403
10 Year US Treasury Notes, 530 contracts (USD)	September 2009		(62,085,201	)		(61,620,781	)		464,420
Index futures buy contracts:
FTSE MIB Index, 26 contracts (EUR)	September 2009		3,479,046			3,500,063			21,017
Hang Seng Stock Index, 26 contracts (HKD)	July 2009		3,029,987			3,079,999			50,012
IBEX 35 Index, 10 contracts (EUR)	July 2009		1,329,315			1,367,484			38,169
MSCI Singapore Index, 12 contracts (SGD)	July 2009		455,766			452,916			(2,850	)
MSCI Taiwan Index, 610 contracts (USD)	July 2009		13,922,182			13,993,845			71,663
NIKKEI 225 Index, 174 contracts (JPY)	September 2009		17,895,540			17,818,148			(77,392	)
S&P 500 Index, 172 contracts (USD)	September 2009		40,336,752			39,366,500			(970,252	)
Index futures sell contracts:
Amsterdam Exchanges Index, 9 contracts (EUR)	July 2009		(664,750	)		(641,494	)		23,256
CAC 40 Index, 344 contracts (EUR)	July 2009		(15,763,356	)		(15,170,468	)		592,888
DAX Index, 77 contracts (EUR)	September 2009		(13,464,729	)		(13,050,888	)		413,841
Dow Jones EURO STOXX 50 Index, 150 contracts (EUR)	September 2009		(5,221,733	)		(5,061,263	)		160,470
FTSE 100 Index, 296 contracts (GBP)	September 2009		(20,934,265	)		(20,618,753	)		315,512
OMXS 30 Index, 24 contracts (SEK)	July 2009		(238,839	)		(247,679	)		(8,840	)
S&P MidCap 400 Index, 1,722 contracts (USD)	September 2009		(102,281,534	)		(99,307,740	)		2,973,794
S&P Toronto Stock Exchange 60 Index, 20 contracts (CAD)	September 2009		(2,215,175	)		(2,156,558	)		58,617
SPI 200 Index, 170 contracts (AUD)	September 2009		(13,768,436	)		(13,287,803	)		480,633
Interest rate futures buy contracts:
90 Day Bank Bill Futures, 193 contracts (AUD)	March 2011		153,825,166			153,494,534			(330,632	)
90 Day Euro-Dollar Futures, 158 contracts (USD)	March 2012		37,999,353			38,016,775			17,422
Euro-Bund, 458 contracts (EUR)	September 2009		76,468,301			77,794,541			1,326,240
Euro-Dollar Futures, 480 contracts (USD)	June 2010		118,051,680			118,146,000			94,320
30 Day Fed Fund Futures, 168 contracts (USD)	February 2010		69,602,522			69,631,070			28,548
Interest rate futures sell contracts:
90 Day Bank Bill Futures, 193 contracts (AUD)	March 2010		(154,274,303	)		(154,102,084	)		172,219
90 Day Euro-Dollar Futures, 158 contracts (USD)	March 2011		(38,504,047	)		(38,455,225	)		48,822
Japanese 10 Year Bond, 86 contracts (JPY)	September 2009		(121,544,140	)		(123,284,372	)		(1,740,232	)
30 Day Fed Fund Futures, 54 contracts (USD)	January 2010		(22,406,201	)		(22,414,043	)		(7,842	)
30 Day Fed Fund Futures, 54 contracts (USD)	March 2010		(22,340,432	)		(22,362,289	)		(21,857	)
Net unrealized appreciation on futures contracts								$	4,217,836

Currency type abbreviations:

AUD  Australian Dollar

CAD  Canadian Dollar

EUR  Euro

GBP  Great Britain Pound

HKD  Hong Kong Dollar

JPY  Japanese Yen

SEK  Swedish Krona

SGD  Singapore Dollar

USD  United States Dollar

26

UBS Dynamic Alpha Fund—Portfolio of investments

June 30, 2009

Options written

UBS Dynamic Alpha Fund had the following open options written as of June 30, 2009:

	Expiration dates	Premiums received		Value
Call options:
1 Year Euro-Dollar Mid Curve, 700 contracts, strike @ USD 98.38	July 2009	$	111,300	$	65,625
10 Year US Treasury Futures, 300 contracts, strike @ USD 118.00	July 2009		164,063		154,688
30 Day Fed Fund Futures, 516 contracts, strike @ USD 99.75	November 2009		71,590		64,505
30 Year US Treasury Futures, 150 contracts, strike @ USD 118.00	July 2009		96,094		86,719
30 Year US Treasury Futures, 300 contracts, strike @ USD 120.00	August 2009		599,346		604,687
5 Year US Treasury Futures, 240 contracts, strike @ USD 118.00	August 2009		123,228		31,875
Put options:
3 Month Euro Euribor Interest Rate Futures, 1,000 contracts, strike @ EUR 97.00	December 2009		159,655		—
3 Month Sterling Interest Rate Futures, 170 contracts, strike @ GBP 97.50	March 2010		84,438		41,953
30 Year US Treasury Futures, 300 contracts, strike @ USD 110.00	August 2009		749,346		145,312
90 Day Euro-Dollar Interest Rate Futures, 244 contracts, strike @ USD 98.63	September 2009		50,996		12,200
90 Day Euro-Dollar Interest Rate Futures, 150 contracts, strike @ USD 99.00	September 2009		23,850		15,000
Total options written		$	2,233,906	$	1,222,564

Currency type abbreviations:

EUR  Euro

GBP  Great Britain Pound

USD  United States Dollar

Written option activity for the year ended June 30, 2009 for UBS Dynamic Alpha Fund was as follows:

	Number of contracts			Amount of premiums received
Options outstanding at June 30, 2008		220		$	131,652
Options written		34,268			28,491,861
Options terminated in closing purchase transactions		(30,418	)		(26,389,607	)
Options expired prior to exercise		—			—
Options outstanding at June 30, 2009		4,070		$	2,233,906

27

UBS Dynamic Alpha Fund—Portfolio of investments

June 30, 2009

Swap agreements

UBS Dynamic Alpha Fund had outstanding interest rate swap agreements with the following terms as of June 30, 2009:

Counterparty	Notional amount		Termination dates	Payments made by the Fund			Payments received by the Fund			Upfront payments (made) received		Value			Unrealized appreciation/ (depreciation)
Barclays Bank PLC	GBP	13,300,000	01/19/36		—	(1)		3.0550	%(2)	$	—	$	(3,277,676	)	$	(3,277,676	)
Citigroup Global Markets Ltd.	USD	1,200,000	04/01/36		3.9600	%(2)		—	(3)		—		88,249			88,249
Deutsche Bank AG	GBP	19,300,000	12/15/11		—	(4)		4.1950	(2)		—		789,440			789,440
Deutsche Bank AG	USD	77,200,000	11/30/13		—	(3)		2.9400	(2)		—		82,509			82,509
Deutsche Bank AG	USD	11,000,000	10/01/18		4.5460	(2)		0.5969	(5)		—		(862,094	)		(862,094	)
Deutsche Bank AG	AUD	11,800,000	01/20/19		3.4567	(6)		4.2700	(2)		—		(1,131,326	)		(1,131,326	)
Deutsche Bank AG	GBP	4,500,000	12/15/19		4.6425	(2)		—	(4)		—		(162,416	)		(162,416	)
Deutsche Bank AG	USD	11,100,000	11/15/24		4.1160	(2)		—	(3)		—		(19,216	)		(19,216	)
Deutsche Bank AG	GBP	28,000,000	06/27/37		—	(1)		3.3150	(2)		—		(3,532,161	)		(3,532,161	)
Deutsche Bank AG	GBP	34,000,000	06/27/37		5.2100	(2)		1.4088	(7)		—		(8,614,346	)		(8,614,346	)
Deutsche Bank AG	AUD	6,200,000	01/20/39		3.1000	(2)		3.4567	(6)		—		1,859,438			1,859,438
Deutsche Bank AG	USD	360,000	04/01/39		4.5690	(2)		—	(3)		—		(5,933	)		(5,933	)
Goldman Sachs International	USD	119,500,000	11/24/09		0.6613	(5)		0.5975	(8)		—		9,148			9,148
Goldman Sachs International	CHF	14,000,000	09/01/18		3.2500	(2)		0.6483	(9)		—		(950,363	)		(950,363	)
Goldman Sachs International	JPY	1,700,000,000	02/02/37		2.5230	(2)		0.8525	(10)		—		(2,013,280	)		(2,013,280	)
JPMorgan Chase Bank	USD	29,900,000	01/09/10		1.1494	(5)		0.7406	(8)		—		12,731			12,731
JPMorgan Chase Bank	USD	119,500,000	11/24/18		0.3250	(8)		0.6613	(5)		—		323,706			323,706
JPMorgan Chase Bank	USD	29,900,000	01/09/19		0.3319	(8)		1.1494	(5)		—		113,030			113,030
Merrill Lynch International	USD	29,900,000	01/09/10		1.1494	(5)		0.7306	(8)		—		10,434			10,434
Merrill Lynch International	USD	119,500,000	11/24/10		—	(3)		0.1150	(11)		—		(40,005	)		(40,005	)
Merrill Lynch International	USD	46,800,000	08/15/16		4.3300	(2)		0.8831	(5)		—		(3,428,572	)		(3,428,572	)
Merrill Lynch International	USD	29,900,000	01/09/19		0.3306	(8)		1.1494	(5)		—		116,239			116,239
Merrill Lynch International	CAD	10,400,000	03/09/19		2.6300	(2)		0.6829	(12)		—		598,412			598,412
Merrill Lynch International	USD	8,550,000	03/11/19		0.6475	(5)		3.1100	(2)		—		(347,929	)		(347,929	)
Merrill Lynch International	CAD	6,450,000	03/09/29		0.6829	(12)		3.7575	(2)		—		(465,359	)		(465,359	)
Merrill Lynch International	USD	5,050,000	03/12/29		3.2775	(2)		0.6475	(5)		—		517,395			517,395
Merrill Lynch International	USD	4,080,000	06/15/39		3.6250	(2)		0.6144	(5)		—		369,158			369,158
										$	—	$	(19,960,787	)	$	(19,960,787	)

⁽¹⁾  Zero coupon inflation swap. Cash is exchanged at the end of the swap. The dollar amount to be paid/received by the Fund is based on the RPI (Retail Price Index in the UK) as published by the Office of National Statistics.

⁽²⁾  Payments made or received are based on the notional amount.

⁽³⁾  Rate based on 3 month LIBOR (USD BBA). This is a forward starting trade and, as such, a floating rate has not yet been assigned as of June 30, 2009.

⁽⁴⁾  Rate based on 6 month LIBOR (GBP BBA). This is a forward starting trade and, as such, a floating rate has not yet been assigned as of June 30, 2009.

⁽⁵⁾  Rate based on 3 month LIBOR (USD BBA).

⁽⁶⁾  Rate based on 6 month BBSW.

⁽⁷⁾  Rate based on 6 month LIBOR (GBP BBA).

⁽⁸⁾  Rate based on 1 month LIBOR (USD BBA).

⁽⁹⁾  Rate based on 6 month LIBOR (CHF BBA).

⁽¹⁰⁾  Rate based on 6 month LIBOR (JPY BBA).

⁽¹¹⁾  Rate based on 1 month LIBOR (USD BBA). This is a forward starting trade and, as such, a floating rate has not yet been assigned as of June 30, 2009.

⁽¹²⁾  Rate based on 3 month Canadian Bankers Acceptance.

BBA  British Banking Association

BBSW  Bank Bill Swap Rate

LIBOR  London Interbank Offered Rate

28

UBS Dynamic Alpha Fund—Portfolio of investments

June 30, 2009

Currency type abbreviations:

AUD  Australian Dollar

CAD  Canadian Dollar

CHF  Swiss Franc

GBP  Great Britain Pound

JPY  Japanese Yen

USD  United States Dollar

UBS Dynamic Alpha Fund had outstanding credit default swap agreements with the following terms as of June 30, 2009:

Credit default swaps on credit indices—buy protection⁽¹⁾

Counterparty	Notional Amount		Termination date	Payments made by the Fund			Payments received by the Fund			Upfront payments (made) received			Value			Unrealized appreciation/ (depreciation)
Deutsche Bank AG	USD	12,883,200	12/20/12		0.6000	%(2)		—	(3)	$	—		$	512,324		$	512,324
Deutsche Bank AG	USD	24,000,000	06/20/13		3.2500	(2)		—	(4)		—			3,449,473			3,449,473
Deutsche Bank AG	USD	33,000,000	06/20/13		3.2500	(2)		—	(4)		—			4,743,026			4,743,026
Deutsche Bank AG	USD	5,760,000	06/20/14		5.0000	(2)		—	(5)		(1,093,200	)		915,399			(177,801	)
Deutsche Bank AG	USD	7,000,000	06/20/14		5.0000	(2)		—	(6)		302,945			(324,995	)		(22,050	)
Goldman Sachs International	USD	5,618,125	06/20/13		5.0000	(2)		—	(7)		—			695,005			695,005
Goldman Sachs International	USD	12,500,000	12/20/13		1.5000	(2)		—	(8)		(302,657	)		76,633			(226,024	)
Goldman Sachs International	USD	11,520,000	06/20/14		5.0000	(2)		—	(5)		(1,800,800	)		1,830,798			29,998
Goldman Sachs International	USD	12,000,000	06/20/14		5.0000	(2)		—	(6)		584,333			(557,135	)		27,198
Goldman Sachs International	USD	9,300,000	02/17/51		0.3500	(2)		—	(9)		(988,405	)		2,518,078			1,529,673
Goldman Sachs International	USD	2,500,000	10/12/52		0.1000	(2)		—	(10)		(476,941	)		309,847			(167,094	)
Merrill Lynch	USD	10,680,000	06/20/13		5.0000	(2)		—	(7)		(1,852,617	)		1,321,198			(531,419	)
Merrill Lynch	USD	24,000,000	06/20/13		3.2500	(2)		—	(4)		—			3,449,473			3,449,473
Merrill Lynch	USD	41,500,000	06/20/13		3.2500	(2)		—	(4)		—			5,964,714			5,964,714
Merrill Lynch	USD	1,750,000	12/20/13		1.5000	(2)		—	(8)		(30,973	)		10,729			(20,244	)
										$	(5,658,315	)	$	24,914,567		$	19,256,252

⁽¹⁾  If the Fund is a buyer of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will either (i) receive from the seller of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation or underlying securities comprising the referenced index or (ii) receive a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index.

⁽²⁾  Payments made are based on the notional amount.

⁽³⁾  Payment from the counterparty will be received upon the occurrence of a failure to pay, obligation acceleration, repudiation or restructuring of the referenced obligation specified in the Dow Jones CDX.NA.IG Series 9 Index.

⁽⁴⁾  Payment from the counterparty will be received upon the occurrence of a failure to pay, obligation acceleration, repudiation or restructuring of the referenced obligation specified in the Dow Jones LCDX.NA Series 10 Index.

⁽⁵⁾  Payment from the counterparty will be received upon the occurrence of a failure to pay, obligation acceleration, repudiation or restructuring of the referenced obligation specified in the Dow Jones CDX.NA.HY Series 12 Index.

⁽⁶⁾  Payment from the counterparty will be received upon the occurrence of a failure to pay, obligation acceleration, repudiation or restructuring of the referenced obligation specified in the Dow Jones CDX.EM Series 11 Index.

⁽⁷⁾  Payment from the counterparty will be received upon the occurrence of a failure to pay, obligation acceleration, repudiation or restructuring of the referenced obligation specified in the Dow Jones CDX.NA.HY Series 10 Index.

⁽⁸⁾  Payment from the counterparty will be received upon the occurrence of a failure to pay, obligation acceleration, repudiation or restructuring of the referenced obligation specified in the Dow Jones CDX.NA.IG Series 11 Index.

⁽⁹⁾  Payment from the counterparty will be received upon the occurrence of a failure to pay, obligation acceleration, repudiation or restructuring of the referenced obligation specified in the Dow Jones CMBX-NA-AAA Series 4 Index.

⁽¹⁰⁾  Payment from the counterparty will be received upon the occurrence of a failure to pay, obligation acceleration, repudiation or restructuring of the referenced obligation specified in the Dow Jones CMBX-NA-AAA Series 1 Index.

29

UBS Dynamic Alpha Fund—Portfolio of investments

June 30, 2009

Credit default swaps on corporate and sovereign issues—buy protection⁽¹⁾

Counterparty	Notional Amount		Termination date	Payments made by the Fund			Payments received by the Fund			Upfront payments (made) received		Value			Unrealized appreciation/ (depreciation)
Goldman Sachs International	USD	1,850,000	09/20/13		1.4700	%(2)		—	(3)	$	—	$	56,552		$	56,552
Goldman Sachs International	USD	3,000,000	12/20/13		0.5500	(2)		—	(4)		—		6,140			6,140
Merrill Lynch	USD	1,600,000	09/20/13		2.8500	(2)		—	(5)		—		(71,163	)		(71,163	)
Merrill Lynch	USD	1,800,000	12/20/13		3.0500	(2)		—	(6)		—		(45,451	)		(45,451	)
Merrill Lynch	USD	1,800,000	05/20/14		3.3200	(2)		—	(7)		—		(121,033	)		(121,033	)
										$	—	$	(174,955	)	$	(174,955	)

⁽¹⁾  If the Fund is a buyer of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will either (i) receive from the seller of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation or (ii) receive a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation.

⁽²⁾  Payments made are based on the notional amount.

⁽³⁾  Payment from the counterparty will be received upon the occurrence of bankruptcy and/or restructuring event with respect to the Ryder System, Inc. 6.950% bond, due 12/01/25.

⁽⁴⁾  Payment from the counterparty will be received upon the occurrence of bankruptcy and/or restructuring event with respect to the Walt Disney Company 5.625% bond, due 09/15/16.

⁽⁵⁾  Payment from the counterparty will be received upon the occurrence of bankruptcy and/or restructuring event with respect to the Republic of Panama 8.875% bond, due 09/30/27.

⁽⁶⁾  Payment from the counterparty will be received upon the occurrence of bankruptcy and/or restructuring event with respect to the AXP 4.875% bond, due 07/15/13.

⁽⁷⁾  Payment from the counterparty will be received upon the occurrence of bankruptcy and/or restructuring event with respect to the United Mexican States 7.500% bond, due 04/08/33.

Credit default swaps on credit indices—sell protection⁽¹⁾

Counterparty	Notional Amount		Termination date	Payments made by the Fund			Payments received by the Fund			Upfront payments (made) received			Value			Unrealized appreciation/ (depreciation)			Credit spread(2)
Deutsche Bank AG	EUR	26,460,000	06/20/13		—	(3)		6.5000	%(4)	$	—		$	(2,943,256	)	$	(2,943,256	)		9.0601	%
Deutsche Bank AG	USD	45,500,000	06/20/13		—	(5)		3.2500	(4)		—			(6,539,627	)		(6,539,627	)		9.0000
Deutsche Bank AG	USD	3,000,000	06/20/14		—	(6)		1.0000	(4)		103,203			(45,105	)		58,098			1.3508
Deutsche Bank AG	EUR	11,500,000	06/20/14		—	(7)		1.8500	(4)		(252,951	)		531,424			278,473			1.1483
Deutsche Bank AG	EUR	24,200,000	06/20/14		—	(7)		1.8500	(4)		(1,003,906	)		1,118,301			114,395			1.1483
Deutsche Bank AG	USD	9,500,000	07/25/45		—	(8)		0.5400	(4)		—			(8,546,134	)		(8,546,134	)		7.8400
Goldman Sachs International	USD	6,832,000	06/20/13		—	(9)		1.5500	(4)		—			(64,539	)		(64,539	)		1.8667
Goldman Sachs International	USD	30,260,000	06/20/13		—	(10)		5.0000	(4)		—			(3,743,393	)		(3,743,393	)		8.8740
Goldman Sachs International	USD	70,272,000	06/20/13		—	(9)		1.5500	(4)		—			(663,835	)		(663,835	)		1.8667
Goldman Sachs International	EUR	6,000,000	06/20/14		—	(7)		1.8500	(4)		(274,526	)		277,265			2,739			1.1483
JPMorgan Chase Bank	USD	77,000,000	06/20/13		—	(11)		5.0000	(4)		—			(717,214	)		(717,214	)		5.5000
Merrill Lynch	USD	12,000,000	06/20/13		—	(5)		3.2500	(4)		2,544,830			(1,724,737	)		820,093			9.0000
Merrill Lynch	USD	3,100,000	07/25/45		—	(8)		0.5400	(4)		—			(2,788,738	)		(2,788,738	)		7.8400
										$	1,116,650		$	(25,849,588	)	$	(24,732,938	)

⁽¹⁾  If the Fund is a seller of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will either (i) pay to the buyer of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation or underlying securities comprising the referenced index or (ii) pay a net settlement amount in

30

UBS Dynamic Alpha Fund—Portfolio of investments

June 30, 2009

the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index.

⁽²⁾  Credit spreads, where available, represented in absolute terms, utilized in determining the market value as of period end serve as an indicator of the current status of the payment/performance risk and represent the likelihood or risk of default for the credit derivative. The credit spread of a particular referenced entity reflects the cost of buying/selling protection and may include upfront payments required to be made to enter into the agreement. Wider credit spreads represent a deterioration of the referenced entity's credit soundness and a greater likelihood of risk of default or other credit event occurring as defined under the terms of the agreement. A credit spread identified as "Defaulted" indicates a credit event has occurred for the referenced entity.

⁽³⁾  Payment to the counterparty will be made upon the occurrence of a succession event with respect to the iTraxx Europe Crossover Series 9 Index.

⁽⁴⁾  Payments received are based on the notional amount.

⁽⁵⁾  Payment to the counterparty will be made upon the occurrence of a failure to pay, obligation acceleration, repudiation or restructuring of the referenced obligation specified in the Dow Jones LCDX.NA Series 10 Index.

⁽⁶⁾  Payment to the counterparty will be made upon the occurrence of a failure to pay, obligation acceleration, repudiation or restructuring of the referenced obligation specified in the Dow Jones CDX.NA.IG Series 12 Index.

⁽⁷⁾  Payment to the counterparty will be made upon the occurrence of a succession event with respect to the iTraxx Europe Series 11 Index.

⁽⁸⁾  Payment to the counterparty will be made upon the occurrence of a failure to pay, obligation acceleration, repudiation or restructuring of the referenced obligation specified in the Dow Jones ABX-HE-A Series 6 Index.

⁽⁹⁾  Payment to the counterparty will be made upon the occurrence of a failure to pay, obligation acceleration, repudiation or restructuring of the referenced obligation specified in the Dow Jones CDX.NA.IG Series 10 Index.

⁽¹⁰⁾  Payment to the counterparty will be made upon the occurrence of a failure to pay, obligation acceleration, repudiation or restructuring of the referenced obligation specified in the Dow Jones CDX.NA.HY Series 10 Index.

⁽¹¹⁾  Payment to the counterparty will be made upon the occurrence of a failure to pay, obligation acceleration, repudiation or restructuring of the referenced obligation specified in the Dow Jones LCDX.NA Series 10 Index 15-100% Tranche.

Credit default swaps on corporate and sovereign issues—sell protection⁽¹⁾

Counterparty	Notional Amount		Termination date	Payments made by the Fund			Payments received by the Fund			Upfront payments (made) received		Value			Unrealized appreciation/ (depreciation)			Credit spread(2)
Deutsche Bank AG	USD	625,000	09/20/13		—	(3)		1.8000	%(4)	$	—	$	(60,029	)	$	(60,029	)		4.1700	%
Deutsche Bank AG	USD	1,750,000	12/20/13		—	(5)		4.0800	(4)		—		129,929			129,929			2.0000
Deutsche Bank AG	USD	1,750,000	12/20/13		—	(6)		5.3500	(4)		—		66,567			66,567			4.1700
Goldman Sachs International	USD	1,250,000	09/20/09		—	(7)		7.0000	(4)		—		(11,322	)		(11,322	)		12.4000
Goldman Sachs International	USD	1,250,000	09/20/13		—	(3)		1.5300	(4)		—		(131,934	)		(131,934	)		4.1700
										$	—	$	(6,789	)	$	(6,789	)

⁽¹⁾  If the Fund is a seller of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will either (i) pay to the buyer of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation or (ii) pay a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation.

⁽²⁾  Credit spreads, where available, represented in absolute terms, utilized in determining the market value as of period end serve as an indicator of the current status of the payment/performance risk and represent the likelihood or risk of default for the credit derivative. The credit spread of a particular referenced entity reflects the cost of buying/selling protection and may include upfront payments required to be made to enter into the agreement. Wider credit spreads represent a deterioration of the referenced entity's credit soundness and a greater likelihood of risk of default or other credit event occurring as defined under the terms of the agreement. A credit spread identified as "Defaulted" indicates a credit event has occurred for the referenced entity.

⁽³⁾  Payment to the counterparty will be made upon the occurrence of bankruptcy and/or restructuring event with respect to the Citigroup, Inc. 6.500% bond, due 01/18/11.

⁽⁴⁾  Payments received are based on the notional amount.

⁽⁵⁾  Payment to the counterparty will be made upon the occurrence of bankruptcy and/or restructuring event with respect to the Morgan Stanley 6.600% bond, due 04/01/12.

⁽⁶⁾  Payment to the counterparty will be made upon the occurrence of bankruptcy and/or restructuring event with respect to the General Electric Capital Corp. 6.000% bond, due 06/15/12.

31

UBS Dynamic Alpha Fund—Portfolio of investments

June 30, 2009

⁽⁷⁾  Payment to the counterparty will be made upon the occurrence of bankruptcy and/or restructuring event with respect to the International Lease Finance Corp. 4.150% bond, due 01/20/15.

Currency type abbreviations:

EUR  Euro

USD  United States Dollar

UBS Dynamic Alpha Fund had outstanding total return swap agreements with the following terms as of June 30, 2009:

Counterparty	Notional amount		Termination date		Payments made by the Fund			Payments received by the Fund			Upfront payments (made) received		Value			Unrealized depreciation
Merrill Lynch	GBP	21,390,000		03/31/11		—	(1)		1.2500	%(2)	$	—	$	(2,606,118	)	$	(2,606,118	)

⁽¹⁾  Payment to the counterparty is equal to the negative total return of the IPD UK Annual Index multiplied by the notional amount.

⁽²⁾  Fixed payment received is based on the notional amount. The Fund will also receive a payment from the counterparty if the total return of the IPD UK Annual Index is positive equal to the positive return multiplied by the notional amount.

IPD  Institutional Property Databank

Currency type abbreviation:

GBP  Great Britain Pound

The following is a summary of the inputs used as of June 30, 2009 in valuing the Fund's investments.

Measurements at 06/30/09
Description	Quoted prices in active markets for identical investments (Level 1)			Significant other observable inputs (Level 2)			Unobservable inputs (Level 3)		Total
Common stocks(1)	$	298,661,654		$	154,318,501		$	45,729	$	453,025,884
Common stocks sold short		(94,113,824	)		—			—		(94,113,824	)
Corporate bonds		—			15,255,876			—		15,255,876
Asset-backed securities		—			13,178,847			112,633		13,291,480
Collateralized debt obligations		—			6,500			1,934,202		1,940,702
Commercial mortgage-backed securities		—			11,978,237			149,708		12,127,945
Mortgage & agency debt securities		—			5,215,493			—		5,215,493
Municipal bond		—			548,352			—		548,352
Rights		—			167,602			46,344		213,946
Warrants		—			—			0		0
Investment companies		—			89,339,884			—		89,339,884
Short-term investment		—			2,893,375			—		2,893,375
Investment of cash collateral from securities loaned		—			7,699,401			—		7,699,401
Other financial instruments(2)		4,631,142			(32,629,606	)		—		(27,998,464	)
Total	$	209,178,972		$	267,972,462		$	2,288,616	$	479,440,050

⁽¹⁾  The Fund may hold investments which have been fair valued in accordance with the Fund's fair valuation policy as of June 30, 2009, which may result in movement between Level 1 and Level 2.

⁽²⁾  Other financial instruments may include open futures contracts, swap agreements, options and forward foreign currency contracts.

32

UBS Dynamic Alpha Fund—Portfolio of investments

June 30, 2009

Level 3 Rollforward Disclosure

The following is a rollforward of the Fund's investments that were valued using unobservable inputs for the period:

Measurements using unobservable inputs (Level 3)
	Common stocks			Asset-backed securities			Collateralized debt obligations			Commercial mortgage- backed securities			Rights		Warrants		Total
Assets
Beginning balance	$	—		$	33,185		$	45,462,285		$	547,344		$	—	$	0	$	46,042,814
Total gains or losses (realized/unrealized) included in earnings(a)		—			85,320			(44,010,276	)		(405,926	)		—		—		(44,330,882	)
Purchases, sales, issuances, and settlements (net)		—			11,714			1,071,024			9,262			—		—		1,092,000
Transfers in and/or out of Level 3		45,729			(17,586	)		(588,831	)		(972	)		46,344		—		(515,316	)
Ending balance	$	45,729		$	112,633		$	1,934,202		$	149,708		$	46,344	$	0	$	2,288,616
The amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to investments still held at 06/30/09	$	(169,499	)	$	85,320		$	(45,395,828	)	$	(405,926	)	$	46,344	$	—	$	(45,839,589	)

^(a)  Does not include unrealized losses of $443,761 related to transferred assets, presented at their end of period values.

See accompanying notes to financial statements.
33

UBS Global Allocation Fund

Portfolio performance

For the 12 months ended June 30, 2009, Class A shares of UBS Global Allocation Fund (the "Fund") declined 22.36% (Class A shares declined 26.62% after the deduction of the maximum sales charge), while Class Y shares declined 22.12%. The Fund's benchmark, the GSMI Mutual Fund Index (the "Index"), declined 16.60% over the same time period.⁽¹⁾ For comparison purposes, the MSCI World Free Index (net) declined 29.50%, The Russell 3000 Index declined 26.56%, and the Citigroup World Government Bond Index (WGBI)^SM returned 4.00% over the same period. (Class Y shares have lower expenses than other share classes of the Fund. Returns for all share classes over various time periods are shown on page 36; please note that these returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares, while the Index returns do not reflect the deduction of fees and expenses.) For a detailed commentary on the market environment in general during the reporting period, see page 2.

The Fund's underperformance was due primarily to market allocation and security selection. Currency positioning was positive for the reporting period.

Portfolio performance summary

What worked

•  The Fund's currency strategy made a significant contribution to performance. During the second half of 2008, the Fund maintained an anti-carry trade position, emphasizing lower-risk currencies at the expense of high-volatility currencies. (A carry trade is a strategy in which an investor sells a currency with a relatively low interest rate, and uses the funds to purchase a different currency yielding a higher interest rate.) When the carry trade unwound, this positioning produced some of the largest contributions to Fund performance over the 12 months.

•  The Fund was allocated to lower-yielding, "safe-haven" currencies, such as the Japanese yen, Swiss franc and Swedish krona. Conversely, the Fund underweighted high-yielding currencies like the euro, British pound, Australian dollar and Canadian dollar, which our research indicated were overvalued. This left the Fund well-positioned during the turbulence of the credit crisis, when sentiment worsened and investors sought to reduce their riskier asset positions. The result was a rapid and sharp unwinding of carry trade positions.

•  In addition, the Fund held an overweight position in the US dollar, which had weakened to the point that we viewed it as deeply undervalued. The Fund benefited when the US dollar rebounded in late 2008, and investors moved into currencies considered "safe havens."

•  Between September and November of 2008, the Fund's currency exposures made large gains. As valuation returned to what we viewed as normal levels, we progressively cut back the Fund's currency risks. By the end of December, the Fund's forward-looking currency strategy risk was below normal levels, reflecting what we viewed as a shrunken opportunity set.

What didn't work

•  Market allocation decisions early in the review period hindered performance.

•  Our research indicated that world equity market prices reflected an excessively pessimistic long-term outlook. We believed that US equities, in particular, were trading at 49% below fair value as 2008

⁽¹⁾Note: In order to better reflect the more global nature of the current capital markets, the Board of Trustees of the Fund made a change to the composition of the Index, effective April 30, 2009. For a detailed description of the changes to the Index, please see page 36.

34

UBS Global Allocation Fund

ended. Our conviction led us to increase global equity exposure—particularly within the US—during the fourth quarter of 2008. Following a period of significant market volatility, this exposure detracted from performance overall. However, as world markets rallied in the second quarter of 2009, the US led the way. While it was not enough to overcome weakness from earlier in the period, the overweight position made a significant contribution to Fund returns.

•  Entering the review period, the Fund was underweight to global fixed income securities. As equities declined in 2008, bonds benefited from investors' flight to quality. While this underweight position hurt performance overall, it began to benefit the Fund's performance as yield curves steepened during the second quarter of 2009.

•  At the time of this writing, the Fund maintains an asset allocation of 80% to global equities and 20% to global bonds. According to our valuation research, US equities remain at about a 35% discount to fair value, while international equities are roughly 40% undervalued. While we still expect to see market volatility and economic uncertainty in the near term, we believe several recent signs of stabilization may indicate that the worst is behind us.

•  Issue selection within the Fund's fixed income components hindered performance.

•  The Fund's positions in nonagency mortgage-backed securities suffered in the wake of the deteriorating real estate market and the seizing up of the credit markets.

•  An overweight allocation to the credit sectors—particularly US investment grade credit—hampered returns as well. This sector has become more attractive as spreads have widened.

•  The Fund's position in high yield bonds underperformed during the period. During the second half of 2008, as we increased the Fund's exposure to equities, we also added to its position in noninvestment grade credit. Our research pointed to attractive valuations in the sector. We believed that the markets were pricing in a default rate far in excess of what our research deemed justified. High yield bonds posted a negative return during that time, however, as spreads widened substantially during the credit crisis.

•  The high yield market rallied strongly following its lows of early March 2009, and spreads have narrowed considerably as a result. We believed the market had moved strongly ahead of economic reality. More recently, we reduced the Fund's position in high yield debt back to a neutral weighting.

•  Issue selection within the high yield sector focused on higher-quality debt, which lagged the benchmark as this segment failed to rally as strongly as lower-quality high yield bonds.

This letter is intended to assist shareholders in understanding how the Fund performed during the 12 months ended June 30, 2009. The views and opinions in the letter were current as of August 17, 2009. They are not guarantees of performance or investment results and should not be taken as investment advice. Investment decisions reflect a variety of factors, and we reserve the right to change our views about individual securities, sectors and markets at any time. As a result, the views expressed should not be relied upon as a forecast of the Fund's future investment intent. We encourage you to consult your financial advisor regarding your personal investment program. Mutual funds are sold by prospectus only. You should read it carefully and consider a fund's investment objectives, risks, charges, expenses and other important information contained in the prospectus before investing. Prospectuses for most of our funds can be obtained from your financial advisor, by calling UBS Funds at 800-647 1568 or by visiting our Web site at www.ubs.com

35

UBS Global Allocation Fund

Average annual total returns for periods ended 06/30/09 (unaudited)

		1 year			5 years			10 years			Inception(1)
Before deducting	Class A(2)		(22.36	)%		0.10	%		3.06	%		3.58	%
maximum sales charge	Class B(3)		(22.98	)		(0.70	)		N/A			2.70
	Class C(4)		(22.93	)		(0.67	)		N/A			2.70
	Class Y(5)		(22.12	)		0.36			3.31			6.15
After deducting maximum	Class A(2)		(26.62	)		(1.03	)		2.48			3.09
sales charge	Class B(3)		(26.21	)		(0.98	)		N/A			2.70
	Class C(4)		(23.58	)		(0.67	)		N/A			2.70
Russell 3000 Index(6)			(26.56	)		(1.84	)		(1.46	)		7.07
MSCI World Free Index (net)(7)			(29.50	)		0.03			(0.85	)		5.59
Citigroup World Government Bond Index (WGBI)SM(8)			4.00			6.06			6.53			6.33
GSMI Mutual Fund Index(9)			(16.60	)		2.82			2.72			6.97

The annualized gross and net expense ratios, respectively, for each class of shares as in the October 28, 2008 prospectuses were as follows: Class A—1.11% and 1.11%; Class B—1.93% and 1.93%; Class C—1.91% and 1.91%; Class Y—0.84% and 0.84%. Net expenses reflect fee waivers and/or expense reimbursements, if any, pursuant to an agreement that is in effect to cap the expenses.

⁽¹⁾  Inception date of UBS Global Allocation Fund Class A shares is June 30, 1997. Inception dates of Class B and Class C shares are December 13, 2001 and November 22, 2001, respectively. Inception date of Class Y shares and, for purposes of this illustration, the indices, is August 31,1992.

⁽²⁾  Maximum sales charge for Class A shares is 5.5%. Class A shares bear ongoing 12b-1 service fees.

⁽³⁾  Maximum contingent deferred sales charge for Class B shares is 5% imposed on redemptions and is reduced to 0% after a maximum of six years. Class B shares bear ongoing 12b-1 service and distribution fees.

⁽⁴⁾  Maximum contingent deferred sales charge for Class C shares is 1% imposed on redemptions and is reduced to 0% after one year. Class C shares bear ongoing 12b-1 service and distribution fees.

⁽⁵⁾  The Fund offers Class Y shares to a limited group of eligible investors, including certain qualifying retirement plans. Class Y shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees.

⁽⁶⁾  The Russell 3000 Index represents a broad US equities universe representing approximately 98% of the market. It is designed to provide a representative indication of the capitalization and return for the US equity market. Investors should note that indices do not reflect the deduction of fees, expenses or taxes.

⁽⁷⁾  The MSCI World Free Index (net) is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets. As of June 2007, the index consisted of 23 developed market country indices. Dividends are reinvested after deduction of withholding tax, using tax rates applicable to Luxembourg holding companies, as Luxembourg applies the highest rates. Had US tax rates been applied, the performance of the index would be different. The index excludes closed markets and those shares in otherwise free markets that are not purchasable by foreigners. Investors should note that indices do not reflect the deduction of fees and expenses.

⁽⁸⁾  The Citigroup World Government Bond Index (WGBI)^SM is a market capitalization-weighted index composed of straight (i.e., not floating rate or index-linked) government bonds with a one-year minimum maturity. The average maturity is seven years. The Index tracks the government bond markets of 23 developed countries. Investors should note that indices do not reflect the deduction of fees, expenses or taxes.

⁽⁹⁾  The GSMI Mutual Fund Index is an unmanaged index compiled by the Advisor, constructed as follows: 65% MSCI All Country World Index; 15% Citigroup World Government Bond ex US Index (WGBI)^SM; 15% Citigroup World Government Bond Index (WGBI)^SM; 2% J.P. Morgan Emerging Markets Bond Index Global (EMBI Global), and 3% Merrill Lynch US High Yield Cash Pay Constrained Index. On December 1, 2003, the 40% Russell 3000 Index replaced the 40% Wilshire 5000 Index, and on June 1, 2005, the 3% Merrill Lync h US High Yield Cash Pay Constrained Index replaced the 3% Merrill Lynch US High Yield Cash Pay Index. On April 30, 2009, the 65% MSCI All Country World Index replaced the 40% Russell 3000 Index, 22% MSCI World ex USA Index and 3% MSCI Emerging Markets Index (net); the 15% Citigroup World Government Bond ex US Index (WGBI)^SM and 15% Citigroup World Government Bond Index (WGBI)^SM replaced the 21% Citigroup Broad Investment Grade Index and 9% Citigroup World Government Bond ex US Index (WGBI)^SM. Investors should note that indices do not reflect the deduction of fees and expenses.

If an investor sells or exchanges shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged will be deducted at the time of the transaction, except as noted otherwise in the prospectus.

Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://www.ubs.com.

36

UBS Global Allocation Fund

Illustration of an assumed investment of $10,000 in Class A shares (adjusted for 5.50% maximum

sales charge) and $10,000,000 in Class Y shares (unaudited)

The following two graphs depict the performance of UBS Global Allocation Fund Class A and Class Y shares versus the Russell 3000 Index, the MSCI World Free Index (net), the Citigroup World Government Bond Index (WGBI)^SM and the GSMI Mutual Fund Index over the 10 years ended June 30, 2009. The performance of Class B and Class C shares will vary based upon the different inception dates, class specific expenses and sales charges. No adjustment has been made for any income taxes payable by shareholders on income dividends and capital gain distributions. Past performance is no guarantee of future results. Share price and returns will vary with market conditions; investors may realize a gain or loss upon redemption.

UBS Global Allocation Fund Class A vs.
Russell 3000 Index, MSCI World Free Index (net), Citigroup World Government Bond Index (WGBI)^SM and GSMI Mutual Fund Index

Wealth value with dividends reinvested

The Fund's growth of an assumed $10,000 investment is adjusted for the maximum sales charge of 5.50%.

UBS Global Allocation Fund Class Y vs.
Russell 3000 Index, MSCI World Free Index (net), Citigroup World Government Bond Index (WGBI)^SM and GSMI Mutual Fund Index

Wealth value with dividends reinvested

Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://www.ubs.com.

37

UBS Global Allocation Fund

Top ten equity holdings (unaudited)⁽¹⁾

As of June 30, 2009

	Percentage of net assets
Apple, Inc.		0.8	%
General Electric Co.		0.7
Pfizer, Inc.		0.7
Covidien PLC.		0.6
Allergan, Inc.		0.6
Chevron Corp.		0.6
General Dynamics Corp.		0.6
JPMorgan Chase & Co.		0.6
Comcast Corp., Class A		0.6
Exelon Corp.		0.6
Total		6.4	%

Top ten long-term fixed income

holdings (unaudited)⁽¹⁾

As of June 30, 2009

	Percentage of net assets
US Treasury Notes, 0.875%, due 04/30/11		2.8	%
US Treasury Notes, 2.250%, due 05/31/14		1.0
US Treasury Notes, 3.125%, due 05/15/19		0.8
US Treasury Notes, 2.625%, due 04/30/16		0.7
UK Gilts, 2.250%, due 03/7/14		0.6
US Treasury Notes, 2.625%, due 06/30/14		0.5
US Treasury Bonds, 6.125%, due 11/15/27		0.4
US Treasury Bonds, 3.500%, due 02/15/39		0.4
US Treasury Notes, 0.875%, due 05/31/11		0.4
US Treasury Bonds, 8.750%, due 08/15/20		0.4
Total		8.0	%

Country exposure, top five (unaudited)⁽²⁾

As of June 30, 2009

	Percentage of net assets
United States		38.0	%
United Kingdom		3.7
Japan		3.2
Germany		2.5
France		1.8
Total		49.2	%

⁽¹⁾  Figures represent the direct investments of the UBS Global Allocation Fund. Figures could be different if a breakdown of the underlying investment companies was included.

⁽²⁾  Figures represent the direct investments of the UBS Global Allocation Fund. If a breakdown of the underlying investment companies was included, the country exposure percentages would be as follows: United States: 46.9%, Japan: 6.4%, United Kingdom: 5.8%, China: 3.5%, Germany: 3.2%.

38

UBS Global Allocation Fund

Industry diversification (unaudited)⁽¹⁾

As a percentage of net assets as of June 30, 2009

Common stocks
Aerospace & defense	0.80	%
Air freight & logistics	0.51
Airlines	0.22
Auto components	0.64
Automobiles	0.52
Beverages	0.71
Biotechnology	0.44
Capital markets	1.62
Chemicals	1.49
Commercial banks	2.13
Communications equipment	0.87
Computers & peripherals	1.40
Construction materials	0.21
Consumer finance	0.31
Diversified consumer services	0.12
Diversified financial services	1.31
Diversified telecommunication services	0.93
Electric utilities	1.44
Energy equipment & services	1.13
Food & staples retailing	0.58
Food products	0.13
Health care equipment & supplies	1.88
Health care providers & services	0.92
Hotels, restaurants & leisure	0.68
Household durables	0.30
Household products	0.50
Independent power producers & energy traders	0.03
Industrial conglomerates	0.85
Insurance	1.51
Internet & catalog retail	0.43
Internet software & services	0.39
IT services	0.64
Life sciences tools & services	0.11
Machinery	1.34
Marine	0.15
Media	1.62
Metals & mining	0.41
Multiline retail	0.42
Multi-utilities	0.55
Office electronics	0.24
Oil, gas & consumable fuels	4.42
Personal products	0.26
Pharmaceuticals	2.09
Professional services	0.19
Real estate investment trusts (REITs)	0.08
Real estate management & development	0.50
Road & rail	0.85	%
Semiconductors & semiconductor equipment	1.19
Software	1.59
Specialty retail	0.53
Textiles, apparel & luxury goods	0.18
Tobacco	0.51
Trading companies & distributors	0.42
Wireless telecommunication services	0.94
Total common stocks	44.23
Bonds Corporate bonds
Commercial banks	0.10
Diversified financial services	0.06
Wireless telecommunication services	0.02
Total corporate bonds	0.18
Asset-backed securities	0.09
Collateralized debt obligation	0.01
Commercial mortgage-backed securities	0.13
Mortgage & agency debt securities	0.79
Stripped mortgage-backed securities	0.02
US government obligations	7.95
Non US-government obligations	4.44
Sovereign/supranational bond	0.11
Total bonds	13.72
Investment companies
iShares MSCI Emerging Markets Index Fund	3.32
UBS Corporate Bond Relationship Fund	5.15
UBS Emerging Markets Equity Relationship Fund	6.16
UBS Global (ex-U.S.) All Cap Growth Relationship Fund	15.05
UBS High Yield Relationship Fund	2.97
UBS Small-Cap Equity Relationship Fund	1.85
UBS U.S. Treasury Inflation Protected Securities Relationship Fund	0.11
Total investment companies	34.61
Rights	0.04
Short-term investment	4.38
Investment of cash collateral from securities loaned	1.24
Total investments	98.22
Cash and other assets, less liabilities	1.78
Net assets	100.00	%

⁽¹⁾  Figures represent the industry breakdown of direct investments of the UBS Global Allocation Fund. Figures would be different if a breakdown of the underlying investment companies' industry diversification was included.

39

UBS Global Allocation Fund—Portfolio of investments

June 30, 2009

Security description	Shares		Value
Common stocks—44.23%
Australia—0.54%
BHP Billiton Ltd.		57,825	$	1,584,834
Orica Ltd.		203,837		3,548,506
Qantas Airways Ltd.		1,381,806		2,229,081
QBE Insurance Group Ltd.		117,929		1,881,654
Total Australia common stocks				9,244,075
Austria—0.23%
Telekom Austria AG(1)		246,054		3,849,858
Belgium—0.22%
Anheuser-Busch InBev NV		103,708		3,754,495
Bermuda—0.64%
Covidien PLC.		292,500		10,951,200
Canada—0.76%
EnCana Corp.		80,200		3,976,387
Manulife Financial Corp.		91,600		1,589,996
Toronto-Dominion Bank		75,200		3,884,940
TransCanada Corp.(1)		132,000		3,554,348
Total Canada common stocks				13,005,671
Cayman Islands—0.31%
Seagate Technology		503,300		5,264,518
China—0.46%
Bank of East Asia Ltd.		922,000		2,809,025
Jardine Matheson Holdings Ltd.		94,400		2,582,668
New World Development Ltd.		1,376,000		2,483,781
Total China common stocks				7,875,474
Finland—0.24%
Nokia Oyj		276,619		4,036,887
France—1.05%
BNP Paribas(1)		96,909		6,288,801
GDF Suez		63,840		2,384,918
Societe Generale		36,258		1,978,218
Technip SA		34,984		1,719,639
Total SA		104,296		5,648,899
Total France common stocks				18,020,475
Germany—1.40%
Bayer AG(1)		78,174		4,197,636
Daimler AG		77,357		2,798,928
E.ON AG		153,455		5,446,788
Henkel AG & Co KGaA, Preference shares		78,340		2,447,695
MAN AG		28,129		1,730,052
Metro AG		82,376		3,937,792
Muenchener Rueckversicherungs- Gesellschaft AG		25,078		3,391,667
Total Germany common stocks				23,950,558
Guernsey—0.05%
Resolution Ltd.*		594,235		871,656

Security description	Shares		Value
Ireland—0.34%
CRH PLC		156,674	$	3,591,933
Elan Corp. PLC ADR*		109,000		694,330
Ryanair Holdings PLC ADR*(1)		54,800		1,555,772
Total Ireland common stocks				5,842,035
Japan—3.23%
Canon, Inc.(1)		127,400		4,146,484
Honda Motor Co., Ltd.		122,400		3,351,452
Japan Tobacco, Inc.		1,812		5,647,924
Kao Corp.		133,000		2,898,509
Kuraray Co., Ltd.		191,500		2,122,727
Mitsubishi Corp.		267,600		4,914,523
Mitsui Fudosan Co., Ltd.		208,000		3,603,564
Mitsui OSK Lines Ltd.		390,000		2,516,038
Mitsui Sumitomo Insurance Group Holdings, Inc.		93,700		2,443,409
Nintendo Co., Ltd.		9,900		2,724,521
Nissan Motor Co. Ltd.		476,600		2,877,351
Nomura Holdings, Inc.		574,100		4,809,879
NTT DoCoMo, Inc.		1,533		2,238,999
Shin-Etsu Chemical Co., Ltd.		72,700		3,357,666
Sumitomo Mitsui Financial Group, Inc.		116,900		4,727,248
THK Co., Ltd.		192,000		2,862,881
Total Japan common stocks				55,243,175
Luxembourg—0.11%
ArcelorMittal(1)		59,330		1,948,498
Netherlands—0.60%
Akzo Nobel NV		52,472		2,309,034
ASML Holding NV		136,969		2,970,892
ING Groep NV CVA		349,614		3,518,901
Reed Elsevier NV		138,071		1,522,690
Total Netherlands common stocks				10,321,517
Norway—0.33%
Petroleum Geo-Services ASA*		303,400		1,891,944
Telenor ASA*		483,800		3,734,856
Total Norway common stocks				5,626,800
Singapore—0.53%
CapitaLand Ltd.		970,000		2,463,591
DBS Group Holdings Ltd.		309,000		2,507,689
Olam International Ltd.(1)		2,418,000		4,042,979
Total Singapore common stocks				9,014,259
Spain—0.14%
Inditex SA(1)		50,210		2,412,963
Switzerland—1.34%
Adecco SA		78,913		3,295,450
Alcon, Inc.		35,400		4,110,648
Credit Suisse Group AG		68,663		3,134,443
Nobel Biocare Holding AG		132,403		2,902,534
Roche Holding AG		55,813		7,593,289

40

UBS Global Allocation Fund—Portfolio of investments

June 30, 2009

Security description	Shares		Value
Common stocks—(continued)
Switzerland—(concluded)
Synthes, Inc.		19,550	$	1,892,454
Total Switzerland common stocks				22,928,818
United Kingdom—2.74%
Barclays PLC		1,053,871		4,908,649
BP PLC		364,360		2,883,238
British Land Co. PLC		231,470		1,459,829
British Sky Broadcasting Group PLC		607,524		4,557,491
Cobham PLC		591,170		1,686,175
Home Retail Group PLC		530,836		2,276,683
Imperial Tobacco Group PLC		119,449		3,106,780
Kingfisher PLC		619,345		1,815,654
Man Group PLC		611,367		2,806,086
Prudential PLC		383,742		2,611,121
Rio Tinto PLC		104,145		3,625,614
Sage Group PLC		1,029,421		3,023,257
Tullow Oil PLC		172,757		2,672,765
Vodafone Group PLC		3,739,304		7,227,976
Wolseley PLC*		113,822		2,175,997
Total United Kingdom common stocks				46,837,315
United States—28.97%
ACE Ltd.		80,700		3,569,361
Adobe Systems, Inc.*		89,000		2,518,700
Aflac, Inc.		109,900		3,416,791
Air Products & Chemicals, Inc.		11,200		723,408
Allergan, Inc.		220,800		10,505,664
Amazon.com, Inc.*		60,900		5,094,894
American Electric Power Co., Inc.		239,500		6,919,155
American Tower Corp., Class A*		65,800		2,074,674
Amgen, Inc.*		70,200		3,716,388
Anadarko Petroleum Corp.		124,000		5,628,360
Apple, Inc.*		100,700		14,342,701
AT&T, Inc.		333,700		8,289,108
Avon Products, Inc.		85,400		2,201,612
Baker Hughes, Inc.		165,500		6,030,820
Bank of New York Mellon Corp.		227,402		6,665,153
Baxter International, Inc.		28,200		1,493,472
BlackRock, Inc.		13,500		2,368,170
BorgWarner, Inc.		129,200		4,412,180
Broadcom Corp., Class A*(1)		150,900		3,740,811
Burlington Northern Santa Fe Corp.		97,300		7,155,442
Carnival Corp.		215,000		5,540,550
Celanese Corp., Series A		49,900		1,185,125
Chevron Corp.		155,000		10,268,750
Cisco Systems, Inc.*		239,500		4,464,280
City National Corp.(1)		54,200		1,996,186
CME Group, Inc.		13,300		4,137,763
Coach, Inc.		115,200		3,096,576
Colgate-Palmolive Co.		45,000		3,183,300
Comcast Corp., Class A		670,700		9,718,443

Security description	Shares		Value
United States—(continued)
DaVita, Inc.*		19,800	$	979,308
DeVry, Inc.		42,300		2,116,692
Discover Financial Services		515,975		5,299,063
Dr. Pepper Snapple Group, Inc.*		28,800		610,272
Dynegy, Inc., Class A*		215,200		488,504
Ecolab, Inc.		39,200		1,528,408
EOG Resources, Inc.		28,800		1,956,096
Estee Lauder Cos., Inc., Class A		67,300		2,198,691
Exelon Corp.		172,300		8,823,483
Expeditors International Washington, Inc.		25,700		856,838
Express Scripts, Inc.*		49,800		3,423,750
Exxon Mobil Corp.		70,400		4,921,664
FedEx Corp.		140,000		7,786,800
Fortune Brands, Inc.		148,200		5,148,468
General Dynamics Corp.		177,800		9,848,342
General Electric Co.		1,019,100		11,943,852
Genzyme Corp.*		68,700		3,824,529
Google, Inc., Class A*		15,900		6,703,281
Halliburton Co.		198,200		4,102,740
Hess Corp.		99,000		5,321,250
Hewlett-Packard Co.		109,800		4,243,770
Home Depot, Inc.		87,100		2,058,173
Illinois Tool Works, Inc.		197,500		7,374,650
Intel Corp.		369,800		6,120,190
IntercontinentalExchange, Inc.*		34,400		3,929,856
International Game Technology		220,000		3,498,000
Interpublic Group of Cos., Inc.*		706,100		3,565,805
Intersil Corp., Class A		110,700		1,391,499
Intuit, Inc.*		73,500		2,069,760
JC Penney Co., Inc.		115,800		3,324,618
Johnson Controls, Inc.		295,700		6,422,604
JPMorgan Chase & Co.		288,700		9,847,557
Kellogg Co.		48,700		2,267,959
Kla-Tencor Corp.		76,900		1,941,725
Laboratory Corp. of America Holdings*		29,500		1,999,805
Macy's, Inc.		333,100		3,917,256
Marathon Oil Corp.		212,700		6,408,651
Marvell Technology Group Ltd.*		258,500		3,008,940
MasterCard, Inc., Class A		29,820		4,989,184
McDonald's Corp.		47,100		2,707,779
MDU Resources Group, Inc.		62,700		1,189,419
Medco Health Solutions, Inc.*		122,800		5,600,908
Medtronic, Inc.		123,500		4,308,915
Merck & Co., Inc.		52,100		1,456,716
MetLife, Inc.		99,500		2,985,995
Microsoft Corp.		337,300		8,017,621
Millipore Corp.*		27,900		1,958,859
Monsanto Co.		93,500		6,950,790
Morgan Stanley		283,750		8,089,712
National Semiconductor Corp.		102,500		1,286,375
NiSource, Inc.		57,500		670,450
Noble Corp.		63,400		1,917,850

41

UBS Global Allocation Fund—Portfolio of investments

June 30, 2009

Security description	Shares		Value
Common stocks—(concluded)
United States—(concluded)
Northeast Utilities		77,200	$	1,722,332
Omnicom Group, Inc.		162,900		5,144,382
Oracle Corp.		132,300		2,833,866
PACCAR, Inc.		219,350		7,131,068
Pall Corp.		95,900		2,547,104
Parker Hannifin Corp.		29,900		1,284,504
Peabody Energy Corp.		205,600		6,200,896
Pepco Holdings, Inc.		126,900		1,705,536
PepsiCo, Inc.		140,000		7,694,400
Pfizer, Inc.		758,600		11,379,000
Praxair, Inc.		52,400		3,724,068
Principal Financial Group, Inc.		214,800		4,046,832
QUALCOMM, Inc.		139,300		6,296,360
Ryder System, Inc.		107,400		2,998,608
Salesforce.com, Inc.*		43,600		1,664,212
Schlumberger Ltd.		34,600		1,872,206
Sempra Energy		102,000		5,062,260
Sherwin-Williams Co.		51,800		2,784,250
Southwestern Energy Co.*		81,200		3,154,620
Sprint Nextel Corp.*		960,452		4,619,774
Stryker Corp.		58,400		2,320,816
Sysco Corp.		84,100		1,890,568
Ultra Petroleum Corp.*		140,500		5,479,500
Union Pacific Corp.		83,400		4,341,804
United Technologies Corp.		38,200		1,984,872
UnitedHealth Group, Inc.		142,400		3,557,152
Viacom, Inc., Class B*		136,800		3,105,360
Visa, Inc., Class A		97,199		6,051,610
VMware, Inc., Class A*		151,891		4,142,068
Weatherford International Ltd.*		97,200		1,901,232
Wells Fargo & Co.		295,600		7,171,256
Williams Cos., Inc.		242,200		3,780,742
XTO Energy, Inc.		101,475		3,870,257
Zimmer Holdings, Inc.*		98,400		4,191,840
Total United States common stocks				495,516,614
Total common stocks (cost $776,243,047)				756,516,861
	Face amount
Bonds—13.72%
Corporate bonds—0.18%
France—0.02%
Compagnie de Financement Foncier, 4.000%, due 07/21/11	EUR	260,000		374,810
Germany—0.02%
Hypothekenbank in Essen AG, 3.750%, due 09/28/12	EUR	260,000		375,134

Security description	Face amount		Value
Ireland—0.02%
GE Capital European Funding, 4.625%, due 08/23/10	EUR	260,000	$	372,710
Italy—0.02%
Intesa Sanpaolo SpA, 6.375%, due 04/06/10	EUR	255,000		364,883
Netherlands—0.04%
E.ON International Finance BV, 5.125%, due 10/02/12	EUR	250,000		373,745
Rabobank Nederland NV, 4.125%, due 04/04/12		250,000		365,007
Total Netherlands corporate bonds				738,752
United Kingdom—0.04%
Lloyds TSB Bank PLC, 6.750%, due 10/24/18	GBP	80,000		133,444
Royal Bank of Scotland PLC, 6.625%, due 09/17/18		90,000		147,643
Vodafone Group PLC, 3.625%, due 11/29/12	EUR	280,000		394,927
Total United Kingdom corporate bonds				676,014
United States—0.02%
Citigroup, Inc., 5.500%, due 11/18/15	GBP	205,000		292,750
Total corporate bonds (cost $3,295,797)				3,195,053
Asset-backed securities—0.09%
United States—0.09%
Asset Backed Funding Certificates, Series 2006-OPT3, Class A3A, 0.374%, due 11/25/36(2)		433,246		414,128
Ford Credit Auto Owner Trust, Series 2007-B, Class A3A, 5.150%, due 11/15/11		800,000		820,283
Irwin Home Equity Corp., Series 2005-C, Class 1M3, 6.150%, due 04/25/30(3),(4)		255,242		102,097
Morgan Stanley ABS Capital I, Series 2006-HE6, Class A2A, 0.354%, due 09/25/36(2)		235,430		228,711
SACO I Trust, Series 2006-5, Class 1A, 0.464%, due 04/25/36(2)		196,338		23,256
Total asset-backed securities (cost $1,797,369)				1,588,475
Collateralized debt obligation—0.01%
Cayman Islands—0.01%
LNR CDO Ltd., Series 2002-1A, Class EFX, 7.781%, due 07/24/37(4),(5)(cost $358,319)		325,000		87,750

42

UBS Global Allocation Fund—Portfolio of investments

June 30, 2009

Security description	Face amount		Value
Bonds—(continued)
Commercial mortgage-backed securities—0.13%
United States—0.13%
Greenwich Capital Commercial Funding Corp., Series 2006-RR1, Class A1, 5.961%, due 03/18/49(2),(6)	$	825,000	$	99,000
GS Mortgage Securities Corp. II, Series 2006-CC1, Class A, 5.507%, due 03/21/46(2),(4),(5)		510,744		76,612
Series 2006-RR2, Class A1, 5.818%, due 06/23/46(2),(4),(5)		8,952,951		2,059,179
Total commercial mortgage-backed securities (cost $10,149,863)				2,234,791
Mortgage & agency debt securities—0.79%
United States—0.79%
Federal Home Loan Mortgage Corp.,† 3.750%, due 03/27/19		4,000,000		3,930,576
Federal Home Loan Mortgage Corp. Gold Pools,† #G04437, 5.000%, due 08/01/37		341,773		348,115
#G02922, 5.500%, due 04/01/37		290,985		300,939
#G00194, 7.500%, due 02/01/24		91,951		100,093
Federal National Mortgage Association,† 2.500%, due 05/15/14		3,750,000		3,686,546
5.250%, due 08/01/12		1,255,000		1,304,071
Federal National Mortgage Association Pools,† #AA4331, 4.500%, due 04/01/39		99,499		99,421
#AA5503, 4.500%, due 04/01/39		99,184		99,106
#933523, 5.000%, due 02/01/38		147,245		150,153
#975213, 5.000%, due 03/01/38		158,084		161,206
#975375, 5.000%, due 06/01/38		108,490		110,632
#555591, 5.500%, due 07/01/33		216,180		224,318
Government National Mortgage Association, Series 2001-35, Class AZ, 6.500%, due 08/20/31		1,883,707		2,012,369
Government National Mortgage Association Pools, #701302, 4.500%, due 01/15/39		99,378		99,405

Security description	Face amount		Value
United States—(concluded)
#701578, 4.500%, due 01/15/39	$	99,340	$	99,367
#701813, 4.500%, due 04/15/39		99,736		99,764
#508540, 6.000%, due 02/20/34		96,439		100,222
IndyMac INDX Mortgage Loan Trust, Series 2005-AR1, Class B1, 4.998%, due 03/25/35(2)		698,300		101,951
Structured Adjustable Rate Mortgage Loan Trust, Series 2005-11, Class B1, 4.825%, due 05/25/35(2)		1,184,010		98,240
WaMu Mortgage Pass-Through Certificates, Series 2007-HY7, Class LB2, 5.787%, due 07/25/37(2)		1,270,895		95,864
Wells Fargo Mortgage Backed Securities Trust, Series 2005-14, Class 2B1, 5.500%, due 12/25/35		424,994		104,037
Series 2006-AR19, Class B1, 6.127%, due 12/25/36(2)		945,410		100,186
Total mortgage & agency debt securities (cost $16,741,713)				13,426,581
Stripped mortgage-backed securities—0.02%
United States—0.02%
Sequoia Mortgage Trust, Series 2004-11, Class XA1, IO 1.530%, due 12/20/34(2),(4)		15,406,044		238,794
Structured Adjustable Rate Mortgage Loan Trust, Series 2005-21, Class 6AX, IO, 5.500%, due 10/15/15(2),(4)		685,970		99,073
Total stripped mortgage-backed securities (cost $1,195,647)				337,867
US government obligations—7.95%
United States—7.95%
US Treasury Bonds, 3.500%, due 02/15/39(1)		7,295,000		6,307,914
6.125%, due 11/15/27		6,000,000		7,393,128
6.250%, due 08/15/23		3,500,000		4,263,437
8.125%, due 08/15/19		130,000		178,242
8.500%, due 02/15/20		4,000,000		5,625,000
8.750%, due 08/15/20		4,125,000		5,909,063
US Treasury Inflation Indexed Bonds (TIPS), 1.375%, due 07/15/18		235,000		225,268
US Treasury Notes, 0.875%, due 05/31/11(1)		6,240,000		6,217,598

43

UBS Global Allocation Fund—Portfolio of investments

June 30, 2009

Security description	Face amount		Value
Bonds—(concluded)
US government obligations—(concluded)
United States—(concluded)
0.875%, due 04/30/11(1)	$	47,380,000	$	47,241,177
2.250%, due 05/31/14(1)		17,635,000		17,397,986
2.625%, due 06/30/14		8,295,000		8,320,963
2.625%, due 04/30/16		12,000,000		11,602,500
2.750%, due 02/15/19		1,000,000		936,560
3.125%, due 05/15/19(1)		14,865,000		14,377,279
3.250%, due 12/31/09		60,000		60,858
Total US government obligations (cost $136,807,575)				136,056,973
Non US-government obligations—4.44%
Austria—0.23%
Government of Austria, 4.150%, due 03/15/37(6)	EUR	3,060,000		3,931,231
Belgium—0.48%
Belgium Kingdom, 4.000%, due 03/28/14	EUR	2,800,000		4,117,466
Government of Belgium, 8.000%, due 03/28/15		2,300,000		4,018,222
				8,135,688
Canada—0.06%
Government of Canada, 5.250%, due 06/01/12	CAD	1,150,000		1,083,530
France—0.65%
Government of France, 3.750%, due 04/25/21	EUR	1,170,000		1,607,523
4.000%, due 04/25/14		2,800,000		4,157,845
4.250%, due 04/25/19		2,800,000		4,091,227
4.750%, due 04/25/35		855,000		1,266,329
				11,122,924
Germany—1.14%
Bundesobligation, 4.000%, due 10/11/13	EUR	2,700,000		4,034,274
Bundesrepublik Deutschland, 3.500%, due 01/04/16		2,800,000		4,057,643
3.750%, due 01/04/19		3,920,000		5,687,793
4.000%, due 01/04/37		620,000		836,629
4.250%, due 01/04/14		2,700,000		4,072,492
4.500%, due 01/04/13		155,000		234,511
Bundesschatzanweisungen, 4.000%, due 09/10/10		340,000		493,849
				19,417,191
Italy—0.64%
Buoni Poliennali Del Tesoro, 3.750%, due 08/01/21	EUR	540,000		697,284
3.750%, due 12/15/13		2,900,000		4,158,995
4.000%, due 02/01/17		2,850,000		4,063,812
4.250%, due 08/01/13		1,159,000		1,706,418
5.000%, due 08/01/34		200,000		273,618
				10,900,127

Security description	Face amount		Value
Netherlands—0.23%
Government of Netherlands, 4.000%, due 07/15/16	EUR	2,750,000	$	4,012,537
Spain—0.06%
Government of Spain, 5.750%, due 07/30/32	EUR	700,000		1,107,533
Sweden—0.04%
Government of Sweden, 6.750%, due 05/05/14	SEK	4,600,000		705,868
United Kingdom—0.91%
UK Gilts, 2.250%, due 03/07/14	GBP	6,440,000		10,171,284
4.250%, due 03/07/11		1,000,000		1,724,532
4.250%, due 12/07/27		160,000		261,600
4.500%, due 03/07/19		800,000		1,401,381
4.750%, due 12/07/38		800,000		1,390,721
5.000%, due 03/07/12		175,000		308,274
8.000%, due 06/07/21		135,000		311,531
				15,569,323
Total non US-government obligations (cost $72,437,675)				75,985,952
Sovereign/supranational bond—0.11%
European Investment Bank, 5.375%, due 10/15/12 (cost $1,786,615)	EUR	1,270,000		1,942,163
Total bonds (cost $244,570,573)				234,855,605
	Units
Investment companies—34.61%
iShares MSCI Emerging Markets Index Fund		1,763,600		56,840,828
UBS Corporate Bond Relationship Fund*(7)		7,392,026		88,036,816
UBS Emerging Markets Equity Relationship Fund*(7)		4,198,042		105,347,347
UBS Global (ex-U.S.) All Cap Growth Relationship Fund*(7)		22,962,519		257,485,609
UBS High Yield Relationship Fund*(7)		2,613,473		50,775,856
UBS Small-Cap Equity Relationship Fund*(7)		1,009,838		31,609,145
UBS U.S. Treasury Inflation Protected Securities Relationship Fund*(7)		173,355		1,988,539
Total investment companies (cost $533,897,685)				592,084,140

44

UBS Global Allocation Fund—Portfolio of investments

June 30, 2009

Security description	Number of rights		Value
Rights—0.04%
United Kingdom—0.04%
Rio Tinto PLC, expires 07/01/09* (cost $789,447)		59,076	$	678,399
	Units
Short-term investment—4.38%
Investment company—4.38%
UBS Cash Management Prime Relationship Fund, 0.384%(7),(8)(cost $75,008,315)		75,008,315		75,008,315

Security description	Shares		Value
Investment of cash collateral from securities loaned—1.24%
UBS Private Money Market Fund LLC, 0.488%(7),(8)(cost $21,204,379)		21,204,379	$	21,204,379
Total investments—98.22% (cost $1,651,713,446)				1,680,347,699
Cash and other assets, less liabilities—1.78%				30,255,460
Net assets—100.00%			$	1,710,603,159

Notes to portfolio of investments

Aggregate cost for federal income tax purposes was $1,782,515,817; and net unrealized depreciation consisted of:

Gross unrealized appreciation	$	71,159,726
Gross unrealized depreciation		(173,327,844	)
Net unrealized depreciation of investments	$	(102,168,118	)

^†  On September 7, 2008, the Federal Housing Finance Agency placed the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation into conservatorship, and the US Treasury guaranteed the debt issued by those organizations.

*  Non-income producing security.

⁽¹⁾  Security, or portion thereof, was on loan at June 30, 2009.

⁽²⁾  Floating rate security—The interest rates shown are the current rates as of June 30, 2009.

⁽³⁾  Step bond—Coupon rate increases in increments to maturity. Rate disclosed is as of June 30, 2009. Maturity date disclosed is the ultimate maturity date.

⁽⁴⁾  Security is illiquid. At June 30, 2009, these securities amounted to $2,663,505 or 0.16% of net assets.

⁽⁵⁾  Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities, which represent 0.13% of net assets as of June 30, 2009, are considered illiquid and restricted (See restricted securities table below for more information.)

Restricted securities	Acquisition dates	Acquisition cost		Acquisition cost as a percentage of net assets			06/30/09 Market value		06/30/09 Market value as a percentage of net assets
GS Mortgage Securities Corp. II, Series 2006-CC1, Class A, 5.507%, due 03/21/46	03/22/06	$	1,015,469		0.06	%	$	70,775		0.00	%(a)
GS Mortgage Securities Corp. II, Series 2006-CC1, Class A, 5.507%, due 03/21/46	02/28/07		570,601		0.03			5,837		0.00	(a)
GS Mortgage Securities Corp. II, Series 2006-RR2, Class A1, 5.818%, due 06/23/46	07/11/06		8,783,248		0.51			2,059,179		0.12
LNR CDO Ltd., Series 2002-IA, Class EFX, 7.781%, due 07/24/37	12/01/06		1,666,224		0.10			87,750		0.01
		$	12,035,542		0.70	%	$	2,223,541		0.13	%

^(a)  Amount represents less than 0.005%.

⁽⁶⁾  Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities are considered liquid, unless noted otherwise, and may be resold in transactions exempt from registration, normally to qualified institutional buyers. At June 30, 2009, the value of these securities amounted to $4,030,231 or 0.24% of net assets.

⁽⁷⁾  Investment in affiliated mutual fund.

⁽⁸⁾  The rate shown reflects the yield at June 30, 2009.

45

UBS Global Allocation Fund—Portfolio of investments

June 30, 2009

ABS  Asset-backed securities

ADR  American depositary receipt

CDO  Collateralized debt obligations

CVA  Dutch certification—depository certificate

GS  Goldman Sachs

IO  Interest only—This security entitles the holder to receive interest payments from an underlying pool of mortgages. The risk associated with this security is related to the speed of the principal paydowns. High prepayments would result in a smaller amount of interest being received and cause the yield to decrease. Low prepayments would result in a greater amount of interest being received and cause the yield to increase.

Preference
shares  A special type of equity investment that shares in the earnings of the company, has limited voting rights, and may have a dividend preference. Preference shares may also have liquidation preference.

TIPS  Treasury inflation protected securities ("TIPS") are debt securities issued by the US Treasury whose principal and/or interest payments are adjusted for inflation, unlike debt securities that make fixed principal and interest payments. The interest rate paid by the TIPS is fixed, while the principal value rises or falls based on changes in a published Consumer Price Index ("CPI"). Thus, if inflation occurs, the principal and interest payments on the TIPS are adjusted accordingly to protect investors from inflationary loss. During a deflationary period, the principal and interest payments decrease, although the TIPS principal amounts will not drop below their face amounts at maturity. In exchange for the inflation protection, the TIPS generally pay lower interest rates than typical US Treasury securities. Only if inflation occurs will TIPS offer a higher real yield than a conventional Treasury security of the same maturity.

Currency type abbreviations:

CAD  Canadian Dollar

EUR  Euro

GBP  Great Britain Pound

SEK  Swedish Krona

Forward foreign currency contracts

UBS Global Allocation Fund had the following open forward foreign currency contracts as of June 30, 2009:

	Contracts to deliver		In exchange for		Maturity dates	Unrealized appreciation/ (depreciation)
Brazilian Real		23,810,000	USD	11,597,662	09/03/09	$	(399,392	)
Singapore Dollar		11,800,000	USD	8,135,406	09/03/09		(8,085	)
Swiss Franc		15,205,000	USD	13,997,827	09/03/09		(6,833	)
United States Dollar		29,309,301	AUD	36,295,000	09/03/09		(199,986	)
United States Dollar		50,482,668	CAD	55,590,000	09/03/09		(2,673,184	)
United States Dollar		14,097,239	CHF	15,205,000	09/03/09		(92,578	)
United States Dollar		46,585,578	EUR	33,250,000	09/03/09		58,520
United States Dollar		46,262,414	GBP	28,150,000	09/03/09		46,870
United States Dollar		142,560,384	JPY	13,938,200,000	09/03/09		2,230,056
United States Dollar		83,169,736	SEK	638,440,000	09/03/09		(423,736	)
United States Dollar		17,004,049	TWD	546,000,000	09/03/09		(174,512	)
Net unrealized depreciation on forward foreign currency contracts						$	(1,642,860	)

Currency type abbreviations:

AUD   Australian Dollar

CAD   Canadian Dollar

CHF   Swiss Franc

EUR   Euro

GBP   Great Britain Pound

JPY   Japanese Yen

SEK   Swedish Krona

TWD   New Taiwan Dollar

USD   United States Dollar

46

UBS Global Allocation Fund—Portfolio of investments

June 30, 2009

Futures contracts

UBS Global Allocation Fund had the following open futures contracts as of June 30, 2009:

	Expiration dates	Cost/ (proceeds)			Value			Unrealized appreciation/ (depreciation)
US treasury futures buy contracts:
US Long Bond, 758 contracts (USD)	September 2009	$	87,795,737		$	89,716,406		$	1,920,669
10 Year US Treasury Notes, 1,525 contracts (USD)	September 2009		175,068,480			177,305,078			2,236,598
US treasury futures sell contracts:
2 Year US Treasury Notes, 1,620 contracts (USD)	September 2009		(349,346,507	)		(350,274,375	)		(927,868	)
Index futures buy contracts:
Amsterdam Exchange Index, 377 contracts (EUR)	July 2009		26,806,138			26,871,474			65,336
Dow Jones EURO STOXX 50 Index, 1,590 contracts (EUR)	September 2009		54,155,675			53,649,381			(506,294	)
FTSE 100 Index, 1,017 contracts (GBP)	September 2009		71,931,187			70,842,136			(1,089,051	)
FTSE MIB Index, 131 contracts (EUR)	September 2009		17,529,039			17,634,931			105,892
NIKKEI 225 Index, 269 contracts (JPY)	September 2009		27,666,093			27,546,447			(119,646	)
S&P 500 Index, 202 contracts (USD)	September 2009		47,245,982			46,232,750			(1,013,232	)
Index futures sell contracts:
DAX Index, 105 contracts (EUR)	September 2009		(17,825,937	)		(17,796,666	)		29,271
Hang Seng Stock Index, 76 contracts (HKD)	July 2009		(8,862,246	)		(9,003,074	)		(140,828	)
S&P Toronto Stock Exchange 60 Index, 313 contracts (CAD)	September 2009		(34,664,136	)		(33,750,127	)		914,009
SPI 200 Index, 332 contracts (AUD)	September 2009		(26,888,946	)		(25,950,298	)		938,648
Interest rate futures buy contracts:
Euro-Bund, 223 contracts (EUR)	September 2009		37,232,383			37,878,128			645,745
Long Gilt, 47 contracts (GBP)	September 2009		9,096,941			9,130,465			33,524
Net unrealized appreciation on futures contracts								$	3,092,773

Currency type abbreviations:

AUD  Australian Dollar

CAD  Canadian Dollar

EUR  Euro

GBP  Great Britain Pound

HKD  Hong Kong Dollar

JPY  Japanese Yen

USD  United States Dollar

Swap agreements

At June 30, 2009, the Fund had outstanding interest rate swap contracts with the following terms

Counterparty	Notional amount		Termination dates	Payments made by the Fund			Payments received by the Fund			Upfront payments (made) received		Value		Unrealized appreciation
Credit Suisse	USD	140,800,000	01/13/10		1.13875	(1)		0.68938	(2)	$	—	$	4,213	$	4,213
Deutsche Bank AG	USD	140,800,000	01/13/19		0.32813	(2)		1.13875	(1)		—		558,124		558,124
Merrill Lynch International	USD	79,000,000	01/13/10		1.13875	(1)		0.68938	(2)		—		2,364		2,364
Merrill Lynch International	USD	79,000,000	01/13/19		0.32938	(2)		1.13875	(1)		—		304,675		304,675
										$	—	$	869,376	$	869,376

⁽¹⁾  Rate based on 3 month LIBOR (USD BBA).

⁽²⁾  Rate based on 1 month LIBOR (USD BBA).

BBA  British Banking Association

LIBOR  London Interbank Offered Rate

Currency type abbreviation:

USD  United States Dollar

47

UBS Global Allocation Fund—Portfolio of investments

June 30, 2009

The following is a summary of the inputs used as of June 30, 2009 in valuing the Fund's investments.

Measurements at 06/30/09
Description	Quoted prices in active markets for identical investments (Level 1)		Significant other observable inputs (Level 2)			Unobservable inputs (Level 3)		Total
Common stocks(1)	$	531,098,753	$	225,418,108		$	—	$	756,516,861
Corporate bonds		—		3,195,053			—		3,195,053
Asset-backed securities		—		1,486,378			102,097		1,588,475
Collateralized debt obligation		—		—			87,750		87,750
Commercial mortgage-backed securities		—		99,000			2,135,791		2,234,791
Mortgage & agency debt securities		—		13,426,581			—		13,426,581
Stripped mortgage-backed securities		—		99,073			238,794		337,867
US government obligations		—		136,056,973			—		136,056,973
Non US-government obligations		—		75,985,952			—		75,985,952
Sovereign/supranational bond		—		1,942,163			—		1,942,163
Investment companies		56,840,828		535,243,312			—		592,084,140
Rights		—		678,399			—		678,399
Short-term investment		—		75,008,315			—		75,008,315
Investment of cash collateral from securities loaned		—		21,204,379			—		21,204,379
Other financial instruments(2)		3,092,773		(773,484	)		—		2,319,289
Total	$	591,032,354	$	1,089,070,202		$	2,564,432	$	1,682,666,988

⁽¹⁾  The Fund may hold investments which have been fair valued in accordance with the Fund's fair valuation policy as of June 30, 2009, which may result in movement between Level 1 and Level 2.

⁽²⁾  Other financial instruments may include open futures contracts, swaps agreements, options and forward foreign currency contracts.

Level 3 Rollforward Disclosure

The following is a rollforward of the Fund's investments that were valued using unobservable inputs for the period:

Measurements using unobservable inputs (Level 3)
	Asset-backed securities			Collateralized debt obligation			Commercial mortgage- backed securities			Stripped mortgage- backed securities			Total
Assets
Beginning balance	$	—		$	—		$	6,180,384		$	794,706		$	6,975,090
Total gains or losses (realized/unrealized) included in earnings(a)		—			—			(4,516,779	)		151,953			(4,364,826	)
Purchases, sales, issuances, and settlements (net)		—			—			(1,663,605	)		(228,203	)		(1,891,808	)
Transfers in and/or out of Level 3		102,097			87,750			2,135,791			(479,662	)		1,845,976
Ending balance	$	102,097		$	87,750		$	2,135,791		$	238,794		$	2,564,432
The amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to investments still held at 06/30/09	$	(1,578,474	)	$	(1,518,594	)	$	(6,238,748	)	$	152,871		$	(9,182,945	)

^(a)  Does not include unrealized losses of $9,335,816 related to transferred assets, presented at their end of period values.

See accompanying notes to financial statements.
48

UBS Global Frontier Fund

Portfolio performance

For the 12 months ended June 30, 2009, Class A shares of UBS Global Frontier Fund (the "Fund") declined 34.51% (Class A shares declined 38.12% after the deduction of the maximum sales charge), while Class Y shares declined 34.30%. The Fund's benchmark, the GSMI Mutual Fund Index (the "Index"), declined 16.60% over the same time period.⁽¹⁾ For comparison purposes, the MSCI World Free Index (net) declined 29.50% over the same time period. (Class Y shares have lower expenses than other share classes of the Fund. Returns for all share classes over various time periods are shown on page 52; please note that these returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares, while the Index returns do not reflect the deductions of fees and expenses.) For a detailed commentary on the market environment in general during the reporting period, see page 2.

The Fund's underperformance was due primarily to market allocation, leverage decisions and security selection. Currency positioning was positive for the reporting period.

Portfolio performance summary

What worked

•  The Fund's currency strategy made a significant contribution to performance. During the second half of 2008, the Fund maintained an anti-carry trade position, emphasizing lower-risk currencies at the expense of high-volatility currencies. (A carry trade is a strategy in which an investor sells a currency with a relatively low interest rate, and uses the funds to purchase a different currency yielding a higher interest rate.) When the carry trade unwound, this positioning produced some of the largest contributions to Fund performance over the 12 months.

•  The Fund was allocated to lower-yielding, "safe-haven" currencies, such as the Japanese yen, Swiss franc and Swedish krona. Conversely, the Fund underweighted high-yielding currencies like the euro, British pound, Australian dollar and Canadian dollar, which our research indicated were overvalued. This left the Fund well-positioned during the turbulence of the credit crisis, when sentiment worsened and investors sought to reduce their riskier asset positions. The result was a rapid and sharp unwinding of carry trade positions.

•  In addition, the Fund held an overweight position in the US dollar, which had weakened to the point that we viewed it as deeply undervalued. The Fund benefited when the US dollar rebounded in late 2008, and investors moved into currencies considered "safe havens."

•  Between September and November of 2008, the Fund's currency exposures made large gains. As valuation returned to what we viewed as normal levels, we progressively cut back the Fund's currency risks. By the end of December, the Fund's forward-looking currency strategy risk was below normal levels, reflecting what we viewed as a shrunken opportunity set.

⁽¹⁾Note: In order to better reflect the more global nature of the current capital markets, the Board of Trustees of the Fund made a change to the composition of the Index, effective April 30, 2009. For a detailed description of the changes to the Index, please see page 52.

49

UBS Global Frontier Fund

What didn't work

•  Market allocation decisions early in the review period hindered performance.

•  Our research indicated that world equity market prices reflected what we believed was an excessively pessimistic long-term outlook. We believed that US equities were trading at 49% below fair value as 2008 ended. Our conviction led us to increase global equity exposure—particularly within the US—during the fourth quarter of 2008. Following a period of significant market volatility, this exposure detracted from performance overall. However, as world markets rallied in the second quarter of 2009, the US led the way. While it was not enough to overcome weakness from earlier in the period, the overweight position made a significant contribution to Fund returns.

•  Entering the review period, the Fund was underweight to global fixed income securities. As equities declined in 2008, bonds benefited from investors' flight to quality. While this underweight position hurt performance overall, it began to benefit the Fund's performance as yield curves steepened during the second quarter of 2009.

•  At the time of this writing, the Fund maintained an asset allocation of 80% to global equities and 20% to global bonds. According to our valuation research, US equities remain at about a 35% discount to fair value, while international equities are roughly 40% undervalued. While we still expect to see market volatility and economic uncertainty in the near term, we believe several recent signs of stabilization may indicate that the worst is behind us.

•  Issue selection within the Fund's fixed income components hindered performance.

•  The Fund's positions in nonagency mortgage-backed securities suffered in the wake of the deteriorating real estate market and the seizing up of the credit markets.

•  An overweight allocation to the credit sectors—particularly US investment grade credit—hampered returns as well. This sector has become more attractive as spreads have widened.

•  The Fund's position in high yield bonds underperformed during the period. During the second half of 2008, as we increased the Fund's exposure to equities, we also added to its position in noninvestment grade credit. Our research pointed to attractive valuations in the sector. We believed that the markets were pricing in a default rate far in excess of what our research deemed justified. High yield bonds posted a negative return during that time, however, as spreads widened substantially during the credit crisis.

•  The high yield market rallied strongly following its lows of early March 2009, and spreads have narrowed considerably as a result. We believed that the market had moved strongly ahead of economic reality. More recently, we reduced the Fund's position in high yield debt back to a neutral weighting.

•  Issue selection within the high yield sector focused on higher-quality debt, which lagged the benchmark as this segment failed to rally as strongly as lower-quality high yield bonds.

50

UBS Global Frontier Fund

•  The Fund's leverage strategy detracted from performance. Over the second half of 2008, we steadily increased the amount of leverage in the Fund to the maximum level of 50%. We maintained this level through period end based on our view that the global opportunity set was at a multi-year high, and that borrowing costs were attractive. The Fund's use of leverage magnified the effects of weakness in the equity markets, its exposure to the underperforming high yield bond sector, and an underweight to global sovereign bonds.

This letter is intended to assist shareholders in understanding how the Fund performed during the 12 months ended June 30, 2009. The views and opinions in the letter were current as of August 17, 2009. They are not guarantees of performance or investment results and should not be taken as investment advice. Investment decisions reflect a variety of factors, and we reserve the right to change our views about individual securities, sectors and markets at any time. As a result, the views expressed should not be relied upon as a forecast of the Fund's future investment intent. We encourage you to consult your financial advisor regarding your personal investment program. Mutual funds are sold by prospectus only. You should read it carefully and consider a fund's investment objectives, risks, charges, expenses and other important information contained in the prospectus before investing. Prospectuses for most of our funds can be obtained from your financial advisor, by calling UBS Funds at 800-647 1568 or by visiting our Web site at www.ubs.com

51

UBS Global Frontier Fund

Average annual total returns for periods ended 06/30/09 (unaudited)

		1 year			Inception(1)
Before deducting	Class A(2)		(34.51	)%		(24.65	)%
maximum sales charge	Class C(3)		(35.03	)		(25.23	)
	Class Y(4)		(34.30	)		(24.40	)
After deducting maximum	Class A(2)		(38.12	)		(26.82	)
sales charge	Class C(3)		(35.67	)		(25.23	)
MSCI World Free Index (net)(5)			(29.50	)		(20.51	)
GSMI Mutual Fund Index(6)			(16.60	)		(10.24	)

The gross and net expense ratios, respectively, for each class of shares as in the October 28, 2008 prospectuses were as follows: Class A—1.67% and 1.48%; Class C—2.48% and 2.23%; Class Y—1.39% and 1.23%. Net expenses reflect fee waivers and/or expense reimbursements, if any, pursuant to an agreement that is in effect to cap the expenses. The Trust, with respect to the Fund, and the Advisor have entered into a written agreement pursuant to which the Advisor has agreed to waive a portion of its management fees and/or to reimburse expenses (excluding expenses incurred through investment in other investment companies and interest expense) to the extent necessary so that the Fund's operating expenses (excluding expenses incurred through investment in other investment companies and interest expense), through the fiscal year ending June 30, 2009, do not exceed 1.40% for Class A shares, 2.15% for Class C shares and 1.15% for Class Y shares. Pursuant to the written agreement, the Advisor is entitled to be reimbursed for any fees it waives and expenses it reimburses for a period of three years following such fee waivers and expense reimbursements to the extent that such reimbursement of the Advisor by the Fund will not cause the Fund to exceed any applicable expense limit that is in place for the Fund.

⁽¹⁾  Inception date of UBS Global Frontier Fund Class A, Class C and Class Y shares is July 26, 2007. Inception date of the indices, for the purpose of this illustration, is July 31, 2007.

⁽²⁾  Maximum sales charge for Class A shares is 5.5%. Class A shares bear ongoing 12b-1 service fees.

⁽³⁾  Maximum contingent deferred sales charge for Class C shares is 1% imposed on redemptions and is reduced to 0% after one year. Class C shares bear ongoing 12b-1 service and distribution fees.

⁽⁴⁾  The Fund offers Class Y shares to a limited group of eligible investors, including certain qualifying retirement plans. Class Y shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees.

⁽⁵⁾  The MSCI World Free Index (net) is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets. As of June 2007, the index consisted of 23 developed market country indices. Dividends are reinvested after deduction of withholding tax, using tax rates applicable to Luxembourg holding companies, as Luxembourg applies the highest rates. Had US tax rates been applied, the performance of the index would be different. The index excludes closed markets and those shares in otherwise free markets that are not purchasable by foreigners. Investors should note that indices do not reflect the deduction of fees and expenses.

⁽⁶⁾  The GSMI Mutual Fund Index is an unmanaged index compiled by the Advisor, constructed as follows: 65% MSCI All Country World Index; 15% Citigroup World Government Bond ex US Index (WGBI)^SM; 15% Citigroup World Government Bond Index (WGBI)^SM; 2% J.P. Morgan Emerging Markets Bond Index Global (EMBI Global), and 3% Merrill Lynch US High Yield Cash Pay Constrained Index. On December 1, 2003, the 40% Russell 3000 Index replaced the 40% Wilshire 5000 Index, and on June 1, 2005, the 3% Merrill Lync h US High Yield Cash Pay Constrained Index replaced the 3% Merrill Lynch US High Yield Cash Pay Index. On April 30, 2009, the 65% MSCI All Country World Index replaced the 40% Russell 3000 Index, 22% MSCI World ex USA Index and 3% MSCI Emerging Markets Index (net); the 15% Citigroup World Government Bond ex US Index (WGBI)^SM and 15% Citigroup World Government Bond Index (WGBI)^SM replaced the 21% Citigroup Broad Investment Grade Index and 9% Citigroup World Government Bond ex US Index (WGBI)^SM. Investors should note that indices do not reflect the deduction of fees and expenses.

If an investor sells or exchanges shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged will be deducted at the time of the transaction, except as noted otherwise in the prospectus.

Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://www.ubs.com.

52

UBS Global Frontier Fund

Illustration of an assumed investment of $10,000 in Class A shares (adjusted for 5.50% maximum

sales charge) and $5,000,000 in Class Y shares (unaudited)

The following two graphs depict the performance of UBS Global Frontier Fund Class A and Class Y shares versus the MSCI World Free Index (net) and the GSMI Mutual Fund Index from July 26, 2007, which is the inception date of the two classes, through June 30, 2009. The performance of Class C shares will vary based upon the different class specific expenses and sales charges. No adjustment has been made for any income taxes payable by shareholders on income dividends and capital gain distributions. Past performance is no guarantee of future results. Share price and returns will vary with market conditions; investors may realize a gain or loss upon redemption.

UBS Global Frontier Fund Class A vs.
MSCI World Free Index (net) and GSMI Mutual Fund Index

Wealth value with dividends reinvested

Indices are started on July 31, 2007

The Fund's growth of an assumed $10,000 investment is adjusted for the maximum sales charge of 5.50%.

UBS Global Frontier Fund Class Y vs.
MSCI World Free Index (net) and GSMI Mutual Fund Index

Wealth value with dividends reinvested

Indices are started on July 31, 2007

Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://www.ubs.com.

53

UBS Global Frontier Fund

Top ten long-term fixed income

holdings (unaudited)⁽¹⁾

As of June 30, 2009

	Percentage of net assets
US Treasury Notes, 3.125%, due 05/15/19		1.4	%
US Treasury Notes, 0.875%, due 04/30/11		1.1
Bundesrepublik Deutschland, 4.500%, due 01/04/13		0.7
Government of Netherlands, 5.000%, due 07/15/12		0.6
UK Gilts, 5.000%, due 03/07/12		0.5
Bundesrepublik Deutschland, 3.750%, due 01/04/19		0.5
Buoni Poliennali Del Tesoro, 4.250%, due 08/01/13		0.5
Government of France, 4.250%, due 10/25/17		0.4
US Treasury Notes, 2.250%, due 05/31/14		0.4
Buoni Poliennali Del Tesoro, 4.500%, due 08/01/18		0.3
Total		6.4	%

Country exposure, top five (unaudited)⁽²⁾

As of June 30, 2009

	Percentage of net assets
United States		5.0	%
Germany		1.7
United Kingdom		1.5
Netherlands		1.0
France		1.0
Total		10.2	%

⁽¹⁾  Figures represent the direct investments of the UBS Global Frontier Fund. Figures could be different if a breakdown of the underlying investment companies was included.

⁽²⁾  Figures represent the direct investments of the UBS Global Frontier Fund. If a breakdown of the underlying investment companies was included the country exposure percentages would be as follows: Unites States: 37.4%, United Kingdom: 5.1%, Japan: 4.9%, China: 3.9%, Germany: 3.3%.

54

UBS Global Frontier Fund

Industry diversification (unaudited)⁽¹⁾

As a percentage of net assets as of June 30, 2009

Bonds Corporate bonds
Commercial banks	0.13	%
Diversified financial services	0.13
Total corporate bonds	0.26
Asset-backed securities	0.07
Commercial mortgage-backed securities	0.07
Mortgage & agency debt securities	0.85
US government obligations	4.02
Non US-government obligations	7.21
Sovereign/supranational bond	0.07
Total bonds	12.55
Investment companies
UBS Corporate Bond Relationship Fund	6.81
UBS Emerging Markets Equity Relationship Fund	13.96
UBS Global (ex-U.S.) All Cap Growth Relationship Fund	10.97
UBS High Yield Relationship Fund	4.45
UBS International Equity Relationship Fund	11.34
UBS U.S. Large Cap Equity Relationship Fund	18.81
UBS U.S. Large Cap Growth Equity Relationship Fund	4.36
Total investment companies	70.70
Short-term investment	10.33
Total investments	93.58
Cash and other assets, less liabilities	6.42
Net assets	100.00	%

⁽¹⁾  Figures represent the industry breakdown of direct investments of the UBS Global Frontier Fund. Figures would be different if a breakdown of the underlying investment companies' industry diversification was included.

55

UBS Global Frontier Fund—Portfolio of investments

June 30, 2009

Security description	Face amount		Value
Bonds—12.55%
Corporate bonds—0.26%
Germany—0.06%
Hypothekenbank in Essen AG, 3.750%, due 09/28/12	EUR	25,000	$	36,071
Ireland—0.06%
GE Capital European Funding, 4.625%, due 08/23/10	EUR	25,000		35,837
Italy—0.04%
Intesa Sanpaolo SpA, 6.375%, due 04/06/10	EUR	20,000		28,618
Netherlands—0.10%
E.ON International Finance BV, 5.125%, due 10/02/12	EUR	30,000		44,849
Rabobank Nederland NV, 4.125%, due 04/04/12		15,000		21,901
Total Netherlands corporate bonds				66,750
Total corporate bonds (cost $171,313)				167,276
Asset-backed securities—0.07%
United States—0.07%
Ford Credit Auto Owner Trust, Series 2007-B, Class A3A, 5.150%, due 11/15/11	$	20,000		20,507
Irwin Home Equity Corp., Series 2005-C, Class 1M3, 6.150%, due 04/25/30(1),(2)		68,065		27,226
Total asset-backed securities (cost $86,421)				47,733
Commercial mortgage-backed securities—0.07%
United States—0.07%
Greenwich Capital Commercial Funding Corp., Series 2006-RR1, Class A1, 5.961%, due 03/18/49(3),(4)		200,000		24,000
GS Mortgage Securities Corp. II, Series 2006-GG8, Class A2, 5.479%, due 11/10/39		20,000		18,668
Total commercial mortgage- backed securities (cost $221,594)				42,668
Mortgage & agency debt securities—0.85%
United States—0.85%
Federal Home Loan Mortgage Corp.,† 5.750%, due 09/15/10		25,000		36,738
Federal Home Loan Mortgage Corp. Gold Pools,† #G04437, 5.000%, due 08/01/37		106,804		108,786
#G02922, 5.500%, due 04/01/37		96,995		100,313

Security description	Face amount		Value
United States—(concluded)
Federal National Mortgage Association,† 2.500%, due 05/15/14	$	150,000	$	147,462
Federal National Mortgage Association Pools,† #555591, 5.500%, due 07/01/33		69,486		72,102
Wells Fargo Mortgage Backed Securities Trust, Series 2005-14, Class 2B1, 5.500%, due 12/25/35		349,995		85,677
Total mortgage & agency debt securities (cost $798,536)				551,078
US government obligations—4.02%
US Treasury Bonds, 3.500%, due 02/15/39		185,000		159,968
5.375%, due 02/15/31		85,000		97,564
US Treasury Notes, 0.875%, due 04/30/11		695,000		692,964
0.875%, due 05/31/11		165,000		164,408
2.250%, due 05/31/14		250,000		246,640
2.625%, due 06/30/14		170,000		170,532
3.125%, due 05/15/19		965,000		933,338
4.625%, due 07/31/12		120,000		130,640
Total US government obligations (cost $2,580,519)				2,596,054
Non US-government obligations—7.21%
Austria—0.33%
Republic of Austria, 4.350%, due 03/15/19(3)	EUR	150,000		213,885
Belgium—0.32%
Belgium Kingdom, 5.500%, due 09/28/17	EUR	130,000		204,756
Canada—0.09%
Government of Canada, 4.000%, due 06/01/16	CAD	60,000		55,108
Finland—0.31%
Government of Finland, 3.875%, due 09/15/17	EUR	140,000		200,836
France—0.99%
Government of France, 3.750%, due 04/25/21	EUR	145,000		199,223
4.000%, due 04/25/18		40,000		57,772
4.250%, due 10/25/17		190,000		279,447
4.750%, due 04/25/35		70,000		103,676
				640,118
Germany—1.62%
Bundesrepublik Deutschland, 3.750%, due 01/04/19	EUR	210,000		304,703
4.500%, due 01/04/13		325,000		491,717
4.750%, due 07/04/34		120,000		179,271

56

UBS Global Frontier Fund—Portfolio of investments

June 30, 2009

Security description	Face amount		Value
Bonds—(concluded)
Non US-government obligations—(concluded)
Germany—(concluded)
Bundesschatzanweisungen, 4.000%, due 09/10/10	EUR	20,000	$	29,050
Kreditanstalt fuer Wiederaufbau, 4.625%, due 10/12/12		30,000		44,947
				1,049,688
Italy—0.99%
Buoni Poliennali Del Tesoro, 4.000%, due 02/01/37	EUR	120,000		140,064
4.250%, due 08/01/13		195,000		287,102
4.500%, due 08/01/18		150,000		215,766
				642,932
Netherlands—0.91%
Government of Netherlands, 4.000%, due 07/15/18	EUR	140,000		200,857
5.000%, due 07/15/12		255,000		388,195
				589,052
Spain—0.08%
Government of Spain, 6.000%, due 01/31/29	EUR	30,000		48,534
Sweden—0.09%
Government of Sweden, 6.750%, due 05/05/14	SEK	390,000		59,845
United Kingdom—1.48%
UK Gilts, 2.250%, due 03/07/14	GBP	125,000		197,424
4.500%, due 03/07/19		110,000		192,690
4.750%, due 12/07/38		55,000		95,612
5.000%, due 03/07/12		190,000		334,697
8.000%, due 06/07/21		60,000		138,459
				958,882
Total non US-government obligations (cost $4,469,634)				4,663,636

Security description	Face amount		Value
Sovereign/supranational bond—0.07%
European Investment Bank, 5.375%, due 10/15/12 (cost $45,495)	EUR	30,000	$	45,878
Total bonds (cost $8,373,512)				8,114,323
	Units
Investment companies—70.70%
UBS Corporate Bond Relationship Fund*(5)		369,601		4,401,841
UBS Emerging Markets Equity Relationship Fund*(5)		359,641		9,024,979
UBS Global (ex-U.S.) All Cap Growth Relationship Fund*(5)		632,471		7,092,092
UBS High Yield Relationship Fund*(5)		148,226		2,879,802
UBS International Equity Relationship Fund*(5)		554,930		7,330,241
UBS U.S. Large Cap Equity Relationship Fund*(5)		894,650		12,161,156
UBS U.S. Large Cap Growth Equity Relationship Fund*(5)		308,759		2,818,201
Total investment companies (cost $40,611,372)				45,708,312
Short-term investment—10.33%
Investment company—10.33%
UBS Cash Management Prime Relationship Fund, 0.384%(5),(6)(cost $6,677,130)		6,677,130		6,677,130
Total investments—93.58% (cost $55,662,014)				60,499,765
Cash and other assets, less liabilities—6.42%				4,152,320
Net assets—100.00%			$	64,652,085

Notes to portfolio of investments

Aggregate cost for federal income tax purposes was $85,544,172; and net unrealized depreciation consisted of:

Gross unrealized appreciation	$	—
Gross unrealized depreciation		(25,044,407	)
Net unrealized depreciation of investments	$	(25,044,407	)

*  Non-income producing security.

^†  On September 7, 2008, the Federal Housing Finance Agency placed the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation into conservatorship, and the US Treasury guaranteed the debt issued by those organizations.

⁽¹⁾  Step bond—Coupon rate increases in increments to maturity. Rate disclosed is as of June 30, 2009. Maturity date disclosed is the ultimate maturity date.

⁽²⁾  Security is illiquid. At June 30, 2009, this security amounted to $27,226 or 0.04% of net assets.

57

UBS Global Frontier Fund—Portfolio of investments

June 30, 2009

⁽³⁾  Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities are considered liquid, unless noted otherwise, and may be resold in transactions exempt from registration, normally to qualified institutional buyers. At June 30, 2009, the value of these securities amounted to $237,885 or 0.37% of net assets.

⁽⁴⁾  Floating rate security—The interest rates shown are the current rates as of June 30, 2009.

⁽⁵⁾  Investment in affiliated mutual fund.

⁽⁶⁾  The rate shown reflects the yield at June 30, 2009.

GS  Goldman Sachs

Currency type abbreviations:

CAD  Canadian Dollar

EUR  Euro

GBP  Great Britain Pound

SEK  Swedish Krona

Forward foreign currency contracts

UBS Global Frontier Fund had the following open forward foreign currency contracts as of June 30, 2009:

	Contracts to deliver		In exchange for		Maturity dates	Unrealized appreciation/ (depreciation)
Brazilian Real		740,000	USD	360,448	09/03/09	$	(12,413	)
Japanese Yen		80,300,000	USD	841,957	09/03/09		7,798
Swiss Franc		1,155,000	USD	1,063,301	09/03/09		(519	)
United States Dollar		993,262	AUD	1,230,000	09/03/09		(6,777	)
United States Dollar		2,211,284	CAD	2,435,000	09/03/09		(117,093	)
United States Dollar		1,070,852	CHF	1,155,000	09/03/09		(7,033	)
United States Dollar		2,486,899	EUR	1,775,000	09/03/09		3,125
United States Dollar		3,114,290	GBP	1,895,000	09/03/09		3,155
United States Dollar		9,277,850	JPY	907,100,000	09/03/09		145,132
United States Dollar		4,341,907	SEK	33,330,000	09/03/09		(22,121	)
United States Dollar		713,173	TWD	22,900,000	09/03/09		(7,319	)
Net unrealized depreciation on forward foreign currency contracts						$	(14,065	)

Currency type abbreviations:

AUD  Australian Dollar

CAD  Canadian Dollar

CHF  Swiss Franc

EUR  Euro

GBP  Great Britain Pound

JPY  Japanese Yen

SEK  Swedish Krona

TWD  New Taiwan Dollar

USD  United States Dollar

Futures contracts

UBS Global Frontier Fund had the following open futures contracts as of June 30, 2009:

	Expiration dates	Cost/ (proceeds)			Value			Unrealized appreciation/ (depreciation)
US treasury futures buy contracts:
US Long Bond, 42 contracts (USD)	September 2009	$	4,864,826		$	4,971,094		$	106,268
10 Year US Treasury Notes, 85 contracts (USD)	September 2009		9,757,733			9,882,578			124,845
US treasury futures sell contracts:
2 Year US Treasury Notes, 90 contracts (USD)	September 2009		(19,408,212	)		(19,459,687	)		(51,475	)

58

UBS Global Frontier Fund—Portfolio of investments

June 30, 2009

Futures contracts—(concluded)

	Expiration dates	Cost/ (proceeds)			Value			Unrealized appreciation/ (depreciation)
Index futures buy contracts:
Amsterdam Exchange Index, 21 contracts (EUR)	July 2009	$	1,493,180		$	1,496,819		$	3,639
CAC 40 Index, 37 contracts (EUR)	July 2009		1,678,339			1,631,708			(46,631	)
DAX Index, 3 contracts (EUR)	September 2009		509,183			508,476			(707	)
Dow Jones EURO STOXX 50 Index, 83 contracts (EUR)	September 2009		2,826,987			2,800,565			(26,422	)
FTSE 100 Index, 106 contracts (GBP)	September 2009		7,497,253			7,383,743			(113,510	)
FTSE MIB Index, 7 contracts (EUR)	September 2009		936,666			942,324			5,658
IBEX 35 Index, 6 contracts (EUR)	July 2009		797,584			820,491			22,907
OMX Stockholm 30 Index, 69 contracts (SEK)	July 2009		710,251			712,078			1,827
Russell 2000 Index, 60 contracts (USD)	September 2009		3,144,780			3,043,200			(101,580	)
S&P 500 Index, 80 contracts (USD)	September 2009		18,711,280			18,310,000			(401,280	)
TOPIX Index, 45 contracts (JPY)	September 2009		4,338,291			4,292,753			(45,538	)
Index futures sell contracts:
S&P Toronto Stock Exchange 60 Index, 3 contracts (CAD)	September 2009		(332,281	)		(323,484	)		8,797
SPI 200 Index, 2 contracts (AUD)	September 2009		(161,982	)		(156,327	)		5,655
Net unrealized depreciation on futures contracts								$	(507,547	)

Currency type abbreviations:

AUD  Australian Dollar

CAD  Canadian Dollar

EUR  Euro

GBP  Great Britain Pound

JPY  Japanese Yen

SEK  Swedish Krona

USD  United States Dollar

The following is a summary of the inputs used as of June 30, 2009 in valuing the Fund's investments.

Measurements at 06/30/09
Description	Quoted prices in active markets for identical investments (Level 1)			Significant other observable inputs (Level 2)			Unobservable inputs (Level 3)		Total
Corporate bonds	$	—		$	167,276		$	—	$	167,276
Asset-backed securities		—			20,507			27,226		47,733
Commercial mortgage-backed securities		—			42,668			—		42,668
Mortgage & agency debt securities		—			551,078			—		551,078
US government obligations		—			2,596,054			—		2,596,054
Non US-government obligations		—			4,663,636			—		4,663,636
Sovereign/supranational bond		—			45,878			—		45,878
Investment companies		—			45,708,312			—		45,708,312
Short-term investment		—			6,677,130			—		6,677,130
Other financial instruments(1)(2)		(507,547	)		(14,065	)		—		(521,612	)
Total	$	(507,547	)	$	60,458,474		$	27,226	$	59,978,153

⁽¹⁾  The Fund may hold investments which have been fair valued in accordance with the Fund's fair valuation policy as of June 30, 2009, which may result in movement between Level 1 and Level 2.

⁽²⁾  Other financial instruments may include open futures contracts, swap agreements, options and forward foreign currency contracts.

59

UBS Global Frontier Fund—Portfolio of investments

June 30, 2009

Level 3 Rollforward Disclosure

The following is a rollforward of the Fund's investments that were valued using unobservable inputs for the period:

Measurements using unobservable inputs (Level 3)
	Asset-backed securities			Total
Assets
Beginning balance	$	5,611		$	5,611
Total gains or losses (realized/unrealized) included in earnings(a)		(514	)		(514	)
Purchases, sales, issuances, and settlements (net)		(5,097	)		(5,097	)
Transfers in and/or out of Level 3		27,226			27,226
Ending balance	$	27,226		$	27,226
The amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to investments still held at 06/30/09.	$	(40,449	)	$	(40,449	)

^(a)  Does not include unrealized losses of ($105,208) related to transferred assets, presented at their end of period values.

See accompanying notes to financial statements.
60

UBS Global Equity Fund

Portfolio performance

For the 12 months ended June 30, 2009, Class A shares of UBS Global Equity Fund (the "Fund") declined 24.86% (Class A shares declined 29.00% after the deduction of the maximum sales charge), while Class Y shares declined 24.52%. The Fund's benchmark, the MSCI World Free Index (net) (the "Index"), declined 29.50% over the same time period. (Class Y shares have lower expenses than other share classes of the Fund. Returns for all share classes over various time periods are shown on page 63; please note that these returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares, while the Index returns do not reflect the deduction of fees and expenses.) For a detailed commentary on the market environment in general during the reporting period, see page 2.

The Fund outperformed its benchmark during the reporting period primarily due to widespread stock selection gains within most sectors and industry groups.

Portfolio performance summary

What worked

•  Stock selection contributed positively in seven out of the 10 global sectors during the reporting period, with security decisions in financials and industrials, respectively, making the strongest contributions to performance.

•  Within financials, outperformance was driven by holdings in banks and real estate, including positions in Barclays, ING Groep and BNP Paribas. While we reduced the Fund's holdings in each following strong gains in the second half of the reporting period, the Fund retained positions in all three companies.

–  Avoiding Bank of America through most of the reporting period also contributed strongly to performance, as the company's stock price fell substantially. However, toward the end of the reporting period we purchased the stock, as we thought that the shares had fallen more than we believed to be justified.

–  Stock selection within real estate was also positive. The Fund's overweight positions in New World Development in China and CapitaLand in Singapore were key contributors.

•  Within industrials, outperformance was driven by holdings in the capital goods subsector. Avoiding General Electric, which dramatically underperformed during the period, was a key positive contributor to the Fund's relative performance, as was the Fund's position in Jardine Matheson, an Asia-based conglomerate. (For details, see "Portfolio highlights.")

What didn't work

•  Stock selection within telecom services was the largest negative contributor to performance during the 12-month period. Within telecoms, the largest single negative contributor to performance was Sprint Nextel, which fell substantially and was sold during the period. Not holding Telefonica also detracted, as that stock significantly outperformed the Index.

•  Notable positive contributions from NTT DoCoMo, which was sold from the Fund during the period, as well as Telekom Austria failed to make up for the negative contributions from Sprint Nextel

61

UBS Global Equity Fund

and Telefonica,which was also sold from the Fund during the period. As a result, the telecom services sector hurt performance overall.

•  The Fund's exposures within energy also hindered relative performance. Overweight positions in Peabody Energy and Halliburton were the largest negative stock contributors. Despite holding an overweight in Tullow Oil—one of the Fund's strongest performers during the period—holdings in the energy sector were negative for performance overall. (For details, see "Portfolio highlights. ")

•  Despite some successes within the sector, stock selection in the health care sector hurt performance. On the positive side, an overweight to Wyeth benefited performance, and was sold from the Fund following gains. However, an underweight in pharmaceutical stocks, including not holding GlaxoSmithKline, AstraZeneca and Johnson & Johnson, which held up well during the period, detracted from performance.

Portfolio highlights

•  Jardine Matheson was introduced as a new holding toward the end of the reporting period. Jardine Matheson is a Singapore-listed, Asia-based conglomerate with a premium office portfolio in Hong Kong and an expanding supermarket franchise in India and Southeast Asia. Because its diverse mix of strong franchises was trading at what we considered an unusually large discount, we purchased the shares. This holding has already started to contribute strongly to Fund performance, and we continue to find it attractive.

•  Ahold is a Netherlands-based food retailer that dominates its domestic market. In addition, Ahold has strong positions in certain retail businesses in the US, Czech Republic and Slovakia, as well as holdings of Nordic and Portuguese retailers. The company has operated successfully through the downturn, its shares outperforming strongly during the 12-month period, and the Fund sold the position.

•  Tullow Oil is a UK-based oil and gas company with extensive interests in Africa and a strong exploration track record. The shares outperformed strongly during the period following ongoing exploration success. Although some shares were sold in order to take profits from them, Tullow remains an overweight position in the Fund. We continue to believe that further potential from its fields in Uganda, India and Ghana is still not yet fully priced into the shares.

This letter is intended to assist shareholders in understanding how the Fund performed during the 12 months ended June 30, 2009. The views and opinions in the letter were current as of August 17, 2009. They are not guarantees of performance or investment results and should not be taken as investment advice. Investment decisions reflect a variety of factors, and we reserve the right to change our views about individual securities, sectors and markets at any time. As a result, the views expressed should not be relied upon as a forecast of the Fund's future investment intent. We encourage you to consult your financial advisor regarding your personal investment program. Mutual funds are sold by prospectus only. You should read it carefully and consider a fund's investment objectives, risks, charges, expenses and other important information contained in the prospectus before investing. Prospectuses for most of our funds can be obtained from your financial advisor, by calling UBS Funds at 800-647 1568 or by visiting our Web site at www.ubs.com

62

UBS Global Equity Fund

Average annual total returns for periods ended 06/30/09 (unaudited)

		1 year			5 years			10 years			Inception(1)
Before deducting	Class A(2)		(24.86	)%		(0.36	)%		0.33	%		1.75	%
maximum sales charge	Class B(3)		(25.39	)		(1.10	)		N/A			0.68
	Class C(4)		(25.46	)		(1.10	)		N/A			0.50
	Class Y(5)		(24.52	)		(0.08	)		0.65			4.50
After deducting maximum	Class A(2)		(29.00	)		(1.48	)		(0.24	)		1.28
sales charge	Class B(3)		(28.90	)		(1.48	)		N/A			0.68
	Class C(4)		(26.16	)		(1.10	)		N/A			0.50
MSCI World Free Index (net)(6)			(29.50	)		0.03			(0.85	)		4.38

The annualized gross and net expense ratios, respectively, for each class of shares as in the October 28, 2008 prospectuses were as follows: Class A—1.33% and 1.27%; Class B—2.07% and 2.02%; Class C—2.13% and 2.02%; Class Y—0.98% and 0.98%. Net expenses reflect fee waivers and/or expense reimbursements, if any, pursuant to an agreement that is in effect to cap the expenses. The Trust, with respect to the Fund, and the Advisor have entered into a written agreement pursuant to which the Advisor has agreed to waive a portion of its management fees and/or to reimburse expenses (excluding expenses incurred through investment in other investment companies and interest expense) to the extent necessary so that the Fund's operating expenses (excluding expenses incurred through investment in other investment companies and interest expense), through the fiscal year ending June 30, 2009, do not exceed 1.25% for Class A s hares, 2.00% for Class B shares, 2.00% for Class C shares and 1.00% for Class Y shares. Pursuant to the written agreement, the Advisor is entitled to be reimbursed for any fees it waives and expenses it reimburses for a period of three years following such fee waivers and expense reimbursements, to the extent that such reimbursement of the Advisor by the Fund will not cause the Fund to exceed any applicable expense limit that is in place for the Fund.

⁽¹⁾  Inception date of UBS Global Equity Fund Class A shares is June 30, 1997. Inception dates of Class B and Class C shares are December 11, 2001 and November 27, 2001, respectively. Inception date of Class Y shares is January 28, 1994. The inception return of the index is calculated as of January 31, 1994, which is the closest month-end to the inception date of the oldest share class (Class Y).

⁽²⁾  Maximum sales charge for Class A shares is 5.5%. Class A shares bear ongoing 12b-1 service fees.

⁽³⁾  Maximum contingent deferred sales charge for Class B shares is 5% imposed on redemptions and is reduced to 0% after a maximum of six years. Class B shares bear ongoing 12b-1 service and distribution fees.

⁽⁴⁾  Maximum contingent deferred sales charge for Class C shares is 1% imposed on redemptions and is reduced to 0% after one year. Class C shares bear ongoing 12b-1 service and distribution fees.

⁽⁵⁾  The Fund offers Class Y shares to a limited group of eligible investors, including certain qualifying retirement plans. Class Y shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees.

⁽⁶⁾  The MSCI World Free Index (net) is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets. As of June 2007, the index consisted of 23 developed market country indices. Dividends are reinvested after deduction of withholding tax, using tax rates applicable to Luxembourg holding companies, as Luxembourg applies the highest rates. Had US tax rates been applied, the performance of the index would be different. The index excludes closed markets and those shares in otherwise free markets that are not purchasable by foreigners. Investors should note that indices do not reflect the deduction of fees and expenses.

If an investor sells or exchanges shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged will be deducted at the time of the transaction, except as noted otherwise in the prospectus.

Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://www.ubs.com.

63

UBS Global Equity Fund

Illustration of an assumed investment of $10,000 in Class A shares (adjusted for 5.50% maximum

sales charge) and $10,000,000 in Class Y shares (unaudited)

The following two graphs depict the performance of UBS Global Equity Fund Class A and Class Y shares versus the MSCI World Free Index (net) over the 10 years ended June 30, 2009. The performance of Class B and Class C shares will vary based upon the different inception dates, class specific expenses and sales charges. No adjustment has been made for any income taxes payable by shareholders on income dividends and capital gain distributions. Past performance is no guarantee of future results. Share price and returns will vary with market conditions; investors may realize a gain or loss upon redemption.

UBS Global Equity Fund Class A vs. MSCI World Free Index (net)

Wealth value with dividends reinvested

The Fund's growth of an assumed $10,000 investment is adjusted for the maximum sales charge of 5.50%.

UBS Global Equity Fund Class Y vs. MSCI World Free Index (net)

Wealth value with dividends reinvested

Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://ww.ubs.com.

64

UBS Global Equity Fund

Top ten equity holdings (unaudited)⁽¹⁾

As of June 30, 2009

	Percentage of net assets
Vodafone Group PLC		2.4	%
Roche Holding AG		2.3
Japan Tobacco, Inc.		2.2
Intel Corp.		1.9
Nomura Holdings, Inc.		1.8
Exelon Corp.		1.7
CRH PLC		1.6
BNP Paribas		1.6
Adecco SA		1.5
Bank of America Corp.		1.5
Total		18.5	%

Country exposure, top five (unaudited)⁽²⁾

As of June 30, 2009

	Percentage of net assets
United States		42.6	%
Japan		12.1
United Kingdom		10.1
Switzerland		4.4
Australia		2.6
Total		71.8	%

⁽¹⁾  Figures represent the direct investments of the UBS Global Equity Fund. Figures could be different if a breakdown of the underlying investment company was included.

⁽²⁾  Figures represent the industry breakdown of direct investments of the UBS Global Equity Fund. If a breakdown of the underlying investment company was included, the country exposure percentages would be as follows: United States: 42.6%, Japan: 12.1%, United Kingdom: 10.1%, China: 5.5%, Switzerland: 4.4%.

65

UBS Global Equity Fund

Industry diversification (unaudited)⁽¹⁾

As a percentage of net assets as of June 30, 2009

Common stocks
Airlines	1.95	%
Auto components	1.02
Automobiles	1.19
Beverages	1.84
Biotechnology	0.96
Capital markets	3.57
Chemicals	2.70
Commercial banks	6.07
Commercial services & supplies	2.58
Communications equipment	2.51
Computers & peripherals	1.59
Construction materials	1.65
Consumer finance	0.74
Diversified financial services	2.58
Diversified telecommunication services	2.84
Electric utilities	1.71
Energy equipment & services	1.66
Food & staples retailing	1.40
Health care equipment & supplies	3.29
Health care providers & services	0.82
Household durables	0.79
Independent power producers & energy traders	0.72
Industrial conglomerates	0.61
Insurance	2.65
Internet & catalog retail	1.21
Machinery	2.97
Marine	0.87
Media	2.31
Metals & mining	0.93	%
Multiline retail	0.89
Multi-utilities	1.06
Office electronics	1.03
Oil, gas & consumable fuels	5.05
Personal products	1.79
Pharmaceuticals	4.55
Professional services	1.48
Real estate investment trusts (REITs)	0.95
Real estate management & development	1.82
Semiconductors & semiconductor equipment	2.55
Software	3.35
Specialty retail	0.92
Textiles, apparel & luxury goods	0.83
Tobacco	3.37
Trading companies & distributors	1.34
Wireless telecommunication services	2.36
Total common stocks	89.07
Investment company
UBS Emerging Markets Equity Completion Relationship Fund	9.33
Rights	0.22
Short-term investment	0.05
Investment of cash collateral from securities loaned	1.71
Total investments	100.38
Liabilities, in excess of cash and other assets	(0.38	)
Net assets	100.00	%

⁽¹⁾  Figures represent the industry breakdown of direct investments of the UBS Global Equity Fund. Figures would be different if a breakdown of the underlying investment company's industry diversification was included.

66

UBS Global Equity Fund—Portfolio of investments

June 30, 2009

Security description	Shares		Value
Common stocks—89.07%
Australia—2.43%
Qantas Airways Ltd.		783,070	$	1,263,221
QBE Insurance Group Ltd.		73,291		1,169,418
Rio Tinto Ltd.(1)		36,306		1,519,487
Total Australia common stocks				3,952,126
Austria—1.39%
Telekom Austria AG(1)		144,182		2,255,928
Belgium—0.84%
Anheuser-Busch InBev NV		37,761		1,367,045
Cayman Islands—0.70%
Seagate Technology		108,300		1,132,818
China—2.56%
Bank of East Asia Ltd.		538,780		1,641,482
Jardine Matheson Holdings Ltd.		36,400		995,859
New World Development Ltd.		846,000		1,527,092
Total China common stocks				4,164,433
Finland—1.28%
Nokia Oyj		142,215		2,075,439
France—1.56%
BNP Paribas(1)		39,205		2,544,165
Germany—1.84%
Metro AG		17,860		853,756
Muenchener Rueckversicherungs- Gesellschaft AG		15,804		2,137,407
Total Germany common stocks				2,991,163
Guernsey—0.33%
Resolution Ltd.*		369,621		542,180
Ireland—1.65%
CRH PLC		117,433		2,692,288
Japan—12.06%
Canon, Inc.		51,600		1,679,423
Japan Tobacco, Inc.		1,121		3,494,108
Kuraray Co., Ltd.		103,500		1,147,270
Mitsubishi Corp.		118,900		2,183,620
Mitsui OSK Lines Ltd.		220,000		1,419,304
Nintendo Co., Ltd.		4,200		1,155,857
Nissan Motor Co. Ltd.		321,000		1,937,956
Nomura Holdings, Inc.		342,000		2,865,317
Shin-Etsu Chemical Co., Ltd.		30,900		1,427,124
Sumitomo Mitsui Financial Group, Inc.		57,200		2,313,076
Total Japan common stocks				19,623,055
Netherlands—1.49%
ASML Holding NV		52,527		1,139,324
ING Groep NV CVA		128,158		1,289,923
Total Netherlands common stocks				2,429,247

Security description	Shares		Value
Norway—2.13%
Petroleum Geo-Services ASA*		176,800	$	1,102,491
Telenor ASA*		306,300		2,364,585
Total Norway common stocks				3,467,076
Singapore—0.88%
CapitaLand Ltd.		564,000		1,432,439
Spain—0.92%
Inditex SA		31,186		1,498,719
Switzerland—4.37%
Adecco SA		57,690		2,409,165
Nobel Biocare Holding AG		47,047		1,031,363
Roche Holding AG		27,031		3,677,534
Total Switzerland common stocks				7,118,062
United Kingdom—10.06%
Barclays PLC		323,815		1,508,243
British Land Co. PLC		244,774		1,543,734
British Sky Broadcasting Group PLC		283,845		2,129,333
Home Retail Group PLC		458,270		1,965,458
Imperial Tobacco Group PLC		76,364		1,986,171
Man Group PLC		289,505		1,328,786
Tullow Oil PLC		133,473		2,064,993
Vodafone Group PLC		1,985,246		3,837,428
Total United Kingdom common stocks				16,364,146
United States—42.58%
Aflac, Inc.		32,300		1,004,207
Allergan, Inc.		34,000		1,617,720
Apple, Inc.*		10,200		1,452,786
Bank of America Corp.		179,500		2,369,400
BorgWarner, Inc.(1)		48,600		1,659,690
Cisco Systems, Inc.*		106,900		1,992,616
Coach, Inc.		50,300		1,352,064
Comcast Corp., Class A		112,600		1,631,574
Covidien PLC		61,804		2,313,942
Discover Financial Services		117,283		1,204,496
Dr. Pepper Snapple Group, Inc.*		76,900		1,629,511
Dynegy, Inc., Class A*		513,400		1,165,418
EOG Resources, Inc.		25,700		1,745,544
Estee Lauder Cos., Inc., Class A		35,600		1,163,052
Exelon Corp.		54,400		2,785,824
Fortune Brands, Inc.		37,100		1,288,854
Genzyme Corp.*		28,100		1,564,327
Halliburton Co.		77,100		1,595,970
Hess Corp.		28,300		1,521,125
Illinois Tool Works, Inc.		60,600		2,262,804
Ingersoll-Rand Co., Ltd., Class A		68,800		1,437,920
Intel Corp.		181,700		3,007,135
Intuit, Inc.*		53,900		1,517,824
JC Penney Co., Inc.		50,700		1,455,597
Mead Johnson Nutrition Co., Class A		54,763		1,739,821
Monsanto Co.		24,200		1,799,028
Morgan Stanley		56,800		1,619,368

67

UBS Global Equity Fund—Portfolio of investments

June 30, 2009

Security description	Shares		Value
Common stocks—(concluded)
United States—(concluded)
PACCAR, Inc.		35,000	$	1,137,850
Peabody Energy Corp.		34,000		1,025,440
Pfizer, Inc.		140,800		2,112,000
Pitney Bowes, Inc.		99,600		2,184,228
Republic Services, Inc.		82,300		2,008,943
Sempra Energy		34,600		1,717,198
Southwest Airlines Co.		283,900		1,910,647
Symantec Corp.*		85,365		1,328,279
Sysco Corp.		62,800		1,411,744
Ultra Petroleum Corp.*		47,700		1,860,300
UnitedHealth Group, Inc.		53,600		1,338,928
VMware, Inc., Class A*(1)		53,012		1,445,637
Wells Fargo & Co.		77,000		1,868,020
Zimmer Holdings, Inc.*		47,500		2,023,500
Total United States common stocks				69,270,331
Total common stocks (cost $138,506,438)				144,920,660

Security description	Units		Value
Investment company—9.33%
UBS Emerging Markets Equity Completion Relationship Fund*(2) (cost $12,605,627)		1,336,404	$	15,173,928
	Number of rights
Rights—0.22%
Australia—0.22%
Rio Tinto Ltd., expires 7/1/09* (cost $358,560)		19,059		363,191
	Units
Short-term investment—0.05%
Investment company—0.05%
UBS Cash Management Prime Relationship Fund, 0.384%(2),(3) (cost $75,974)		75,974		75,974
	Shares
Investment of cash collateral from securities loaned—1.71%
UBS Private Money Market Fund LLC, 0.488%(2),(3) (cost $2,774,813)		2,774,813		2,774,813
Total investments—100.38% (cost $154,321,412)				163,308,566
Liabilities, in excess of cash and other assets—(0.38)%				(610,144	)
Net assets—100.00%			$	162,698,422

Notes to portfolio of investments

Aggregate cost for federal income tax purposes was $164,643,501; and net unrealized depreciation consisted of:

Gross unrealized appreciation	$	13,564,994
Gross unrealized depreciation		(14,899,929	)
Net unrealized depreciation of investments	$	(1,334,935	)

*  Non-income producing security.

⁽¹⁾  Security, or portion thereof, was on loan at June 30, 2009.

⁽²⁾  Investment in affiliated mutual fund.

⁽³⁾  The rate shown reflects the yield at June 30, 2009.

CVA  Dutch certification—depository certificate

68

UBS Global Equity Fund—Portfolio of investments

June 30, 2009

Forward foreign currency contracts

UBS Global Equity Fund had the following open forward foreign currency contracts as of June 30, 2009:

	Contracts to deliver		In exchange for		Maturity dates	Unrealized appreciation/ (depreciation)
Brazilian Real		1,920,000	USD	960,240	07/27/09	$	(14,838	)
Great Britain Pound		1,385,000	USD	2,270,493	09/03/09		(7,956	)
Hong Kong Dollar		22,775,000	USD	2,939,867	09/03/09		(421	)
Japanese Yen		175,200,000	USD	1,801,360	09/03/09		(18,623	)
Korean Won		1,158,000,000	USD	868,066	07/27/09		(42,348	)
New Taiwan Dollar		26,500,000	USD	784,024	07/27/09		(28,512	)
Norwegian Krone		9,700,000	USD	1,523,265	09/03/09		17,222
Norwegian Krone		7,700,000	USD	1,186,342	09/03/09		(9,177	)
Singapore Dollar		1,265,000	USD	872,143	09/03/09		(867	)
Swiss Franc		1,465,000	EUR	970,070	09/03/09		11,496
Swiss Franc		1,930,000	USD	1,789,390	09/03/09		11,751
United States Dollar		783,304	AUD	970,000	09/03/09		(5,345	)
United States Dollar		8,640,809	CAD	9,515,000	09/03/09		(457,552	)
United States Dollar		674,863	DKK	3,590,000	09/03/09		730
United States Dollar		1,963,740	EUR	1,405,000	09/03/09		7,236
United States Dollar		928,535	GBP	565,000	09/03/09		941
United States Dollar		850,773	HKD	6,590,000	09/03/09		6
United States Dollar		912,530	KRW	1,158,000,000	07/27/09		(2,116	)
United States Dollar		6,458,799	SEK	49,580,000	09/03/09		(32,906	)
Net unrealized depreciation on forward foreign currency contracts						$	(571,279	)

Currency type abbreviations:

AUD   Australian Dollar

CAD   Canadian Dollar

DKK   Danish Krone

EUR   Euro

GBP   Great Britain Pound

HKD   Hong Kong Dollar

KRW   Korean Won

SEK   Swedish Krona

USD   United States Dollar

The following is a summary of the inputs used as of June 30, 2009 in valuing the Fund's investments.

Measurements at 06/30/09
Description	Quoted prices in active markets for identical investments (Level 1)		Significant other observable inputs (Level 2)			Unobservable inputs (Level 3)		Total
Common stocks(1)	$	70,403,149	$	74,517,511		$	—	$	144,920,660
Right		—		363,191			—		363,191
Investment company		—		15,173,928			—		15,173,928
Short-term investment		—		75,974			—		75,974
Investment of cash collateral from securities loaned		—		2,774,813			—		2,774,813
Other financial instruments(2)		—		(571,279	)		—		(571,279	)
Total	$	70,403,149	$	92,334,138		$	—	$	162,737,287

⁽¹⁾  The Fund may hold investments which have been fair valued in accordance with the Fund's fair valuation policy as of June 30, 2009, which may result in movement between Level 1 and Level 2.

⁽²⁾  Other financial instruments may include open futures contracts, swap agreements, options and forward foreign currency contracts.

See accompanying notes to financial statements.
69

UBS International Equity Fund

Portfolio performance

For the 12 months ended June 30, 2009, Class A shares of UBS International Equity Fund (the "Fund") declined 26.75% (Class A shares declined 30.78% after the deduction of the maximum sales charge), while Class Y shares declined 26.62%. The Fund's benchmark, the MSCI World Free ex USA Index (net) (the "Index") declined 31.62% over the same time period. (Class Y shares have lower expenses than other share classes of the Fund. Returns for all share classes over various time periods are shown on page 73; please note that these returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares, while the Index returns do not reflect the deduction of fees and expenses.) For a detailed commentary on the market environment in general during the reporting period, see page 2.

The Fund outperformed its benchmark during the reporting period primarily due to strong stock selection within most sectors and industry groups.

Investing in international growth in UBS International Equity Fund

At UBS Global Asset Management, we continually review our strategies in an effort to ensure that they are optimally positioned to meet clients' needs. After careful analysis, it was determined that allocating a portion of the Fund's portfolio to actively managed international growth equities could potentially have a positive impact on the Fund's risk-adjusted return.

The Fund implemented this addition to International Growth Equities effective January 21, 2009 by selling a portion of its International Core Equity strategy component (that is, the portion using our fundamental price/value approach), and using the proceeds to buy the International Growth Equity strategy component.

By including growth equities in the Fund, we hope to achieve stronger performance versus the benchmark on both an absolute and a risk-adjusted basis. We have a high degree of conviction in the skill of our International Growth Equity strategy team and in its ability to generate value-added results.

Portfolio performance summary

What worked

•  For the Fund as a whole, stock selection contributed positively in most global sectors during the year. In particular, stock selection within the financial sector was the strongest positive contributor during the period, while stock selection within the energy sector was the second-strongest positive contributor.

•  Within financials, outperformance was driven by holdings in the real estate and bank subsectors.

•  In real estate, overweight positions in New World Development in China and CapitaLand in Singapore were the key positive contributors. New holdings included QBE Insurance, CapitaLand and British Land (For details, see "Portfolio highlights.")

•  Within banks, the Fund benefited by avoiding Royal Bank of Scotland, whose shares fell steeply during the period. Activity during the period included closing out the Fund's positions in Bank of Yokohama, National Australia Bank and AXA. We have recently trimmed the Fund's holdings in Barclays and BNP Paribas after exceptionally strong performance, but the Fund retains positions in both companies. Additionally, ICICI Bank was among the strongest bank stocks the Fund held. (For details, see "Portfolio highlights.")

70

UBS International Equity Fund

•  Holdings in the materials group contributed positively to Fund returns. One standout was mining company Teck Resources, which was the Fund's top-performing name during the reporting period. (For details, see "Portfolio highlights.")

•  Within energy, outperformance was driven by the Fund's exposure to Tullow Oil, as well as avoiding poor performers in the sector. Despite seeing its shares fall in absolute terms during the year, holding an overweight position in Tullow Oil was still one of the key positive performance contributors, as Tullow significantly outperformed the falling market. (For details, see "Portfolio highlights.")

  Many other stocks in the energy sector did not fare as well. Avoiding Suncor, Royal Dutch Shell and Canadian Natural Resources were all notably successful decisions for the Fund, as these shares fell sharply.

•  Several sector allocation decisions made positive contributions to overall Fund returns, as well. Overweights to materials stocks added to performance as commodity prices rebounded strongly during the second quarter of 2009. We increased the Fund's weight in materials as the sector was supported by industry consolidation.

•  The Fund's country weightings contributed positively to performance during the period. Underweights to Switzerland, the United Kingdom and Canada contributed positively to Fund performance overall for the 12-month period.

What didn't work

•  Utilities was the worst-performing sector for the Fund as a whole during the period, primarily due to stock selection.

•  The Fund's exposure to E.On, the power company operating in Germany and the UK, was a significant detractor within this sector. We have added to the Fund's holdings in E.On during the recent share price weakness, as we still find it attractive.

•  Not holding a number of other utility stocks around the world combined to materially detract from performance. Investors found the relatively defensive nature of the sector compelling. On balance, we find the valuations of utility companies unattractive, and so continue to underweight the sector as a whole.

•  An underweight to and stock selection within the industrials sector hindered returns.

•  Several country weights hindered the relative returns of the Fund as a whole. Underweights to Japan, France and Australia were negative for the period.

71

UBS International Equity Fund

Portfolio highlights

•  ICICI Bank, India's largest consumer lender, performed strongly. This was fueled by optimism that Prime Minister Manmohan Singh's Congress party victory in May will enable the party to implement reforms to boost economic growth. With a strong presence in retail and corporate banking, ICICI is looking to take advantage of its strong brand, multi-channel distribution network and wide product offering to grow market share in the Indian financial services market.

•  Canadian miner Teck Resources had a very strong first half of 2009, as it took steps to strengthen its balance sheet by divesting some assets and issuing long-term bonds. The market anticipates that the company will divest itself of more of its coal assets.

•  Tullow Oil is a UK-based oil and gas company with extensive interests in Africa and a strong exploration track record. The shares outperformed strongly during the period following ongoing exploration success, adding to performance. Despite taking some profits from the Fund's holding, Tullow remains an overweight position. We continue to believe that further potential from its fields in Uganda, India and Ghana are still not yet fully priced into the shares.

•  Nippon Electric Glass Co. Ltd., one of three major suppliers globally of glass used in the manufacturing of LCD panels, continued its rise as LCD panel demand and pricing outpaced expectations, which benefited performance.

This letter is intended to assist shareholders in understanding how the Fund performed during the 12 months ended June 30, 2009. The views and opinions in the letter were current as of August 17, 2009. They are not guarantees of performance or investment results and should not be taken as investment advice. Investment decisions reflect a variety of factors, and we reserve the right to change our views about individual securities, sectors and markets at any time. As a result, the views expressed should not be relied upon as a forecast of the Fund's future investment intent. We encourage you to consult your financial advisor regarding your personal investment program. Mutual funds are sold by prospectus only. You should read it carefully and consider a fund's investment objectives, risks, charges, expenses and other important information contained in the prospectus before investing. Prospectuses for most of our funds can be obtained from your financial advisor, by calling UBS Funds at 800-647 1568 or by visiting our Web site at www.ubs.com

72

UBS International Equity Fund

Average annual total returns for periods ended 06/30/09 (unaudited)

		1 year			5 years			10 years			Inception(1)
Before deducting	Class A(2)		(26.75	)%		1.24	%		0.65	%		1.19	%
maximum sales charge	Class B(3)		(27.30	)		0.47			N/A			2.63
	Class C(4)		(27.33	)		0.47			N/A			2.43
	Class Y(5)		(26.62	)		1.43			0.86			3.46
After deducting maximum	Class A(2)		(30.78	)		0.10			0.08			0.71
sales charge	Class B(3)		(30.62	)		0.17			N/A			2.63
	Class C(4)		(27.99	)		0.47			N/A			2.43
MSCI World Free ex USA Index (net)(6)			(31.62	)		2.87			1.63			4.10

The annualized gross and net expense ratios, respectively, for each class of shares as in the October 28, 2008 prospectuses were as follows: Class A—1.35% and 1.28%; Class B—2.28% and 2.03%; Class C—2.16% and 2.03%; Class Y—1.16% and 1.03%. Net expenses reflect fee waivers and/or expense reimbursements, if any, pursuant to an agreement that is in effect to cap the expenses. The Advisor has agreed irrevocably to waive its fees and reimburse certain expenses (excluding expenses incurred through investment in other investment companies and interest expense) so that total operating expenses (excluding expenses incurred through investment in other investment companies and interest expense) of the Fund do not exceed 1.25% for Class A shares, 2.00% for Class B shares, 2.00% for Class C shares and 1.00% for Class Y shares.

⁽¹⁾  Inception date of UBS International Equity Fund Class A shares is June 30, 1997. Inception dates of Class B and Class C shares are February 12, 2002 and January 25, 2002, respectively. Inception date of Class Y shares and the index is August 31, 1993.

⁽²⁾  Maximum sales charge for Class A shares is 5.5%. Class A shares bear ongoing 12b-1 service fees.

⁽³⁾  Maximum contingent deferred sales charge for Class B shares is 5% imposed on redemptions and is reduced to 0% after a maximum of six years. Class B shares bear ongoing 12b-1 service and distribution fees.

⁽⁴⁾  Maximum contingent deferred sales charge for Class C shares is 1% imposed on redemptions and is reduced to 0% after one year. Class C shares bear ongoing 12b-1 service and distribution fees.

⁽⁵⁾  The Fund offers Class Y shares to a limited group of eligible investors, including certain qualifying retirement plans. Class Y shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees.

⁽⁶⁾  The MSCI World Free ex USA Index (net) is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets excluding the United States. As of June 2007, the index consisted of 22 developed market country indices. Dividends are reinvested after deduction of withholding tax, using tax rates applicable to Luxembourg holding companies, as Luxembourg applies the highest rates. Had US tax rates been applied, the performance of the index would be different. The index excludes closed markets and those shares in otherwise free markets that are not purchasable by foreigners. Investors should note that indices do not reflect the deduction of fees and expenses. Inception date of the MSCI World Free ex USA Index (net) is December 31, 1997.

If an investor sells or exchanges shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged will be deducted at the time of the transaction, except as noted otherwise in the prospectus.

Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://www.ubs.com.

73

UBS International Equity Fund

Illustration of an assumed investment of $10,000 in Class A shares (adjusted for 5.50% maximum

sales charge) and $10,000,000 in Class Y shares (unaudited)

The following two graphs depict the performance of UBS International Equity Fund Class A and Class Y shares versus the MSCI World Free ex USA Index (net) over the 10 years ended June 30, 2009. The performance of Class B and Class C shares will vary based upon the different inception dates, class specific expenses and sales charges. No adjustment has been made for any income taxes payable by shareholders on income dividends and capital gain distributions. Past performance is no guarantee of future results. Share price and returns will vary with market conditions; investors may realize a gain or loss upon redemption.

UBS International Equity Fund Class A vs. MSCI World Free ex USA Index (net)

Wealth value with dividends reinvested

The Fund's growth of an assumed $10,000 investment is adjusted for the maximum sales charge of 5.50%.

UBS International Equity Fund Class Y vs. MSCI World Free ex USA Index (net)

Wealth value with dividends reinvested

Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://www.ubs.com.

74

UBS International Equity Fund

Top ten equity holdings (unaudited)

As of June 30, 2009

	Percentage of net assets
Nomura Holdings, Inc.		2.0	%
Roche Holding AG		1.9
Total SA		1.9
Vodafone Group PLC		1.8
Mitsubishi Corp.		1.5
Canon, Inc.		1.5
BNP Paribas		1.5
E.ON AG		1.4
Japan Tobacco, Inc.		1.4
Vale SA		1.3
Total		16.2	%

Country exposure, top five (unaudited)

As of June 30, 2009

	Percentage of net assets
Japan		19.5	%
United Kingdom		15.0
China		7.4
Germany		7.2
Switzerland		6.1
Total		55.2	%

75

UBS International Equity Fund

Industry diversification (unaudited)

As a percentage of net assets as of June 30, 2009

Common stocks
Aerospace & defense	0.98	%
Airlines	0.90
Automobiles	4.16
Beverages	0.90
Building products	0.47
Capital markets	3.07
Chemicals	3.54
Commercial banks	12.69
Communications equipment	0.34
Construction materials	0.91
Diversified financial services	2.24
Diversified telecommunication services	2.06
Electric utilities	2.82
Electrical equipment	1.37
Electronic equipment, instruments & components	1.90
Energy equipment & services	2.31
Food & staples retailing	2.05
Food products	1.78
Health care equipment & supplies	0.93
Hotels, restaurants & leisure	0.47
Household durables	0.56
Household products	0.89
Independent power producers & energy traders	0.23
Industrial conglomerates	0.47
Insurance	3.56
Internet & catalog retail	0.54
Internet software & services	0.19
IT services	1.07	%
Machinery	2.49
Marine	0.62
Media	1.03
Metals & mining	5.52
Multi-utilities	0.73
Office electronics	1.50
Oil, gas & consumable fuels	7.59
Pharmaceuticals	4.63
Professional services	0.56
Real estate investment trusts (REITs)	0.35
Real estate management & development	3.99
Semiconductors & semiconductor equipment	1.50
Software	2.28
Specialty retail	2.11
Textiles, apparel & luxury goods	0.40
Tobacco	2.22
Trading companies & distributors	2.01
Wireless telecommunication services	3.87
Total common stocks	96.80
Rights	0.13
Warrants	0.00
Short-term investment	2.48
Investment of cash collateral from securities loaned	9.00
Total investments	108.41
Liabilities, in excess of cash and other assets	(8.41	)
Net assets	100.00	%

76

UBS International Equity Fund—Portfolio of investments

June 30, 2009

Security description	Shares		Value
Common stocks—96.80%
Australia—2.83%
AMP Ltd.		95,072	$	372,520
BHP Billiton Ltd.		18,193		498,623
Incitec Pivot Ltd.		134,262		255,487
Orica Ltd.		17,674		307,679
Qantas Airways Ltd.		246,466		397,590
QBE Insurance Group Ltd.		19,083		304,485
Total Australia common stocks				2,136,384
Austria—0.56%
Telekom Austria AG		26,993		422,343
Belgium—1.28%
Anheuser-Busch InBev NV		18,755		678,979
Colruyt SA(1)		1,262		287,997
Total Belgium common stocks				966,976
Bermuda—0.47%
Seadrill Ltd.		24,600		353,475
Brazil—2.78%
BM&FBOVESPA SA		61,000		364,226
Itau Unibanco Banco Multiplo SA ADR		9,900		156,717
Petroleo Brasileiro SA ADR		14,600		598,308
Vale SA		55,900		985,517
Total Brazil common stocks				2,104,768
Canada—2.73%
EnCana Corp.		15,500		768,504
Kinross Gold Corp.		8,900		162,215
Potash Corp. of Saskatchewan		2,600		241,930
Teck Resources Ltd., Class B*		5,600		89,309
Toronto-Dominion Bank		7,700		397,793
TransCanada Corp.(1)		15,000		403,903
Total Canada common stocks				2,063,654
Cayman Islands—0.26%
Subsea 7, Inc.*		19,400		198,877
China—7.36%
Bank of East Asia Ltd.		213,780		651,316
Belle International Holdings Ltd.		392,000		344,146
China Life Insurance Co., Ltd., H Shares		32,000		118,154
China Mengniu Dairy Co., Ltd.*		236,000		547,444
China Merchants Bank Co., Ltd., H Shares		302,300		689,583
China Overseas Land & Investment Ltd.		184,000		426,018
China South Locomotive and Rolling Stock Corp., H Shares		447,000		263,520
China Resources Land Ltd .		140,000		308,234
China Zhongwang Holdings Ltd.*		239,600		328,946
Hong Kong Exchanges and Clearing Ltd.		23,800		369,244

Security description	Shares		Value
China—(concluded)
Industrial & Commercial Bank of China, H Shares		445,000	$	309,039
New World Development Ltd.		263,000		474,734
Shangri-La Asia Ltd.		118,000		176,458
Sun Hung Kai Properties Ltd.		30,000		373,412
Suntech Power Holdings Co. Ltd. ADR*(1)		10,200		182,172
Total China common stocks				5,562,420
Czech Republic—0.60%
CEZ AS		10,144		457,113
Denmark—0.69%
Novo Nordisk A/S, Class B		5,251		285,403
Vestas Wind Systems A/S*		3,333		239,602
Total Denmark common stocks				525,005
Finland—0.10%
Nokia Oyj		5,014		73,173
France—4.98%
Alstom SA(1)		2,849		168,622
BNP Paribas(1)		17,111		1,110,399
Cie Generale de Geophysique-Veritas*		15,750		284,331
GDF Suez		11,002		411,010
Nexans SA(1)		3,793		202,193
Total SA		26,686		1,446,572
Veolia Environnement(1)		4,751		140,359
Total France common stocks				3,763,486
Germany—7.15%
BASF SE		4,778		190,577
Bayer AG(1)		14,971		803,884
Daimler AG(1)		19,905		720,202
Deutsche Boerse AG		2,828		219,803
E.ON AG(1)		29,497		1,046,977
GEA Group AG		13,284		201,517
Henkel AG & Co KGaA, Preference shares		10,214		319,132
MAN AG		5,089		312,995
Metro AG		14,262		681,761
Muenchener Rueckversicherungs- Gesellschaft AG		4,789		647,687
Solarworld AG(1)		5,005		118,193
United Internet AG*		12,169		142,942
Total Germany common stocks				5,405,670
Greece—0.91%
National Bank of Greece SA*		18,478		506,264
Public Power Corp. SA*		8,873		182,618
Total Greece common stocks				688,882
Guernsey—0.17%
Resolution Ltd.*		87,164		127,857

77

UBS International Equity Fund—Portfolio of investments

June 30, 2009

Security description	Shares		Value
Common stocks—(continued)
India—1.87%
ICICI Bank Ltd. ADR		20,400	$	601,800
Infosys Technology Ltd., ADR		22,100		812,838
Total India common stocks				1,414,638
Indonesia—1.76%
Astra International Tbk PT		232,500		541,066
Bank Rakyat Indonesia PT		711,500		437,161
Bumi Resources Tbk PT		1,928,500		349,395
Total Indonesia common stocks				1,327,622
Ireland—1.40%
CRH PLC		29,958		686,822
Elan Corp. PLC ADR*		14,100		89,817
Ryanair Holdings PLC ADR*		10,000		283,900
Total Ireland common stocks				1,060,539
Israel—0.70%
Teva Pharmaceutical Industries Ltd.		10,810		532,819
Italy—0.54%
Intesa Sanpaolo SpA*		34,731		112,604
Saipem SpA		12,053		294,220
Total Italy common stocks				406,824
Japan—19.52%
Asahi Glass Co., Ltd..		44,000		351,132
Canon, Inc.(1)		34,800		1,132,634
Fanuc Ltd.		4,000		319,162
Fast Retailing Co., Ltd.		2,000		260,489
Honda Motor Co., Ltd.		20,600		564,052
Hosiden Corp.		8,400		106,374
Ibiden Co. Ltd.		3,900		108,943
Japan Tobacco, Inc.		329		1,025,478
Komatsu Ltd.		18,400		282,389
Kuraray Co., Ltd.		33,500		371,339
Mitsubishi Corp.		62,700		1,151,497
Mitsubishi UFJ Financial Group, Inc.		44,800		275,394
Mitsui Fudosan Co., Ltd.		47,000		814,267
Mitsui OSK Lines Ltd.		73,000		470,951
Mitsui Sumitomo Insurance Group Holdings, Inc.		15,100		393,762
Mizuho Financial Group, Inc.(1)		36,700		85,357
Nintendo Co., Ltd.		3,100		853,133
Nippon Electric Glass Co., Ltd.		44,000		490,457
Nippon Steel Corp.		39,000		148,737
Nissan Motor Co. Ltd.		98,100		592,254
Nomura Holdings, Inc.		181,600		1,521,467
NTT DoCoMo, Inc.		300		438,160
Shin-Etsu Chemical Co., Ltd.		15,300		706,634
Sumitomo Mitsui Financial Group, Inc.		15,900		642,970
Takeda Pharmaceutical Co., Ltd.		2,500		97,142

Security description	Shares		Value
Japan—(concluded)
THK Co., Ltd.		33,900	$	505,477
Tokyu Land Corp.(1)		71,000		320,712
Toyota Motor Corp.		19,200		725,842
Total Japan common stocks				14,756,205
Luxembourg—0.95%
ArcelorMittal(1)		21,918		719,824
Mexico—0.49%
Grupo Financiero Banorte SAB de CV, Class O(1)		154,000		373,064
Netherlands—3.37%
Akzo Nobel NV		8,672		381,612
ASML Holding NV		31,450		682,158
ING Groep NV CVA		61,026		614,233
Koninklijke Philips Electronics NV(1)		19,400		357,348
Reed Elsevier NV		8,735		96,332
TomTom NV*(1)		34,516		419,742
Total Netherlands common stocks				2,551,425
Norway—1.30%
Petroleum Geo-Services ASA*		55,000		342,970
Telenor ASA*		82,400		636,114
Total Norway common stocks				979,084
Russia—2.51%
Gazprom OAO ADR		37,516		759,699
Mobile Telesystems OJSC ADR		12,100		446,853
Novolipetsk Steel OJSC GDR*		13,031		267,135
Sberbank		1,934		426,019
Total Russia common stocks				1,899,706
Singapore—2.04%
CapitaLand Ltd.		120,500		306,044
DBS Group Holdings Ltd.		50,000		405,775
Golden Agri-Resources Ltd.(1)		948,000		248,007
Olam International Ltd.(1)		348,000		581,868
Total Singapore common stocks				1,541,694
South Africa—0.85%
MTN Group Ltd.		41,678		640,392
Spain—3.10%
Banco Santander SA		33,065		399,028
Gamesa Corp. Tecnologica SA		6,734		127,843
Iberdrola SA(1)		29,439		239,418
Inditex SA		14,862		714,229
Red Electrica Corp. SA		4,517		204,367
Tecnicas Reunidas SA		3,320		156,676
Telefonica SA		22,140		502,024
Total Spain common stocks				2,343,585
Sweden—0.24%
Telefonaktiebolaget LM Ericsson, Class B		18,693		182,841

78

UBS International Equity Fund—Portfolio of investments

June 30, 2009

Security description	Shares		Value
Common stocks—(concluded)
Switzerland—6.06%
Adecco SA		10,161	$	424,329
Alcon, Inc.		2,100		243,852
Julius Baer Holding AG		7,829		305,252
Nestle SA		14,534		548,530
Nobel Biocare Holding AG(1)		20,983		459,989
Roche Holding AG		10,700		1,455,722
Swatch Group AG		9,235		302,804
Syngenta AG		954		221,532
Xstrata PLC		23,200		255,871
Zurich Financial Services AG		2,048		362,516
Total Switzerland common stocks				4,580,397
Taiwan—1.57%
Advanced Semiconductor Engineering, Inc.		775,000		453,460
HON HAI Precision Industry Co., Ltd.		239,450		737,071
Total Taiwan common stocks				1,190,531
Thailand—0.71%
Kasikornbank PCL		254,500		536,570
United Kingdom—14.95%
Anglo American PLC		10,392		303,246
AstraZeneca PLC		5,383		237,053
Autonomy Corp. PLC*		13,713		324,925
BAE Systems PLC		75,476		421,310
Barclays PLC		160,792		748,926
BG Group PLC		31,579		530,589
BP PLC		49,364		390,625
British Land Co. PLC		42,411		267,477
British Sky Broadcasting Group PLC		91,013		682,756
Cobham PLC		110,337		314,711
Compass Group PLC		32,794		184,794
Home Retail Group PLC		94,503		405,310
HSBC Holdings PLC		38,557		320,086
Imperial Tobacco Group PLC		24,891		647,396
International Power PLC		43,540		170,943
John Wood Group PLC		24,391		107,525
Kingfisher PLC		93,868		275,181
Man Group PLC		108,919		499,922
Prudential PLC		72,247		491,595
Reckitt Benckiser Group PLC		7,781		354,612
Rio Tinto PLC		11,857		412,779
Sage Group PLC		184,774		542,654
Standard Chartered PLC		21,623		407,260
Tullow Oil PLC		31,708		490,562
Vodafone Group PLC		722,379		1,396,340

Security description	Shares		Value
United Kingdom—(concluded)
Wolseley PLC*		19,543	$	373,614
Total United Kingdom common stocks				11,302,191
Total common stocks (cost $59,518,145)				73,190,034
	Number of rights
Rights—0.13%
Singapore—0.03%
Golden Agri-Resources Ltd., expires 07/16/09*(2)		177,990		24,445
United Kingdom—0.10%
Rio Tinto PLC, expires 07/01/09*		6,224		71,473
Total rights (cost $61,631)				95,918
	Number of warrants
Warrants—0.00%
Singapore—0.00%
Golden Agri-Resources Ltd., strike @ SGD $0.01, expires 12/31/49*(2),(3) (cost $0)		71,196		0
	Units
Short-term investment—2.48%
Investment company—2.48%
UBS Cash Management Prime Relationship Fund, 0.384%(4),(5)(cost $1,873,956)		1,873,956		1,873,956
	Shares
Investment of cash collateral from securities loaned—8.98%
UBS Private Money Market Fund LLC, 0.488%(4),(5)(cost $6,791,233)		6,791,233		6,791,233
Total investments—108.39% (cost $68,244,965)				81,951,141
Liabilities, in excess of cash and other assets—(8.39)%				(6,345,380	)
Net assets—100.00%			$	75,605,761

79

UBS International Equity Fund—Portfolio of investments

June 30, 2009

Notes to portfolio of investments

Aggregate cost for federal income tax purposes was $72,305,652; and net unrealized appreciation consisted of:

Gross unrealized appreciation	$	12,585,232
Gross unrealized depreciation		(2,939,743	)
Net unrealized appreciation of investments	$	9,645,489

*  Non-income producing security.

⁽¹⁾  Security, or portion thereof, was on loan at June 30, 2009.

⁽²⁾  Security is being fair valued by a valuation committee under the direction of the Board of Trustees. At June 30, 2009, the value of these securities amounted to $24,445 or 0.03% of net assets.

⁽³⁾  Security is illiquid. At June 30, 2009, the value of these securities amounted to $0, or 0.00% of net assets.

⁽⁴⁾  Investment in affiliated mutual fund.

⁽⁵⁾  The rate shown reflects the yield at June 30, 2009.

ADR  American depositary receipt

CVA  Dutch certification—depository certificate

GDR  Global Depositary Receipt

OJSC  Open Joint Stock Company

Preference
shares  A special type of equity investment that shares in the earnings of the company, has limited voting rights, and may have a dividend preference. Preference shares may also have liquidation preference.

Currency type abbreviation:

SGD   Singapore Dollar

Forward foreign currency contracts

UBS International Equity Fund had the following open forward foreign currency contracts as of June 30, 2009:

	Contracts to deliver		In exchange for		Maturity dates	Unrealized appreciation/ (depreciation)
Brazilian Real		2,580,000	USD	1,256,698	09/03/09	$	(43,277	)
Czech Koruna		7,530,000	USD	394,228	09/03/09		(12,001	)
Euro		1,255,000	USD	1,758,343	09/03/09		(2,209	)
Great Britain Pound		305,000	USD	500,005	09/03/09		(1,748	)
Hong Kong Dollar		11,545,000	USD	1,490,264	09/03/09		(213	)
Israeli Shekel		1,985,000	USD	508,173	09/03/09		2,899
Japanese Yen		34,400,000	USD	355,739	09/03/09		(1,609	)
Mexican Peso		4,940,000	USD	360,124	09/03/09		(11,537	)
New Taiwan Dollar		43,300,000	USD	1,348,490	09/03/09		13,839
Norwegian Krone		2,410,000	USD	378,461	09/03/09		4,279
Singapore Dollar		1,135,000	USD	782,516	09/03/09		(778	)
South African Rand		5,500,000	USD	675,087	09/03/09		(28,975	)
Swiss Franc		505,000	EUR	334,393	09/03/09		3,963
Thai Baht		14,040,000	USD	410,706	09/03/09		(937	)
United States Dollar		2,002,674	AUD	2,480,000	09/03/09		(13,665	)
United States Dollar		2,951,406	CAD	3,250,000	09/03/09		(156,284	)
United States Dollar		959,595	CHF	1,035,000	09/03/09		(6,302	)
United States Dollar		351,530	DKK	1,870,000	09/03/09		380
United States Dollar		570,488	EUR	410,000	09/03/09		4,672
United States Dollar		1,388,694	GBP	845,000	09/03/09		1,407
United States Dollar		391,856	HKD	3,035,000	09/03/09		(33	)
United States Dollar		1,062,693	JPY	103,900,000	09/03/09		16,624
United States Dollar		861,086	SEK	6,610,000	09/03/09		(4,387	)
Net unrealized depreciation on forward foreign currency contracts						$	(235,892	)

80

UBS International Equity Fund—Portfolio of investments

June 30, 2009

Currency type abbreviations:

AUD   Australian Dollar

CAD   Canadian Dollar

CHF   Swiss Franc

DKK   Danish Krone

EUR   Euro

GBP   Great Britain Pound

HKD   Hong Kong Dollar

JPY   Japanese Yen

SEK   Swedish Krona

USD   United States Dollar

The following is a summary of the inputs used as of June 30, 2009 in valuing the Fund's investments.

Measurements at 06/30/09
Description	Quoted prices in active markets for identical investments (Level 1)		Significant other observable inputs (Level 2)			Unobservable inputs (Level 3)		Total
Common stocks(1)	$	9,546,771	$	63,643,263		$	—	$	73,190,034
Rights		—		71,473			24,445		95,918
Warrants		—		—			0		0
Short-term investment		—		1,873,956			—		1,873,956
Investment of cash collateral from securities loaned		—		6,791,233			—		6,791,233
Other financial instruments(2)		—		(235,892	)		—		(235,892	)
Total	$	9,546,771	$	72,144,033		$	24,445	$	81,715,249

⁽¹⁾  The Fund may hold investments which have been fair valued in accordance with the Fund's fair valuation policy as of June 30, 2009, which may result in movement between Level 1 and Level 2.

⁽²⁾  Other financial instruments may include open futures contracts, swap agreements, options and forward foreign currency contracts.

Level 3 Rollforward Disclosure

The following is a rollforward of the Fund's investments that were valued using unobservable inputs for the period:

Measurements using unobservable inputs (Level 3)
	Rights		Warrants		Total
Assets
Beginning balance	$	—	$	0	$	—
Total gains or losses (realized/unrealized) included in earnings(a)		—		—		—
Purchases, sales, issuances, and settlements (net)		—		—		—
Transfers in and/or out of Level 3		24,445		—		24,445
Ending balance	$	24,445	$	0	$	24,445
The amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to investments still held at 06/30/09	$	24,445	$	0	$	24,445

^(a)  Does not include unrealized gains of $24,445 related to transferred assets, presented at their end of period values.

See accompanying notes to financial statements.
81

UBS U.S. Equity Alpha Fund

Portfolio performance

For the 12 months ended June 30, 2009, Class A shares of UBS U.S. Equity Alpha Fund (the "Fund") declined 27.52% (Class A shares declined 31.48% after the deduction of the maximum sales charge), while Class Y shares declined 27.22%. The Fund's benchmark, the Russell 1000 Index (the "Index"), declined 26.69% over the same time period. (Class Y shares have lower expenses than other share classes of the Fund. Returns for all share classes over various time periods are shown on page 85; please note that the Fund's returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares, while the Index returns do not reflect the deduction of fees and expenses.) For a detailed commentary on the market environment in general during the reporting period, see page 2.

The Fund's underperformance resulted from industry allocation during the reporting period, while stock selection made a positive contribution to relative returns.

Portfolio performance summary

What worked

•  Strong stock selection across a number of industries contributed positively to Fund performance during the reporting period.

•  Security selection in the technology industry was positive. In particular, the Fund's positions in Apple, Marvell Technology Group, Broadcom, Intuit, Intel and VMware made significant contributions to Fund returns.

•  Several energy stocks held in the Fund outperformed for the reporting period, most notably Anadarko Petroleum.

•  Within materials, stocks including Alcoa and Celanese added value during the 12-month period.

•  The Fund had a meaningful underweight to the materials sector, which benefited relative returns during the 12-month period. The Fund entered the second half of 2008 with underweights to both energy and materials stocks, reflecting our belief that commodity prices were unsustainably high. During the second half of 2008, our conviction was rewarded as oil and other commodity prices dropped sharply. Energy and materials stocks meaningfully underperformed other areas of the US market. The Fund's reduced exposure helped to insulate it from these declines.

As energy and materials stock prices returned to earlier, lower levels, our research indicated that the valuations of these companies had become more attractive, so we added to the Fund's exposure incrementally. At the end of the reporting period, the Fund held an overweight position to energy and underweight to materials. Relative to the benchmark, the Fund has a neutral exposure to commodity-driven sectors.

•  Several targeted weightings in industry subsectors benefited Fund returns.

•  Within the technology sector, the Fund was overweight to semiconductors and semiconductor equipment companies for most of the 12 months. Though chip demand has slowed, inventories are now depleted, leading to improved pricing power among these companies.

82

UBS U.S. Equity Alpha Fund

•  The Fund was overweight to pharmaceuticals and biotechnology companies within the health care industry. Success stories for the period included Wyeth, which rallied strongly after Pfizer announced it would acquire the drug maker. (For details, see "Portfolio highlights.")

•  Within the financial sector, several decisions generated positive results. The Fund is tilted toward diversified players and insurers that are taking the necessary steps of strengthening their balance sheets through asset sales, capital raises and deleveraging.

•  In particular, Morgan Stanley was one of the strongest performers during the reporting period, with most of its outperformance occurring during the first six months of 2009. Wells Fargo also made a significant contribution to returns, particularly in the second half of 2008, outpacing other banking stocks. (For details, see "Portfolio highlights.")

•  The Fund was successfully underweight to real estate investment trusts during the period, reflecting our caution about this industry group.

•  Short positions in Akamai Technology and Devon Energy were two of the larger positive contributors to returns during the reporting period. These positions benefited returns as both stocks delivered poor performance during the period.

What didn't work

•  Industry group allocation offset the Fund's gains from stock selection, and detracted from performance. The Fund was underweight to consumer staples, which negatively impacted relative returns. The sector outperformed the market as a whole during the second half of 2008, as defensive sectors exhibited strength during the market downturn. Although investors gravitated toward the sector, perceiving it to be a safe haven, our research indicated that most companies in this area had become less attractively priced than other parts of the market.

While the consumer staples underweight hurt performance for the period as a whole, beginning in March of 2009, our convictions began to pay off. There was a dramatic shift in sector performance as the market rallied, and the consumer staples sector lagged. Short positions in Campbell's Soup, General Mills, and Wal-Mart, as well as the fact that the Fund did not own Procter & Gamble, added value during the period.

•  Positioning within the financials sector suffered from an overweight to bank and insurance stocks. These stocks declined, particularly during the fourth quarter of 2008, as negative economic news proliferated. Several regional banks held in the Fund, including Fifth Third Bancorp and SunTrust Banks, hurt performance and were sold from the Fund during the reporting period. Insurance holdings such as Aflac and Principal Financial Group detracted, as well. Financial stocks began to outperform in March of 2009, however, and several of the Fund's holdings benefited. (For details, see "Portfolio highlights.")

83

UBS U.S. Equity Alpha Fund

•  While security selection overall added value, it underperformed the benchmark in some sectors. Most notably, the underperformance came from the consumer discretionary, health care and telecommunications sectors, which detracted from results.

•  The Fund's oil services holdings, such as Halliburton and Baker Hughes, hindered returns for much of the 12-month period. That said, we saw a number of companies that we considered to be good values in the oil services sector. As energy demand began to recover in the second quarter of 2009, these names began to perform well. We believe that they could continue to benefit from increased exploration. (For details, see "Portfolio highlights.")

•  The Fund did not hold ExxonMobil. Unlike most energy stocks, ExxonMobil posted positive absolute returns in the fourth quarter of 2008. While this decision initially had a negative impact, we held to our conviction. As a result, the Fund saw positive relative results from not owning the stock in 2009, as shares of ExxonMobil declined.

Portfolio highlights

•  Shares of Wyeth held by the Fund added to relative performance for the period, particularly after Pfizer announced a $68 billion deal to purchase the company. Among big pharmaceutical companies, Wyeth faces the fewest patent expiries over the next several years. Furthermore, the company derives approximately 35% of its revenues from the sale of biotechnology products, where a regulatory pathway for generic drug approval has not yet been defined. We used the price appreciation as an opportunity to sell out of the Fund's position in Wyeth and to purchase shares of Pfizer.

•  Morgan Stanley was a positive contributor to performance during the reporting period, especially relative to other stocks in this sector. We believe that, regardless of the severe economic downturn, the capital markets will eventually begin to operate more normally. When this happens, we think it is likely that Morgan Stanley's strong investment banking capabilities, broad product offering and customer relationships will enable the firm to garner a significant share of the impending business.

•  The Fund's position in Halliburton detracted from performance. Shares of oil services companies fell as analysts predicted a drop in activity due to the recession. Spending cuts by oil and gas producers may mean less work for companies that assist in production. Despite this, we believe the company is well-positioned to endure the current market crunch.

•  The Fund's position in Aflac detracted from performance during the period. Shares fell due to growing concerns that the company could be hit by losses from its holdings of European hybrid securities. We maintain the Fund's position in this stock as we believe that the market is overly concerned with fundamentals of Aflac's Japanese business and near-term sales weakness in Japan, and that its financial performance is more stable than many appreciate.

This letter is intended to assist shareholders in understanding how the Fund performed during the 12 months ended June 30, 2009. The views and opinions in the letter were current as of August 17, 2009. They are not guarantees of performance or investment results and should not be taken as investment advice. Investment decisions reflect a variety of factors, and we reserve the right to change our views about individual securities, sectors and markets at any time. As a result, the views expressed should not be relied upon as a forecast of the Fund's future investment intent. We encourage you to consult your financial advisor regarding your personal investment program. Mutual funds are sold by prospectus only. You should read it carefully and consider a fund's investment objectives, risks, charges, expenses and other important information contained in the prospectus before investing. Prospectuses for most of our funds can be obtained from your financial advisor, by calling UBS Funds at 800-647 1568 or by visiting our Web site at www.ubs.com

84

UBS U.S. Equity Alpha Fund

Average annual total returns for periods ended 06/30/09 (unaudited)

		1 year			Inception(1)
Before deducting	Class A(2)		(27.52	)%		(12.87	)%
maximum sales charge	Class C(3)		(28.03	)		(13.50	)
	Class Y(4)		(27.22	)		(12.64	)
After deducting maximum	Class A(2)		(31.48	)		(14.63	)
sales charge	Class C(3)		(28.75	)		(13.50	)
Russell 1000 Index(5)			(26.69	)		(10.51	)

The annualized gross and net expense ratios, respectively, for each class of shares as in the October 28, 2008 prospectuses were as follows: Class A—1.94% and 1.94%; Class C—2.75% and 2.69%; Class Y—1.71% and 1.71%. Net expenses reflect fee waivers and/or expense reimbursements, if any, pursuant to an agreement that is in effect to cap the expenses. The Trust, with respect to the Fund, and the Advisor have entered into a written agreement pursuant to which the Advisor has agreed to waive a portion of its management fees and/or to reimburse expenses (excluding interest expense, securities loan fees and dividend expense for securities sold short and expenses incurred through investment in other investment companies) to the extent necessary so that the Fund's expenses (excluding interest expense, securities loan fees and dividend expense for securities sold short and expenses incurred through investment in other inve stment companies), through the fiscal year ending June 30, 2009, otherwise do not exceed 1.50% for Class A shares, 2.25% for Class C shares and 1.25% for Class Y shares. Pursuant to the written agreement, the Advisor is entitled to be reimbursed for any fees it waives and expenses it reimburses for a period of three years following such fee waivers and expense reimbursements, to the extent that such reimbursement of the Advisor by the Fund will not cause the Fund to exceed any applicable expense limit that is in place for the Fund.

⁽¹⁾  Inception date of UBS U.S. Equity Alpha Fund Class A, Class C and Class Y shares and the index is September 26, 2006.

⁽²⁾  Maximum sales charge for Class A shares is 5.5%. Class A shares bear ongoing 12b-1 service fees.

⁽³⁾  Maximum contingent deferred sales charge for Class C shares is 1% imposed on redemptions and is reduced to 0% after one year. Class C shares bear ongoing 12b-1 service and distribution fees.

⁽⁴⁾  The Fund offers Class Y shares to a limited group of eligible investors, including certain qualifying retirement plans. Class Y shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees.

⁽⁵⁾  The Russell 1000 Index measures the performance of the 1,000 largest companies in the Russell 3000 Index, and represents approximately 92% of the total market capitalization of the Russell 3000 Index. Investors should note that indices do not reflect the deduction of fees, expenses or taxes.

If an investor sells or exchanges shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged will be deducted at the time of the transaction, except as noted otherwise in the prospectus.

Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://www.ubs.com.

85

UBS U.S. Equity Alpha Fund

Illustration of an assumed investment of $10,000 in Class A shares (adjusted for 5.50% maximum

sales charge) and $5,000,000 in Class Y shares (unaudited)

The following two graphs depict the performance of UBS U.S. Equity Alpha Fund Class A and Class Y shares versus the Russell 1000 Index from September 26, 2006, which is the inception date of the two classes, through June 30, 2009. The performance of Class C shares will vary based upon the class specific expenses and sales charges. No adjustment has been made for any income taxes payable by shareholders on income dividends and capital gain distributions. Past performance is no guarantee of future results. Share price and returns will vary with market conditions; investors may realize a gain or loss upon redemption.

UBS U.S. Equity Alpha Fund Class A vs. Russell 1000 Index

Wealth value with dividends reinvested

The Fund's growth of an assumed $10,000 investment is adjusted for the maximum sales charge of 5.50%.

UBS U.S. Equity Alpha Fund Class Y vs. Russell 1000 Index

Wealth value with dividends reinvested

Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://www.ubs.com.

86

UBS U.S. Equity Alpha Fund

Top ten equity holdings (unaudited)*⁽¹⁾

As of June 30, 2009

	Percentage of net assets
Covidien PLC		3.3	%
PepsiCo, Inc.		3.1
General Electric Co.		3.1
Comcast Corp., Class A		3.0
Microsoft Corp.		2.9
Exelon Corp.		2.8
FedEx Corp.		2.8
Johnson Controls, Inc.		2.8
AT&T, Inc.		2.5
Apple, Inc.		2.5
Total		28.8	%

*  Only long positions are considered for top ten holdings.

⁽¹⁾  Figures represent the direct investments of the UBS U.S. Equity Alpha Fund. Figures could be different if a breakdown of the underlying investment company was included.

87

UBS U.S. Equity Alpha Fund

Industry diversification (unaudited)⁽¹⁾

As a percentage of net assets as of June 30, 2009

Common stocks
Aerospace & defense	2.30	%
Air freight & logistics	2.78
Airlines	1.28
Auto components	4.31
Beverages	4.29
Biotechnology	3.58
Capital markets	3.74
Chemicals	2.56
Commercial banks	1.86
Computers & peripherals	5.18
Consumer finance	1.66
Diversified financial services	2.04
Diversified telecommunication services	2.53
Electric utilities	5.60
Energy equipment & services	2.58
Food & staples retailing	0.48
Health care equipment & supplies	6.24
Health care providers & services	2.98
Hotels, restaurants & leisure	1.41
Household durables	1.30
Independent power producers & energy traders	0.20
Industrial conglomerates	3.05
Insurance	3.46
Life sciences tools & services	1.34
Machinery	5.52
Media	6.74
Multiline retail	2.14
Multi-utilities	2.84
Oil, gas & consumable fuels	11.65
Personal products	1.75
Pharmaceuticals	4.23
Road & rail	2.39
Semiconductors & semiconductor equipment	7.42
Software	5.40
Textiles, apparel & luxury goods	1.26
Wireless telecommunication services	1.18
Total common stocks	119.27
Investment company
SPDR Trust, Series 1	1.53
Short-term investment	1.77
Total investments before investments sold short	122.57
Investments sold short Common stocks
Aerospace & defense	(1.28	)%
Air freight & logistics	(0.83	)
Capital markets	(0.68	)
Chemicals	(0.44	)
Diversified telecommunication services	(0.73	)
Electronic equipment, instruments & components	(0.71	)
Food & staples retailing	(0.32	)
Food products	(1.69	)
Health care providers & services	(1.59	)
Hotels, restaurants & leisure	(1.62	)
Household durables	(0.65	)
Internet & catalog retail	(0.47	)
Internet software & services	(0.61	)
Machinery	(0.86	)
Multi-utilities	(1.24	)
Oil, gas & consumable fuels	(0.71	)
Pharmaceuticals	(1.47	)
Software	(0.85	)
Specialty retail	(2.19	)
Thrifts & mortgage finance	(0.70	)
Tobacco	(0.62	)
Trading companies & distributors	(0.60	)
Water utilities	(1.32	)
Total investments sold short	(22.18	)
Total investments, net of investments sold short	100.39
Liabilities, in excess of cash and other assets	(0.39	)
Net assets	100.00	%

⁽¹⁾  Figures represent the industry breakdown of direct investments of the UBS U.S. Equity Alpha Fund. Figures would be different if a breakdown of the underlying investment companies' industry diversification was included.

88

UBS U.S. Equity Alpha Fund—Portfolio of investments

June 30, 2009

Security description	Shares		Value
Common stocks—119.27%
Aerospace & defense—2.30%
General Dynamics Corp.(1)		57,200	$	3,168,308
Air freight & logistics—2.78%
FedEx Corp.(1)		68,900		3,832,218
Airlines—1.28%
Southwest Airlines Co.(1)		262,100		1,763,933
Auto components—4.31%
BorgWarner, Inc.(1)		62,300		2,127,545
Johnson Controls, Inc.(1)		175,600		3,814,032
				5,941,577
Beverages—4.29%
Dr. Pepper Snapple Group, Inc.*(1)		77,600		1,644,344
PepsiCo, Inc.(1)		77,700		4,270,392
				5,914,736
Biotechnology—3.58%
Amgen, Inc.*(1)		35,600		1,884,664
Cephalon, Inc.*(1)		14,200		804,430
Genzyme Corp.*(1)		40,500		2,254,635
				4,943,729
Capital markets—3.74%
Bank of New York Mellon Corp.(1)		83,106		2,435,837
Morgan Stanley(1)		95,400		2,719,854
				5,155,691
Chemicals—2.56%
Air Products & Chemicals, Inc.(1)		26,000		1,679,340
Monsanto Co.(1)		24,900		1,851,066
				3,530,406
Commercial banks—1.86%
City National Corp.(1)		19,400		714,502
Wells Fargo & Co.(1)		76,600		1,858,316
				2,572,818
Computers & peripherals—5.18%
Apple, Inc.*(1)		24,300		3,461,049
Hewlett-Packard Co.(1)		53,900		2,083,235
Seagate Technology(1)		153,700		1,607,702
				7,151,986
Consumer finance—1.66%
Discover Financial Services(1)		222,350		2,283,535
Diversified financial services—2.04%
JPMorgan Chase & Co.(1)		82,600		2,817,486
Diversified telecommunication services—2.53%
AT&T, Inc.(1)		140,700		3,494,988
Electric utilities—5.60%
American Electric Power Co., Inc.(1)		98,300		2,839,887
Exelon Corp.(1)		76,900		3,938,049
Pepco Holdings, Inc.(1)		70,000		940,800
				7,718,736

Security description	Shares		Value
Energy equipment & services—2.58%
Baker Hughes, Inc.(1)		56,700	$	2,066,148
Halliburton Co.(1)		72,100		1,492,470
				3,558,618
Food & staples retailing—0.48%
Sysco Corp.(1)		29,300		658,664
Health care equipment & supplies—6.24%
Covidien PLC(1)		121,800		4,560,192
Medtronic, Inc.(1)		79,900		2,787,711
Zimmer Holdings, Inc.*(1)		29,600		1,260,960
				8,608,863
Health care providers & services—2.98%
DaVita, Inc.*(1)		10,800		534,168
Medco Health Solutions, Inc.*(1)		51,500		2,348,915
UnitedHealth Group, Inc.(1)		49,300		1,231,514
				4,114,597
Hotels, restaurants & leisure—1.41%
Carnival Corp.(1)		75,300		1,940,481
Household durables—1.30%
Fortune Brands, Inc.(1)		51,500		1,789,110
Independent power producers & energy traders—0.20%
Dynegy, Inc., Class A*(1)		121,800		276,486
Industrial conglomerates—3.05%
General Electric Co.(1)		359,600		4,214,512
Insurance—3.46%
ACE Ltd.(1)		34,300		1,517,089
Aflac, Inc.(1)		38,400		1,193,856
MetLife, Inc.(1)		26,200		786,262
Principal Financial Group, Inc.(1)		67,800		1,277,352
				4,774,559
Life sciences tools & services—1.34%
Millipore Corp.*(1)		11,500		807,415
Waters Corp.*(1)		20,200		1,039,694
				1,847,109
Machinery—5.52%
Illinois Tool Works, Inc.(1)		72,800		2,718,352
PACCAR, Inc.(1)		93,000		3,023,430
Pall Corp.(1)		70,500		1,872,480
				7,614,262
Media—6.74%
Comcast Corp., Class A(1)		282,500		4,093,425
Interpublic Group of Cos., Inc.*(1)		252,745		1,276,362
Omnicom Group, Inc.(1)		76,900		2,428,502
Viacom, Inc., Class B*(1)		66,200		1,502,740
				9,301,029
Multiline retail—2.14%
JC Penney Co., Inc.(1)		48,700		1,398,177
Macy's, Inc.(1)		131,800		1,549,968
				2,948,145

89

UBS U.S. Equity Alpha Fund—Portfolio of investments

June 30, 2009

Security description	Shares		Value
Common stocks—(concluded)
Multi-utilities—2.84%
MDU Resources Group, Inc.(1)		72,800	$	1,381,016
Sempra Energy(1)		51,100		2,536,093
				3,917,109
Oil, gas & consumable fuels—11.65%
Anadarko Petroleum Corp.(1)		45,600		2,069,784
ConocoPhillips(1)		53,600		2,254,416
EOG Resources, Inc.(1)		13,600		923,712
Hess Corp.(1)		39,000		2,096,250
Marathon Oil Corp.(1)		97,800		2,946,714
Peabody Energy Corp.(1)		82,500		2,488,200
Ultra Petroleum Corp.*(1)		46,100		1,797,900
Williams Cos., Inc.(1)		96,000		1,498,560
				16,075,536
Personal products—1.75%
Avon Products, Inc.(1)		51,600		1,330,248
Estee Lauder Cos., Inc., Class A(1)		33,400		1,091,178
				2,421,426
Pharmaceuticals—4.23%
Allergan, Inc.(1)		50,000		2,379,000
Pfizer, Inc.(1)		230,700		3,460,500
				5,839,500
Road & rail—2.39%
Burlington Northern Santa Fe Corp.(1)		22,300		1,639,942
Ryder System, Inc.(1)		59,500		1,661,240
				3,301,182
Semiconductors & semiconductor equipment—7.42%
Broadcom Corp., Class A*(1)		74,600		1,849,334
Intel Corp.(1)		133,300		2,206,115
Intersil Corp., Class A(1)		112,800		1,417,896
Kla-Tencor Corp.(1)		46,400		1,171,600
Marvell Technology Group Ltd.*(1)		194,500		2,263,980
National Semiconductor Corp.(1)		105,500		1,324,025
				10,232,950
Software—5.40%
Intuit, Inc.*(1)		50,300		1,416,448
Microsoft Corp.(1)		166,100		3,948,197
VMware, Inc., Class A*(1)		76,200		2,077,974
				7,442,619
Textiles, apparel & luxury goods—1.26%
Coach, Inc.(1)		64,500		1,733,760
Wireless telecommunication services—1.18%
Sprint Nextel Corp.*(1)		337,700		1,624,337
Total common stocks (cost $157,754,782)				164,525,001
Investment company—1.53%
SPDR Trust, Series 1 (cost $2,104,279)		23,000		2,114,160

Security description	Units			Value
Short-term investment—1.77%
Investment company—1.77%
UBS Cash Management Prime Relationship Fund, 0.384%(2),(3)(cost $2,440,832)		2,440,832		$	2,440,832
Total investments before investments sold short—122.57% (cost $162,299,893)					169,079,993
	Shares
Investments sold short—(22.18)%
Common stocks—(22.18)%
Aerospace & defense—(1.28%)
Lockheed Martin Corp.		(11,400	)		(919,410	)
Raytheon Co.		(19,000	)		(844,170	)
					(1,763,580	)
Air freight & logistics—(0.83%)
C.H. Robinson Worldwide, Inc.		(21,900	)		(1,142,085	)
Capital markets—(0.68%)
Charles Schwab Corp.		(53,400	)		(936,636	)
Chemicals—(0.44%)
Praxair, Inc.		(8,600	)		(611,202	)
Diversified telecommunication services—(0.73%)
Qwest Communications International, Inc.		(242,600	)		(1,006,790	)
Electronic equipment, instruments & components—(0.71%)
Corning, Inc.		(60,600	)		(973,236	)
Food & staples retailing—(0.32%)
Wal-Mart Stores, Inc.		(9,200	)		(445,648	)
Food products—(1.69%)
Flowers Foods, Inc.		(30,066	)		(656,641	)
General Mills, Inc.		(16,900	)		(946,738	)
Kellogg Co.		(15,500	)		(721,835	)
					(2,325,214	)
Health care providers & services—(1.59%)
Express Scripts, Inc.		(16,500	)		(1,134,375	)
Quest Diagnostics Inc.		(18,700	)		(1,055,241	)
					(2,189,616	)
Hotels, restaurants & leisure—(1.62%)
McDonald's Corp.		(21,100	)		(1,213,039	)
Yum! Brands, Inc.		(30,700	)		(1,023,538	)
					(2,236,577	)
Household durables—(0.65%)
Stanley Works		(26,400	)		(893,376	)
Internet & catalog retail—(0.47%)
NetFlix, Inc.		(15,600	)		(644,904	)
Internet software & services—(0.61%)
Akamai Technologies, Inc.		(44,100	)		(845,838	)

90

UBS U.S. Equity Alpha Fund—Portfolio of investments

June 30, 2009

Security description	Shares			Value
Investments sold short—(concluded)
Machinery—(0.86%)
Cummins, Inc.		(33,800	)	$	(1,190,098	)
Multi-utilities—(1.24%)
Consolidated Edison, Inc.		(28,900	)		(1,081,438	)
NSTAR		(19,500	)		(626,145	)
					(1,707,583	)
Oil, gas & consumable fuels—(0.71%)
Occidental Petroleum Corp.		(14,800	)		(973,988	)
Pharmaceuticals—(1.47%)
Eli Lilly & Co.		(28,100	)		(973,384	)
Watson Pharmaceuticals, Inc.		(31,400	)		(1,057,866	)
					(2,031,250	)
Software—(0.85%)
BMC Software, Inc.		(34,600	)		(1,169,134	)
Specialty retail—(2.19%)
Best Buy Co., Inc.		(28,400	)		(951,116	)
Sherwin-Williams Co.		(20,300	)		(1,091,125	)
Tiffany & Co.		(38,600	)		(978,896	)
					(3,021,137	)

Security description	Shares			Value
Thrifts & mortgage finance—(0.70%)
Hudson City Bancorp, Inc.		(73,100	)	$	(971,499	)
Tobacco—(0.62%)
Altria Group, Inc.		(52,500	)		(860,475	)
Trading companies & distributors—(0.60%)
WW Grainger, Inc.		(10,200	)		(835,176	)
Water utilities—(1.32%)
American Water Works Co., Inc.		(46,400	)		(886,703	)
Aqua America, Inc.		(52,200	)		(934,380	)
					(1,821,083	)
Total investments sold short (proceeds $30,111,584)					(30,596,126	)
Total investments, net of investments sold short—100.39%					138,483,866
Liabilities, in excess of cash and other assets—(0.39)%					(539,443	)
Net assets—100.00%				$	137,944,423

Notes to portfolio of investments

Aggregate cost for federal income tax purposes before investments sold short, was $170,182,279; and net unrealized depreciation consisted of:

Gross unrealized appreciation	$	5,634,911
Gross unrealized depreciation		(6,737,197	)
Net unrealized depreciation of investments	$	(1,102,286	)

*  Non-income producing security.

⁽¹⁾  All or a portion of these securities have been delivered to cover open short positions.

⁽²⁾  Investment in affiliated mutual fund.

⁽³⁾  The rate shown reflects the yield at June 30, 2009.

The following is a summary of the inputs used as of June 30, 2009 in valuing the Fund's investments.

Measurements at 06/30/09
Description	Quoted prices in active markets for identical investments (Level 1)			Significant other observable inputs (Level 2)		Unobservable inputs (Level 3)		Total
Common stocks	$	164,525,001		$	—	$	—	$	164,525,001
Investment company		2,114,160			—		—		2,114,160
Common stocks sold short		(30,596,126	)		—		—		(30,596,126	)
Short-term investment		—			2,440,832		—		2,440,832
Total	$	136,043,035		$	2,440,832	$	—	$	138,483,867

See accompanying notes to financial statements.
91

UBS U.S. Large Cap Equity Fund

Portfolio performance

For the 12 months ended June 30, 2009, Class A shares of UBS U.S. Large Cap Equity Fund (the "Fund") declined 28.04% (Class A shares declined 32.01% after the deduction of the maximum sales charge), while Class Y shares declined 27.85%. The Fund's benchmark, the Russell 1000 Index (the "Index"), declined 26.69% over the same time period. (Class Y shares have lower expenses than other share classes of the Fund. Returns for all share classes over various time periods are shown on page 95; please note that the Fund's returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares, while the Index returns do not reflect the deduction of fees and expenses.) For a detailed commentary on the market environment in general during the reporting period, see page 2.

The Fund's underperformance resulted from industry allocation during the reporting period, while stock selection made a positive contribution to relative returns.

Portfolio performance summary

What worked

•  Strong stock selection across a number of industries contributed positively to Fund performance during the reporting period.

•  In technology, the Fund's positions in Apple, Marvell Technology Group, Broadcom, Intuit, Intel and VMware made significant contributions to Fund returns.

•  Several energy stocks held in the Fund outperformed, most notably, Anadarko Petroleum.

•  Within the materials group, names including Alcoa and Celanese added value during the 12-month period, prior to being sold from the Fund.

•  The Fund had a meaningful underweight to the materials sector, which benefited relative returns for the 12-month period. The Fund began the period with underweights to energy and materials stocks, reflecting our belief that commodity prices were unsustainably high. During the second half of 2008, our conviction was rewarded as oil and other commodity prices dropped sharply, and energy and materials stocks meaningfully underperformed other areas of the US market. The Fund's reduced exposure helped to insulate it from these declines.

As energy and materials stock prices returned to earlier, lower levels, our research indicated that the valuations of these companies had become more attractive, so we added incrementally to the Fund's exposure. At the end of the reporting period, the Fund was overweight to energy and underweight to materials. Relative to the benchmark, the Fund has a neutral exposure to commodity-driven sectors.

•  Several targeted weightings in industry subsectors benefited Fund returns.

•  Within the technology sector, we overweighted semiconductors and semiconductor equipment companies. Though chip demand has slowed, inventories are now depleted, leading to improved pricing power among these companies.

•  Within health care, the Fund was overweight to pharmaceuticals and biotechnology companies. Success stories included Wyeth, which rallied strongly after Pfizer announced it would acquire the drug maker. (For details, see "Portfolio highlights.")

92

UBS U.S. Large Cap Equity Fund

•  Within the financial sector, several decisions generated positive results. The Fund is tilted toward diversified players and insurers that are taking the necessary steps of strengthening their balance sheets through asset sales, capital raises and deleveraging.

In particular, Morgan Stanley was one of the strongest performers during the reporting period, with most of its outperformance occurring during the first six months of 2009. Wells Fargo also made a significant contribution to returns, particularly in the second half of 2008. (For details, see "Portfolio highlights.")

•  The Fund was successfully underweight to real estate investment trusts during the period, reflecting our caution about this industry group.

What didn't work

•  Industry group allocation offset the Fund's gains from stock selection, and detracted from performance. Our research indicated that most companies in the consumer staples sector had become less attractively priced than other parts of the market, and the Fund continued to underweight the sector. However, the consumer staples sector outperformed the market as defensive sectors exhibited strength during the downturn. While this underweight hurt the Fund's relative returns during the reporting period as a whole, this changed dramatically beginning in March of 2009, when the consumer staples sector began to lag following a shift in sector performance.

•  Positioning within the financial sector suffered from an overweight to banks and insurance stocks. These stocks declined, particularly during the fourth quarter of 2008, when negative economic news proliferated. Several regional banks held in the Fund, including Fifth Third Bancorp and SunTrust Banks, hurt performance and were sold during the reporting period. Insurance holdings such as Aflac and Principal Financial Group detracted, as well. (For details, see "Portfolio highlights.")

•  While security selection overall added value, it underperformed the benchmark in some sectors. Most notably, underperformance came from the consumer discretionary, health care and telecommunications industries.

•  The Fund's oil services holdings, such as Halliburton and Baker Hughes, also hindered returns for much of the period. However, we saw a number of companies that we considered to be good values in the oil services sector. As energy demand began to recover in the second quarter of 2009, these names performed well. We believed that they could continue to benefit from increased exploration. (For details, see "Portfolio highlights.")

•  The Fund did not hold ExxonMobil. Unlike most energy stocks, ExxonMobil posted positive absolute returns in the fourth quarter of 2008. While this decision initially had a negative impact, we held to our conviction. As a result, the Fund saw positive results from not owning the stock in 2009, as shares of ExxonMobil declined.

93

UBS U.S. Large Cap Equity Fund

Portfolio highlights

•  Shares of Wyeth held by the Fund added to relative performance for the period. Wyeth performed well, particularly after Pfizer announced a $68 billion deal to purchase the company. The company derives approximately 35% of its revenues from the sale of biotechnology products, where a regulatory pathway for generic drug approval has not yet been defined. We used Wyeth's price appreciation as an opportunity to sell out of the stock and purchase shares of Pfizer.

•  Morgan Stanley was a positive contributor to performance, especially relative to other financial stocks. We believe that, regardless of the severe economic downturn, the capital markets will eventually begin to operate more normally. When this happens, we think it is likely that Morgan Stanley's strong investment banking capabilities, broad product offering and customer relationships will enable the firm to garner a significant share of the impending business.

•  The portfolio's position in Halliburton detracted from performance. Shares of oil services companies fell as analysts predicted a drop in activity due to the recession. Spending cuts by oil and gas producers may mean less work for companies that assist in production. Despite this, we believe the company is well-positioned to endure the market crunch.

•  The Fund's position in Aflac detracted from performance during the period. Shares fell due to growing concerns that the company could be hit by losses from its holdings of European hybrid securities. We maintain the Fund's position in this stock as we believe that the market is overly concerned with fundamentals of Aflac's Japanese business and near-term sales weakness in Japan, and that its financial performance is more stable than many appreciate.

This letter is intended to assist shareholders in understanding how the Fund performed during the 12 months ended June 30, 2009. The views and opinions in the letter were current as of August 17, 2009. They are not guarantees of performance or investment results and should not be taken as investment advice. Investment decisions reflect a variety of factors, and we reserve the right to change our views about individual securities, sectors and markets at any time. As a result, the views expressed should not be relied upon as a forecast of the Fund's future investment intent. We encourage you to consult your financial advisor regarding your personal investment program. Mutual funds are sold by prospectus only. You should read it carefully and consider a fund's investment objectives, risks, charges, expenses and other important information contained in the prospectus before investing. Prospectuses for most of our funds can be obtained from your financial advisor, by calling UBS Funds at 800-647 1568 or by visiting our Web site at www.ubs.com

94

UBS U.S. Large Cap Equity Fund

Average annual total returns for periods ended 06/30/09 (unaudited)

		1 year			5 years			10 years			Inception(1)
Before deducting	Class A(2)		(28.04	)%		(2.84	)%		(1.31	)%		1.66	%
maximum sales charge	Class B(3)		(28.61	)		(3.60	)		N/A			(0.15	)
	Class C(4)		(28.57	)		(3.56	)		N/A			(0.65	)
	Class Y(5)		(27.85	)		(2.56	)		(1.03	)		6.31
After deducting maximum	Class A(2)		(32.01	)		(3.94	)		(1.86	)		1.18
sales charge	Class B(3)		(32.05	)		(3.93	)		N/A			(0.15	)
	Class C(4)		(29.26	)		(3.56	)		N/A			(0.65	)
Russell 1000 Index(6)			(26.69	)		(1.85	)		(1.75	)		6.54

The annualized gross and net expense ratios, respectively, for each class of shares as in the October 28, 2008 prospectuses were as follows: Class A—1.16% and 1.16%; Class B—1.93% and 1.93%; Class C—1.91% and 1.91%; Class Y—0.87% and 0.87%. Net expenses reflect fee waivers and/or expense reimbursements, if any, pursuant to an agreement that is in effect to cap the expenses. The Trust, with respect to the Fund, and the Advisor have entered into a written agreement pursuant to which the Advisor has agreed to waive a portion of its management fees and/or to reimburse expenses (excluding expenses incurred through investment in other investment companies and interest expense) to the extent necessary so that the Fund's operating expenses (excluding expenses incurred through investment in other investment companies and interest expense), through the fiscal year ending June 30, 2009, do not exceed 1.30% for Class A s hares, 2.05% for Class B shares, 2.05% for Class C shares, and 1.05% for Class Y shares. Pursuant to the written agreement, the Advisor is entitled to be reimbursed for any fees it waives and expenses it reimburses for a period of three years following such fee waivers and expense reimbursements, to the extent that such reimbursement of the Advisor by the Fund will not cause the Fund to exceed any applicable expense limit that is in place for the Fund.

⁽¹⁾  Inception date of UBS U.S. Large Cap Equity Fund Class A shares is June 30, 1997. Inception dates of Class B and Class C shares are November 5, 2001 and November 13, 2001, respectively. Inception date of Class Y shares and the index is February 22, 1994.

⁽²⁾  Maximum sales charge for Class A shares is 5.5%. Class A shares bear ongoing 12b-1 service fees.

⁽³⁾  Maximum contingent deferred sales charge for Class B shares is 5% imposed on redemptions and is reduced to 0% after a maximum of six years. Class B shares bear ongoing 12b-1 service and distribution fees.

⁽⁴⁾  Maximum contingent deferred sales charge for Class C shares is 1% imposed on redemptions and is reduced to 0% after one year. Class C shares bear ongoing 12b-1 service and distribution fees.

⁽⁵⁾  The Fund offers Class Y shares to a limited group of eligible investors, including certain qualifying retirement plans. Class Y shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees.

⁽⁶⁾  The Russell 1000 Index measures the performance of the 1,000 largest companies in the Russell 3000 Index, and represents approximately 92% of the total market capitalization of the Russell 3000 Index. Investors should note that indices do not reflect the deduction of fees, expenses or taxes.

If an investor sells or exchanges shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged will be deducted at the time of the transaction, except as noted otherwise in the prospectus.

Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://www.ubs.com.

95

UBS U.S. Large Cap Equity Fund

Illustration of an assumed investment of $10,000 in Class A shares (adjusted for 5.50% maximum

sales charge) and $10,000,000 in Class Y shares (unaudited)

The following two graphs depict the performance of UBS U.S. Large Cap Equity Fund Class A and Class Y shares versus the Russell 1000 Index over the 10 years ended June 30, 2009. The performance of Class B and Class C shares will vary based upon the different inception dates, class specific expenses and sales charges. No adjustment has been made for any income taxes payable by shareholders on income dividends and capital gain distributions. Past performance is no guarantee of future results. Share price and returns will vary with market conditions; investors may realize a gain or loss upon redemption.

UBS U.S. Large Cap Equity Fund Class A vs. Russell 1000 Index

Wealth value with dividends reinvested

The Fund's growth of an assumed $10,000 investment is adjusted for the maximum sales charge of 5.50%.

UBS U.S. Large Cap Equity Fund Class Y vs. Russell 1000 Index

Wealth value with dividends reinvested

Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://www.ubs.com.

96

UBS U.S. Large Cap Equity Fund

Top ten equity holdings (unaudited)

As of June 30, 2009

	Percentage of net assets
Microsoft Corp.		2.9	%
Covidien PLC.		2.7
General Electric Co.		2.5
Pfizer, Inc.		2.5
Apple, Inc.		2.4
Exelon Corp.		2.4
Comcast Corp., Class A		2.4
Chevron Corp.		2.3
PepsiCo, Inc.		2.2
Morgan Stanley		2.0
Total		24.3	%

Industry diversification (unaudited)

As a percentage of net assets as of June 30, 2009

Common stocks
Aerospace & defense	1.95	%
Air freight & logistics	1.94
Auto components	2.59
Beverages	2.23
Biotechnology	2.70
Capital markets	3.57
Chemicals	1.33
Commercial banks	1.88
Computers & peripherals	4.98
Consumer finance	1.39
Diversified financial services	1.91
Diversified telecommunication services	1.64
Electric utilities	4.43
Energy equipment & services	3.32
Food & staples retailing	0.68
Health care equipment & supplies	4.83
Health care providers & services	2.27
Hotels, restaurants & leisure	1.34
Household durables	1.46
Independent power producers & energy traders	0.19
Industrial conglomerates	2.53	%
Insurance	3.38
Life sciences tools & services	0.71
Machinery	4.54
Media	5.55
Multiline retail	1.77
Multi-utilities	1.24
Oil, gas & consumable fuels	11.29
Personal products	1.58
Pharmaceuticals	4.20
Road & rail	1.85
Semiconductors & semiconductor equipment	5.51
Software	5.09
Textiles, apparel & luxury goods	0.70
Wireless telecommunication services	1.18
Total common stocks	97.75
Short-term investment	0.55
Total investments	98.30
Cash and other assets, less liabilities	1.70
Net assets	100.00	%

97

UBS U.S. Large Cap Equity Fund—Portfolio of investments

June 30, 2009

Security description	Shares		Value
Common stocks—97.75%
Aerospace & defense—1.95%
General Dynamics Corp.		90,500	$	5,012,795
Air freight & logistics—1.94%
FedEx Corp.		89,500		4,977,990
Auto components—2.59%
BorgWarner, Inc.		79,400		2,711,510
Johnson Controls, Inc.		182,000		3,953,040
				6,664,550
Beverages—2.23%
PepsiCo, Inc.		104,200		5,726,832
Biotechnology—2.70%
Amgen, Inc.*		64,700		3,425,218
Genzyme Corp.*		63,200		3,518,344
				6,943,562
Capital markets—3.57%
Bank of New York Mellon Corp.		138,683		4,064,799
Morgan Stanley		179,800		5,126,098
				9,190,897
Chemicals—1.33%
Monsanto Co.		46,000		3,419,640
Commercial banks—1.88%
City National Corp.		34,200		1,259,586
Wells Fargo & Co.		147,300		3,573,498
				4,833,084
Computers & peripherals—4.98%
Apple, Inc.*		43,800		6,238,434
Hewlett-Packard Co.		99,600		3,849,540
Seagate Technology		259,900		2,718,554
				12,806,528
Consumer finance—1.39%
Discover Financial Services		347,150		3,565,231
Diversified financial services—1.91%
JPMorgan Chase & Co.		144,200		4,918,662
Diversified telecommunication services—1.64%
AT&T, Inc.		169,800		4,217,832
Electric utilities—4.43%
American Electric Power Co., Inc.		150,200		4,339,278
Exelon Corp.		121,200		6,206,652
Pepco Holdings, Inc.		64,100		861,504
				11,407,434
Energy equipment & services—3.32%
Baker Hughes, Inc.		106,800		3,891,792
Halliburton Co.		139,700		2,891,790
Noble Corp.		57,900		1,751,475
				8,535,057

Security description	Shares		Value
Food & staples retailing—0.68%
Sysco Corp.		78,400	$	1,762,432
Health care equipment & supplies—4.83%
Covidien PLC.		184,500		6,907,680
Medtronic, Inc.		113,700		3,966,993
Zimmer Holdings, Inc.*		36,400		1,550,640
				12,425,313
Health care providers & services—2.27%
DaVita, Inc.*		18,900		934,794
Medco Health Solutions, Inc.*		56,500		2,576,965
UnitedHealth Group, Inc.		92,900		2,320,642
				5,832,401
Hotels, restaurants & leisure—1.34%
Carnival Corp.		134,200		3,458,334
Household durables—1.46%
Fortune Brands, Inc.		107,900		3,748,446
Independent power producers & energy traders—0.19%
Dynegy, Inc., Class A*		219,900		499,173
Industrial conglomerates—2.53%
General Electric Co.		556,400		6,521,008
Insurance—3.38%
ACE Ltd.		52,600		2,326,498
Aflac, Inc.		69,600		2,163,864
MetLife, Inc.		49,200		1,476,492
Principal Financial Group, Inc.		144,700		2,726,148
				8,693,002
Life sciences tools & services—0.71%
Millipore Corp.*		26,100		1,832,481
Machinery—4.54%
Illinois Tool Works, Inc.		126,300		4,716,042
PACCAR, Inc.		141,450		4,598,539
Pall Corp.		88,800		2,358,528
				11,673,109
Media—5.55%
Comcast Corp., Class A		428,300		6,206,067
Interpublic Group of Cos., Inc.*		426,300		2,152,815
Omnicom Group, Inc.		96,600		3,050,628
Viacom, Inc., Class B*		126,500		2,871,550
				14,281,060
Multiline retail—1.77%
JC Penney Co., Inc.		79,000		2,268,090
Macy's, Inc.		193,700		2,277,912
				4,546,002
Multi-utilities—1.24%
Sempra Energy		64,400		3,196,172
Oil, gas & consumable fuels—11.29%
Anadarko Petroleum Corp.		75,500		3,426,945
Chevron Corp.		88,700		5,876,375

98

UBS U.S. Large Cap Equity Fund—Portfolio of investments

June 30, 2009

Security description	Shares		Value
Common stocks—(concluded)
Oil, gas & consumable fuels—(concluded)
EOG Resources, Inc.		26,900	$	1,827,048
Hess Corp.		65,100		3,499,125
Marathon Oil Corp.		113,300		3,413,729
Peabody Energy Corp.		129,600		3,908,736
Ultra Petroleum Corp.*		92,677		3,614,403
Williams Cos., Inc.		222,100		3,466,981
				29,033,342
Personal products—1.58%
Avon Products, Inc.		78,100		2,013,418
Estee Lauder Cos., Inc., Class A		62,600		2,045,142
				4,058,560
Pharmaceuticals—4.20%
Allergan, Inc.		89,900		4,277,442
Pfizer, Inc.		434,500		6,517,500
				10,794,942
Road & rail—1.85%
Burlington Northern Santa Fe Corp.		39,400		2,897,476
Ryder System, Inc.		66,500		1,856,680
				4,754,156
Semiconductors & semiconductor equipment—5.51%
Broadcom Corp., Class A*		139,800		3,465,642
Intel Corp.		217,000		3,591,350
Intersil Corp., Class A		104,200		1,309,794
Kla-Tencor Corp.		71,500		1,805,375

Security description	Shares		Value
Semiconductors & semiconductor equipment—(concluded)
Marvell Technology Group Ltd.*		239,200	$	2,784,288
National Semiconductor Corp.		96,700		1,213,585
				14,170,034
Software—5.09%
Intuit, Inc.*		68,600		1,931,776
Microsoft Corp.		309,000		7,344,930
VMware, Inc., Class A*		139,800		3,812,346
				13,089,052
Textiles, apparel & luxury goods—0.70%
Coach, Inc.		66,600		1,790,208
Wireless telecommunication services—1.18%
Sprint Nextel Corp.*		631,920		3,039,535
Total common stocks (cost $255,967,397)				251,418,856
	Units
Short-term investment—0.55%
Investment company—0.55%
UBS Cash Management Prime Relationship Fund, 0.384%(1),(2)(cost $1,408,399)		1,408,399		1,408,399
Total investments—98.30% (cost $257,375,796)				252,827,255
Cash and other assets, less liabilities—1.70%				4,383,520
Net assets—100.00%			$	257,210,775

Notes to portfolio of investments

Aggregate cost for federal income tax purposes was $277,785,925; and net unrealized depreciation consisted of:

Gross unrealized appreciation	$	20,534,449
Gross unrealized depreciation		(45,493,119	)
Net unrealized depreciation of investments	$	(24,958,670	)

*  Non-income producing security.

⁽¹⁾  Investment in affiliated mutual fund.

⁽²⁾  The rate shown reflects the yield at June 30, 2009.

Futures contracts

UBS U.S. Large Cap Equity Fund had the following open futures contracts as of June 30, 2009:

Index futures buy contracts:	Expiration date	Cost		Value		Unrealized appreciation
S&P 500 Index, 12 contracts (USD)	September 2009	$	2,738,442	$	2,746,500	$	8,058

Currency type abbreviation:

USD  United States Dollar

99

UBS U.S. Large Cap Equity Fund—Portfolio of investments

June 30, 2009

The following is a summary of the inputs used as of June 30, 2009 in valuing the Fund's investments.

Measurements at 06/30/09
Description	Quoted prices in active markets for identical investments (Level 1)		Significant other observable inputs (Level 2)		Unobservable inputs (Level 3)		Total
Common stocks	$	251,418,856	$	—	$	—	$	251,418,856
Short-term investment		—		1,408,399		—		1,408,399
Other financial instruments(1)		8,058		—		—		8,058
Total	$	251,426,914	$	1,408,399	$	—	$	252,835,313

⁽¹⁾  Other financial instruments may include open futures contracts, swap agreements, options and forward foreign currency contracts.

See accompanying notes to financial statements.
100

UBS U.S. Large Cap Growth Fund

Portfolio performance

For the 12 months ended June 30, 2009, Class A shares of UBS U.S. Large Cap Growth Fund (the "Fund") declined 24.37% (Class A shares declined 28.54% after the deduction of the maximum sales charge), while Class Y shares declined 24.19%. The Fund's benchmark, the Russell 1000 Growth Index (the "Index"), declined 24.50% over the same time period. (Class Y shares have lower expenses than other share classes of the Fund. Returns for all share classes over various time periods are shown on page 104; please note that the Fund's returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares, while the Index returns do not reflect the deduction of fees and expenses.) For a detailed commentary on the market environment in general during the reporting period, see page 2.

Note: On July 10, 2009, following the conclusion of the reporting period, the assets and liabilities of the UBS U.S. Large Cap Growth Fund were transferred to the Laudus Growth Investors U.S. Large Cap Growth Fund ("Laudus Fund") in exchange for shares of the Laudus Fund. Shareholders of the Fund became shareholders of the Laudus Fund effective July 13, 2009.

The Fund's slight outperformance was due primarily to stock selection, with sector allocation making a positive contribution to relative returns, as well.

Portfolio performance summary

What worked

•  The Fund's overweight to the financial sector, and stock selection within the sector, were the main drivers of performance for the period. The Fund's sector allocations are a byproduct of our bottom-up, fundamental research. We seek to identify and own companies whose future growth, in our view, is underestimated by the market. Our research pointed to opportunities in financial stocks, particularly during the second half of 2008, and the Fund was overweight the sector as a result.

•  The Fund's financial holdings were concentrated in securities exchanges and asset managers, which contributed positively to relative performance. Among these, positions in CME Group and IntercontinentalExchange were particularly successful. Shares of asset manager BlackRock rose as well, particularly after the company announced the acquisition of Barclays Global Investors. (For additional details, see "Portfolio highlights.")

•  The Fund largely avoided banks and broker/dealers, which were among the hardest hit of the financial stocks during the market downturn of 2008 and early 2009.

•  The Fund's underweight to the energy sector was positive for the 12-month period. The Fund began to trim exposure to energy stocks as higher commodity prices began to reverse. From September through December of 2008, the Fund's positioning was rewarded as crude oil declined from $147 per barrel to prices in the mid-$30 range at year end. The Fund's reduced exposure to the energy sector insulated it from the broad declines suffered by many oil-related stocks.

•  After the market lows of early March 2009, we began to systematically add to the Fund's position in the energy sector. The rapid decline of commodity prices in the second half of 2008 and early 2009 hurt the share prices of many companies, resulting in what we viewed as overly pessimistic prices, and attractive valuations. At the end of the reporting period, the Fund was overweight to the sector.

101

UBS U.S. Large Cap Growth Fund

What didn't work

•  The Fund was underweight consumer staples, which negatively impacted relative returns. We avoided these stocks as we believed that they had become expensive from a valuation standpoint. However, consumer staples stocks outperformed the market as a whole during the 12-month period as investors poured into them, seeking a safe haven. While the Fund's underweight in consumer staples was negative for the reporting period overall, as the market began to recover following its March 2009 lows, this position was rewarded as these stocks failed to make strong gains.

•  Stock selection in the health care sector negatively affected performance. In particular, Zimmer Holdings and Stryker, two medical device stocks held in the Fund, declined during the reporting period. Both companies manufacture implants for orthopedic surgeries, which tend to be elective procedures. As the economy slowed, so did consumer demand for these procedures. However, we believe Zimmer and Stryker are solid companies whose future growth prospects have been ignored, and that are positioned to benefit from the aging US population. ( For additional details, see "Portfolio highlights.")

•  Security selection in the consumer discretionary sector was negative for the reporting period. Casino operator Wynn Resorts declined during the 12-month period as discretionary spending slowed. (For additional details, see "Portfolio highlights.") Clothing retailer J. Crew detracted from performance during the period, as well. We sold out of the Fund's positions in both stocks during the period.

Portfolio highlights

•  BlackRock has a premier franchise in institutional fixed income asset management, with strong recent performance in equity products as well. Shares rose during the period after the company agreed to acquire Barclays Global Investors. We believe this purchase may boost earnings, and expect that it should position the asset manager to benefit from trends toward exchange-traded funds and passive investing, enabling continued strong growth in assets under management.

•  CME Group is a clearinghouse that allows parties to trade futures in interest rates, equity indices, commodities and currencies. Shares of the company rose during the period, as volumes in key futures products improved from low levels that were reached following the global financial crisis. The company retains high barriers to entry through its monopoly on the execution and clearing of key futures products. We believe this combination could lead to significant profit growth over the next five years, and the Fund remains overweight to the CME Group.

•  Shares of Southwestern Energy rose during the reporting period, benefiting Fund performance. The company is one of the lowest-cost gas producers in North America. We like Southwestern's ability to grow organically even in a low gas price environment. Also,we prefer companies with industry-leading reserve life, strong organic growth and strong land positions to provide better than average cash flows. Southwestern exhibits all these aspects, yet its valuation remains compelling, in our view.

•  Zimmer Holdings is the global market share leader in reconstructive knee and hip implants. Its shares declined during the period, but we believe the company offers the potential for strong long-term growth. Long-term fundamentals in orthopedics are extremely attractive as the number of candidates for knee and hip replacements (62 to 65 years old, on average) is growing much faster than the population at large.

102

UBS U.S. Large Cap Growth Fund

•  Wynn Resorts, the owner and operator of destination casinos in Las Vegas and the Macau Special Administrative Region of China, lagged the consumer discretionary group for the 12 months. While we believe that long-term trends could be positive, near-term pressures prompted us to sell the stock during the period.

This letter is intended to assist shareholders in understanding how the Fund performed during the 12 months ended June 30, 2009. The views and opinions in the letter were current as of August 17, 2009. They are not guarantees of performance or investment results and should not be taken as investment advice. Investment decisions reflect a variety of factors, and we reserve the right to change our views about individual securities, sectors and markets at any time. As a result, the views expressed should not be relied upon as a forecast of the Fund's future investment intent. We encourage you to consult your financial advisor regarding your personal investment program. Mutual funds are sold by prospectus only. You should read it carefully and consider a fund's investment objectives, risks, charges, expenses and other important information contained in the prospectus before investing. Prospectuses for most of our funds can be obtained from your financial advisor, by calling UBS Funds at 800-647 1568 or by visiting our Web site at www.ubs.com

103

UBS U.S. Large Cap Growth Fund

Average annual total returns for periods ended 06/30/09 (unaudited)

		1 year			5 years			10 years			Inception(1)
Before deducting	Class A(2)		(24.37	)%		1.99	%		(2.57	)%		(0.96	)%
maximum sales charge	Class B(3)		(24.93	)		1.21			N/A			0.53
	Class C(4)		(24.91	)		1.26			N/A			(0.13	)
	Class Y(5)		(24.19	)		2.25			(2.30	)		1.25
After deducting maximum	Class A(2)		(28.54	)		0.84			(3.12	)		(1.49	)
sales charge	Class B(3)		(28.68	)		0.83			N/A			0.53
	Class C(4)		(25.66	)		1.26			N/A			(0.13	)
Russell 1000 Growth Index(6)			(24.50	)		(1.83	)		(4.18	)		(0.09	)

The annualized gross and net expense ratios, respectively, for each class of shares as in the October 28, 2008 prospectuses were as follows: Class A—1.36% and 1.06%; Class B—2.15% and 1.81%; Class C—2.14% and 1.81%; Class Y—1.22% and 0.81%. Net expenses reflect fee waivers and/or expense reimbursements, if any, pursuant to an agreement that is in effect to cap the expenses. The Trust, with respect to the Fund, and the Advisor have entered into a written agreement pursuant to which the Advisor has agreed to waive a portion of its management fees and/or to reimburse expenses (excluding expenses incurred through investment in other investment companies and interest expense) to the extent necessary so that the Fund's operating expenses (excluding expenses incurred through investment in other investment companies and interest expense), through the fiscal year ending June 30, 2009, do not exceed 1.05% for Class A s hares, 1.80% for Class B shares, 1.80% for Class C shares and 0.80% for Class Y shares. Pursuant to the written agreement, the Advisor is entitled to be reimbursed for any fees it waives and expenses it reimburses for a period of three years following such fee waivers and expense reimbursements, to the extent that such reimbursement of the Advisor by the Fund will not cause the Fund to exceed any applicable expense limit that is in place for the Fund.

⁽¹⁾  Inception date of UBS U.S. Large Cap Growth Fund Class A shares is December 31, 1998. Inception dates of Class B and Class C shares are November 7, 2001 and November 19, 2001, respectively. Inception date of Class Y shares and the index is October 14, 1997.

⁽²⁾  Maximum sales charge for Class A shares is 5.5%. Class A shares bear ongoing 12b-1 service fees.

⁽³⁾  Maximum contingent deferred sales charge for Class B shares is 5% imposed on redemptions and is reduced to 0% after a maximum of six years. Class B shares bear ongoing 12b-1 service and distribution fees.

⁽⁴⁾  Maximum contingent deferred sales charge for Class C shares is 1% imposed on redemptions and is reduced to 0% after one year. Class C shares bear ongoing 12b-1 service and distribution fees.

⁽⁵⁾  The Fund offers Class Y shares to a limited group of eligible investors, including certain qualifying retirement plans. Class Y shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees.

⁽⁶⁾  The Russell 1000 Growth Index measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values. Investors should note that indices do not reflect the deduction of fees, expenses or taxes.

If an investor sells or exchanges shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged will be deducted at the time of the transaction, except as noted otherwise in the prospectus.

Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://www.ubs.com.

104

UBS U.S. Large Cap Growth Fund

Illustration of an assumed investment of $10,000 in Class A shares (adjusted for 5.50% maximum

sales charge) and $10,000,000 in Class Y shares (unaudited)

The following two graphs depicts the performance of UBS U.S. Large Cap Growth Fund Class A and Class Y shares versus the Russell 1000 Growth Index over the 10 years ended June 30, 2009. The performance of Class B and Class C shares will vary based upon the different inception dates, class specific expenses and sales charges. No adjustment has been made for any income taxes payable by shareholders on income dividends and capital gain distributions. Past performance is no guarantee of future results. Share price and returns will vary with market conditions; investors may realize a gain or loss upon redemption.

UBS U.S. Large Cap Growth Fund Class A vs. Russell 1000 Growth Index

Wealth value with dividends reinvested

The Fund's growth of an assumed $10,000 investment is adjusted for the maximum sales charge of 5.50%.

UBS U.S. Large Cap Growth Fund Class Y vs. Russell 1000 Growth Index

Wealth value with dividends reinvested

Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://www.ubs.com.

105

UBS U.S. Large Cap Growth Fund

Top ten equity holdings (unaudited)⁽¹⁾

As of June 30, 2009

	Percentage of net assets
Apple, Inc.		5.4	%
Google, Inc., Class A		4.8
QUALCOMM, Inc.		4.5
Visa, Inc., Class A		4.3
Allergan, Inc.		4.2
Amazon.com, Inc.		3.6
MasterCard, Inc., Class A		3.6
Cisco Systems, Inc.		3.2
Union Pacific Corp.		3.1
CME Group, Inc.		3.0
Total		39.7	%

⁽¹⁾  Figures represent the direct investments of the UBS U.S. Large Cap Growth Fund. Figures could be different if a breakdown of the underlying investment company was included.

Industry diversification (unaudited)⁽²⁾

As a percentage of net assets as of June 30, 2009

Common stocks
Aerospace & defense	2.91	%
Air freight & logistics	0.61
Capital markets	1.69
Chemicals	6.04
Communications equipment	7.68
Computers & peripherals	5.43
Diversified consumer services	1.51
Diversified financial services	5.78
Energy equipment & services	2.69
Food products	1.62
Health care equipment & supplies	7.46
Health care providers & services	5.19
Hotels, restaurants & leisure	4.43
Household products	2.27
Internet & catalog retail	3.64
Internet software & services	4.76
IT services	7.88	%
Machinery	0.92
Oil, gas & consumable fuels	6.72
Pharmaceuticals	4.17
Road & rail	4.85
Software	5.01
Specialty retail	3.44
Textiles, apparel & luxury goods	0.84
Wireless telecommunication services	1.48
Total common stocks	99.02
Investment company
iShares Russell 1000 Growth Index Fund	0.87
Total investments	99.89
Cash and other assets, less liabilities	0.11
Net assets	100.00	%

⁽²⁾  Figures represent the industry breakdown of direct investments of the UBS U.S. Large Cap Growth Fund. Figures would be different if a breakdown of the underlying investment company's industry diversification was included.

106

UBS U.S. Large Cap Growth Fund—Portfolio of investments

June 30, 2009

Security description	Shares		Value
Common stocks—99.02%
Aerospace & defense—2.91%
General Dynamics Corp.		22,600	$	1,251,814
United Technologies Corp.		23,000		1,195,080
				2,446,894
Air freight & logistics—0.61%
Expeditors International Washington, Inc.		15,500		516,770
Capital markets—1.69%
BlackRock, Inc.		8,100		1,420,902
Chemicals—6.04%
Ecolab, Inc.		23,500		916,265
Monsanto Co.		25,900		1,925,406
Praxair, Inc.		31,500		2,238,705
				5,080,376
Communications equipment—7.68%
Cisco Systems, Inc.*		143,800		2,680,432
QUALCOMM, Inc.		83,700		3,783,240
				6,463,672
Computers & peripherals—5.43%
Apple, Inc.*		32,100		4,572,003
Diversified consumer services—1.51%
DeVry, Inc.		25,400		1,271,016
Diversified financial services—5.78%
CME Group, Inc.		8,000		2,488,880
IntercontinentalExchange, Inc.*		20,800		2,376,192
				4,865,072
Energy equipment & services—2.69%
Schlumberger Ltd.		20,800		1,125,488
Weatherford International Ltd.*		58,400		1,142,304
				2,267,792
Food products—1.62%
Kellogg Co.		29,300		1,364,501
Health care equipment & supplies—7.46%
Alcon, Inc.		21,300		2,473,356
Baxter International, Inc.		16,900		895,024
Stryker Corp.		35,100		1,394,874
Zimmer Holdings, Inc.*		35,700		1,520,820
				6,284,074
Health care providers & services—5.19%
Express Scripts, Inc.*		29,600		2,035,000
Laboratory Corp. of America Holdings*		17,800		1,206,662
Medco Health Solutions, Inc.*		24,800		1,131,128
				4,372,790
Hotels, restaurants & leisure—4.43%
International Game Technology		132,200		2,101,980
McDonald's Corp.		28,300		1,626,967
				3,728,947

Security description	Shares		Value
Household products—2.27%
Colgate-Palmolive Co.		27,000	$	1,909,980
Internet & catalog retail—3.64%
Amazon.com, Inc.*		36,600		3,061,956
Internet software & services—4.76%
Google, Inc., Class A*		9,500		4,005,105
IT services—7.88%
MasterCard, Inc., Class A		17,900		2,994,849
Visa, Inc., Class A		58,400		3,635,984
				6,630,833
Machinery—0.92%
Parker Hannifin Corp.		18,000		773,280
Oil, gas & consumable fuels—6.72%
Exxon Mobil Corp.		20,700		1,447,137
Southwestern Energy Co.*		48,800		1,895,880
XTO Energy, Inc.		60,575		2,310,331
				5,653,348
Pharmaceuticals—4.17%
Allergan, Inc.		73,800		3,511,404
Road & rail—4.85%
Burlington Northern Santa Fe Corp.		20,100		1,478,154
Union Pacific Corp.		50,100		2,608,206
				4,086,360
Software—5.01%
Adobe Systems, Inc.*		53,500		1,514,050
Oracle Corp.		79,500		1,702,890
Salesforce.com, Inc.*		26,200		1,000,054
				4,216,994
Specialty retail—3.44%
Home Depot, Inc.		52,300		1,235,849
Sherwin-Williams Co.		30,900		1,660,875
				2,896,724
Textiles, apparel & luxury goods—0.84%
Coach, Inc.		26,400		709,632
Wireless telecommunication services—1.48%
American Tower Corp., Class A*		39,500		1,245,435
Total common stocks (cost $81,945,452)				83,355,860
	Units
Investment company—0.87%
iShares Russell 1000 Growth Index Fund (cost $720,672)		17,800		730,334
Total investments—99.89% (cost $82,666,124)				84,086,194
Cash and other assets, less liabilities—0.11%				88,982
Net assets—100.00%			$	84,175,176

107

UBS U.S. Large Cap Growth Fund—Portfolio of investments

June 30, 2009

Notes to portfolio of investments

Aggregate cost for federal income tax purposes, was $85,359,052; and net unrealized depreciation consisted of:

Gross unrealized appreciation	$	4,882,732
Gross unrealized depreciation		(6,155,590	)
Net unrealized depreciation of investments	$	(1,272,858	)

*  Non income producing security.

The following is a summary of the inputs used as of June 30, 2009 in valuing the Fund's investments.

Measurements at 06/30/09
Description	Quoted prices in active markets for identical investments (Level 1)		Significant other observable inputs (Level 2)		Unobservable inputs (Level 3)		Total
Common stocks	$	83,355,860	$	—	$	—	$	83,355,860
Investment company		730,334		—		—		730,334
Total	$	84,086,194	$	—	$	—	$	84,086,194

See accompanying notes to financial statements.
108

UBS U.S. Large Cap Value Equity Fund

Portfolio performance

For the 12 months ended June 30, 2009, Class A shares of UBS U.S. Large Cap Value Equity Fund (the "Fund") declined 29.74% (Class A shares declined 33.60% after the deduction of the maximum sales charge), while Class Y shares declined 29.53%. The Fund's benchmark, the Russell 1000 Value Index (the "Index"), declined 29.03% over the same time period. (Class Y shares have lower expenses than other share classes of the Fund. Returns for all share classes over various time periods are shown on page 112; please note that the Fund's returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares, while the Index returns do not reflect the deduction of fees and expenses.) For a detailed commentary on the market environment in general during the reporting period, see page 2.

The Fund's modest underperformance relative to the Index resulted from industry allocation during the reporting period, while stock selection made a positive contribution to relative returns.

Portfolio performance summary

What worked

•  Strong stock selection across a number of industries contributed positively to Fund performance during the reporting period.

•  Security selection in the energy industry was positive. In particular, the Fund's position in Anadarko Petroleum, as well as not holding ConocoPhillips, made significant contributions to Fund returns.

•  The Fund benefited from positive stock selection in the materials group, most notably Celanese and Alcoa, which was sold from the Fund.

•  Within the industrial group, stock selection in the capital goods and transportation sectors was strong. Holdings such as General Dynamics added value during the reporting period.

•  The Fund had a meaningful underweight to the materials sector, which benefited relative returns for the 12-month period. The Fund began the period with an underweight to materials stocks, reflecting our belief that commodity prices were unsustainably high. During the second half of 2008, our conviction was rewarded as oil and other commodity prices dropped sharply. As materials stocks meaningfully underperformed other areas of the US market, the Fund's reduced exposure helped to insulate it from the declines.

As materials stock prices returned to earlier, lower levels, our research indicated that the valuations of these companies had become more attractive, so we added incrementally to the Fund's exposure. At the end of the reporting period, the Fund was underweight to materials.

•  Several targeted weightings in industry subsectors benefited Fund returns.

•  Within the technology sector, we successfully overweighted technology hardware and semiconductor companies, particularly Intel, during the period.

109

UBS U.S. Large Cap Value Equity Fund

•  The Fund was overweight to diversified financial stocks within the financial industry. Success stories for the period included Wells Fargo, particularly in the second half of 2008, and Morgan Stanley during the first half of 2009. (For details, see "Portfolio highlights.")

•  Although stock selection in the consumer discretionary sector as a whole contributed negatively to performance, several stocks held by the Fund in the retailing sector performed well. These included Macy's and J.C. Penney. (For details, see "Portfolio highlights.")

What didn't work

•  The Fund's positioning in energy stocks performed poorly during the period. In particular, Peabody Energy was a negative contributor. Oil services stocks including Halliburton and Baker Hughes also hindered returns for much of the 12-month period. However, we see a number of companies that we consider to be good value in the oil services sector as the push toward deep water oil and shale g as intensifies. As energy demand began to recover in the second quarter of 2009, these holdings began to perform well. We believe that they could continue to benefit from increased exploration. (For details, see "Portfolio highlights.")

•  Industry group allocation offset the Fund's gains from stock selection, and detracted from performance. Our research indicated that most companies in the consumer staples sector had become less attractively priced than other parts of the market, and the Fund continued to underweight the sector. However, the consumer staples sector outperformed the market as defensive sectors exhibited strength during the downturn. While this underweight hurt the Fund's relative returns during the reporting period as a whole, this changed dramatically beginning in March of 2009, when the consumer staples sector began to lag following a shift in sector performance.

•  An overweight to industrials had a negative impact on results during much of the reporting period.

•  The Fund suffered from security selection decisions within the financial sector.

•  Many of the bank stocks held in the Fund declined for the period, particularly during the fourth quarter of 2008, when negative economic news proliferated. Several regional banks the Fund owned, including Fifth Third Bancorp and SunTrust Banks, contributed negatively to performance. Both of these banks were sold from the Fund during the period.

•  The Fund's insurance holdings, such as Aflac, detracted as well.

•  Financial stocks began to outperform in March of 2009, and several of the Fund's holdings benefited.

•  While security selection overall added value, it underperformed the benchmark in some sectors. In particular, security selection in the consumer discretionary and telecommunications industries detracted from results.

•  The Fund's position in Sprint declined, while shares of Verizon, which the Fund did not hold, gained during the period. As with many equity sectors, stronger balance sheets in telecommunications were rewarded during this period. Those companies viewed as needing access to near-term credit tended to underperform, and this was a contributing factor in the performance of many telecom stocks during the second half of 2008. (For details, see "Portfolio highlights.")

110

UBS U.S. Large Cap Value Equity Fund

Portfolio highlights

•  The Fund's position in Macy's contributed positively to performance. Despite weak holiday sales, Macy's was able to shore up its liquidity position by amending its credit agreements, alleviating investors' liquidity concerns. While we expect that the company will continue feeling near-term headwinds, we believe the stock has more than priced in a significant consumer slowdown.

•  Morgan Stanley was a positive contributor to performance during the reporting period, especially relative to other financial stocks. We believe that, regardless of the severe economic downturn, the capital markets will eventually begin to operate more normally. When this happens, we think it is likely that Morgan Stanley's strong investment banking capabilities, broad product offering and customer relationships will enable the firm to garner a significant share of the impending business.

•  Sprint traded lower during the reporting period, despite its announcement that its faster WIMAX broadband wireless network is ready for commercial services. Despite recent losses in Sprint's client base, we remain confident in the Fund's current position. The company formed a new unit focused on business and government customers, and we believe that Sprint can stabilize its customer base and return to growth.

•  The Fund's position in Halliburton detracted from performance. Shares of oil services companies fell as analysts predicted a drop in activity due to the recession. Spending cuts by oil and gas producers may mean less work for companies that assist in production. Despite this, we believe the company is well-positioned to endure the market crunch.

This letter is intended to assist shareholders in understanding how the Fund performed during the 12 months ended June 30, 2009. The views and opinions in the letter were current as of August 17, 2009. They are not guarantees of performance or investment results and should not be taken as investment advice. Investment decisions reflect a variety of factors, and we reserve the right to change our views about individual securities, sectors and markets at any time. As a result, the views expressed should not be relied upon as a forecast of the Fund's future investment intent. We encourage you to consult your financial advisor regarding your personal investment program. Mutual funds are sold by prospectus only. You should read it carefully and consider a fund's investment objectives, risks, charges, expenses and other important information contained in the prospectus before investing. Prospectuses for most of our funds can be obtained from your financial advisor, by calling UBS Funds at 800-647 1568 or by visiting our Web site at www.ubs.com

111

UBS U.S. Large Cap Value Equity Fund

Average annual total returns for periods ended 06/30/09 (unaudited)

		1 year			5 years			Inception(1)
Before deducting	Class A(2)		(29.74	)%		(2.86	)%		(0.20	)%
maximum sales charge	Class B(3)		(30.23	)		(3.57	)		(0.35	)
	Class C(4)		(30.25	)		(3.54	)		(0.62	)
	Class Y(5)		(29.53	)		(2.59	)		0.00
After deducting maximum	Class A(2)		(33.60	)		(3.95	)		(0.95	)
sales charge	Class B(3)		(33.15	)		(3.77	)		(0.35	)
	Class C(4)		(30.83	)		(3.54	)		(0.62	)
Russell 1000 Value Index(6)			(29.03	)		(2.12	)		(0.24	)

The annualized gross and net expense ratios, respectively, for each class of shares as in the October 28, 2008 prospectuses were as follows: Class A—1.33% and 1.11%; Class B—2.18% and 1.86%; Class C—2.11% and 1.86%; Class Y—1.14% and 0.86%. Net expenses reflect fee waivers and/or expense reimbursements, if any, pursuant to an agreement that is in effect to cap the expenses. The Trust, with respect to the Fund, and the Advisor have entered into a written agreement pursuant to which the Advisor has agreed to waive a portion of its management fees and/or to reimburse expenses (excluding expenses incurred through investment in other investment companies and interest expense) to the extent necessary so that the Fund's operating expenses (excluding expenses incurred through investment in other investment companies and interest expense), through the fiscal year ending June 30, 2009, do not exceed 1.10% for Class A s hares, 1.85% for Class B shares, 1.85% for Class C shares and 0.85% for Class Y shares. Pursuant to the written agreement, the Advisor is entitled to be reimbursed for any fees it waives and expenses it reimburses for a period of three years following such fee waivers and expense reimbursements, to the extent that such reimbursement of the Advisor by the Fund will not cause the Fund to exceed any applicable expense limit that is in place for the Fund.

⁽¹⁾  Inception date of UBS U.S. Large Cap Value Equity Fund Class A shares is December 7, 2001. Inception dates of Class B and Class C shares are November 8, 2001 and December 12, 2001, respectively. Inception date of Class Y shares and the index is June 29, 2001.

⁽²⁾  Maximum sales charge for Class A shares is 5.5%. Class A shares bear ongoing 12b-1 service fees.

⁽³⁾  Maximum contingent deferred sales charge for Class B shares is 5% imposed on redemptions and is reduced to 0% after a maximum of six years. Class B shares bear ongoing 12b-1 service and distribution fees.

⁽⁴⁾  Maximum contingent deferred sales charge for Class C shares is 1% imposed on redemptions and is reduced to 0% after one year. Class C shares bear ongoing 12b-1 service and distribution fees.

⁽⁵⁾  The Fund offers Class Y shares to a limited group of eligible investors, including certain qualifying retirement plans. Class Y shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees.

⁽⁶⁾  The Russell 1000 Value Index measures the performance of those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values. Investors should note that indices do not reflect the deduction of fees, expenses or taxes.

If an investor sells or exchanges shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged will be deducted at the time of the transaction, except as noted otherwise in the prospectus.

Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://www.ubs.com.

112

UBS U.S. Large Cap Value Equity Fund

Illustration of an assumed investment of $10,000 in Class A shares (adjusted for 5.50% maximum

sales charge) and $10,000,000 in Class Y shares (unaudited)

The first graph depicts the performance of UBS U.S. Large Cap Value Equity Fund Class A versus the Russell 1000 Value Index from December 7, 2001, which is the inception date of the class, through June 30, 2009. The second graph depicts the performance of UBS U.S. Large Cap Value Equity Fund Class Y versus the Russell 1000 Value Index from June 29, 2001, which is the inception date of the class, through June 30, 2009. The performance of Class B and Class C shares will vary based upon the different inception dates, class specific expenses and sales charges. No adjustment has been made for any income taxes payable by shareholders on income dividends and capital gain distributions. Past performance is no guarantee of future results. Share price and returns will vary with market conditions; investors may realize a gain or loss upon redemption.

UBS U.S. Large Cap Value Equity Fund Class A vs. Russell 1000 Value Index

Wealth value with dividends reinvested

The Fund's growth of an assumed $10,000 investment is adjusted for the maximum sales charge of 5.50%.

UBS U.S. Large Cap Value Equity Fund Class Y vs. Russell 1000 Value Index

Wealth value with dividends reinvested

Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://www.ubs.com.

113

UBS U.S. Large Cap Value Equity Fund

Top ten equity holdings (unaudited)⁽¹⁾

As of June 30, 2009

	Percentage of net assets
General Electric Co.		4.5	%
JPMorgan Chase & Co.		4.2
Pfizer, Inc.		4.0
Chevron Corp.		3.6
AT&T, Inc.		3.5
Covidien PLC.		3.2
Wells Fargo & Co.		3.0
Comcast Corp., Class A		2.7
Marathon Oil Corp.		2.5
Exxon Mobil Corp.		2.4
Total		33.6	%

⁽¹⁾  Figures represent the direct investments of the UBS U.S. Large Cap Value Equity Fund. Figures could be different if a breakdown of the underlying investment company was included.

Industry diversification (unaudited)⁽²⁾

As a percentage of net assets as of June 30, 2009

Common stocks
Aerospace & defense	2.15	%
Air freight & logistics	2.21
Auto components	3.40
Beverages	1.93
Capital markets	4.41
Chemicals	1.79
Commercial banks	3.55
Computers & peripherals	2.20
Consumer finance	1.34
Diversified financial services	4.20
Diversified telecommunication services	3.47
Electric utilities	6.36
Energy equipment & services	2.62
Health care equipment & supplies	3.17
Health care providers & services	1.86
Hotels, restaurants & leisure	1.68
Household durables	1.00
Industrial conglomerates	4.52
Insurance	4.32	%
Machinery	4.12
Media	5.64
Multiline retail	2.19
Multi-utilities	3.25
Oil, gas & consumable fuels	14.99
Pharmaceuticals	5.37
Road & rail	2.42
Semiconductors & semiconductor equipment	2.13
Wireless telecommunication services	1.25
Total common stocks	97.54
Investment company
SPDR Trust, Series 1	2.04
Short-term investment	1.40
Total investments	100.98
Liabilities, in excess of cash and other assets	(0.98	)
Net assets	100.00	%

⁽²⁾  Figures represent the industry breakdown of direct investments of the UBS U.S. Large Cap Value Equity Fund. Figures would be different if a breakdown of the underlying investment company's industry diversification was included.

114

UBS U.S. Large Cap Value Equity Fund—Portfolio of investments

June 30, 2009

Security description	Shares		Value
Common stocks—97.54%
Aerospace & defense—2.15%
General Dynamics Corp.		20,100	$	1,113,339
Air freight & logistics—2.21%
FedEx Corp.		20,600		1,145,772
Auto components—3.40%
BorgWarner, Inc.		21,200		723,980
Johnson Controls, Inc.		47,700		1,036,044
				1,760,024
Beverages—1.93%
Dr. Pepper Snapple Group, Inc.*		14,000		296,660
PepsiCo, Inc.		12,800		703,488
				1,000,148
Capital markets—4.41%
Bank of New York Mellon Corp.		37,300		1,093,263
Morgan Stanley		41,800		1,191,718
				2,284,981
Chemicals—1.79%
Air Products & Chemicals, Inc.		5,400		348,786
Celanese Corp., Series A		24,300		577,125
				925,911
Commercial banks—3.55%
City National Corp.		8,700		320,421
Wells Fargo & Co.		62,700		1,521,102
				1,841,523
Computers & peripherals—2.20%
Seagate Technology		108,800		1,138,048
Consumer finance—1.34%
Discover Financial Services		67,900		697,333
Diversified financial services—4.20%
JPMorgan Chase & Co.		63,770		2,175,195
Diversified telecommunication services—3.47%
AT&T, Inc.		72,350		1,797,174
Electric utilities—6.36%
American Electric Power Co., Inc.		36,700		1,060,263
Exelon Corp.		19,600		1,003,716
Northeast Utilities		37,500		836,625
Pepco Holdings, Inc.		29,200		392,448
				3,293,052
Energy equipment & services—2.62%
Baker Hughes, Inc.		24,000		874,560
Halliburton Co.		23,300		482,310
				1,356,870
Health care equipment & supplies—3.17%
Covidien PLC.		43,900		1,643,616

Security description	Shares		Value
Health care providers & services—1.86%
Medco Health Solutions, Inc.*		9,900	$	451,539
UnitedHealth Group, Inc.		20,500		512,090
				963,629
Hotels, restaurants & leisure—1.68%
Carnival Corp.		33,700		868,449
Household durables—1.00%
Fortune Brands, Inc.		14,900		517,626
Industrial conglomerates—4.52%
General Electric Co.		199,900		2,342,828
Insurance—4.32%
ACE Ltd.		11,700		517,491
Aflac, Inc.		16,500		512,985
MetLife, Inc.		22,800		684,228
Principal Financial Group, Inc.		27,700		521,868
				2,236,572
Machinery—4.12%
Illinois Tool Works, Inc.		29,600		1,105,264
PACCAR, Inc.		31,700		1,030,567
				2,135,831
Media—5.64%
Comcast Corp., Class A		98,600		1,428,714
Interpublic Group of Cos., Inc.*		119,100		601,455
Omnicom Group, Inc.		28,300		893,714
				2,923,883
Multiline retail—2.19%
JC Penney Co., Inc.		14,800		424,908
Macy's, Inc.		60,200		707,952
				1,132,860
Multi-utilities—3.25%
MDU Resources Group, Inc.		30,500		578,585
NiSource, Inc.		27,900		325,314
Sempra Energy		15,700		779,191
				1,683,090
Oil, gas & consumable fuels—14.99%
Anadarko Petroleum Corp.		20,600		935,034
Chevron Corp.		28,000		1,855,000
Exxon Mobil Corp.		17,450		1,219,929
Hess Corp.		13,800		741,750
Marathon Oil Corp.		43,500		1,310,655
Peabody Energy Corp.		31,500		950,040
Ultra Petroleum Corp.*		19,300		752,700
				7,765,108
Pharmaceuticals—5.37%
Merck & Co., Inc.		25,300		707,388
Pfizer, Inc.		138,200		2,073,000
				2,780,388

115

UBS U.S. Large Cap Value Equity Fund—Portfolio of investments

June 30, 2009

Security description	Shares		Value
Common stocks—(concluded)
Road & rail—2.42%
Burlington Northern Santa Fe Corp.		10,400	$	764,816
Ryder System, Inc.		17,500		488,600
				1,253,416
Semiconductors & semiconductor equipment—2.13%
Intel Corp.		66,700		1,103,885
Wireless telecommunication services—1.25%
Sprint Nextel Corp.*		134,457		646,738
Total common stocks (cost $61,553,185)				50,527,289
Investment company—2.04%
SPDR Trust, Series 1 (cost $1,081,343)		11,500		1,057,080

Security description	Units		Value
Short-term investment—1.40%
Investment company—1.40%
UBS Cash Management Prime Relationship Fund, 0.384%(1),(2)(cost $723,700)		723,700	$	723,700
Total investments—100.98% (cost $63,358,228)				52,308,069
Liabilities, in excess of cash and other assets—(0.98)%				(507,169	)
Net assets—100.00%			$	51,800,900

Notes to portfolio of investments

Aggregate cost for federal income tax purposes, was $65,173,817; and net unrealized depreciation consisted of:

Gross unrealized appreciation	$	2,636,154
Gross unrealized depreciation		(15,501,902	)
Net unrealized depreciation of investments	$	(12,865,748	)

*  Non-income producing security.

⁽¹⁾  Investment in affiliated mutual fund.

⁽²⁾  The rate shown reflects the yield at June 30, 2009.

The following is a summary of the inputs used as of June 30, 2009 in valuing the Fund's investments.

Measurements at 06/30/09
Description	Quoted prices in active markets for identical investments (Level 1)		Significant other observable inputs (Level 2)		Unobservable inputs (Level 3)		Total
Common stocks	$	50,527,289	$	—	$	—	$	50,527,289
Investment company		1,057,080		—		—		1,057,080
Short-term investment		—		723,700		—		723,700
Total	$	51,584,369	$	723,700	$	—	$	52,308,069

See accompanying notes to financial statements.
116

UBS U.S. Mid Cap Growth Equity Fund

Portfolio performance

For the 12 months ended June 30, 2009, Class A shares of UBS U.S. Mid Cap Growth Equity Fund (the "Fund") declined 31.54% (Class A shares declined 35.28% after the deduction of the maximum sales charge), while Class Y shares declined 31.18%. The Fund's benchmark, the Russell Midcap Growth Index (the "Index"), declined 30.33% over the same time period. (Class Y shares have lower expenses than other share classes of the Fund. Returns for all share classes over various time periods are shown on page 120; please note that the Fund's returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares, while the Index returns do not reflect the deduction of fees and expenses.) For a detailed commentary on the market environment in general during the reporting period, see page 2.

The Fund underperformed its benchmark largely due to stock selection.

Portfolio performance summary

What worked

•  Stock selection in the information technology sector made a positive contribution to Fund returns. The information technology sector makes up the largest weight in the Fund's benchmark Russell Midcap Growth Index, and was the Fund's largest source of relative return during the period.

•  Along with the Fund's core long-term holdings in the sector, we are also finding what we view as compelling opportunities in companies that are benefiting from strength in their product cycles, as well as firms with stable business models and significant recurring revenues.

•  Successful holdings included stocks such as DataDomain, a network and storage company whose shares rose when the company was the subject of a bidding war between two potential acquirers. Other data storage companies held in the Fund benefited from this activity as well, particularly F5 Networks. (For details, see "Portfolio highlights.")

•  Security selection in the financial sector also had a positive effect on performance for the reporting period. Because financial stocks make up only 6% of the Fund's benchmark Index, stock selection is key to the Fund's success within the group. The sector includes relatively few large, well-known firms. We rely on our independent fundamental research in our effort to identify undervalued stocks that we believe are poised to outperform.

•  One such stock during the period was Digital Realty Trust, a data center real estate investment trust ("REIT"). Although the national real estate market declined as a result of the credit crisis, Digital Realty was able to limit its losses relative to its peers.

•  The Fund's position in online discount broker TD Ameritrade posted strong relative performance for the 12-month period. Discount brokers have seen significant inflows as investors have fled many large national broker/dealers. (For details, see "Portfolio highlights.")

•  Several positions in the telecom sector added to Fund returns for the 12-month period. The Fund's sector allocations are a byproduct of our bottom-up, fundamental research. We seek to identify and own companies whose future growth, in our view, is underestimated by the market. Our bottom-up

117

UBS U.S. Mid Cap Growth Equity Fund

research has found what we believe are attractive opportunities in wireless services, specifically low-cost service providers and wireless tower owners/operators.

•  In particular, SBA Communications was a strong performer for the Fund. The company operates wireless communication towers, and has grown its business in recent quarters. Metro PCS also added value during the period. This discount wireless carrier offers prepaid phones and pay-as-you-go contracts, and is having success with the lower end of the wireless market.

What didn't work

•  Within health care, security selection was a negative contributor to Fund returns. We are focused on health care service providers that we believe are insulated from the negative trends affecting most companies in the space, such as pricing pressure, risks from generic drug competition, and Medicare exposure. Among these, Fund holdings Immucor and Psychiatric Solutions, which was sold from the Fund during the period, disappointed during this time. (For details, see "Portfolio highlights.")

•  The stocks the Fund held in the consumer discretionary group—including Gildan Activewear and Gaylord Entertainment—underperformed for the reporting period. This sector was challenged during the second half of 2008 and the beginning of 2009, as consumer spending slowed due to the uncertain economic environment (For details, see "Portfolio highlights.").

•  Stock selection in the consumer staples sector detracted from performance. Deteriorating consumer sentiment had a negative effect on several stocks held in the Fund that we believe offer an excellent risk-reward tradeoff. Notably, Central European Distribution, which produces vodka, sold off dramatically during the credit crisis due to concerns about exchange rates in Russia and Poland, the company's two main markets. (For details, see "Portfolio highlights.")

Portfolio highlights

•  DataDomain is a leading provider of storage solutions for backup and archive applications. Late in the reporting period, NetApp, a provider of storage and data management solutions, announced it had entered into a definitive agreement to acquire DataDomain. Shares of the stock rose strongly in response, and we sold the Fund's position in DataDomain, as we believed that it became fully valued based on the merger.

•  Shares of TD Ameritrade performed well for the period. While the company has maintained its leading services to its traditional target market of active traders, it is also steadily building asset gathering capabilities focused on longer-term investors, which represent a more stable, high-margin revenue stream. We are encouraged by this progress, and believe that the company's past and current investments in infrastructure will lead to increased growth and stability in the longer term.

•  Shares of Immucor, manufacturer of diagnostic equipment and products for blood typing, detracted from relative performance during the reporting period. However, Immucor is in the early stages of a major new product cycle and it has an updated version of its large lab equipment moving through the pipeline. In addition, Immucor is a major player in its market, which has resulted in tremendous pricing power, which we believe will be sustainable in the near term.

118

UBS U.S. Mid Cap Growth Equity Fund

•  Gildan Activewear had been viewed as a defensive consumer stock, selling high-value, low-priced products (such as T-shirts and fleece items) used for promotions. The stock appeared to hold up well in the early part of the reporting period. However, in a year-end conference call in December 2008, management reported slightly weaker than expected results and offered an extremely cautious outlook, which resulted in a drop in share price. We sold the Fund's position in the stock during the first quarter of 2009 due to lower earnings expectations.

•  Central European Distribution Corp. ("CEDC") hurt Fund performance for the period. Fundamentals at the company continue to reflect CEDC's strong market position as a distributor and manufacturer primarily of vodka in Poland and Russia. Management recently announced the details of a renegotiated agreement for their purchase of Russian Alcohol Group (RAG). As competitors are going out of business, CEDC is picking up market share. We continue to believe that CEDC is well-positioned to execute growth in Poland and Russia, and that its valuation is still at conservative levels.

This letter is intended to assist shareholders in understanding how the Fund performed during the 12 months ended June 30, 2009. The views and opinions in the letter were current as of August 17, 2009. They are not guarantees of performance or investment results and should not be taken as investment advice. Investment decisions reflect a variety of factors, and we reserve the right to change our views about individual securities, sectors and markets at any time. As a result, the views expressed should not be relied upon as a forecast of the Fund's future investment intent. We encourage you to consult your financial advisor regarding your personal investment program. Mutual funds are sold by prospectus only. You should read it carefully and consider a fund's investment objectives, risks, charges, expenses and other important information contained in the prospectus before investing. Prospectuses for most of our funds can be obtained from your financial advisor, by calling UBS Funds at 800-647 1568 or by visiting our Web site at www.ubs.com

119

UBS U.S. Mid Cap Growth Equity Fund

Average annual total returns for periods ended 06/30/09 (unaudited)

		1 year			Inception(1)
Before deducting	Class A(2)		(31.54	)%		(10.57	)%
maximum sales charge	Class C(3)		(32.83	)		(12.44	)
	Class Y(4)		(31.18	)		(9.79	)
After deducting maximum	Class A(2)		(35.28	)		(12.11	)
sales charge	Class C(3)		(33.49	)		(12.44	)
Russell Midcap Growth Index(5)			(30.33	)		(8.46	)

The annualized gross and net expense ratios, respectively, for each class of shares as in the October 28, 2008 prospectuses were as follows: Class A—4.59% and 1.46%; Class C—5.50% and 2.21%; Class Y—4.13% and 1.21%. Net expenses reflect fee waivers and/or expense reimbursements, if any, pursuant to an agreement that is in effect to cap the expenses. The Trust, with respect to the Fund, and the Advisor have entered into a written agreement pursuant to which the Advisor has agreed to waive a portion of its management fees and/or to reimburse expenses (excluding expenses incurred through investment in other investment companies and interest expense) to the extent necessary so that the Fund's expenses (excluding expenses incurred through investment in other investment companies and interest expense), through the fiscal year ending June 30, 2009, otherwise do not exceed 1.45% for Class A shares, 2.20% for Class C share s and 1.20% for Class Y shares. Pursuant to the written agreement, the Advisor is entitled to be reimbursed for any fees it waives and expenses it reimburses for a period of three years following such fee waivers and expense reimbursements, to the extent that such reimbursement of the Advisor by the Fund will not cause the Fund to exceed any applicable expense limit that is in place for the Fund.

⁽¹⁾  Inception date of UBS U.S. Mid Cap Growth Equity Fund Class A shares is March 31, 2006. Inception date of Class C shares is April 21, 2006. Inception date of Class Y shares and the index is March 27, 2006.

⁽²⁾  Maximum sales charge for Class A shares is 5.5%. Class A shares bear ongoing 12b-1 service fees.

⁽³⁾  Maximum contingent deferred sales charge for Class C shares is 1% imposed on redemptions and is reduced to 0% after one year. Class C shares bear ongoing 12b-1 service and distribution fees.

⁽⁴⁾  The Fund offers Class Y shares to a limited group of eligible investors, including certain qualifying retirement plans. Class Y shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees.

⁽⁵⁾  The Russell Midcap Growth Index is an unmanaged index that measures the performance of those Russell mid cap companies with higher price-to-book ratios and higher forecasted growth values. Investors should note that indices do not reflect the deduction of fees, expenses or taxes.

If an investor sells or exchanges shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged will be deducted at the time of the transaction, except as noted otherwise in the prospectus.

Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://www.ubs.com.

120

UBS U.S. Mid Cap Growth Equity Fund

Illustration of an assumed investment of $10,000 in Class A shares (adjusted for 5.50% maximum

sales charge) and $5,000,000 in Class Y shares (unaudited)

The first graph depicts the performance of UBS U.S. Mid Cap Growth Equity Fund Class A versus the Russell Midcap Growth Index from March 31, 2006, which is the inception date of the class, through June 30, 2009. The second graph depicts the performance of UBS U.S. Mid Cap Growth Equity Fund Class Y versus the Russell Midcap Growth Index from March 27, 2006, which is the inception date of the class, through June 30, 2009. The performance of Class C shares will vary based upon the different inception date, class specific expenses and sales charges. No adjustment has been made for any income taxes payable by shareholders on income dividends and capital gain distributions. Past performance is no guarantee of future results. Share price and returns will vary with market conditions; investors may realize a gain or loss upon redemption.

UBS U.S. Mid Cap Growth Equity Fund Class A vs. Russell Midcap Growth Index

Wealth value with dividends reinvested

The Fund's growth of an assumed $10,000 investment is adjusted for the maximum sales charge of 5.50%.

UBS U.S. Mid Cap Growth Equity Fund Class Y vs. Russell Midcap Growth Index

Wealth value with dividends reinvested

Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://www.ubs.com.

121

UBS U.S. Mid Cap Growth Equity Fund

Top ten equity holdings (unaudited)⁽¹⁾

As of June 30, 2009

	Percentage of net assets
WMS Industries, Inc.		4.2	%
Express Scripts, Inc.		3.6
Solera Holdings, Inc.		3.1
Cognizant Technology Solutions Corp., Class A		2.9
TD Ameritrade Holding Corp.		2.7
Strayer Education, Inc.		2.6
American Tower Corp., Class A		2.3
Ecolab, Inc.		2.3
Amphenol Corp., Class A		2.3
Republic Services, Inc.		2.2
Total		28.2	%

⁽¹⁾  Figures represent the direct investments of the UBS U.S. Mid Cap Growth Equity Fund. Figures would be different if a breakdown of the underlying investment company's industry diversification was included.

Industry diversification (unaudited)⁽¹⁾

As a percentage of net assets as of June 30, 2009

Common stocks
Air freight & logistics	1.49	%
Beverages	1.64
Biotechnology	0.78
Capital markets	2.71
Chemicals	3.78
Commercial services & supplies	7.00
Communications equipment	1.31
Computers & peripherals	5.12
Construction & engineering	2.15
Distributors	1.10
Diversified consumer services	2.60
Diversified financial services	4.90
Electrical equipment	1.59
Electronic equipment, instruments & components	2.26
Energy equipment & services	1.48
Food products	0.99
Health care equipment & supplies	4.11
Health care providers & services	8.88
Hotels, restaurants & leisure	7.07
IT services	4.17	%
Life sciences tools & services	3.12
Machinery	2.33
Oil, gas & consumable fuels	5.43
Professional services	1.74
Real estate investment trusts (REITs)	1.20
Semiconductors & semiconductor equipment	2.24
Software	6.90
Specialty retail	4.09
Trading companies & distributors	1.77
Wireless telecommunication services	4.67
Total common stocks	98.62
Investment company
iShares Russell Midcap Growth Index Fund	2.25
Short-term investment	0.90
Total investments	101.77
Liabilities, in excess of cash and other assets	(1.77	)
Net assets	100.00	%

⁽¹⁾  Figures represent the industry breakdown of direct investments of the UBS U.S. Mid Cap Growth Equity Fund. Figures would be different if a breakdown of the underlying investment company's industry diversification was included.

122

UBS U.S. Mid Cap Growth Equity Fund—Portfolio of investments

June 30, 2009

Security description	Shares		Value
Common stocks—98.62%
Air freight & logistics—1.49%
C.H. Robinson Worldwide, Inc.		1,200	$	62,580
Beverages—1.64%
Central European Distribution Corp.*		2,600		69,082
Biotechnology—0.78%
BioMarin Pharmaceutical, Inc.*		2,100		32,781
Capital markets—2.71%
TD Ameritrade Holding Corp.*		6,500		114,010
Chemicals—3.78%
Air Products & Chemicals, Inc.		500		32,295
Ecolab, Inc.		2,500		97,475
Terra Industries, Inc.		1,200		29,064
				158,834
Commercial services & supplies—7.00%
EnergySolutions, Inc.		7,000		64,400
Monster Worldwide, Inc.*		2,100		24,801
Republic Services, Inc.		3,765		91,904
Stericycle, Inc.*		1,300		66,989
Tetra Tech, Inc.*		1,600		45,840
				293,934
Communications equipment—1.31%
F5 Networks, Inc.*		600		20,754
Starent Networks Corp.*		1,400		34,174
				54,928
Computers & peripherals—5.12%
NCR Corp.*		5,100		60,333
NetApp, Inc.*		3,200		63,104
Teradata Corp.*		3,900		91,377
				214,814
Construction & engineering—2.15%
Quanta Services, Inc.*		3,900		90,207
Distributors—1.10%
LKQ Corp.*		2,800		46,060
Diversified consumer services—2.60%
Strayer Education, Inc.		500		109,055
Diversified financial services—4.90%
CME Group, Inc.		100		31,111
IntercontinentalExchange, Inc.*		500		57,120
MSCI, Inc., Class A*		3,500		85,540
Nasdaq OMX Group, Inc.*		1,500		31,965
				205,736
Electrical equipment—1.59%
Regal-Beloit Corp.		1,000		39,720
Roper Industries, Inc.		600		27,186
				66,906
Electronic equipment, instruments & components—2.26%
Amphenol Corp., Class A		3,000		94,920

Security description	Shares		Value
Energy equipment & services—1.48%
National Oilwell Varco, Inc.*		800	$	26,128
Smith International, Inc.		1,400		36,050
				62,178
Food products—0.99%
Flowers Foods, Inc.		1,900		41,496
Health care equipment & supplies—4.11%
C.R. Bard, Inc.		1,200		89,340
Idexx Laboratories, Inc.*		700		32,340
Immucor, Inc.*		3,700		50,912
				172,592
Health care providers & services—8.88%
Aetna, Inc.		1,600		40,080
DaVita, Inc.*		1,300		64,298
Express Scripts, Inc.*		2,200		151,250
Fresenius Medical Care AG & Co. KGaA ADR		900		40,500
Henry Schein, Inc.*		1,600		76,720
				372,848
Hotels, restaurants & leisure—7.07%
Darden Restaurants, Inc.		2,200		72,556
International Game Technology		1,900		30,210
WMS Industries, Inc.*		5,600		176,456
Wynn Resorts Ltd.*		500		17,650
				296,872
IT services—4.17%
Cognizant Technology Solutions Corp., Class A*		4,500		120,150
Fiserv, Inc.*		1,200		54,840
				174,990
Life sciences tools & services—3.12%
Covance, Inc.*		700		34,440
Qiagen NV*		1,900		35,321
Thermo Fisher Scientific, Inc.*		1,500		61,155
				130,916
Machinery—2.33%
Bucyrus International, Inc.		1,100		31,416
Joy Global, Inc.		900		32,148
SPX Corp.		700		34,279
				97,843
Oil, gas & consumable fuels—5.43%
Continental Resources, Inc.*		3,000		83,250
Newfield Exploration Co.*		1,700		55,539
Southwestern Energy Co.*		2,300		89,355
				228,144
Professional services—1.74%
Dun & Bradstreet Corp.		900		73,089
Real estate investment trusts (REITs)—1.20%
Digital Realty Trust, Inc.		1,400		50,190

123

UBS U.S. Mid Cap Growth Equity Fund—Portfolio of investments

June 30, 2009

Security description	Shares		Value
Common stocks—(concluded)
Semiconductors & semiconductor equipment—2.24%
ASML Holding NV, Class G		2,000	$	43,300
Atmel Corp. *		13,600		50,728
				94,028
Software—6.90%
Activision Blizzard, Inc.*		2,500		31,575
Concur Technologies, Inc.*		1,900		59,052
Micros Systems, Inc.*		1,600		40,512
Salesforce.com, Inc.*		700		26,719
Solera Holdings, Inc.*		5,200		132,080
				289,938
Specialty retail—4.09%
GameStop Corp., Class A*		2,400		52,824
O'Reilly Automotive, Inc.*		1,700		64,736
Urban Outfitters, Inc.*		2,600		54,262
				171,822
Trading companies & distributors—1.77%
MSC Industrial Direct Co., Class A		2,100		74,508

Security description	Shares		Value
Wireless telecommunication services—4.67%
American Tower Corp., Class A*		3,100	$	97,743
MetroPCS Communications, Inc.*		2,400		31,944
SBA Communications Corp., Class A*		2,700		66,258
				195,945
Total common stocks (cost $4,427,263)				4,141,246
	Units
Investment company—2.25%
iShares Russell Midcap Growth Index Fund (cost $92,391)		2,600		94,770
Short-term investment—0.90%
Investment company—0.90%
UBS Cash Management Prime Relationship Fund, 0.384%(1),(2) (cost $37,594)		37,594		37,594
Total investments—101.77% (cost $4,557,248)				4,273,610
Liabilities, in excess of cash and other assets—(1.77)%				(74,426	)
Net assets—100.00%			$	4,199,184

Notes to portfolio of investments

Aggregate cost for federal income tax purposes was $4,594,049; and net unrealized depreciation consisted of:

Gross unrealized appreciation	$	221,833
Gross unrealized depreciation		(542,272	)
Net unrealized depreciation of investments	$	(320,439	)

*  Non-income producing security.

⁽¹⁾  Investment in affiliated mutual fund.

⁽²⁾  The rate shown reflects the yield at June 30, 2009.

ADR  American depositary receipt

The following is a summary of the inputs used as of June 30, 2009 in valuing the Fund's investments.

Measurements at 06/30/09
Description	Quoted prices in active markets for identical investments (Level 1)		Significant other observable inputs (Level 2)		Unobservable inputs (Level 3)		Total
Common stocks	$	4,141,246	$	—	$	—	$	4,141,246
Investment company		94,770		—		—		94,770
Short-term investment		—		37,594		—		37,594
Total	$	4,236,016	$	37,594	$	—	$	4,273,610

See accompanying notes to financial statements.
124

UBS U.S. Small Cap Growth Fund

Portfolio performance

For the 12 months ended June 30, 2009, Class A shares of UBS U.S. Small Cap Growth Fund (the "Fund") declined 35.68% (Class A shares declined 39.20% after the deduction of the maximum sales charge), while Class Y shares declined 35.51%. The Fund's benchmark, the Russell 2000 Growth Index (the "Index"), declined 24.85% over the same time period. (Class Y shares have lower expenses than other share classes of the Fund. Returns for all share classes over various time periods are shown on page 127; please note that the Fund's returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares, while the Index returns do not reflect the deduction of fees and expenses.) For a detailed commentary on the market environment in general during the reporting period, see page 2.

The Fund underperformed primarily due to stock selection decisions.

Portfolio performance summary

What worked

•  Strong stock selection in the consumer discretionary sector contributed positively to the Fund's returns. We seek to identify individual companies that can sustain above-average revenue and earnings growth over time. Regardless of the shifting winds of the broader economy, we believe this strategy is likely to reward Fund shareholders in the long run.

•  The consumer discretionary sector as a whole was challenged by the difficult economy. However, we have found select opportunities in the sector that we believe will benefit from shifting consumer spending patterns. One example is sandwich chain Panera Bread, which was one of the Fund's top-performing holdings for the 12 months. (For details, see "Portfolio highlights.")

•  Other success stories include Chico's, a specialty retailer that made considerable gains in the first six months of 2009, despite reduced consumer spending. (For details, see "Portfolio highlights.")

•  The Fund benefited from stock selection in the telecommunications sector. Though this sector does not make up a large portion of the Fund's benchmark Index, several key decisions benefited relative returns. Notably, Neutral Tandem, a provider of connection services to wireless and cable broadband customers, rallied strongly during the reporting period.

What didn't work

•  Stock selection in health care was the largest negative factor in the Fund's returns. The Fund's health care holdings are focused on health care service and technology firms that we believe are insulated from the negative trends affecting many health care companies, such as pricing pressure, generic risks and Medicare exposure.

•  The Fund's holdings in companies such as Natus Medical, a maker of newborn care products, suffered sharp declines during the second half of 2008, and was sold from the Fund during the reporting period.

125

UBS U.S. Small Cap Growth Fund

•  Within the information technology group, stock selection underperformed the benchmark. The Fund's holdings in the electronic equipment and instruments group, such as Technitrol, suffered during the period and was sold from the Fund.

•  Likewise, shares of the Fund's holdings in semiconductor manufacturer Microsemi Corp. were down for the period and were sold from the Fund. (For details, see "Portfolio highlights.")

•  The stocks the Fund held in the energy sector—in particular, energy equipment and services stocks—detracted from relative performance. The Fund is overweight energy, where the rapid decline of commodity prices in the second half of 2008 had an adverse effect on the share prices of many companies. This resulted in overly pessimistic prices and what we believe to be attractive valuations. We believe any recovery in aggregate demand is likely to disproportionately benefit companies with low development costs, as well as service providers which offer the means to extract crude and natural gas from ever more complicated geologic reservoirs.

•  GMX Resources underperformed for the period due to falling energy prices and was sold from the Fund. (For details, see "Portfolio highlights.")

Portfolio highlights

•  The Fund's holdings in Chico's, a clothing retailer focused on women aged 35 to 60, helped performance. With approximately 400 stores, we feel the company has significant growth potential to cover 550 to 650 locations, with strategic acquisitions providing further upside to growth prospects. The company's product mix avoids fads as well as markdowns that can dilute brand effectiveness and hurt profitability.

•  Panera Bread, an owner and franchisor of bakery cafes under the Panera Bread and Saint Louis Bread Co. names, benefited performance during the reporting period. The company saw its shares rise after posting better-than-expected earnings. We believe that commodity cost declines coupled with menu price increases should allow the company to expand margins and grow earnings further during the rest of 2009.

•  Microsemi Corp., a leading designer and manufacturer of high-performance analog, mixed-signal, and high-reliability discrete semiconductors, was sold from the Fund following underperformance during a pullback in December 2008, as questions regarding the CEO's academic background emerged. In addition, the Justice Department announced that it is challenging Microsemi's recent acquisition of Semicoa.

•  GMX Resources Inc., an oil and natural gas exploration and production company, saw its shares decline as falling natural gas commodity prices increased investors' concerns over the ability of the company to fund its current capital expenditures, and was sold during the period.

This letter is intended to assist shareholders in understanding how the Fund performed during the 12 months ended June 30, 2009. The views and opinions in the letter were current as of August 17, 2009. They are not guarantees of performance or investment results and should not be taken as investment advice. Investment decisions reflect a variety of factors, and we reserve the right to change our views about individual securities, sectors and markets at any time. As a result, the views expressed should not be relied upon as a forecast of the Fund's future investment intent. We encourage you to consult your financial advisor regarding your personal investment program. Mutual funds are sold by prospectus only. You should read it carefully and consider a fund's investment objectives, risks, charges, expenses and other important information contained in the prospectus before investing. Prospectuses for most of our funds can be obtained from your financial advisor, by calling UBS Funds at 800-647 1568 or by visiting our Web site at www.ubs.com

126

UBS U.S. Small Cap Growth Fund

Average annual total returns for periods ended 06/30/09 (unaudited)

		1 year			5 years			10 years			Inception(1)
Before deducting	Class A(2)		(35.68	)%		(4.16	)%		3.44	%		3.67	%
maximum sales charge	Class B(3)		(36.06	)		(4.84	)		N/A			(0.20	)
	Class C(4)		(36.11	)		(4.86	)		N/A			(0.61	)
	Class Y(5)		(35.51	)		(3.92	)		3.72			2.41
After deducting maximum	Class A(2)		(39.20	)		(5.24	)		2.86			3.12
sales charge	Class B(3)		(39.25	)		(5.16	)		N/A			(0.20	)
	Class C(4)		(36.75	)		(4.86	)		N/A			(0.61	)
Russell 2000 Growth Index(6)			(24.85	)		(1.32	)		(0.89	)		(0.36	)

The annualized gross and net expense ratios, respectively, for each class of shares as in the October 28, 2008 prospectuses were as follows: Class A—1.47% and 1.28%; Class B—2.20% and 2.03%; Class C—2.25% and 2.03%; Class Y—1.12% and 1.03%. Net expenses reflect fee waivers and/or expense reimbursements, if any, pursuant to an agreement that is in effect to cap the expenses. The Trust, with respect to the Fund, and the Advisor have entered into a written agreement pursuant to which the Advisor has agreed to waive a portion of its management fees and/or to reimburse expenses (excluding expenses incurred through investment in other investment companies and interest expense) to the extent necessary so that the Fund's operating expenses (excluding expenses incurred through investment in other investment companies and interest expense), through the fiscal year ending June 30, 2009, do not exceed 1.28% for Class A s hares, 2.03% for Class B shares, 2.03% for Class C shares and 1.03% for Class Y shares. Pursuant to the written agreement, the Advisor is entitled to be reimbursed for any fees it waives and expenses it reimburses for a period of three years following such fee waivers and expense reimbursements, to the extent that such reimbursement of the Advisor by the Fund will not cause the Fund to exceed any applicable expense limit that is in place for the Fund.

⁽¹⁾  Inception date of UBS U.S. Small Cap Growth Fund Class A shares is December 31, 1998. Inception dates of Class B and Class C shares are November 7, 2001 and November 19, 2001, respectively. Inception date of Class Y shares and the index is September 30, 1997.

⁽²⁾  Maximum sales charge for Class A shares is 5.5%. Class A shares bear ongoing 12b-1 service fees.

⁽³⁾  Maximum contingent deferred sales charge for Class B shares is 5% imposed on redemptions and is reduced to 0% after a maximum of six years. Class B shares bear ongoing 12b-1 service and distribution fees.

⁽⁴⁾  Maximum contingent deferred sales charge for Class C shares is 1% imposed on redemptions and is reduced to 0% after one year. Class C shares bear ongoing 12b-1 service and distribution fees.

⁽⁵⁾  The Fund offers Class Y shares to a limited group of eligible investors, including certain qualifying retirement plans. Class Y shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees.

⁽⁶⁾  The Russell 2000 Growth Index is an unmanaged index composed of those companies in the Russell 2000 Index with higher price-to-book ratios and higher forecasted growth values. The Russell 2000 Index is an index composed of the 2,000 smallest companies in the Russell 3000 Index, which represents approximately 8% of the total market capitalization of the Russell 3000 Index. Investors should note that indices do not reflect the deduction of fees, expenses or taxes.

If an investor sells or exchanges shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged will be deducted at the time of the transaction, except as noted otherwise in the prospectus.

The Fund invests in IPOs which may have a magnified impact on performance.

Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://www.ubs.com.

127

UBS U.S. Small Cap Growth Fund

Illustration of an assumed investment of $10,000 in Class A shares (adjusted for 5.50% maximum

sales charge) and $5,000,000 in Class Y shares (unaudited)

The following two graphs depict the performance of UBS U.S. Small Cap Growth Fund Class A and Class Y versus the Russell 2000 Growth Index over the 10 years ended June 30, 2009. The performance of Class B and Class C shares will vary based upon the different inception dates, class specific expenses and sales charges. No adjustment has been made for any income taxes payable by shareholders on income dividends and capital gain distributions. Past performance is no guarantee of future results. Share price and returns will vary with market conditions; investors may realize a gain or loss upon redemption.

UBS U.S. Small Cap Growth Fund Class A vs. Russell 2000 Growth Index

Wealth value with dividends reinvested

The Fund's growth of an assumed $10,000 investment is adjusted for the maximum sales charge of 5.50%.

UBS U.S. Small Cap Growth Fund Class Y vs. Russell 2000 Growth Index

Wealth value with dividends reinvested

Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://www.ubs.com.

128

UBS U.S. Small Cap Growth Fund

Top ten equity holdings (unaudited)

As of June 30, 2009

	Percentage of net assets
F5 Networks, Inc.		2.1	%
Data Domain, Inc.		2.0
Landstar System, Inc.		1.9
EnerSys		1.8
Rock-Tenn Co., Class A		1.8
Phillips-Van Heusen Corp.		1.8
Chico's FAS, Inc.		1.8
Ventas, Inc.		1.7
Texas Roadhouse, Inc., Class A		1.7
EMCOR Group, Inc.		1.7
Total		18.3	%

Industry diversification (unaudited)

As a percentage of net assets as of June 30, 2009

Common stocks
Aerospace & defense	0.52	%
Air freight & logistics	1.37
Biotechnology	7.45
Chemicals	0.90
Commercial banks	0.08
Commercial services & supplies	4.86
Communications equipment	6.26
Computers & peripherals	4.21
Construction & engineering	3.04
Containers & packaging	1.79
Distributors	1.33
Diversified telecommunication services	0.72
Electrical equipment	4.12
Electronic equipment, instruments & components	1.48
Energy equipment & services	2.41
Health care equipment & supplies	4.07
Health care providers & services	5.90
Health care technology	3.69
Hotels, restaurants & leisure	4.05
Household durables	1.02
Internet software & services	2.28
IT services	0.92	%
Life sciences tools & services	1.58
Machinery	3.26
Media	1.15
Metals & mining	0.93
Oil, gas & consumable fuels	3.89
Personal products	1.68
Pharmaceuticals	0.77
Real estate investment trusts (REITs)	2.17
Road & rail	1.90
Semiconductors & semiconductor equipment	3.94
Software	8.70
Specialty retail	4.24
Textiles, apparel & luxury goods	3.05
Total common stocks	99.73
Short-term investment	0.86
Investment of cash collateral from securities loaned	4.55
Total investments	105.14
Liabilities, in excess of cash and other assets	(5.14	)
Net assets	100.00	%

129

UBS U.S. Small Cap Growth Fund—Portfolio of investments

June 30, 2009

Security description	Shares		Value
Common stocks—99.73%
Aerospace & defense—0.52%
DigitalGlobe, Inc.*		47,900	$	919,680
Air freight & logistics—1.37%
Hub Group, Inc., Class A*		117,800		2,431,392
Biotechnology—7.45%
Acorda Therapeutics, Inc.*(1)		35,053		988,144
Alkermes, Inc.*		94,300		1,020,326
Allos Therapeutics, Inc.*		135,900		1,126,611
Array Biopharma, Inc.*		155,500		488,270
Cougar Biotechnology, Inc.*		27,800		1,194,288
Genomic Health, Inc.*		72,290		1,252,786
Halozyme Therapeutics, Inc.*		181,779		1,267,000
Isis Pharmaceuticals, Inc.*		79,800		1,316,700
Medivation, Inc.*(1)		44,884		1,005,850
Regeneron Pharmaceuticals, Inc.*		72,800		1,304,576
Seattle Genetics, Inc.*(1)		127,318		1,237,531
United Therapeutics Corp.*		12,900		1,074,957
				13,277,039
Chemicals—0.90%
Scotts Miracle-Gro Co., Class A(1)		45,894		1,608,585
Commercial banks—0.08%
IBERIABANK Corp.		3,700		145,817
Commercial services & supplies—4.86%
Clean Harbors, Inc.*		43,100		2,326,969
EnergySolutions, Inc.		194,000		1,784,800
GeoEye, Inc.*(1)		43,865		1,033,459
Healthcare Services Group, Inc.		93,713		1,675,589
Tetra Tech, Inc.*		63,900		1,830,735
				8,651,552
Communications equipment—6.26%
Blue Coat Systems, Inc.*		119,500		1,976,530
F5 Networks, Inc.*		110,000		3,804,900
Riverbed Technology, Inc.*		116,100		2,692,359
Starent Networks Corp.*(1)		110,100		2,687,541
				11,161,330
Computers & peripherals—4.21%
Compellent Technologies, Inc.*		86,400		1,317,600
Data Domain, Inc.*(1)		106,692		3,558,178
STEC, Inc.*(1)		113,100		2,622,789
				7,498,567
Construction & engineering—3.04%
EMCOR Group, Inc.*		149,300		3,003,916
Orion Marine Group, Inc.*		127,200		2,416,800
				5,420,716
Containers & packaging—1.79%
Rock-Tenn Co., Class A		83,656		3,192,313
Distributors—1.33%
LKQ Corp.*		144,200		2,372,090

Security description	Shares		Value
Diversified telecommunication services—0.72%
Neutral Tandem, Inc.*		43,699	$	1,289,994
Electrical equipment—4.12%
EnerSys*		177,200		3,223,268
Thomas & Betts Corp.*		70,700		2,040,402
Woodward Governor Co.		105,100		2,080,980
				7,344,650
Electronic equipment, instruments & components—1.48%
Tech Data Corp.*		80,700		2,639,697
Energy equipment & services—2.41%
Dril-Quip, Inc.*		66,800		2,545,080
Helix Energy Solutions Group, Inc.*		160,500		1,744,635
				4,289,715
Health care equipment & supplies—4.07%
Haemonetics Corp.*		40,200		2,291,400
Integra LifeSciences Holdings Corp.*		79,200		2,099,592
ResMed, Inc.*		47,100		1,918,383
STERIS Corp.		36,200		944,096
				7,253,471
Health care providers & services—5.90%
Emergency Medical Services Corp., Class A*		57,100		2,102,422
HMS Holdings Corp.*(1)		70,445		2,868,520
LHC Group, Inc.*		67,275		1,494,178
Mednax, Inc.*		31,500		1,327,095
Psychiatric Solutions, Inc.*		51,600		1,173,384
VCA Antech, Inc.*(1)		57,600		1,537,920
				10,503,519
Health care technology—3.69%
MedAssets, Inc.*		148,300		2,884,435
Medidata Solutions, Inc.*		22,900		375,102
Phase Forward, Inc.*		175,000		2,644,250
SXC Health Solutions Corp.*		26,416		671,495
				6,575,282
Hotels, restaurants & leisure—4.05%
Panera Bread Co., Class A*		39,200		1,954,512
Texas Roadhouse, Inc., Class A*		278,200		3,035,162
WMS Industries, Inc.*		70,500		2,221,455
				7,211,129
Household durables—1.02%
Ryland Group, Inc.		108,300		1,815,108
Internet software & services—2.28%
AsiaInfo Holdings, Inc.*		134,400		2,313,024
VistaPrint Ltd.*		41,199		1,757,137
				4,070,161
IT services—0.92%
NCI, Inc., Class A*		54,117		1,646,239

130

UBS U.S. Small Cap Growth Fund—Portfolio of investments

June 30, 2009

Security description	Shares		Value
Common stocks—(concluded)
Life sciences tools & services—1.58%
Icon PLC ADR*		86,300	$	1,862,354
Nektar Therapeutics*		146,200		947,376
				2,809,730
Machinery—3.26%
Bucyrus International, Inc.		89,700		2,561,832
ESCO Technologies, Inc.*		57,400		2,571,520
Titan International, Inc.		89,228		666,533
				5,799,885
Media—1.15%
National CineMedia, Inc.		149,400		2,055,744
Metals & mining—0.93%
Steel Dynamics, Inc.		112,100		1,651,233
Oil, gas & consumable fuels—3.89%
Arena Resources, Inc.*		83,900		2,672,215
Goodrich Petroleum Corp.*		72,200		1,775,398
Whiting Petroleum Corp.*		70,700		2,485,812
				6,933,425
Personal products—1.68%
Chattem, Inc.*(1)		44,000		2,996,400
Pharmaceuticals—0.77%
Auxilium Pharmaceuticals, Inc.*		43,578		1,367,478
Real estate investment trusts (REITs)—2.17%
BioMed Realty Trust, Inc.		76,100		778,503
Ventas, Inc.		103,400		3,087,524
				3,866,027
Road & rail—1.90%
Landstar System, Inc.		94,000		3,375,540
Semiconductors & semiconductor equipment—3.94%
Hittite Microwave Corp.*		75,300		2,616,675
Power Integrations, Inc.		94,200		2,241,018
Skyworks Solutions, inc.*		221,100		2,162,358
				7,020,051

Security description	Shares		Value
Software—8.70%
ArcSight, Inc.*		149,216	$	2,651,568
Factset Research Systems, Inc.(1)		46,500		2,318,955
Macrovision Solutions Corp.*		113,600		2,477,616
Nice Systems Ltd. ADR*		114,700		2,646,129
Nuance Communications, Inc.*		210,000		2,538,900
Sourcefire, Inc.*		37,000		458,430
Ultimate Software Group, Inc.*		99,604		2,414,401
				15,505,999
Specialty retail—4.24%
Aeropostale, Inc.*		58,800		2,015,076
Chico's FAS, Inc.*		321,300		3,126,249
Children's Place Retail Stores, Inc.*		91,200		2,410,416
				7,551,741
Textiles, apparel & luxury goods—3.05%
Iconix Brand Group, Inc.*		148,200		2,279,316
Phillips-Van Heusen Corp.		110,100		3,158,769
				5,438,085
Total common stocks (cost $182,307,923)				177,689,384
	Units
Short-term investment—0.86%
Investment company—0.86%
UBS Cash Management Prime Relationship Fund, 0.384%(2),(3) (cost $1,529,915)		1,529,915		1,529,915
	Shares
Investment of cash collateral from securities loaned—4.55%
UBS Private Money Market Fund LLC, 0.488%(2),(3) (cost $8,099,185)		8,099,185		8,099,185
Total investments—105.14% (cost $191,937,023)				187,318,484
Liabilities, in excess of cash and other assets—(5.14)%				(9,150,908	)
Net assets—100.00%			$	178,167,576

Notes to portfolio of investments

Aggregate cost for federal income tax purposes was $192,751,515; and net unrealized depreciation consisted of:

Gross unrealized appreciation	$	17,629,707
Gross unrealized depreciation		(23,062,738	)
Net unrealized depreciation of investments	$	(5,433,031	)

*  Non-income producing security.

⁽¹⁾  Security, or portion thereof, was on loan at June 30, 2009.

⁽²⁾  Investment in affiliated mutual fund.

⁽³⁾  The rate shown reflects the yield at June 30, 2009.

ADR  American depositary receipt

131

UBS U.S. Small Cap Growth Fund—Portfolio of investments

June 30, 2009

The following is a summary of the inputs used as of June 30, 2009 in valuing the Fund's investments.

Measurements at 06/30/09
Description	Quoted prices in active markets for identical investments (Level 1)		Significant other observable inputs (Level 2)		Unobservable inputs (Level 3)		Total
Common stocks	$	177,689,384	$	—	$	—	$	177,689,384
Short-term investment		—		1,529,915		—		1,529,915
Investments of cash collateral from securities loaned		—		8,099,185		—		8,099,185
Total	$	177,689,384	$	9,629,100	$	—	$	187,318,484

See accompanying notes to financial statements.
132

UBS Absolute Return Bond Fund

Portfolio performance

For the 12 months ended June 30, 2009, Class A shares of UBS Absolute Return Bond Fund (the "Fund") declined 9.48% (Class A shares declined 11.73% after the deduction of the maximum sales charge), while Class Y shares declined 9.32%. For purposes of comparison, the Merrill Lynch US Treasury 1-3 Year Index returned 4.39%, and the US LIBOR 3-Month Index returned 2.09%. (Class Y shares have lower expenses than other share classes of the Fund.) Returns for all share classes over various time periods are shown on page 135; please note that the Fund's returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares, while Index returns do not reflect the deduction of fees and expenses.) For a detailed commentary on the market environment in general during the reporting period, see page 2.

Despite improving results toward the end of the reporting period, overall, the Fund generated disappointing performance during the reporting period. In particular, security selection detracted from performance, eclipsing the modest positive results from the Fund's currency and duration positioning.

Portfolio performance summary

What worked

•  Active currency management was beneficial. Throughout the 12-month period, we implemented a number of tactical currency trades in an effort to take advantage of opportunities in the foreign exchange markets. As a whole, this contributed to the Fund's performance.

•  The Fund's duration positioning was positive for performance. The Fund's duration (which is a measure of a portfolio's sensitivity to changes in interest rates) was adjusted during the reporting period. When the 12-month reporting period began, the Fund had a short duration given our views on the economy and the market. As the period progressed, we adjusted this positioning and moved to a long duration based on signs that the global recession was escalating. This enhanced the Fund's results as interest rates moved lower during the reporting period.

What didn't work

•  Security selection was the largest detractor from the Fund's performance.

•  The first half of the reporting period was characterized by periods of extreme volatility in the financial markets as the credit markets essentially seized up and investor risk aversion intensified. This resulted in spread sectors (that is, non-Treasury sectors) selling off indiscriminately into highly illiquid markets. While market conditions largely stabilized as the reporting period progressed, it was not enough to offset earlier losses.

•  The Fund's holdings in the securitized markets were weak during the 12–month period as a whole. In particular, the Fund's holdings in asset-backed securities, residential mortgage-backed securities and collateralized debt obligations detracted from results. A portion of these losses was recouped during the second half of the period as liquidity improved and investor risk aversion abated.

133

UBS Absolute Return Bond Fund

•  Corporate bond spreads—that is, the difference between the yields paid on US Treasury bonds and corporate bonds—significantly narrowed in April and May 2009 compared to the record wide levels they reached during the financial crisis in 2008. However, corporate bond exposure overall was a negative for performance during the reporting period.

•  Spread management was not rewarded. Spread management—the allocation of assets among nongovernment sectors of the fixed income market—hurt the Fund's performance during the reporting period.

This letter is intended to assist shareholders in understanding how the Fund performed during the 12 months ended June 30, 2009. The views and opinions in the letter were current as of August 17, 2009. They are not guarantees of performance or investment results and should not be taken as investment advice. Investment decisions reflect a variety of factors, and we reserve the right to change our views about individual securities, sectors and markets at any time. As a result, the views expressed should not be relied upon as a forecast of the Fund's future investment intent. We encourage you to consult your financial advisor regarding your personal investment program. Mutual funds are sold by prospectus only. You should read it carefully and consider a fund's investment objectives, risks, charges, expenses and other important information contained in the prospectus before investing. Prospectuses for most of our funds can be obtained from your financial advisor, by calling UBS Funds at 800-647 1568 or by visiting our Web site at www.ubs.com

134

UBS Absolute Return Bond Fund

Average annual total returns for periods ended 06/30/09 (unaudited)

		1 year			Inception(1)
Before deducting	Class A(2)		(9.48	)%		(5.23	)%
maximum sales charge	Class C(3)		(9.81	)		(5.56	)
	Class Y(4)		(9.32	)		(5.06	)
After deducting maximum	Class A(2)		(11.73	)		(5.81	)
sales charge	Class C(3)		(10.21	)		(5.56	)
Merrill Lynch US Treasury 1-3 Year Index(5)			4.39			4.58
US LIBOR 3-Month Index(6)			2.09			4.13

The annualized gross and net expense ratios, respectively, for each class of shares as in the October 28, 2008 prospectuses were as follows: Class A—0.99% and 0.99%; Class C—1.32% and 1.32%; Class Y—0.76% and 0.76%. Net expenses reflect fee waivers and/or expense reimbursements, if any, pursuant to an agreement that is in effect to cap the expenses. The Trust, with respect to the Fund, and the Advisor have entered into a written agreement pursuant to which the Advisor has agreed to waive a portion of its management fees and/or to reimburse expenses (excluding expenses incurred through investment in other investment companies and interest expense) to the extent necessary so that the Fund's operating expenses (excluding expenses incurred through investment in other investment companies and interest expense), through the fiscal year ending June 30, 2009, do not exceed 1.00% for Class A shares, 1.35% for Class C share s and 0.85% for Class Y shares. Pursuant to the written agreement, the Advisor is entitled to be reimbursed for any fees it waives and expenses it reimburses for a period of three years following such fee waivers and expense reimbursements, to the extent that such reimbursement of the Advisor by the Fund will not cause the Fund to exceed any applicable expense limit that is in place for the Fund.

⁽¹⁾  Inception date of all shares of UBS Absolute Return Bond Fund is April 27, 2005. Inception date of the indices, for the purpose of this illustration, is April 30, 2005.

⁽²⁾  Maximum sales charge for Class A shares is 2.5%. Class A shares bear ongoing 12b-1 service fees.

⁽³⁾  Maximum contingent deferred sales charge for Class C shares is 0.5% imposed on redemptions and is reduced to 0% after one year. Class C shares bear ongoing 12b-1 service and distribution fees.

⁽⁴⁾  The Fund offers Class Y shares to a limited group of eligible investors, including certain qualifying retirement plans. Class Y shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees.

⁽⁵⁾  The Merrill Lynch US Treasury 1-3 Year Index is an unmanaged index tracking short-term US Treasury securities with maturities between 1 and 3 years. Investors should note that indices do not reflect the deduction of fees, expenses or taxes.

⁽⁶⁾  The US LIBOR 3-Month Index is based on LIBOR, the London Interbank Offered Rate, a short-term interest rate that banks charge one another generally representative of the most competitive and current cash rate available. The US LIBOR 3-Month Index tracks the interest rate earned on a three month inter-bank deposit in US dollars. Investors should note that indices do not reflect the deduction of fees, expenses or taxes.

If an investor sells or exchanges shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged will be deducted at the time of the transaction, except as noted otherwise in the prospectus.

Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://www.ubs.com.

135

UBS Absolute Return Bond Fund

Illustration of an assumed investment of $10,000 in Class A shares (adjusted for 2.50% maximum

sales charge) and $5,000,000 in Class Y shares (unaudited)

The following two graphs depict the performance of UBS Absolute Return Bond Fund Class A and Class Y shares versus the Merrill Lynch US Treasury 1-3 Year Index and the US LIBOR 3-Month Index from April 27, 2005, which is the inception date of the two classes, through June 30, 2009. The performance of Class C shares will vary based upon the different class specific expenses and sales charges. No adjustment has been made for any income taxes payable by shareholders on income dividends and capital gain distributions. Past performance is no guarantee of future results. Share price and returns will vary with market conditions; investors may realize a gain or loss upon redemption.

UBS Absolute Return Bond Fund Class A vs.
Merrill Lynch US Treasury 1-3 Year Index and US LIBOR 3-Month Index

Wealth value with dividends reinvested

The Fund's growth of an assumed $10,000 investment is adjusted for the maximum sales charge of 2.50%.

Indices are started on April 30, 2005.

UBS Absolute Return Bond Fund Class Y vs.
Merrill Lynch US Treasury 1-3 Year Index and US LIBOR 3-Month Index

Wealth value with dividends reinvested

Indices are started on April 30, 2005.

Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://www.ubs.com.

136

UBS Absolute Return Bond Fund

Top ten long-term fixed income holdings

(unaudited)

As of June 30, 2009

	Percentage of net assets
Federal Home Loan Mortgage Corp., 5.000%, due 02/16/17		6.1	%
Federal National Mortgage Association, 5.000%, due 10/15/11		4.9
Federal Home Loan Mortgage Corp., 4.750%, due 03/05/12		4.9
Hypothekenbank in Essen AG, Series REGS, 5.250%, due 01/17/11		4.8
U.S. Treasury Note, 1.375%, due 03/15/12		3.2
Compagnie de Financement Foncier, 3.625%, due 01/16/12		3.1
Federal Home Loan Bank, Series 467, 5.250%, due 06/18/14		2.9
Federal National Mortgage Association, 4.125%, due 04/15/14		2.9
Federal National Mortgage Association Pools, #992260, 4.000%, due 01/01/39		2.8
Bundesschatzanweisungen, Series 1, 4.000%, due 12/11/09		2.7
Total		38.3	%

137

UBS Absolute Return Bond Fund

Industry diversification (unaudited)

As a percentage of net assets as of June 30, 2009

Bonds Corporate bonds
Aerospace & defense	0.36	%
Banks	1.71
Commercial banks	3.57
Communications equipment	0.20
Computers	0.27
Diversified financial services	4.26
Diversified telecommunication services	1.24
Electric	0.50
Electric utilities	1.20
Financial	2.89
Food	1.88
Food & staples retailing	1.00
Healthcare-services	0.43
Media	0.26
Metals & mining	0.61
Mining	0.28
Miscellaneous manufacturer	0.25
Oil, gas & consumable fuels	1.06
Personal products	0.56
Sovereign	1.07
Telecommunications	2.03
Thrifts & mortgage finance	8.08
Tobacco	2.37
Transportation	0.41
Total corporate bonds	36.49
Asset-backed securities	0.83
Collateralized debt obligations	0.35
Commercial mortgage-backed securities	0.38
Mortgage & agency debt securities	29.06
US government obligation	3.24
Non US-government obligations	20.82
Sovereign/supranational bonds	4.41
Total bonds	95.58
Short-term investment	2.68
Total investments	98.26
Cash and other assets, less liabilities	1.74
Net assets	100.00	%

138

UBS Absolute Return Bond Fund—Portfolio of investments

June 30, 2009

Security description	Face amount		Value
Bonds—95.58%
Corporate bonds—36.49%
Australia—0.57%
BHP Billiton Finance LTD, 4.750%, due 04/04/12	EUR	300,000	$	436,650
Rio Tinto Finance USA Ltd., 8.950%, due 05/01/14	$	400,000		444,498
Total Australia corporate bonds				881,148
Bermuda—0.26%
Qtel International Finance Ltd., 6.500%, due 06/10/14(1)	$	400,000		406,563
France—6.45%
BNP Paribas, 5.250%, due 12/17/12	EUR	2,165,000		3,179,392
Casino Guichard Perrachon SA, 5.500%, due 01/30/15		550,000		773,203
Compagnie de Financement Foncier, 3.625%, due 01/16/12		3,350,000		4,787,777
Credit Agricole SA, 0.829%, due 03/13/16(2)	$	800,000		698,667
EDF SA, 5.500%, due 01/26/14(1)		450,000		484,482
Total France corporate bonds				9,923,521
Germany—5.31%
Hypo Real Estate Bank AG, 1.452%, due 02/09/10(2)	EUR	250,000		328,553
Hypothekenbank in Essen AG, Series REGS, 5.250%, due 01/17/11		5,000,000		7,346,066
IKB Deutsche Industriebank AG, 1.174%, due 07/24/09(2)	$	300,000		298,634
1.319%, due 03/19/10(2)	EUR	150,000		196,915
Total Germany corporate bonds				8,170,168
Italy—1.09%
Telecom Italia SpA, 4.750%, due 05/19/14	EUR	1,200,000		1,672,225
Netherlands—2.51%
LeasePlan Corp. NV, 1.441%, due 02/16/10(2)	EUR	300,000		402,002
MDC-GMTN BV, 5.750%, due 05/06/14(1)	$	1,650,000		1,650,000
PACCAR Financial Europe BV, 5.125%, due 05/19/11	EUR	350,000		464,923
RWE Finance BV, 4.625%, due 08/17/10	GBP	800,000		1,344,483
Total Netherlands corporate bonds				3,861,408
Spain—0.48%
Telefonica Emisiones SAU, 5.431%, due 02/03/14	EUR	500,000		740,424

Security description	Face amount		Value
Switzerland—0.84%
Credit Suisse/London, 6.125%, due 05/16/14	EUR	850,000	$	1,290,758
United Kingdom—6.60%
Anglo American Capital PLC, 9.375%, due 04/08/14(1)	$	450,000		488,813
Bank of Scotland PLC, 6.375%, due 08/16/19	GBP	1,445,000		1,801,460
HSBC Holdings PLC, 4.500%, due 04/30/14	EUR	250,000		357,159
Imperial Tobacco Finance PLC, 8.375%, due 02/17/16		1,200,000		1,833,653
Reed Elsevier Investments PLC, 5.625%, due 10/20/16	GBP	450,000		709,986
Royal Bank of Scotland Group PLC, 5.250%, due 05/15/13	EUR	1,000,000		1,405,712
Smiths Group plc, 6.050%, due 05/15/14(1)	$	400,000		390,004
Tesco plc, 5.875%, due 09/12/16	EUR	1,400,000		2,114,253
Vodafone Group plc, 5.750%, due 03/15/16	$	650,000		667,309
WPP PLC, 6.625%, due 05/12/16	EUR	300,000		397,540
Total United Kingdom corporate bonds				10,165,889
United States—12.38%
Altria Group, Inc., 9.250%, due 08/06/19	$	300,000		336,873
Anadarko Petroleum Corp., 5.750%, due 06/15/14		1,000,000		1,016,686
AT&T, Inc., 4.850%, due 02/15/14		750,000		777,900
Avon Products, Inc., 5.625%, due 03/01/14		810,000		856,172
BAE Systems Holdings, Inc., 4.950%, due 06/01/14(1)		550,000		552,830
Bank of America Corp., 4.900%, due 05/01/13		1,400,000		1,363,645
Cisco Systems, Inc., 4.950%, due 02/15/19		310,000		309,984
Citigroup, Inc., 5.625%, due 08/27/12		940,000		880,060
CSX Corp., 5.750%, due 03/15/13		610,000		625,464
General Electric Capital Corp., 5.900%, due 05/13/14		800,000		816,529
6.750%, due 03/15/32		2,900,000		2,603,347
Hewlett-Packard Co., 4.250%, due 02/24/12		400,000		417,496
JPMorgan Chase & Co., 4.750%, due 05/01/13		1,300,000		1,326,390
Nisource Finance Corp., 7.875%, due 11/15/10		750,000		774,667

139

UBS Absolute Return Bond Fund—Portfolio of investments

June 30, 2009

Security description	Face amount		Value
Bonds—(continued)
Corporate bonds—(concluded)
United States—(concluded)
ONEOK Partners LP, 8.625%, due 03/01/19	$	550,000	$	615,113
Roche Holdings, Inc., 4.625%, due 03/04/13	EUR	450,000		664,084
UST, Inc., 6.625%, due 07/15/12	$	1,375,000		1,470,926
Verizon Wireless Capital LLC, 7.625%, due 12/19/11	EUR	500,000		771,441
Wal-Mart Stores, Inc., 6.875%, due 08/10/09	$	1,525,000		1,534,891
Wells Fargo & Co., 5.250%, due 10/23/12		1,300,000		1,345,674
Total United States corporate bonds				19,060,172
Total corporate bonds (cost $56,152,996)				56,172,276
Asset-backed securities—0.83%
United States—0.83%
BA Credit Card Trust, Series 2008-A1, Class A1, 0.899%, due 04/15/13(2)		300,000		297,638
Series 2008-A5, Class A5, 1.519%, due 12/16/13(2)		300,000		299,192
Chase Issuance Trust, Series 2007-A16, Class A16, 0.929%, due 06/16/14(2)		300,000		290,463
Series 2009-A3, Class A3, 2.400%, due 06/17/13		390,000		387,211
Total asset-backed securities (cost $1,253,364)				1,274,504
Collateralized debt obligations—0.35%
Cayman Islands—0.20%
Aladdin CDO I Ltd, Series 2006-2A, Class 10D, 8.109%, due 10/31/16(2),(3),(4)		250,000		11,775
Avenue CLO Fund Ltd., Series 2006-3A, Class B2L, 5.107%, due 07/20/18(2),(3),(4)		220,000		2,200
Denali Capital CLO VII Ltd., Series 2007-1A, Class B2L, 5.351%, due 01/22/22(2),(3),(4)		290,000		22,968
FM Leveraged Capital Fund, Series 2006-2A, Class E, 4.633%, due 11/15/20(2),(3)		400,000		32,000
Galena CDO Ltd., Series II-AIRL, Class A1U, 2.413%, due 04/07/17(2),(3),(4)		1,000,000		218,100
Gresham Street CDO Funding, Series 2003-1X, Class D, 4.236%, due 11/07/33(2),(3)		100,000		3,000

Security description	Face amount		Value
Cayman Islands—(concluded)
Herald Ltd., Series REGS, 4.124%, due 09/16/45(2),(3)	$	300,000	$	360
Kingsland Ltd., Series 2007-5A, Class E, 5.389%, due 07/14/21(2),(3),(4)		250,000		7,500
Trimaran CLO Ltd., Series 2007-1A, Class B2L, 4.029%, due 06/15/11(2),(3),(4)		200,000		14,826
Total Cayman Islands collateralized debt obligations				312,729
Ireland—0.01%
Valleriite CDO, Series 2007-1A, Class D1EU, 2.057%, due 12/20/17(2),(3),(4)	EUR	350,000		16,154
Luxembourg—0.00%(5)
Ashwell Rated SA, due 12/22/77(3),(4),(6)	GBP	220,000		3,619
Netherlands—0.07%
Ares Euro CLO BV, Series 2007-1A, Class E, 4.979%, due 05/15/24(2),(3),(4)	EUR	470,000		52,681
Grosvenor Place CLO BV, Series II-A, Class SUB, 7.500%, due 03/28/23(3),(4)		530,000		14,870
Harbourmaster CLO Ltd., Series 7A, Class C, 12.000%, due 09/22/22(3),(4)		300,000		4,209
Highlander Euro CDO, Series 2006-2CA, Class E, due 12/14/22(3),(4),(6)		250,000		7,014
Queen Street CLO, Series 2007-1A, Class F, due 08/15/24(3),(4),(6)		350,000		24,550
Total Netherlands collateralized debt obligations				103,324
United States—0.07%
Ajax One Ltd., Series 2A, Class C, 3.033%, due 09/08/32(2),(3),(4)	$	500,000		50,000
Axius Europe CLO SA, Series 2007-1A, Class D, 7.309%, due 11/15/23(2),(3),(4)	EUR	350,000		14,730
MC Funding Ltd., Series 2006-1A, Class E, 4.359%, due 12/20/20(2),(3),(4)	$	640,000		41,600
Total United States collateralized debt obligations				106,330
Total collateralized debt obligations (cost $7,900,320)				542,156

140

UBS Absolute Return Bond Fund—Portfolio of investments

June 30, 2009

Security description	Face amount		Value
Bonds—(concluded)
Commercial mortgage-backed securities—0.38%
United States—0.38%
Banc of America Commercial Mortgage, Inc., Series 2006-6, Class A2, 5.309%, due 10/10/45	$	390,000	$	359,280
GS Mortgage Securities Corp. II, Series 2007-GG10, Class A4, 5.993%, due 08/10/45(2)		300,000		226,701
Total commercial mortgage-backed securities (cost $588,763)				585,981
Mortgage & agency debt securities—29.06%
United States—29.06%
Federal Home Loan Bank, Series 467, 5.250%, due 06/18/14		4,100,000		4,525,137
Federal Home Loan Mortgage Corp.,†4.750%, due 03/05/12		6,950,000		7,501,566
5.000%, due 02/16/17		8,600,000		9,353,618
Federal Home Loan Mortgage Corp. Gold Pools,†#G04668, 5.000%, due 03/01/38		1,223,101		1,245,795
#G08307, 5.000%, due 11/01/38		1,712,014		1,743,684
Federal National Mortgage Association,†4.125%, due 04/15/14		4,200,000		4,448,002
5.000%, due 10/15/11		6,970,000		7,533,559
Federal National Mortgage Association Pools,†#992260, 4.000%, due 01/01/39		4,421,464		4,285,699
#933765, 4.500%, due 04/01/38		4,095,456		4,092,626
Total mortgage & agency debt securities (cost $43,853,037)				44,729,686
US government obligation—3.24%
U.S. Treasury Note, 1.375%, due 03/15/12 (cost $5,017,923)	$	5,000,000		4,990,235
Non US-government obligations—20.82%
Belgium—1.91%
Belgium Kingdom, 4.000%, due 03/28/14	EUR	2,000,000		2,941,047
Canada—1.30%
Quebec Province, 6.125%, due 01/22/11	$	1,880,000		2,001,730
France—1.59%
Government of France, 1.800%, due 07/25/40	EUR	1,887,698		2,443,216

Security description	Face amount		Value
Germany—10.84%
Bundesrepublik Deutschland, 3.250%, due 07/04/15	GBP	800,000	$	1,148,193
Bundesschatzanweisungen, 4.000%, due 09/11/09	EUR	2,900,000		4,095,665
4.000%, due 12/11/09		2,900,000		4,130,103
Kreditanstalt fuer Wiederaufbau, 3.375%, due 01/16/12		2,800,000		4,047,524
5.550%, due 06/07/21		1,800,000		3,255,097
				16,676,582
Italy—2.06%
Republic of Italy, 4.500%, due 01/21/15	$	1,565,000		1,604,463
4.750%, due 01/25/16		1,565,000		1,572,980
				3,177,443
Japan—1.87%
Government of Japan, Series 27 2.500%, due 09/20/37	JPY	127,000,000		1,406,007
Japan Bank for International Cooperation, 5.250%, due 03/23/16	$	1,400,000		1,474,207
				2,880,214
Spain—1.25%
Instituto de Credito Oficial, 5.375%, due 07/02/12	$	1,800,000		1,920,544
Total non US-government obligations (cost $31,138,825)				32,040,776
Sovereign/supranational bonds—4.41%
European Investment Bank, 5.625%, due 10/15/10	EUR	1,200,000		1,773,705
6.250%, due 04/15/14	GBP	1,270,000		2,324,055
Inter-American Development Bank, 3.250%, due 11/15/11	$	2,600,000		2,694,770
Total sovereign/supranational bonds (cost $6,422,396)				6,792,530
Total bonds (cost $152,327,625)				147,128,144
Short-term investment—2.68%
Investment company—2.68%
UBS Cash Management Prime Relationship Fund, 0.384(7),(8) (cost $4,120,804)		4,120,804		4,120,804
Total investments—98.26% (cost $156,448,429)				151,248,948
Cash and other assets, less liabilities—1.74%				2,681,145
Net assets—100.00%			$	153,930,093

141

UBS Absolute Return Bond Fund—Portfolio of investments

June 30, 2009

Notes to portfolio of investments

Aggregate cost for federal income tax purposes was $156,452,109; and net unrealized depreciation consisted of:

Gross unrealized appreciation	$	5,126,047
Gross unrealized depreciation		(10,329,208	)
Net unrealized depreciation of investments	$	(5,203,161	)

^†  On September 7, 2008, the Federal Housing Finance Agency placed the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation into conservatorship, and the US Treasury guaranteed the debt issued by those organizations.

⁽¹⁾  Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities are considered liquid, unless noted otherwise, and may be resold in transactions exempt from registration, normally to qualified institutional buyers. At June 30, 2009, the value of these securities amounted to $3,972,692 or 2.58% of net assets.

⁽²⁾  Floating rate security—The interest rates shown are the current rates as of June 30, 2009.

⁽³⁾  Security is illiquid. At June 30, 2009, these securities amounted to $542,156 or 0.35% of net assets.

⁽⁴⁾  Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities, which represent 0.33% of net assets as of June 30, 2009, are considered illiquid and restricted (See restricted securities table below for more information.)

Restricted securities	Acquisition dates	Acquisition cost		Acquisition cost as a percentage of net assets			06/30/09 Market value		06/30/09 Market value as a percentage of net assets
Ajax One Ltd., Series 2A, Class C, 3.033%, due 09/08/32	11/08/05	$	487,550		0.32	%	$	50,000		0.03	%
Aladdin CDO I Ltd, Series 2006-2A, Class 10D, 8.109%, due 10/31/16	06/26/06		250,000		0.16			11,775		0.01
Ares Euro CLO BV, Series 2007-1A, Class E, 4.979%, due 05/15/24	03/16/07		470,000		0.31			52,681		0.03
Ashwell Rated SA, due 12/22/77	01/29/07		202,730		0.13			3,619		0.00	(a)
Avenue CLO Fund Ltd., Series 2006-3A, Class B2L, 5.107%, due 07/20/18	04/24/06		215,160		0.14			2,200		0.00	(a)
Axius Europe CLO SA, Series 2007-1A, Class D, 7.309%, due 11/15/23	09/28/07		326,550		0.21			14,730		0.01
Denali Capital CLO VII Ltd., Series 2007-1A, Class B2L, 5.351%, due 01/22/22	04/27/07		285,864		0.19			22,968		0.02
Galena CDO Ltd., Series II-AIRL, Class A1U, 2.413%, due 04/07/17	03/08/07		1,000,000		0.65			218,100		0.14
Grosvenor Place CLO BV, Series II-A, Class SUB, 7.500%, due 03/28/23	12/15/06		524,700		0.34			14,870		0.01
Harbourmaster CLO Ltd., Series 7A, Class C, 12.000%, due 09/22/22	10/31/06		285,000		0.19			4,209		0.00	(a)
Highlander Euro CDO, Series 2006-2CA, Class E, due 12/14/22	11/28/06		249,750		0.16			7,014		0.01
Kingsland Ltd., Series 2007-5A, Class E, 5.389%, due 07/14/21	05/02/07		241,728		0.16			7,500		0.00	(a)

142

UBS Absolute Return Bond Fund—Portfolio of investments

June 30, 2009

Restricted securities (concluded)

Securities	Acquisition dates	Acquisition cost		Acquisition cost as a percentage of net assets			06/30/09 Market value		06/30/09 Market value as a percentage of net assets
MC Funding Ltd., Series 2006-1A, Class E, 4.359%, due 12/20/20	12/08/06	$	640,000		0.42	%	$	41,600		0.03	%
Queen Street CLO, Series 2007-1A, Class F, due 08/15/24	05/18/07		343,000		0.22			24,550		0.02
Trimaran CLO Ltd., Series 2007-1A, Class B2L, 4.029%, due 06/15/11	03/09/07		198,806		0.13			14,826		0.01
Valleriite CDO, Series 2007-1A, Class D1EU, 2.057%, due 12/20/17	06/12/07		350,000		0.23			16,154		0.01
		$	6,070,838		3.94	%	$	506,796		0.33	%

^(a)  Amount represents less that 0.005%.

⁽⁵⁾  Amount represents less than 0.005%.

⁽⁶⁾  This security is the equity tranche of a collateralized debt obligation. The Fund receives periodic payments, which may vary, from the issuer of this security.

⁽⁷⁾  Investment in affiliated mutual fund.

⁽⁸⁾  The rate shown reflects the yield at June 30, 2009.

CDO  Collateralized debt obligations

CLO  Collateralized loan obligations

GMTN  Global medium term note

GS  Goldman Sachs

Currency type abbreviations:

EUR  Euro

GBP  Great Britain Pound

JPY  Japanese Yen

Forward foreign currency contracts

UBS Absolute Return Bond Fund had the following open forward foreign currency contracts as of June 30, 2009:

	Contracts to deliver		In exchange for		Maturity dates	Unrealized appreciation/ (depreciation)
Australian Dollar		4,050,000	USD	3,104,892	07/21/09	$	(153,724	)
Canadian Dollar		1,520,000	USD	1,246,970	07/21/09		(59,898	)
Euro		3,525,000	NOK	32,025,115	07/21/09		32,817
Euro		2,215,000	SEK	24,608,008	07/21/09		82,280
Euro		42,390,000	USD	56,391,458	07/21/09		(3,075,353	)
Great Britain Pound		10,395,000	USD	15,452,791	07/21/09		(1,649,063	)
Japanese Yen		400,200,000	USD	4,021,221	07/21/09		(133,974	)
Norwegian Krone		19,577,732	USD	3,095,000	07/21/09		51,911
Swiss Franc		7,941,457	USD	6,962,743	07/21/09		(347,836	)
United States Dollar		3,158,190	AUD	4,050,000	07/21/09		100,427
United States Dollar		813,008	CHF	870,000	07/21/09		(12,122	)
United States Dollar		6,098,889	EUR	4,425,000	07/21/09		108,722
United States Dollar		6,605,676	GBP	4,427,469	07/21/09		678,397
United States Dollar		1,719,115	JPY	167,700,000	07/21/09		22,080
United States Dollar		5,610,118	NOK	37,430,713	07/21/09		207,973
United States Dollar		6,190,000	NOK	39,155,464	07/21/09		(103,822	)
Net unrealized depreciation on forward foreign currency contracts						$	(4,251,185	)

143

UBS Absolute Return Bond Fund—Portfolio of investments

June 30, 2009

Currency type abbreviations:

AUD  Australian Dollar

CHF  Swiss Franc

EUR  Euro

GBP  Great Britain Pound

JPY  Japanese Yen

NOK  Norwegian Krone

SEK  Swedish Krona

USD  United States Dollar

Futures contracts

UBS Absolute Return Bond Fund had the following open futures contracts as of June 30, 2009:

	Expiration dates	Cost/ (proceeds)			Value			Unrealized appreciation/ (depreciation)
US treasury futures sell contracts:
2 Year US Treasury Notes, 235 contracts (USD)	September 2009	$	(50,895,623	)	$	(50,811,406	)	$	84,217
5 Year US Treasury Notes, 300 contracts (USD)	September 2009		(34,577,245	)		(34,415,625	)		161,620
10 Year US Treasury Notes, 180 contracts (USD)	September 2009		(21,072,040	)		(20,927,813	)		144,227
Interest rate futures buy contracts:
Euro-Buxl, 21 contracts (EUR)	September 2009		2,728,116			2,792,794			64,678
Interest rate futures sell contracts:
Euro-Bobl, 120 contracts (EUR)	September 2009		(19,304,976	)		(19,435,084	)		(130,108	)
Euro-Bund, 31 contracts (EUR)	September 2009		(5,174,361	)		(5,265,569	)		(91,208	)
Long Gilt, 37 contracts (GBP)	September 2009		(7,165,453	)		(7,187,813	)		(22,360	)
Euro-Schatz, 135 contracts (EUR)	September 2009		(20,418,698	)		(20,434,615	)		(15,917	)
Net unrealized appreciation on futures contracts								$	195,149

Currency type abbreviations:

EUR  Euro

GBP  Great Britain Pound

USD  United States Dollar

Credit default swaps on credit indices—buy protection⁽¹⁾

Counterparty	Notional Amount		Termination date		Payments made by the Fund			Payments received by the Fund			Upfront payments (made) received		Value		Unrealized appreciation
Goldman Sachs International	EUR	3,700,000		12/20/13		2.2000	%(2)		—	(3)	$	—	$	65,572	$	65,572

⁽¹⁾  If the Fund is a buyer of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will either (i) receive from the seller of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation or underlying securities comprising the referenced index or (ii) receive a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index.

⁽²⁾  Payments made are based on the notional amount.

⁽³⁾  Payment from the counterparty will be received upon the occurrence of a succession event with respect to the iTraxx Europe HiVol Series 10 Index.

144

UBS Absolute Return Bond Fund—Portfolio of investments

June 30, 2009

Credit default swaps on corporate and sovereign issues—sell protection⁽¹⁾

Counterparty	Notional Amount		Termination date	Payments made by the Fund			Payments received by the Fund			Upfront payments (made) received		Value			Unrealized depreciation			Credit spread(2)
Goldman Sachs International	EUR	230,000	12/20/09		—	(3)		2.0000	%(4)	$	—	$	(4,274	)	$	(4,274	)		4.9127	%
Goldman Sachs International	EUR	340,000	12/20/09		—	(5)		2.0000	(4)		—		(6,823	)		(6,823	)		5.1401
Goldman Sachs International	USD	6,300,000	06/20/18		—	(6)		0.5140	(4)		—		(187,991	)		(187,991	)		0.9217
Goldman Sachs International	USD	2,300,000	12/20/18		—	(7)		1.1425	(4)		—		(112,226	)		(112,226	)		1.8005
										$	—	$	(311,314	)	$	(311,314	)

⁽¹⁾  If the Fund is a seller of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will either (i) pay to the buyer of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation or (ii) pay a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation.

⁽²⁾  Credit spreads, where available, represented in absolute terms, utilized in determining the market value as of period end serve as an indicator of the current status of the payment/performance risk and represent the likelihood or risk of default for the credit derivative. The credit spread of a particular referenced entity reflects the cost of buying/selling protection and may include upfront payments required to be made to enter into the agreement. Wider credit spreads represent a deterioration of the referenced entity's credit soundness and a greater likelihood of risk of default or other credit event occurring as defined under the terms of the agreement. A credit spread identified as "Defaulted" indicates a credit event has occurred for the referenced entity.

⁽³⁾  Payment to the counterparty will be made upon the occurrence of bankruptcy and/or restructuring event with respect to the Hammerson PLC 5.250% bond, due 12/15/16.

⁽⁴⁾  Payments received are based on the notional amount.

⁽⁵⁾  Payment to the counterparty will be made upon the occurrence of bankruptcy and/or restructuring event with respect to the British Land 10.250% bond, due 03/26/12.

⁽⁶⁾  Payment to the counterparty will be made upon the occurrence of bankruptcy and/or restructuring event with respect to the Republic of Spain 5.500% bond, due 12/20/17.

⁽⁷⁾  Payment to the counterparty will be made upon the occurrence of bankruptcy and/or restructuring event with respect to the Republic of Poland 5.250% bond, due 01/15/14.

Currency type abbreviations:

EUR  Euro

USD  United States Dollar

145

UBS Absolute Return Bond Fund—Portfolio of investments

June 30, 2009

The following is a summary of the inputs used as of June 30, 2009 in valuing the Fund's investments.

Measurements at 06/30/09
Description	Quoted prices in active markets for identical investments (Level 1)		Significant other observable inputs (Level 2)			Unobservable inputs (Level 3)		Total
Corporate bonds	$	—	$	56,172,276		$	—	$	56,172,276
Asset-backed securities		—		1,274,504			—		1,274,504
Collateralized debt obligations		—		—			542,156		542,156
Commercial mortgage-backed securities		—		585,981			—		585,981
Mortgage & agency debt securities		—		44,729,686			—		44,729,686
US government obligation		—		4,990,235			—		4,990,235
Non US-government obligations		—		32,040,776			—		32,040,776
Sovereign/supranational bonds		—		6,792,530			—		6,792,530
Short-term investment		—		4,120,804			—		4,120,804
Other financial instruments(1)		195,149		(4,496,927	)		—		(4,301,778	)
Total	$	195,149	$	146,209,865		$	542,156	$	146,947,170

⁽¹⁾  Other financial instruments may include open futures contracts, swaps agreements, options and forward foreign currency contracts.

Level 3 Rollforward Disclosure

The following is a rollforward of the Fund's investments that were valued using unobservable inputs for the period:

Measurements using unobservable inputs (Level 3)
	Collateralized debt obligations			Total
Assets
Beginning balance	$	8,887,782		$	8,887,782
Total gains or losses (realized/unrealized) included in earnings(a)		(6,686,119	)		(6,686,119	)
Purchases, sales, issuances, and settlements (net)		(1,659,867	)		(1,659,867	)
Transfers in and/or out of Level 3		360			360
Ending balance	$	542,156		$	542,156
The amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to investments still held at 06/30/09	$	(4,610,515	)	$	(4,610,515	)

^(a)  Does not include unrealized losses of $22,500 related to transferred assets, presented at their end of period values.

See accompanying notes to financial statements.
146

UBS Global Bond Fund

Portfolio performance

For the 12 months ended June 30, 2009, Class A shares of UBS Global Bond Fund (the "Fund") declined 7.66% (Class A shares declined 11.80% after the deduction of the maximum sales charge), while Class Y shares declined 7.54%. The Fund's benchmark, the Barclays Capital Global Aggregate Index (formerly known as the Lehman Brothers Global Aggregate Index, the "Index"), returned 2.76% over the same time period. (Class Y shares have lower expenses than other share classes of the Fund. Returns for all share classes over various time periods are shown on page 148; please note that the Fund's returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares, while the Index returns do not reflect the deduction of fees and expenses.) For a detailed commentary on the market environment in general during the reporting period, see page 2.

The Fund's underperformance was largely due to security selection. In particular, the Fund's mortgage-related and asset-backed securities detracted from performance during the reporting period.

Portfolio performance summary

What worked

•  An overweight to non-US government bonds contributed to performance during the fourth quarter of 2008, as aggressive interest rate cuts and falling inflation expectations helped spur a powerful rally in developed government bond markets.

What didn't work

•  Security selection significantly detracted from the Fund's performance. The Fund's underperformance versus the Index was, by and large, due to security selection in mortgage-related securities and other structured credit holdings. In particular, the Fund's exposure to mortgage-backed securities and collateralized debt obligations (CDOs) that were invested in asset-backed securities (ABS) hurt the Fund's performance. Despite the rally in the spread sectors (that is, non-Treasury sectors) since mid-March 2009, many of these securities continued to perform poorly given their weak underlying fundamentals.

•  Spread management (the Fund's allocation among sectors) was not rewarded. The Fund's overweight to nonagency mortgage-backed securities and asset-backed securities detracted from results. During the reporting period as a whole, these securities generated weak results due to ongoing issues in the housing market.

This letter is intended to assist shareholders in understanding how the Fund performed during the 12 months ended June 30, 2009. The views and opinions in the letter were current as of August 17, 2009. They are not guarantees of performance or investment results and should not be taken as investment advice. Investment decisions reflect a variety of factors, and we reserve the right to change our views about individual securities, sectors and markets at any time. As a result, the views expressed should not be relied upon as a forecast of the Fund's future investment intent. We encourage you to consult your financial advisor regarding your personal investment program. Mutual funds are sold by prospectus only. You should read it carefully and consider a fund's investment objectives, risks, charges, expenses and other important information contained in the prospectus before investing. Prospectuses for most of our funds can be obtained from your financial advisor, by calling UBS Funds at 800-647 1568 or by visiting our Web site at www.ubs.com

147

UBS Global Bond Fund

Average annual total returns for periods ended 06/30/09 (unaudited)

		1 year			5 years			10 years			Inception(1)
Before deducting	Class A(2)		(7.66	)%		0.21	%	N/A				3.75	%
maximum sales charge	Class B(3)		(8.45	)		(0.54	)	N/A				3.55
	Class C(4)		(8.27	)		(0.30	)	N/A				2.57
	Class Y(5)		(7.54	)		0.46			3.45	%		4.36
After deducting maximum	Class A(2)		(11.80	)		(0.72	)	N/A				3.14
sales charge	Class B(3)		(12.33	)		(0.84	)	N/A				3.55
	Class C(4)		(8.85	)		(0.30	)	N/A				2.57
Barclays Capital Global Aggregate Index(6)			2.76			5.53			6.05			6.18

The annualized gross and net expense ratios, respectively, for each class of shares as in the October 28, 2008 prospectuses were as follows: Class A—1.32% and 1.16%; Class B—2.21% and 1.91%; Class C—1.80% and 1.66%; Class Y—1.05% and 0.91%. Net expenses reflect fee waivers and/or expense reimbursements, if any, pursuant to an agreement that is in effect to cap the expenses. The Trust, with respect to the Fund, and the Advisor have entered into a written agreement pursuant to which the Advisor has agreed to waive a portion of its management fees and/or to reimburse expenses (excluding expenses incurred through investment in other investment companies and interest expense) to the extent necessary so that the Fund's operating expenses (excluding expenses incurred through investment in other investment companies and interest expense), through the fiscal year ending June 30, 2009, do not exceed 1.15% for Class A s hares, 1.90% for Class B shares, 1.65% for Class C shares and 0.90% for Class Y shares. Pursuant to the written agreement, the Advisor is entitled to be reimbursed for any fees it waives and expenses it reimburses for a period of three years following such fee waivers and expense reimbursements, to the extent that such reimbursement of the Advisor by the Fund will not cause the Fund to exceed any applicable expense limit that is in place for the Fund.

⁽¹⁾  Inception date of UBS Global Bond Fund Class A shares is November 5, 2001. Inception dates of Class B and Class C shares are November 26, 2001 and July 2, 2002, respectively. Inception date of Class Y shares and the index is July 31, 1993.

⁽²⁾  Maximum sales charge for Class A shares is 4.5%. Class A shares bear ongoing 12b-1 service fees.

⁽³⁾  Maximum contingent deferred sales charge for Class B shares is 5% imposed on redemptions and is reduced to 0% after a maximum of six years. Class B shares bear ongoing 12b-1 service and distribution fees.

⁽⁴⁾  Maximum contingent deferred sales charge for Class C shares is 0.75% imposed on redemptions and is reduced to 0% after one year. Class C shares bear ongoing 12b-1 service and distribution fees.

⁽⁵⁾  The Portfolio offers Class Y shares to a limited group of eligible investors, including certain qualifying retirement plans. Class Y shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees.

⁽⁶⁾  The Barclays Capital Global Aggregate Index (formerly known as the Lehman Brothers Global Aggregate Index) is a broad-based, market capitalization weighted index which measures the broad global market for US and non US corporate, government, governmental agency, supranational, mortgage-backed and asset- backed fixed income securities. Investors should note that indices do not reflect the deduction of fees, expenses or taxes.

If an investor sells or exchanges shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged will be deducted at the time of the transaction, except as noted otherwise in the prospectus.

Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://www.ubs.com.

148

UBS Global Bond Fund

Illustration of an assumed investment of $10,000 in Class A shares (adjusted for 4.50% maximum

sales charge) and $10,000,000 in Class Y shares (unaudited)

The first graph depicts the performance of UBS Global Bond Fund Class A versus the Barclays Capital Global Aggregate Index (formerly known as the Lehman Brothers Global Aggregate Index) from November 5, 2001, which is the inception date of the class, through June 30, 2009. The second graph depicts the performance of UBS Global Bond Fund Class Y versus the Barclays Capital Global Aggregate Index over the 10 years ended June 30, 2009. The performance of Class B and Class C shares will vary based upon the different inception dates, class specific expenses and sales charges. No adjustment has been made for any income taxes payable by shareholders on income dividends and capital gain distributions. Past performance is no guarantee of future results. Share price and returns will vary with market conditions; investors may realize a gain or loss upon redemption.

UBS Global Bond Fund Class A vs. Barclays Capital Global Aggregate Index

Wealth value with dividends reinvested

The Fund's growth of an assumed $10,000 investment is adjusted for the maximum sales charge of 4.50%.

UBS Global Bond Fund Class Y vs. Barclays Capital Global Aggregate Index

Wealth value with dividends reinvested

Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://www.ubs.com.

149

UBS Global Bond Fund

Top ten long-term fixed income holdings

(unaudited)

As of June 30, 2009

	Percentage of net assets
Buoni Poliennali Del Tesoro, 4.500%, due 02/01/18		5.3	%
Government of Japan CPI Linked Bond, 1.200%, due 06/10/17		5.1
Buoni Poliennali Del Tesoro, 5.000%, due 08/01/39		4.0
UK Gilts, 5.000%, due 03/07/12		3.8
Bundesrepublik Deutschland, 4.250%, due 01/04/14		3.7
Government of Japan, 1.900%, due 06/20/25		3.7
Government of Japan, 0.800%, due 03/20/13		3.4
Government of Japan, 1.300%, due 03/20/15		3.1
Kreditanstalt fuer Wiederaufbau, 5.500%, due 12/07/15		2.6
Government of Spain, 4.200%, due 07/30/13		2.4
Total		37.1	%

Country exposure, top five (unaudited)

As of June 30, 2009

	Percentage of net assets
United States		31.9	%
Japan		17.6
Germany		13.0
Italy		11.7
United Kingdom		7.6
Total		81.8	%

150

UBS Global Bond Fund

Industry diversification (unaudited)

As a percentage of net assets as of June 30, 2009

Bonds Corporate bonds
Auto manufacturers	1.46	%
Beverages	1.15
Capital markets	0.69
Commercial banks	8.88
Diversified financial services	3.49
Diversified telecommunication services	2.69
Food & staples retailing	2.93
Food products	0.62
Insurance	0.60
Media	1.42
Metals & mining	0.32
Oil, gas & consumable fuels	2.71
Personal products	0.68
Thrifts & mortgage finance	2.66
Tobacco	2.16
Total corporate bonds	32.46
Asset-backed securities	0.50
Collateralized debt obligations	0.31
Commercial mortgage-backed securities	1.32
Mortgage & agency debt securities	10.63
US government obligations	4.94
Non US-government obligations	46.40
Sovereign/supranational bond	1.55
Total bonds	98.11
Short-term investment	1.59
Total investments	99.70
Cash and other assets, less liabilities	0.30
Net assets	100.00	%

151

UBS Global Bond Fund—Portfolio of investments

June 30, 2009

Security description	Face amount		Value
Bonds—98.11%
Corporate bonds—32.46%
Australia—0.32%
Rio Tinto Finance USA Ltd., 8.950%, due 05/01/14	$	100,000	$	111,124
Bermuda—0.30%
Qtel International Finance Ltd., 6.500%, due 06/10/14(1)	$	100,000		101,641
France—2.19%
Compagnie de Financement Foncier, 4.000%, due 07/21/11	EUR	150,000		216,237
France Telecom SA, 8.500%, due 03/01/31	$	200,000		256,866
GE Capital FCC, 1.198%, due 12/14/09(2)	EUR	200,000		279,052
Total France corporate bonds				752,155
Germany—7.41%
Bayerische Landesbank, 3.750%, due 05/23/11	EUR	240,000		347,188
Dexia Kommunalbank Deutschland AG, Series 1273, 3.500%, due 04/15/11		250,000		358,106
Hypothekenbank in Essen AG, 4.000%, due 11/21/11		240,000		348,959
IKB Deutsche Industriebank AG, 1.174%, due 07/24/09(2)	$	600,000		597,268
Kreditanstalt fuer Wiederaufbau, 5.500%, due 12/07/15	GBP	500,000		892,155
Total Germany corporate bonds				2,543,676
Ireland—0.36%
Anglo Irish Bank Corp. PLC, 2.156%, due 06/25/14(2)	EUR	200,000		125,225
Jersey (Channel Islands)—0.47%
Travelers Insurance Company Institutional Funding Ltd., 5.750%, due 12/06/11	GBP	100,000		160,183
Luxembourg—1.64%
Telecom Italia Finance SA, 6.575%, due 07/30/09	EUR	400,000		562,232
Norway—0.69%
StatoilHydro ASA, 5.250%, due 04/15/19	$	230,000		236,698
Spain—0.76%
Caja de Ahorros y Monte de Piedad de Madrid, 4.125%, due 03/24/36	EUR	250,000		262,964

Security description	Face amount		Value
United Kingdom—3.82%
Barclays Bank PLC, 5.750%, due 09/14/26	GBP	80,000	$	99,555
7.500%, due 12/15/10(2),(3)	EUR	75,000		77,858
Imperial Tobacco Finance PLC, 8.375%, due 02/17/16		300,000		458,414
National Westminster Bank PLC, 6.500%, due 09/07/21	GBP	110,000		138,524
Nationwide Building Society, 1.455%, due 12/22/16(2)	EUR	200,000		207,605
WPP PLC, 6.625%, due 05/12/16		250,000		331,283
Total United Kingdom corporate bonds				1,313,239
United States—14.50%
Altria Group, Inc., 9.250%, due 08/06/19	$	250,000		280,728
Anadarko Petroleum Corp., 5.750%, due 06/15/14		100,000		101,668
Avon Products, Inc., 5.625%, due 03/01/14		220,000		232,541
BNP Paribas Capital Trust III, 6.625%, due 10/23/11(2),(3)	EUR	175,000		187,708
Comcast Cable Communications LLC, 6.750%, due 01/30/11	$	150,000		158,492
Daimler Chrysler Holdings NA, 7.200%, due 09/01/09		150,000		150,673
Daimler Finance NA LLC, 7.200%, due 09/01/09		350,000		351,569
General Electric Capital Corp., 6.750%, due 03/15/32		110,000		98,748
HSBC Finance Corp., 6.750%, due 05/15/11		350,000		359,867
JPMorgan Chase & Co., 4.650%, due 06/01/14		300,000		299,209
Kinder Morgan Energy Partners LP, 5.800%, due 03/15/35		175,000		147,732
Kraft Foods, Inc., 5.625%, due 11/01/11		200,000		212,495
Kroger Co., 8.050%, due 02/01/10		350,000		359,734
Marsh & McLennan Cos., Inc., 6.250%, due 03/15/12		200,000		205,730
Miller Brewing Co., 5.500%, due 08/15/13(1)		400,000		395,498
Morgan Stanley, 5.300%, due 03/01/13		235,000		238,024
ONEOK Partners LP, 8.625%, due 03/01/19		400,000		447,355
SanPaolo IMI Capital, 8.126%, due 11/10/10(2),(3)	EUR	100,000		105,214

152

UBS Global Bond Fund—Portfolio of investments

June 30, 2009

Security description	Face amount		Value
Bonds—(continued)
Corporate bonds—(concluded)
United States—(concluded)
Wal-Mart Stores, Inc., 4.875%, due 01/19/39	GBP	200,000	$	294,563
6.875%, due 08/10/09	$	350,000		352,270
Total United States corporate bonds				4,979,818
Total corporate bonds (cost $11,342,795)				11,148,955
Asset-backed securities—0.50%
United Kingdom—0.03%
Whinstone Capital Management Ltd., Series 1A, Class B2, 2.306%, due 10/25/44(2)	$	77,108		11,899
United States—0.47%
Citibank Credit Card Issuance Trust, Series 2002-A8, Class A8, 0.508%, due 11/07/11(2)	$	150,000		149,845
Merrill Lynch Mortgage Investors, Inc., Series 2006-SL1, Class A, 0.494%, due 09/25/36(2)		50,283		10,496
Total United States asset-backed securities				160,341
Total asset-backed securities (cost $286,065)				172,240
Collateralized debt obligations—0.31%
Cayman Islands—0.02%
Black Diamond CLO Ltd., Series 2005-2X, Class IN, due 01/07/18(4),(5)	$	100,000		5,311
Gulf Stream - Sextant CLO Ltd., Series 2007-1A, Class SUB, due 06/17/21(4),(5),(6)		100,000		3,000
Total Cayman Islands collateralized debt obligations				8,311
Ireland—0.13%
Valleriite CDO, Series 2007-1A, Class A1EU, 3.843%, due 12/29/17(2),(4),(6)	EUR	160,000		43,410
Netherlands—0.07%
Queen Street CLO, Series 2007-1A, Class F, due 08/15/24(4),(5),(6)	EUR	100,000		7,014
Series 2006-1A, Class C1, 2.218%, due 04/15/23(2),(4),(6)		250,000		17,087
Total Netherlands collateralized debt obligations				24,101

Security description	Face amount		Value
United States—0.09%
Hewett's Island CDO Ltd., Series 2007-6A, Class D, 2.883%, due 06/09/19(2),(4),(6)	$	250,000	$	30,000
Total collateralized debt obligations (cost $1,116,630)				105,822
Commercial mortgage-backed securities—1.32%
United States—1.32%
Bear Stearns Commercial Mortgage Securities Trust, Series 2005-PWR7, Class A2, 4.945%, due 02/11/41		70,994		70,329
Series 2000-WF2, Class A2, 7.320%, due 10/15/32(2)		75,890		77,726
GS Mortgage Securities Corp. II, Series 2007-GG10, Class A2, 5.778%, due 08/10/45(2)		25,000		23,192
JPMorgan Chase Commercial Alternative Mortgage Product, Series 2006-CB17, Class A4, 5.429%, due 12/12/43		350,000		282,950
Total commercial mortgage-backed securities (cost $493,818)				454,197
Mortgage & agency debt securities—10.63%
United States—10.63%
Federal Home Loan Mortgage Corp. Gold Pools,† #G04461, 5.000%, due 07/01/38		258,792		263,579
#G04684, 5.500%, due 09/01/38		252,814		261,330
Federal National Mortgage Association Pools,† #AA5244, 4.000%, due 05/01/39		74,895		72,595
#909356, 5.000%, due 02/01/37		273,128		278,665
#914467, 5.000%, due 04/01/37		233,338		237,959
#903709, 5.500%, due 11/01/36		234,050		242,094
#915829, 5.500%, due 03/01/37		254,486		263,072
#928197, 5.500%, due 03/01/37		244,853		253,115
#937094, 5.500%, due 05/01/37		232,099		239,930
#918638, 5.500%, due 06/01/37		260,464		269,252
#968197, 5.500%, due 01/01/38		242,126		250,295
#934323, 5.500%, due 07/01/38		262,340		271,177

153

UBS Global Bond Fund—Portfolio of investments

June 30, 2009

Security description	Face amount		Value
Bonds—(concluded)
Mortgage & agency debt securities—(concluded)
United States—(concluded)
#900568, 6.000%, due 09/01/36	$	155,994	$	163,407
#940642, 6.000%, due 08/01/37		238,930		250,060
#889579, 6.000%, due 05/01/38		246,195		257,663
Government National Mortgage Association Pools, #781276, 6.500%, due 04/15/31		70,933		76,574
Total mortgage & agency debt securities (cost $3,510,722)				3,650,767
US government obligations—4.94%
US Treasury Bonds, 4.250%, due 05/15/39		510,000		504,818
6.250%, due 05/15/30		150,000		190,172
US Treasury Inflation Indexed Bonds (TIPS), 1.625%, due 01/15/18		500,000		504,005
US Treasury Notes, 1.750%, due 03/31/14		225,000		217,617
2.750%, due 02/15/19		300,000		280,968
Total US government obligations (cost $1,735,387)				1,697,580
Non US-government obligations—46.40%
France—2.29%
Government of France, 4.000%, due 10/25/14	EUR	530,000		785,050
Germany—5.67%
Bundesobligation, 4.000%, due 10/11/13	EUR	445,000		664,908
Bundesrepublik Deutschland, 4.250%, due 01/04/14		850,000		1,282,081
				1,946,989
Italy—11.67%
Buoni Poliennali Del Tesoro, 4.500%, due 02/01/18	EUR	1,260,000		1,829,474
5.000%, due 08/01/39		1,035,000		1,386,569
Republic of Italy, 4.500%, due 01/21/15	$	390,000		399,834
4.750%, due 01/25/16		390,000		391,989
				4,007,866
Japan—17.60%
Government of Japan, 0.800%, due 03/20/13	JPY	109,950,000		1,152,177
1.300%, due 03/20/15		101,050,000		1,076,361
1.800%, due 06/20/17		73,000,000		797,913
1.900%, due 06/20/25		120,800,000		1,262,019

Security description	Face amount		Value
Japan—(concluded)
Government of Japan CPI Linked Bond, 1.200%, due 06/10/17	JPY	193,303,200	$	1,756,554
				6,045,024
Spain—5.38%
Government of Spain, 4.200%, due 07/30/13	EUR	550,000		817,044
6.000%, due 01/31/29		175,000		283,117
Instituto de Credito Oficial, 5.375%, due 07/02/12	$	700,000		746,878
				1,847,039
United Kingdom—3.79%
UK Gilts, 5.000%, due 03/07/12	GBP	740,000		1,303,558
Total non US-government obligations (cost $15,389,536)				15,935,526
Sovereign/supranational bond—1.55%
European Investment Bank, 6.250%, due 04/15/14 (cost $590,835)	GBP	290,000		530,690
Total bonds (cost $34,465,788)				33,695,777
	Units
Short-term investment—1.59%
Investment company—1.59%
UBS Cash Management Prime Relationship Fund, 0.384%(7),(8) (cost $545,874)		545,874		545,874
Total investments—99.70% (cost $35,011,662)				34,241,651
Cash and other assets, less liabilities—0.30%				103,576
Net assets—100.00%			$	34,345,227

154

UBS Global Bond Fund—Portfolio of investments

June 30, 2009

Notes to portfolio of investments

Aggregate cost for federal income tax purposes was $35,040,498; and net unrealized depreciation consisted of:

Gross unrealized appreciation	$	1,411,156
Gross unrealized depreciation		(2,210,003	)
Net unrealized depreciation of investments	$	(798,847	)

^†  On September 7, 2008, the Federal Housing Finance Agency placed the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation into conservatorship, and the US Treasury guaranteed the debt issued by those organizations.

⁽¹⁾  Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities are considered liquid, unless noted otherwise, and may be resold in transactions exempt from registration, normally to qualified institutional buyers. At June 30, 2009, the value of these securities amounted to $497,139 or 1.45% of net assets.

⁽²⁾  Floating rate security—The interest rates shown are the current rates as of June 30, 2009.

⁽³⁾  Perpetual bond security. The maturity date reflects the next call date.

⁽⁴⁾  Security is illiquid. At June 30, 2009, these securities amounted to $105,822 or 0.31% of net assets.

⁽⁵⁾  This security is the equity tranche of a collateralized debt obligation. The Fund receives periodic payments, which may vary, from the issuer of this security.

⁽⁶⁾  Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities, which represent 0.29% of net assets as of June 30, 2009, are considered illiquid and restricted. (See restricted securities table for more information.)

Restricted securities	Acquisition dates	Acquisition cost		Acquisition cost as a percentage of net assets			06/30/09 Market value		06/30/09 Market value as a percentage of net assets
Gulf Stream - Sextant CLO Ltd., Series 2007-1A, Class SUB, due 06/17/21	05/17/07	$	100,000		0.29	%	$	3,000		0.01	%
Hewett's Island CDO Ltd., Series 2007-6A, Class D, 2.883%, due 06/09/19	05/09/07		247,467		0.72			30,000		0.09
Queen Street CLO, Series 2007-1A, Class F, due 08/15/24	05/18/07		132,413		0.39			7,014		0.02
Series 2006-1A, Class C1, 2.218%, due 04/15/23	12/21/06		323,782		0.94			17,087		0.05
Valleriite CDO, Series 2007-1A, Class A1EU, 3.843%, due 12/29/17	06/12/07		212,968		0.62			43,410		0.12
		$	1,016,630		2.96	%	$	100,511		0.29	%

⁽⁷⁾  Investment in affiliated mutual fund.

⁽⁸⁾  The rate shown reflects the yield at June 30, 2009.

CDO  Collateralized debt obligations

CLO  Collateralized loan obligations

CPI  Consumer price index

GS  Goldman Sachs

TIPS  Treasury inflation protected securities ("TIPS") are debt securities issued by the US Treasury whose principal and/or interest payments are adjusted for inflation, unlike debt securities that make fixed principal and interest payments. The interest rate paid by the TIPS is fixed, while the principal value rises or falls based on changes in a published Consumer Price Index ("CPI"). Thus, if inflation occurs, the principal and interest payments on the TIPS are adjusted accordingly to protect investors from inflationary loss. During a deflationary period, the principal and interest payments decrease, although the TIPS principal amounts will not drop below their face amounts at maturity. In exchange for the inflation protection, the TIPS generally pay lower interest rates than typical US Treasury securities. Only if inflation occurs will TIPS offer a higher real yield than a conventional Treasury security of the same maturity.

155

UBS Global Bond Fund—Portfolio of investments

June 30, 2009

Currency type abbreviations:

EUR  Euro

GBP  Great Britain Pound

JPY  Japanese Yen

Forward foreign currency contracts

UBS Global Bond Fund had the following open forward foreign currency contracts as of June 30, 2009:

	Contracts to deliver		In exchange for		Maturity dates	Unrealized appreciation/ (depreciation)
Euro		255,943	SEK	2,820,000	09/03/09	$	6,446
Euro		1,005,000	USD	1,408,075	09/03/09		(1,769	)
Great Britain Pound		915,000	USD	1,503,734	09/03/09		(1,523	)
United States Dollar		710,626	AUD	880,000	09/03/09		(4,849	)
United States Dollar		903,584	CAD	995,000	09/03/09		(47,847	)
United States Dollar		255,658	DKK	1,360,000	09/03/09		277
United States Dollar		422,918	KRW	537,000,000	09/03/09		(60	)
United States Dollar		725,605	SEK	5,570,000	09/03/09		(3,697	)
Net unrealized depreciation on forward foreign currency contracts						$	(53,022	)

Currency type abbreviations:

AUD  Australian Dollar

CAD  Canadian Dollar

DKK  Danish Krone

KRW  Korean Won

SEK  Swedish Krona

USD  United States Dollar

Credit default swaps on corporate and sovereign issues—buy protection⁽¹⁾

Counterparty	Notional amount		Termination date	Payments made by the Fund			Payments received by the Fund			Upfront payments (made) received		Value			Unrealized depreciation
Deutsche Bank AG	EUR	250,000	12/20/13		1.6000	%(2)		—	(3)	$	—	$	(9,208	)	$	(9,208	)
Deutsche Bank AG	EUR	250,000	12/20/13		0.9500	(2)		—	(4)		—		(2,236	)		(2,236	)
Goldman Sachs International	EUR	250,000	12/20/13		1.0500	(2)		—	(5)		—		(4,720	)		(4,720	)
										$	—	$	(16,164	)	$	(16,164	)

⁽¹⁾  If the Fund is a buyer of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will either (i) receive from the seller of protection an amount equal to the notional amount of the swap and deliver the referenced obligation or (ii) receive a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation.

⁽²⁾  Payments made are based on the notional amount.

⁽³⁾  Payment from the counterparty will be received upon the occurrence of bankruptcy and/or restructuring event with respect to the Deutsche Telecom 8.125% bond, due 05/29/12.

⁽⁴⁾  Payment from the counterparty will be received upon the occurrence of bankruptcy and/or restructuring event with respect to the Akzo Nobel NV 4.250% bond, due 06/14/11.

⁽⁵⁾  Payment from the counterparty will be received upon the occurrence of bankruptcy and/or restructuring event with respect to the Henkel AG & Co KGaA 4.250% bond, due 06/10/13.

Currency type abbreviation:

EUR  Euro

156

UBS Global Bond Fund—Portfolio of investments

June 30, 2009

Credit default swaps on corporate and sovereign issues—sell protection⁽¹⁾

Counterparty	Notional amount		Termination date	Payments made by the Fund			Payments received by the Fund			Upfront payments made (received)		Value			Unrealized appreciation/ (depreciation)			Credit spread(2)
Goldman Sachs International	EUR	90,000	12/20/09		—	(3)		2.0000	%(4)	$	—	$	(1,673	)	$	(1,673	)		4.913	%
Goldman Sachs International	EUR	90,000	12/20/09		—	(5)		2.0000	(4)		—		(1,806	)		(1,806	)		5.140
Goldman Sachs International	EUR	280,000	12/20/18		—	(6)		1.2600	(4)		—		10,081			10,081			0.940
JPMorgan Chase Bank	USD	700,000	12/20/18		—	(7)		0.4700	(4)		—		(24,317	)		(24,317	)		82.665
										$	—	$	(17,715	)	$	(17,715	)

⁽¹⁾  If the Fund is a seller of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will either (i) pay to the buyer of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation or (ii) pay a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation.

⁽²⁾  Credit spreads, where available, represented in absolute terms, utilized in determining the market value as of period end serve as an indicator of the current status of the payment/performance risk and represent the likelihood or risk of default for the credit derivative. The credit spread of a particular referenced entity reflects the cost of buying/selling protection and may include upfront payments required to be made to enter into the agreement. Wider credit spreads represent a deterioration of the referenced entity's credit soundness and a greater likelihood of risk of default or other credit event occurring as defined under the terms of the agreement. A credit spread identified as "Defaulted" indicates a credit event has occurred for the referenced entity.

⁽³⁾  Payment to the counterparty will be made upon the occurrence of bankruptcy and/or restructuring event with respect to the Hammerson PLC 5.250% bond, due 12/15/16.

⁽⁴⁾  Payments received are based on the notional amount.

⁽⁵⁾  Payment to the counterparty will be made upon the occurrence of bankruptcy and/or restructuring event with respect to the British Land 10.250% bond, due 03/26/12.

⁽⁶⁾  Payment to the counterparty will be made upon the occurrence of bankruptcy and/or restructuring event with respect to the Republic of Italy 6.875% bond, due 09/27/23.

⁽⁷⁾  Payment to the counterparty will be made upon the occurrence of bankruptcy and/or restructuring event with respect to the Republic of Spain 5.500% bond, due 12/20/17.

Currency type abbreviations:

EUR  Euro

USD  United States Dollar

157

UBS Global Bond Fund—Portfolio of investments

June 30, 2009

The following is a summary of the inputs used as of June 30, 2009 in valuing the Fund's investments.

Measurements at 06/30/09
Description	Quoted prices in active markets for identical investments (Level 1)		Significant other observable inputs (Level 2)			Unobservable inputs (Level 3)		Total
Corporate bonds	$	—	$	11,148,955		$	—	$	11,148,955
Asset-backed securities		—		172,240			—		172,240
Collateralized debt obligations		—		—			105,822		105,822
Commercial mortgage-backed securities		—		454,197			—		454,197
Mortgage & agency debt securities		—		3,650,767			—		3,650,767
US government obligations		—		1,697,580			—		1,697,580
Non US-government obligations		—		15,935,526			—		15,935,526
Sovereign/supranational bond		—		530,690			—		530,690
Short-term investment		—		545,874			—		545,874
Other financial instruments(1)		—		(86,901	)		—		(86,901	)
Total	$	—	$	34,048,928		$	105,822	$	34,154,750

⁽¹⁾  Other financial instruments may include open futures contracts, swap agreements, options and forward foreign currency contracts.

Level 3 Rollforward Disclosure

The following is a rollforward of the Fund's investments that were valued using unobservable inputs for the period:

Measurements using unobservable inputs (Level 3)
	Collateralized debt obligations			Total
Assets
Beginning balance	$	2,967,364		$	2,967,364
Total gains or losses (realized/unrealized) included in earnings		(2,337,337	)		(2,337,337	)
Purchases, sales, issuances, and settlements (net)		(524,205	)		(524,205	)
Transfers in and/or out of Level 3		—			—
Ending balance	$	105,822		$	105,822
The amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to investments still held at 06/30/09.	$	(771,351	)	$	(771,351	)

See accompanying notes to financial statements.
158

UBS High Yield Fund

Portfolio performance

For the 12 months ended June 30, 2009, Class A shares of UBS High Yield Fund (the "Fund") declined 7.12% (Class A shares declined 11.27% after the deduction of the maximum sales charge), while Class Y shares declined 6.83%. The Fund's benchmark, the Merrill Lynch US High Yield Cash Pay Constrained Index (the "Index"), declined 3.15% over the same time period. (Class Y shares have lower expenses than other share classes of the Fund. Returns for all share classes over various time periods are shown on page 161; please note that the Fund's returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares, while the Index returns do not reflect the deduction of fees and expenses.) For a detailed commentary on the market environment in general during the reporting period, see page 2.

The reporting period was characterized by periods of extreme volatility and rapidly changing investor preferences for risky assets. Against this backdrop, the Fund underperformed its benchmark. Overall, positioning and security selection in certain sectors detracted from relative performance.

Portfolio performance summary

What worked

•  Overall, the Fund's more conservative approach to the high yield market was beneficial. Given concerns about the economy and the likelihood of rising high yield defaults, we maintained a defensive stance in managing the Fund's portfolio, as demonstrated by our preference for more defensive industries. In addition, we continued to hold an underweight position in CCC-rated securities.⁽¹⁾ This positioning was rewarded during the reporting period, as CCC-rated securities declined 10.88% during the 12-month reporting period. In contrast, higher-rated BB bonds gained 1.19% over the same period.⁽²⁾

•  The Fund's underweight to the more cyclical chemical sector was beneficial for the Fund's relative performance. While the sector rallied sharply during the second half of the reporting period, it declined 12.8% during the 12-month period as a whole.

•  In keeping with our preference for more defensive areas of the market, the Fund held an overweight position in the health care sector, which contributed positively to results. While it lagged in the exuberant rally that took place during the first six months of 2009, the sector outperformed the Index during the reporting period as a whole, returning 4.0%.

⁽¹⁾  According to Standard & Poor's Ratings Group, debt rated CCC has a current identifiable vulnerability to default, and is dependent upon favorable business, financial and economic conditions to meet timely payments of interest and repayment of principal. In the event of adverse business, financial or economic conditions, it is not likely to have the capacity to pay interest or repay principal.

⁽²⁾  According to Standard & Poor's Ratings Group, debt rated BB has less near-term vulnerability to default than other speculative grade debt. However, it faces major ongoing uncertainties or exposure to adverse business, financial or economic conditions which could lend to inadequate capacity to meet timely interest and principal payments.

159

UBS High Yield Fund

What didn't work

•  Sector positioning in a number of areas negatively contributed to performance.

•  The Fund's underweight in portions of the financial sector detracted from results. Despite ongoing concerns regarding the long-term health of certain financial institutions, financial sector bonds generated extremely strong results during the second half of the reporting period as investor risk aversion abated. As a result, the Fund's underweight position to the sector was a hindrance overall.

•  The Fund's overweight in electric utilities was not rewarded. While this defensive sector typically holds up relatively well during periods of economic weakness, it declined 5.7% during the reporting period.

•  An underweight in telecommunications detracted from performance after the sector gained 5.7% following solid results in the second half of the reporting period.

This letter is intended to assist shareholders in understanding how the Fund performed during the 12 months ended June 30, 2009. The views and opinions in the letter were current as of August 17, 2009. They are not guarantees of performance or investment results and should not be taken as investment advice. Investment decisions reflect a variety of factors, and we reserve the right to change our views about individual securities, sectors and markets at any time. As a result, the views expressed should not be relied upon as a forecast of the Fund's future investment intent. We encourage you to consult your financial advisor regarding your personal investment program. Mutual funds are sold by prospectus only. You should read it carefully and consider a fund's investment objectives, risks, charges, expenses and other important information contained in the prospectus before investing. Prospectuses for most of our funds can be obtained from your financial advisor, by calling UBS Funds at 800-647 1568 or by visiting our Web site at www.ubs.com

160

UBS High Yield Fund

Average annual total returns for periods ended 06/30/09 (unaudited)

		1 year			5 years			10 years			Inception(1)
Before deducting	Class A(2)		(7.12	)%		2.19	%		3.37	%		3.47	%
maximum sales charge	Class B(3)		(7.98	)		1.41			N/A			4.26
	Class C(4)		(7.60	)		1.67			N/A			4.36
	Class Y(5)		(6.83	)		2.47			3.65			4.22
After deducting maximum	Class A(2)		(11.27	)		1.26			2.89			3.02
sales charge	Class B(3)		(12.14	)		1.13			N/A			4.26
	Class C(4)		(8.22	)		1.67			N/A			4.36
Merrill Lynch US High Yield Cash Pay Constrained Index(6)			(3.15	)		4.08			4.84			4.80

The annualized gross and net expense ratios, respectively, for each class of shares as in the October 28, 2008 prospectuses were as follows: Class A—1.29% and 1.20%; Class B—2.07% and 1.95%; Class C—1.79% and 1.70%; Class Y—0.99% and 0.95%. Net expenses reflect fee waivers and/or expense reimbursements, if any, pursuant to an agreement that is in effect to cap the expenses. The Trust, with respect to the Fund, and the Advisor have entered into a written agreement pursuant to which the Advisor has agreed to waive a portion of its management fees and/or to reimburse expenses (excluding expenses incurred through investment in other investment companies and interest expense) to the extent necessary so that the Fund's operating expenses (excluding expenses incurred through investment in other investment companies and interest expense), through the fiscal year ending June 30, 2009, do not exceed 1.20% for Class A s hares, 1.95% for Class B shares, 1.70% for Class C shares and 0.95% for Class Y shares. Pursuant to the written agreement, the Advisor is entitled to be reimbursed for any fees it waives and expenses it reimburses for a period of three years following such fee waivers and expense reimbursements, to the extent that such reimbursement of the Advisor by the Fund will not cause the Fund to exceed any applicable expense limit that is in place for the Fund.

⁽¹⁾  Inception date of UBS High Yield Fund Class A shares is December 31, 1998. Inception date of Class B and Class C shares is November 7, 2001. Inception date of Class Y shares and the index is September 30, 1997.

⁽²⁾  Maximum sales charge for Class A shares is 4.5%. Class A shares bear ongoing 12b-1 service fees.

⁽³⁾  Maximum contingent deferred sales charge for Class B shares is 5% imposed on redemptions and is reduced to 0% after a maximum of six years. Class B shares bear ongoing 12b-1 service and distribution fees.

⁽⁴⁾  Maximum contingent deferred sales charge for Class C shares is 0.75% imposed on redemptions and is reduced to 0% after one year. Class C shares bear ongoing 12b-1 service and distribution fees.

⁽⁵⁾  The Portfolio offers Class Y shares to a limited group of eligible investors, including certain qualifying retirement plans. Class Y shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees.

⁽⁶⁾  The Merrill Lynch US High Yield Cash Pay Constrained Index is the index of publicly placed non-convertible, coupon-bearing US domestic debt with a term to maturity of at least one year. The index is market weighted, so that larger bond issuers have a greater effect on the index's return. However, the representation of any single bond issue is restricted to a maximum of 2% of the total index. Investors should note that indices do not reflect the deduction of fees, expenses or taxes.

If an investor sells or exchanges shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged will be deducted at the time of the transaction, except as noted otherwise in the prospectus.

Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://www.ubs.com.

161

UBS High Yield Fund

Illustration of an assumed investment of $10,000 in Class A shares (adjusted for 4.50% maximum

sales charge) and $5,000,000 in Class Y shares (unaudited)

The following two graphs depict the performance of UBS High Yield Fund Class A and Class Y versus the Merrill Lynch US High Yield Cash Pay Constrained Index over the 10 years ended June 30, 2009. The performance of Class B and Class C shares will vary based upon the different inception dates, class specific expenses and sales charges. No adjustment has been made for any income taxes payable by shareholders on income dividends and capital gain distributions. Past performance is no guarantee of future results. Share price and returns will vary with market conditions; investors may realize a gain or loss upon redemption.

UBS High Yield Fund Class A vs. Merrill Lynch US High Yield Cash Pay Constrained Index

Wealth value with dividends reinvested

The Fund's growth of an assumed $10,000 investment is adjusted for the maximum sales charge of 4.50%.

UBS High Yield Fund Class Y vs. Merrill Lynch US High Yield Cash Pay Constrained Index

Wealth value with dividends reinvested

Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://www.ubs.com.

162

UBS High Yield Fund

Top ten long-term fixed income

holdings (unaudited)

As of June 30, 2009

	Percentage of net assets
Intelsat Jackson Holdings Ltd., 11.250%, due 06/15/16		1.7	%
Sprint Capital Corp., 8.375%, due 03/15/12		1.6
United Rentals North America, Inc., 7.750%, due 11/15/13		1.6
Biomet, Inc., 11.625%, due 10/15/17		1.4
AES Corp./The, 8.000%, due 06/01/20		1.4
DISH DBS Corp., 6.625%, due 10/01/14		1.4
Chesapeake Energy Corp., 7.250%, due 12/15/18		1.4
Frontier Communications Corp., 9.000%, due 08/15/31		1.3
AK Steel Corp., 7.750%, due 06/15/12		1.2
GMAC LLC, 7.250%, due 03/02/11		1.2
Total		14.2	%

163

UBS High Yield Fund

Industry diversification (unaudited)

As a percentage of net assets as of June 30, 2009

Bonds Corporate bonds
Aerospace/defense	1.35	%
Airlines	0.20
Auto loans	2.14
Auto parts & equipment	0.95
Automotive	0.18
Banking	5.67
Beverage	0.57
Brokerage	0.42
Building & construction	1.47
Building materials	0.58
Chemicals	0.41
Computer hardware	0.15
Consumer/commercial lease financing	1.45
Consumer—products	0.81
Diversified capital goods	0.88
Electric—generation	8.51
Electronics	0.50
Energy—exploration & production	4.38
Food—wholesale	0.54
Food & drug retailers	0.98
Forestry/paper	2.65
Gaming	5.15
Gas distribution	4.90
Health services	8.07
Hotels	0.25
Insurance	0.16
Leisure	0.26
Machinery	0.09
Media—broadcast	1.05
Media—services	1.33
Media—cable	2.80
Metals/mining excluding steel	2.71
Mining	0.15
Multi-line insurance	0.86
Non-food & drug retailers	3.31
Oil field equipment & services	0.66	%
Oil refining & marketing	0.57
Property & casualty insurance	0.33
Packaging	1.33
Pharmaceuticals	1.00
Pipelines	0.18
Printing & publishing	1.60
Real estate development & management	0.13
Real estate investment trusts (REITs)	0.40
Software/services	2.76
Steel producers/products	2.21
Support—services	2.43
Technology	0.39
Telecom—integrated/services	6.51
Telecom—wireless	5.13
Theaters & entertainment	0.17
Transportation excluding air/rail	0.63
Total corporate bonds	92.31
Asset-backed securities	0.23
Total bonds	92.54
Preferred stocks
Banking	0.15
Media—broadcast	0.00	(1)
Total preferred stocks	0.15
Common stocks
Hotels, restaurants & leisure	0.00
Media	0.03
Packaging	0.00
Printing & publishing	0.00
Total common stocks	0.03
Warrants	0.00	(1)
Short-term investment	6.24
Total investments	98.96
Cash and other assets, less liabilities	1.04
Net assets	100.00	%

⁽¹⁾  Amount represents less than 0.005%.

164

UBS High Yield Fund—Portfolio of investments

June 30, 2009

Security description	Face Amount		Value
Bonds—92.54%
Corporate bonds—92.31%
Bermuda—2.15%
Intelsat Jackson Holdings Ltd., 11.250%, due 06/15/16	$	1,852,000	$	1,889,040
Petroplus Finance Ltd., 6.750%, due 05/01/14(1)		175,000		150,500
7.000%, due 05/01/17(1)		375,000		311,250
Total Bermuda corporate bonds				2,350,790
Canada—1.51%
Bombardier, Inc., 6.750%, due 05/01/12(1)		230,000		216,200
Teck Resources Ltd., 10.250%, due 05/15/16(1)		825,000		864,187
10.750%, due 05/15/19(1)		525,000		564,375
Total Canada corporate bonds				1,644,762
Liberia—0.26%
Royal Caribbean Cruises Ltd., 6.875%, due 12/01/13		230,000		192,050
7.000%, due 06/15/13		100,000		87,375
Total Liberia corporate bonds				279,425
Luxembourg—0.85%
FMC Finance III SA, 6.875%, due 07/15/17		1,000,000		930,000
United Kingdom—0.58%
Ineos Group Holdings PLC, 8.500%, due 02/15/16(1)		230,000		71,300
Lloyds Banking Group PLC, 6.267%, due 11/14/16(1),(2),(3)		650,000		221,000
Royal Bank of Scotland Group PLC, 7.640%, due 09/29/17(2),(3)		850,000		344,250
Total United Kingdom corporate bonds				636,550
United States—86.96%
AAC Group Holding Corp., 10.250%, due 10/01/12(1),(4)		1,075,000		780,719
AES Corp./The, 8.000%, due 06/01/20		1,700,000		1,525,750
Affinion Group, Inc., 10.125%, due 10/15/13		500,000		462,500
Ahern Rentals, Inc., 9.250%, due 08/15/13		650,000		260,000
AK Steel Corp., 7.750%, due 06/15/12		1,400,000		1,358,000
Allison Transmission, Inc., 11.000%, due 11/01/15(1)		255,000		201,450
Alltel Corp., 7.000%, due 07/01/12		500,000		540,040
AMC Entertainment, Inc., 8.750%, due 06/01/19(1)		200,000		188,000
American General Finance Corp., 4.875%, due 05/15/10		150,000		126,205
5.375%, due 10/01/12		75,000		44,224

Security description	Face Amount		Value
United States—(continued)
5.625%, due 08/17/11	$	325,000	$	208,198
5.850%, due 06/01/13		600,000		344,183
6.900%, due 12/15/17		825,000		446,723
American International Group, Inc., 6.250%, due 03/15/37		705,000		174,488
8.175%, due 05/15/58(1),(2)		615,000		175,457
Apria Healthcare Group, Inc., 11.250%, due 11/01/14(1)		300,000		289,500
ARAMARK Corp., 8.500%, due 02/01/15		310,000		300,700
Arch Western Finance LLC, 6.750%, due 07/01/13		490,000		447,125
Ashland, Inc., 9.125%, due 06/01/17(1)		140,000		145,600
Atlas Pipeline Partners LP, 8.125%, due 12/15/15		850,000		607,750
Axcan Intermediate Holdings, Inc., 9.250%, due 03/01/15		360,000		361,800
12.750%, due 03/01/16		720,000		729,000
BAC Capital Trust XI, 6.625%, due 05/23/36		150,000		113,116
Baker & Taylor, Inc., 11.500%, due 07/01/13(1)		400,000		112,000
Baldor Electric Co., 8.625%, due 02/15/17		110,000		101,750
BankAmerica Capital II, 8.000%, due 12/15/26		355,000		294,614
Bausch & Lomb, Inc., 9.875%, due 11/01/15		125,000		119,375
Beazer Homes USA, Inc., 6.875%, due 07/15/15		15,000		7,050
8.125%, due 06/15/16		150,000		72,000
Belden, Inc., 9.250%, due 06/15/19(1)		100,000		96,875
Biomet, Inc., 10.375%, due 10/15/17(5)		650,000		628,875
11.625%, due 10/15/17		1,611,000		1,578,780
Bio-Rad Laboratories, Inc., 8.000%, due 09/15/16(1)		140,000		138,600
Boise Cascade LLC, 7.125%, due 10/15/14		100,000		52,750
Boyd Gaming Corp., 7.750%, due 12/15/12		500,000		465,000
Cablevision Systems Corp., Series B, 8.000%, due 04/15/12		250,000		247,500
Calpine Construction Finance Co. LP and CCFC Finance Corp., 8.000%, due 06/01/16(1)		725,000		694,187
Carriage Services, Inc., 7.875%, due 01/15/15		550,000		413,875
Cellu Tissue Holdings, Inc., 9.750%, due 03/15/10		1,050,000		1,050,000
11.500%, due 06/01/14(1)		1,000,000		982,500

165

UBS High Yield Fund—Portfolio of investments

June 30, 2009

Security description	Face Amount		Value
Bonds—(continued)
Corporate bonds—(continued)
United States—(continued)
Centex Corp., 7.500%, due 01/15/12	$	540,000	$	544,050
Chesapeake Energy Corp., 7.250%, due 12/15/18		1,700,000		1,479,000
Cincinnati Bell, Inc., 7.250%, due 07/15/13		645,000		590,175
Circus & Eldorado Joint Venture/ Silver Legacy Capital Corp., 10.125%, due 03/01/12		500,000		398,125
CIT Group, Inc., 4.750%, due 12/15/10		400,000		314,004
5.400%, due 02/13/12		700,000		476,073
5.400%, due 03/07/13		350,000		216,916
5.400%, due 01/30/16		650,000		367,035
12.000%, due 12/18/18(1)		315,000		147,987
Citigroup Capital XXI, 8.300%, due 12/21/57(2)		700,000		545,877
CMP Susquehanna Corp., due 05/15/14(1),(6)		50,000		23,000
Coleman Cable, Inc., 9.875%, due 10/01/12		600,000		483,750
Community Health Systems, Inc., 8.875%, due 07/15/15		750,000		735,000
Constellation Brands, Inc., Series B, 8.125%, due 01/15/12		230,000		230,000
8.375%, due 12/15/14		250,000		250,625
Corrections Corp of America, 7.750%, due 06/01/17		140,000		137,900
Cott Beverages USA, Inc., 8.000%, due 12/15/11		150,000		139,500
Cricket Communications, Inc., 7.750%, due 05/15/16(1)		300,000		288,750
10.000%, due 07/15/15(1)		575,000		570,687
CSC Holdings, Inc., 6.750%, due 04/15/12		200,000		193,000
8.500%, due 04/15/14(1)		65,000		64,431
8.625%, due 02/15/19(1)		200,000		194,500
DAE Aviation Holdings, Inc., 11.250%, due 08/01/15(1)		372,000		215,760
DaVita, Inc., 7.250%, due 03/15/15		500,000		470,000
Deluxe Corp., 5.000%, due 12/15/12		665,000		541,144
Denbury Resources, Inc., 9.750%, due 03/01/16		300,000		308,250
Developers Diversified Realty Corp., 5.375%, due 10/15/12		125,000		84,501
5.500%, due 05/01/15		220,000		140,304
DirecTV Holdings LLC/DirecTV Financing Co., 7.625%, due 05/15/16		850,000		826,625

Security description	Face Amount		Value
United States—(continued)
DISH DBS Corp., 6.625%, due 10/01/14	$	1,650,000	$	1,522,125
Dollar General Corp., 11.875%, due 07/15/17(5)		850,000		918,000
Domtar Corp., 7.875%, due 10/15/11		20,000		19,500
Dycom Investments, Inc., 8.125%, due 10/15/15		350,000		294,000
Dynegy Holdings, Inc., 7.500%, due 06/01/15		1,083,000		902,951
7.750%, due 06/01/19		340,000		264,775
E*Trade Financial Corp., 7.375%, due 09/15/13		150,000		120,750
12.500%, due 11/30/17(5)		305,000		338,550
Edison Mission Energy, 7.000%, due 05/15/17		1,425,000		1,093,687
El Paso Corp., 7.800%, due 08/01/31		815,000		664,803
7.875%, due 06/15/12		200,000		196,178
8.250%, due 02/15/16		1,140,000		1,108,650
12.000%, due 12/12/13		330,000		363,000
Encore Acquisition Co., 9.500%, due 05/01/16		175,000		172,375
Esterline Technologies Corp., 6.625%, due 03/01/17		585,000		534,544
Exopack Holding, Inc., 11.250%, due 02/01/14		570,000		467,400
Ferrell Gas Partners-LP, 6.750%, due 05/01/14(1)		711,000		615,015
Ferrell Gas Partners-LP / Ferrell Gas Partners-LP Finance Corp., 8.750%, due 06/15/12		600,000		558,000
FireKeepers Development Authority, 13.875%, due 05/01/15(1)		1,355,000		1,249,988
First Data Corp., 9.875%, due 09/24/15(1)		250,000		177,500
9.875%, due 09/24/15		1,495,000		1,061,450
Ford Motor Co., 7.450%, due 07/16/31		330,000		194,700
Ford Motor Credit Co. LLC, 7.250%, due 10/25/11		725,000		627,080
8.000%, due 12/15/16		140,000		107,034
9.750%, due 09/15/10		375,000		359,211
9.875%, due 08/10/11		1,350,000		1,248,822
Forest Oil Corp., 8.500%, due 02/15/14(1)		140,000		137,550
Freeport-McMoRan Copper & Gold, Inc., 6.875%, due 02/01/14		165,000		169,125
8.250%, due 04/01/15		100,000		101,000
8.375%, due 04/01/17		435,000		438,262
Frontier Communications Corp., 9.000%, due 08/15/31		1,710,000		1,410,750
GameStop Corp./GameStop, Inc., 8.000%, due 10/01/12		185,000		186,388

166

UBS High Yield Fund—Portfolio of investments

June 30, 2009

Security description	Face Amount		Value
Bonds—(continued)
Corporate bonds—(continued)
United States—(continued)
Genworth Financial, Inc., 6.150%, due 11/15/66(2)	$	690,000	$	310,552
Georgia-Pacific LLC, 8.250%, due 05/01/16(1)		375,000		363,750
8.875%, due 05/15/31		145,000		125,425
Glen Meadow Pass-Through Trust, 6.505%, due 02/12/67(1),(2)		200,000		101,830
GMAC LLC, 6.875%, due 09/15/11		200,000		171,966
7.250%, due 03/02/11(1)		598,000		547,170
7.250%, due 03/02/11		1,475,000		1,338,352
6.750%, due 12/01/14		200,000		153,755
8.000%, due 11/01/31(1)		385,000		269,500
8.000%, due 11/01/31		610,000		417,816
Goodyear Tire & Rubber Co., 10.500%, due 05/15/16		335,000		338,350
Graham Packaging Co., Inc., 9.875%, due 10/15/14		850,000		790,500
Graphic Packaging International, Inc., 9.500%, due 08/15/13		145,000		138,475
Gulfmark Offshore, Inc., 7.750%, due 07/15/14		750,000		686,250
Harland Clarke Holdings Corp., 9.500%, due 05/15/15		1,025,000		791,812
Harrahs Operating Escrow LLC/ Harrahs Escrow Corp., 11.250%, due 06/01/17(1)		680,000		642,600
Hartford Financial Services Group, Inc., 8.125%, due 06/15/68(2)		310,000		217,000
HCA, Inc., 6.300%, due 10/01/12		500,000		458,750
9.125%, due 11/15/14		1,115,000		1,103,850
9.250%, due 11/15/16		700,000		689,500
9.625%, due 11/15/16(5)		4		4
HCA, Inc., 8.500%, due 04/15/19(1)		300,000		294,000
Helix Energy Solutions Group, Inc., 9.500%, due 01/15/16(1)		625,000		570,312
Host Hotels & Resorts LP, 9.000%, due 05/15/17(1)		285,000		271,463
Inergy LP/Inergy Finance Corp., 8.750%, due 03/01/15(1)		290,000		283,475
8.250%, due 03/01/16		875,000		833,437
Ingles Markets, Inc., 8.875%, due 05/15/17(1)		480,000		472,800
Interface, Inc., 11.375%, due 11/01/13(1)		185,000		191,475
iStar Financial, Inc., 6.000%, due 12/15/10		300,000		207,000
Jacobs Entertainment, Inc., 9.750%, due 06/15/14		700,000		581,000

Security description	Face Amount		Value
United States—(continued)
K Hovnanian Enterprises, Inc., 11.500%, due 05/01/13	$	150,000	$	129,750
KB Home, 5.750%, due 02/01/14		75,000		65,625
5.875%, due 01/15/15		150,000		126,750
6.250%, due 06/15/15		150,000		128,250
Key Energy Services, Inc., 8.375%, due 12/01/14		175,000		154,438
L-3 Communications Corp., 5.875%, due 01/15/15		810,000		718,875
Land O' Lakes Capital Trust I, Inc., 7.450%, due 03/15/28(1)		200,000		151,000
Lennar Corp., Series B, 5.125%, due 10/01/10		150,000		144,000
Liberty Mutual Group, Inc., 7.800%, due 03/15/37(1)		100,000		56,000
10.750%, due 06/15/58(1),(2)		420,000		302,400
LIN Television Corp., Series B, 6.500%, due 05/15/13		800,000		536,000
Ltd. Brands, Inc., 8.500%, due 06/15/19(1)		155,000		148,504
Macy's Retail Holdings, Inc., 5.350%, due 03/15/12		375,000		341,329
5.900%, due 12/01/16		650,000		529,546
6.375%, due 03/15/37		225,000		152,964
Massey Energy Co., 6.875%, due 12/15/13		250,000		228,750
MetLife Capital Trust X, 9.250%, due 04/08/38(1),(2)		155,000		137,950
MetroPCS Wireless, Inc., 9.250%, due 11/01/14(1)		70,000		69,300
9.250%, due 11/01/14		1,000,000		993,750
MGM Mirage, Inc., 10.375%, due 05/15/14(1)		150,000		155,625
11.125%, due 11/15/17(1)		410,000		434,600
Mirant Americas Generation LLC, 9.125%, due 05/01/31		1,100,000		792,000
Mirant North America LLC, 7.375%, due 12/31/13		275,000		264,000
Momentive Performance Materials, Inc., 10.125%, due 12/01/14(5)		19,194		7,294
MTR Gaming Group, Inc., Series B, 9.000%, due 06/01/12		425,000		291,125
Nalco Co., 8.875%, due 11/15/13		215,000		219,300
NB Capital Trust II, 7.830%, due 12/15/26		300,000		246,719
Neiman Marcus Group, Inc., 9.000%, due 10/15/15(5)		450,725		265,928
10.375%, due 10/15/15		125,000		73,125

167

UBS High Yield Fund—Portfolio of investments

June 30, 2009

Security description	Face Amount		Value
Bonds—(continued)
Corporate bonds—(continued)
United States—(continued)
Newfield Exploration Co., 7.125%, due 05/15/18	$	747,000	$	678,836
NewPage Corp., 10.000%, due 05/01/12		150,000		72,000
Nexstar Broadcasting, Inc., 7.000%, due 01/15/14(1),(5)		429,142		122,305
7.000%, due 01/15/14		142,000		52,185
Nextel Communications, Inc., Series E, 6.875%, due 10/31/13		375,000		310,312
Series D, 7.375%, due 08/01/15		390,000		311,025
Nielsen Finance LLC / Nielsen Finance Co., 11.625%, due 02/01/14(1)		140,000		138,950
due 08/01/16(4)		450,000		289,125
Nisource Finance Corp., 6.800%, due 01/15/19		350,000		327,983
NRG Energy, Inc., 7.375%, due 02/01/16		400,000		378,500
7.375%, due 01/15/17		1,300,000		1,225,250
8.500%, due 06/15/19		400,000		387,500
Owens-Brockway Glass Container, Inc., 7.375%, due 05/15/16(1)		120,000		116,400
Peabody Energy Corp., Series B, 6.875%, due 03/15/13		325,000		321,750
PetroHawk Energy Corp., 7.875%, due 06/01/15		200,000		185,000
10.500%, due 08/01/14(1)		370,000		378,325
Pinnacle Foods Finance LLC / Pinnacle Foods Finance Corp., 10.625%, due 04/01/17		75,000		63,375
Plains Exploration & Production Co., 7.625%, due 06/01/18		563,000		505,293
10.000%, due 03/01/16		305,000		313,388
PLY Gem Industries, Inc., 11.750%, due 06/15/13		210,000		135,450
Pokagon Gaming Authority, 10.375%, due 06/15/14(1)		653,000		639,940
Pulte Homes, Inc., 8.125%, due 03/01/11		145,000		145,725
Qwest Capital Funding, Inc., 7.250%, due 02/15/11		140,000		135,800
Qwest Communications International, Inc., 7.250%, due 02/15/11		1,000,000		970,000
7.500%, due 02/15/14		250,000		228,125
Series B, 7.500%, due 02/15/14		650,000		593,125

Security description	Face Amount		Value
United States—(continued)
Qwest Corp., 7.875%, due 09/01/11	$	250,000	$	250,000
8.875%, due 03/15/12		350,000		352,625
Realogy Corp., 10.500%, due 04/15/14		120,000		51,900
12.375%, due 04/15/15		305,000		85,400
Residential Capital LLC, 8.375%, due 06/30/10		350,000		255,500
9.625%, due 05/15/15		250,000		158,750
RITE AID Corp., 9.500%, due 06/15/17		150,000		97,500
10.375%, due 07/15/16		225,000		202,500
River Rock Entertainment Authority, 9.750%, due 11/01/11		315,000		236,250
RRI Energy, Inc., 6.750%, due 12/15/14		764,000		736,305
Sally Holdings LLC/Sally Capital, Inc., 10.500%, due 11/15/16		400,000		396,000
Sanmina-SCI Corp., 8.125%, due 03/01/16		750,000		546,562
Sealy Mattress Co., 10.875%, due 04/15/16(1)		100,000		104,750
Sheridan Group, Inc., 10.250%, due 08/15/11		700,000		420,000
Sinclair Television Group, Inc., 8.000%, due 03/15/12		270,000		180,900
Smithfield Foods, Inc., 10.000%, due 07/15/14(1)		190,000		187,625
Solo Cup Co., 10.500%, due 11/01/13(1)		75,000		75,188
Sprint Capital Corp., 7.625%, due 01/30/11		300,000		296,625
8.375%, due 03/15/12		1,750,000		1,723,750
8.750%, due 03/15/32		335,000		269,675
SPX Corp., 7.625%, due 12/15/14		400,000		386,000
Sungard Data Systems, Inc., 10.625%, due 05/15/15(1)		481,000		471,380
10.250%, due 08/15/15		1,415,000		1,307,106
SUPERVALU, Inc., 8.000%, due 05/01/16		300,000		291,000
Tenneco, Inc., Series B, 10.250%, due 07/15/13		310,000		293,725
Terremark Worldwide, Inc., 12.000%, due 06/15/17(1)		170,000		163,200
Tesoro Corp., 9.750%, due 06/01/19		75,000		74,063
Texas Competitive Electric Holdings Co. LLC, Series A, 10.250%, due 11/01/15(4)		1,660,000		1,033,350
Toll Brothers Finance Corp., 8.910%, due 10/15/17		225,000		230,090

168

UBS High Yield Fund—Portfolio of investments

June 30, 2009

Security description	Face Amount		Value
Bonds—(concluded)
Corporate bonds—(concluded)
United States—(concluded)
TRW Automotive, Inc., 7.000%, due 03/15/14(1)	$	290,000	$	208,800
Tube City IMS Corp., 9.750%, due 02/01/15		1,725,000		1,056,562
Tunica-Biloxi Gaming Authority, 9.000%, due 11/15/15(1)		600,000		528,000
Tyson Foods, Inc., 10.500%, due 03/01/14(1)		175,000		189,875
United Rentals North America, Inc., 7.750%, due 11/15/13		1,975,000		1,698,500
Universal Hospital Services, Inc., 8.500%, due 06/01/15(5)		130,000		122,525
Univision Communications, Inc., 9.750%, due 03/15/15(1),(5)		400,000		233,000
US Concrete, Inc., 8.375%, due 04/01/14		460,000		301,300
US Oncology, Inc., 9.125%, due 08/15/17(1)		200,000		198,500
Vanguard Health Holding Co. II LLC, 9.000%, due 10/01/14		690,000		660,675
Verso Paper Holdings LLC / Verso Paper, Inc., 11.500%, due 07/01/14(1)		60,000		54,900
Series B, 9.125%, due 08/01/14		70,000		32,550
Vertis, Inc., 13.500%, due 04/01/14(5),(7)		178,482		892
West Corp., 11.000%, due 10/15/16		300,000		250,500
Western Refining, Inc., 11.250%, due 06/15/17(1)		100,000		88,750
Whiting Petroleum Corp., 7.250%, due 05/01/12		650,000		622,375
Wind Acquisition Finance SA, 10.750%, due 12/01/15(1)		250,000		250,000
Windstream Corp., 8.625%, due 08/01/16		425,000		406,937
WMG Acquisition Corp., 9.500%, due 06/15/16(1)		460,000		457,700
Xerox Capital Trust I, 8.000%, due 02/01/27		560,000		425,600
Yankee Acquisition Corp., Series B, 8.500%, due 02/15/15		720,000		606,600
Total United States corporate bonds				95,011,384
Total corporate bonds (cost $103,978,210)				100,852,911

Security description	Face Amount		Value
Asset-backed securities—0.23%
United States—0.23%
Asset Backed Funding Certificates, Series 2006-OPT3, Class A3A, 0.374%, due 11/25/36(2)	$	70,603	$	67,488
Citibank Credit Card Issuance Trust, Series 2006-C4, Class C4, 0.538%, due 01/09/12(2)		100,000		98,395
Countrywide Asset-Backed Certificates, Series 2006-20, Class 2A1, 0.364%, due 04/25/47(2)		69,143		64,599
Wells Fargo Home Equity Trust, Series 2005-3, Class AII2, 0.554%, due 11/25/35(2)		24,009		23,683
Total asset-backed securities (cost $245,184)				254,165
Total bonds (cost $104,223,394)				101,107,076
	Shares
Preferred stocks—0.15%
United States—0.15%
Diversified financial services—0.15%
Preferred Blocker, Inc. 7.000%(1),(8)		376		161,704
Media—0.00%(9)
CMP Susquehanna Radio Holdings Corp., Series A*(2),(3),(6),(7),(10)		11,661		117
Total preferred stocks (cost $324,203)				161,821
Common stocks—0.03%
United States—0.03%
Aerospace & defense—0.00%
Sabreliner Corp.*(6)		8,400		0
Advertising—0.00%
Vertis Holdings, Inc.*(6),(7)		8,952		0
Hotels, restaurants & leisure—0.00%
American Restaurant Group, Inc.*(6)		972		0
Media—0.03%
Knology, Inc.*		3,926		33,881
Total common stocks (cost $153,000)				33,881

169

UBS High Yield Fund—Portfolio of investments

June 30, 2009

Security description	Number of Warrants		Value
Warrants—0.00%(9)
CNB Capital Trust I, strike @ $0.01, expires 03/26/19*(6),(7)		13,325	$	133
Pliant Corp., strike @ $0.01, expires 06/01/10*(6),(7),(10)		1		0
Total warrants (cost $135)				133

Security description	Units		Value
Short-term investment—6.24%
Investment company—6.24%
UBS Cash Management Prime Relationship Fund, 0.384%(11),(12) (cost $6,815,672)		6,815,672	$	6,815,672
Total investments—98.96% (cost $111,516,404)				108,118,583
Cash and other assets, less liabilities—1.04%				1,133,525
Net assets—100.00%			$	109,252,108

Notes to portfolio of investments

Aggregate cost for federal income tax purposes, was $111,741,241; and net unrealized depreciation consisted of:

Gross unrealized appreciation	$	4,756,345
Gross unrealized depreciation		(8,379,003	)
Net unrealized depreciation of investments	$	(3,622,658	)

*  Non-income producing security.

⁽¹⁾  Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities are considered liquid, unless noted otherwise, and may be resold in transactions exempt from registration, normally to qualified institutional buyers. At June 30, 2009, the value of these securities amounted to $20,122,031 or 18.42% of net assets.

⁽²⁾  Floating rate security—The interest rates shown are the current rates as of June 30, 2009.

⁽³⁾  Perpetual bond security. The maturity date reflects the next call date.

⁽⁴⁾  Step bond—Coupon rate increases in increments to maturity. Rate disclosed is as of June 30, 2009. Maturity date disclosed is the ultimate maturity date.

⁽⁵⁾  PIK—Payment-in kind security. Income may be paid in cash or additional notes, at the discretion of the issuer.

⁽⁶⁾  Security is being fair valued by a valuation committee under the direction of the Board of Trustees. At June 30, 2009, the value of these securities amounted to $23,250 or 0.02% of net assets.

⁽⁷⁾  Security is illiquid. At June 30, 2009, these securities amounted to $1,142 or 0.00% of net assets.

⁽⁸⁾  Security is a multi-coupon preferred stock that had a coupon reset date of January 16, 2009 of 7.000% fixed until its end date of December 31, 2049. This security is subject to a perpetual call and may be called in full or partially on or anytime after December 31, 2011.

⁽⁹⁾  Amount represents less than 0.005%.

⁽¹⁰⁾  Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities, which represent 0.00% if net assets as of June 30, 2009, are considered illiquid and restricted (See restricted securities table below for more information.)

Restricted securities	Acquisition dates	Acquisition cost		Acquisition cost as a percentage of net assets			06/30/09 Market value		06/30/09 Market value as a percentage of net assets
CMP Susquehanna Radio Holdings Corp., Series A, due 12/31/10	03/30/09	$	135		0.00	%(a)	$	117		0.00	%(a)
Pliant Corp., strike @ $0.01, expires 06/01/10	10/20/00		0		0.00			0		0.00
		$	135		0.00	%(a)	$	117		0.00	%(a)

^(a)  Amount represents less than 0.005%.

170

UBS High Yield Fund—Portfolio of investments

June 30, 2009

⁽¹¹⁾  Investment in affiliated mutual fund.

⁽¹²⁾  The rate shown reflects the yield at June 30, 2009.

GMAC  General Motors Acceptance Corp.

The following is a summary of the inputs used as of June 30, 2009 in valuing the Fund's investments.

Measurements at 06/30/09
Description	Quoted prices in active markets for identical investments (Level 1)		Significant other observable inputs (Level 2)		Unobservable inputs (Level 3)		Total
Corporate bonds	$	—	$	100,829,019	$	23,892	$	100,852,911
Asset-backed securities		—		254,165		—		254,165
Preferred stocks		—		161,704		117		161,821
Common stocks		33,881		—		—		33,881
Warrants		—		—		133		133
Short-term investment		—		6,815,672		—		6,815,672
Total	$	33,881	$	108,060,560	$	24,142	$	108,118,583

Level 3 Rollforward Disclosure

The following is a rollforward of the Fund's investments that were valued using unobservable inputs for the period:

Measurements using unobservable inputs (Level 3)
	Corporate bonds			Warrants			Preferred Stocks			Total
Assets
Beginning balance	$	—		$	—		$	—		$	—
Total gains or losses (realized/unrealized) included in earnings(a)		(593,198	)		—			—			(593,198	)
Purchases, sales, issuances, and settlements (net)		594,090			—			—			594,090
Transfers in and/or out of Level 3		23,000			133			117			23,250
Ending balance	$	23,892		$	133		$	117		$	24,142
The amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to investments still held at 06/30/09	$	(957,265	)	$	(2	)	$	(18	)	$	(957,285	)

^(a)  Does not include unrealized gains of ($414,407) related to transferred assets, presented at their end of period values.

See accompanying notes to financial statements.
171

UBS U.S. Bond Fund

Portfolio performance

For the 12 months ended June 30, 2009, Class A shares of UBS U.S. Bond Fund (the "Fund") declined 3.29% (Class A shares declined 7.63% after the deduction of the maximum sales charge), while Class Y shares declined 3.15%. The Fund's benchmark, the Barclays Capital US Aggregate Index (formerly known as the Lehman Brothers US Aggregate Index, the "Index"), returned 6.05% over the same time period. Class Y shares have lower expenses than other share classes of the Fund. Returns for all share classes over various time periods are shown on page 174; please note that the Fund's returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares, while the Index returns do not reflect the deduction of fees and expenses.) For a detailed commentary on the market environment in general during the reporting period, see page 2.

The Fund's underperformance occurred during the first half of the reporting period as its exposure to non-agency mortgage-backed securities significantly detracted from results. We largely eliminated this position in 2008. While the Fund outperformed the Index during the second half of the reporting period, it was not enough to overcome its earlier weak results.

Striving to improve the Fund's performance

As the Fund's performance shows, the first half of the reporting period proved to be an exceptionally challenging one. Given periods of extreme risk aversion, many investors flocked to the safety of US Treasury securities, driving their yields lower and prices higher. In contrast, non-Treasury sectors (also known as spread sectors) generated extremely poor results during the first half of the period. This was especially true during periods of indiscriminate selling that occurred when overleveraged investors were forced to sell securities into a highly illiquid market.

We carefully analyzed the drivers of performance and took a number of steps in an effort to reposition the Fund to face the ongoing challenges in the marketplace and to take advantage of what we believed were compelling opportunities. We believe that our efforts began to be reflected in the second half of the reporting period.

These steps included:

•  Bringing on board investment professionals who we believe have high-caliber expertise and track records of success in addressing some of the recent issues in the marketplace, and who sought to position the Fund to help it benefit from a market recovery.

•  Increasing the depth of our analyst teams, including making sweeping changes to our securitized debt team, which entailed replacing analysts and increasing headcount to create a stronger analytical platform.

•  Placing added emphasis on top-down macro analysis, and incorporating it into our investments as a result of lessons learned from recent market events. Our goal is to better understand secular forces that could have an impact on our bond portfolios. Given these changes, it is our firm belief that the Fund is better positioned to deliver the type of consistent, risk-adjusted results that will reward its shareholders over time.

172

UBS U.S. Bond Fund

Portfolio performance summary

What worked

•  The Fund's out-of-Index exposure to inflation-linked bonds contributed to performance during the reporting period. During the first half of the reporting period, Treasury inflation-protected securities (TIPS) performed poorly. We viewed this weakness as an opportunity to increase the Fund's TIPS exposure given our expectations for future inflation. This benefited the Fund's performance as TIPS rallied during the second half of the reporting period as fears of deflation gave way to concerns regarding rising inflation. This change in sentiment was triggered by signs that the economy may be bottoming, as well as by rising commodity prices and the potential inflationary impact of the US government's stimulus programs.

What didn't work

•  The Fund's exposure to nonagency mortgage-backed securities significantly detracted from performance. Early in the reporting period, the Fund had a meaningful exposure to nonagency mortgage-backed securities (MBS).⁽¹⁾ These securities historically performed similarly to agency securities. However, due to ongoing weakness in the US housing market, illiquidity and a lack of government support, nonagency MBS substantially lagged their agency counterparts during the first half of the reporting period. During this time, we transitioned away from nonagency MBS and added to agency mortgage exposure.

•  Overall, exposure to commercial mortgage-backed securities (CMBS) was a drag on performance. During the first half of the reporting period, CMBS exposure detracted from performance as these securities were dragged down by heightened risk aversion and fears that the weak economy would negatively affect the commercial real estate market. We selectively increased the Fund's exposure to AAA-rated securities, as we felt they were attractively valued.⁽²⁾ While the CMBS sector subsequently rallied and contributed to the Fund's performance during the second half of the reporting period, the sector modestly detracted from performance over the 12-month period as a whole.

⁽¹⁾  These securities are generally considered liquid and high quality, but are not government guaranteed.

⁽²⁾  AAA is the highest rating assigned by Standard & Poor's Ratings Group to a debt obligation and indicates an extremely strong capacity to pay principal and interest.

This letter is intended to assist shareholders in understanding how the Fund performed during the 12 months ended June 30, 2009. The views and opinions in the letter were current as of August 17, 2009. They are not guarantees of performance or investment results and should not be taken as investment advice. Investment decisions reflect a variety of factors, and we reserve the right to change our views about individual securities, sectors and markets at any time. As a result, the views expressed should not be relied upon as a forecast of the Fund's future investment intent. We encourage you to consult your financial advisor regarding your personal investment program. Mutual funds are sold by prospectus only. You should read it carefully and consider a fund's investment objectives, risks, charges, expenses and other important information contained in the prospectus before investing. Prospectuses for most of our funds can be obtained from your financial advisor, by calling UBS Funds at 800-647 1568 or by visiting our Web site at www.ubs.com

173

UBS U.S. Bond Fund

Average annual total returns for periods ended 06/30/09 (unaudited)

		1 year			5 years			10 years			Inception(1)
Before deducting	Class A(2)		(3.29	)%		(0.19	)%		2.98	%		3.56	%
maximum sales charge	Class B(3)		(4.01	)		(0.94	)		N/A			0.60
	Class C(4)		(3.76	)		(0.70	)		N/A			0.67
	Class Y(5)		(3.15	)		0.04			3.24			4.17
After deducting maximum	Class A(2)		(7.63	)		(1.11	)		2.50			3.17
sales charge	Class B(3)		(8.48	)		(1.26	)		N/A			0.60
	Class C(4)		(4.43	)		(0.70	)		N/A			0.67
Barclays Capital US Aggregate Index(6)			6.05			5.01			5.98			6.18

The annualized gross and net expense ratios, respectively, for each class of shares as in the October 28, 2008 prospectuses were as follows: Class A—1.06% and 0.89%; Class B—1.95% and 1.64%; Class C—1.62% and 1.39%; Class Y—0.82% and 0.64%. Net expenses reflect fee waivers and/or expense reimbursements, if any, pursuant to an agreement that is in effect to cap the expenses. The Trust, with respect to the Fund, and the Advisor have entered into a written agreement pursuant to which the Advisor has agreed to waive a portion of its management fees and/or to reimburse expenses (excluding expenses incurred through investment in other investment companies and interest expense) to the extent necessary so that the Fund's operating expenses (excluding expenses incurred through investment in other investment companies and interest expense), through the fiscal year ending June 30, 2009, do not exceed 0.85% for Class A s hares, 1.60% for Class B shares, 1.35% for Class C shares and 0.60% for Class Y shares. Pursuant to the written agreement, the Advisor is entitled to be reimbursed for any fees it waives and expenses it reimburses for a period of three years following such fee waivers and expense reimbursements, to the extent that such reimbursement of the Advisor by the Fund will not cause the Fund to exceed any applicable expense limit that is in place for the Fund.

⁽¹⁾  Inception date of UBS U.S. Bond Fund Class A shares is June 30, 1997. Inception dates of Class B and Class C shares are November 6, 2001 and November 8, 2001, respectively. Inception date of Class Y shares and the index is August 31,1995.

⁽²⁾  Maximum sales charge for Class A shares is 4.5%. Class A shares bear ongoing 12b-1 service fees.

⁽³⁾  Maximum contingent deferred sales charge for Class B shares is 5% imposed on redemptions and is reduced to 0% after a maximum of six years. Class B shares bear ongoing 12b-1 service and distribution fees.

⁽⁴⁾  Maximum contingent deferred sales charge for Class C shares is 0.75% imposed on redemptions and is reduced to 0% after one year. Class C shares bear ongoing 12b-1 service and distribution fees.

⁽⁵⁾  The Portfolio offers Class Y shares to a limited group of eligible investors, including certain qualifying retirement plans. Class Y shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees.

⁽⁶⁾  The Barclays Capital US Aggregate Index (formerly known as the Lehman Brothers US Aggregate Index) is an unmanaged index of the USD-denominated, investment-grade, fixed rate, taxable bond market of SEC-regulated securities. The index includes bonds from the treasury, government-related, corporate, mortgage-backed, asset-backed and commercial-backed sectors. US agency hybrid adjustable rate mortgage (ARM) securities were added to the index on April 1, 2007. Investors should note that indices do not reflect the deduction of fees, expenses or taxes.

If an investor sells or exchanges shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged will be deducted at the time of the transaction, except as noted otherwise in the prospectus.

Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://www.ubs.com.

174

UBS U.S. Bond Fund

Illustration of an assumed investment of $10,000 in Class A shares (adjusted for 4.50% maximum

sales charge) and $10,000,000 in Class Y shares (unaudited)

The following two graphs depict the performance of UBS U.S. Bond Fund Class A and Class Y shares versus the Barclays Capital US Aggregate Index (formerly known as the Lehman Brothers US Aggregate Index) over the 10 years ended June 30, 2009. The performance of Class B and Class C shares will vary based upon the different inception dates, class specific expenses and sales charges. No adjustment has been made for any income taxes payable by shareholders on income dividends and capital gain distributions. Past performance is no guarantee of future results. Share price and returns will vary with market conditions; investors may realize a gain or loss upon redemption.

UBS U.S. Bond Fund Class A vs. Barclays Capital US Aggregate Index

Wealth value with dividends reinvested

The Fund's growth of an assumed $10,000 investment is adjusted for the maximum sales charge of 4.50%.

UBS U.S. Bond Fund Class Y vs. Barclays Capital US Aggregate Index

Wealth value with dividends reinvested

Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://www.ubs.com.

175

UBS U.S. Bond Fund

Top ten long-term fixed income holdings

(unaudited)⁽¹⁾

As of June 30, 2009

	Percentage of net assets
US Treasury Notes, 2.250%, due 05/31/14		6.8	%
Federal National Mortgage Association, 5.000%, TBA		3.6
US Treasury Notes, 3.125%, due 05/15/19		3.0
Federal National Mortgage Association Pools, #948631, 6.000%, due 08/01/37		2.9
Federal National Mortgage Association Pools, #AA0460, 5.000%, due 02/01/39		2.9
Federal Home Loan Mortgage Corp. Gold Pools, #G08307, 5.000%, due 11/01/38		2.6
Federal National Mortgage Association, 2.750%, due 03/13/14		2.6
Federal National Mortgage Association Pools, #888016, 5.500%, due 05/01/36		2.1
Federal Home Loan Mortgage Corp. Pools, 5.000%, due 01/01/39		2.0
Federal Home Loan Bank, #G05249, 5.000%, due 11/17/17		2.0
Total		30.5	%

⁽¹⁾  Figures represent the direct investments of the UBS U.S. Bond Fund. Figures could be different if a breakdown of the underlying investment company was included.

176

UBS U.S. Bond Fund

Industry diversification (unaudited)⁽²⁾

As a percentage of net assets as of June 30, 2009

Bonds Corporate bonds
Aerospace & defense	0.20	%
Capital markets	0.30
Chemicals	0.10
Commercial banks	0.65
Commercial services & supplies	0.15
Consumer finance	0.09
Diversified financial services	0.79
Diversified telecommunication services	0.18
Electric utilities	0.15
Food products	0.11
Household products	0.19
Insurance	0.27
Media	0.13
Metals & mining	0.16
Oil, gas & consumable fuels	0.24
Pharmaceuticals	0.10
Pipelines	0.16
Real estate investment trusts (REITs)	0.05
Road & rail	0.05
Software	0.13
Tobacco	0.05
Wireless telecommunication services	0.07
Total corporate bonds	4.32
Asset-backed securities	4.17
Commercial mortgage-backed securities	10.61
Mortgage & agency debt securities	45.26
US government obligations	12.51
Total bonds	76.87
Investment companies
UBS Corporate Bond Relationship Fund	18.05	%
UBS High Yield Relationship Fund	1.79
UBS U.S. Treasury Inflation Protected Securities Relationship Fund	1.46
Total investment companies	21.30
Short-term investment	4.31
Investment of cash collateral from securities loaned	1.93
Total investments	104.41
Liabilities, in excess of cash and other assets	(4.41	)
Net assets	100.00	%

⁽²⁾  Figures represent the industry breakdown of direct investments of the UBS U.S. Bond Fund. Figures would be different if a breakdown of the underlying investment companies' industry diversification was included.

177

UBS U.S. Bond Fund—Portfolio of investments

June 30, 2009

Security description	Face amount		Value
Bonds—76.87%
Corporate bonds—4.32%
Bermuda—0.10%
Qtel International Finance Ltd., 6.500%, due 06/10/14(1)	$	65,000	$	66,066
France—0.08%
France Telecom SA, 4.375%, due 07/08/14		50,000		50,389
United Kingdom—0.38%
Anglo American Capital plc, 9.375%, due 04/08/19(1)		100,000		108,000
Barclays Bank PLC, 6.750%, due 05/22/19		100,000		99,177
Vodafone Group PLC, 5.450%, due 06/10/19		50,000		49,168
Total United Kingdom corporate bonds				256,345
United States—3.76%
Allstate Corp., 7.450%, due 05/16/19		55,000		59,502
Altria Group, Inc., 9.950%, due 11/10/38		30,000		34,630
Anadarko Petroleum Corp., 6.450%, due 09/15/36		75,000		67,419
Appalachian Power Co., 7.950%, due 01/15/20		30,000		34,589
BAE Systems Holdings, Inc., 4.950%, due 06/01/14(1)		65,000		65,334
Bank of America Corp., 7.625%, due 06/01/19		100,000		100,446
Browning-Ferris Industries, Inc., 7.400%, due 09/15/35		35,000		32,774
Capital One Financial Corp., 7.375%, due 05/23/14		55,000		56,715
CenterPoint Energy Resources Corp., 6.000%, due 05/15/18		115,000		104,515
Citibank NA, 1.500%, due 07/12/11		335,000		335,866
Citigroup, Inc., 6.125%, due 05/15/18		265,000		231,785
ERAC USA Finance Co., 7.000%, due 10/15/37(1)		85,000		67,599
Express Scripts, Inc., 6.250%, due 06/15/14		65,000		68,777
Fortune Brands, Inc., 6.375%, due 06/15/14		130,000		129,260
Goldman Sachs Group, Inc., 7.500%, due 02/15/19		90,000		96,370
JPMorgan Chase & Co., 6.300%, due 04/23/19		100,000		100,582
Kellogg Co., 4.450%, due 05/30/16		70,000		70,059
Massachusetts Mutual Life Insurance Co., 8.875%, due 06/01/39(1)		50,000		53,095

Security description	Face amount		Value
United States—(concluded)
Microsoft Corp., 5.200%, due 06/01/39	$	35,000	$	34,065
Morgan Stanley, 6.625%, due 04/01/18		200,000		199,381
Mosaic Co., 7.375%, due 12/01/14(1)		65,000		66,950
News America, Inc., 6.200%, due 12/15/34		35,000		29,879
Nisource Finance Corp., 10.750%, due 03/15/16		30,000		33,276
Norfolk Southern Corp., 5.900%, due 06/15/19		35,000		36,273
Northrop Grumman Systems Corp., 7.875%, due 03/01/26		55,000		65,070
Oracle Corp., 6.125%, due 07/08/39		55,000		54,634
Pacific Gas & Electric Co., 6.050%, due 03/01/34		30,000		31,123
Pemex Project Funding Master Trust, 5.750%, due 03/01/18		100,000		92,000
Prudential Financial, Inc., 7.375%, due 06/15/19		35,000		34,364
Simon Property Group LP, 5.375%, due 06/01/11		35,000		35,080
Time Warner Cable, Inc., 6.550%, due 05/01/37		65,000		62,326
Travelers Cos., Inc., 6.250%, due 06/15/37		35,000		36,247
Total United States corporate bonds				2,519,985
Total corporate bonds (cost $2,854,129)				2,892,785
Asset-backed securities—4.17%
United States—4.17%
American Express Credit Account Master Trust, Series 2006-1, Class C, 0.599%, due 12/15/13(1),(2)		325,000		295,527
Ameriquest Mortgage Securities, Inc., Series 2005-R6, Class A2, 0.514%, due 08/25/35(2)		103,537		87,591
Asset Backed Funding Certificates , Series 2006-OPT3, Class A3A, 0.374%, due 11/25/36(2)		125,160		119,637
Chase Issuance Trust, Series 2005-C2, Class C2, 0.759%, due 01/15/15(2)		225,000		196,099
Citibank Credit Card Issuance Trust, Series 2006-C4, Class C4, 0.538%, due 01/09/12(2)		175,000		172,192

178

UBS U.S. Bond Fund—Portfolio of investments

June 30, 2009

Security description	Face amount		Value
Bonds—(continued)
Asset-backed securities—(concluded)
United States—(continued)
Conseco Finance, Series 2001-D, Class M2, 2.069%, due 11/15/32(2)	$	465,340	$	87,329
Countrywide Asset-Backed Certificates, Series 2006-20, Class 2A1, 0.364%, due 04/25/47(2)		73,465		68,637
Series 2004-SD1, Class A1, 0.654%, due 06/25/33(1),(2)		76,268		49,452
Ford Credit Auto Owner Trust, Series 2007-B, Class A3A, 5.150%, due 11/15/11		190,000		194,817
GSAMP Trust, Series 2006-S3, Class A1, 6.085%, due 05/25/36(3)		632,828		52,898
MBNA Credit Card Master Note Trust, Series 2006-B1, Class B1, 0.539%, due 07/15/15(2)		300,000		263,378
Series 2002-C1, Class C1, 6.800%, due 07/15/14		350,000		340,134
MBNA Master Credit Card Trust, Series 1997-B, Class A, 0.479%, due 08/15/14(2)		275,000		265,043
Series 2001-B, Class C, 7.250%, due 08/15/13(1)		100,000		99,741
Merrill Lynch First Franklin Mortgage Loan Trust, Series 2007-A, Class A1, 1.414%, due 10/25/27(2)		70,318		64,946
Merrill Lynch Mortgage Investors, Inc., Series 2006-SL1, Class A, 0.494%, due 09/25/36(2)		70,396		14,695
Morgan Stanley ABS Capital I, Series 2006-HE6, Class A2A, 0.354%, due 09/25/36(2)		66,957		65,046
Renaissance Home Equity Loan Trust, Series 2006-4, Class AF1, 5.545%, due 01/25/37(3)		92,189		89,271
Residential Asset Mortgage Products, Inc., Series 2006-RZ5, Class A1B, 0.414%, due 08/25/46(2)		63,533		60,603
Residential Asset Securities Corp., Series 2006-KS9, Class AI1, 0.384%, due 11/25/36(2)		49,079		48,420
SACO I Trust, Series 2006-3, Class A1, 0.494%, due 04/25/36(2)		150,111		22,376

Security description	Face amount		Value
United States—(concluded)
Structured Asset Investment Loan Trust, Series 2005-7, Class A4, 0.504%, due 08/25/35(2)	$	59,544	$	58,137
Structured Asset Securities Corp., Series 2005-S7, Class A2, 0.614%, due 12/25/35(1),(2)		326,416		78,989
Total asset-backed securities (cost $3,959,649)				2,794,958
Commercial mortgage-backed securities—10.61%
United States—10.61%
Banc of America Commercial Mortgage, Inc., Series 2006-6, Class A4, 5.356%, due 10/10/45		625,000		492,292
Series 2007-4, Class AM, 6.002%, due 02/10/51(2)		350,000		174,686
Series 2002-PB2, Class C, 6.349%, due 06/11/35		945,000		840,042
Bear Stearns Commercial Mortgage Securities Trust, Series 2006-PW12, Class A4, 5.903%, due 09/11/38(2)		300,000		260,902
Series 2000-WF2, Class A2, 7.320%, due 10/15/32(2)		189,725		194,314
Citigroup Commercial Mortgage Trust, Series 2007-C6, Class AM, 5.888%, due 12/10/49(2)		970,000		521,956
Citigroup/Deutsche Bank Commercial Mortgage Trust, Series 2006-CD3, Class A2, 5.560%, due 10/15/48		325,000		303,813
Greenwich Capital Commercial Funding Corp., Series 2007-GG9, Class A4, 5.444%, due 03/10/39		600,000		478,269
GS Mortgage Securities Corp. II, Series 2006-GG8, Class A2, 5.479%, due 11/10/39		190,000		177,341
Series 2006-GG6, Class A2, 5.506%, due 04/10/38(2)		200,000		193,708
Series 2006-CC1, Class A, 5.507%, due 03/21/46(2),(4),(5)		486,294		72,944
Series 2006-GG6, Class AM, 5.622%, due 04/10/38(2)		450,000		260,699
Series 2007-GG10, Class A2, 5.778%, due 08/10/45(2)		350,000		324,692
Series 2007-GG10, Class A4, 5.993%, due 08/10/45(2)		1,515,000		1,144,841
JPMorgan Chase Commercial Alternative Mortgage Product, Series 2006-CB17, Class A4, 5.429%, due 12/12/43		650,000		525,479

179

UBS U.S. Bond Fund—Portfolio of investments

June 30, 2009

Security description	Face amount		Value
Bonds—(continued)
Commercial mortgage-backed securities—(concluded)
United States—(concluded)
Merrill Lynch/Countrywide Commercial Mortgage Trust, Series 2006-3, Class B, 5.525%, due 07/12/46(2)	$	300,000	$	39,750
Salomon Brothers Mortgage Securities VII, Inc., Series 2000-C1, Class A2, 7.520%, due 12/18/09(2)		634,840		638,730
Wachovia Bank Commercial Mortgage Trust, Series 2006-C23, Class AM, 5.466%, due 01/15/45(2)		475,000		271,298
Series 2006-C27, Class A2, 5.624%, due 07/15/45		200,000		186,947
Total commercial mortgage-backed securities (cost $7,785,253)				7,102,703
Mortgage & agency debt securities—45.26%
United States—45.26%
American Home Mortgage Investment Trust, Series 2006-3, Class 4A, 0.504%, due 11/25/35(2)		139,331		27,002
Federal Home Loan Bank, 5.000%, due 11/17/17		1,250,000		1,330,143
Federal Home Loan Mortgage Corp.,† 2.500%, due 04/23/14		800,000		787,335
3.750%, due 03/27/19		750,000		736,983
4.500%, TBA		325,000		323,477
5.000%, TBA		775,000		788,078
Federal Home Loan Mortgage Corp. Gold Pools,† #G05249, 5.000%, due 01/01/39		1,317,676		1,342,051
#G08307, 5.000%, due 11/01/38		1,712,014		1,743,684
#G04121, 5.500%, due 04/01/38		1,235,273		1,276,951
#G04458, 5.500%, due 06/01/38		741,572		766,551
#G04567, 5.500%, due 07/01/38		779,061		805,302
#C63008, 6.000%, due 01/01/32		528,544		556,468
#G01717, 6.500%, due 11/01/29		222,232		238,869
#G01449, 7.000%, due 07/01/32		503,126		546,154

Security description	Face amount		Value
United States—(continued)
Federal National Mortgage Association,† 1.875%, due 04/20/12(6)	$	1,280,000	$	1,285,204
2.500%, due 05/15/14		50,000		49,154
2.750%, due 03/13/14(6)		1,725,000		1,721,309
2.875%, due 12/11/13(6)		325,000		327,669
4.500%, TBA		690,000		688,490
5.000%, TBA		2,350,000		2,392,594
5.250%, due 08/01/12		165,000		171,451
Federal National Mortgage Association Pools,† #AA4319, 4.500%, due 04/01/39		734,651		734,070
#AA0460, 5.000%, due 02/01/39		1,887,777		1,925,057
#576764, 5.500%, due 09/01/24		150,398		156,949
#688314, 5.500%, due 03/01/33		427,225		445,281
#688066, 5.500%, due 03/01/33		364,960		380,116
#802481, 5.500%, due 11/01/34		688,658		715,839
#888016, 5.500%, due 05/01/36		1,361,578		1,410,709
#545015, 6.000%, due 06/01/16		753,990		803,895
#408267, 6.000%, due 03/01/28		38,568		40,794
#323715, 6.000%, due 05/01/29		42,105		44,527
#522564, 6.000%, due 07/01/29		150,192		158,343
#676733, 6.000%, due 01/01/33		320,931		340,538
#708631, 6.000%, due 06/01/33		60,213		63,955
#948631, 6.000%, due 08/01/37		1,847,128		1,933,171
#988988, 6.000%, due 09/01/38		203,876		213,330
#990740, 6.000%, due 09/01/38		1,008,757		1,055,532
#831730, 6.500%, due 09/01/36		550,000		586,706
#253824, 7.000%, due 03/01/31		11,902		13,096
#619809, 7.000%, due 11/01/31		60,581		66,369
Federal National Mortgage Association Whole Loan,† Series 1995-W3, Class A, 9.000%, due 04/25/25		1,748		1,787

180

UBS U.S. Bond Fund—Portfolio of investments

June 30, 2009

Security description	Face amount		Value
Bonds—(concluded)
Mortgage & agency debt securities—(concluded)
United States—(concluded)
First Horizon Asset Securities, Inc., Series 2004-FL1, Class 1A1, 0.584%, due 02/25/35(2)	$	50,057	$	29,351
Government National Mortgage Association Pools, #701813, 4.500%, due 04/15/39		723,086		723,284
#2687, 6.000%, due 12/20/28		49,971		52,282
#2794, 6.000%, due 08/20/29		178,244		186,332
#780204, 7.000%, due 07/15/25		4,375		4,755
IndyMac INDX Mortgage Loan Trust, Series 2005-AR3, Class B1, 4.899%, due 04/25/35(2)		1,093,421		110,289
Residential Asset Securitization Trust, Series 2004-IP2, Class B1, 4.942%, due 12/25/34(2)		677,271		88,045
Residential Funding Mortgage Securities I, Series 2006-S6, Class M2, 6.000%, due 07/25/36		1,319,751		48,398
WaMu Mortgage Pass-Through Certificates, Series 2007-HY1, Class 3B2, 5.876%, due 02/25/37(2)		1,098,752		65,848
Total mortgage & agency debt securities (cost $31,718,577)				30,303,567
US government obligations—12.51%
US Treasury Bonds, 3.500%, due 02/15/39		1,045,000		903,601
US Treasury Notes, 0.875%, due 05/31/11(6)		930,000		926,661
2.250%, due 05/31/14(6)		4,635,000		4,572,706
3.125%, due 05/15/19(6)		2,045,000		1,977,903
Total US government obligations (cost $8,326,811)				8,380,871
Total bonds (cost $54,644,419)				51,474,884

Security description	Units		Value
Investment companies—21.30%
UBS Corporate Bond Relationship Fund*(7)		1,014,977	$	12,088,071
UBS High Yield Relationship Fund*(7)		61,461		1,194,089
UBS U.S. Treasury Inflation Protected Securities Relationship Fund*(7)		85,409		979,715
Total investment companies (cost $13,178,140)				14,261,875
Short-term investment—4.31%
Investment company—4.31%
UBS Cash Management Prime Relationship Fund, 0.384%(7),(8) (cost $2,885,206)		2,885,206		2,885,206
	Shares
Investment of cash collateral from securities loaned—1.93%
UBS Private Money Market Fund LLC, 0.488%(7),(8) (cost $1,292,045)		1,292,045		1,292,045
Total investments—104.41% (cost $71,999,810)				69,914,010
Liabilities, in excess of cash and other assets—(4.41%)				(2,954,654	)
Net assets—100.00%			$	66,959,365

181

UBS U.S. Bond Fund—Portfolio of investments

June 30, 2009

Notes to portfolio of investments

Aggregate cost for federal income tax purposes was $73,930,087; and net unrealized depreciation consisted of:

Gross unrealized appreciation	$	1,460,498
Gross unrealized depreciation		(5,476,575	)
Net unrealized depreciation of investments	$	(4,016,077	)

^†  On September 7, 2008, the Federal Housing Finance Agency placed the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation into conservatorship, and the US Treasury guaranteed the debt issued by those organizations.

*  Non-income producing security.

⁽¹⁾  Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities are considered liquid, unless noted otherwise, and may be resold in transactions exempt from registration, normally to qualified institutional buyers. At June 30, 2009, the value of these securities amounted to $950,753 or 1.42% of net assets.

⁽²⁾  Floating rate security—The interest rates shown are the current rates as of June 30, 2009.

⁽³⁾  Step bond—Coupon rate increases in increments to maturity. Rate disclosed is as of June 30, 2009. Maturity date disclosed is the ultimate maturity date.

⁽⁴⁾  Security exempt from registration under Rule 144A of the Securities Act of 1933. This security, which represents 0.11% of net assets as of June 30, 2009, is considered illiquid and restricted (See restricted security table below for more information.)

Restricted security	Acquisition dates		Acquisition cost		Acquisition cost as a percentage of net assets			06/30/09 Market value		06/30/09 Market value as a percentage of net assets
GS Mortgage Securities Corp. II, Series 2006-CC1, Class A, 5.507%, due 03/21/46		07/19/07	$	465,133		0.69	%	$	72,944		0.11	%

⁽⁵⁾  Security is illiquid. At June 30, 2009, this security amounted to $72,944 or 0.11% of net assets.

⁽⁶⁾  Security, or portion thereof, was on loan at June 30, 2009.

⁽⁷⁾  Investment in affiliated mutual fund.

⁽⁸⁾  The rate shown reflects the yield at June 30, 2009.

ABS  Asset-backed securities

GS  Goldman Sachs

GSAMP  Goldman Sachs Mortgage Securities Corp.

TBA  (To be announced) Security is purchased on a forward commitment basis with an approximate principal amount (generally +/-1.0%) and no definite maturity date. The actual principal amount and maturity date will be determined upon settlement, when the specific mortgage pools are assigned.

Futures contracts

UBS U.S. Bond Fund had the following open futures contracts as of June 30, 2009:

	Expiration dates	Cost/ (proceeds)			Value			Unrealized appreciation/ (depreciation)
US treasury futures buy contracts:
10 Year US Treasury Notes, 103 contracts (USD)	September 2009	$	11,984,377		$	11,975,359		$	(9,018	)
US treasury futures sell contracts:
5 Year US Treasury Notes, 144 contracts (USD)	September 2009		(16,544,019	)		(16,519,500	)		24,519
Net unrealized appreciation on futures contracts								$	15,501

Currency type abbreviation:

USD  United States Dollar

182

UBS U.S. Bond Fund—Portfolio of investments

June 30, 2009

Swap agreements

UBS US Bond Fund had outstanding interest rate swap agreements with the following terms as of June 30, 2009:

Counterparty	Notional amount		Termination dates	Payments made by the Fund			Payments received by the Fund			Upfront payments (made) received		Value			Unrealized appreciation/ (depreciation)
Citigroup Global Markets Limited	USD	10,600,000	08/15/16		4.3400	%(1)		0.88313	%(2)	$	304,316	$	(781,207	)	$	(476,891	)
Credit Suisse	USD	34,900,000	01/13/10		1.13875	(2)		0.31938	(3)		—		1,044			1,044
Deutsche Bank AG	USD	17,500,000	11/30/13		—	(4)		2.9400	(1)		—		18,704			18,704
Deutsche Bank AG	USD	34,900,000	01/13/19		0.31938	(3)		1.13875	(2)		—		138,342			138,342
Merrill Lynch International	USD	37,300,000	01/13/10		1.13875	(2)		0.31938	(3)		—		1,116			1,116
Merrill Lynch International	USD	37,300,000	01/13/19		0.31938	(3)		1.13875	(2)		—		143,853			143,853
										$	304,316	$	(478,148	)	$	(173,832	)

⁽¹⁾  Payments made or received are based on the notional amount.

⁽²⁾  Rate based on 3 month LIBOR (USD BBA).

⁽³⁾  Rate based on 1 month LIBOR (USD BBA).

⁽⁴⁾  Rate based on 3 month LIBOR (USD BBA). This is a forward starting trade and, as such, a floating rate has not yet been assigned as of June 30, 2009.

BBA  British Banking Association

LIBOR  London Interbank Offered Rate

Currency type abbreviation:

USD  United States Dollar

Written option activity for the period ended June 30, 2009 for UBS U.S. Bond Fund was as follows:

	Number of contracts			Amount of premiums received
Options outstanding at June 30, 2008		—		$	—
Options written		699			584,698
Options terminated in closing purchase transactions		(699	)		(584,698	)
Options expired prior to exercise		—			—
Options outstanding at June 30, 2009		—		$	—

The following is a summary of the inputs used as of June 30, 2009 in valuing the Fund's investments.

Measurements at 06/30/09
Description	Quoted prices in active markets for identical investments (Level 1)		Significant other observable inputs (Level 2)			Unobservable inputs (Level 3)		Total
Corporate bonds	$	—	$	2,892,785		$	—	$	2,892,785
Asset-backed securities		—		2,794,958			—		2,794,958
Commercial mortgage-backed securities		—		7,029,759			72,944		7,102,703
Mortgage & agency debt securities		—		30,303,567			—		30,303,567
US government obligations		—		8,380,871			—		8,380,871
Investment companies		—		14,261,875			—		14,261,875
Short-term investment		—		2,885,206			—		2,885,206
Investment of cash collateral from securities loaned		—		1,292,045			—		1,292,045
Other financial instruments(1)		15,501		(173,832	)		—		(158,331	)
Total	$	15,501	$	69,667,234		$	72,944	$	69,755,679

⁽¹⁾  Other financial instruments may include open futures contracts, swaps agreements, options and forward foreign currency contracts.

183

UBS U.S. Bond Fund—Portfolio of investments

June 30, 2009

Level 3 Rollforward Disclosure

The following is a rollforward of the Fund's investments that were valued using unobservable inputs for the period:

Measurements using unobservable inputs (Level 3)
	Commercial mortgage- backed securities			Total
Assets
Beginning balance	$	255,945		$	255,945
Total gains or losses (realized/unrealized) included in earnings(a)		(101,684	)		(101,684	)
Purchases, sales, issuances, and settlements (net)		(154,261	)		(154,261	)
Transfers in and/or out of Level 3		72,944			72,944
Ending balance	$	72,944		$	72,944
The amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to investments still held at 06/30/09	$	274,547		$	274,547

^(a)  Does not include unrealized gains of $274,547 related to transferred assets, presented at their end of period values.

See accompanying notes to financial statements.
184

The UBS Funds

June 30, 2009 (unaudited)

Explanation of expense disclosure (unaudited)

As a shareholder of the Funds, you incur two types of costs: (1) transactional costs (as applicable); including sales charges (loads); and (2) ongoing costs, including management fees; service and/or distribution (12b-1) fees (if applicable); and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in each Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The example below is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2009 to June 30, 2009.

Actual expenses

The first line of each class of shares in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over a period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses paid during period" to estimate the expenses you paid on your account during this period.

Hypothetical example for comparison purposes

The second line for each class of shares in the table below provides information about hypothetical account values and hypothetical expenses based on that Fund's actual expense ratios for each class of shares and an assumed rate of return of 5% per year before expenses, which is not that Fund's actual return for each class of shares. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in a Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs (as applicable), such as sales charges (loads). Therefore, the second line in the table for each class of shares is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

This projection assumes that annualized expense ratios were in effect during the period January 1, 2009 to June 30, 2009.

185

The UBS Funds

June 30, 2009 (unaudited)

	Beginning account value January 1, 2009		Ending account value June 30, 2009			Expenses paid during period* 01/01/09 - 06/30/09			Expense ratio during period
UBS Dynamic Alpha Fund
Class A Actual	$	1,000.00	$	1,070.70		$	9.04	(1)		1.76	%(1)
Hypothetical (5% annual return before expenses)		1,000.00		1,016.07	(1)		8.80	(1)		1.76	%(1)
Class B Actual		1,000.00		1,067.60			12.97	(1)		2.53	%(1)
Hypothetical (5% annual return before expenses)		1,000.00		1,012.25	(1)		12.62	(1)		2.53	%(1)
Class C Actual		1,000.00		1,067.60			12.92	(1)		2.52	%(1)
Hypothetical (5% annual return before expenses)		1,000.00		1,012.30	(1)		12.57	(1)		2.52	%(1)
Class Y Actual		1,000.00		1,069.50			7.59	(1)		1.48	%(1)
Hypothetical (5% annual return before expenses)		1,000.00		1,017.46	(1)		7.40	(1)		1.48	%(1)
UBS Global Allocation Fund
Class A Actual		1,000.00		1,111.40			6.33			1.21	%
Hypothetical (5% annual return before expenses)		1,000.00		1,018.79			6.06			1.21	%
Class B Actual		1,000.00		1,106.50			10.55			2.02	%
Hypothetical (5% annual return before expenses)		1,000.00		1,014.78			10.09			2.02	%
Class C Actual		1,000.00		1,107.10			10.19			1.95	%
Hypothetical (5% annual return before expenses)		1,000.00		1,015.12			9.74			1.95	%
Class Y Actual		1,000.00		1,112.00			4.77			0.91	%
Hypothetical (5% annual return before expenses)		1,000.00		1,020.28			4.56			0.91	%
UBS Global Frontier Fund
Class A Actual		1,000.00		1,115.80			7.34			1.40	%
Hypothetical (5% annual return before expenses)		1,000.00		1,017.85			7.00			1.40	%
Class C Actual		1,000.00		1,111.60			11.26			2.15	%
Hypothetical (5% annual return before expenses)		1,000.00		1,014.13			10.74			2.15	%
Class Y Actual		1,000.00		1,117.80			6.04			1.15	%
Hypothetical (5% annual return before expenses)		1,000.00		1,019.09			5.76			1.15	%
UBS Global Equity Fund
Class A Actual		1,000.00		1,145.30			6.65			1.25	%
Hypothetical (5% annual return before expenses)		1,000.00		1,018.60			6.26			1.25	%
Class B Actual		1,000.00		1,141.30			10.62			2.00	%
Hypothetical (5% annual return before expenses)		1,000.00		1,014.88			9.99			2.00	%
Class C Actual		1,000.00		1,141.30			10.62			2.00	%
Hypothetical (5% annual return before expenses)		1,000.00		1,014.88			9.99			2.00	%
Class Y Actual		1,000.00		1,146.70			5.32			1.00	%
Hypothetical (5% annual return before expenses)		1,000.00		1,019.84			5.01			1.00	%

⁽¹⁾  Amounts have been restated to reflect interest and dividend expense for securities sold short.

186

The UBS Funds

June 30, 2009 (unaudited)

	Beginning account value January 1, 2009		Ending account value June 30, 2009		Expenses paid during period* 01/01/09 - 06/30/09		Expense ratio during period
UBS International Equity Fund
Class A Actual	$	1,000.00	$	1,136.80	$	6.62		1.25	%
Hypothetical (5% annual return before expenses)		1,000.00		1,018.60		6.26		1.25	%
Class B Actual		1,000.00		1,132.60		10.58		2.00	%
Hypothetical (5% annual return before expenses)		1,000.00		1,014.88		9.99		2.00	%
Class C Actual		1,000.00		1,132.10		10.57		2.00	%
Hypothetical (5% annual return before expenses)		1,000.00		1,014.88		9.99		2.00	%
Class Y Actual		1,000.00		1,138.10		5.30		1.00	%
Hypothetical (5% annual return before expenses)		1,000.00		1,019.84		5.01		1.00	%
UBS U.S. Equity Alpha Fund
Class A Actual		1,000.00		1,082.30		12.49		2.42	%
Hypothetical (5% annual return before expenses)		1,000.00		1,012.79		12.08		2.42	%
Class C Actual		1,000.00		1,078.90		16.34		3.17	%
Hypothetical (5% annual return before expenses)		1,000.00		1,009.07		15.79		3.17	%
Class Y Actual		1,000.00		1,086.20		11.85		2.29	%
Hypothetical (5% annual return before expenses)		1,000.00		1,013.44		11.43		2.29	%
UBS U.S. Large Cap Equity Fund
Class A Actual		1,000.00		1,062.00		6.39		1.25	%
Hypothetical (5% annual return before expenses)		1,000.00		1,018.60		6.26		1.25	%
Class B Actual		1,000.00		1,057.90		10.26		2.01	%
Hypothetical (5% annual return before expenses)		1,000.00		1,014.83		10.04		2.01	%
Class C Actual		1,000.00		1,057.90		9.75		1.91	%
Hypothetical (5% annual return before expenses)		1,000.00		1,015.32		9.54		1.91	%
Class Y Actual		1,000.00		1,064.10		5.07		0.99	%
Hypothetical (5% annual return before expenses)		1,000.00		1,019.89		4.96		0.99	%
UBS U.S. Large Cap Growth Fund
Class A Actual		1,000.00		1,173.90		5.66		1.05	%
Hypothetical (5% annual return before expenses)		1,000.00		1,019.59		5.26		1.05	%
Class B Actual		1,000.00		1,168.40		9.68		1.80	%
Hypothetical (5% annual return before expenses)		1,000.00		1,015.87		9.00		1.80	%
Class C Actual		1,000.00		1,168.10		9.68		1.80	%
Hypothetical (5% annual return before expenses)		1,000.00		1,015.87		9.00		1.80	%
Class Y Actual		1,000.00		1,174.60		4.31		0.80	%
Hypothetical (5% annual return before expenses)		1,000.00		1,020.83		4.01		0.80	%

187

The UBS Funds

June 30, 2009 (unaudited)

	Beginning account value January 1, 2009		Ending account value June 30, 2009		Expenses paid during period* 01/01/09 - 06/30/09		Expense ratio during period
UBS U.S. Large Cap Value Equity Fund
Class A Actual	$	1,000.00	$	1,010.20	$	5.48		1.10	%
Hypothetical (5% annual return before expenses)		1,000.00		1,019.34		5.51		1.10	%
Class B Actual		1,000.00		1,008.30		9.21		1.85	%
Hypothetical (5% annual return before expenses)		1,000.00		1,015.62		9.25		1.85	%
Class C Actual		1,000.00		1,008.30		9.21		1.85	%
Hypothetical (5% annual return before expenses)		1,000.00		1,015.62		9.25		1.85	%
Class Y Actual		1,000.00		1,012.20		4.24		0.85	%
Hypothetical (5% annual return before expenses)		1,000.00		1,020.58		4.26		0.85	%
UBS U.S. Mid Cap Growth Equity Fund
Class A Actual		1,000.00		1,144.60		7.71		1.45	%
Hypothetical (5% annual return before expenses)		1,000.00		1,017.60		7.25		1.45	%
Class C Actual		1,000.00		1,140.40		11.68		2.20	%
Hypothetical (5% annual return before expenses)		1,000.00		1,013.88		10.99		2.20	%
Class Y Actual		1,000.00		1,144.80		6.38		1.20	%
Hypothetical (5% annual return before expenses)		1,000.00		1,018.84		6.01		1.20	%
UBS U.S. Small Cap Growth Fund
Class A Actual		1,000.00		1,083.50		6.61		1.28	%
Hypothetical (5% annual return before expenses)		1,000.00		1,018.45		6.41		1.28	%
Class B Actual		1,000.00		1,080.50		10.47		2.03	%
Hypothetical (5% annual return before expenses)		1,000.00		1,014.73		10.14		2.03	%
Class C Actual		1,000.00		1,079.30		10.47		2.03	%
Hypothetical (5% annual return before expenses)		1,000.00		1,014.73		10.14		2.03	%
Class Y Actual		1,000.00		1,084.50		5.32		1.03	%
Hypothetical (5% annual return before expenses)		1,000.00		1,019.69		5.16		1.03	%
UBS Absolute Return Bond Fund
Class A Actual		1,000.00		1,036.50		5.05		1.00	%
Hypothetical (5% annual return before expenses)		1,000.00		1,019.84		5.01		1.00	%
Class C Actual		1,000.00		1,034.60		6.81		1.35	%
Hypothetical (5% annual return before expenses)		1,000.00		1,018.10		6.76		1.35	%
Class Y Actual		1,000.00		1,037.40		4.19		0.83	%
Hypothetical (5% annual return before expenses)		1,000.00		1,020.68		4.16		0.83	%

188

The UBS Funds

June 30, 2009 (unaudited)

	Beginning account value January 1, 2009		Ending account value June 30, 2009		Expenses paid during period* 01/01/09 - 06/30/09		Expense ratio during period
UBS Global Bond Fund
Class A Actual	$	1,000.00	$	988.10	$	5.67		1.15	%
Hypothetical (5% annual return before expenses)		1,000.00		1,019.09		5.76		1.15	%
Class B Actual		1,000.00		984.50		9.35		1.90	%
Hypothetical (5% annual return before expenses)		1,000.00		1,015.37		9.49		1.90	%
Class C Actual		1,000.00		984.20		8.12		1.65	%
Hypothetical (5% annual return before expenses)		1,000.00		1,016.61		8.25		1.65	%
Class Y Actual		1,000.00		989.40		4.44		0.90	%
Hypothetical (5% annual return before expenses)		1,000.00		1,020.33		4.51		0.90	%
UBS High Yield Fund
Class A Actual		1,000.00		1,195.70		6.53		1.20	%
Hypothetical (5% annual return before expenses)		1,000.00		1,018.84		6.01		1.20	%
Class B Actual		1,000.00		1,188.50		10.58		1.95	%
Hypothetical (5% annual return before expenses)		1,000.00		1,015.12		9.74		1.95	%
Class C Actual		1,000.00		1,190.00		9.23		1.70	%
Hypothetical (5% annual return before expenses)		1,000.00		1,016.36		8.50		1.70	%
Class Y Actual		1,000.00		1,195.40		5.17		0.95	%
Hypothetical (5% annual return before expenses)		1,000.00		1,020.08		4.76		0.95	%
UBS U.S. Bond Fund
Class A Actual		1,000.00		1,032.90		4.28		0.85	%
Hypothetical (5% annual return before expenses)		1,000.00		1,020.58		4.26		0.85	%
Class B Actual		1,000.00		1,030.20		8.05		1.60	%
Hypothetical (5% annual return before expenses)		1,000.00		1,016.86		8.00		1.60	%
Class C Actual		1,000.00		1,031.70		6.80		1.35	%
Hypothetical (5% annual return before expenses)		1,000.00		1,018.10		6.76		1.35	%
Class Y Actual		1,000.00		1,034.20		3.03		0.60	%
Hypothetical (5% annual return before expenses)		1,000.00		1,021.82		3.01		0.60	%

*  Expenses are equal to the Fund's annualized net expense ratios, multiplied by the average account value over the period, multiplied by 181 divided by 365 (to reflect the one-half year period).

189

The UBS Funds—Financial statements

Statements of assets and liabilities

June 30, 2009

	UBS Dynamic Alpha Fund		UBS Global Allocation Fund		UBS Global Frontier Fund		UBS Global Equity Fund
Assets:
Investments, at cost:
Unaffiliated issuers	$	605,934,106	$	1,072,246,253	$	8,373,512	$	138,864,998
Affiliated issuers		92,246,030		558,262,814		47,288,502		12,681,601
Investments of cash collateral in affiliated issuers received from securities loaned, at cost		7,699,401		21,204,379		—		2,774,813
Uninvested cash collateral received from securities loaned, at cost		284,879		—		—		—
Foreign currency, at cost		4,305,465		2,283,063		23,244		64,403
	$	710,469,881	$	1,653,996,509	$	55,685,258	$	154,385,815
Investments, at value:
Unaffiliated issuers	$	503,679,746	$	1,048,891,693	$	8,114,323	$	145,283,851
Affiliated issuers		92,233,259		610,251,627		52,385,442		15,249,902
Investments of cash collateral in affiliated issuers received from securities loaned, at value(1)		7,699,401		21,204,379		—		2,774,813
Uninvested cash collateral received from securities loaned, at value		284,879		—		—		—
Foreign currency, at value		4,352,588		2,305,038		23,291		66,905
Cash		86,963,676		32,624		—		—
Receivables:
Investment securities sold		8,311,579		24,535,615		147,696		3,175,377
Dividends		977,697		1,213,282		—		355,158
Interest		889,775		2,204,717		127,712		185
Fund shares sold		235,318		716,385		13,923		11,151
Variation margin		267,525		—		—		—
Receivable for foreign tax reclaims		480,736		211,463		1,232		311,327
Cash collateral for futures contracts		20,457,180		36,224,475		4,514,757		—
Cash collateral for swap agreements		34,705,000		—		—		—
Outstanding swap agreements, at value(2)		32,872,764		869,376		—		—
Unrealized appreciation on forward foreign currency contracts		1,210,103		2,335,446		159,210		49,382
Other assets		65,452		67,775		1,867		64,959
Total assets		795,686,678		1,751,063,895		65,489,453		167,343,010
Liabilities:
Payables:
Cash collateral from securities loaned		7,984,280		21,204,379		—		2,774,813
Investment securities purchased		10,221,934		3,040,357		143,627		561,157
Investment advisory and fund administration fees		475,674		1,174,746		51,648		87,570
Fund shares redeemed		4,676,981		8,523,329		87,517		452,113
Custody and fund accounting fees		43,485		87,991		10,348		17,748
Distribution and service fees		200,812		615,492		22,243		34,734
Dividends payable to unit holders		—		—		42		—
Dividends payable on investments sold short		—		—		—		—
Trustees' fees		1,964		4,465		714		944
Due to broker		302,522		—		—		—
Due to custodian		—		—		291		—
Variation margin		—		1,332,703		306,942		—
Accrued expenses		218,346		498,968		40,721		94,848
Options written, at value(3)		1,222,564		—		—		—
Investments sold short, at value(4)		94,113,824		—		—		—
Outstanding swap agreements, at value(2)		56,556,434		—		—		—
Unrealized depreciation on forward foreign currency contracts		5,614,374		3,978,306		173,275		620,661
Total liabilities		181,633,194		40,460,736		837,368		4,644,588
Net assets	$	614,053,484	$	1,710,603,159	$	64,652,085	$	162,698,422

⁽¹⁾  The market value of securities loaned by UBS Dynamic Alpha Fund, UBS Global Allocation Fund, UBS Global Equity Fund and UBS International Equity Fund as of June 30, 2009 was $7,646,940, $25,341,856, $2,550,673 and $6,460,409, respectively.

⁽²⁾  Net upfront payments made by UBS Dynamic Alpha Fund were $4,541,665.

⁽³⁾  Premiums received by UBS Dynamic Alpha Fund were $2,233,906.

⁽⁴⁾  Proceeds from Investments sold short by UBS Dynamic Alpha Fund and UBS U.S. Equity Alpha Fund were $93,570,462 and $30,111,584, respectively.

190

The UBS Funds—Financial statements

	UBS International Equity Fund		UBS U.S. Equity Alpha Fund		UBS U.S. Large Cap Equity Fund		UBS U.S. Large Cap Growth Fund
Assets:
Investments, at cost:
Unaffiliated issuers	$	59,579,776	$	159,859,061	$	255,967,397	$	82,666,124
Affiliated issuers		1,873,956		2,440,832		1,408,399		—
Investments of cash collateral in affiliated issuers received from securities loaned, at cost		6,791,233		—		—		—
Uninvested cash collateral received from securities loaned, at cost		14,169		—		—		—
Foreign currency, at cost		925,234		—		—		—
	$	69,184,368	$	162,299,893	$	257,375,796	$	82,666,124
Investments, at value:
Unaffiliated issuers	$	73,285,952	$	166,639,161	$	251,418,856	$	84,086,194
Affiliated issuers		1,873,956		2,440,832		1,408,399		—
Investments of cash collateral in affiliated issuers received from securities loaned, at value(1)		6,791,233		—		—		—
Uninvested cash collateral received from securities loaned, at value		14,169		—		—		—
Foreign currency, at value		926,421		—		—		—
Cash		—		952,108		—		—
Receivables:
Investment securities sold		1,313,408		—		4,730,779		370,871
Dividends		210,818		218,148		278,580		68,814
Interest		650		98		1,118		—
Fund shares sold		—		15,434		330,248		600
Variation margin		—		—		8,058		—
Receivable for foreign tax reclaims		109,131		—		—		7,799
Cash collateral for futures contracts		—		—		—		—
Cash collateral for swap agreements		—		—		—		—
Outstanding swap agreements, at value(2)		—		—		—		—
Unrealized appreciation on forward foreign currency contracts		48,063		—		—		—
Other assets		28,830		1,592		10,988		2,343
Total assets		84,602,631		170,267,373		258,187,026		84,536,621
Liabilities:
Payables:
Cash collateral from securities loaned		6,805,402		—		—		—
Investment securities purchased		1,149,294		—		—		—
Investment advisory and fund administration fees		11,990		121,727		170,742		27,784
Fund shares redeemed		647,560		1,414,323		638,088		221,949
Custody and fund accounting fees		30,546		11,816		16,638		7,850
Distribution and service fees		2,574		14,630		11,393		6,452
Dividends payable to unit holders		—		—		—		4
Dividends payable on investments sold short		—		41,445		—		—
Trustees' fees		749		901		1,136		761
Due to broker		—		—		—		—
Due to custodian		714		—		1,089		26,621
Variation margin		—		—		—		—
Accrued expenses		64,086		121,982		137,165		70,024
Options written, at value(3)		—		—		—		—
Investments sold short, at value(4)		—		30,596,126		—		—
Outstanding swap agreements, at value(2)		—		—		—		—
Unrealized depreciation on forward foreign currency contracts		283,955		—		—		—
Total liabilities		8,996,870		32,322,950		976,251		361,445
Net assets	$	75,605,761	$	137,944,423	$	257,210,775	$	84,175,176

See accompanying notes to financial statements.
191

The UBS Funds—Financial statements

Statements of assets and liabilities (cont'd)

June 30, 2009

	UBS Dynamic Alpha Fund			UBS Global Allocation Fund			UBS Global Frontier Fund(1)			UBS Global Equity Fund
Net assets consist of:
Beneficial interest	$	1,113,173,909		$	2,830,912,438		$	85,235,949		$	475,425,652
Accumulated undistributed net investment income		20,336,334			106,532,019			2,257,877			3,923,331
Accumulated net realized loss		(389,712,384	)		(1,259,267,691	)		(27,165,390	)		(325,091,507	)
Net unrealized appreciation (depreciation)		(129,744,375	)		32,426,393			4,323,649			8,440,946
Net assets	$	614,053,484		$	1,710,603,159		$	64,652,085		$	162,698,422
Class A
Net assets	$	398,321,242		$	996,059,238		$	48,394,790		$	72,279,938
Shares outstanding		73,112,446			121,755,929			8,654,561			7,638,011
Net asset value per share and redemption proceeds per share	$	5.45		$	8.18		$	5.59		$	9.46
Offering price per share (NAV per share plus maximum sales charge)(2)	$	5.77		$	8.66		$	5.92		$	10.01
Class B
Net assets	$	6,733,466		$	33,685,381			—		$	1,253,773
Shares outstanding		1,293,829			4,211,533			—			136,022
Net asset value per share and offering price per share	$	5.20		$	8.00			—		$	9.22
Redemption proceeds per share (NAV per share less maximum contingent deferred sales charge)(2)	$	4.94		$	7.60			—		$	8.76
Class C
Net assets	$	131,744,526		$	456,577,403		$	14,558,634		$	22,518,693
Shares outstanding		25,309,325			57,372,275			2,606,978			2,465,374
Net asset value per share and offering price per share	$	5.21		$	7.96		$	5.58		$	9.13
Redemption proceeds per share (NAV per share less maximum contingent deferred sales charge)(2)	$	5.16		$	7.88		$	5.52		$	9.04
Class Y
Net assets	$	77,254,250		$	224,281,137		$	1,698,661		$	66,646,018
Shares outstanding		13,947,260			26,886,579			303,471			6,876,346
Net asset value per share, offering price per share, and redemption proceeds per share	$	5.54		$	8.34		$	5.60		$	9.69

⁽¹⁾  UBS Global Frontier Fund and UBS U.S. Equity Alpha Fund do not offer Class B Shares.

⁽²⁾  For Class A, the maximum sales charge is 5.50%. Classes B, C and Y have no front-end sales charges. For Class A, the maximum contingent deferred sales charge of 1.00% of the shares' offering price or the net asset value at the time of sales by the shareholder, whichever is less, is charged on sales of shares on original purchases of $1 million or more that were not subject to a front-end sales charge made within one year of the purchase date. For Class B, the maximum contingent deferred sales charge is 5.00%. Class C maximum contingent deferred sales charge is 1.00%. Class Y has no contingent deferred sales charge.

192

The UBS Funds—Financial statements

	UBS International Equity Fund			UBS U.S. Equity Alpha Fund(1)			UBS U.S. Large Cap Equity Fund			UBS U.S. Large Cap Growth Fund
Net assets consist of:
Beneficial interest	$	97,197,851		$	191,914,535		$	507,354,864		$	107,088,854
Accumulated undistributed net investment income		3,794,827			—			5,959,087			279,106
Accumulated net realized loss		(38,882,636	)		(60,265,670	)		(251,562,693	)		(24,612,854	)
Net unrealized appreciation (depreciation)		13,495,719			6,295,558			(4,540,483	)		1,420,070
Net assets	$	75,605,761		$	137,944,423		$	257,210,775		$	84,175,176
Class A
Net assets	$	7,808,757		$	33,137,321		$	34,405,613		$	24,811,684
Shares outstanding		1,205,156			5,248,152			2,997,161			2,940,400
Net asset value per share and redemption proceeds per share	$	6.48		$	6.31		$	11.48		$	8.44
Offering price per share (NAV per share plus maximum sales charge)(2)	$	6.86		$	6.68		$	12.15		$	8.93
Class B
Net assets	$	218,226			—		$	265,003		$	608,745
Shares outstanding		33,622			—			23,785			76,268
Net asset value per share and offering price per share	$	6.49			—		$	11.14		$	7.98
Redemption proceeds per share (NAV per share less maximum contingent deferred sales charge)(2)	$	6.17			—		$	10.58		$	7.58
Class C
Net assets	$	913,567		$	9,002,651		$	4,719,062		$	4,410,611
Shares outstanding		144,052			1,431,205			423,488			552,156
Net asset value per share and offering price per share	$	6.34		$	6.29		$	11.14		$	7.99
Redemption proceeds per share (NAV per share less maximum contingent deferred sales charge)(2)	$	6.28		$	6.23		$	11.03		$	7.91
Class Y
Net assets	$	66,665,211		$	95,804,451		$	217,821,097		$	54,344,136
Shares outstanding		10,240,398			15,199,501			18,748,912			6,258,396
Net asset value per share, offering price per share, and redemption proceeds per share	$	6.51		$	6.30		$	11.62		$	8.68

See accompanying notes to financial statements.
193

The UBS Funds—Financial statements

Statements of assets and liabilities (cont'd)

June 30, 2009

	UBS U.S. Large Cap Value Equity Fund		UBS U.S. Mid Cap Growth Equity Fund		UBS U.S. Small Cap Growth Fund		UBS Absolute Return Bond Fund
Assets:
Investments, at cost:
Unaffiliated issuers	$	62,634,528	$	4,519,654	$	182,307,923	$	152,327,625
Affiliated issuers		723,700		37,594		1,529,915		4,120,804
Investments of cash collateral in affiliated issuers received from securities loaned, at cost		—		—		8,099,185		—
Foreign currency, at cost		—		—		—		1,325,916
	$	63,358,228	$	4,557,248	$	191,937,023	$	157,774,345
Investments, at value:
Unaffiliated issuers	$	51,584,369	$	4,236,016	$	177,689,384	$	147,128,144
Affiliated issuers		723,700		37,594		1,529,915		4,120,804
Investments of cash collateral in affiliated issuers received from securities loaned, at value(1)		—		—		8,099,185		—
Foreign currency, at value		—		—		—		1,326,215
Cash		—		—		—		33,471
Receivables:
Investment securities sold		—		91,406		3,536,092		12,341,205
Due from advisor		—		—		—		—
Dividends		87,202		2,320		17,499		—
Interest		269		18		1,037		2,389,744
Fund shares sold		524		—		427,148		20,982
Variation margin		—		—		—		144,739
Receivable for foreign tax reclaims		—		—		—		25,751
Cash collateral for futures contracts		—		—		—		1,408,545
Outstanding swap agreements, at value(2)		—		—		—		65,572
Unrealized appreciation on forward foreign currency contracts		—		—		—		1,284,607
Other assets		1,475		97		30,017		4,124
Total assets		52,397,539		4,367,451		191,330,277		170,293,903
Liabilities:
Payables:
Cash collateral from securities loaned		—		—		8,099,185		—
Investment securities purchased		—		111,172		3,803,702		10,207,079
Investment advisory and fund administration fees		23,337		4,764		144,957		88,262
Fund shares redeemed		483,780		—		964,459		100,410
Custody and fund accounting fees		7,676		7,261		12,141		12,166
Distribution and service fees		13,878		204		10,910		4,471
Dividends payable to unit holders		—		—		—		—
Trustees' fees		684		577		958		903
Due to custodian		652		549		916		—
Accrued expenses		66,632		43,740		125,473		103,413
Outstanding swap agreements, at value(2)		—		—		—		311,314
Unrealized depreciation on forward foreign currency contracts		—		—		—		5,535,792
Total liabilities		596,639		168,267		13,162,701		16,363,810
Net assets	$	51,800,900	$	4,199,184	$	178,167,576	$	153,930,093

⁽¹⁾  The market value of securities loaned by UBS U.S. Small Cap Growth Fund and UBS U.S. Bond Fund as of June 30, 2009 was $7,907,506 and $2,027,751, respectively.

⁽²⁾  Upfront payments received by UBS U.S. Bond Fund were $304,316.

194

The UBS Funds—Financial statements

	UBS Global Bond Fund		UBS High Yield Fund		UBS U.S. Bond Fund
Assets:
Investments, at cost:
Unaffiliated issuers	$	34,465,788	$	104,700,732	$	54,644,419
Affiliated issuers		545,874		6,815,672		16,063,346
Investments of cash collateral in affiliated issuers received from securities loaned, at cost		—		—		1,292,045
Foreign currency, at cost		343,279		—		—
	$	35,354,941	$	111,516,404	$	71,999,810
Investments, at value:
Unaffiliated issuers	$	33,695,777	$	101,302,911	$	51,474,884
Affiliated issuers		545,874		6,815,672		17,147,081
Investments of cash collateral in affiliated issuers received from securities loaned, at value(1)		—		—		1,292,045
Foreign currency, at value		345,762		—		—
Cash		—		2,741		107
Receivables:
Investment securities sold		—		393,077		3,455,394
Due from advisor		20,418		—		—
Dividends		—		—		—
Interest		538,812		2,339,783		276,708
Fund shares sold		4,458		77,335		79,404
Variation margin		—		—		3,188
Receivable for foreign tax reclaims		—		—		—
Cash collateral for futures contracts		—		—		70,713
Outstanding swap agreements, at value(2)		10,081		—		303,059
Unrealized appreciation on forward foreign currency contracts		6,723		—		—
Other assets		1,379		2,581		2,467
Total assets		35,169,284		110,934,100		74,105,050
Liabilities:
Payables:
Cash collateral from securities loaned		—		—		1,292,045
Investment securities purchased		—		367,665		4,505,595
Investment advisory and fund administration fees		8,950		53,283		16,269
Fund shares redeemed		645,615		1,154,741		485,814
Custody and fund accounting fees		11,368		8,543		11,105
Distribution and service fees		2,773		13,243		3,512
Dividends payable to unit holders		—		24		—
Trustees' fees		648		807		722
Due to custodian		617		—		—
Accrued expenses		50,381		83,686		49,416
Outstanding swap agreements, at value(2)		43,960		—		781,207
Unrealized depreciation on forward foreign currency contracts		59,745		—		—
Total liabilities		824,057		1,681,992		7,145,685
Net assets	$	34,345,227	$	109,252,108	$	66,959,365

See accompanying notes to financial statements.
195

The UBS Funds—Financial statements

Statements of assets and liabilities (cont'd)

June 30, 2009

	UBS U.S. Large Cap Value Equity Fund			UBS U.S. Mid Cap Growth Equity Fund(1)			UBS U.S. Small Cap Growth Fund			UBS Absolute Return Bond Fund(1)
Net assets consist of:
Beneficial interest	$	84,629,162		$	6,060,085		$	269,980,622		$	284,263,047
Accumulated undistributed (distributions in excess of) net investment income.		1,136,066			—			41,825			(2,587,750	)
Accumulated net realized loss		(22,914,169	)		(1,577,263	)		(87,236,332	)		(118,296,590	)
Net unrealized depreciation		(11,050,159	)		(283,638	)		(4,618,539	)		(9,448,614	)
Net assets	$	51,800,900		$	4,199,184		$	178,167,576		$	153,930,093
Class A
Net assets	$	43,951,313		$	512,245		$	41,141,111		$	17,850,185
Shares outstanding		8,892,547			76,116			4,804,166			2,812,295
Net asset value per share and redemption proceeds per share	$	4.94		$	6.73		$	8.56		$	6.35
Offering price per share (NAV per share plus maximum sales charge)(2)	$	5.23		$	7.12		$	9.06		$	6.51
Class B
Net assets	$	246,786			—		$	177,295			—
Shares outstanding		50,672			—			22,026			—
Net asset value per share and offering price per share	$	4.87			—		$	8.05			—
Redemption proceeds per share (NAV per share less maximum contingent deferred sales charge)(2)	$	4.63			—		$	7.65			—
Class C
Net assets	$	5,428,523		$	113,463		$	2,471,165		$	5,146,816
Shares outstanding		1,124,850			17,457			307,703			811,017
Net asset value per share and offering price per share	$	4.83		$	6.50		$	8.03		$	6.35
Redemption proceeds per share (NAV per share less maximum contingent deferred sales charge)(2)	$	4.78		$	6.44		$	7.95		$	6.32
Class Y
Net assets	$	2,174,278		$	3,573,476		$	134,378,005		$	130,933,092
Shares outstanding		437,111			525,438			15,160,692			20,642,419
Net asset value per share, offering price per share, and redemption proceeds per share	$	4.97		$	6.80		$	8.86		$	6.34

⁽¹⁾  UBS U.S. Mid Cap Growth Equity Fund and UBS Absolute Return Bond Fund do not offer Class B Shares.

⁽²⁾  For Class A, the maximum sales charge is 5.50%, except for UBS Global Bond Fund, UBS High Yield Fund and UBS U.S. Bond Fund which are 4.50%, and UBS Absolute Return Bond Fund which is 2.50%. Classes B, C and Y have no front-end sales charges. For Class A, the maximum contingent deferred sales charge of 1.00% of the shares' offering price or the net asset value at the time of sales by the shareholder, whichever is less, is charged on sales of shares on original purchases of $250,000 or more that were not subject to a front-end sales charge made within one year of the purchase date. For Class B, the maximum contingent deferred sales charge is 5.00%. Class C maximum contingent deferred sales charge is 1.00%, except for UBS Global Bond Fund, UBS High Yield Fund and UBS U.S. Bond Fund which are 0.75%, and UBS Absolute Return Bond Fund wh ich is 0.50%. Class Y has no contingent deferred sales charge.

196

The UBS Funds—Financial statements

	UBS Global Bond Fund			UBS High Yield Fund			UBS U.S. Bond Fund
Net assets consist of:
Beneficial interest	$	51,741,531		$	246,827,089		$	106,678,606
Accumulated undistributed (distributions in excess of) net investment income.		169,035			280,273			1,259,567
Accumulated net realized loss		(16,729,347	)		(134,457,433	)		(38,734,677	)
Net unrealized depreciation		(835,992	)		(3,397,821	)		(2,244,131	)
Net assets	$	34,345,227		$	109,252,108		$	66,959,365
Class A
Net assets	$	7,930,212		$	39,859,100		$	9,128,067
Shares outstanding		1,113,855			7,726,950			1,116,852
Net asset value per share and redemption proceeds per share	$	7.12		$	5.16		$	8.17
Offering price per share (NAV per share plus maximum sales charge)(2)	$	7.46		$	5.40		$	8.55
Class B
Net assets	$	122,304		$	900,150		$	109,139
Shares outstanding		17,129			174,450			13,337
Net asset value per share and offering price per share	$	7.14		$	5.16		$	8.18
Redemption proceeds per share (NAV per share less maximum contingent deferred sales charge)(2)	$	6.78		$	4.90		$	7.77
Class C
Net assets	$	1,855,817		$	7,071,706		$	2,573,516
Shares outstanding		261,554			1,369,995			315,778
Net asset value per share and offering price per share	$	7.10		$	5.16		$	8.15
Redemption proceeds per share (NAV per share less maximum contingent deferred sales charge)(2)	$	7.04		$	5.12		$	8.09
Class Y
Net assets	$	24,436,894		$	61,421,152		$	55,148,643
Shares outstanding		3,015,588			11,821,700			6,755,374
Net asset value per share, offering price per share, and redemption proceeds per share	$	8.10		$	5.20		$	8.16

See accompanying notes to financial statements.
197

The UBS Funds—Financial statements

Statements of operations

For the year ended June 30, 2009

	UBS Dynamic Alpha Fund			UBS Global Allocation Fund			UBS Global Frontier Fund			UBS Global Equity Fund
Investment Income:
Dividends	$	14,436,565		$	36,036,606		$	—		$	4,793,669
Interest and other		21,285,009			11,006,085			245,649			4,657
Affiliated interest		902,728			608,617			35,008			26,015
Securities lending-net		381,041			637,856			—			74,632
Foreign tax withheld		(285,331	)		(1,148,568	)		—			(216,727	)
Total income	$	36,720,012		$	47,140,596		$	280,657		$	4,682,246
Expenses:
Advisory and administration	$	9,243,165		$	18,376,003		$	730,546		$	1,670,087
Service and distribution:
Class A		1,700,792			3,408,980			132,963			194,662
Class B		95,812			538,695			—			22,170
Class C		1,979,731			5,902,699			151,387			238,687
Transfer agency:
Class A		538,845			971,506			27,850			175,353
Class B		14,876			84,279			—			5,649
Class C		189,831			632,954			19,622			69,352
Class Y		49,529			115,947			82			70,701
Custodian and fund accounting		390,929			760,095			69,205			121,657
Federal and state registration		36,078			39,510			15,065			28,612
Professional services		139,573			158,625			88,162			103,789
Shareholder reports		251,772			635,900			29,053			93,969
Trustees		54,110			107,414			15,967			21,456
Offering costs		—			—			10,284			—
Dividend expense for investments sold short		2,528,910			—			—			—
Other		8,453			20,112			8,871			2,859
Total operating expenses		17,222,406			31,752,719			1,299,057			2,819,003
Fee waivers and/or expense reimbursements by Advisor		(2,654	)		—			(193,388	)		(335,794	)
Net operating expenses		17,219,752			31,752,719			1,105,669			2,483,209
Interest expense		—			3,646			—			—
Net expenses		17,219,752			31,756,365			1,105,669			2,483,209
Net investment income (loss)		19,500,260			15,384,231			(825,012	)		2,199,037
Net realized gain (loss) on:
Investments in unaffiliated issuers		(330,841,371	)		(1,028,762,566	)		(1,476,584	)		(69,876,584	)
Investments in affiliated issuers		(125,119,078	)		(193,010,440	)		(35,126,618	)		—
Futures contracts		72,582,150			(88,493,156	)		(8,745,397	)		—
Options written		(3,369,221	)		45,852			—			—
Investments sold short		23,873,864			—			—			—
Swap agreements		(70,770,513	)		4,144,492			(10,545,264	)		—
Foreign forward currency transactions		150,936,358			12,066,746			155,349			307,145
Net realized loss		(282,707,811	)		(1,294,009,072	)		(55,738,514	)		(69,569,439	)
Change in net unrealized appreciation (depreciation) on:
Investments		(26,754,465	)		286,579,565			14,849,637			(19,138,979	)
Futures contracts		(30,593,444	)		11,093,265			(216,670	)		—
Options written		949,815			—			—			—
Investments sold short		(543,362	)		—			—			—
Swap agreements		35,535,963			5,690,129			4,112,672			—
Foreign forward currency contracts		239,423			31,216,569			761,851			1,066,903
Translation of other assets and liabilities denominated in foreign currency		(50,121	)		1,237,302			1,919			(29,908	)
Change in net unrealized appreciation (depreciation)		(21,216,191	)		335,816,830			19,509,409			(18,101,984	)
Net realized and unrealized loss		(303,924,002	)		(958,192,242	)		(36,229,105	)		(87,671,423	)
Contributions from advisor		468,462			—			—			—
Net decrease in net assets resulting from operations	$	(283,955,280	)	$	(942,808,011	)	$	(37,054,117	)	$	(85,472,386	)

198

The UBS Funds—Financial statements

	UBS International Equity Fund			UBS U.S. Equity Alpha Fund			UBS U.S. Large Cap Equity Fund			UBS U.S. Large Cap Growth Fund
Investment Income:
Dividends	$	2,718,180		$	2,486,519		$	10,313,726		$	1,072,474
Interest and other		2,745			161			63			—
Affiliated interest		15,899			12,721			152,837			29,440
Securities lending-net		120,035			—			—			—
Foreign tax withheld		(219,783	)		—			—			(6,278	)
Total income	$	2,637,076		$	2,499,401		$	10,466,626		$	1,095,636
Expenses:
Advisory and administration	$	822,240		$	996,804		$	3,433,536		$	692,565
Service and distribution:
Class A		24,223			126,955			133,718			57,579
Class B		1,466			—			4,050			6,776
Class C		11,279			131,311			47,960			24,377
Transfer agency:
Class A		9,030			34,677			87,320			14,314
Class B		435			—			640			1,045
Class C		1,775			19,755			6,324			4,153
Class Y		157,646			3,805			365,567			120,784
Custodian and fund accounting		144,867			73,394			166,830			49,943
Federal and state registration		29,034			47,980			42,085			31,861
Professional services		101,632			96,563			91,289			87,266
Shareholder reports		40,088			38,958			92,488			31,497
Trustees		16,873			17,301			30,680			17,048
Offering costs		—			1			—			—
Dividend expense for investments sold short		—			478,135			—			—
Other		4,267			11,573			10,156			16,146
Total operating expenses		1,364,855			2,077,212			4,512,643			1,155,354
Fee waivers and/or expense reimbursements by Advisor		(387,619	)		(181,743	)		—			(338,574	)
Net operating expenses		977,236			1,895,469			4,512,643			816,780
Interest expense		—			278,757			—			—
Net expenses		977,236			2,174,226			4,512,643			816,780
Net investment income (loss)		1,659,840			325,175			5,953,983			278,856
Net realized gain (loss) on:
Investments in unaffiliated issuers		(35,508,489	)		(63,108,861	)		(231,853,412	)		(24,070,731	)
Investments in affiliated issuers		(1,325,539	)		—			—			—
Futures contracts		—			—			(3,335,420	)		—
Options written		—			—			—			—
Investments sold short		—			8,095,856			—			—
Swap agreements		—			—			—			—
Foreign forward currency transactions		1,202,847			—			—			—
Net realized loss		(35,631,181	)		(55,013,005	)		(235,188,832	)		(24,070,731	)
Change in net unrealized appreciation (depreciation) on:
Investments		(11,478,904	)		32,192,578			18,728,668			(4,813,074	)
Futures contracts		—			—			565,061			—
Options written		—			—			—			—
Investments sold short		—			(2,564,020	)		—			—
Swap agreements		—			—			—			—
Foreign forward currency contracts		536,463			—			—			—
Translation of other assets and liabilities denominated in foreign currency		(18,132	)		—			—			—
Change in net unrealized appreciation (depreciation)		(10,960,573	)		29,628,558			19,293,729			(4,813,074	)
Net realized and unrealized loss		(46,591,754	)		(25,384,447	)		(215,895,103	)		(28,883,805	)
Contributions from advisor		—			—			—			—
Net decrease in net assets resulting from operations	$	(44,931,914	)	$	(25,059,272	)	$	(209,941,120	)	$	(28,604,949	)

See accompanying notes to financial statements.
199

The UBS Funds—Financial statements

Statements of operations (cont'd)

For the year ended June 30, 2009

	UBS U.S. Large Cap Value Equity Fund			UBS U.S. Mid Cap Growth Equity Fund			UBS U.S. Small Cap Growth Fund			UBS Absolute Return Bond Fund
Investment Income:
Dividends	$	1,852,199		$	21,257		$	928,951		$	—
Interest and other		5,674			—			—			4,691,528
Affiliated interest		13,013			1,046			61,698			24,552
Securities lending-net		—			—			506,537			—
Foreign tax withheld		—			—			(9,921	)		—
Total income	$	1,870,886		$	22,303		$	1,487,265		$	4,716,080
Expenses:
Advisory and administration	$	485,640		$	38,281		$	2,042,798		$	1,057,632
Service and distribution:
Class A		130,719			1,206			138,749			41,881
Class B		3,242			—			3,242			—
Class C		64,928			1,089			34,275			34,351
Transfer agency:
Class A		76,616			1,922			195,151			46,950
Class B		1,102			—			1,566			—
Class C		13,140			878			13,306			7,394
Class Y		8,899			47			288,185			7,806
Custodian and fund accounting		48,078			44,560			90,652			72,030
Federal and state registration		26,708			16,107			33,367			15,466
Professional services		97,216			88,790			88,789			188,856
Shareholder reports		32,618			5,092			78,076			27,418
Trustees		15,570			13,117			22,123			20,621
Other		3,976			5,608			9,871			4,888
Total operating expenses		1,008,452			216,697			3,040,150			1,525,293
Fee waivers and/or expense reimbursements by Advisor		(274,308	)		(163,923	)		(590,971	)		(39,790	)
Net operating expenses		734,144			52,774			2,449,179			1,485,503
Interest expense		—			—			—			—
Net expenses		734,144			52,774			2,449,179			1,485,503
Net investment income (loss)		1,136,742			(30,471	)		(961,914	)		3,230,577
Net realized gain (loss) on:
Investments in unaffiliated issuers		(21,689,579	)		(1,483,122	)		(87,081,406	)		(26,260,093	)
Investments in affiliated issuers		—			—			—			(9,498,563	)
Futures contracts		—			—			—			(9,100,301	)
Options written		—			—			—			—
Swap agreements		—			—			—			1,430,339
Foreign forward currency transactions		—			—			—			9,555,728
Net realized loss		(21,689,579	)		(1,483,122	)		(87,081,406	)		(33,872,890	)
Change in net unrealized appreciation (depreciation) on:
Investments		(6,462,189	)		(362,083	)		(36,741,700	)		14,138,607
Futures contracts		—			—			—			710,167
Swap agreements		—			—			—			(302,186	)
Foreign forward currency contracts		—			—			—			(2,145,841	)
Translation of other assets and liabilities denominated in foreign currency		—			—			—			(380,568	)
Change in net unrealized appreciation (depreciation)		(6,462,189	)		(362,083	)		(36,741,700	)		12,020,179
Net realized and unrealized loss		(28,151,768	)		(1,845,205	)		(123,823,106	)		(21,852,711	)
Net decrease in net assets resulting from operations	$	(27,015,026	)	$	(1,875,676	)	$	(124,785,020	)	$	(18,622,134	)

200

The UBS Funds—Financial statements

	UBS Global Bond Fund			UBS High Yield Fund			UBS U.S. Bond Fund
Investment Income:
Dividends	$	—		$	10,205		$	—
Interest and other		2,059,840			12,368,967			2,992,580
Affiliated interest		30,077			40,428			8,942
Securities lending-net		—			—			6,890
Foreign tax withheld		—			—			—
Total income	$	2,089,917		$	12,419,600		$	3,008,412
Expenses:
Advisory and administration	$	373,722		$	757,205		$	495,117
Service and distribution:
Class A		23,463			89,401			20,377
Class B		1,176			9,914			1,466
Class C		12,095			49,368			12,101
Transfer agency:
Class A		14,251			61,192			12,952
Class B		290			2,723			349
Class C		1,676			13,758			1,779
Class Y		73,542			108,075			76,025
Custodian and fund accounting		74,295			59,126			73,126
Federal and state registration		28,424			29,526			35,552
Professional services		132,947			93,989			93,025
Shareholder reports		22,778			53,839			28,142
Trustees		15,121			18,005			16,755
Other		3,759			2,466			40,189
Total operating expenses		777,539			1,348,587			906,955
Fee waivers and/or expense reimbursements by Advisor		(276,516	)		(134,086	)		(317,352	)
Net operating expenses		501,023			1,214,501			589,603
Interest expense		—			599			—
Net expenses		501,023			1,215,100			589,603
Net investment income (loss)		1,588,894			11,204,500			2,418,809
Net realized gain (loss) on:
Investments in unaffiliated issuers		(9,316,447	)		(33,291,081	)		(3,851,477	)
Investments in affiliated issuers		(923,617	)		—			(16,585,396	)
Futures contracts		10,823			—			(776,960	)
Options written		—			—			28,706
Swap agreements		38,302			1,753,488			2,592,269
Foreign forward currency transactions		(664,725	)		—			117,553
Net realized loss		(10,855,664	)		(31,537,593	)		(18,475,305	)
Change in net unrealized appreciation (depreciation) on:
Investments		3,102,490			9,690,569			9,542,487
Futures contracts		—			—			(69,485	)
Swap agreements		(308,315	)		(987,120	)		1,942,251
Foreign forward currency contracts		405,548			—			9,760
Translation of other assets and liabilities denominated in foreign currency		2,126			—			(9,273	)
Change in net unrealized appreciation (depreciation)		3,201,849			8,703,449			11,415,740
Net realized and unrealized loss		(7,653,815	)		(22,834,144	)		(7,059,565	)
Net decrease in net assets resulting from operations	$	(6,064,921	)	$	(11,629,644	)	$	(4,640,756	)

See accompanying notes to financial statements.
201

The UBS Funds—Financial statements

Statements of changes in net assets

	UBS Dynamic Alpha Fund						UBS Global Allocation Fund						UBS Global Frontier Fund
	Year ended June 30, 2009			Year ended June 30, 2008			Year ended June 30, 2009			Year ended June 30, 2008			Year ended June 30, 2009			Period ended June 30, 2008^
Operations:
Net investment income (loss)	$	19,500,260		$	6,877,755		$	15,384,231		$	48,802,926		$	(825,012	)	$	(697,486	)
Net realized gain (loss)		(282,707,811	)		550,168,965			(1,294,009,072	)		468,643,317			(55,738,514	)		(463,284	)
Change in net unrealized appreciation (depreciation)		(21,216,191	)		(664,414,072	)		335,816,830			(922,271,019	)		19,509,409			(15,119,173	)
Contributions from advisor		468,462			—			—			—			—			—
Net decrease in net assets from operations		(283,955,280	)		(107,367,352	)		(942,808,011	)		(404,824,776	)		(37,054,117	)		(16,279,943	)
Dividends and distributions to shareholders by class:
Class A:
Dividends from net investment income and net foreign currency gains		—			(2,126,516	)		(59,648,240	)		(47,817,449	)		(1,267,938	)		(284,895	)
Distributions from net realized gain		(192,230,422	)		(146,653,781	)		(123,974,517	)		(173,372,470	)		—			(702,936	)
Total Class A dividends and distributions		(192,230,422	)		(148,780,297	)		(183,622,757	)		(221,189,919	)		(1,267,938	)		(987,831	)
Class B:
Dividends from net investment income and net foreign currency gains		—			—			(2,269,417	)		(790,695	)		—			—
Distributions from net realized gain		(3,120,832	)		(1,886,941	)		(5,525,208	)		(7,053,722	)		—			—
Total Class B dividends and distributions		(3,120,832	)		(1,886,941	)		(7,794,625	)		(7,844,417	)		—			—
Class C:
Dividends from net investment income and net foreign currency gains		—			—			(23,434,528	)		(10,110,965	)		(204,311	)		(12,394	)
Distributions from net realized gain		(63,020,277	)		(39,173,757	)		(57,275,656	)		(71,832,344	)		—			(185,387	)
Total Class C dividends and distributions		(63,020,277	)		(39,173,757	)		(80,710,184	)		(81,943,309	)		(204,311	)		(197,781	)
Class Y:
Dividends from net investment income and net foreign currency gains		—			(1,348,972	)		(15,557,694	)		(11,213,322	)		(62,386	)		(35,242	)
Distributions from net realized gain		(32,866,940	)		(37,471,448	)		(30,474,399	)		(35,120,005	)		—			(67,476	)
Total Class Y dividends and distributions		(32,866,940	)		(38,820,420	)		(46,032,093	)		(46,333,327	)		(62,386	)		(102,718	)
Decrease in net assets from dividends and distributions		(291,238,471	)		(228,661,415	)		(318,159,659	)		(357,310,972	)		(1,534,635	)		(1,288,330	)
Beneficial interest transactions:
Proceeds from shares sold		115,085,769			397,434,507			232,846,047			811,103,968			39,256,449			168,824,442
Shares issued on reinvestment of dividends and distributions		275,369,691			219,171,325			300,453,214			339,698,927			1,318,346			1,227,251
Cost of shares redeemed		(1,032,877,113	)		(1,702,328,712	)		(1,511,910,920	)		(1,595,105,075	)		(47,222,976	)		(42,663,400	)
Redemption fees		132,489			199,526			228,376			277,022			39,387			29,611
Net increase (decrease) in net assets resulting from beneficial interest transactions		(642,289,164	)		(1,085,523,354	)		(978,383,283	)		(444,025,158	)		(6,608,794	)		127,417,904
Increase (decrease) in net assets		(1,217,482,915	)		(1,421,552,121	)		(2,239,350,953	)		(1,206,160,906	)		(45,197,546	)		109,849,631
Net assets, beginning of year		1,831,536,399			3,253,088,520			3,949,954,112			5,156,115,018			109,849,631			—
Net assets, end of year	$	614,053,484		$	1,831,536,399		$	1,710,603,159		$	3,949,954,112		$	64,652,085		$	109,849,631
Net assets include accumulated undistributed net investment income	$	20,336,334		$	44,981,549		$	106,532,019		$	152,663,977		$	2,257,877		$	7,816,545

^{^}  UBS Global Frontier Fund commenced operations on July 26, 2007.

202

The UBS Funds—Financial statements

	UBS Global Equity Fund						UBS International Equity Fund
	Year ended June 30, 2009			Year ended June 30, 2008			Year ended June 30, 2009			Year ended June 30, 2008
Operations:
Net investment income (loss)	$	2,199,037		$	3,746,279		$	1,659,840		$	3,233,514
Net realized gain (loss)		(69,569,439	)		34,858,651			(35,631,181	)		13,280,789
Change in net unrealized appreciation (depreciation)		(18,101,984	)		(85,747,731	)		(10,960,573	)		(41,273,845	)
Contributions from advisor		—			—			—			—
Net decrease in net assets from operations		(85,472,386	)		(47,142,801	)		(44,931,914	)		(24,759,542	)
Dividends and distributions to shareholders by class:
Class A:
Dividends from net investment income and net foreign currency gains		(4,842,626	)		—			(231,657	)		(395,862	)
Distributions from net realized gain		—			—			(760,618	)		(2,260,166	)
Total Class A dividends and distributions		(4,842,626	)		—			(992,275	)		(2,656,028	)
Class B:
Dividends from net investment income and net foreign currency gains		(128,499	)		—			—			(5,166	)
Distributions from net realized gain		—			—			(6,885	)		(41,131	)
Total Class B dividends and distributions		(128,499	)		—			(6,885	)		(46,297	)
Class C:
Dividends from net investment income and net foreign currency gains		(1,311,744	)		—			(11,121	)		(33,741	)
Distributions from net realized gain		—			—			(94,172	)		(245,694	)
Total Class C dividends and distributions		(1,311,744	)		—			(105,293	)		(279,435	)
Class Y:
Dividends from net investment income and net foreign currency gains		(6,370,482	)		—			(2,441,800	)		(2,893,911	)
Distributions from net realized gain		—			—			(6,407,652	)		(15,270,335	)
Total Class Y dividends and distributions		(6,370,482	)		—			(8,849,452	)		(18,164,246	)
Decrease in net assets from dividends and distributions		(12,653,351	)		—			(9,953,905	)		(21,146,006	)
Beneficial interest transactions:
Proceeds from shares sold		37,961,057			64,142,944			46,338,330			58,818,646
Shares issued on reinvestment of dividends and distributions		12,106,041			—			9,877,838			20,942,139
Cost of shares redeemed		(110,911,845	)		(103,442,721	)		(74,614,879	)		(86,837,905	)
Redemption fees		47,416			12,783			21,033			6,688
Net increase (decrease) in net assets resulting from beneficial interest transactions		(60,797,331	)		(39,286,994	)		(18,377,678	)		(7,070,432	)
Increase (decrease) in net assets		(158,923,068	)		(86,429,795	)		(73,263,497	)		(52,975,980	)
Net assets, beginning of year		321,621,490			408,051,285			148,869,258			201,845,238
Net assets, end of year	$	162,698,422		$	321,621,490		$	75,605,761		$	148,869,258
Net assets include accumulated undistributed net investment income	$	3,923,331		$	13,823,933		$	3,794,827		$	4,117,915

See accompanying notes to financial statements.
203

The UBS Funds—Financial statements

Statements of changes in net assets

	UBS U.S. Equity Alpha Fund						UBS U.S. Large Cap Equity Fund						UBS U.S. Large Cap Growth Fund
	Year ended June 30, 2009			Year ended June 30, 2008			Year ended June 30, 2009			Year ended June 30, 2008			Year ended June 30, 2009			Year ended June 30, 2008
Operations:
Net investment income (loss)	$	325,175		$	677,065		$	5,953,983		$	9,830,536		$	278,856		$	(13,862	)
Net realized gain (loss)		(55,013,005	)		12,911			(235,188,832	)		22,120,705			(24,070,731	)		891,947
Change in net unrealized appreciation (depreciation)		29,628,558			(38,791,790	)		19,293,729			(190,999,382	)		(4,813,074	)		2,571,813
Net decrease in net assets from operations		(25,059,272	)		(38,101,814	)		(209,941,120	)		(159,048,141	)		(28,604,949	)		3,449,898
Dividends and distributions to shareholders by class:
Class A:
Dividends from net investment income and net foreign currency gains		(576,077	)		(528,450	)		(305,532	)		(1,177,152	)					—
Distributions from net realized gain		—			(10,020,460	)		(1,595,416	)		(6,625,321	)		—			(70,792	)
Total Class A dividends and distributions		(576,077	)		(10,548,910	)		(1,900,948	)		(7,802,473	)					(70,792	)
Class B:
Dividends from net investment income and net foreign currency gains		—			—			(623	)		(245	)		—			—
Distributions from net realized gain		—			—			(13,791	)		(40,054	)		—			(9,693	)
Total Class B dividends and distributions		—			—			(14,414	)		(40,299	)		—			(9,693	)
Class C:
Dividends from net investment income and net foreign currency gains		—			—			(12,672	)		—			—			—
Distributions from net realized gain		—			(2,253,303	)		(163,602	)		(417,852	)		—			(15,221	)
Total Class C dividends and distributions		—			(2,253,303	)		(176,274	)		(417,852	)		—			(15,221	)
Class Y:
Dividends from net investment income and net foreign currency gains		(110,609	)		(29,142	)		(3,820,205	)		(8,246,286	)		—			(72,391	)
Distributions from net realized gain		—			(303,337	)		(12,193,390	)		(34,151,483	)		—			(454,792	)
Total Class Y dividends and distributions		(110,609	)		(332,479	)		(16,013,595	)		(42,397,769	)		—			(527,183	)
Decrease in net assets from dividends and distributions		(686,686	)		(13,134,692	)		(18,105,231	)		(50,658,393	)		–			(622,889	)
Beneficial interest transactions:
Proceeds from shares sold		117,825,079			28,373,781			93,811,450			301,382,164			60,218,860			53,512,638
Shares issued on reinvestment of dividends and distributions		666,293			12,657,561			17,806,087			47,101,585			—			620,363
Cost of shares redeemed		(80,103,113	)		(100,161,333	)		(369,797,169	)		(398,080,214	)		(41,895,797	)		(35,802,292	)
Redemption fees		13,594			56,289			58,778			58,335			21,887			4,703
Net increase (decrease) in net assets resulting from beneficial interest transactions		38,401,853			(59,073,702	)		(258,120,854	)		(49,538,130	)		18,344,950			18,335,412
Increase (decrease) in net assets		12,655,895			(110,310,208	)		(486,167,205	)		(259,244,664	)		(10,259,999	)		21,162,421
Net assets, beginning of year		125,288,528			235,598,736			743,377,980			1,002,622,644			94,435,175			73,272,754
Net assets, end of year	$	137,944,423		$	125,288,528		$	257,210,775		$	743,377,980		$	84,175,176		$	94,435,175
Net assets include accumulated undistributed net investment income	$	—		$	350,343		$	5,959,087		$	5,083,421		$	279,106		$	—

204

The UBS Funds—Financial statements

	UBS U.S. Large Cap Value Equity Fund						UBS U.S. Mid Cap Growth Equity Fund
	Year ended June 30, 2009			Year ended June 30, 2008			Year ended June 30, 2009			Year ended June 30, 2008
Operations:
Net investment income (loss)	$	1,136,742		$	1,524,434		$	(30,471	)	$	(50,607	)
Net realized gain (loss)		(21,689,579	)		13,812,998			(1,483,122	)		130,416
Change in net unrealized appreciation (depreciation)		(6,462,189	)		(39,915,124	)		(362,083	)		(551,189	)
Net decrease in net assets from operations		(27,015,026	)		(24,577,692	)		(1,875,676	)		(471,380	)
Dividends and distributions to shareholders by class:
Class A:
Dividends from net investment income and net foreign currency gains		(516,748	)		(1,321,256	)		—			(1,276	)
Distributions from net realized gain		(7,453,614	)		(9,164,654	)		(9,595	)		(12,162	)
Total Class A dividends and distributions		(7,970,362	)		(10,485,910	)		(9,595	)		(13,438	)
Class B:
Dividends from net investment income and net foreign currency gains		(2,141	)		(2,162	)		—			—
Distributions from net realized gain		(60,577	)		(71,441	)		—			—
Total Class B dividends and distributions		(62,718	)		(73,603	)		—			—
Class C:
Dividends from net investment income and net foreign currency gains		(22,232	)		(56,435	)		—			(116	)
Distributions from net realized gain		(925,371	)		(1,190,175	)		(2,082	)		(3,793	)
Total Class C dividends and distributions		(947,603	)		(1,246,610	)		(2,082	)		(3,909	)
Class Y:
Dividends from net investment income and net foreign currency gains		(27,994	)		(115,125	)		—			(17,422	)
Distributions from net realized gain		(332,468	)		(660,370	)		(65,030	)		(125,402	)
Total Class Y dividends and distributions		(360,462	)		(775,495	)		(65,030	)		(142,824	)
Decrease in net assets from dividends and distributions		(9,341,145	)		(12,581,618	)		(76,707	)		(160,171	)
Beneficial interest transactions:
Proceeds from shares sold		1,979,114			4,382,799			328,613			569,694
Shares issued on reinvestment of dividends and distributions		8,347,989			11,362,921			76,709			160,171
Cost of shares redeemed		(17,119,519	)		(22,913,652	)		(166,889	)		(108,905	)
Redemption fees		1,154			8,527			3			451
Net increase (decrease) in net assets resulting from beneficial interest transactions		(6,791,262	)		(7,159,405	)		238,436			621,411
Increase (decrease) in net assets		(43,147,433	)		(44,318,715	)		(1,713,947	)		(10,140	)
Net assets, beginning of year		94,948,333			139,267,048			5,913,131			5,923,271
Net assets, end of year	$	51,800,900		$	94,948,333		$	4,199,184		$	5,913,131
Net assets include accumulated undistributed net investment income	$	1,136,066		$	628,697		$	—		$	—

See accompanying notes to financial statements.
205

The UBS Funds—Financial statements

Statements of changes in net assets

	UBS U.S. Small Cap Growth Fund						UBS Absolute Return Bond Fund						UBS Global Bond Fund
	Year ended June 30, 2009			Year ended June 30, 2008			Year ended June 30, 2009			Year ended June 30, 2008			Year ended June 30, 2009			Year ended June 30, 2008
Operations:
Net investment income (loss)	$	(961,914	)	$	(2,643,633	)	$	3,230,577		$	14,899,372		$	1,588,894		$	3,521,852
Net realized gain (loss)		(87,081,406	)		24,338,394			(33,872,890	)		(68,123,871	)		(10,855,664	)		4,130,935
Change in net unrealized appreciation (depreciation)		(36,741,700	)		(67,818,979	)		12,020,179			(22,129,390	)		3,201,849			(4,201,660	)
Net increase (decrease) in net assets from operations		(124,785,020	)		(46,124,218	)		(18,622,134	)		(75,353,889	)		(6,064,921	)		3,451,127
Dividends and distributions to shareholders by class:
Class A:
Dividends from net investment income and net foreign currency gains		—			—			(2,667,309	)		(6,055,622	)		(1,516,275	)		(598,908	)
Distributions from net realized gain		(3,056	)		(8,040,750	)		—			—			—			—
Total Class A dividends and distributions		(3,056	)		(8,040,750	)		(2,667,309	)		(6,055,622	)		(1,516,275	)		(598,908	)
Class B:
Dividends from net investment income and net foreign currency gains		—			—			—			—			(19,560	)		(5,422	)
Distributions from net realized gain		(19	)		(72,906	)		—			—			—			—
Total Class B dividends and distributions		(19	)		(72,906	)		—			—			(19,560	)		(5,422	)
Class C:
Dividends from net investment income and net foreign currency gains		—			—			(658,994	)		(897,169	)		(259,857	)		(63,951	)
Distributions from net realized gain		(187	)		(517,433	)		—			—			—			—
Total Class C dividends and distributions		(187	)		(517,433	)		(658,994	)		(897,169	)		(259,857	)		(63,951	)
Class Y:
Dividends from net investment income and net foreign currency gains		—			—			(13,660,426	)		(11,794,125	)		(6,148,254	)		(4,189,865	)
Distributions from net realized gain		(8,114	)		(20,219,591	)		—			—			—			—
Total Class Y dividends and distributions		(8,114	)		(20,219,591	)		(13,660,426	)		(11,794,125	)		(6,148,254	)		(4,189,865	)
Decrease in net assets from dividends and distributions		(11,376	)		(28,850,680	)		(16,986,729	)		(18,746,916	)		(7,943,946	)		(4,858,146	)
Beneficial interest transactions:
Proceeds from shares sold		50,736,468			103,968,581			3,120,247			63,928,939			36,103,750			95,397,335
Shares issued on reinvestment of dividends and distributions		10,729			26,289,775			16,649,066			18,272,721			7,709,896			4,775,596
Cost of shares redeemed		(119,932,435	)		(145,245,179	)		(78,413,871	)		(293,783,418	)		(62,052,653	)		(155,452,100	)
Redemption fees		21,887			23,206			6,753			42,317			3,335			12,380
Net increase (decrease) in net assets resulting from beneficial interest transactions		(69,163,351	)		(14,963,617	)		(58,637,805	)		(211,539,441	)		(18,235,672	)		(55,266,789	)
Increase (decrease) in net assets		(193,959,747	)		(89,938,515	)		(94,246,668	)		(305,640,246	)		(32,244,539	)		(56,673,808	)
Net assets, beginning of year		372,127,323			462,065,838			248,176,761			553,817,007			66,589,766			123,263,574
Net assets, end of year	$	178,167,576		$	372,127,323		$	153,930,093		$	248,176,761		$	34,345,227		$	66,589,766
Net assets include accumulated undistributed (distributions in excess of) net investment income	$	41,825		$	—		$	(2,587,750	)	$	2,401,520		$	169,035		$	7,255,849

206

The UBS Funds—Financial statements

	UBS High Yield Fund						UBS U.S. Bond Fund
	Year ended June 30, 2009			Year ended June 30, 2008			Year ended June 30, 2009			Year ended June 30, 2008
Operations:
Net investment income (loss)	$	11,204,500		$	10,023,651		$	2,418,809		$	4,664,858
Net realized gain (loss)		(31,537,593	)		(2,523,631	)		(18,475,305	)		(1,946,406	)
Change in net unrealized appreciation (depreciation)		8,703,449			(12,102,564	)		11,415,740			(14,223,474	)
Net increase (decrease) in net assets from operations		(11,629,644	)		(4,602,544	)		(4,640,756	)		(11,505,022	)
Dividends and distributions to shareholders by class:
Class A:
Dividends from net investment income and net foreign currency gains		(3,772,743	)		(3,050,987	)		(634,150	)		(821,505	)
Distributions from net realized gain		—			—			—			—
Total Class A dividends and distributions		(3,772,743	)		(3,050,987	)		(634,150	)		(821,505	)
Class B:
Dividends from net investment income and net foreign currency gains		(93,997	)		(126,383	)		(10,106	)		(15,513	)
Distributions from net realized gain		—			—			—			—
Total Class B dividends and distributions		(93,997	)		(126,383	)		(10,106	)		(15,513	)
Class C:
Dividends from net investment income and net foreign currency gains		(649,853	)		(673,782	)		(101,001	)		(64,031	)
Distributions from net realized gain		—			—			—			—
Total Class C dividends and distributions		(649,853	)		(673,782	)		(101,001	)		(64,031	)
Class Y:
Dividends from net investment income and net foreign currency gains		(7,095,294	)		(5,847,636	)		(5,778,806	)		(8,560,244	)
Distributions from net realized gain		—			—			—			—
Total Class Y dividends and distributions		(7,095,294	)		(5,847,636	)		(5,778,806	)		(8,560,244	)
Decrease in net assets from dividends and distributions		(11,611,887	)		(9,698,788	)		(6,524,063	)		(9,461,293	)
Beneficial interest transactions:
Proceeds from shares sold		29,315,974			86,377,481			47,460,979			85,774,851
Shares issued on reinvestment of dividends and distributions		9,810,068			7,800,393			6,388,526			9,320,981
Cost of shares redeemed		(56,711,483	)		(36,337,963	)		(88,912,663	)		(155,491,548	)
Redemption fees		26,029			126			17,108			37,314
Net increase (decrease) in net assets resulting from beneficial interest transactions		(17,559,412	)		57,840,037			(35,046,050	)		(60,358,402	)
Increase (decrease) in net assets		(40,800,943	)		43,538,705			(46,210,869	)		(81,324,717	)
Net assets, beginning of year		150,053,051			106,514,346			113,170,234			194,494,951
Net assets, end of year	$	109,252,108		$	150,053,051		$	66,959,365		$	113,170,234
Net assets include accumulated undistributed (distributions in excess of) net investment income	$	280,273		$	(226,257	)	$	1,259,567		$	1,326,222

See accompanying notes to financial statements.
207

UBS Dynamic Alpha Fund — Financial highlights

The table below sets forth financial data for one share of beneficial interest outstanding throughout
each period presented.

	Class A
	Year ended June 30,												For the period ended
	2009			2008			2007			2006			June 30, 2005(6)
Net asset value, beginning of period	$	9.89		$	11.42		$	11.04		$	10.22		$	10.00
Income (loss) from investment operations:
Net investment income (loss)(1)		0.14			0.04			0.01			(0.09	)		(0.04	)
Net realized and unrealized gain (loss) from investment activities		(1.84	)		(0.56	)		0.37			1.01			0.26
Net increase from payment by Advisor		0.00	(3)		—			—			0.00	(3)		—
Total income (loss) from investment operations		(1.70	)		(0.52	)		0.38			0.92			0.22
Less dividends/distributions:
From net investment income and net foreign currency gains		—			(0.01	)		0.00	(3)		(0.10	)		—
From net realized gains		(2.74	)		(1.00	)		—			—			—
Total dividends/distributions		(2.74	)		(1.01	)		0.00	(3)		(0.10	)		—
Net asset value, end of period	$	5.45		$	9.89		$	11.42		$	11.04		$	10.22
Total investment return(2)		(14.31	)%(8)		(4.95	)%		3.44	%		9.02	%(4)		2.20	%
Ratios/Supplemental data:
Net assets, end of period (in 000s)	$	398,321		$	1,178,342		$	2,168,596		$	1,777,329		$	528,088
Ratio of expenses to average net assets		1.54	%(9)		1.20	%		1.17	%		1.20	%		1.32	%(7)
Ratio of net investment income (loss) to average net assets		1.99	%		0.35	%		0.06	%		(0.80	)%		(1.04	)%(7)
Portfolio turnover		139	%		39	%		28	%		38	%		6	%
	Class B
	Year ended June 30,												For the period ended
	2009			2008			2007			2006			June 30, 2005(6)
Net asset value, beginning of period	$	9.68		$	11.26		$	10.98		$	10.19		$	10.00
Income (loss) from investment operations:
Net investment income (loss)(1)		0.08			(0.04	)		(0.09	)		(0.17	)		(0.08	)
Net realized and unrealized gain (loss) from investment activities		(1.82	)		(0.54	)		0.37			1.00			0.27
Net increase from payment by Advisor		0.00	(3)		—			—			0.00	(3)		—
Total income (loss) from investment operations		(1.74	)		(0.58	)		0.28			0.83			0.19
Less dividends/distributions:
From net investment income and net foreign currency gains		—			—			—			(0.04	)		—
From net realized gains		(2.74	)		(1.00	)		—			—			—
Total dividends/distributions		(2.74	)		(1.00	)		—			(0.04	)		—
Net asset value, end of period	$	5.20		$	9.68		$	11.26		$	10.98		$	10.19
Total investment return(2)		(14.98	)%(8)		(5.62	)%		2.64	%		8.09	%(4)		1.90	%
Ratios/Supplemental data:
Net assets, end of period (in 000s)	$	6,733		$	14,905		$	25,790		$	30,051		$	14,815
Ratio of expenses to average net assets:
Before expense reimbursement/recoupment		2.39	%(9)		1.99	%		1.95	%		1.98	%		2.11	%(7)
After expense reimbursement/recoupment		2.36	%(9)		1.99	%		1.95	%		1.99	%(5)		2.10	%(7)
Ratio of net investment income (loss) to average net assets		1.23	%		(0.42	)%		(0.78	)%		(1.59	)%		(1.82	)%(7)
Portfolio turnover		139	%		39	%		28	%		38	%		6	%

⁽¹⁾  Calculated using the average shares method.

⁽²⁾  Total investment return is calculated assuming a $10,000 investment on the first day of each period reported, reinvestment of all dividends and distributions, if any, at net asset value on the ex-dividend dates, and a sale at net asset value on the last day of each period reported. The figures do not include any applicable sales charges; results would be lower if they were included. Total investment return for periods of less than one year has not been annualized. Returns do not reflect the deduction of taxes that a shareholder would pay on dividends/distributions or the redemption of Fund shares.

⁽³⁾  Amount represents less than $0.005 per share.

⁽⁴⁾  During the fiscal year ended June 30, 2006, the Fund's total investment return included a reimbursement by the Investment Advisor for amounts relating to a trading error that had an impact on the total return of less than 0.005%.

⁽⁵⁾  The Investment Manager recouped expenses previously reimbursed by the investment manager on behalf of the Fund, not to exceed the expense cap.

⁽⁶⁾  For the period January 27, 2005 (commencement of operations) through June 30, 2005.

⁽⁷⁾  Annualized.

⁽⁸⁾  During the fiscal year ended June 30, 2009, the Fund's total investment return included a reimbursement by the Investment Advisor for amounts relating to a trading error that had an impact on total return of less then 0.005%

⁽⁹⁾  Ratios have been restated to reflect interest and dividend expense for securities sold short. This restatement had no impact on the Fund's previously reported net assets, net investment income, net asset value, total return or ratio of net investment income to average net assets. See Note 12.

208

	Class C
	Year ended June 30,												For the period ended
	2009			2008			2007			2006			June 30, 2005(6)
Net asset value, beginning of period	$	9.68		$	11.26		$	10.97		$	10.19		$	10.00
Income (loss) from investment operations:
Net investment income (loss)(1)		0.08			(0.04	)		(0.08	)		(0.17	)		(0.08	)
Net realized and unrealized gain (loss) from investment activities		(1.81	)		(0.54	)		0.37			1.00			0.27
Net increase from payment by Advisor		0.00	(3)		—			—			0.00	(3)		—
Total income (loss) from investment operations		(1.73	)		(0.58	)		0.29			0.83			0.19
Less dividends/distributions:
From net investment income and net foreign currency gains		—			—			—			(0.05	)		—
From net realized gains		(2.74	)		(1.00	)		—			—			—
Total dividends/distributions		(2.74	)		(1.00	)		—			(0.05	)		—
Net asset value, end of period	$	5.21		$	9.68		$	11.26		$	10.97		$	10.19
Total investment return(2)		(14.98	)%(8)		(5.62	)%		2.64	%		8.15	%(4)		1.90	%
Ratios/Supplemental data:
Net assets, end of period (in 000s)	$	131,745		$	317,450		$	579,916		$	520,754		$	202,891
Ratio of expenses to average net assets		2.32	%(9)		1.97	%		1.93	%		1.97	%		2.09	%(7)
Ratio of net investment income (loss) to average net assets		1.24	%		(0.41	)%		(0.72	)%		(1.57	)%		(1.81	)%(7)
Portfolio turnover		139	%		39	%		28	%		38	%		6	%
	Class Y
	Year ended June 30,												For the period ended
	2009			2008			2007			2006			June 30, 2005(6)
Net asset value, beginning of period	$	9.96		$	11.48		$	11.07		$	10.23		$	10.00
Income (loss) from investment operations:
Net investment income (loss)(1)		0.17			0.08			0.05			(0.06	)		(0.03	)
Net realized and unrealized gain (loss) from investment activities		(1.85	)		(0.56	)		0.36			1.02			0.26
Net increase from payment by Advisor		0.00	(3)		—			—			0.00	(3)		—
Total income (loss) from investment operations		(1.68	)		(0.48	)		0.41			0.96			0.23
Less dividends/distributions:
From net investment income and net foreign currency gains		—			(0.04	)		0.00	(3)		(0.12	)		—
From net realized gains		(2.74	)		(1.00	)		—			—			—
Total dividends/distributions		(2.74	)		(1.04	)		0.00	(3)		(0.12	)		—
Net asset value, end of period	$	5.54		$	9.96		$	11.48		$	11.07		$	10.23
Total investment return(2)		(13.99	)%(8)		(4.64	)%		3.80	%		9.28	%(4)		2.30	%
Ratios/Supplemental data:
Net assets, end of period (in 000s)	$	77,254		$	320,839		$	478,785		$	293,004		$	56,220
Ratio of expenses to average net assets:
Before expense reimbursement/recoupment		1.22	%(9)		0.91	%		0.89	%		0.92	%		1.00	%(7)
After expense reimbursement/recoupment		1.22	%(9)		0.91	%		0.89	%		0.92	%		1.00	%(7)
Ratio of net investment income (loss) to average net assets		2.23	%		0.69	%		0.40	%		(0.52	)%		(0.72	)%(7)
Portfolio turnover		139	%		39	%		28	%		38	%		6	%

See accompanying notes to financial statements.
209

UBS Global Allocation Fund — Financial highlights

The table below sets forth financial data for one share of beneficial interest outstanding throughout
each year presented.

	Class A
	Year ended June 30,
	2009			2008			2007			2006			2005
Net asset value, beginning of year	$	12.59		$	14.81		$	13.86		$	13.33		$	12.35
Income (loss) from investment operations:
Net investment income(1)		0.08			0.17			0.19			0.19			0.17
Net realized and unrealized gain (loss) from investment activities		(3.08	)		(1.34	)		1.83			1.08			1.32
Total income (loss) from investment operations		(3.00	)		(1.17	)		2.02			1.27			1.49
Less dividends/distributions:
From net investment income and net foreign currency gains		(0.46	)		(0.23	)		(0.27	)		(0.14	)		(0.19	)
From net realized gains		(0.95	)		(0.82	)		(0.80	)		(0.60	)		(0.32	)
Total dividends/distributions		(1.41	)		(1.05	)		(1.07	)		(0.74	)		(0.51	)
Net asset value, end of year	$	8.18		$	12.59		$	14.81		$	13.86		$	13.33
Total investment return(2)		(22.36	)%		(8.43	)%		14.93	%		9.72	%		12.11	%
Ratios/Supplemental data:
Net assets, end of year (in 000s)	$	996,059		$	2,396,937		$	3,094,036		$	2,246,289		$	1,594,113
Ratio of expenses to average net assets		1.19	%		1.09	%		1.13	%		1.14	%		1.20	%
Ratio of net investment income to average net assets		0.84	%		1.19	%		1.28	%		1.41	%		1.34	%
Portfolio turnover		122	%		83	%		74	%		83	%		84	%
	Class B
	Year ended June 30,
	2009			2008			2007			2006			2005
Net asset value, beginning of year	$	12.35		$	14.52		$	13.60		$	13.08		$	12.14
Income (loss) from investment operations:
Net investment income(1)		0.00	(3)		0.05			0.07			0.08			0.08
Net realized and unrealized gain (loss) from investment activities		(3.01	)		(1.31	)		1.79			1.06			1.29
Total income (loss) from investment operations		(3.01	)		(1.26	)		1.86			1.14			1.37
Less dividends/distributions:
From net investment income and net foreign currency gains		(0.39	)		(0.09	)		(0.14	)		(0.02	)		(0.11	)
From net realized gains		(0.95	)		(0.82	)		(0.80	)		(0.60	)		(0.32	)
Total dividends/distributions		(1.34	)		(0.91	)		(0.94	)		(0.62	)		(0.43	)
Net asset value, end of year	$	8.00		$	12.35		$	14.52		$	13.60		$	13.08
Total investment return(2)		(22.98	)%		(9.14	)%		13.96	%		8.81	%		11.24	%
Ratios/Supplemental data:
Net assets, end of year (in 000s)	$	33,685		$	90,258		$	139,061		$	161,704		$	184,359
Ratio of expenses to average net assets		2.02	%		1.91	%		1.93	%		1.95	%		1.96	%
Ratio of net investment income to average net assets		0.01	%		0.36	%		0.48	%		0.60	%		0.58	%
Portfolio turnover		122	%		83	%		74	%		83	%		84	%

⁽¹⁾  Calculated using the average shares method.

⁽²⁾  Total investment return is calculated assuming a $10,000 investment on the first day of each year reported, reinvestment of all dividends and distributions, if any, at net asset value on the ex-dividend dates, and a sale at net asset value on the last day of each year reported. The figures do not include any applicable sales charges; results would be lower if they were included. Returns do not reflect the deduction of taxes that a shareholder would pay on dividend/distributions or the redemption of Fund shares.

⁽³⁾  Amount represents less than $0.005 per share.

210

	Class C
	Year ended June 30,
	2009			2008			2007			2006			2005
Net asset value, beginning of year	$	12.29		$	14.48		$	13.58		$	13.09		$	12.15
Income (loss) from investment operations:
Net investment income(1)		0.00	(3)		0.05			0.07			0.09			0.09
Net realized and unrealized gain (loss) from investment activities		(2.99	)		(1.30	)		1.79			1.05			1.29
Total income (loss) from investment operations		(2.99	)		(1.25	)		1.86			1.14			1.38
Less dividends/distributions:
From net investment income and net foreign currency gains		(0.39	)		(0.12	)		(0.16	)		(0.05	)		(0.12	)
From net realized gains		(0.95	)		(0.82	)		(0.80	)		(0.60	)		(0.32	)
Total dividends/distributions		(1.34	)		(0.94	)		(0.96	)		(0.65	)		(0.44	)
Net asset value, end of year	$	7.96		$	12.29		$	14.48		$	13.58		$	13.09
Total investment return(2)		(22.93	)%		(9.15	)%		14.02	%		8.82	%		11.32	%
Ratios/Supplemental data:
Net assets, end of year (in 000s)	$	456,577		$	985,156		$	1,274,539		$	1,044,517		$	903,280
Ratio of expenses to average net assets		1.97	%		1.89	%		1.90	%		1.91	%		1.95	%
Ratio of net investment income to average net assets		0.06	%		0.40	%		0.51	%		0.64	%		0.59	%
Portfolio turnover		122	%		83	%		74	%		83	%		84	%
	Class Y
	Year ended June 30,
	2009			2008			2007			2006			2005
Net asset value, beginning of year	$	12.80		$	15.04		$	14.06		$	13.51		$	12.50
Income (loss) from investment operations:
Net investment income(1)		0.10			0.21			0.23			0.23			0.22
Net realized and unrealized gain (loss) from investment activities		(3.13	)		(1.37	)		1.85			1.09			1.33
Total income (loss) from investment operations		(3.03	)		(1.16	)		2.08			1.32			1.55
Less dividends/distributions:
From net investment income and net foreign currency gains		(0.48	)		(0.26	)		(0.30	)		(0.17	)		(0.22	)
From net realized gains		(0.95	)		(0.82	)		(0.80	)		(0.60	)		(0.32	)
Total dividends/distributions		(1.43	)		(1.08	)		(1.10	)		(0.77	)		(0.54	)
Net asset value, end of year	$	8.34		$	12.80		$	15.04		$	14.06		$	13.51
Total investment return(2)		(22.12	)%		(8.20	)%		15.18	%		9.98	%		12.40	%
Ratios/Supplemental data:
Net assets, end of year (in 000s)	$	224,281		$	477,603		$	648,479		$	463,122		$	356,154
Ratio of expenses to average net assets		0.90	%		0.82	%		0.88	%		0.88	%		0.93	%
Ratio of net investment income to average net assets		1.14	%		1.46	%		1.53	%		1.67	%		1.61	%
Portfolio turnover		122	%		83	%		74	%		83	%		84	%

See accompanying notes to financial statements.
211

UBS Global Frontier Fund—Financial highlights

The table below sets forth financial data for one share of beneficial interest outstanding throughout
each period presented.

	Class A						Class C
	For the year ended June 30, 2009			For the period ended June 30, 2008(3)			For the year ended June 30, 2009			For the period ended June 30, 2008(3)
Net asset value, beginning of period	$	8.75		$	10.00		$	8.71		$	10.00
Loss from investment operations:
Net investment loss(1)		(0.06	)		(0.05	)		(0.10	)		(0.12	)
Net realized and unrealized loss from investment activities		(2.98	)		(1.10	)		(2.96	)		(1.10	)
Total loss from investment operations		(3.04	)		(1.15	)		(3.06	)		(1.22	)
Less dividends/distributions:
From net investment income		(0.12	)		(0.03	)		(0.07	)		0.00	(4)
From net realized gains		—			(0.07	)		—			(0.07	)
Total dividends/distributions		(0.12	)		(0.10	)		(0.07	)		(0.07	)
Net asset value, end of period	$	5.59		$	8.75		$	5.58		$	8.71
Total investment return(2)		(34.51	)%		(11.60	)%		(35.03	)%		(12.22	)%
Ratios/Supplemental data:
Net assets, end of period (in 000s)	$	48,395		$	79,572		$	14,559		$	22,882
Ratio of expenses to average net assets:
Before expense reimbursement		1.66	%		1.59	%(5)		2.48	%		2.40	%(5)
After expense reimbursement		1.40	%		1.40	%(5)		2.15	%		2.15	%(5)
Ratio of net investment loss to average net assets		(1.01	)%		(0.52	)%(5)		(1.76	)%		(1.27	)%(5)
Portfolio turnover		148	%		84	%		148	%		84	%

	Class Y
	For the year ended June 30, 2009			For the period ended June 30, 2008(3)
Net asset value, beginning of period	$	8.77		$	10.00
Loss from investment operations:
Net investment loss(1)		(0.04	)		(0.02	)
Net realized and unrealized loss from investment activities		(2.99	)		(1.10	)
Total loss from investment operations		(3.03	)		(1.12	)
Less dividends/distributions:
From net investment income		(0.14	)		(0.04	)
From net realized gains		—			(0.07	)
Total dividends/distributions.		(0.14	)		(0.11	)
Net asset value, end of period	$	5.60		$	8.77
Total investment return(2)		(34.30	)%		(11.33	)%
Ratios/Supplemental data:
Net assets, end of period (in 000s)	$	1,699		$	7,395
Ratio of expenses to average net assets:
Before expense reimbursement		1.35	%		1.31	%(5)
After expense reimbursement		1.15	%		1.15	%(5)
Ratio of net investment loss to average net assets		(0.73	)%		(0.26	)%(5)
Portfolio turnover		148	%		84	%

⁽¹⁾  Calculated using the average shares method.

⁽²⁾  Total investment return is calculated assuming a $10,000 investment on the first day of each period reported, reinvestment of all dividends and distributions, if any, at net asset value on the ex-dividend dates, and a sale at net asset value on the last day of each period reported. The figures do not include any applicable sales charges; results would be lower if they were included. Total investment return for periods of less than one year has not been annualized. Returns do not reflect the deduction of taxes that a shareholder would pay on dividends/distributions or the redemption of Fund shares.

⁽³⁾  For the period July 26, 2007 (commencement of operations) through June 30, 2008.

⁽⁴⁾  Amount represents less than $0.005 per share.

⁽⁵⁾  Annualized.

See accompanying notes to financial statements.
212

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213

UBS Global Equity Fund—Financial highlights

The table below sets forth financial data for one share of beneficial interest outstanding throughout
each year presented.

	Class A
	Year ended June 30,
	2009			2008			2007			2006			2005
Net asset value, beginning of year	$	13.54		$	15.47		$	12.99		$	11.63		$	10.51
Income (loss) from investment operations:
Net investment income(1)		0.10			0.15			0.13			0.11			0.15
Net realized and unrealized gain (loss) from investment activities		(3.57	)		(2.08	)		2.47			1.32			0.97
Total income (loss) from investment operations		(3.47	)		(1.93	)		2.60			1.43			1.12
Less dividends/distributions:
From net investment income and net foreign currency gains		(0.61	)		—			(0.12	)		(0.07	)		—
Net asset value, end of year	$	9.46		$	13.54		$	15.47		$	12.99		$	11.63
Total investment return(2)		(24.86	)%		(12.48	)%		20.11	%		12.35	%		10.66	%
Ratios/Supplemental data:
Net assets, end of year (in 000s)	$	72,280		$	117,601		$	168,208		$	173,052		$	109,998
Ratio of expenses to average net assets:
Before expense reimbursement		1.48	%		1.31	%		1.35	%		1.37	%		1.39	%
After expense reimbursement		1.25	%		1.25	%		1.25	%		1.25	%		1.25	%
Ratio of net investment income to average net assets		1.10	%		0.98	%		0.91	%		0.88	%		1.35	%
Portfolio turnover		76	%		66	%		32	%		48	%		37	%
	Class B
	Year ended June 30,
	2009			2008			2007			2006			2005
Net asset value, beginning of year	$	13.13		$	15.11		$	12.69		$	11.39		$	10.37
Income (loss) from investment operations:
Net investment income(1)		0.02			0.02			0.01			0.02			0.07
Net realized and unrealized gain (loss) from investment activities		(3.43	)		(2.00	)		2.43			1.28			0.95
Total income (loss) from investment operations		(3.41	)		(1.98	)		2.44			1.30			1.02
Less dividends/distributions:
From net investment income and net foreign currency gains		(0.50	)		—			(0.02	)		—			—
Net asset value, end of year	$	9.22		$	13.13		$	15.11		$	12.69		$	11.39
Total investment return(2)		(25.39	)%		(13.10	)%		19.25	%		11.41	%		9.84	%
Ratios/Supplemental data:
Net assets, end of year (in 000s)	$	1,254		$	3,814		$	7,439		$	13,672		$	108,894
Ratio of expenses to average net assets:
Before expense reimbursement/recoupment		2.25	%		2.05	%		2.17	%		2.35	%		2.22	%
After expense reimbursement/recoupment		2.00	%		2.00	%		2.00	%		2.00	%		2.00	%
Ratio of net investment income to average net assets		0.26	%		0.17	%		0.10	%		0.13	%		0.60	%
Portfolio turnover		76	%		66	%		32	%		48	%		37	%

⁽¹⁾  Calculated using the average shares method.

⁽²⁾  Total investment return is calculated assuming a $10,000 investment on the first day of each year reported, reinvestment of all dividends and distributions, if any, at net asset value on the ex-dividend dates, and a sale at net asset value on the last day of each year reported. The figures do not include any applicable sales charges; results would be lower if they were included. Returns do not reflect the deduction of taxes that a shareholder would pay on dividends/distributions or the redemption of Fund shares.

⁽³⁾  The investment manager recouped expenses previously reimbursed by the investment manager on behalf of the Fund, not to exceed the expense cap.

214

	Class C
	Year ended June 30,
	2009			2008			2007			2006			2005
Net asset value, beginning of year	$	13.05		$	15.02		$	12.65		$	11.35		$	10.33
Income (loss) from investment operations:
Net investment income(1)		0.03			0.03			0.02			0.02			0.06
Net realized and unrealized gain (loss) from investment activities		(3.44	)		(2.00	)		2.42			1.28			0.96
Total income (loss) from investment operations		(3.41	)		(1.97	)		2.44			1.30			1.02
Less dividends/distributions:
From net investment income and net foreign currency gains		(0.51	)		—			(0.07	)		—			—
Net asset value, end of year	$	9.13		$	13.05		$	15.02		$	12.65		$	11.35
Total investment return(2)		(25.46	)%		(13.12	)%		19.28	%		11.45	%		9.87	%
Ratios/Supplemental data:
Net assets, end of year (in 000s)	$	22,519		$	35,900		$	52,378		$	56,836		$	68,735
Ratio of expenses to average net assets:
Before expense reimbursement		2.30	%		2.11	%		2.14	%		2.20	%		2.20	%
After expense reimbursement		2.00	%		2.00	%		2.00	%		2.00	%		2.00	%
Ratio of net investment income to average net assets		0.34	%		0.23	%		0.16	%		0.13	%		0.60	%
Portfolio turnover		76	%		66	%		32	%		48	%		37	%
	Class Y
	Year ended June 30,
	2009			2008			2007			2006			2005
Net asset value, beginning of year	$	13.84		$	15.78		$	13.23		$	11.83		$	10.67
Income (loss) from investment operations:
Net investment income(1)		0.13			0.19			0.17			0.15			0.18
Net realized and unrealized gain (loss) from investment activities		(3.63	)		(2.13	)		2.52			1.34			0.98
Total income (loss) from investment operations		(3.50	)		(1.94	)		2.69			1.49			1.16
Less dividends/distributions:
From net investment income and net foreign currency gains		(0.65	)		—			(0.14	)		(0.09	)		—
Net asset value, end of year	$	9.69		$	13.84		$	15.78		$	13.23		$	11.83
Total investment return(2)		(24.52	)%		(12.29	)%		20.44	%		12.67	%		10.87	%
Ratios/Supplemental data:
Net assets, end of year (in 000s)	$	66,646		$	164,307		$	180,027		$	180,990		$	159,252
Ratio of expenses to average net assets:
Before expense reimbursement/recoupment		1.08	%		0.96	%		0.99	%		0.99	%		1.04	%
After expense reimbursement/recoupment		1.00	%		1.00	%(3)		0.99	%		0.99	%		1.00	%
Ratio of net investment income to average net assets		1.27	%		1.29	%		1.16	%		1.14	%		1.60	%
Portfolio turnover		76	%		66	%		32	%		48	%		37	%

See accompanying notes to financial statements.
215

UBS International Equity Fund—Financial highlights

The table below sets forth financial data for one share of beneficial interest outstanding throughout
each year presented.

	Class A
	Year ended June 30,
	2009			2008			2007			2006			2005
Net asset value, beginning of year	$	9.97		$	12.99		$	10.98		$	9.48		$	8.58
Income (loss) from investment operations:
Net investment income(1)		0.10			0.17			0.17			0.16			0.15
Net realized and unrealized gain (loss) from investment activities		(2.89	)		(1.83	)		2.47			1.81			0.86
Total income (loss) from investment operations		(2.79	)		(1.66	)		2.64			1.97			1.01
Less dividends/distributions:
From net investment income and net foreign currency gains		(0.16	)		(0.20	)		(0.11	)		(0.10	)		(0.11	)
From net realized gains		(0.54	)		(1.16	)		(0.52	)		(0.37	)		—
Total dividends/distributions		(0.70	)		(1.36	)		(0.63	)		(0.47	)		(0.11	)
Net asset value, end of year	$	6.48		$	9.97		$	12.99		$	10.98		$	9.48
Total investment return(2)		(26.75	)%		(13.93	)%		24.84	%		20.93	%		11.73	%
Ratios/Supplemental data:
Net assets, end of year (in 000s)	$	7,809		$	17,023		$	26,564		$	23,539		$	15,168
Ratio of expenses to average net assets:
Before expense reimbursement		1.57	%		1.32	%		1.38	%(3)		1.48	%		1.68	%
After expense reimbursement		1.25	%		1.25	%		1.26	%(3)		1.25	%		1.25	%
Ratio of net investment income to average net assets		1.50	%		1.43	%		1.42	%		1.52	%		1.61	%
Portfolio turnover		124	%		55	%		72	%		69	%		71	%
	Class B
	Year ended June 30,
	2009			2008			2007			2006			2005
Net asset value, beginning of year	$	9.79		$	12.81		$	10.82		$	9.34		$	8.48
Income (loss) from investment operations:
Net investment income(1)		0.06			0.08			0.06			0.08			0.08
Net realized and unrealized gain (loss) from investment activities		(2.82	)		(1.79	)		2.46			1.77			0.85
Total income (loss) from investment operations		(2.76	)		(1.71	)		2.52			1.85			0.93
Less dividends/distributions:
From net investment income and net foreign currency gains		—			(0.15	)		(0.01	)		—			(0.07	)
From net realized gains		(0.54	)		(1.16	)		(0.52	)		(0.37	)		—
Total dividends/distributions		(0.54	)		(1.31	)		(0.53	)		(0.37	)		(0.07	)
Net asset value, end of year	$	6.49		$	9.79		$	12.81		$	10.82		$	9.34
Total investment return(2)		(27.30	)%		(14.55	)%		23.97	%		19.86	%		10.92	%
Ratios/Supplemental data:
Net assets, end of year (in 000s)	$	218		$	324		$	555		$	732		$	876
Ratio of expenses to average net assets:
Before expense reimbursement		2.52	%		2.25	%		2.25	%(3)		2.22	%		2.25	%
After expense reimbursement		2.00	%		2.00	%		2.01	%(3)		2.00	%		2.00	%
Ratio of net investment income to average net assets		0.93	%		0.67	%		0.51	%		0.77	%		0.86	%
Portfolio turnover		124	%		55	%		72	%		69	%		71	%

⁽¹⁾  Calculated using the average shares method.

⁽²⁾  Total investment return is calculated assuming a $10,000 investment on the first day of each year reported, reinvestment of all dividends and distributions, if any, at net asset value on the ex-dividend dates, and a sale at net asset value on the last day of each year reported. The figures do not include any applicable sales charges; results would be lower if they were included. Returns do not reflect the deduction of taxes that a shareholder would pay on dividends/distributions or the redemption of Fund shares.

⁽³⁾  Includes interest expense of 0.01%.

216

	Class C
	Year ended June 30,
	2009			2008			2007			2006			2005
Net asset value, beginning of year	$	9.69		$	12.71		$	10.76		$	9.30		$	8.45
Income (loss) from investment operations:
Net investment income(1)		0.05			0.09			0.08			0.08			0.08
Net realized and unrealized gain (loss) from investment activities		(2.80	)		(1.79	)		2.42			1.77			0.85
Total income (loss) from investment operations		(2.75	)		(1.70	)		2.50			1.85			0.93
Less dividends/distributions:
From net investment income and net foreign currency gains		(0.06	)		(0.16	)		(0.03	)		(0.02	)		(0.08	)
From net realized gains		(0.54	)		(1.16	)		(0.52	)		(0.37	)		—
Total dividends/distributions		(0.60	)		(1.32	)		(0.55	)		(0.39	)		(0.08	)
Net asset value, end of year	$	6.34		$	9.69		$	12.71		$	10.76		$	9.30
Total investment return(2)		(27.33	)%		(14.51	)%		23.85	%		19.93	%		10.97	%
Ratios/Supplemental data:
Net assets, end of year (in 000s)	$	914		$	1,949		$	2,576		$	2,412		$	1,816
Ratio of expenses to average net assets:
Before expense reimbursement		2.38	%		2.13	%		2.16	%(3)		2.17	%		2.16	%
After expense reimbursement		2.00	%		2.00	%		2.01	%(3)		2.01	%		2.00	%
Ratio of net investment income to average net assets		0.75	%		0.75	%		0.66	%		0.77	%		0.86	%
Portfolio turnover		124	%		55	%		72	%		69	%		71	%
	Class Y
	Year Ended June 30,
	2009			2008			2007			2006			2005
Net asset value, beginning of year	$	10.05		$	13.07		$	11.04		$	9.55		$	8.63
Income (loss) from investment operations:
Net investment income(1)		0.12			0.21			0.20			0.19			0.17
Net realized and unrealized gain (loss) from investment activities		(2.91	)		(1.85	)		2.49			1.79			0.86
Total income (loss) from investment operations		(2.79	)		(1.64	)		2.69			1.98			1.03
Less dividends/distributions:
From net investment income and net foreign currency gains		(0.21	)		(0.22	)		(0.14	)		(0.12	)		(0.11	)
From net realized gains		(0.54	)		(1.16	)		(0.52	)		(0.37	)		—
Total dividends/distributions		(0.75	)		(1.38	)		(0.66	)		(0.49	)		(0.11	)
Net asset value, end of year	$	6.51		$	10.05		$	13.07		$	11.04		$	9.55
Total investment return(2)		(26.62	)%		(13.63	)%		24.83	%		21.22	%		11.97	%
Ratios/Supplemental data:
Net assets, end of year (in 000s)	$	66,665		$	129,573		$	172,150		$	147,397		$	113,264
Ratio of expenses to average net assets:
Before expense reimbursement		1.42	%		1.13	%		1.16	%(3)		1.19	%		1.18	%
After expense reimbursement		1.00	%		1.00	%		1.01	%(3)		1.00	%		1.00	%
Ratio of net investment income to average net assets		1.81	%		1.79	%		1.63	%		1.77	%		1.86	%
Portfolio turnover		124	%		55	%		72	%		69	%		71	%

See accompanying notes to financial statements.
217

UBS U.S. Equity Alpha Fund—Financial highlights

The table below sets forth financial data for one share of beneficial interest outstanding throughout each period presented.

	Class A
	For the year ended June 30,						For the period ended
	2009			2008			June 30, 2007(3)
Net asset value, beginning of period	$	8.82		$	11.55		$	10.00
Income (loss) from investment operations:
Net investment income (loss)(1)		0.04			0.05			0.02
Net realized and unrealized gain (loss) from investment activities		(2.48	)		(2.10	)		1.55
Total income (loss) from investment operations		(2.44	)		(2.05	)		1.57
Less dividends/distributions:
From net investment income		(0.07	)		(0.03	)		(0.01	)
From net realized gains		—			(0.65	)		(0.01	)
Total dividends/distributions		(0.07	)		(0.68	)		(0.02	)
Net asset value, end of period	$	6.31		$	8.82		$	11.55
Total investment return(2)		(27.52	)%		(18.49	)%		15.73	%
Ratios/Supplemental data:
Net assets, end of period (in 000s)	$	33,137		$	93,344		$	187,444
Ratio of expenses to average net assets:
Before expense reimbursement/recoupment and after interest and dividend expense for securities sold short		2.47	%		1.93	%		1.93	%(4)
After expense reimbursement/recoupment and interest and dividend expense for securities sold short		2.24	%		1.93	%		1.88	%(4)
After expense reimbursement/recoupment and before interest and dividend expense for securities sold short		1.50	%		1.50	%		1.50	%(4)
Ratio of net investment income (loss) to average net assets		0.63	%		0.47	%		0.30	%(4)
Portfolio turnover		154	%		72	%		81	%

	Class Y
	For the year ended June 30,						For the period ended
	2009			2008			June 30, 2007(3)
Net asset value, beginning of period	$	8.82		$	11.55		$	10.00
Income (loss) from investment operations:
Net investment income(1)		0.00	(5)		0.08			0.04
Net realized and unrealized gain (loss) from investment activities		(2.41	)		(2.10	)		1.54
Total income (loss) from investment operations		(2.41	)		(2.02	)		1.58
Less dividends/distributions:
From net investment income		(0.11	)		(0.06	)		(0.02	)
From net realized gains		—			(0.65	)		(0.01	)
Total dividends/distributions		(0.11	)		(0.71	)		(0.03	)
Net asset value, end of period	$	6.30		$	8.82		$	11.55
Total investment return(2)		(27.22	)%		(18.34	)%		15.88	%
Ratios/Supplemental data:
Net assets, end of period (in 000s)	$	95,804		$	9,121		$	5,405
Ratio of expenses to average net assets:
Before expense reimbursement/recoupment and after interest and dividend expense for securities sold short		2.33	%		1.70	%		1.67	%(4)
After expense reimbursement/recoupment and interest and dividend expense for securities sold short		2.25	%		1.70	%		1.67	%(4)
After expense reimbursement/recoupment and before interest and dividend expense for securities sold short		1.25	%		1.25	%		1.25	%(4)
Ratio of net investment income to average net assets		0.07	%		0.74	%		0.43	%(4)
Portfolio turnover		154	%		72	%		81	%

⁽¹⁾  Calculated using the average shares method.

⁽²⁾  Total investment return is calculated assuming a $10,000 investment on the first day of each period reported, reinvestment of all dividends and distributions, if any, at net asset value on the ex-dividend dates, and a sale at net asset value on the last day of each period reported. The figures do not include any applicable sales charges; results would be lower if they were included. Total investment return for periods of less than one year has not been annualized. Returns do not reflect the deduction of taxes that a shareholder would pay on dividends/distributions or the redemption of Fund shares.

⁽³⁾  For the period September 26, 2006 (commencement of operations) through June 30, 2007.

⁽⁴⁾  Annualized.

⁽⁵⁾  Amount represents less than $0.005 per share.

218

	Class C
	For the year ended June 30,						For the period ended
	2009			2008			June 30, 2007(3)
Net asset value, beginning of period	$	8.74		$	11.50		$	10.00
Income (loss) from investment operations:
Net investment income (loss)(1)		(0.01	)		(0.03	)		(0.04	)
Net realized and unrealized gain (loss) from investment activities		(2.44	)		(2.08	)		1.55
Total income (loss) from investment operations		(2.45	)		(2.11	)		1.51
Less dividends/distributions:
From net investment income		—			—			—
From net realized gains		—			(0.65	)		(0.01	)
Total dividends/distributions		—			(0.65	)		(0.01	)
Net asset value, end of period	$	6.29		$	8.74		$	11.50
Total investment return(2)		(28.03	)%		(19.11	)%		15.12	%
Ratios/Supplemental data:
Net assets, end of period (in 000s)	$	9,003		$	22,823		$	42,750
Ratio of expenses to average net assets:
Before expense reimbursement/recoupment and after interest and dividend expense for securities sold short		3.30	%		2.74	%		2.72	%(4)
After expense reimbursement/recoupment and interest and dividend expense for securities sold short		2.99	%		2.68	%		2.64	%(4)
After expense reimbursement/recoupment and before interest and dividend expense for securities sold short		2.25	%		2.25	%		2.25	%(4)
Ratio of net investment income (loss) to average net assets		(0.12	)%		(0.28	)%		(0.44	)%(4)
Portfolio turnover		154	%		72	%		81	%

See accompanying notes to financial statements.
219

UBS U.S. Large Cap Equity Fund—Financial highlights

The table below sets forth financial data for one share of beneficial interest outstanding throughout each
year presented.

	Class A
	Year ended June 30,
	2009			2008			2007			2006			2005
Net asset value, beginning of year	$	16.63		$	21.19		$	18.24		$	17.27		$	16.08
Income (loss) from investment operations:
Net investment income (loss)(1)		0.13			0.16			0.15			0.10			0.15
Net realized and unrealized gain (loss) from investment activities		(4.84	)		(3.68	)		3.52			1.39			1.63
Total income (loss) from investment operations		(4.71	)		(3.52	)		3.67			1.49			1.78
Less dividends/distributions:
From net investment income		(0.07	)		(0.16	)		(0.10	)		(0.11	)		(0.11	)
From net realized gains		(0.37	)		(0.88	)		(0.62	)		(0.41	)		(0.48	)
Total dividends/distributions		(0.44	)		(1.04	)		(0.72	)		(0.52	)		(0.59	)
Net asset value, end of year	$	11.48		$	16.63		$	21.19		$	18.24		$	17.27
Total investment return(2)		(28.04	)%		(17.17	)%		20.39	%		8.62	%		11.10	%
Ratios/Supplemental data:
Net assets, end of year (in 000s)	$	34,406		$	90,558		$	158,138		$	88,968		$	25,669
Ratio of expenses to average net assets		1.28	%		1.16	%		1.18	%		1.24	%(4)		1.14	%
Ratio of net investment income (loss) to average net assets		1.05	%		0.83	%		0.75	%		0.54	%		0.89	%
Portfolio turnover		62	%		47	%		34	%		50	%		32	%
	Class B
	Year ended June 30,
	2009			2008			2007			2006			2005
Net asset value, beginning of year	$	16.20		$	20.66		$	17.84		$	16.94		$	15.81
Income (loss) from investment operations:
Net investment income (loss)(1)		0.04			0.01			0.00	(3)		(0.04	)		0.00	(3)
Net realized and unrealized gain (loss) from investment activities		(4.71	)		(3.58	)		3.44			1.35			1.61
Total income (loss) from investment operations		(4.67	)		(3.57	)		3.44			1.31			1.61
Less dividends/distributions:
From net investment income		(0.02	)		(0.01	)		—			—			—
From net realized gains		(0.37	)		(0.88	)		(0.62	)		(0.41	)		(0.48	)
Total dividends/distributions		(0.39	)		(0.89	)		(0.62	)		(0.41	)		(0.48	)
Net asset value, end of year	$	11.14		$	16.20		$	20.66		$	17.84		$	16.94
Total investment return(2)		(28.61	)%		(17.79	)%		19.50	%		7.73	%		10.19	%
Ratios/Supplemental data:
Net assets, end of year (in 000s)	$	265		$	635		$	870		$	989		$	1,018
Ratio of expenses to average net assets		2.02	%		1.93	%		1.95	%		2.01	%(4)		2.02	%
Ratio of net investment income (loss) to average net assets		0.33	%		0.07	%		(0.01	)%		(0.23	)%		0.01	%
Portfolio turnover		62	%		47	%		34	%		50	%		32	%

⁽¹⁾  Calculated using the average shares method.

⁽²⁾  Total investment return is calculated assuming a $10,000 investment on the first day of each year reported, reinvestment of all dividends and distributions, if any, at net asset value on the ex-dividend dates, and a sale at net asset value on the last day of each year reported. The figures do not include any applicable sales charges; results would be lower if they were included. Returns do not reflect the deduction of taxes that a shareholder would pay on dividends/distributions or the redemption of Fund shares.

⁽³⁾  Amount represents less than $0.005 per share.

⁽⁴⁾  The investment manager recouped expenses previously reimbursed by the investment manager on behalf of the Fund, not to exceed the expense cap. The ratio of expenses to average net assets before expense recoupment was 1.20%, 1.92%, 1.96% and 0.92% for Class A, Class B, Class C and Class Y, respectively.

220

	Class C
	Year ended June 30,
	2009			2008			2007			2006			2005
Net asset value, beginning of year	$	16.21		$	20.66		$	17.83		$	16.93		$	15.80
Income (loss) from investment operations:
Net investment income (loss)(1)		0.04			0.02			0.00	(3)		(0.04	)		0.01
Net realized and unrealized gain (loss) from investment activities		(4.71	)		(3.59	)		3.45			1.36			1.60
Total income (loss) from investment operations		(4.67	)		(3.57	)		3.45			1.32			1.61
Less dividends/distributions:
From net investment income		(0.03	)		—			—			(0.01	)		—
From net realized gains		(0.37	)		(0.88	)		(0.62	)		(0.41	)		(0.48	)
Total dividends/distributions		(0.40	)		(0.88	)		(0.62	)		(0.42	)		(0.48	)
Net asset value, end of year	$	11.14		$	16.21		$	20.66		$	17.83		$	16.93
Total investment return(2)		(28.57	)%		(17.76	)%		19.56	%		7.79	%		10.20	%
Ratios/Supplemental data:
Net assets, end of year (in 000s)	$	4,719		$	6,382		$	10,591		$	5,977		$	2,423
Ratio of expenses to average net assets		1.96	%		1.91	%		1.92	%		1.98	%(4)		1.95	%
Ratio of net investment income (loss) to average net assets		0.35	%		0.09	%		0.01	%		(0.20	)%		0.08	%
Portfolio turnover		62	%		47	%		34	%		50	%		32	%
	Class Y
	Year ended June 30,
	2009			2008			2007			2006			2005
Net asset value, beginning of year	$	16.85		$	21.44		$	18.43		$	17.42		$	16.21
Income (loss) from investment operations:
Net investment income (loss)(1)		0.17			0.22			0.21			0.15			0.19
Net realized and unrealized gain (loss) from investment activities		(4.91	)		(3.72	)		3.56			1.40			1.65
Total income (loss) from investment operations		(4.74	)		(3.50	)		3.77			1.55			1.84
Less dividends/distributions:
From net investment income		(0.12	)		(0.21	)		(0.14	)		(0.13	)		(0.15	)
From net realized gains		(0.37	)		(0.88	)		(0.62	)		(0.41	)		(0.48	)
Total dividends/distributions		(0.49	)		(1.09	)		(0.76	)		(0.54	)		(0.63	)
Net asset value, end of year	$	11.62		$	16.85		$	21.44		$	18.43		$	17.42
Total investment return(2)		(27.85	)%		(16.87	)%		20.73	%		8.91	%		11.37	%
Ratios/Supplemental data:
Net assets, end of year (in 000s)	$	217,821		$	645,803		$	833,023		$	543,099		$	367,268
Ratio of expenses to average net assets		0.96	%		0.87	%		0.89	%		0.97	%(4)		0.90	%
Ratio of net investment income (loss) to average net assets		1.39	%		1.13	%		1.04	%		0.81	%		1.13	%
Portfolio turnover		62	%		47	%		34	%		50	%		32	%

See accompanying notes to financial statements.
221

UBS U.S. Large Cap Growth Fund—Financial highlights

The table below sets forth financial data for one share of beneficial interest outstanding throughout each
year presented.

	Class A
	Year ended June 30,
	2009			2008			2007			2006			2005
Net asset value, beginning of year	$	11.16		$	10.68		$	8.81		$	8.21		$	7.71
Income (loss) from investment operations:
Net investment income (loss)(1)		0.02			(0.02	)		0.01			(0.01	)		0.00	(3)
Net realized and unrealized gain (loss) from investment activities		(2.74	)		0.58			1.87			0.61			0.50
Total income (loss) from investment operations		(2.72	)		0.56			1.88			0.60			0.50
Less dividends/distributions:
From net investment income		—			—			(0.01	)		(0.00	)(3)		—
From net realized gains		—			(0.08	)		—			—			—
Total dividends/distributions		—			(0.08	)		(0.01	)		(0.00	)(3)		—
Net asset value, end of year	$	8.44		$	11.16		$	10.68		$	8.81		$	8.21
Total investment return(2)		(24.37	)%		5.25	%		21.29	%		7.33	%		6.49	%
Ratios/Supplemental data:
Net assets, end of year (in 000s)	$	24,812		$	13,994		$	9,542		$	6,803		$	3,175
Ratio of expenses to average net assets:
Before expense reimbursement		1.36	%		1.35	%		1.68	%		2.33	%		3.19	%
After expense reimbursement		1.05	%		1.05	%		1.05	%		1.05	%		1.05	%
Ratio of net investment income (loss) to average net assets		0.22	%		(0.20	)%		0.12	%		(0.16	)%		0.04	%
Portfolio turnover		132	%		102	%		112	%		137	%		145	%
	Class B
	Year ended June 30,
	2009			2008			2007			2006			2005
Net asset value, beginning of year	$	10.63		$	10.26		$	8.52		$	8.00		$	7.57
Income (loss) from investment operations:
Net investment income (loss)(1)		(0.05	)		(0.10	)		(0.06	)		(0.08	)		(0.05	)
Net realized and unrealized gain (loss) from investment activities		(2.60	)		0.55			1.80			0.60			0.48
Total income (loss) from investment operations		(2.65	)		0.45			1.74			0.52			0.43
Less dividends/distributions:
From net investment income		—			—			—			—			—
From net realized gains		—			(0.08	)		—			—			—
Total dividends/distributions		—			(0.08	)		—			—			—
Net asset value, end of year	$	7.98		$	10.63		$	10.26		$	8.52		$	8.00
Total investment return(2)		(24.93	)%		4.39	%		20.42	%		6.50	%		5.68	%
Ratios/Supplemental data:
Net assets, end of year (in 000s)	$	609		$	1,276		$	216		$	389		$	564
Ratio of expenses to average net assets:
Before expense reimbursement		1.93	%		2.14	%		2.61	%		3.23	%		3.93	%
After expense reimbursement		1.80	%		1.80	%		1.80	%		1.80	%		1.80	%
Ratio of net investment income (loss) to average net assets		(0.60	)%		(0.90	)%		(0.64	)%		(0.91	)%		(0.71	)%
Portfolio turnover		132	%		102	%		112	%		137	%		145	%

⁽¹⁾  Calculated using the average shares method.

⁽²⁾  Total investment return is calculated assuming a $10,000 investment on the first day of each year reported, reinvestment of all dividends and distributions, if any, at net asset value on the ex-dividend dates, and a sale at net asset value on the last day of each year reported. The figures do not include any applicable sales charges; results would be lower if they were included. Returns do not reflect the deduction of taxes that a shareholder would pay on dividends/distributions or the redemption of Fund shares.

⁽³⁾  Amount represents less than $0.005 per share.

222

	Class C
	Year ended June 30,
	2009			2008			2007			2006			2005
Net asset value, beginning of year	$	10.64		$	10.26		$	8.53		$	8.00		$	7.56
Income (loss) from investment operations:
Net investment income (loss)(1)		(0.04	)		(0.10	)		(0.06	)		(0.08	)		(0.05	)
Net realized and unrealized gain (loss) from investment activities		(2.61	)		0.56			1.79			0.61			0.49
Total income (loss) from investment operations		(2.65	)		0.46			1.73			0.53			0.44
Less dividends/distributions:
From net investment income		—			—			—			—			—
From net realized gains		—			(0.08	)		—			—			—
Total dividends/distributions		—			(0.08	)		—			—			—
Net asset value, end of year	$	7.99		$	10.64		$	10.26		$	8.53		$	8.00
Total investment return(2)		(24.91	)%		4.49	%		20.28	%		6.63	%		5.82	%
Ratios/Supplemental data:
Net assets, end of year (in 000s)	$	4,411		$	2,990		$	986		$	814		$	407
Ratio of expenses to average net assets:
Before expense reimbursement		1.87	%		2.13	%		2.51	%		3.12	%		3.96	%
After expense reimbursement		1.80	%		1.80	%		1.80	%		1.80	%		1.80	%
Ratio of net investment income (loss) to average net assets		(0.54	)%		(0.96	)%		(0.64	)%		(0.91	)%		(0.71	)%
Portfolio turnover		132	%		102	%		112	%		137	%		145	%
	Class Y
	Year ended June 30,
	2009			2008			2007			2006			2005
Net asset value, beginning of year	$	11.45		$	10.94		$	9.02		$	8.38		$	7.85
Income (loss) from investment operations:
Net investment income (loss)(1)		0.03			0.01			0.04			0.01			0.02
Net realized and unrealized gain (loss) from investment activities		(2.80	)		0.59			1.90			0.64			0.51
Total income (loss) from investment operations		(2.77	)		0.60			1.94			0.65			0.53
Less dividends/distributions:
From net investment income		—			(0.01	)		(0.02	)		(0.01	)		—
From net realized gains		—			(0.08	)		—			—			—
Total dividends/distributions		—			(0.09	)		(0.02	)		(0.01	)		—
Net asset value, end of year	$	8.68		$	11.45		$	10.94			9.02		$	8.38
Total investment return(2)		(24.19	)%		5.52	%		21.51	%		7.72	%		6.75	%
Ratios/Supplemental data:
Net assets, end of year (in 000s)	$	54,344		$	76,175		$	62,529		$	4,797		$	3,078
Ratio of expenses to average net assets:
Before expense reimbursement		1.23	%		1.21	%		1.25	%		2.10	%		3.01	%
After expense reimbursement		0.80	%		0.80	%		0.80	%		0.80	%		0.80	%
Ratio of net investment income (loss) to average net assets		0.41	%		0.05	%		0.35	%		0.09	%		0.29	%
Portfolio turnover		132	%		102	%		112	%		137	%		145	%

See accompanying notes to financial statements.
223

UBS U.S. Large Cap Value Equity Fund—Financial highlights

The table below sets forth financial data for one share of beneficial interest outstanding throughout each
year presented.

	Class A
	Year ended June 30,
	2009			2008			2007			2006			2005
Net asset value, beginning of year	$	8.42		$	11.66		$	10.54		$	10.48		$	11.18
Income (loss) from investment operations:
Net investment income(1)		0.11			0.14			0.13			0.11			0.12
Net realized and unrealized gain (loss) from investment activities		(2.66	)		(2.25	)		2.03			1.12			1.22
Total income (loss) from investment operations		(2.55	)		(2.11	)		2.16			1.23			1.34
Less dividends/distributions:
From net investment income		(0.06	)		(0.14	)		(0.11	)		(0.12	)		(0.12	)
From net realized gains		(0.87	)		(0.99	)		(0.93	)		(1.05	)		(1.92	)
Total dividends/distributions		(0.93	)		(1.13	)		(1.04	)		(1.17	)		(2.04	)
Net asset value, end of year	$	4.94		$	8.42		$	11.66		$	10.54		$	10.48
Total investment return(2)		(29.74	)%		(19.38	)%		21.20	%		12.13	%		12.35	%
Ratios/Supplemental data:
Net assets, end of year (in 000s)	$	43,951		$	78,989		$	113,213		$	105,709		$	105,975
Ratio of expenses to average net assets:
Before expense reimbursement		1.52	%		1.32	%		1.29	%		1.31	%		1.39	%
After expense reimbursement		1.10	%		1.10	%		1.10	%		1.10	%		1.10	%
Ratio of net investment income to average net assets		1.89	%		1.35	%		1.12	%		1.07	%		1.09	%
Portfolio turnover		67	%		52	%		27	%		41	%		49	%
	Class B
	Year ended June 30,
	2009			2008			2007			2006			2005
Net asset value, beginning of year	$	8.33		$	11.50		$	10.39		$	10.31		$	10.99
Income (loss) from investment operations:
Net investment income(1)		0.06			0.06			0.04			0.03			0.04
Net realized and unrealized gain (loss) from investment activities		(2.62	)		(2.21	)		2.00			1.10			1.20
Total income (loss) from investment operations		(2.56	)		(2.15	)		2.04			1.13			1.24
Less dividends/distributions:
From net investment income		(0.03	)		(0.03	)		—			—			—
From net realized gains		(0.87	)		(0.99	)		(0.93	)		(1.05	)		(1.92	)
Total dividends/distributions		(0.90	)		(1.02	)		(0.93	)		(1.05	)		(1.92	)
Net asset value, end of year	$	4.87		$	8.33		$	11.50		$	10.39		$	10.31
Total investment return(2)		(30.23	)%		(19.92	)%		20.21	%		11.25	%		11.59	%
Ratios/Supplemental data:
Net assets, end of year (in 000s)	$	247		$	471		$	1,061		$	1,978		$	4,997
Ratio of expenses to average net assets:
Before expense reimbursement		2.48	%		2.17	%		2.19	%		2.15	%		2.35	%
After expense reimbursement		1.85	%		1.85	%		1.85	%		1.85	%		1.85	%
Ratio of net investment income to average net assets		1.14	%		0.59	%		0.39	%		0.32	%		0.34	%
Portfolio turnover		67	%		52	%		27	%		41	%		49	%

⁽¹⁾  Calculated using the average shares method.

⁽²⁾  Total investment return is calculated assuming a $10,000 investment on the first day of each year reported, reinvestment of all dividends and distributions, if any, at net asset value on the ex-dividend dates, and a sale at net asset value on the last day of each year reported. The figures do not include any applicable sales charges; results would be lower if they were included. Returns do not reflect the deduction of taxes that a shareholder would pay on dividends/distributions or the redemption of Fund shares

224

	Class C
	Year ended June 30,
	2009			2008			2007			2006			2005
Net asset value, beginning of year	$	8.26		$	11.42		$	10.34		$	10.30		$	11.00
Income (loss) from investment operations:
Net investment income(1)		0.06			0.06			0.04			0.03			0.04
Net realized and unrealized gain (loss) from investment activities		(2.60	)		(2.18	)		1.99			1.10			1.20
Total income (loss) from investment operations		(2.54	)		(2.12	)		2.03			1.13			1.24
Less dividends/distributions:
From net investment income		(0.02	)		(0.05	)		(0.02	)		(0.04	)		(0.02	)
From net realized gains		(0.87	)		(0.99	)		(0.93	)		(1.05	)		(1.92	)
Total dividends/distributions		(0.89	)		(1.04	)		(0.95	)		(1.09	)		(1.94	)
Net asset value, end of year	$	4.83		$	8.26		$	11.42		$	10.34		$	10.30
Total investment return(2)		(30.25	)%		(19.83	)%		20.24	%		11.26	%		11.62	%
Ratios/Supplemental data:
Net assets, end of year (in 000s)	$	5,429		$	9,795		$	15,919		$	15,683		$	17,235
Ratio of expenses to average net assets:
Before expense reimbursement		2.33	%		2.10	%		2.06	%		2.08	%		2.19	%
After expense reimbursement		1.85	%		1.85	%		1.85	%		1.85	%		1.85	%
Ratio of net investment income to average net assets		1.13	%		0.60	%		0.37	%		0.32	%		0.34	%
Portfolio turnover		67	%		52	%		27	%		41	%		49	%
	Class Y
	Year ended June 30,
	2009			2008			2007			2006			2005
Net asset value, beginning of year	$	8.46		$	11.71		$	10.58		$	10.52		$	11.22
Income (loss) from investment operations:
Net investment income(1)		0.12			0.16			0.15			0.14			0.14
Net realized and unrealized gain (loss) from investment activities		(2.67	)		(2.25	)		2.05			1.12			1.24
Total income (loss) from investment operations		(2.55	)		(2.09	)		2.20			1.26			1.38
Less dividends/distributions:
From net investment income		(0.07	)		(0.17	)		(0.14	)		(0.15	)		(0.16	)
From net realized gains		(0.87	)		(0.99	)		(0.93	)		(1.05	)		(1.92	)
Total dividends/distributions		(0.94	)		(1.16	)		(1.07	)		(1.20	)		(2.08	)
Net asset value, end of year	$	4.97		$	8.46		$	11.71		$	10.58		$	10.52
Total investment return(2)		(29.53	)%		(19.15	)%		21.52	%		12.37	%		12.74	%
Ratios/Supplemental data:
Net assets, end of year (in 000s)	$	2,174		$	5,694		$	9,074		$	7,172		$	5,760
Ratio of expenses to average net assets:
Before expense reimbursement		1.45	%		1.13	%		1.06	%		1.06	%		1.13	%
After expense reimbursement		0.85	%		0.85	%		0.85	%		0.85	%		0.85	%
Ratio of net investment income to average net assets		2.08	%		1.60	%		1.36	%		1.32	%		1.34	%
Portfolio turnover		67	%		52	%		27	%		41	%		49	%

See accompanying notes to financial statements.
225

UBS U.S. Mid Cap Growth Equity Fund—Financial highlights

The table below sets forth financial data for one share of beneficial interest outstanding throughout each
period presented.

	Class A
	Year ended June 30,									For the period ended
	2009			2008			2007			June 30, 2006(3)
Net asset value, beginning of period	$	10.05		$	11.13		$	9.60		$	10.15
Income (loss) from investment operations:
Net investment loss(1)		(0.06	)		(0.11	)		(0.10	)		(0.02	)
Net realized and unrealized gain (loss) from investment activities		(3.13	)		(0.69	)		1.63			(0.53	)
Total income (loss) from investment operations		(3.19	)		(0.80	)		1.53			(0.55	)
Less dividends/distributions:
From net investment income		—			(0.03	)		—			—
From net realized gains		(0.13	)		(0.25	)		—			—
Total dividends/distributions		(0.13	)		(0.28	)		—			—
Net asset value, end of period	$	6.73		$	10.05		$	11.13		$	9.60
Total investment return(2)		(31.54	)%		(7.34	)%		15.94	%		(5.42	)%
Ratios/Supplemental data:
Net assets, end of period (in 000s)	$	512		$	579		$	261		$	162
Ratio of expenses to average net assets:
Before expense reimbursement		5.76	%		4.58	%		4.61	%		6.59	%(4)
After expense reimbursement		1.45	%		1.45	%		1.45	%		1.45	%(4)
Ratio of net investment loss to average net assets		(0.91	)%		(1.05	)%		(0.99	)%		(0.87	)%(4)
Portfolio turnover		86	%		115	%		72	%		12	%

	Class Y
	Year ended June 30,									For the period ended
	2009			2008			2007			June 30, 2006(6)
Net asset value, beginning of period	$	10.10		$	11.15		$	9.61		$	10.00
Income (loss) from investment operations:
Net investment loss(1)		(0.05	)		(0.09	)		(0.07	)		(0.02	)
Net realized and unrealized gain (loss) from investment activities		(3.12	)		(0.68	)		1.62			(0.37	)
Total income (loss) from investment operations		(3.17	)		(0.77	)		1.55			(0.39	)
Less dividends/distributions:
From net investment income		—			(0.03	)		(0.01	)		—
From net realized gains		(0.13	)		(0.25	)		—			—
Total dividends/distributions		(0.13	)		(0.28	)		(0.01	)		—
Net asset value, end of period	$	6.80		$	10.10		$	11.15		$	9.61
Total investment return(2)		(31.18	)%		(6.98	)%		16.17	%		(3.90	)%
Ratios/Supplemental data:
Net assets, end of period (in 000s)	$	3,573		$	5,192		$	5,580		$	4,805
Ratio of expenses to average net assets:
Before expense reimbursement		5.01	%		4.12	%		4.31	%		5.90	%(4)
After expense reimbursement		1.20	%		1.20	%		1.20	%		1.20	%(4)
Ratio of net investment loss to average net assets		(0.67	)%		(0.80	)%		(0.73	)%		(0.61	)%(4)
Portfolio turnover		86	%		115	%		72	%		12	%

⁽¹⁾  Calculated using the average shares method.

⁽²⁾  Total investment return is calculated assuming a $10,000 investment on the first day of each period reported, reinvestment of all dividends and distributions, if any, at net asset value on the ex-dividend dates, and a sale at net asset value on the last day of each period reported. The figures do not include any applicable sales charges; results would be lower if they were included. Total investment return for periods of less than one year has not been annualized. Returns do not reflect the deduction of taxes that a shareholder would pay on dividends/distributions or the redemption of Fund shares.

⁽³⁾  For the period March 31, 2006 (commencent of operations) through June 30, 2006.

⁽⁴⁾  Annualized.

⁽⁵⁾  For the period April 21, 2006 (commencement of operations) through June 30, 2006.

⁽⁶⁾  For the period March 27, 2006 (commencement of operations) through June 30, 2006.

226

	Class C
	Year ended June 30,									For the period ended
	2009			2008			2007			June 30, 2006(5)
Net asset value, beginning of period	$	9.90		$	11.03		$	9.58		$	10.41
Income (loss) from investment operations:
Net investment loss(1)		(0.11	)		(0.19	)		(0.17	)		(0.03	)
Net realized and unrealized gain (loss) from investment activities		(3.16	)		(0.68	)		1.62			(0.80	)
Total income (loss) from investment operations		(3.27	)		(0.87	)		1.45			(0.83	)
Less dividends/distributions:
From net investment income		—			(0.01	)		—			—
From net realized gains		(0.13	)		(0.25	)		—			—
Total dividends/distributions		(0.13	)		(0.26	)		—			—
Net asset value, end of period	$	6.50		$	9.90		$	11.03		$	9.58
Total investment return(2)		(32.83	)%		(8.03	)%		15.14	%		(7.97	)%
Ratios/Supplemental data:
Net assets, end of period (in 000s)	$	114		$	142		$	82		$	67
Ratio of expenses to average net assets:
Before expense reimbursement		7.01	%		5.49	%		5.10	%		7.52	%(4)
After expense reimbursement		2.20	%		2.20	%		2.20	%		2.20	%(4)
Ratio of net investment loss to average net assets		(1.65	)%		(1.78	)%		(1.73	)%		(1.62	)%(4)
Portfolio turnover		86	%		115	%		72	%		12	%

See accompanying notes to financial statements.
227

UBS U.S. Small Cap Growth Fund—Financial highlights

The table below sets forth financial data for one share of beneficial interest outstanding throughout
each year presented.

	Class A
	Year ended June 30,
	2009			2008			2007			2006			2005
Net asset value, beginning of year	$	13.31		$	15.94		$	14.41		$	13.65		$	12.41
Income (loss) from investment operations:
Net investment loss(1)		(0.06	)		(0.12	)		(0.14	)		(0.12	)		(0.11	)
Net realized and unrealized gain (loss) from investment activities		(4.69	)		(1.47	)		2.14			1.45			1.55
Total income (loss) from investment operations		(4.75	)		(1.59	)		2.00			1.33			1.44
Distributions from net realized gains		0.00	(3)		(1.04	)		(0.47	)		(0.57	)		(0.20	)
Net asset value, end of year	$	8.56		$	13.31		$	15.94		$	14.41		$	13.65
Total investment return(2)		(35.68	)%		(10.25	)%		14.18	%		9.88	%		11.63	%
Ratios/Supplemental data:
Net assets, end of year (in 000s)	$	41,141		$	92,759		$	149,362		$	151,731		$	110,795
Ratio of expenses to average net assets:
Before expense reimbursement		1.67	%		1.47	%		1.65	%		1.50	%		1.59	%
After expense reimbursement		1.28	%		1.28	%		1.28	%		1.28	%		1.28	%
Ratio of net investment loss to average net assets		(0.60	)%		(0.81	)%		(0.93	)%		(0.82	)%		(0.88	)%
Portfolio turnover		73	%		51	%		34	%		49	%		50	%
	Class B
	Year ended June 30,
	2009			2008			2007			2006			2005
Net asset value, beginning of year	$	12.59		$	15.25		$	13.91		$	13.29		$	12.17
Income (loss) from investment operations:
Net investment loss(1)		(0.12	)		(0.22	)		(0.24	)		(0.22	)		(0.20	)
Net realized and unrealized gain (loss) from investment activities		(4.42	)		(1.40	)		2.05			1.41			1.52
Total income (loss) from investment operations		(4.54	)		(1.62	)		1.81			1.19			1.32
Distributions from net realized gains		0.00	(3)		(1.04	)		(0.47	)		(0.57	)		(0.20	)
Net asset value, end of year	$	8.05		$	12.59		$	15.25		$	13.91		$	13.29
Total investment return(2)		(36.06	)%		(10.94	)%		13.32	%		9.09	%		10.86	%
Ratios/Supplemental data:
Net assets, end of year (in 000s)	$	177		$	661		$	1,798		$	5,598		$	9,592
Ratio of expenses to average net assets:
Before expense reimbursement		2.55	%		2.20	%		2.29	%		2.39	%		2.53	%
After expense reimbursement		2.03	%		2.03	%		2.03	%		2.03	%		2.03	%
Ratio of net investment loss to average net assets		(1.38	)%		(1.58	)%		(1.69	)%		(1.57	)%		(1.63	)%
Portfolio turnover		73	%		51	%		34	%		49	%		50	%

⁽¹⁾  Calculated using the average shares method.

⁽²⁾  Total investment return is calculated assuming a $10,000 investment on the first day of each year reported, reinvestment of all dividends and distributions, if any, at net asset value on the ex-dividend dates, and a sale at net asset value on the last day of each year reported. The figures do not include any applicable sales charges; results would be lower if they were included. Returns do not reflect the deduction of taxes that a shareholder would pay on dividends/distributions or the redemption of Fund shares.

⁽³⁾  Amount represents less than $0.005 per share.

228

	Class C
	Year ended June 30,
	2009			2008			2007			2006			2005
Net asset value, beginning of year	$	12.57		$	15.23		$	13.89		$	13.28		$	12.16
Income (loss) from investment operations:
Net investment loss(1)		(0.12	)		(0.21	)		(0.24	)		(0.22	)		(0.20	)
Net realized and unrealized gain (loss) from investment activities		(4.42	)		(1.41	)		2.05			1.40			1.52
Total income (loss) from investment operations		(4.54	)		(1.62	)		1.81			1.18			1.32
Distributions from net realized gains		0.00	(3)		(1.04	)		(0.47	)		(0.57	)		(0.20	)
Net asset value, end of year	$	8.03		$	12.57		$	15.23		$	13.89		$	13.28
Total investment return(2)		(36.11	)%		(10.95	)%		13.33	%		9.02	%		10.87	%
Ratios/Supplemental data:
Net assets, end of year (in 000s)	$	2,471		$	6,042		$	7,877		$	8,329		$	8,661
Ratio of expenses to average net assets:
Before expense reimbursement		2.45	%		2.25	%		2.28	%		2.31	%		2.45	%
After expense reimbursement		2.03	%		2.03	%		2.03	%		2.03	%		2.03	%
Ratio of net investment loss to average net assets		(1.38	)%		(1.55	)%		(1.68	)%		(1.57	)%		(1.63	)%
Portfolio turnover		73	%		51	%		34	%		49	%		50	%
	Class Y
	Year ended June 30,
	2009			2008			2007			2006			2005
Net asset value, beginning of year	$	13.74		$	16.38		$	14.75		$	13.93		$	12.63
Income (loss) from investment operations:
Net investment loss(1)		(0.03	)		(0.08	)		(0.10	)		(0.08	)		(0.08	)
Net realized and unrealized gain (loss) from investment activities		(4.85	)		(1.52	)		2.20			1.47			1.58
Total income (loss) from investment operations		(4.88	)		(1.60	)		2.10			1.39			1.50
Distributions from net realized gains		0.00	(3)		(1.04	)		(0.47	)		(0.57	)		(0.20	)
Net asset value, end of year	$	8.86		$	13.74		$	16.38		$	14.75		$	13.93
Total investment return(2)		(35.51	)%		(10.03	)%		14.54	%		10.12	%		11.90	%
Ratios/Supplemental data:
Net assets, end of year (in 000s)	$	134,378		$	272,666		$	303,029		$	269,696		$	146,725
Ratio of expenses to average net assets:
Before expense reimbursement		1.25	%		1.12	%		1.18	%		1.13	%		1.14	%
After expense reimbursement		1.03	%		1.03	%		1.03	%		1.03	%		1.03	%
Ratio of net investment loss to average net assets		(0.36	)%		(0.55	)%		(0.68	)%		(0.57	)%		(0.63	)%
Portfolio turnover		73	%		51	%		34	%		49	%		50	%

See accompanying notes to financial statements.
229

UBS Absolute Return Bond Fund—Financial highlights

The table below sets forth financial data for one share of beneficial interest outstanding throughout
each period presented.

	Class A
	Year ended June 30,												For the period ended
	2009			2008			2007			2006			June 30, 2005(4)
Net asset value, beginning of period	$	7.81		$	10.05		$	10.14		$	9.98		$	10.00
Income (loss) from investment operations:
Net investment income(1)		0.13			0.34			0.35			0.28			0.03
Net realized and unrealized gain (loss) from investment activities		(0.88	)		(2.13	)		(0.06	)		0.18			(0.02	)
Total income (loss) from investment operations		(0.75	)		(1.79	)		0.29			0.46			0.01
Less dividends/distributions:
From net investment income and net foreign currency gains		(0.71	)		(0.45	)		(0.30	)		(0.29	)		(0.03	)
From net realized gains		—			—			(0.08	)		(0.01	)		—
Total dividends/distributions		(0.71	)		(0.45	)		(0.38	)		(0.30	)		(0.03	)
Net asset value, end of period	$	6.35		$	7.81		$	10.05		$	10.14		$	9.98
Total investment return(2)		(9.48	)%		(18.07	)%		2.87	%		4.65	%		0.06	%
Ratios/Supplemental data:
Net assets, end of period (in 000s)	$	17,850		$	50,761		$	257,180		$	212,983		$	105,373
Ratio of expenses to average net assets:
Before expense reimbursement/recoupment		1.12	%		0.99	%		0.95	%		0.96	%		1.31	%(5)
After expense reimbursement/recoupment		1.00	%		0.99	%		0.95	%		0.99	%(3)		1.00	%(5)
Ratio of net investment income to average net assets		1.85	%		3.68	%		3.43	%		2.78	%		1.75	%(5)
Portfolio turnover		99	%		33	%		56	%		96	%		22	%

	Class Y
	Year ended June 30,												For the period ended
	2009			2008			2007			2006			June 30, 2005(4)
Net asset value, beginning of period	$	7.81		$	10.05		$	10.15		$	9.98		$	10.00
Income (loss) from investment operations:
Net investment income(1)		0.13			0.36			0.37			0.30			0.03
Net realized and unrealized gain (loss) from investment activities		(0.88	)		(2.12	)		(0.07	)		0.19			(0.02	)
Total income (loss) from investment operations		(0.75	)		(1.76	)		0.30			0.49			0.01
Less dividends/distributions:
From net investment income and net foreign currency gains		(0.72	)		(0.48	)		(0.32	)		(0.31	)		(0.03	)
From net realized gains		—			—			(0.08	)		(0.01	)		—
Total dividends/distributions		(0.72	)		(0.48	)		(0.40	)		(0.32	)		(0.03	)
Net asset value, end of period	$	6.34		$	7.81		$	10.05		$	10.15		$	9.98
Total investment return(2)		(9.32	)%		(17.92	)%		2.96	%		4.94	%		0.09	%
Ratios/Supplemental data:
Net assets, end of period (in 000s)	$	130,933		$	187,445		$	259,089		$	232,208		$	20,004
Ratio of expenses to average net assets:
Before expense reimbursement/recoupment		0.83	%		0.76	%		0.75	%		0.77	%		1.11	%(5)
After expense reimbursement/recoupment		0.83	%		0.76	%		0.75	%		0.77	%		0.85	%(5)
Ratio of net investment income to average net assets		1.94	%		3.92	%		3.63	%		3.00	%		1.90	%(5)
Portfolio turnover		99	%		33	%		56	%		96	%		22	%

⁽¹⁾  Calculated using the average shares method.

⁽²⁾  Total investment return is calculated assuming a $10,000 investment on the first day of each period reported, reinvestment of all dividends and distributions, if any, at net asset value on the ex-dividend dates, and a sale at net asset value on the last day of each period reported. The figures do not include any applicable sales charges; results would be lower if they were included. Total investment return for periods of less than one year has not been annualized. Returns do not reflect the deduction of taxes that a shareholder would pay on dividends/distributions or the redemption of Fund shares.

230

	Class C
	Year ended June 30,												For the period ended
	2009			2008			2007			2006			June 30, 2005(4)
Net asset value, beginning of period	$	7.81		$	10.04		$	10.14		$	9.98		$	10.00
Income (loss) from investment operations:
Net investment income(1)		0.10			0.31			0.31			0.24			0.02
Net realized and unrealized gain (loss) from investment activities		(0.87	)		(2.12	)		(0.06	)		0.18			(0.02	)
Total income (loss) from investment operations		(0.77	)		(1.81	)		0.25			0.42			—
Less dividends/distributions:
From net investment income and net foreign currency gains		(0.69	)		(0.42	)		(0.27	)		(0.25	)		(0.02	)
From net realized gains		—			—			(0.08	)		(0.01	)		—
Total dividends/distributions		(0.69	)		(0.42	)		(0.35	)		(0.26	)		(0.02	)
Net asset value, end of period	$	6.35		$	7.81		$	10.04		$	10.14		$	9.98
Total investment return(2)		(9.81	)%		(18.27	)%		2.42	%		4.30	%		0.01	%
Ratios/Supplemental data:
Net assets, end of period (in 000s)	$	5,147		$	9,971		$	37,548		$	30,618		$	16,973
Ratio of expenses to average net assets:
Before expense reimbursement/recoupment		1.42	%		1.32	%		1.29	%		1.32	%		1.68	%(5)
After expense reimbursement/recoupment		1.35	%		1.32	%		1.30	%(3)		1.35	%(3)		1.35	%(5)
Ratio of net investment income to average net assets		1.46	%		3.35	%		3.07	%		2.42	%		1.40	%(5)
Portfolio turnover		99	%		33	%		56	%		96	%		22	%

⁽³⁾  The investment manager recouped expenses previously reimbursed by the investment manager on behalf of the Fund, not to exceed the expense cap.

⁽⁴⁾  For the period April 27, 2005 (commencement of operations) through June 30, 2005.

⁽⁵⁾  Annualized.

See accompanying notes to financial statements.
231

UBS Global Bond Fund—Financial highlights

The table below sets forth financial data for one share of beneficial interest outstanding throughout
each year presented.

	Class A
	Year ended June 30,
	2009			2008			2007			2006			2005
Net asset value, beginning of year	$	9.17		$	9.41		$	9.50		$	9.83		$	9.87
Income (loss) from investment operations:
Net investment income(1)		0.22			0.27			0.26			0.19			0.17
Net realized and unrealized gain (loss) from investment activities		(0.92	)		(0.08	)		(0.10	)		(0.15	)		0.34
Total income (loss) from investment operations		(0.70	)		0.19			0.16			0.04			0.51
Less dividends/distributions:
From net investment income and net foreign currency gains		(1.35	)		(0.43	)		(0.25	)		(0.37	)		(0.55	)
Net asset value, end of year	$	7.12		$	9.17		$	9.41		$	9.50		$	9.83
Total investment return(2)		(7.66	)%		1.94	%		1.67	%		0.51	%		5.05	%
Ratios/Supplemental data:
Net assets, end of year (in 000s)	$	7,930		$	12,123		$	14,093		$	15,546		$	16,701
Ratio of expenses to average net assets:
Before expense reimbursement		1.68	%		1.31	%		1.40	%		1.48	%		1.48	%
After expense reimbursement		1.15	%		1.15	%		1.15	%		1.15	%		1.15	%
Ratio of net investment income to average net assets		2.90	%		2.81	%		2.67	%		1.97	%		1.65	%
Portfolio turnover		116	%		137	%		74	%		114	%		112	%
	Class B
	Year ended June 30,
	2009			2008			2007			2006			2005
Net asset value, beginning of year	$	9.20		$	9.43		$	9.52		$	9.85		$	9.88
Income (loss) from investment operations:
Net investment income(1)		0.17			0.20			0.18			0.12			0.09
Net realized and unrealized gain (loss) from investment activities		(0.93	)		(0.08	)		(0.09	)		(0.15	)		0.35
Total income (loss) from investment operations		(0.76	)		0.12			0.09			(0.03	)		0.44
Less dividends/distributions:
From net investment income and net foreign currency gains		(1.30	)		(0.35	)		(0.18	)		(0.30	)		(0.47	)
Net asset value, end of year	$	7.14		$	9.20		$	9.43		$	9.52		$	9.85
Total investment return(2)		(8.45	)%		1.27	%		0.90	%		(0.26	)%		4.29	%
Ratios/Supplemental data:
Net assets, end of year (in 000s)	$	122		$	131		$	215		$	420		$	1,153
Ratio of expenses to average net assets:
Before expense reimbursement		2.55	%		2.20	%		2.17	%		2.25	%		2.30	%
After expense reimbursement		1.90	%		1.90	%		1.90	%		1.90	%		1.90	%
Ratio of net investment income to average net assets		2.15	%		2.06	%		1.92	%		1.22	%		0.90	%
Portfolio turnover		116	%		137	%		74	%		114	%		112	%

⁽¹⁾  Calculated using the average shares method.

⁽²⁾  Total investment return is calculated assuming a $10,000 investment on the first day of each year reported, reinvestment of all dividends and distributions, if any, at net asset value on the ex-dividend dates, and a sale at net asset value on the last day of each year reported. The figures do not include any applicable sales charges; results would be lower if they were included. Returns do not reflect the deduction of taxes that a shareholder would pay on dividends/distributions or the redemption of Fund shares.

232

	Class C
	Year ended June 30,
	2009			2008			2007			2006			2005
Net asset value, beginning of year	$	9.15		$	9.38		$	9.47		$	9.81		$	9.85
Income (loss) from investment operations:
Net investment income(1)		0.18			0.22			0.21			0.14			0.12
Net realized and unrealized gain (loss) from investment activities		(0.92	)		(0.07	)		(0.10	)		(0.15	)		0.35
Total income (loss) from investment operations		(0.74	)		0.15			0.11			(0.01	)		0.47
Less dividends/distributions:
From net investment income and net foreign currency gains		(1.32	)		(0.38	)		(0.20	)		(0.33	)		(0.51	)
Net asset value, end of year	$	7.09		$	9.15		$	9.38		$	9.47		$	9.81
Total investment return(2)		(8.27	)%		1.56	%		1.17	%		(0.09	)%		4.60	%
Ratios/Supplemental data:
Net assets, end of year (in 000s)	$	1,856		$	1,716		$	1,491		$	2,426		$	3,081
Ratio of expenses to average net assets:
Before expense reimbursement		2.17	%		1.79	%		1.77	%		1.88	%		1.92	%
After expense reimbursement		1.65	%		1.65	%		1.65	%		1.65	%		1.65	%
Ratio of net investment income to average net assets		2.37	%		2.31	%		2.17	%		1.47	%		1.15	%
Portfolio turnover		116	%		137	%		74	%		114	%		112	%
	Class Y
	Year ended June 30,
	2009			2008			2007			2006			2005
Net asset value, beginning of year	$	10.24		$	10.45		$	10.51		$	10.84		$	10.83
Income (loss) from investment operations:
Net investment income(1)		0.28			0.32			0.31			0.23			0.21
Net realized and unrealized gain (loss) from investment activities		(1.05	)		(0.08	)		(0.10	)		(0.17	)		0.38
Total income (loss) from investment operations		(0.77	)		0.24			0.21			0.06			0.59
Less dividends/distributions:
From net investment income and net foreign currency gains		(1.37	)		(0.45	)		(0.27	)		(0.39	)		(0.58	)
Net asset value, end of year	$	8.10		$	10.24		$	10.45		$	10.51		$	10.84
Total investment return(2)		(7.54	)%		2.28	%		2.03	%		0.65	%		5.36	%
Ratios/Supplemental data:
Net assets, end of year (in 000s)	$	24,437		$	52,620		$	107,465		$	80,536		$	52,345
Ratio of expenses to average net assets:
Before expense reimbursement		1.44	%		1.04	%		1.03	%		1.16	%		1.16	%
After expense reimbursement		0.90	%		0.90	%		0.90	%		0.90	%		0.90	%
Ratio of net investment income to average net assets		3.15	%		3.06	%		2.93	%		2.22	%		1.90	%
Portfolio turnover		116	%		137	%		74	%		114	%		112	%

See accompanying notes to financial statements.
233

UBS High Yield Fund—Financial highlights

The table below sets forth financial data for one share of beneficial interest outstanding throughout
each year presented.

	Class A
	Year ended June 30,
	2009			2008			2007			2006			2005
Net asset value, beginning of year	$	6.19		$	6.92		$	6.89		$	7.14		$	7.06
Income (loss) from investment operations:
Net investment income(1)		0.50			0.51			0.50			0.55			0.57
Net realized and unrealized gain (loss) from investment activities		(1.00	)		(0.75	)		0.08			(0.24	)		0.10
Total income (loss) from investment operations		(0.50	)		(0.24	)		0.58			0.31			0.67
Less dividends/distributions:
From net investment income		(0.53	)		(0.49	)		(0.55	)		(0.56	)		(0.59	)
Net asset value, end of year	$	5.16		$	6.19		$	6.92		$	6.89		$	7.14
Total investment return(2)		(7.12	)%		(3.55	)%		8.60	%		4.48	%		9.66	%
Ratios/Supplemental data:
Net assets, end of year (in 000s)	$	39,859		$	40,582		$	45,031		$	51,121		$	66,677
Ratio of expenses to average net assets:
Before expense reimbursement		1.33	%		1.29	%		1.28	%		1.37	%		1.28	%
After expense reimbursement		1.20	%		1.20	%		1.20	%		1.20	%		1.20	%
Ratio of net investment income to average net assets		9.96	%		7.81	%		7.16	%		7.86	%		7.83	%
Portfolio turnover		92	%		39	%		46	%		64	%		61	%
	Class B
	Year ended June 30,
	2009			2008			2007			2006			2005
Net asset value, beginning of year	$	6.20		$	6.93		$	6.89		$	7.14		$	7.06
Income (loss) from investment operations:
Net investment income(1)		0.46			0.46			0.45			0.50			0.51
Net realized and unrealized gain (loss) from investment activities		(1.01	)		(0.75	)		0.09			(0.25	)		0.10
Total income (loss) from investment operations		(0.55	)		(0.29	)		0.54			0.25			0.61
Less dividends/distributions:
From net investment income		(0.49	)		(0.44	)		(0.50	)		(0.50	)		(0.53	)
Net asset value, end of year	$	5.16		$	6.20		$	6.93		$	6.89		$	7.14
Total investment return(2)		(7.98	)%		(4.27	)%		7.93	%		3.69	%		8.79	%
Ratios/Supplemental data:
Net assets, end of year (in 000s)	$	900		$	1,480		$	2,386		$	2,497		$	3,945
Ratio of expenses to average net assets:
Before expense reimbursement		2.15	%		2.07	%		2.04	%		2.09	%		1.99	%
After expense reimbursement		1.95	%		1.95	%		1.95	%		1.95	%		1.95	%
Ratio of net investment income to average net assets		9.01	%		7.02	%		6.42	%		7.11	%		7.08	%
Portfolio turnover		92	%		39	%		46	%		64	%		61	%

⁽¹⁾  Calculated using the average shares method.

⁽²⁾  Total investment return is calculated assuming a $10,000 investment on the first day of each year reported, reinvestment of all dividends and distributions, if any, at net asset value on the ex-dividend dates, and a sale at net asset value on the last day of each year reported. The figures do not include any applicable sales charges; results would be lower if they were included. Returns do not reflect the deduction of taxes that a shareholder would pay on dividends/distributions or the redemption of Fund shares.

234

	Class C
	Year ended June 30,
	2009			2008			2007			2006			2005
Net asset value, beginning of year	$	6.19		$	6.93		$	6.89		$	7.14		$	7.06
Income (loss) from investment operations:
Net investment income(1)		0.48			0.48			0.47			0.52			0.53
Net realized and unrealized gain (loss) from investment activities		(1.01	)		(0.76	)		0.08			(0.25	)		0.10
Total income (loss) from investment operations		(0.53	)		(0.28	)		0.55			0.27			0.63
Less dividends/distributions:
From net investment income		(0.50	)		(0.46	)		(0.51	)		(0.52	)		(0.55	)
Net asset value, end of year	$	5.16		$	6.19		$	6.93		$	6.89		$	7.14
Total investment return(2)		(7.60	)%		(4.03	)%		8.05	%		3.95	%		9.09	%
Ratios/Supplemental data:
Net assets, end of year (in 000s)	$	7,072		$	8,453		$	11,330		$	12,177		$	15,389
Ratio of expenses to average net assets:
Before expense reimbursement		1.86	%		1.79	%		1.78	%		1.86	%		1.79	%
After expense reimbursement		1.70	%		1.70	%		1.70	%		1.70	%		1.70	%
Ratio of net investment income to average net assets		9.41	%		7.31	%		6.66	%		7.36	%		7.33	%
Portfolio turnover		92	%		39	%		46	%		64	%		61	%
	Class Y
	Year ended June 30,
	2009			2008			2007			2006			2005
Net asset value, beginning of year	$	6.23		$	6.96		$	6.92		$	7.17		$	7.10
Income (loss) from investment operations:
Net investment income(1)		0.52			0.53			0.52			0.57			0.59
Net realized and unrealized gain (loss) from investment activities		(1.01	)		(0.75	)		0.09			(0.24	)		0.09
Total income (loss) from investment operations		(0.49	)		(0.22	)		0.61			0.33			0.68
Less dividends/distributions:
From net investment income		(0.54	)		(0.51	)		(0.57	)		(0.58	)		(0.61	)
Net asset value, end of year	$	5.20		$	6.23		$	6.96		$	6.92		$	7.17
Total investment return(2)		(6.83	)%		(3.28	)%		8.98	%		4.72	%		9.82	%
Ratios/Supplemental data:
Net assets, end of year (in 000s)	$	61,421		$	99,538		$	47,768		$	33,015		$	30,277
Ratio of expenses to average net assets:
Before expense reimbursement		1.06	%		0.99	%		0.98	%		1.06	%		0.96	%
After expense reimbursement		0.95	%		0.95	%		0.95	%		0.95	%		0.95	%
Ratio of net investment income to average net assets		10.07	%		8.13	%		7.43	%		8.11	%		8.08	%
Portfolio turnover		92	%		39	%		46	%		64	%		61	%

See accompanying notes to financial statements.
235

UBS U.S. Bond Fund—Financial highlights

The table below sets forth financial data for one share of beneficial interest outstanding throughout
each year presented.

	Class A
	Year ended June 30,
	2009			2008			2007			2006			2005
Net asset value, beginning of year	$	9.13		$	10.46		$	10.27		$	10.73		$	10.56
Income (loss) from investment operations:
Net investment income(1)		0.23			0.25			0.32			0.40			0.39
Net realized and unrealized gain (loss) from investment activities		(0.54	)		(1.06	)		0.24			(0.42	)		0.20
Net increase from payment by Advisor		—			—			—			—			—
Total income (loss) from investment operations		(0.31	)		(0.81	)		0.56			(0.02	)		0.59
Redemption fees		0.01			0.01			—			—			—
Less dividends/distributions:
From net investment income		(0.64	)		(0.53	)		(0.37	)		(0.44	)		(0.42	)
Net asset value, end of year	$	8.17		$	9.13		$	10.46		$	10.27		$	10.73
Total investment return(2)		(3.29	)%		(8.03	)%		5.39	%		(0.07	)%		5.72	%
Ratios/Supplemental data:
Net assets, end of year (in 000s)	$	9,128		$	9,330		$	29,356		$	31,285		$	34,282
Ratio of expenses to average net assets:
Before expense reimbursement		1.27	%		1.02	%		1.07	%		1.07	%		1.19	%
After expense reimbursement		0.85	%		0.85	%		0.85	%		0.85	%		0.85	%
Ratio of net investment income to average net assets		2.71	%		2.50	%		3.08	%		3.79	%		3.61	%
Portfolio turnover		247	%		192	%		209	%		229	%		174	%
	Class B
	Year ended June 30,
	2009			2008			2007			2006			2005
Net asset value, beginning of year	$	9.14		$	10.47		$	10.28		$	10.74		$	10.56
Income (loss) from investment operations:
Net investment income(1)		0.16			0.18			0.25			0.32			0.31
Net realized and unrealized gain (loss) from investment activities		(0.54	)		(1.07	)		0.23			(0.42	)		0.21
Net increase from payment by Advisor		—			—			—			—			—
Total income (loss) from investment operations		(0.38	)		(0.89	)		0.48			(0.10	)		0.52
Redemption fees		0.00	(3)		0.01			—			—			—
Less dividends/distributions:
From net investment income		(0.58	)		(0.45	)		(0.29	)		(0.36	)		(0.34	)
Net asset value, end of year	$	8.18		$	9.14		$	10.47		$	10.28		$	10.74
Total investment return(2)		(4.01	)%		(8.72	)%		4.70	%		(0.93	)%		4.96	%
Ratios/Supplemental data:
Net assets, end of year (in 000s)	$	109		$	250		$	442		$	808		$	1,620
Ratio of expenses to average net assets:
Before expense reimbursement		2.10	%		1.91	%		1.84	%		1.83	%		2.00	%
After expense reimbursement		1.60	%		1.60	%		1.60	%		1.60	%		1.60	%
Ratio of net investment income to average net assets		1.89	%		1.77	%		2.39	%		3.04	%		2.86	%
Portfolio turnover		247	%		192	%		209	%		229	%		174	%

⁽¹⁾  Calculated using the average shares method.

⁽²⁾  Total investment return is calculated assuming a $10,000 investment on the first day of each year reported, reinvestment of all dividends and distributions, if any, at net asset value on the ex-dividend dates, and a sale at net asset value on the last day of each year reported. The figures do not include any applicable sales charges; results would be lower if they were included. Returns do not reflect the deduction of taxes that a shareholder would pay on dividends/distributions or the redemption of Fund shares.

⁽³⁾  Amount represents less than $0.005 per share.

236

	Class C
	Year ended June 30,
	2009			2008			2007			2006			2005
Net asset value, beginning of year	$	9.12		$	10.45		$	10.26		$	10.72		$	10.55
Income (loss) from investment operations:
Net investment income(1)		0.19			0.20			0.27			0.34			0.33
Net realized and unrealized gain (loss) from investment activities		(0.55	)		(1.05	)		0.24			(0.41	)		0.22
Net increase from payment by Advisor		—			—			0.00	(3)		—			—
Total income (loss) from investment operations		(0.36	)		(0.85	)		0.51			(0.07	)		0.55
Redemption fees		0.01			—			—			—			—
Less dividends/distributions:
From net investment income		(0.60	)		(0.48	)		(0.32	)		(0.39	)		(0.38	)
Net asset value, end of year	$	8.15		$	9.12		$	10.45		$	10.26		$	10.72
Total investment return(2)		(3.76	)%		(8.58	)%		4.98	%		(0.67	)%		5.25	%
Ratios/Supplemental data:
Net assets, end of year (in 000s)	$	2,574		$	1,117		$	1,525		$	1,530		$	2,068
Ratio of expenses to average net assets:
Before expense reimbursement		1.76	%		1.58	%		1.55	%		1.56	%		1.64	%
After expense reimbursement		1.35	%		1.35	%		1.35	%		1.35	%		1.35	%
Ratio of net investment income to average net assets		2.35	%		2.01	%		2.56	%		3.29	%		3.11	%
Portfolio turnover		247	%		192	%		209	%		229	%		174	%
	Class Y
	Year ended June 30,
	2009			2008			2007			2006			2005
Net asset value, beginning of year	$	9.13		$	10.46		$	10.27		$	10.72		$	10.57
Income (loss) from investment operations:
Net investment income(1)		0.24			0.28			0.34			0.42			0.41
Net realized and unrealized gain (loss) from investment activities		(0.55	)		(1.06	)		0.25			(0.41	)		0.21
Net increase from payment by Advisor		—			—			0.00	(3)		—			—
Total income (loss) from investment operations		(0.31	)		(0.78	)		0.59			0.01			0.62
Redemption fees		—			—			—			—			—
Less dividends/distributions:
From net investment income		(0.66	)		(0.55	)		(0.40	)		(0.46	)		(0.47	)
Net asset value, end of year	$	8.16		$	9.13		$	10.46		$	10.27		$	10.72
Total investment return(2)		(3.15	)%		(7.78	)%		5.76	%		0.14	%		5.95	%
Ratios/Supplemental data:
Net assets, end of year (in 000s)	$	55,149		$	102,473		$	163,172		$	105,526		$	109,568
Ratio of expenses to average net assets:
Before expense reimbursement		0.96	%		0.78	%		0.76	%		0.82	%		0.78	%
After expense reimbursement		0.60	%		0.60	%		0.60	%		0.60	%		0.60	%
Ratio of net investment income to average net assets		2.88	%		2.77	%		3.27	%		4.04	%		3.86	%
Portfolio turnover		247	%		192	%		209	%		229	%		174	%

See accompanying notes to financial statements.
237

The UBS Funds—Notes to financial statements

1.  Organization and significant accounting policies

The UBS Funds (the "Trust") is registered with the Securities and Exchange Commission under the Investment Company Act of 1940 (the "1940 Act"), as amended, as an open-end management investment company currently offering multiple series representing separate investment portfolios. The Trust is a Delaware statutory trust organized on August 13, 1993. The trustees of the Trust have the authority to issue an unlimited number of shares of beneficial interest at a par value of $0.001 per share.

The Trust has fourteen Funds available for investment, each having its own investment objectives and policies: UBS Dynamic Alpha Fund, UBS Global Allocation Fund, UBS Global Frontier Fund, UBS Global Equity Fund, UBS International Equity Fund, UBS U.S. Equity Alpha Fund, UBS U.S. Large Cap Equity Fund, UBS U.S. Large Cap Value Equity Fund, UBS U.S. Mid Cap Growth Equity Fund, UBS U.S. Small Cap Growth Fund, UBS Absolute Return Bond Fund, UBS Global Bond Fund, UBS High Yield Fund and UBS U.S. Bond Fund (each a "Fund", and collectively, the "Funds").

Each of the Funds is classified as a "diversified" investment company with the exception of UBS Dynamic Alpha Fund, UBS Absolute Return Bond Fund and UBS Global Bond Fund which are classified as "non-diversified" for purposes of the 1940 Act. Each Fund currently offers Class A, Class B, Class C and Class Y shares, except for UBS Global Frontier Fund, UBS U.S. Equity Alpha Fund, UBS U.S. Mid Cap Growth Equity Fund and UBS Absolute Return Bond Fund, which offer Class A, Class C and Class Y. Effective October 1, 2007, new or additional investments into Class B shares, including investments through an automatic investment plan, are no longer permitted. However, existing Class B shareholders may: (1) continue as Class B shareholders; (2) continue to reinvest dividends and distributions into Class B shares; and (3) exchange their Class B shares for Class B shares of other series of the UBS Family of Funds, as permitted by existing exc hange privileges. Each class represents interests in the same assets of the applicable Fund and the classes are identical except for differences in their sales charge structures, ongoing service and distribution charges and certain transfer agency and related services expenses. In addition, Class B shares and all corresponding reinvested dividend shares automatically convert to Class A shares within a certain number of years after issuance which varies depending upon the amount invested. All classes of shares have equal voting privileges except that each class has exclusive voting rights with respect to its service and/or distribution plan, if any. Class Y shares have no service or distribution plan.

In the normal course of business, the Funds may enter into contracts that contain a variety of representations or that provide general indemnification for certain liabilities. The Funds' maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Funds that have not yet occurred. However, the Funds have not had any prior claims or losses pursuant to these contracts and expect the risk of loss to be remote.

The Trust accounts separately for the assets, liabilities and operations of each series. Expenses directly attributable to each series are charged to that series' operations; expenses which are applicable to all series are allocated among them on a pro rata basis.

The preparation of financial statements in accordance with US generally accepted accounting principles requires the Trust's management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. The following is a summary of significant accounting policies:

A:  Valuation of investments: Each Fund calculates its net asset value based on the current market value for its portfolio securities. The Funds normally obtain market values for their securities and other instruments from independent pricing sources. Independent pricing sources may use last reported sale prices,

238

The UBS Funds—Notes to financial statements

current market quotations or valuations from computerized "matrix" systems that derive values based on comparable securities or instruments. A matrix system incorporates parameters such as security quality, maturity and coupon, and/or research and evaluations by its staff, including review of broker-dealer market price quotations, if available, in determining the valuation of the portfolio securities or instruments. Securities traded in the over-the-counter ("OTC") market and listed on The NASDAQ Stock Market, Inc. ("NASDAQ") normally are valued at the NASDAQ Official Closing Price. Other OTC securities are valued at the last bid price available prior to valuation. Securities which are listed on US and foreign stock exchanges normally are valued at the last sale price on the day the securities are valued or, lacking any sales on such day, at the last available bid price. Securities listed on foreign stock exchanges may be fair v alued based on significant events that have occurred subsequent to the close of the foreign markets. Certain funds may use a systematic fair valuation model provided by an independent third party to value securities principally traded in foreign markets in order to adjust for possible stale pricing that may occur between the close of the foreign exchanges and the time for valuation. If a security is valued at a "fair value," that value is likely to be different from the last quoted market price for the security. In cases where securities are traded on more than one exchange, the securities are valued on the exchange designated as the primary market by UBS Global Asset Management (Americas) Inc. ("UBS Global AM"), the investment advisor of the Funds. UBS Global AM is an indirect wholly owned asset management subsidiary of UBS AG, an internationally diversified organization with headquarters in Zurich and Basel, Switzerland and operations in many areas of the financial services industry. If a market value is n ot readily available from an independent pricing source for a particular security or instrument, that security or instrument is valued at a fair value determined by or under the direction of the Trust's Board of Trustees (the "Board"). Various factors may be reviewed in order to make a good faith determination of a security's or instrument's fair value. These factors include, but are not limited to, fundamental analytical data relating to the investment; the nature and duration of restrictions on disposition of the securities or instruments; and the evaluation of forces which influence the market in which the securities or instruments are purchased and sold. Investments in open-end investment companies are valued at the daily closing net asset value of the respective investment company.

Certain securities in which the Funds invest are traded in markets that close before 4:00 p.m. Eastern Time. Normally, developments that occur between the close of the foreign markets and 4:00 p.m. Eastern Time will not be reflected in the Fund's NAV. However, if any of the Funds determine that such developments are so significant that they will materially affect the value of the Fund's securities, the Fund may adjust the previous closing prices to reflect what the Board believes to be the fair value of these securities as of 4:00 p.m. Eastern Time.

Futures contracts are generally valued at the settlement price established each day on the exchange on which they are traded. Forward foreign currency contracts are valued daily using forward exchange rates quoted by independent pricing services. Short-term obligations with maturities of 60 days or less are valued at amortized cost, which approximates market value.

Swaps are marked to market daily based upon values from third party vendors or quotations from market makers to the extent available and the change in value, if any, is recorded as an unrealized gain or loss on the Statements of assets and liabilities. In the event that market quotations are not readily available or deemed unreliable, the swap is valued at fair value as determined in good faith by or under the direction of the Board.

The Funds adopted Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" ("FAS 157"). FAS 157 requires disclosure surrounding the various inputs that are used in determining the value of the Funds' investments. These inputs are summarized into the three broad levels listed below:

Level 1—Quoted prices in active markets for identical investments.

Level 2—Other significant observable inputs, including but not limited to, quoted prices for similar investments, interest rates, prepayment speeds and credit risk.

239

The UBS Funds—Notes to financial statements

Level 3—Unobservable inputs inclusive of the Funds' own assumptions in determining the value of investments. Details of this disclosure can be found in the Portfolios of investments.

In September 2008, the Financial Accounting Standards Board ("FASB") issued FASB Staff Position No. FAS 133-1 and FIN 45-4, "Disclosures about Credit Derivatives and Certain Guarantees: An Amendment of FASB Statement No. 133 and FASB Interpretation No. 45" (the "FSP"). The FSP amends FASB Statement No. 133 ("FAS 133"), "Accounting for Derivative Instruments and Hedging Activities", and also amends FASB Interpretation No. 45 ("FIN 45"), "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others". The amendments to FAS 133 include required disclosure for (i) the nature a nd terms of the credit derivative, reasons for entering into the credit derivative, the events or circumstances that would require the seller to perform under the credit derivative, and the current status of the payment/performance risk of the credit derivative, (ii) the maximum potential amount of future payments (undiscounted) the seller could be required to make under the credit derivative, (iii) the fair value of the credit derivative, and (iv) the nature of any recourse provisions and assets held either as collateral or by third parties. The amendments to FIN 45 require additional disclosures about the current status of the payment/performance risk of a guarantee. All changes to accounting policies have been made in accordance with the FSP and incorporated for the current period as part of the Notes to the portfolios of investments and disclosures within the footnote, "Swap agreements".

In March 2008, the FASB issued Statement of Financial Accounting Standards No. 161, "Disclosures about Derivative Instruments and Hedging Activities" ("FAS 161"), which changes the disclosure requirements for derivative instruments and hedging activities. Because investment companies value their derivatives at fair value and recognize changes in fair value through the statement of operations, they do not qualify for FAS 133 hedge accounting. Accordingly, even though a fund's investments in derivatives may represent economic hedges, they are considered to be non-hedge transactions for purposes of FAS 161 disclosure. FAS 161 requires that (1) objectives for using derivative instruments be disclosed in terms of underlying risk and accounting designation, (2) the fair values of derivative instruments and their gains and losses be disclosed in a tabular format, and (3) information be disclosed about credit-risk contingent features of derivatives contracts. FAS 161 is effective for financial statements for fiscal years and interim periods beginning after November 15, 2008. Details of this disclosure can be found below as well as in the Portfolios of investments and Notes to financial statements beginning on page 242:

UBS Dynamic Alpha Fund
Fair value of derivative instruments
	As of June 30, 2009
Underlying risk	Statement of assets and liabilities location*			Derivative assets		Statement of assets and liabilities location*			Derivative liabilities
Interest rates		(1	),(2)	$	8,626,594		(1	),(2),(3)	$	(30,702,895	)
Credit		(1	)		21,933,870		(1	)		(27,592,300	)
Equity		(2	)		5,199,872		(2	)		(1,059,334	)
Currencies		(4	)		1,210,103		(5	)		(5,614,374	)
Gross fair value of derivative contracts				$	36,970,439				$	(64,968,903	)

^*  Statement of assets and liabilities location:

(1)  Outstanding swap agreements, at value

(2)  Receivable for variation margin/Net unrealized depreciation. Amount represents cumulative appreciation (depreciation) of futures contracts as shown in the Portfolio of investments.

(3)  Options written, at value

(4)  Unrealized appreciation on forward foreign currency contracts

(5)  Unrealized depreciation on forward foreign currency contracts

240

The UBS Funds—Notes to financial statements

The effect of derivative instruments on the Statement of operations for the year ended June 30, 2009
	Amount of realized gains/(losses) on derivatives recognized in income(6)
Underlying risk	Forward foreign currency contracts		Futures			Swaps			Options		Total
Interest rates	$	—	$	(21,081,076	)	$	(24,109,090	)	$	23,622,846	$	(21,567,320	)
Credit		—		—			(46,661,423	)		—		(46,661,423	)
Equity		—		93,663,226			—			—		93,663,226
Currencies		156,280,287		—			—			—		156,280,287
	$	156,280,287	$	72,582,150		$	(70,770,513	)	$	23,622,846	$	181,714,770
	Amount of unrealized appreciation/(depreciation) on derivatives recognized in income(7)
Underlying risk	Forward foreign currency contracts		Futures			Swaps			Options		Total
Interest rates	$	—	$	3,427,023		$	30,206,154		$	2,290,685	$	35,923,865
Credit		—		—			5,329,809			—		5,329,806
Equity		—		(34,020,467	)		—			—		(34,020,467	)
Currencies		239,423		—			—			—		239,423
	$	239,423	$	(30,593,444	)	$	35,535,963		$	2,290,685	$	7,472,627

⁽⁶⁾  Statement of operations location: Net realized gain (loss) on futures contracts, options written, swap agreements and forward foreign currency transactions.

⁽⁷⁾  Statement of operations location: Net change in unrealized appreciation (depreciation) on futures contracts, options written, swap agreements and forward foreign currency contracts.

UBS Global Allocation Fund
Fair value of derivative instruments
	As of June 30, 2009
Underlying risk	Statement of assets and liabilities location*			Derivative assets		Statement of assets and liabilities location*			Derivative liabilities
Interest rates		(8	),(9)	$	5,705,912		(9	)	$	(927,868	)
Equity		(9	)		2,053,156		(9	)		(2,869,051	)
Currencies		(10	)		2,335,446		(11	)		(3,978,306	)
Gross fair value of derivative contracts				$	10,094,514				$	(7,775,225	)

^*  Statement of assets and liabilities location:

(8)  Outstanding swap agreements, at value

(9)  Receivable for variation margin/Net unrealized appreciation. Amount represents cumulative appreciation (depreciation) of futures contracts as shown in the Portfolio of investments.

(10)  Unrealized appreciation on forward foreign currency contracts

(11)  Unrealized depreciation on forward foreign currency contracts

241

The UBS Funds—Notes to financial statements

The effect of derivative instruments on the Statement of operations for the year ended June 30, 2009
	Amount of realized gains/(losses) on derivatives recognized in income(12)
Underlying risk	Forward foreign currency contracts		Futures			Swaps			Options			Total
Interest rates	$	—	$	(19,011,049	)	$	8,096,711		$	(87,546	)	$	(11,001,884	)
Credit		—		—			(3,952,219	)		—			(3,952,219	)
Equity		—		(69,482,107	)		—			—			(69,482,107	)
Currencies		8,689,907		—			—			—			8,689,907
	$	8,689,907	$	(88,493,156	)	$	4,144,492		$	(87,546	)	$	(75,746,303	)
	Amount of unrealized appreciation/(depreciation) on derivatives recognized in income(13)
Underlying risk	Forward foreign currency contracts		Futures			Swaps			Options			Total
Interest rates	$	—	$	4,463,999		$	5,690,129		$	—		$	10,154,128
Equity		—		6,629,266			—			—			6,629,266
Currencies		31,216,569		—			—			—			31,216,569
	$	31,216,569	$	11,093,265		$	5,690,129		$	—		$	47,999,963

⁽¹²⁾  Statement of operations location: Net realized gain (loss) on futures contracts, options written, swap agreements and forward foreign currency transactions.

⁽¹³⁾  Statement of operations location: Net change in unrealized appreciation (depreciation) on futures contracts, swap agreements and forward foreign currency contracts.

UBS Global Frontier Fund
Fair value of derivative instruments
	As of June 30, 2009
Underlying risk	Statement of assets and liabilities location*			Derivative assets		Statement of assets and liabilities location*			Derivative liabilities
Interest rates		(14	)	$	231,113		(14	)	$	(51,475	)
Equity		(14	)		48,483		(14	)		(735,668	)
Currencies		(15	)		159,210		(16	)		(173,275	)
Gross fair value of derivative contracts				$	438,806				$	(960,418	)

^*  Statement of assets and liabilities location:

(14)  Receivable for variation margin/Net unrealized appreciation. Amount represents cumulative appreciation (depreciation) of futures contracts as shown in the Portfolio of investments.

(15)  Unrealized appreciation on forward foreign currency contracts

(16)  Unrealized depreciation on forward foreign currency contracts

242

The UBS Funds—Notes to financial statements

The effect of derivative instruments on the Statement of operations for the year ended June 30, 2009
	Amount of realized gains/(losses) on derivatives recognized in income(17)
Underlying risk	Forward foreign currency contracts			Futures			Swaps			Options		Total
Interest rates	$	—		$	(363,361	)	$	(10,545,264	)	$	—	$	(10,908,625	)
Equity		—			(8,382,036	)		—			—		(8,382,036	)
Currencies		(6,202	)		—			—			—		(6,202	)
	$	(6,202	)	$	(8,745,397	)	$	(10,545,264	)	$	—	$	(19,296,863	)
	Amount of unrealized appreciation/(depreciation) on derivatives recognized in income(18)
Underlying risk	Forward foreign currency contracts			Futures			Swaps			Options		Total
Interest rates	$	—		$	190,837		$	4,112,672		$	—	$	4,303,509
Equity		—			(407,507	)		—			—		(407,507	)
Currencies		761,851			—			—			—		761,851
	$	761,851		$	(216,670	)	$	4,112,672		$	—	$	4,657,853

⁽¹⁷⁾  Statement of operations location: Net realized gain (loss) on futures contracts, swap agreements and forward foreign currency transactions.

⁽¹⁸⁾  Statement of operations location: Net change in unrealized appreciation (depreciation) on futures contracts, swap agreements and forward foreign currency contracts.

UBS Absolute Return Bond Fund
Fair value of derivative instruments
	As of June 30, 2009
Underlying risk	Statement of assets and liabilities location*			Derivative assets		Statement of assets and liabilities location*			Derivative liabilities
Interest rates		(19	)	$	454,742		(19	)	$	(259,593	)
Credit		(20	)		65,572		(20	)		(311,314	)
Currencies		(21	)		1,284,607		(22	)		(5,535,792	)
Gross fair value of derivative contracts				$	1,804,921				$	(6,106,699	)

^*  Statement of assets and liabilities location:

(19)  Receivable for variation margin/Net unrealized depreciation. Amount represents cumulative appreciation (depreciation) of futures contracts as shown in the Portfolio of investments.

(20)  Outstanding swap agreements, at value

(21)  Unrealized appreciation on forward foreign currency contracts

(22)  Unrealized depreciation on forward foreign currency contracts

243

The UBS Funds—Notes to financial statements

The effect of derivative instruments on the Statement of operations for the year ended June 30, 2009
	Amount of realized gains/(losses) on derivatives recognized in income(23)
Underlying risk	Forward foreign currency contracts			Futures			Swaps			Options		Total
Interest rates	$	—		$	(9,100,301	)	$	154,967		$	—	$	(8,945,334	)
Credit		—			—			1,275,372			—		1,275,372
Currencies		15,329,680			—			—			—		15,329,680
	$	15,329,680		$	(9,100,301	)	$	1,430,339		$	—	$	7,659,718
	Amount of unrealized appreciation/(depreciation) on derivatives recognized in income(24)
Underlying risk	Forward foreign currency contracts			Futures			Swaps			Options		Total
Interest rates	$	—		$	710,167		$	177,633		$	—	$	887,800
Credit		—			—			(479,819	)		—		(479,819	)
Currencies		(2,145,841	)		—			—			—		(2,145,841	)
	$	(2,145,841	)	$	710,167		$	(302,186	)	$	—	$	(1,737,860	)

⁽²³⁾  Statement of operations location: Net realized gain (loss) on futures contracts, swap agreements and forward foreign currency transactions.

⁽²⁴⁾  Statement of operations location: Net change in unrealized appreciation (depreciation) on futures contracts, swap agreements and forward foreign currency contracts.

UBS Global Bond Fund
Fair value of derivative instruments
	As of June 30, 2009
Underlying risk	Statement of assets and liabilities location*			Derivative assets		Statement of assets and liabilities location*			Derivative liabilities
Credit		(25	)	$	10,081		(25	)	$	(43,960	)
Currencies		(26	)		6,723		(27	)		(59,745	)
Gross fair value of derivative contracts				$	16,804				$	(103,705	)

^*  Statement of assets and liabilities location:

(25)  Outstanding swap agreements, at value

(26)  Unrealized appreciation on forward foreign currency contracts

(27)  Unrealized depreciation on forward foreign currency contracts

244

The UBS Funds—Notes to financial statements

The effect of derivative instruments on the Statement of operations for the year ended June 30, 2009
	Amount of realized gains/(losses) on derivatives recognized in income(28)
Underlying risk	Forward foreign currency contracts		Futures		Swaps			Options		Total
Interest rates	$	—	$	10,823	$	599,461		$	—	$	610,284
Credit		—		—		(561,159	)		—		(561,159	)
Currencies		899,850		—		—			—		899,850
	$	899,850	$	10,823	$	38,302		$	—	$	948,975
	Amount of unrealized appreciation/(depreciation) on derivatives recognized in income(29)
Underlying risk	Forward foreign currency contracts		Futures		Swaps			Options		Total
Interest rates	$	—	$	—	$	(26,856	)	$	—	$	(26,856	)
Credit		—		—		(281,459	)		—		(281,459	)
Currencies		405,548		—		—			—		405,548
	$	405,548	$	—	$	(308,315	)	$	—	$	97,233

⁽²⁸⁾  Statement of operations location: Net realized gain (loss) on swap agreements, futures contracts and forward foreign currency transactions.

⁽²⁹⁾  Statement of operations location: Net change in unrealized appreciation (depreciation) on swap agreements and forward foreign currency contracts.

UBS U.S. Bond Fund
Fair value of derivative instruments
	As of June 30, 2009
Underlying risk	Statement of assets and liabilities location*			Derivative assets		Statement of assets and liabilities location*			Derivative liabilities
Interest rates		(30	),(31)	$	327,578		(30	),(31)	$	(485,909	)
Gross fair value of derivative contracts				$	327,578				$	(485,909	)

^*  Statement of assets and liabilities location:

(30)  Outstanding swap agreements, at value

(31)  Receivable for variation margin/Net unrealized depreciation. Amount represents cumulative appreciation (depreciation) of futures contracts as shown in the Portfolio of investments.

The effect of derivative instruments on the Statement of operations for the year ended June 30, 2009
	Amount of realized gains/(losses) on derivatives recognized in income(32)
Underlying risk	Forward foreign currency contracts		Futures			Swaps			Options		Total
Interest rates	$	—	$	(776,960	)	$	3,880,467		$	326,950	$	3,430,457
Credit		—		—			(1,288,198	)		—		(1,288,198	)
Currencies		505,178		—			—			—		505,178
	$	505,178	$	(776,960	)	$	2,592,269		$	326,950	$	2,647,437

245

The UBS Funds—Notes to financial statements

	Amount of unrealized appreciation/(depreciation) on derivatives recognized in income(33)
Underlying risk	Forward foreign currency contracts		Futures			Swaps		Options		Total
Interest rates	$	—	$	(69,485	)	$	697,202	$	—	$	627,717
Credit		—		—			1,245,049		—		1,245,049
Currencies		9,760		—			—		—		9,760
	$	9,760	$	(69,485	)	$	1,942,251	$	—	$	1,882,526

⁽³²⁾  Statement of operations location: Net realized gain (loss) on futures contracts, options written, swap agreements and forward foreign currency transactions.

⁽³³⁾  Statement of operations location: Net change in unrealized appreciation (depreciation) on futures contracts, swap agreements and forward foreign currency contracts.

B.  Restricted securities: The Funds may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities, if any, is included at the end of each Fund's Portfolio of investments.

C.  Foreign currency translation: Investment securities and other assets and liabilities denominated in foreign currencies are translated daily into US dollars using foreign currency exchange rates determined as of the close of regular trading on the New York Stock Exchange. Purchases and sales of portfolio securities, commitments under forward foreign currency contracts and income receipts are translated at the prevailing exchange rate as of the date of each transaction. Realized and unrealized foreign exchange gains or losses on investments are included as a component of net realized and unrealized gain or loss on foreign forward currency contracts and foreign currency transactions in the Statements of operations. Certain foreign exchange gains and losses included in realized and unrealized gains and losses are included in or are a reducti on of ordinary income in accordance with US federal income tax regulations.

D.  Investment transactions, investment income and expenses: Investment transactions are recorded on the trade date. Realized gains and losses from investment transactions and foreign exchange transactions are calculated using the identified cost method. Dividend income and expense is recorded on the ex-dividend date ("ex-date") except in the case of certain dividends from foreign securities which are recorded as soon after the ex-date as the respective Fund, using reasonable diligence, becomes aware of such dividends. Interest income is recorded on an accrual basis. Discounts are accreted and premiums are amortized as adjustments to interest income and the identified cost of investments.

Income, expenses (excluding class-specific expenses) and realized/unrealized gains/losses are allocated proportionately to each class of shares based upon the relative net asset value of outstanding shares (or the value of dividend-eligible shares, as appropriate) of each class at the beginning of the day after adjusting for current capital share activity of the respective classes. Class specific expenses are charged directly to the applicable class of shares.

E.  Forward foreign currency contracts: A forward foreign currency contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated forward rate. Risks associated with such contracts include movement in the value of the foreign currency relative to the US dollar and the potential inability of the counterparty to meet the terms of the contract. The Funds may purchase or sell currencies and/or engage in forward foreign currency transactions in order to expedite settlement of portfolio transactions and to manage currency risk. Forward foreign currency contracts involve, to varying degrees, elements of market risk (specifically foreign currency risk).

246

The UBS Funds—Notes to financial statements

A Fund will only enter into forward contracts to sell, for a fixed amount of US dollars or other appropriate currency, an amount of foreign currency, to the extent that the value of the short forward contract is covered by the underlying value of securities denominated in the currency being sold. Alternatively, when a Fund enters into a forward contract to sell an amount of foreign currency, the Fund's custodian or sub-custodian will place assets in a segregated account of the Fund in an amount not less than the value of the Fund's total assets committed to the consumption of such forward contracts. If the assets placed in the account decline in value, additional cash or securities will be placed in the account on a daily basis so that the value of the account will equal the amount of the Fund's commitments with respect to such contracts.

The unrealized gain, if any, represents the credit risk to each Fund on a forward foreign currency contract. Fluctuations in the value of the open forward foreign currency contracts are recorded daily for book purposes as net unrealized gains or losses on foreign forward currency contracts by the Funds. Realized gains and losses include net gains and losses recognized by the Funds on contracts which have been sold or matured.

F.  Futures contracts: The Funds may purchase or sell exchange-traded futures contracts, which are contracts that obligate the Funds to make or take delivery of a financial instrument or the cash value of a securities index at a specified future date at a specified price. The Fund may purchase or sell futures contracts to increase or reduce its exposure to an asset class without purchasing or selling the underlying securities, either as a hedge or to enhance or realize gains. Using futures contracts involves various market risks, including interest rate risk and equity risk. Risks of entering into futures contracts include the possibility that there may be an illiquid market or that a change in the value of the contract may not correlate with changes in the value of the underlying securities.

Upon entering into a futures contract, the Fund is required to deliver to a broker an amount of cash and/or securities equal to a certain percentage of the contract amount. This amount is known as the "initial margin". Subsequent payments, known as "variation margin", are made or received by the Fund each day, depending on the daily fluctuations in the value of the underlying futures contracts. Such variation margin is recorded for financial statement purposes on a daily basis as an unrealized gain or loss on futures until the futures contract is closed or expires, at which time the net gain or loss is reclassified to realized gain or loss on futures.

The Statements of operations reflect net realized and net unrealized gains and losses on these contracts.

G.  Securities traded on to-be-announced basis: Certain Funds may from time to time purchase, or sell short, securities on a to-be-announced ("TBA") basis. In a TBA transaction, the Fund commits to purchasing or selling securities for which all specific information is not yet known at the time of the trade, particularly the face amount and maturity date of the underlying security transactions. Securities purchased on a TBA basis are not settled until they are delivered to the Fund, normally 15 to 45 days later. Beginning on the date the Fund enters into a TBA transaction, cash, US government securities or other liquid high grade debt obligations are segregated in an amount equal in value to the purchase price of the TBA security. These transactions are subject to market fluctuations and their current value is determined in the same manner as for other securities.

H.  Swap agreements: Certain Funds may engage in swap agreements, including but not limited to interest rate, currency, credit default and total return swap agreements. A Fund expects to enter into these transactions to preserve a return or spread on a particular investment or portion of the portfolio's duration, to protect against any increase in the price of securities the Fund anticipates purchasing at a later date, or to gain exposure to certain markets in the most economical way possible.

247

The UBS Funds—Notes to financial statements

Certain Funds may enter into interest rate swap agreements with another party to receive or pay interest (e.g., an exchange of fixed rate payments for floating rate payments) to protect themselves from interest rate fluctuations. This type of swap is an agreement that obligates two parties to exchange a series of cash flows at specified intervals based upon or calculated by reference to a specified interest rate(s) for a specified amount. The payment flows are usually netted against each other, with the difference being paid by one party to the other. Interest rate swap agreements are subject to general market risk, liquidity risk, counterparty risk and interest rate risk.

Credit default swap agreements involve commitments to make or receive payments in the event of a default or a credit event of a referenced security. As a buyer, the Fund would make periodic payments to the counterparty, and the Fund would receive payments only upon the occurrence of a credit event. If no credit event occurs, the Fund will lose its periodic stream of payments over the term of the contract. However, if a credit event does occur, the Fund typically would receive full notional value for a reference obligation that may have little or no value. As a seller, the Fund would receive periodic payments from the counterparty, and the Fund would make payments only upon the occurrence of a credit event. If no credit event occurs, the Fund will gain the periodic stream of payments it received over the term of the contract. However, if a credit event occurs, the Fund will pay full notional value for a reference obligation that may have little or no value. Credit default swaps may involve greater risks than if the Fund had invested in the reference obligation directly and are subject to general market risk, liquidity risk, counterparty risk and credit risk.

Credit default swap agreements on credit indices involve one party making a stream of payments to another party in exchange for the right to receive a specified return in the event of a write-down, principal shortfall, interest shortfall or default of all or part of the referenced entities comprising the credit index. A credit index is a list of a basket of credit instruments or exposures designed to be representative of some part of the credit market as a whole. These indices are made up of referenced credits that are judged by a poll of dealers to be the most liquid entities in the credit default swap market based on the sector of the index. Components of the indices may include, but are not limited to, investment grade securities, high yield securities, asset backed securities, emerging markets, and/or various credit ratings within each sector. Credit indices are trades using credit default swaps with standardized terms inclu ding a fixed spread and standard maturity dates. An index credit default swap references all the names in the index, and if there is a default, the credit event is settled based on that name's weight in the index. The composition of the indices changes periodically, usually every six months, and for most indices, each name has an equal weight in the index. A Fund may use credit default swaps on credit indices to hedge a portfolio of credit default swaps or bonds with a credit default swap on indices which is less expensive than it would be to buy many credit default swaps to achieve a similar effect. Credit default swap on indices are benchmarks for protecting investors owning bonds against default, and traders use them to speculate on changes in credit quality.

Credit default swap agreements on corporate issues or sovereign issues of an emerging country involve one party making a stream of payments to another party in exchange for the right to receive a specified return in the event of a default or other credit event. If a credit event occurs and cash settlement is not elected, a variety of other deliverable obligations may be delivered in lieu of the specific referenced obligation. The ability to deliver other obligations may result in a cheapest-to-deliver option (the buyer of protection's right to choose the deliverable obligation with the lowest value following a credit event). The Fund may use credit default swaps on corporate issues or sovereign issues of an emerging country to provide a measure of protection against defaults of the issuers (i.e., to reduce risk where the Fund owns or has exposure to the referenced obligation) or to take an active long or short position with resp ect to the likelihood of a particular issuer's default.

248

The UBS Funds—Notes to financial statements

The maximum potential amount of future payments (undiscounted) that a Fund as a seller of protection could be required to make under a credit default swap agreement would be an amount equal to the notional amount of the agreement which may exceed the amount of unrealized appreciation or depreciation reflected on the Statement of assets and liabilities. Notional amounts of all credit default swap agreements outstanding as of June 30, 2009 for which a Fund is the seller of protection are disclosed under the sections "Credit default swaps on credit indices—sell protection" and "Credit default swaps on corporate and sovereign issues—sell protection" in the Portfolios of investments. These potential amounts would be partially offset by any recovery values of the respective referenced obligations, upfront payments received upon entering into the agreement, or net amounts received from the settlement of buy protection credit default swap agreements entered into, if any, by a Fund for the same referenced entity or entities.

Total return swap agreements involve commitments to pay or receive interest in exchange for a market-linked return based on a notional amount. To the extent the total return of the security or index underlying the transaction exceeds or falls short of the offsetting interest rate obligation, the Fund will receive a payment from or make a payment to the counterparty, respectively. Total return swaps are marked-to-market daily, and the change, if any, is recorded as unrealized appreciation or depreciation. Total return swap agreements are subject to general market risk, liquidity risk, counterparty risk and that there may be unfavorable changes in the underlying investments or instruments.

The use of swaps involves investment techniques and risks different from those associated with ordinary portfolio security transactions. If UBS Global AM is incorrect in its forecast of market values, interest rates and other applicable factors, the investment performance of the Funds will be less favorable than it would have been if this investment technique was never used. Swaps do not involve the delivery of securities and are subject to counterparty risk. If the other party to a swap agreement defaults and fails to consummate the transaction, a Fund's risk of loss will consist of the net amount of interest or other payments that the Fund is contractually entitled to receive. Therefore, the Fund would consider the creditworthiness of the counterparty to a swap agreement in evaluating potential credit risk.

The Funds will accrue for interim payments on swap agreements on a daily basis, with the net amount recorded within unrealized appreciation/depreciation of swap agreements on the Statements of assets and liabilities. Once interim payments are settled in cash, the net amount is recorded as realized gain/loss on swap agreements, in addition to realized gain/loss recorded upon the termination of swap agreements on the Statements of operations. Fluctuations in the value of swap agreements are recorded for financial statement purposes as unrealized appreciation or depreciation of swap agreements.

I.  Option writing: Certain Funds may write (sell) put and call options on foreign or US securities indices in order to gain exposure to or protect against changes in the markets. When a Fund writes a call or a put option, an amount equal to the premium received by the Fund is included in the Fund's Statement of assets and liabilities as an asset and as an equivalent liability. The amount of the liability is subsequently marked-to-market to reflect the current market value of the option written. If an option which the Fund has written either expires on its stipulated expiration date or the Fund enters into a closing purchase transaction, the Fund realizes a gain (or loss if the cost of a closing purchase transaction exceeds the premium received when the option was written) without regard to any unrealized gain or loss on the underlying secur ity or derivative instrument, and the liability related to such option is extinguished. If a call option which the Fund has written is exercised, the Fund recognizes a realized gain or loss (long-term or short-term, depending on the holding period of the underlying security) from the sale of the underlying security or derivative instrument and the proceeds from the sale are increased by the premium originally received. If a put option which the Fund has written is exercised, the amount of the premium originally received reduces the cost of the security or derivative instrument which the Fund purchases upon exercise of the option.

249

The UBS Funds—Notes to financial statements

In writing an option, the Funds bear the market risk (specifically interest rate risk) of an unfavorable change in the price of the derivative instrument, security or currency underlying the written option. Exercise of an option written by a Fund could result in the Fund selling or buying a derivative instrument, security or currency at a price different from current market value.

J.  Purchased options: Certain Funds may also purchase put and call options on foreign or US securities and indices as well as exchange-listed call options on particular market segment indices to achieve temporary exposure to a specific industry or geographic region. Purchasing call options tends to increase exposure to the underlying instrument. Purchasing put options tends to decrease exposure to the underlying instrument. The Fund pays a premium which is included in the Statement of assets and liabilities as an investment and subsequently marked-to-market to reflect the current value of the option. Premiums paid for purchasing options which expire are treated as realized losses. Purchased options involve general market risk and interest rate risk. The risk associated with purchasing put and call options is limited to the premium paid. Pre miums paid for purchasing options which are exercised or closed are added to the amounts paid or offset against the proceeds on the underlying futures, security or currency transaction to determine the realized gain or loss.

K.  Short sales: UBS Dynamic Alpha Fund ("Dynamic Alpha") and UBS U.S. Equity Alpha Fund ("Equity Alpha") enter into short sales whereby they sell a security they generally do not own, in anticipation of a decline in the security's price. The initial amount of a short sale is recorded as a liability which is marked to market daily. Fluctuations in the value of this liability are recorded as unrealized gains or losses on the Statement of operations. If Dynamic Alpha or Equity Alpha shorts a security when also holding a long position in the security (a "short against the box"), as the security price declines, the short position increases in value, offsetting the long position's decrease in value. The opposite effect occurs if the security price rises. Dynamic Alpha and Equity Alpha will realize a gain or loss upon closing of the short sale (re turning the security to the counterparty by way of purchase or delivery of a long position owned). Dynamic Alpha and Equity Alpha are liable to the buyer for any dividends payable on securities while those securities are in a short position. These dividends are booked as an expense of the Funds. Dynamic Alpha and Equity Alpha designate collateral consisting of cash, US government securities or other liquid assets sufficient to collateralize the market value of short positions. Dynamic Alpha and Equity Alpha are charged a securities loan fee in connection with short sale transactions.

The UBS U.S. Large Cap Growth Fund, UBS U.S. Mid Cap Growth Equity Fund, UBS U.S. Small Cap Growth Fund, UBS Absolute Return Bond Fund and UBS High Yield Fund may, from time to time, sell securities short. There were no short positions, as of June 30, 2009, for any of these funds.

L.  Dividends and distributions: It is the Funds' policy to distribute their respective net investment income and net capital gains, if any, annually except for UBS Global Bond Fund, UBS U.S. Bond Fund and UBS High Yield Fund, which will distribute their respective net investment income, if any, monthly and UBS Absolute Return Bond Fund which will distribute its net investment income, if any, quarterly. Dividends and distributions to shareholders are recorded on the ex-dividend date. The amounts of dividends from net investment income and distributions of net capital gains are determined in accordance with income tax regulations, which may differ from US generally accepted accounting principles. These "book/tax" differences are either considered temporary or permanent in nature. To the extent they are permanent in nature, such amounts are re classified within the capital accounts based on their federal tax-basis treatment; temporary differences do not require reclassification. Differences in dividends from net investment income per share between the classes are mainly due to service and distribution related expenses.

250

The UBS Funds—Notes to financial statements

M.  Concentration of risk: Investing in securities of foreign issuers and currency transactions may involve certain considerations and risks not typically associated with investments in the United States. These risks include revaluation of currencies, adverse 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 US companies and US government securities. These risks are greater with respect to securities of issuers located in emerging market countries in which some Funds in the Trust invest.

Small capitalization ("small cap") companies may be more vulnerable than larger capitalization ("large cap") companies to adverse business or economic developments. Small cap companies may also have limited product lines, markets or financial resources, and may be dependent on a relatively small management group. Securities of such companies may be less liquid and more volatile than securities of large cap companies or the market averages in general and therefore may involve greater risk than investing in large cap companies. In addition, small cap companies may not be well-known to the investing public, may not have institutional ownership and may have only cyclical, static or moderated growth prospects.

The ability of the issuers of debt securities held by the Funds to meet their obligations may be affected by economic and political developments particular to a specific industry, country, state or region.

N.  Commission recapture program: The following Funds participate in a brokerage commission recapture program: UBS Global Allocation Fund, UBS Global Equity Fund, UBS International Equity Fund, UBS U.S. Equity Alpha Fund, UBS U.S. Large Cap Equity Fund, UBS U.S. Large Cap Growth Fund, UBS U.S. Large Cap Value Equity Fund, UBS U.S. Mid Cap Growth Equity Fund and UBS U.S. Small Cap Growth Fund. These Funds have established commission recapture arrangements with certain participating brokers or dealers. If a Fund's investment manager chooses to execute a transaction through a participating broker subject to best price and execution, the broker will rebate a portion of the commission back to the Fund. Any collateral benefit received through participation in the commission recapture program is directed exclusively to the Fund. For the year ended June 30, 2009, the following Funds recorded recaptured commissions which are reflected on the Statements of operations within the net realized gains (losses) on investment activities:

Fund	Amount
UBS Global Allocation Fund	$	266,754
UBS Global Equity Fund		13,058
UBS U.S. Equity Alpha Fund		24,483
UBS U.S. Large Cap Equity Fund		114,431
UBS U.S. Large Cap Value Equity Fund		10,969
UBS U.S. Mid Cap Growth Equity Fund		1,729

O.  Redemption fees: Each class of each series of The UBS Funds imposes a 1% redemption fee on shares sold or exchanged within 90 days of their purchase date, subject to limited exceptions. This amount is paid to the applicable Fund, not the Advisor or UBS Global AM (US). The redemption fees earned by the Fund are disclosed in the Statements of changes in net assets. For the year ended June 30, 2009, redemption fees represent less than $0.005 per share.

251

The UBS Funds—Notes to financial statements

2.  Investment advisory fees and other transactions with affiliates

UBS Global AM (the "Advisor"), a registered investment advisor, provides the Funds with investment management services. As compensation for these services, each Fund pays the Advisor a monthly fee, accrued daily and paid monthly, based on each Fund's respective average daily net assets in accordance with the following per annum schedule:

Fund	$0 to $500 mm			$500 mm to $1 billion			$1 billion to $1.5 billion			$1.5 billion to $2.0 billion			$2.0 billion to $3.0 billion			$3.0 billion to $6.0 billion			$6.0 billion and over
UBS Global Allocation Fund		0.800	%		0.750	%		0.700	%		0.675	%		0.650	%		0.630	%		0.610	%
UBS Global Frontier Fund		0.950			0.950			0.950			0.950			0.950			0.950			0.950
UBS International Equity Fund		0.800			0.750			0.700			0.675			0.650			0.650			0.650
UBS U.S. Equity Alpha Fund		1.000			0.900			0.850			0.850			0.850			0.850			0.850
UBS U.S. Large Cap Equity Fund		0.700			0.650			0.600			0.575			0.550			0.550			0.550
UBS U.S. Large Cap Growth Fund		0.700			0.650			0.600			0.575			0.550			0.550			0.550
UBS U.S. Large Cap Value Equity Fund		0.700			0.650			0.600			0.575			0.550			0.550			0.550
UBS U.S. Mid Cap Growth Equity Fund		0.850			0.800			0.775			0.775			0.775			0.775			0.775
UBS U.S. Small Cap Growth Fund		0.850			0.850			0.825			0.825			0.825			0.825			0.825
UBS Absolute Return Bond Fund		0.550			0.500			0.475			0.450			0.425			0.425			0.425
UBS Global Bond Fund		0.650			0.650			0.650			0.600			0.550			0.550			0.550
UBS High Yield Fund		0.600			0.550			0.525			0.525			0.525			0.525			0.525
UBS U.S. Bond Fund		0.500			0.475			0.450			0.425			0.400			0.400			0.400

	$0 to $500 mm			$500 mm to $1 billion			$1 billion to $1.5 billion			$1.5 billion to $2.0 billion			$2.0 billion to $4.0 billion			$4.0 billion and over
UBS Dynamic Alpha Fund		0.850	%		0.800	%		0.750	%		0.725	%		0.700	%		0.680	%

	$0 to $250 mm			$250 mm to $500 mm			$500 mm to $1 billion			$1 billion and over
UBS Global Equity Fund		0.750	%		0.700	%		0.680	%		0.650	%

The Advisor has agreed to waive its fees and/or reimburse the expenses (excluding expenses incurred through investment in other investment companies and interest expense) of each Fund to the extent that total annualized operating expenses (excluding expenses incurred through investment in other investment companies and interest expense) exceed a specified percentage of each Fund's respective average daily net assets. For the UBS U.S. Equity Alpha Fund and UBS Dynamic Alpha Fund, the Advisor has agreed to waive its fees and/or reimburse expenses (excluding interest expense, securities loan fees, dividend expense for securities sold short and expenses incurred through investment in other investment companies) to the extent that ordinary operating expenses (excluding interest expense, securities loan fees, dividend expense for securities sold short and expenses incurred through investment in other investment companies) exceed a

252

The UBS Funds—Notes to financial statements

specified percentage of the Fund's average daily net assets. Investment advisory fees, including the dollar amount waived or reimbursed for the year ended June 30, 2009, were as follows:

Fund	Class A expense cap			Class B expense cap			Class C expense cap			Class Y expense cap			Advisory fees		Fees waived/ expenses reimbursed
UBS Dynamic Alpha Fund		1.35	%		2.10	%		2.10	%		1.10	%	$	8,466,664	$	2,654
UBS Global Allocation Fund		N/A			N/A			N/A			N/A			16,641,614		—
UBS Global Frontier Fund		1.40			N/A*			2.15			1.15			677,168		193,388
UBS Global Equity Fund		1.25			2.00			2.00			1.00			1,518,441		335,794
UBS International Equity Fund		1.25			2.00			2.00			1.00			751,990		387,619
UBS U.S. Equity Alpha Fund		1.50			N/A*			2.25			1.25			927,626		181,743
UBS U.S. Large Cap Equity Fund		1.30			2.05			2.05			1.05			3,099,936		—
UBS U.S. Large Cap Growth Fund		1.05			1.80			1.80			0.80			625,543		338,574
UBS U.S. Large Cap Value Equity Fund		1.10			1.85			1.85			0.85			438,779		274,308
UBS U.S. Mid Cap Growth Equity Fund		1.45			N/A*			2.20			1.20			35,134		163,923
UBS U.S. Small Cap Growth Fund		1.28			2.03			2.03			1.03			1,877,775		590,971
UBS Absolute Return Bond Fund		1.00			N/A*			1.35			0.85			931,137		39,790
UBS Global Bond Fund		1.15			1.90			1.65			0.90			335,172		276,516
UBS High Yield Fund		1.20			1.95			1.70			0.95			673,196		134,086
UBS U.S. Bond Fund		0.85			1.60			1.35			0.60			430,712		317,352

*  UBS Global Frontier Fund, UBS U.S. Equity Alpha Fund, UBS U.S. Mid Cap Growth Equity Fund and UBS Absolute Return Bond Fund do not offer Class B shares.

Each Fund, except for UBS International Equity Fund, will reimburse the Advisor for expenses it reimburses for a period of three years following such expense reimbursements, to the extent such reimbursements will not cause a Fund to exceed any applicable expense limit for the Fund. The expenses waived for the year ended June 30, 2009 are subject to repayment through June 30, 2012.

At June 30, 2009, the following Funds had remaining fee waivers and expense reimbursements subject to repayment to the Advisor and respective dates of expiration as follows:

Fund	Fee waivers/ expense reimbursements subject to repayment		Expires June 30, 2010		Expires June 30, 2011		Expires June 30, 2012
UBS Dynamic Alpha Fund—Class A	$	—	$	—	$	—	$	—
UBS Dynamic Alpha Fund—Class B		2,654		—		—		2,654
UBS Dynamic Alpha Fund—Class C		—		—		—		—
UBS Dynamic Alpha Fund—Class Y		—		—		—		—
UBS Global Frontier Fund—Class A		289,938		—		152,817		137,121
UBS Global Frontier Fund—Class C		103,548		—		52,934		50,614
UBS Global Frontier Fund—Class Y		18,095		—		12,442		5,653

253

The UBS Funds—Notes to financial statements

Fund	Fee waivers/ expense reimbursements subject to repayment		Expires June 30, 2010		Expires June 30, 2011		Expires June 30, 2012
UBS Global Equity Fund—Class A	$	448,548	$	173,962	$	91,547	$	183,039
UBS Global Equity Fund—Class B		25,351		17,045		2,660		5,646
UBS Global Equity Fund—Class C		193,124		75,973		46,114		71,037
UBS Global Equity Fund—Class Y		76,072		—		—		76,072
UBS U.S. Equity Alpha Fund—Class A		159,256		36,986		5,169		117,101
UBS U.S. Equity Alpha Fund—Class C		81,699		19,433		21,407		40,859
UBS U.S. Equity Alpha Fund—Class Y		24,075		—		292		23,783
UBS U.S. Large Cap Growth Fund—Class A		151,738		48,070		32,264		71,404
UBS U.S. Large Cap Growth Fund—Class B		7,405		2,793		3,457		1,155
UBS U.S. Large Cap Growth Fund—Class C		15,611		6,608		6,652		2,351
UBS U.S. Large Cap Growth Fund—Class Y		684,596		124,815		296,117		263,664
UBS U.S. Large Cap Value Equity Fund—Class A		650,410		207,668		217,979		224,763
UBS U.S. Large Cap Value Equity Fund—Class B		9,501		4,998		2,454		2,049
UBS U.S. Large Cap Value Equity Fund—Class C		96,481		33,252		32,231		30,998
UBS U.S. Large Cap Value Equity Fund—Class Y		54,719		17,179		21,042		16,498
UBS U.S. Mid Cap Growth Equity Fund—Class A		42,208		6,434		14,938		20,836
UBS U.S. Mid Cap Growth Equity Fund—Class C		11,443		2,011		4,181		5,251
UBS U.S. Mid Cap Growth Equity Fund—Class Y		452,804		157,403		157,565		137,836
UBS U.S. Small Cap Growth Fund—Class A		984,800		552,974		213,353		218,473
UBS U.S. Small Cap Growth Fund—Class B		13,063		9,581		1,801		1,681
UBS U.S. Small Cap Growth Fund—Class C		49,464		19,550		15,477		14,437
UBS U.S. Small Cap Growth Fund—Class Y		1,046,270		419,521		270,369		356,380
UBS Absolute Return Bond Fund—Class A		35,057		—		—		35,057
UBS Absolute Return Bond Fund—Class C		4,733		—		—		4,733
UBS Global Bond Fund—Class A		109,889		38,861		20,765		50,263
UBS Global Bond Fund—Class B		2,205		984		460		761
UBS Global Bond Fund—Class C		12,728		2,040		2,242		8,446
UBS Global Bond Fund—Class Y		470,409		117,753		135,610		217,046
UBS High Yield Fund—Class A		123,455		42,127		35,260		46,068
UBS High Yield Fund—Class B		6,232		2,009		2,204		2,019
UBS High Yield Fund—Class C		28,821		9,583		8,511		10,727
UBS High Yield Fund—Class Y		113,191		11,051		26,868		75,272
UBS U.S. Bond Fund—Class A		132,330		70,199		27,421		34,710
UBS U.S. Bond Fund—Class B		3,479		1,615		1,126		738
UBS U.S. Bond Fund—Class C		12,698		3,139		3,008		6,551
UBS U.S. Bond Fund—Class Y		776,651		222,685		278,613		275,353

254

The UBS Funds—Notes to financial statements

Each Fund pays UBS Global Asset Management (US) Inc. ("UBS Global AM (US)"), an affiliate of the Advisor, a monthly administration fee that is accrued daily and paid monthly at an annual rate of 0.075% of the average daily net assets of such Fund. For the year ended June 30, 2009, the Funds owed and incurred administrative fees as follows:

Fund	Administrative fees owed		Administrative fees incurred
UBS Dynamic Alpha Fund	$	38,857	$	776,501
UBS Global Allocation Fund		108,229		1,734,389
UBS Global Frontier Fund		4,054		53,378
UBS Global Equity Fund		10,297		151,646
UBS International Equity Fund		4,879		70,250
UBS U.S. Equity Alpha Fund		9,035		69,178
UBS U.S. Large Cap Equity Fund		16,000		333,600
UBS U.S. Large Cap Growth Fund		5,378		67,022
UBS U.S. Large Cap Value Equity Fund		3,244		46,861
UBS U.S. Mid Cap Growth Equity Fund		259		3,147
UBS U.S. Small Cap Growth Fund		11,110		165,023
UBS Absolute Return Bond Fund		9,493		126,495
UBS Global Bond Fund		2,165		38,550
UBS High Yield Fund		6,832		84,009
UBS U.S. Bond Fund		4,201		64,405

The Funds may invest in units of certain affiliated investment companies also advised or managed by the Advisor. The Funds pay no management fees to these affiliated investment companies. Investments in affiliated investment companies for the year ended June 30, 2009 were as follows:

					UBS Dynamic Alpha Fund
Affiliated investment companies	Value 06/30/08		Purchases		Sales proceeds		Net realized gain (loss)			Change in net unrealized appreciation (depreciation)			Value 06/30/09		% of net assets
UBS Opportunistic Emerging Markets Debt Relationship Fund	$	31,123,202	$	—	$	11,600,000	$	(1,708,733	)	$	220,328		$	18,034,797		2.94	%
UBS U.S. Equity Alpha Relationship Fund		260,446,522		73,430,000		192,112,964		(53,212,070	)		(17,246,401	)		71,305,087		11.61	%
UBS U.S. Large Cap Equity Relationship Fund		236,295,588		—		192,694,908		(40,094,803	)		(3,505,877	)		—		0.00	%
UBS U.S. Large Cap Growth Equity Relationship Fund		176,426,742		—		117,709,737		(30,103,472	)		(28,613,533	)		—		0.00	%
	$	704,292,054	$	73,430,000	$	514,117,609	$	(125,119,078	)	$	(49,145,483	)	$	89,339,884		14.55	%

255

The UBS Funds—Notes to financial statements

					UBS Global Allocation Fund
Affiliated investment companies	Value 06/30/08		Purchases		Sales proceeds		Net realized gain (loss)			Change in net unrealized appreciation (depreciation)			Value 06/30/09		% of net assets
UBS Corporate Bond Relationship Fund	$	148,281,970	$	85,500,000	$	136,748,203	$	(11,970,567	)	$	2,973,616		$	88,036,816		5.14	%
UBS Emerging Markets Equity Relationship Fund		39,033,323		87,841,191		13,500,000		(15,202,907	)		7,175,740			105,347,347		6.16	%
UBS High Yield Relationship Fund		194,179,949		74,000,000		193,200,000		(27,671,659	)		3,467,566			50,775,856		2.97	%
UBS Small-Cap Equity Relationship Fund		121,624,213		23,000,000		80,000,000		(15,046,444	)		(17,968,624	)		31,609,145		1.85	%
UBS U.S. Securitized Mortgage Relationship Fund		281,506,651		—		228,704,549		(123,195,483	)		70,393,381			—		0.00	%
UBS U.S. Treasury Inflation Protected Securities Relationship Fund		—		14,100,000		11,500,000		(684,548	)		73,087			1,988,539		0.12	%
UBS Global (ex-U.S.) All Cap Growth Relationship Fund		—		250,000,000		12,000,000		761,168			18,724,441			257,485,609		15.05	%
	$	784,626,106	$	534,441,191	$	675,652,752	$	(193,010,440	)	$	84,839,207		$	535,243,312		31.29	%
					UBS Global Frontier Fund
Affiliated investment companies	Value 06/30/08		Purchases		Sales proceeds		Net realized gain (loss)			Change in net unrealized appreciation (depreciation)			Value 06/30/09		% of net assets
UBS Corporate Bond Relationship Fund	$	4,404,488	$	4,100,000	$	3,907,063	$	(426,521	)	$	230,937		$	4,401,841		6.81	%
UBS High Yield Relationship Fund		6,447,333		7,500,000		11,000,000		(512,212	)		444,681			2,879,802		4.45	%
UBS International Equity Relationship Fund		22,425,696		10,100,000		17,700,000		(10,326,978	)		2,831,523			7,330,241		11.34	%
UBS U.S. Large Cap Equity Relationship Fund		45,597,924		15,300,000		37,700,000		(17,286,796	)		6,250,028			12,161,156		18.81	%
UBS U.S. Large Cap Growth Equity Relationship Fund		7,669,685		4,000,000		6,550,000		(2,568,878	)		267,394			2,818,201		4.36	%
UBS U.S. Securitized Mortgage Relationship Fund		11,109,933		—		9,780,705		(3,976,304	)		2,647,076			—		0.00	%
UBS Global (ex-U.S.) All Cap Growth Relationship Fund		—		6,700,000		—		—			392,092			7,092,092		10.97	%
UBS Emerging Markets Equity Relationship Fund		—		7,643,115		700,000		(23,929	)		2,105,793			9,024,979		13.96	%
	$	97,655,059	$	55,343,115	$	87,337,768	$	(35,121,618	)	$	15,169,524		$	45,708,312		70.70	%

256

The UBS Funds—Notes to financial statements

					UBS Global Equity Fund
Affiliated investment companies	Value 06/30/08		Purchases		Sales proceeds		Net realized gain (loss)			Change in net unrealized appreciation (depreciation)			Value 06/30/09		% of net assets
UBS Emerging Markets Equity Completion Relationship Fund	$	19,440,931	$	—	$	—	$	—		$	(4,267,003	)	$	15,173,928		9.33	%
					UBS International Equity Fund
Affiliated investment companies	Value 06/30/08		Purchases		Sales proceeds		Net realized gain (loss)			Change in net unrealized appreciation (depreciation)			Value 06/30/09		% of net assets
UBS Emerging Markets Equity Completion Relationship Fund	$	8,941,330	$	—	$	4,472,077	$	(1,325,539	)	$	(3,143,714	)	$	—		0.00	%
					UBS Absolute Return Bond Fund
Affiliated investment company	Value 06/30/08		Purchases		Sales proceeds		Net realized gain (loss)			Change in net unrealized appreciation (depreciation)			Value 06/30/09		% of net assets
UBS U.S. Securitized Mortgage Relationship Fund	$	16,855,873	$	—	$	11,277,351	$	(9,498,563	)	$	3,920,041		$	—		0.00	%
					UBS Global Bond Fund
Affiliated investment company	Value 06/30/08		Purchases		Sales proceeds		Net realized gain (loss)			Change in net unrealized appreciation (depreciation)			Value 06/30/09		% of net assets
UBS U.S. Securitized Mortgage Relationship Fund	$	2,503,477	$	—	$	2,244,087	$	(923,617	)	$	664,227		$	—		0.00	%
					UBS U.S. Bond Fund
Affiliated investment companies	Value 06/30/08		Purchases		Sales proceeds		Net realized gain (loss)			Change in net unrealized appreciation (depreciation)			Value 06/30/09		% of net assets
UBS Corporate Bond Relationship Fund	$	15,773,933	$	8,400,000	$	11,525,000	$	(1,241,184	)	$	680,322		$	12,088,071		18.05	%
UBS Opportunistic Emerging Markets Debt Relationship Fund		2,535,877		—		2,175,318		(183,257	)		(177,302	)		—		0.00
UBS Opportunistic High Yield Relationship Fund		5,682,700		—		5,407,008		(314,583	)		38,891			—		0.00
UBS U.S. Securitized Mortgage Relationship Fund		26,553,316		—		18,904,276		(14,854,532	)		7,205,492			—		0.00

257

The UBS Funds—Notes to financial statements

					UBS U.S. Bond Fund
Affiliated investment companies	Value 06/30/08		Purchases		Sales proceeds		Net realized gain (loss)			Change in net unrealized appreciation (depreciation)		Value 06/30/09		% of net assets
UBS High Yield Relationship Fund	$	—	$	2,500,000	$	1,500,000	$	25,274		$	168,815	$	1,194,089		1.79	%
UBS U.S. Treasury Inflation Protected Securities Relationship Fund		—		3,400,000		2,450,000		(17,114	)		46,829		979,715		1.46
	$	50,545,826	$	14,300,000	$	41,961,602	$	(16,585,396	)	$	7,963,047	$	14,261,875		21.30	%

The Funds may invest in shares of the UBS Supplementary Trust—U.S. Cash Management Prime Fund ("Supplementary Trust"). Supplementary Trust is managed by the Advisor and is offered as a cash management option only to mutual funds and certain other accounts managed by the Advisor. Supplementary Trust pays no management fees to the Advisor. Effective March 31, 2009, Supplementary Trust liquidated. Distributions received from Supplementary Trust are reflected as affiliated interest income or as securities lending—net in the Statements of operations. Amounts relating to those investments at June 30, 2009 and for the year then ended were as follows:

Fund	Value 06/30/08		Purchases		Sales proceeds		Value 06/30/09		% of net assets			Net income earned
UBS Dynamic Alpha	$	40,016,466	$	—	$	40,016,466	$	—		0.00	%	$	249,648
UBS Global Allocation Fund		127,995,357		869,649,376		997,644,733		—		0.00			828,188
UBS Global Equity Fund		6,322,847		64,473,145		70,795,992		—		0.00			30,556
UBS International Equity Fund		6,962,760		47,481,161		54,443,921		—		0.00			56,054
UBS U.S. Large Cap Equity Fund		28,079,902		144,860,729		172,940,631		—		0.00			141,444
UBS U.S. Large Cap Growth Fund		823,300		52,623,094		53,446,394		—		0.00			26,924
UBS U.S. Large Cap Value Equity Fund		614,765		14,190,031		14,804,796		—		0.00			12,014
UBS U.S. Small Cap Growth Fund		87,899,726		60,404,380		148,304,106		—		0.00			438,635
UBS Global Bond Fund		4,156,388		40,157,717		44,314,105		—		0.00			28,833
UBS High Yield Fund		3,979,048		47,194,201		51,173,249		—		0.00			31,867
UBS U.S. Bond Fund		4,888,080		93,696,968		98,585,048		—		0.00			5,933

258

The UBS Funds—Notes to financial statements

The Funds may invest in units of the UBS Cash Management Prime Relationship Fund ("Cash Prime"). Cash Prime is offered as a cash management option only to mutual funds and certain other accounts. Distributions received from Cash Prime are reflected as affiliated interest income in the Statements of operations. Amounts relating to those investments at June 30, 2009 and for the year then ended were as follows:

Fund	Value 06/30/08		Purchases		Sales proceeds		Value 06/30/09		% of net assets			Interest income
UBS Dynamic Alpha Fund	$	87,629,852	$	1,418,747,804	$	1,503,484,281	$	2,893,375		0.47	%	$	902,728
UBS Global Allocation Fund		—		380,339,365		305,331,050		75,008,315		4.38			81,569
UBS Global Frontier Fund		—		104,578,464		97,901,333		6,677,130		10.33			35,008
UBS Global Equity Fund		—		19,644,401		19,568,427		75,974		0.05			2,324
UBS International Equity Fund		—		22,059,130		20,185,174		1,873,956		2.48			3,623
UBS U.S. Equity Alpha Fund		—		51,648,333		49,207,501		2,440,832		1.77			12,721
UBS U.S. Large Cap Equity Fund		—		42,014,982		40,606,583		1,408,399		0.55			11,393
UBS U.S. Large Cap Growth Fund		—		9,712,075		9,712,075		—		0.00			2,516
UBS U.S. Large Cap Value Equity Fund		—		3,545,872		2,822,172		723,700		1.40			999
UBS U.S. Mid Cap Growth Equity Fund		25,013		1,255,928		1,243,347		37,594		0.90			1,046
UBS U.S. Small Cap Growth Fund		—		18,656,447		17,126,532		1,529,915		0.86			5,919
UBS Absolute Return Bond Fund		36,317,035		103,452,281		135,648,512		4,120,804		2.68			24,552
UBS Global Bond Fund		—		9,155,304		8,609,430		545,874		1.59			1,244
UBS High Yield Fund		—		25,855,972		19,040,299		6,815,672		6.24			8,561
UBS U.S. Bond Fund		—		26,669,443		23,784,238		2,885,206		4.31			8,942

The Funds may invest in shares of the UBS Private Money Market Fund LLC ("Private Money Market"). Private Money Market is managed by the Advisor and is offered as a cash management option only to mutual funds and certain other accounts managed by the Advisor. The Advisor acts as Managing Member and receives a management fee from Private Money Market payable monthly in arrears at the annual rate of 0.10% of Private Money Market's average daily members' equity, minus the aggregate operating expenses of, and incurred by, Private Money Market during each such related month, not including investment expenses (including brokerage commissions, taxes, interest charges and other costs with respect to transactions in securities) and extraordinary expenses including litigation expenses, if any. The Advisor may, in its sole discretion, waive all or any portion of the management fee to which it may be entitled from time to time in

259

The UBS Funds—Notes to financial statements

order to maintain operating expenses at a certain level. Distributions received from Private Money Market are reflected as securities lending—net in the Statements of operations. Amounts relating to those investments at June 30, 2009 and for the year then ended were as follows:

Fund	Value 06/30/08		Purchases		Sales proceeds		Value 06/30/09		% of net assets			Net income earned
UBS Dynamic Alpha Fund	$	—	$	42,959,206	$	35,259,805	$	7,699,401		1.25	%	$	131,393
UBS Global Allocation Fund		—		190,851,672		169,647,293		21,204,379		1.24			488,423
UBS Global Equity Fund		—		26,021,523		23,246,710		2,774,813		1.71			67,767
UBS International Equity Fund		—		28,089,616		21,298,383		6,791,233		8.98			76,257
UBS U.S. Small Cap Growth Fund		—		57,970,625		49,871,440		8,099,185		4.55			123,681
UBS U.S. Bond Fund		—		5,435,938		4,143,893		1,292,045		1.93			957

On June 26, 2009, the following Funds exchanged units of their investment in the UBS U.S. Securitized Mortgage Relationship Fund and received cash and portfolio securities (including accrued interest) in a tax-free exchange. The following Funds received cash and portfolio securities with market values and net unrealized appreciation (depreciation) at the time of the transfer, as listed, in exchange for these units. The cost basis of the portfolio securities transferred to the following Funds is equal to the UBS U.S. Securitized Mortgage Relationship Fund's cost of the securities at the time of the transfer.

Fund	Market value of securities transferred		Unrealized depreciation of securities transferred			Units of UBS U.S. Securitized Mortgage Relationship Fund transferred
UBS Global Allocation Fund	$	2,991,674	$	(4,885,887	)		625,156
UBS Global Frontier Fund		416,506		(468,648	)		84,299

The following Funds have incurred brokerage commissions with UBS AG, an affiliated broker-dealer. Amounts relating to those transactions for the year ended June 30, 2009, were as follows:

Fund	UBS AG
UBS Dynamic Alpha Fund	$	68,808
UBS Global Allocation Fund		138,484
UBS Global Frontier Fund		3,257
UBS International Equity Fund		104
UBS U.S. Equity Alpha Fund		6,007
UBS U.S. Large Cap Equity Fund		27,332
UBS U.S. Large Cap Growth Fund		9,652
UBS U.S. Large Cap Value Equity Fund		3,471
UBS U.S. Mid Cap Growth Equity Fund		305
UBS U.S. Small Cap Growth Fund		11,259

260

The UBS Funds—Notes to financial statements

3.  Service and distribution plans

UBS Global AM (US) is the principal underwriter of each Fund's shares. The Trust has adopted service and/or distribution plans (the "Plans") pursuant to Rule 12b-1 under the 1940 Act for Class A, Class B and Class C. The Plans govern payments made for the expenses incurred in the service and/or distribution of Class A, Class B and Class C. Annual fees under the Plans as a percentage of the average daily net assets of each representative class of each of the Funds are as follows:

Fund	Class A			Class B			Class C
UBS Dynamic Alpha Fund		0.25	%		1.00	%		1.00	%
UBS Global Allocation Fund		0.25			1.00			1.00
UBS Global Frontier Fund		0.25			N/A*			1.00
UBS Global Equity Fund		0.25			1.00			1.00
UBS International Equity Fund		0.25			1.00			1.00
UBS U.S. Equity Alpha Fund		0.25			N/A*			1.00
UBS U.S. Large Cap Equity Fund		0.25			1.00			1.00
UBS U.S. Large Cap Growth Fund		0.25			1.00			1.00
UBS U.S. Large Cap Value Equity Fund		0.25			1.00			1.00
UBS U.S. Mid Cap Growth Equity Fund		0.25			N/A*			1.00
UBS U.S. Small Cap Growth Fund		0.25			1.00			1.00
UBS Absolute Return Bond Fund		0.15			N/A*			0.50
UBS Global Bond Fund		0.25			1.00			0.75
UBS High Yield Fund		0.25			1.00			0.75
UBS U.S. Bond Fund		0.25			1.00			0.75

*  UBS Global Frontier Fund, UBS U.S. Equity Alpha Fund, UBS U.S. Mid Cap Growth Equity Fund and UBS Absolute Return Bond Fund do not offer Class B shares.

UBS Global AM (US) also receives the proceeds of the initial sales charges paid upon purchases of Class A shares and the contingent deferred sales charges paid by shareholders upon certain redemptions of Class A, Class B, and Class C. At June 30, 2009, certain Funds owed UBS Global AM (US) service and distribution fees, and for the year ended June 30, 2009, certain Funds were informed by UBS Global AM (US) that it had earned sales charges as follows:

Fund	Service and distribution fees owed		Sales charges earned
UBS Dynamic Alpha Fund—Class A	$	84,147	$	138,554
UBS Dynamic Alpha Fund—Class B		5,653		45,420
UBS Dynamic Alpha Fund—Class C		111,012		17,070
UBS Global Allocation Fund—Class A		207,345		804,166
UBS Global Allocation Fund—Class B		28,389		192,231
UBS Global Allocation Fund—Class C		379,758		82,007
UBS Global Frontier Fund—Class A		10,134		93,331
UBS Global Frontier Fund—Class C		12,109		9,110
UBS Global Equity Fund—Class A		15,108		3,227
UBS Global Equity Fund—Class B		1,074		3,435
UBS Global Equity Fund—Class C		18,552		138
UBS International Equity Fund—Class A		1,629		2,735
UBS International Equity Fund—Class B		180		17

261

The UBS Funds—Notes to financial statements

Fund	Service and distribution fees owed		Sales charges earned
UBS International Equity Fund—Class C	$	765	$	382
UBS U.S. Equity Alpha Fund—Class A		7,094		15,008
UBS U.S. Equity Alpha Fund—Class C		7,536		1,490
UBS U.S. Large Cap Equity Fund—Class A		7,279		6,237
UBS U.S. Large Cap Equity Fund—Class B		220		2,322
UBS U.S. Large Cap Equity Fund—Class C		3,894		746
UBS U.S. Large Cap Growth Fund—Class A		5,392		32,853
UBS U.S. Large Cap Growth Fund—Class B		131		8,581
UBS U.S. Large Cap Growth Fund—Class C		929		176
UBS U.S. Large Cap Value Equity Fund—Class A		9,159		2,112
UBS U.S. Large Cap Value Equity Fund—Class B		212		1,500
UBS U.S. Large Cap Value Equity Fund—Class C		4,507		50
UBS U.S. Mid Cap Growth Equity Fund—Class A		109		1,549
UBS U.S. Mid Cap Growth Equity Fund—Class C		95		55
UBS U.S. Small Cap Growth Fund—Class A		8,698		1,187
UBS U.S. Small Cap Growth Fund—Class B		148		765
UBS U.S. Small Cap Growth Fund—Class C		2,064		105
UBS Absolute Return Bond Fund—Class A		2,228		1,094
UBS Absolute Return Bond Fund—Class C		2,243		95
UBS Global Bond Fund—Class A		1,616		1,309
UBS Global Bond Fund—Class B		99		—
UBS Global Bond Fund—Class C		1,058		139
UBS High Yield Fund—Class A		8,193		7,099
UBS High Yield Fund—Class B		735		5,874
UBS High Yield Fund—Class C		4,315		442
UBS U.S. Bond Fund—Class A		1,844		5,512
UBS U.S. Bond Fund—Class B		91		311
UBS U.S. Bond Fund—Class C		1,577		35

4.  Transfer agency and related services fees

UBS Financial Services Inc. provides certain sub-transfer agency and administration services to each Fund pursuant to a delegation of authority from PNC Global Investment Servicing ("PNC"), each Fund's transfer agent, and is compensated for these services by PNC, not the Funds.

For the year ended June 30, 2009, UBS Financial Services Inc. received from PNC, not the Funds, total services fees as follows:

Fund	Amount paid
UBS Dynamic Alpha Fund	$	419,631
UBS Global Allocation Fund		799,690
UBS Global Frontier Fund		25,706
UBS Global Equity Fund		111,274
UBS International Equity Fund		6,027
UBS U.S. Equity Alpha Fund		29,579
UBS U.S. Large Cap Equity Fund		13,778

262

The UBS Funds—Notes to financial statements

Fund	Amount paid
UBS U.S. Large Cap Growth Fund	$	7,760
UBS U.S. Large Cap Value Equity Fund		34,478
UBS U.S. Mid Cap Growth Equity Fund		426
UBS U.S. Small Cap Growth Fund		23,593
UBS Absolute Return Bond Fund		33,381
UBS Global Bond Fund		8,644
UBS High Yield Fund		31,966
UBS U.S. Bond Fund		3,250

5.  Securities lending

Each Fund may lend portfolio securities up to 33¹/₃% of its total assets to qualified broker-dealers or institutional investors. The loans are secured at all times by cash, US government securities or irrevocable letters of credit in an amount at least equal to the market value of the securities loaned, plus accrued interest and dividends, determined on a daily basis and adjusted accordingly. Each Fund will regain ownership of loaned securities to exercise certain beneficial rights; however, each Fund may bear the risk of delay in recovery of, or even loss of rights in, the securities loaned should the borrower fail financia lly. Each Fund receives compensation for lending its securities from interest or dividends earned on the cash, US government securities or irrevocable letters of credit held as collateral, net of fee rebates paid to the borrower plus reasonable administrative and custody fees. The Funds monitor the market value of securities loaned on a daily basis and initially require collateral against the loaned securities in an amount at least equal to 102% of the value of domestic securities loaned and 105% of the value of foreign securities loaned.

UBS Dynamic Alpha Fund, UBS Global Allocation Fund, UBS Global Equity Fund, UBS International Equity Fund, UBS U.S. Bond Fund and UBS U.S Small Cap Growth Fund loaned securities to certain qualified broker-dealers, with the Funds' custodian acting as the Funds' lending agent. Cash collateral received is invested in interest bearing securities, which are included in the Portfolio(s) of investments. UBS Dynamic Alpha Fund and UBS International Equity Fund held uninvested cash as collateral from securities loaned of $284,879 and $14,169, respectively. In addition, UBS Global Allocation Fund and UBS U.S. Bond Fund received US Government Agency securities as collateral amounting to $4,890,422 and $775,904, respectively, which cannot be resold. The value of loaned securities and related collateral outstanding at June 30, 2009, were as follows:

Fund	Market value of securities loaned		Market value of collateral received from securities loaned		Market value of of investments of cash collateral received
UBS Dynamic Alpha Fund	$	7,646,940	$	7,984,280	$	7,699,401
UBS Global Allocation Fund		25,341,856		26,325,148		21,204,379
UBS Global Equity Fund		2,550,673		2,876,305		2,774,813
UBS International Equity Fund		6,460,409		6,805,402		6,791,233
UBS U.S. Small Cap Growth Fund		7,907,506		8,099,185		8,099,185
UBS U.S. Bond Fund		2,027,751		2,067,949		1,292,045

263

The UBS Funds—Notes to financial statements

6.  Purchases and sales of securities

For the year ended June 30, 2009, aggregate purchases and sales of portfolio securities, excluding short-term investments and US Government and agency securities, were as follows:

Fund	Purchases		Sales proceeds
UBS Dynamic Alpha Fund	$	1,261,865,992	$	1,924,691,154
UBS Global Allocation Fund		2,274,727,556		3,594,986,641
UBS Global Frontier Fund		84,532,046		114,304,330
UBS Global Equity Fund		155,863,212		224,953,198
UBS International Equity Fund		117,896,341		143,323,909
UBS U.S. Equity Alpha Fund		254,551,557		217,760,201
UBS U.S. Large Cap Equity Fund		275,950,264		526,050,483
UBS U.S. Large Cap Growth Fund		136,224,930		117,317,448
UBS U.S. Large Cap Value Equity Fund		42,734,657		57,088,958
UBS U.S. Mid Cap Growth Equity Fund		3,910,180		3,639,483
UBS U.S. Small Cap Growth Fund		165,136,549		226,022,122
UBS Absolute Return Bond Fund		132,678,153		141,929,722
UBS Global Bond Fund		45,095,736		61,699,439
UBS High Yield Fund		84,343,293		87,145,540
UBS U.S. Bond Fund		120,060,739		146,011,377

For the year ended June 30, 2009, aggregate purchases and sales of US Government and agency securities, excluding short-term investments, were as follows:

Fund	Purchases		Sales proceeds
UBS Dynamic Alpha Fund	$	7,693,642	$	7,815,636
UBS Global Allocation Fund		526,817,420		511,701,716
UBS Global Frontier Fund		15,926,174		17,189,524
UBS Absolute Return Bond Fund		5,019,531		—
UBS Global Bond Fund		12,182,251		14,178,545
UBS High Yield Fund		14,760,547		30,377,403
UBS U.S. Bond Fund		83,316,875		89,539,001

7.  Federal income taxes

It is each Fund's policy to comply with all requirements of the Internal Revenue Code (the "Code") applicable to regulated investment companies and to distribute substantially all of their taxable income to their shareholders. In addition, by distributing during each calendar year substantially all of its net investment income, net realized capital gains and certain other amounts, if any, each Fund intends not to be subject to a federal excise tax. Accordingly, no federal income tax provision was required.

264

The UBS Funds—Notes to financial statements

The tax character of distributions paid during the fiscal years ended June 30, 2009 and June 30, 2008 were as follows:

	2009						2008
Fund	Distributions paid from ordinary income		Distributions paid from net long-term capital gains		Total distributions paid		Distributions paid from ordinary income		Distributions paid from net long-term capital gains		Total distributions paid
UBS Dynamic Alpha Fund	$	8,108	$	291,230,363	$	291,238,471	$	1,987,057	$	226,674,358	$	228,661,415
UBS Global Allocation Fund		165,040,234		153,119,425		318,159,659		132,894,647		224,416,325		357,310,972
UBS Global Frontier Fund		1,534,635		—		1,534,635		1,153,879		134,451		1,288,330
UBS Global Equity Fund		12,653,351		—		12,653,351		—		—		—
UBS International Equity Fund		2,944,392		7,009,513		9,953,905		7,784,553		13,361,453		21,146,006
UBS U.S. Equity Alpha Fund		686,686		—		686,686		12,996,223		138,469		13,134,692
UBS U.S. Large Cap Equity Fund		4,140,422		13,964,809		18,105,231		34,056,316		16,602,077		50,658,393
UBS U.S. Large Cap Growth Fund		—		—		—		72,391		550,498		622,889
UBS U.S. Large Cap Value Equity Fund		569,600		8,771,545		9,341,145		2,775,669		9,805,949		12,581,618
UBS U.S. Mid Cap Growth Equity Fund		—		76,707		76,707		19,589		140,582		160,171
UBS U.S. Small Cap Growth Fund		11,376		—		11,376		7,357,438		21,493,242		28,850,680
UBS Absolute Return Bond Fund		16,986,729		—		16,986,729		18,746,916		—		18,746,916
UBS Global Bond Fund		7,943,946		—		7,943,946		4,858,146		—		4,858,146
UBS High Yield Fund		11,611,887		—		11,611,887		9,698,788		—		9,698,788
UBS U.S. Bond Fund		6,524,063		—		6,524,063		9,461,293		—		9,461,293

At June 30, 2009, the components of accumulated earnings (deficit) on a tax basis were as follows:

Fund	Undistributed ordinary income		Accumulated capital and other losses			Unrealized appreciation/ (depreciation)			Total
UBS Dynamic Alpha Fund	$	6,890,412	$	(350,715,070	)	$	(159,213,700	)	$	(503,038,358	)
UBS Global Allocation Fund		107,573,163		(1,145,813,931	)		(99,301,542	)		(1,137,542,310	)
UBS Global Frontier Fund		2,332,024		(14,643,034	)		(25,228,540	)		(37,539,550	)
UBS Global Equity Fund		3,425,580		(320,130,006	)		(1,383,392	)		(318,087,818	)
UBS International Equity Fund		3,546,677		(34,821,949	)		9,683,182			(21,592,090	)
UBS U.S. Equity Alpha Fund		—		(52,383,284	)		(1,586,828	)		(53,970,112	)
UBS U.S. Large Cap Equity Fund		5,959,087		(231,144,506	)		(24,958,670	)		(250,144,089	)
UBS U.S. Large Cap Growth Fund		279,106		(21,919,926	)		(1,272,858	)		(22,913,678	)
UBS U.S. Large Cap Value Equity Fund		1,136,066		(21,098,580	)		(12,865,748	)		(32,828,262	)
UBS U.S. Mid Cap Growth Equity Fund		—		(1,540,462	)		(320,439	)		(1,860,901	)
UBS U.S. Small Cap Growth Fund		—		(86,380,015	)		(5,433,031	)		(91,813,046	)
UBS Absolute Return Bond Fund		—		(122,613,539	)		(7,719,415	)		(130,332,954	)
UBS Global Bond Fund		466,209		(17,084,863	)		(777,650	)		(17,396,304	)
UBS High Yield Fund		280,273		(134,232,596	)		(3,622,658	)		(137,574,981	)
UBS U.S. Bond Fund		1,218,171		(37,961,518	)		(4,148,513	)		(40,891,860	)

265

The UBS Funds—Notes to financial statements

Due to inherent differences in the recognition of income, expenses and realized gains/losses under US generally accepted accounting principles and federal income tax purposes, permanent differences between book and tax basis reporting for the current fiscal year have been identified and appropriately reclassified. Reclassifications for the year ended June 30, 2009 were as follows:

Fund	Accumulated undistributed net investment income			Accumulated net realized gain (loss)			Beneficial interest
UBS Dynamic Alpha Fund	$	(44,145,475	)	$	(135,968,676	)	$	180,114,151
UBS Global Allocation Fund		39,393,690			19,088,167			(58,481,857	)
UBS Global Frontier Fund		(3,199,021	)		30,480,462			(27,281,441	)
UBS Global Equity Fund		553,712			392,372,412			(392,926,124	)
UBS International Equity Fund		701,650			(3,971,165	)		3,269,515
UBS U.S. Equity Alpha Fund		11,168			(21,867	)		10,699
UBS U.S. Large Cap Equity Fund		(939,285	)		(3,249,547	)		4,188,832
UBS U.S. Large Cap Growth Fund		250			50,306			(50,556	)
UBS U.S. Large Cap Value Equity Fund		(60,258	)		(915,477	)		975,735
UBS U.S. Mid Cap Growth Equity Fund		30,471			9			(30,480	)
UBS U.S. Small Cap Growth Fund		1,003,739			107,992			(1,111,731	)
UBS Absolute Return Bond Fund		8,766,882			(11,963,391	)		3,196,509
UBS Global Bond Fund		(731,762	)		(1,871,746	)		2,603,508
UBS High Yield Fund		913,917			22,291,797			(23,205,714	)
UBS U.S. Bond Fund		4,038,599			(17,511,102	)		13,472,503

At June 30, 2009, the following Funds had net capital loss carryforwards for federal income tax purposes available to offset future capital gains through the indicated expiration dates:

	Expiration dates
Fund	June 30, 2010			June 30, 2011			June 30, 2012		June 30, 2013		June 30, 2014		June 30, 2015		June 30, 2016		June 30, 2017
UBS Dynamic Alpha Fund	$	—		$	—		$	—	$	—	$	—	$	—	$	—	$	145,211,340
UBS Global Allocation Fund		—			—			—		—		—		—		—		288,404,627
UBS Global Frontier Fund		—			—			—		—		—		—		—		12,841,328
UBS Global Equity Fund		253,636,661	(1)		4,283,846	(1)		—		—		—		—		—		14,741,673
UBS International Equity Fund		—			—			—		—		—		—		—		5,638,290
UBS U.S. Equity Alpha Fund		—			—			—		—		—		—		—		15,530,495
UBS U.S. Large Cap Equity Fund		—			—			—		—		—		—		—		52,072,835
UBS U.S. Large Cap Growth Fund		—			—			—		—		—		—		—		7,406,926
UBS U.S. Large Cap Value Equity Fund		273,335	(2)		—			—		—		—		—		—		2,034,727
UBS U.S. Mid Cap Growth Equity Fund		—			—			—		—		—		—		—		197,496

266

The UBS Funds—Notes to financial statements

	Expiration dates
Fund	June 30, 2010		June 30, 2011		June 30, 2012		June 30, 2013		June 30, 2014		June 30, 2015		June 30, 2016		June 30, 2017
UBS U.S. Small Cap Growth Fund	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	10,194,467
UBS Absolute Return Bond Fund		—		—		—		—		—		564,587		8,900,102		70,926,250
UBS Global Bond Fund		—		—		—		—		—		359,497		577,591		3,369,482
UBS High Yield Fund		6,612,767		37,425,637		15,791,570		11,067,780		22,213,870		5,885,761		1,000,707		4,782,241
UBS U.S. Bond Fund		—		—		—		—		353,828		1,283,441		—		3,069,977

⁽¹⁾  Due to merger with UBS Strategy Fund, utilization of capital loss carryforwards in subsequent years may be limited.

⁽²⁾  Due to merger with UBS U.S. Large Cap Equity Fund, utilization of capital loss carryforwards in subsequent years may be limited.

The UBS Global Equity Fund, UBS U.S. Large Cap Value Equity Fund, UBS Global Bond Fund and UBS High Yield Fund had capital loss carryforwards in the amount of $389,124,210, $11,775, $269,385, and $23,205,714, respectively, that expired as of June 30, 2009.

Post-October losses are deemed to arise on the first business day of a Fund's next taxable year. For the year ended June 30, 2009, the following Funds incurred, and elected to defer, losses of the following:

Fund	Net capital losses		Net currency losses
UBS Dynamic Alpha Fund	$	205,503,730	$	—
UBS Global Allocation Fund		854,732,134		—
UBS Global Frontier Fund		1,706,108		—
UBS Global Equity Fund		47,467,826		—
UBS International Equity Fund		29,183,659		—
UBS U.S. Equity Alpha Fund		36,852,789		—
UBS U.S. Large Cap Equity Fund		179,071,671		—
UBS U.S. Large Cap Growth Fund		14,513,000		—
UBS U.S. Large Cap Value Equity Fund		18,790,518		—
UBS U.S. Mid Cap Growth Equity Fund		1,342,966		—
UBS U.S. Small Cap Growth Fund		76,185,548		—
UBS Absolute Return Bond Fund		34,939,027		6,795,241
UBS Global Bond Fund		12,393,941		—
UBS High Yield Fund		29,452,263		—
UBS U.S. Bond Fund		33,248,628		—

As of and during the year ended June 30, 2009, the Funds did not have any liabilities for any unrecognized tax positions. The Funds recognize interest and penalties, if any, related to unrecognized tax positions as income tax expense in the Statements of operations. During the year, the Funds did not incur any interest or penalties.

Each of the tax years in the four year period ended June 30, 2009, remains subject to examination by the Internal Revenue Service and state taxing authorities.

8.  Line of credit

The Trust has entered into an agreement with JPMorgan Chase Bank to provide a $75 million committed line of credit to the Funds ("Committed Credit Facility") to be utilized for temporary financing until the settlement of shares or purchases of portfolio securities, the repurchase or redemption of shares of each Fund at the

267

The UBS Funds—Notes to financial statements

request of shareholders and other temporary or emergency purposes. Interest on amounts borrowed is calculated based on the federal funds rate in effect at the time of borrowing, plus 0.50%. Under the Committed Credit Facility arrangement, each Fund has agreed to pay commitment fees, pro rata, based on the relative asset size of the Funds in the Committed Credit Facility. The average daily borrowings under the agreement for the year ended June 30, 2009, were as follows:

Fund	Average daily borrowings		Number of days outstanding		Interest expense		Weighted average annualized interest rate
UBS Global Allocation Fund	$	27,989,143		7	$	3,646		0.67	%
UBS U.S. Equity Alpha Fund		16,111,000		5		2,184		0.75
UBS High Yield Fund		2,384,444		9		599		1.03

There were no borrowings from the Committed Credit Facility outstanding as of June 30, 2009.

9.  Capital contributions from advisor

During the year ended June 30, 2009, the Advisor reimbursed the UBS Dynamic Alpha Fund in the amounts shown based upon the Fund's shares outstanding at June 30, 2009, for adjusted shareholder activity resulting from incorrect valuations of certain securities.

Fund	Amount		Amount per share
UBS Dynamic Alpha—Class A	$	307,224	$	0.0042
UBS Dynamic Alpha—Class B		5,033		0.0039
UBS Dynamic Alpha—Class C		98,336		0.0039
UBS Dynamic Alpha—Class Y		57,869		0.0041

10.  Shares of beneficial interest

For the year ended June 30, 2009, transactions in shares of beneficial interest for each of the Funds were as follows:

UBS Dynamic Alpha Fund

	Class A						Class B
	Shares			Amount			Shares			Amount
Shares sold		12,201,854		$	84,315,501			76,017		$	485,824
Shares repurchased		(94,925,141	)		(668,841,884	)		(752,172	)		(4,950,099	)
Shares converted from Class B to Class A		197,940			1,247,757			(205,303	)		(1,247,757	)
Dividends reinvested		36,546,773			181,271,963			635,398			3,018,142
Redemption fees		—			111,984			—			—
Net decrease		(45,978,574	)	$	(401,894,679	)		(246,060	)	$	(2,693,890	)
	Class C						Class Y
	Shares			Amount			Shares			Amount
Shares sold		994,111		$	7,576,868			3,987,680		$	21,928,281
Shares repurchased		(20,995,238	)		(138,300,018	)		(28,525,753	)		(219,537,355	)
Dividends reinvested		12,513,912			59,441,082			6,277,481			31,638,504
Redemption fees		—			17,451			—			3,054
Net decrease		(7,487,215	)	$	(71,264,617	)		(18,260,592	)	$	(165,967,516	)

268

The UBS Funds—Notes to financial statements

UBS Global Allocation Fund

	Class A						Class B
	Shares			Amount			Shares			Amount
Shares sold		17,002,992		$	148,901,594			87,388		$	716,139
Shares repurchased		(110,986,962	)		(978,286,940	)		(2,786,597	)		(23,135,806	)
Shares converted from Class B to Class A		1,418,218			10,924,954			(1,448,815	)		(10,924,954	)
Dividends reinvested		23,913,497			171,938,048			1,048,345			7,401,313
Redemption fees		—			187,063			—			171
Net decrease		(68,652,255	)	$	(646,335,281	)		(3,099,679	)	$	(25,943,137	)
	Class C						Class Y
	Shares			Amount			Shares			Amount
Shares sold		3,081,072		$	27,040,672			5,402,385		$	45,262,688
Shares repurchased		(36,745,661	)		(313,102,739	)		(21,956,098	)		(186,460,481	)
Dividends reinvested		10,868,562			76,297,308			6,122,479			44,816,545
Redemption fees		—			22,152			—			18,990
Net decrease		(22,796,027	)	$	(209,742,607	)		(10,431,234	)	$	(96,362,258	)

UBS Global Frontier Fund

	Class A						Class C						Class Y
	Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		5,784,149		$	31,913,221			1,432,561		$	7,334,674			1,690		$	8,554
Shares repurchased		(6,453,656	)		(35,257,994	)		(1,492,704	)		(7,852,515	)		(541,463	)		(4,112,467	)
Dividends reinvested		230,913			1,122,239			40,268			196,107			—			—
Redemption fees		—			35,053			—			4,334			—			—
Net decrease		(438,594	)	$	(2,187,481	)		(19,875	)	$	(317,400	)		(539,773	)	$	(4,103,913	)

UBS Global Equity Fund

	Class A						Class B
	Shares			Amount			Shares			Amount
Shares sold		852,952		$	7,176,020			5,010		$	41,269
Shares repurchased		(2,559,943	)		(24,075,777	)		(57,451	)		(515,592	)
Shares converted from Class B to Class A		110,222			922,712			(113,105	)		(922,712	)
Dividends reinvested		548,867			4,429,358			11,050			87,185
Redemption fees		—			3,930			—			—
Net decrease		(1,047,902	)	$	(11,543,757	)		(154,496	)	$	(1,309,850	)

269

The UBS Funds—Notes to financial statements

	Class C						Class Y
	Shares			Amount			Shares			Amount
Shares sold		229,971		$	1,849,122			2,869,225		$	27,971,934
Shares repurchased		(674,246	)		(6,004,469	)		(8,630,574	)		(79,393,295	)
Dividends reinvested		158,286			1,237,794			768,971			6,351,704
Redemption fees		—			1,982			—			41,504
Net decrease		(285,989	)	$	(2,915,571	)		(4,992,378	)	$	(45,028,153	)

UBS International Equity Fund

	Class A						Class B
	Shares			Amount			Shares			Amount
Shares sold		182,517		$	1,120,748			22,033		$	117,402
Shares repurchased		(875,793	)		(5,639,548	)		(3,460	)		(25,759	)
Shares converted from Class B to Class A		18,906			161,817			(19,254	)		(161,817	)
Dividends reinvested		171,858			955,529			1,229			6,884
Redemption fees		—			606			—			—
Net increase (decrease)		(502,512	)	$	(3,400,848	)		548		$	(63,290	)
	Class C						Class Y
	Shares			Amount			Shares			Amount
Shares sold		8,812		$	50,443			6,334,237		$	44,887,920
Shares repurchased		(84,555	)		(525,044	)		(10,561,037	)		(68,262,711	)
Dividends reinvested		18,700			102,292			1,579,415			8,813,133
Redemption fees		—			4			—			20,423
Net decrease		(57,043	)	$	(372,305	)		(2,647,385	)	$	(14,541,235	)

UBS U.S. Equity Alpha Fund

	Class A						Class C						Class Y
	Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		997,552		$	6,508,277			114,962		$	760,851			19,085,492		$	110,555,951
Shares repurchased		(6,433,661	)		(42,106,053	)		(1,296,571	)		(8,358,332	)		(4,939,401	)		(29,638,728	)
Dividends reinvested		97,832			555,684			—			—			19,542			110,609
Redemption fees		—			6,602			—			1,026			—			5,966
Net increase (decrease)		(5,338,277	)	$	(35,035,490	)		(1,181,609	)	$	(7,596,455	)		14,165,633		$	81,033,798

270

The UBS Funds—Notes to financial statements

UBS U.S. Large Cap Equity Fund

	Class A						Class B
	Shares			Amount			Shares			Amount
Shares sold		713,097		$	8,435,012			3,482		$	34,838
Shares repurchased		(3,332,952	)		(40,109,741	)		(19,766	)		(212,004	)
Shares converted from Class B to Class A		485			5,267			(499	)		(5,267	)
Dividends reinvested		172,359			1,814,939			1,386			14,218
Redemption fees		—			15,350			—			—
Net decrease		(2,447,011	)	$	(29,839,173	)		(15,397	)	$	(168,215	)
	Class C						Class Y
	Shares			Amount			Shares			Amount
Shares sold		184,062		$	2,012,349			6,748,339		$	83,323,984
Shares repurchased		(171,020	)		(1,973,843	)		(27,821,873	)		(327,496,314	)
Dividends reinvested		16,747			171,657			1,485,458			15,805,273
Redemption fees		—			2,386			—			41,042
Net increase (decrease)		29,789		$	212,549			(19,588,076	)	$	(228,326,015	)

UBS U.S. Large Cap Growth Fund

	Class A						Class B
	Shares			Amount			Shares			Amount
Shares sold		3,042,724		$	25,570,504			46,217		$	306,125
Shares repurchased		(1,394,928	)		(10,783,691	)		(49,237	)		(358,469	)
Shares converted from Class B to Class A		38,552			321,670			(40,705	)		(321,670	)
Redemption fees		—			1,668			—			—
Net increase (decrease)		1,686,348		$	15,110,151			(43,725	)	$	(374,014	)
	Class C						Class Y
	Shares			Amount			Shares			Amount
Shares sold		539,216		$	3,773,950			3,012,731		$	30,246,611
Shares repurchased		(267,981	)		(1,967,347	)		(3,404,834	)		(28,464,620	)
Redemption fees		—			121			—			20,098
Net increase (decrease)		271,235		$	1,806,724			(392,103	)	$	1,802,089

271

The UBS Funds—Notes to financial statements

UBS U.S. Large Cap Value Equity Fund

	Class A						Class B
	Shares			Amount			Shares			Amount
Shares sold		122,284		$	656,872			27,467		$	144,398
Shares repurchased		(2,116,892	)		(11,676,380	)		(22,528	)		(123,028	)
Shares converted from Class B to Class A		22,849			114,853			(23,142	)		(114,853	)
Dividends reinvested		1,485,743			7,027,563			12,396			58,013
Redemption fees		—			488			—			—
Net decrease		(486,016	)	$	(3,876,604	)		(5,807	)	$	(35,470	)
	Class C						Class Y
	Shares			Amount			Shares			Amount
Shares sold		68,492		$	369,004			127,685		$	693,987
Shares repurchased		(324,670	)		(1,843,188	)		(439,237	)		(3,362,070	)
Dividends reinvested		194,454			902,267			75,820			360,146
Redemption fees		—			357			—			309
Net decrease		(61,724	)	$	(571,560	)		(235,732	)	$	(2,307,628	)

UBS U.S. Mid Cap Growth Equity Fund

	Class A						Class C						Class Y
	Shares			Amount			Shares			Amount			Shares		Amount
Shares sold		42,285		$	296,951			4,958		$	31,661			—	$	—
Shares repurchased		(25,448	)		(150,823	)		(2,244	)		(16,066	)		—		—
Dividends reinvested		1,692			9,595			379			2,082			11,369		65,032
Redemption fees		—			—			—			3			—		—
Net increase		18,529		$	155,723			3,093		$	17,680			11,369	$	65,032

UBS U.S. Small Cap Growth Fund

	Class A						Class B
	Shares			Amount			Shares			Amount
Shares sold		1,273,917		$	11,039,066			397		$	3,031
Shares repurchased		(3,457,962	)		(30,202,550	)		(12,734	)		(115,065	)
Shares converted from Class B to Class A		17,091			164,512			(18,117	)		(164,512	)
Dividends reinvested		348			2,683			3			18
Redemption fees		—			1,668			—			—
Net decrease		(2,166,606	)	$	(18,994,621	)		(30,451	)	$	(276,528	)

272

The UBS Funds—Notes to financial statements

	Class C						Class Y
	Shares			Amount			Shares			Amount
Shares sold		6,053		$	54,930			4,467,592		$	39,474,929
Shares repurchased		(178,854	)		(1,419,267	)		(9,154,022	)		(88,031,041	)
Dividends reinvested		24			175			985			7,853
Redemption fees		—			121			—			20,098
Net decrease		(172,777	)	$	(1,364,041	)		(4,685,445	)	$	(48,528,161	)

UBS Absolute Return Bond Fund

	Class A						Class C						Class Y
	Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		309,296		$	2,220,375			74,056		$	492,799			51,760		$	407,073
Shares repurchased		(4,378,056	)		(30,803,963	)		(630,509	)		(4,346,811	)		(5,584,328	)		(43,263,097	)
Dividends reinvested		380,701			2,418,045			90,266			570,595			2,162,996			13,660,426
Redemption fees		—			5,996			—			757			—			—
Net decrease		(3,688,059	)	$	(26,159,547	)		(466,187	)	$	(3,282,660	)		(3,369,572	)	$	(29,195,598	)

UBS Global Bond Fund

	Class A						Class B
	Shares			Amount			Shares			Amount
Shares sold		325,664		$	2,540,092			6,575		$	47,353
Shares repurchased		(725,643	)		(5,631,648	)		(19	)		(152	)
Shares converted from Class B to Class A		5,516			38,722			(5,501	)		(38,722	)
Dividends reinvested		186,593			1,382,005			1,855			13,735
Redemption fees		—			1,120			—			—
Net increase (decrease)		(207,870	)	$	(1,669,709	)		2,910		$	22,214
	Class C						Class Y
	Shares			Amount			Shares			Amount
Shares sold		80,927		$	595,188			3,509,825		$	32,882,395
Shares repurchased		(37,844	)		(284,178	)		(6,358,293	)		(56,097,953	)
Dividends reinvested		30,791			226,245			723,055			6,087,911
Redemption fees		—			802			—			1,413
Net increase (decrease)		73,874		$	538,057			(2,125,413	)	$	(17,126,234	)

273

The UBS Funds—Notes to financial statements

UBS High Yield Fund

	Class A						Class B
	Shares			Amount			Shares			Amount
Shares sold		2,194,797		$	10,022,988			5,435		$	29,443
Shares repurchased		(1,544,956	)		(7,599,585	)		(53,700	)		(275,447	)
Shares converted from Class B to Class A		26,706			144,250			(26,700	)		(144,250	)
Dividends reinvested		497,651			2,403,684			10,563			51,628
Redemption fees		—			22,521			—			—
Net increase (decrease)		1,174,198		$	4,993,858			(64,402	)	$	(338,626	)
	Class C						Class Y
	Shares			Amount			Shares			Amount
Shares sold		227,849		$	1,076,360			3,580,691		$	18,042,933
Shares repurchased		(298,810	)		(1,568,007	)		(9,159,332	)		(47,124,194	)
Dividends reinvested		76,090			369,310			1,419,479			6,985,446
Redemption fees		—			325			—			3,183
Net increase (decrease)		5,129		$	(122,012	)		(4,159,162	)	$	(22,092,632	)

UBS U.S. Bond Fund

	Class A						Class B
	Shares			Amount			Shares			Amount
Shares sold		744,830		$	6,095,354			5,526		$	46,040
Shares repurchased		(729,755	)		(6,035,185	)		(5,977	)		(51,628	)
Shares converted from Class B to Class A		14,728			127,368			(14,723	)		(127,368	)
Dividends reinvested		65,661			530,962			1,141			9,212
Redemption fees		—			10,551			—			—
Net increase (decrease)		95,464		$	729,050			(14,033	)	$	(123,744	)
	Class C						Class Y
	Shares			Amount			Shares			Amount
Shares sold		244,703		$	1,973,748			4,612,977		$	39,218,469
Shares repurchased		(62,167	)		(512,531	)		(9,794,703	)		(82,185,951	)
Dividends reinvested		10,733			86,350			711,369			5,762,002
Redemption fees		—			1,524			—			5,033
Net increase (decrease)		193,269		$	1,549,091			(4,470,357	)	$	(37,200,447	)

274

The UBS Funds—Notes to financial statements

For the year ended June 30, 2008, transactions in shares of beneficial interest for each of the Funds were as follows:

UBS Dynamic Alpha Fund

	Class A						Class B
	Shares			Amount			Shares			Amount
Shares sold		24,161,958		$	267,205,629			38,401		$	456,522
Shares repurchased		(109,299,060	)		(1,185,012,180	)		(623,780	)		(6,650,664	)
Shares converted from Class B to Class A		339,416			3,625,461			(345,868	)		(3,625,461	)
Dividends reinvested		13,911,884			141,483,863			180,468			1,802,874
Redemption fees		—			165,837			—			—
Net decrease		(70,885,802	)	$	(772,531,390	)		(750,779	)	$	(8,016,729	)
	Class C						Class Y
	Shares			Amount			Shares			Amount
Shares sold		2,526,902		$	27,853,471			8,943,613		$	98,293,424
Shares repurchased		(25,011,425	)		(267,178,400	)		(22,204,408	)		(239,862,007	)
Dividends reinvested		3,760,721			37,569,603			3,749,020			38,314,985
Redemption fees		—			17,220			—			16,469
Net decrease		(18,723,802	)	$	(201,738,106	)		(9,511,775	)	$	(103,237,129	)

UBS Global Allocation Fund

	Class A						Class B
	Shares			Amount			Shares			Amount
Shares sold		40,838,149		$	579,293,210			203,987		$	2,885,138
Shares repurchased		(76,054,818	)		(1,040,812,664	)		(1,808,870	)		(24,411,073	)
Shares converted from Class B to Class A		1,190,620			16,816,203			(1,212,122	)		(16,816,203	)
Dividends reinvested		15,462,012			210,592,602			553,785			7,426,257
Redemption fees		—			208,152			—			—
Net decrease		(18,564,037	)	$	(233,902,497	)		(2,263,220	)	$	(30,915,881	)
	Class C						Class Y
	Shares			Amount			Shares			Amount
Shares sold		9,408,513		$	131,666,266			5,696,060		$	80,443,151
Shares repurchased		(23,106,589	)		(309,482,159	)		(14,663,472	)		(203,582,976	)
Dividends reinvested		5,839,756			77,960,745			3,163,482			43,719,323
Redemption fees		—			44,649			—			24,221
Net decrease		(7,858,320	)	$	(99,810,499	)		(5,803,930	)	$	(79,396,281	)

275

The UBS Funds—Notes to financial statements

UBS Global Frontier Fund

	Class A						Class C						Class Y
	Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		12,890,167		$	128,991,286			3,027,484		$	30,340,047			939,783		$	9,493,109
Shares repurchased		(3,891,735	)		(37,643,043	)		(420,074	)		(4,020,302	)		(106,957	)		(1,000,055	)
Dividends reinvested		94,723			933,021			19,443			191,512			10,418			102,718
Redemption fees		—			24,495			—			5,116			—			—
Net increase		9,093,155		$	92,305,759			2,626,853		$	26,516,373			843,244		$	8,595,772

UBS Global Equity Fund

	Class A						Class B
	Shares			Amount			Shares			Amount
Shares sold		242,921		$	3,667,600			1,873		$	27,700
Shares repurchased		(2,514,530	)		(37,048,146	)		(117,852	)		(1,700,650	)
Shares converted from Class B to Class A		84,053			1,280,029			(85,788	)		(1,280,029	)
Redemption fees		—			8,588			—			39
Net decrease		(2,187,556	)	$	(32,091,929	)		(201,767	)	$	(2,952,940	)
	Class C						Class Y
	Shares			Amount			Shares			Amount
Shares sold		34,712		$	502,336			3,967,984		$	58,665,279
Shares repurchased		(770,528	)		(11,017,100	)		(3,509,568	)		(52,396,796	)
Redemption fees		—			844			—			3,312
Net increase (decrease)		(735,816	)	$	(10,513,920	)		458,416		$	6,271,795

UBS International Equity Fund

	Class A						Class B
	Shares			Amount			Shares			Amount
Shares sold		200,293		$	2,431,742			—		$	—
Shares repurchased		(769,803	)		(8,704,746	)		(9,762	)		(114,083	)
Shares converted from Class B to Class A		4,631			53,045			(4,699	)		(53,045	)
Dividends reinvested		226,975			2,537,578			4,201			46,320
Redemption fees		—			1,058			—			—
Net decrease		(337,904	)	$	(3,681,323	)		(10,260	)	$	(120,808	)

276

The UBS Funds—Notes to financial statements

	Class C						Class Y
	Shares			Amount			Shares			Amount
Shares sold		64,623		$	761,961			4,763,633		$	55,571,874
Shares repurchased		(91,362	)		(1,019,531	)		(6,652,017	)		(76,946,500	)
Dividends reinvested		25,054			273,336			1,606,122			18,084,929
Redemption fees		—			1,355			—			4,275
Net increase (decrease)		(1,685	)	$	17,121			(282,262	)	$	(3,285,422	)

UBS U.S. Equity Alpha Fund

	Class A						Class C						Class Y
	Shares			Amount			Shares			Amount			Shares		Amount
Shares sold		1,844,411		$	19,752,251			322,009		$	3,570,026			533,230	$	5,051,504
Shares repurchased		(8,482,873	)		(83,732,398	)		(1,646,360	)		(16,428,935	)		—		—
Dividends reinvested		998,856			10,118,407			219,133			2,206,676			32,886		332,478
Redemption fees		—			44,087			—			11,957			—		245
Net increase (decrease)		(5,639,606	)	$	(53,817,653	)		(1,105,218	)	$	(10,640,276	)		566,116	$	5,384,227

UBS U.S. Large Cap Equity Fund

	Class A						Class B
	Shares			Amount			Shares			Amount
Shares sold		1,740,718		$	33,772,562			10,949		$	212,175
Shares repurchased		(4,152,915	)		(76,537,991	)		(9,138	)		(159,900	)
Shares converted from Class B to Class A		6,829			135,973			(6,918	)		(135,973	)
Dividends reinvested		387,691			7,284,708			2,170			39,854
Redemption fees		—			12,577			—			—
Net decrease		(2,017,677	)	$	(35,332,171	)		(2,937	)	$	(43,844	)
	Class C						Class Y
	Shares			Amount			Shares			Amount
Shares sold		54,329		$	1,044,267			14,178,975		$	266,217,187
Shares repurchased		(193,763	)		(3,554,430	)		(16,762,669	)		(317,691,920	)
Dividends reinvested		20,480			376,420			2,073,716			39,400,603
Redemption fees		—			501			—			45,257
Net decrease		(118,954	)	$	(2,133,242	)		(509,978	)	$	(12,028,873	)

277

The UBS Funds—Notes to financial statements

UBS U.S. Large Cap Growth Fund

	Class A						Class B
	Shares			Amount			Shares			Amount
Shares sold		713,802		$	8,049,829			117,641		$	1,282,756
Shares repurchased		(373,264	)		(4,191,090	)		(5,273	)		(53,526	)
Shares converted from Class B to Class A		13,732			153,293			(14,271	)		(153,293	)
Dividends reinvested		6,091			69,505			865			9,443
Redemption fees		—			2,478			—			—
Net increase		360,361		$	4,084,015			98,962		$	1,085,380
	Class C						Class Y
	Shares			Amount			Shares			Amount
Shares sold		219,338		$	2,384,536			3,578,888		$	41,642,224
Shares repurchased		(35,903	)		(374,795	)		(2,688,319	)		(31,029,588	)
Dividends reinvested		1,379			15,058			45,026			526,357
Redemption fees		—			309			—			1,916
Net increase		184,814		$	2,025,108			935,595		$	11,140,909

UBS U.S. Large Cap Value Equity Fund

	Class A						Class B
	Shares			Amount			Shares			Amount
Shares sold		156,104		$	1,603,723			5,136		$	60,028
Shares repurchased		(1,480,093	)		(14,775,673	)		(14,598	)		(149,871	)
Shares converted from Class B to Class A		32,699			332,550			(33,032	)		(332,550	)
Dividends reinvested		958,410			9,326,784			6,768			65,500
Redemption fees		—			2,179			—			211
Net decrease		(332,880	)	$	(3,510,437	)		(35,726	)	$	(356,682	)
	Class C						Class Y
	Shares			Amount			Shares			Amount
Shares sold		35,317		$	352,418			210,546		$	2,034,080
Shares repurchased		(366,429	)		(3,735,479	)		(391,831	)		(3,920,079	)
Dividends reinvested		123,941			1,195,365			79,345			775,272
Redemption fees		—			—			—			6,137
Net decrease		(207,171	)	$	(2,187,696	)		(101,940	)	$	(1,104,590	)

278

The UBS Funds—Notes to financial statements

UBS U.S. Mid Cap Growth Equity Fund

	Class A						Class C						Class Y
	Shares			Amount			Shares			Amount			Shares		Amount
Shares sold		39,143		$	423,583			11,617		$	126,417			—	$	19,693
Shares repurchased		(6,307	)		(62,860	)		(5,021	)		(46,045	)		—		—
Dividends reinvested		1,269			13,439			373			3,909			13,461		142,824
Redemption fees		—			36			—			12			—		403
Net increase		34,105		$	374,198			6,969		$	84,293			13,461	$	162,920

UBS U.S. Small Cap Growth Fund

	Class A						Class B
	Shares			Amount			Shares			Amount
Shares sold		1,229,022		$	17,611,871			513		$	7,023
Shares repurchased		(4,178,495	)		(60,632,051	)		(21,680	)		(309,666	)
Shares converted from Class B to Class A		47,635			697,738			(49,483	)		(697,738	)
Dividends reinvested		504,374			7,020,896			5,228			69,113
Redemption fees		—			4,759			—			—
Net decrease		(2,397,464	)	$	(35,296,787	)		(65,422	)	$	(931,268	)
	Class C						Class Y
	Shares			Amount			Shares			Amount
Shares sold		28,787		$	436,024			5,772,941		$	85,215,925
Shares repurchased		(102,320	)		(1,393,821	)		(5,732,879	)		(82,211,903	)
Dividends reinvested		36,826			486,105			1,304,088			18,713,661
Redemption fees		—			1,313			—			17,134
Net increase (decrease)		(36,707	)	$	(470,379	)		1,344,150		$	21,734,817

UBS Absolute Return Bond Fund

	Class A						Class C						Class Y
	Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		2,772,809		$	26,199,680			193,628		$	1,841,008			3,902,258		$	35,888,251
Shares repurchased		(22,506,529	)		(205,397,957	)		(2,746,416	)		(25,054,839	)		(7,026,311	)		(63,330,622	)
Dividends reinvested		634,181			5,678,177			90,421			800,419			1,360,816			11,794,125
Redemption fees		—			36,357			—			5,960			—			—
Net decrease		(19,099,539	)	$	(173,483,743	)		(2,462,367	)	$	(22,407,452	)		(1,763,237	)	$	(15,648,246	)

279

The UBS Funds—Notes to financial statements

UBS Global Bond Fund

	Class A						Class B
	Shares			Amount			Shares			Amount
Shares sold		207,250		$	1,967,583			2,130		$	19,520
Shares repurchased		(442,685	)		(4,189,668	)		(10,885	)		(104,535	)
Shares converted from Class B to Class A		156			1,500			(155	)		(1,500	)
Dividends reinvested		58,863			555,692			356			3,369
Redemption fees		—			437			—			—
Net decrease		(176,416	)	$	(1,664,456	)		(8,554	)	$	(83,146	)
	Class C						Class Y
	Shares			Amount			Shares			Amount
Shares sold		59,985		$	572,114			8,703,036		$	92,836,618
Shares repurchased		(36,686	)		(350,725	)		(14,246,157	)		(150,805,672	)
Dividends reinvested		5,515			51,746			395,640			4,164,789
Redemption fees		—			5			—			11,938
Net increase (decrease)		28,814		$	273,140			(5,147,481	)	$	(53,792,327	)

UBS High Yield Fund

	Class A						Class B
	Shares			Amount			Shares			Amount
Shares sold		851,598		$	5,406,616			15,807		$	106,649
Shares repurchased		(1,135,109	)		(7,456,843	)		(62,383	)		(410,357	)
Shares converted from Class B to Class A		69,168			450,894			(69,168	)		(450,894	)
Dividends reinvested		263,243			1,703,123			10,156			65,931
Redemption fees		—			41			—			—
Net increase (decrease)		48,900		$	103,831			(105,588	)	$	(688,671	)
	Class C						Class Y
	Shares			Amount			Shares			Amount
Shares sold		48,409		$	323,922			12,186,749		$	80,088,513
Shares repurchased		(373,978	)		(2,449,841	)		(3,946,471	)		(25,570,028	)
Dividends reinvested		54,519			353,103			877,915			5,678,236
Redemption fees		—			972			—			—
Net increase (decrease)		(271,050	)	$	(1,771,844	)		9,118,193		$	60,196,721

280

The UBS Funds—Notes to financial statements

UBS U.S. Bond Fund

	Class A						Class B
	Shares			Amount			Shares			Amount
Shares sold		736,058		$	7,584,383			6,753		$	70,154
Shares repurchased		(2,602,152	)		(26,434,225	)		(11,725	)		(120,074	)
Shares converted from Class B to Class A		11,003			110,995			(10,996	)		(110,995	)
Dividends reinvested		71,267			716,601			1,164			11,721
Redemption fees		—			20,769			—			463
Net decrease		(1,783,824	)	$	(18,001,477	)		(14,804	)	$	(148,731	)
	Class C						Class Y
	Shares			Amount			Shares			Amount
Shares sold		28,785		$	287,426			7,629,722		$	77,721,893
Shares repurchased		(57,004	)		(569,011	)		(12,850,206	)		(128,257,243	)
Dividends reinvested		4,806			48,133			849,513			8,544,526
Redemption fees		—			318			—			15,764
Net decrease		(23,413	)	$	(233,134	)		(4,370,971	)	$	(41,975,060	)

11.  Subsequent events

Events after the date of the Statements of assets and liabilities are evaluated through the issuance of the financial statements. For the Funds, there were no material subsequent events that occurred between the date of the Statements of assets and liabilities through the issuance of the financial statements that required disclosure in the financial statements other than the restatement as discussed in Note 12 and the following:

At the special meeting of shareholders held on June 26, 2009, the UBS U.S. Large Cap Growth Fund's shareholders voted on an Agreement and Plan of Reorganization between The UBS Funds, on behalf of the UBS U.S. Large Cap Growth Fund, and the Laudus Trust, on behalf of the Laudus Growth Investors U.S. Large Cap Growth Fund (the "Laudus Fund"), that provides for: (i) the acquisition of all the assets, subject to the liabilities, of the UBS U.S. Large Cap Growth Fund in exchange for shares of the Laudus Fund; (ii) the pro rata distribution of shares of the Laudus Fund to the shareholders of the UBS U.S. Large Cap Growth Fund; and (iii) the liquidation and dissolution of the UBS U.S. Large Cap Growth Fund.

	FOR		AGAINST		ABSTAIN
Approval of the Agreement and Plan of Reorganization		6,175,077.135		59,280.096		64,778.94

Effective July 13, 2009, pursuant to an Agreement and Plan of Reorganization approved by shareholders of the UBS U.S. Large Cap Growth Fund, the assets and liabilities of the UBS U.S. Large Cap Growth Fund were acquired by the Laudus Fund in exchange for shares of the Laudus Fund. Shareholders of the UBS U.S. Large Cap Growth Fund then received shares of the Laudus Fund equal in value to their investment in the UBS U.S. Large Cap Growth Fund. Shareholders of the UBS U.S. Large Cap Growth Fund became shareholders of the Laudus Fund and are no longer shareholders of the UBS U.S. Large Cap Growth Fund. The UBS U.S. Large Cap Growth Fund is no longer open for investment.

281

The UBS Funds—Notes to financial statements

Effective July 1, 2009, the Trust and the Advisor have renewed the written agreement pursuant to which the Advisor has agreed to waive a portion of its management fees and to reimburse expenses (the "Expense Limitation Agreement") for each Fund so that a Fund's total operating expenses do not exceed a certain rate (the "Expense Limitation Amount") for the fiscal year ending June 30, 2010. The Expense Limitation Amount for each Fund (except UBS Global Allocation Fund, UBS Global Equity Fund, UBS U.S. Large Cap Equity Fund, UBS U.S. Large Cap Value Equity Fund, UBS U.S. Small Cap Growth Fund and UBS U.S. Bond Fund) for the fiscal year ending June 30, 2010 has been renewed at the same Expense Limitation Amount as the fiscal year ended June 30, 2009. The Expense Limitation Amount for each of the UBS Global Allocation Fund, UBS Global Equity Fund, UBS U.S. Large Cap Equity Fund, UBS U.S. Large Cap Value Equity Fund, UBS U.S. Small Ca p Growth Fund and UBS U.S. Bond Fund has been renewed at a different rate as follows:

Fund	Class A expense cap			Class B expense cap			Class C expense cap			Class Y expense cap
UBS Global Allocation Fund		1.35	%		2.10	%		2.10	%		1.10	%
UBS Global Equity Fund		1.50			2.25			2.25			1.25
UBS U.S. Large Cap Equity Fund		1.20			1.95			1.95			0.95
UBS U.S. Large Cap Value Equity Fund		1.20			1.95			1.95			0.95
UBS U.S. Small Cap Growth Fund		1.40			2.15			2.15			1.15
UBS U.S. Bond Fund		0.64			1.39			1.14			0.39

12.  Restatement

Subsequent to the issuance of the June 30, 2009 financial statements, the Fund determined that the ratio of expenses to average net assets for UBS Dynamic Alpha Fund as reported in the Financial highlights for the year ended June 30, 2009 did not reflect interest and dividend expense for securities sold short.

The correction of the above item resulted in the restatement of the ratio of expenses to average net assets in the Financial highlights as shown below:

Financial Highlights

	Class A
	As previously reported:			As restated:
Ratio of expenses to average net assets		1.30	%		1.54	%
	Class B
Ratio of expenses to average net assets	As previously reported:			As restated:
Before expense reimbursement/recoupment		2.13	%		2.39	%
After expense reimbursement/recoupment		2.10	%		2.36	%
	Class C
	As previously reported:			As restated:
Ratio of expenses to average net assets		2.07	%		2.32	%
	Class Y
Ratio of expenses to average net assets	As previously reported:			As restated:
Before expense reimbursement/recoupment		1.00	%		1.22	%
After expense reimbursement/recoupment		1.00	%		1.22	%

282

The UBS Funds—Report of independent registered public accounting firm

The Board of Trustees and Shareholders of The UBS Funds

We have audited the accompanying statements of assets and liabilities of The UBS Funds (comprising, respectively, UBS Dynamic Alpha Fund, UBS Global Allocation Fund, UBS Global Frontier Fund, UBS Global Equity Fund, UBS International Equity Fund, UBS U.S. Equity Alpha Fund, UBS U.S. Large Cap Equity Fund, UBS U.S. Large Cap Growth Fund, UBS U.S. Large Cap Value Equity Fund, UBS U.S. Mid Cap Growth Equity Fund, UBS U.S. Small Cap Growth Fund, UBS Absolute Return Bond Fund, UBS Global Bond Fund, UBS High Yield Fund and UBS U.S. Bond Fund) (collectively the "Funds"), including the portfolios of investments, as of June 30, 2009, and the related statements of operations and changes in net assets and financial highlights for each of the periods indicated therein. These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Funds' internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds' internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and sig nificant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of June 30, 2009, by correspondence with the custodian and others or by other appropriate audit procedures where replies from others were not received. We believe that our audits provide a reasonable basis for our opinion.

As discussed in Note 12, the financial highlights for UBS Dynamic Alpha Fund for the year ended June 30, 2009 have been restated.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the respective Funds constituting The UBS Funds at June 30, 2009, and the results of their operations, changes in their net assets and financial highlights for each of the indicated periods, in conformity with U.S. generally accepted accounting principles.

New York, New York
August 27, 2009
(except for Note 12 as to which the date is June 11, 2010)

283

The UBS Funds—General information (unaudited)

Quarterly Form N-Q portfolio schedule

The Funds will file their complete schedule of portfolio holdings with the Securities and Exchange Commission ("SEC") for the first and third quarters of each fiscal year on Form N-Q. The Funds' Forms N-Q are available on the SEC's Web site at http://www.sec.gov. The Funds' Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. Information on the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC 0330. Additionally, you may obtain copies of Forms N-Q from the Funds upon request by calling 1-800-647 1568.

Proxy voting policies, procedures and record

You may obtain a description of the Funds' (1) proxy voting policies, (2) proxy voting procedures and (3) information regarding how the Funds voted any proxies related to portfolio securities during the most recent 12-month period ended June 30 for which an SEC filing has been made, without charge, upon request by contacting the Funds directly at 1-800-647 1568, online on the Funds' Web site: www.ubs.com/ubsglobalam-proxy, or on the EDGAR Database on the SEC's Web site (http://www.sec.gov).

284

The UBS Funds—Board approval of investment advisory agreements (unaudited)

At the meeting of the Board of Trustees (the "Board") of The UBS Funds (the "Trust"), held on June 1 and 2, 2009 (the "Meeting"), the Board, consisting entirely of Trustees who are not "interested persons" (as defined in the 1940 Act) of the Trust or UBS Global Asset Management (Americas) Inc. (the "Advisor") and its affiliates (together, the "Independent Trustees"), considered the continuation of the investment advisory agreements (the "Advisory Agreements") between the Trust and the Advisor for the UBS Dynamic Alpha Fund, UBS Global Allocation Fund, UBS Global Frontier Fund, UBS Global Equity Fund, UBS International Equity Fund, UBS U.S. Equity Alpha Fund, UBS U.S. Large Cap Equity Fund, UBS U.S. Large Cap Growth Fund, UBS U.S. Large Cap Value Equity Fund, UBS U.S. Mid Cap Growth Equity Fund, UBS U.S. Small Cap Growth Fund, UBS Absolute Return Bond Fund, UBS Global Bond Fund, UBS High Yield Fund and UBS U.S. Bond Fund (each a "Fund," and together, the "Funds"). Prior to the Meeting, the Independent Trustees' counsel had sent to the Advisor a request detailing the information that the Independent Trustees wished to receive in connection with their consideration of the continuation of the Advisory Agreements. The Independent Trustees met with their independent counsel, as well as an independent consultant engaged by the Board to assist in the annual Advisory Agreement review process, on May 21, 2009, June 1, 2009 and June 2, 2009, to discuss the materials provided to them in response to the information request, including materials prepared by the Advisor, as well as reports prepared by Lipper Inc. ("Lipper Reports"), an independent statistical compilation company, providing comparative expense information on an actual and contractual basis and comparative performance information for the Funds. The Board also made reference to information and material that had been provided to the Independent Trustees throughout the year at quarterl y Board meetings.

At the Meeting, the Board considered a number of factors in connection with their deliberations concerning the continuation of the Advisory Agreement for each Fund, including: (i) the nature, extent, and quality of the services provided by the Advisor to the Fund; (ii) the performance of the Fund and the Advisor; (iii) the Fund's expenses, costs of the services to be provided and profits to be realized by the Advisor and its affiliates from the relationship with the Fund; and (iv) whether economies of scale are realized by the Advisor with respect to the Fund, as it grows larger, and the extent to which the economies of scale are reflected in the level of the management fees charged.

Nature, Extent, and Quality of Services. In considering the nature, extent, and quality of the services provided by the Advisor to a Fund, the Board reviewed the material presented by the Advisor describing the various services provided to each Fund. The Board noted that in addition to investment management services, the Advisor provides each Fund with operational, legal, and compliance support. The Board also considered the scope and depth of the Advisor's organization and the experience and expertise of the professionals currently providing investment management and other services to the Funds. The Board considered that the Advisor was a well-established investment management organization employing investment personnel with significant experience in the investment management industry. The Board also considered the Advisor's in-house research capabil ities, as well as other research services available to it, including research services available to the Advisor as a result of securities transactions effected for the Funds and the Advisor's other investment management clients, and noted that the Advisor had extensive global research capabilities. The Board also evaluated the Advisor's portfolio management process for each Fund, including the use of risk management techniques and the proprietary technologies utilized to structure the Fund's portfolio. The Board noted that various presentations had been made by investment personnel at Board meetings throughout the year concerning the Funds' investment performance and investment strategies.

The Board also noted and discussed the services that the Advisor and its affiliates provide to the Funds under other agreements with the Trust including administration services provided by the Advisor, underwriting services provided by UBS Global Asset Management (US) Inc. ("UBS Global AM (US)"), and sub-transfer agency services provided by UBS Financial Services Inc. ("UBS Financial Services"). In connection with the

285

The UBS Funds—Board approval of investment advisory agreements (unaudited)

non-investment management services, the Board also considered the quarterly reports that the Advisor provides to the Board throughout the year pertaining to brokerage commissions, soft dollars, portfolio valuations, and Rule 12b-1 fees, among others. The Board also discussed the annual written compliance report from the Chief Compliance Officer and noted enhancements undertaken and planned with respect to the compliance program. After analyzing the services provided by the Advisor to each Fund, both quantitatively and qualitatively, including the impact of these services on investment performance, the Board concluded that the nature, extent, and quality of services provided to each Fund were consistent with the operational requirements of each Fund, and met the needs of the Fund's shareholders.

Performance. In evaluating the performance of each Fund, the Board analyzed the Lipper Reports, which compared the performance of each Fund with other funds in its respective peer universe over various time periods. The Board also reviewed a memorandum provided by the Advisor providing an analysis of the markets and the Funds' performance during the past year. In reviewing the Lipper Reports, the Board noted that the UBS U.S. Large Cap Growth Fund had appeared in one of the top two performance quintiles for most applicable performance periods, and that the UBS Dynamic Alpha Fund, UBS High Yield Fund, UBS Mid Cap Growth Equity Fund and UBS International Equity Fund had appeared in one of the top three performance quintiles for the one-year performance period. At the Board's request, the Advisor further addressed the performance data for the UBS Global Allocation Fund, UBS Global Frontier Fund, UBS Global Equity Fund, UBS U.S. Equity Alpha Fund, UBS U.S. Large Cap Equity Fund, UBS U.S. Large Cap Value Equity Fund, UBS U.S. Small Cap Growth Fund, UBS Absolute Return Bond Fund, UBS Global Bond Fund and UBS U.S. Bond Fund, each of which had appeared in one of the lower performance quintiles for the one-year and three-year periods.

In explaining the performance of the UBS Global Allocation Fund and UBS Global Frontier Fund, the Advisor discussed the investments that had a negative impact on each Fund's performance during the past year, noting in particular the impact of security selection and the turmoil in credit markets on each Fund. The Advisor also explained that it believes that the UBS Global Allocation Fund and UBS Global Frontier Fund are each well positioned for the upcoming market. The Board also noted that, as of the date of the Meeting, the year-to-date performance of each of the UBS Global Allocation Fund and UBS Global Frontier Fund was competitive with the performance of its respective peers.

The Advisor then discussed the factors that had a negative effect on the performance of the UBS Global Equity Fund, UBS U.S. Equity Alpha Fund, UBS U.S. Large Cap Value Equity Fund and UBS U.S. Large Cap Equity Fund over the past year, noting that the Advisor's price-to-intrinsic value strategy utilized for each Fund was out of step with a market dynamic that over-emphasized short-term safety at the expense of long-term valuation opportunities. The Advisor provided its view that each Fund was well-positioned to take advantage of improving market conditions that are increasingly demonstrating a renewed focus on stock fundamentals. The Advisor stated that each Fund had already begun to benefit from the improving equity markets, noting that, as of the date of the Meeting, each Fund's year-to-date performance compared favorably with its respective peers. With respect to the UBS U.S. Large Cap Value Equity Fund and UBS U.S. Large Cap Equity Fund, it also was noted that while each Fund had underperformed during the last year, each Fund's long-term performance compared more favorably to its peers.

With respect to the performance of the UBS U.S. Small Cap Growth Fund, the Advisor also noted that stock selection was the primary reason for the Fund's underperformance compared to its peer universe. The Advisor described the extensive review of the Fund's investment process and portfolio management team structure undertaken by the Fund's investment management team. The Advisor noted that enhancements designed to improve idea generation and timeliness of investment decisions were put in place that it believes will help to address the recent performance issues of the Fund. It was also noted that while the UBS U.S. Small Cap

286

The UBS Funds—Board approval of investment advisory agreements (unaudited)

Growth Fund underperformed its peer group in the short-term, the Fund's 10-year performance relative to its Lipper peer universe was in the second quintile for performance.

In discussing the performance of the UBS Absolute Return Bond Fund and UBS U.S. Bond Fund, the Advisor explained that security selection, particularly within the securitized credit sector, has been the primary reason for each Fund's relative underperformance. The Advisor explained that each Fund's relative performance in the last year had continued to suffer from security selection decisions made prior to the beginning of the turmoil in the sub-prime mortgage and credit markets. The Advisor noted that as each Fund has been able to reduce its exposure to non-agency mortgage-backed debt securities, each Fund's performance has improved. The Advisor noted that during the first quarter of 2009, the UBS Absolute Return Bond Fund ranked in the 17^th percentile of its Lipper peer group with respect to first quarter performance and that the UBS U.S. Bond Fund's performance improved its ranking to place in the 53^rd pe rcentile of its Lipper peer group with respect to first quarter performance. The Advisor also noted that it has continued the efforts begun in 2008 to enhance the fixed income investment process and the depth and experience of the fixed income investment professionals. The Advisor stated that it believes that the on-going enhancements in both the investment management team and the investment process will help to address the performance issues of the Funds.

With respect to the UBS Global Bond Fund, the Advisor explained that security selection, particularly within the securitized credit sector, has been the primary reason for the Fund's relative underperformance. The Advisor stated that the non-agency mortgage-backed securities purchased prior to the beginning of the turmoil in the sub-prime mortgage and credit markets had negatively affected the Fund's performance over the past year. The Advisor then discussed the enhancements made to the investment process that the Advisor believes will contribute positively to performance of the Fund in the future.

The Board concluded that the Advisor's explanations provided a sound basis for understanding the performance of each Fund that underperformed in comparison to its peer universe. The Board determined, after analyzing the performance data, that the performance of each Fund was acceptable as compared with relevant performance standards, given the investment strategies and risk profile of each Fund, the expectations of the shareholder base, the current market environment and the Advisor's efforts to address the underperformance issues of each Fund.

Fund Fees and Expenses. When considering the fees and expenses borne by each Fund, and the reasonableness of the management fees paid to the Advisor in light of the services provided to each Fund, the Board compared the fees charged by the Advisor to each Fund to fees charged to the funds in its peer group for comparable services, as provided in the Lipper Reports, on both an actual (taking into account expense limitation arrangements) and a contractual basis (assuming all funds in the peer expense group were similar in size to the respective Fund). In examining the Lipper Reports, and in reviewing comparative costs, it was noted that the results of such expense comparisons showed that the actual management fee rate for each Fund, except the UBS U.S. Equity Alpha Fund and UBS U.S. Large Cap Equity Fund, was comparable to, or lower than, the Lipper med ian in its respective Lipper expense group. The Board also noted that each Fund, except the UBS Global Frontier Fund, UBS U.S. Equity Alpha Fund, UBS U.S. Large Cap Equity Fund, UBS U.S. Mid Cap Growth Equity Fund, UBS U.S. Small Cap Growth Fund, UBS High Yield Fund, UBS Absolute Return Bond Fund and UBS Global Bond Fund, had a contractual fee rate comparable to, or lower than, the Lipper median in its respective Lipper expense group. In addition, the Board reviewed the actual total expenses of each Fund and noted that each Fund, except the UBS U.S. Equity Alpha Fund, UBS U.S. Large Cap Equity Fund and UBS High Yield Fund, had total expenses that were comparable to, or lower than, the Lipper median in its respective Lipper expense group.

287

The UBS Funds—Board approval of investment advisory agreements (unaudited)

The Board first considered that the management fee of the UBS U.S. Equity Alpha Fund was slightly higher than the median of its Lipper expense group on both an actual and contractual basis, which led the Board to discuss this Fund's management fee with the Advisor. The Board also considered that the UBS U.S. Equity Alpha Fund's total expenses were only ¹/₁₀^th of a basis point higher than the total expenses of the Fund's Lipper expense group. The Board, therefore, concluded that the UBS U.S. Equity Alpha Fund's management fee and total expenses were not appreciably higher than the Lipper expense group medians.

The Board next discussed the management fee and total expenses of the UBS U.S. Large Cap Equity Fund. It was noted that the UBS U.S. Large Cap Equity Fund's management fee was higher than the median of the Fund's Lipper expense group on both an actual and contractual basis, which led the Board to discuss this Fund's management fee with the Advisor. The Board also considered that the UBS U.S. Large Cap Equity Fund's total expenses also were higher than the total expenses of the Fund's Lipper expense group. The Advisor noted that it was proposing to lower the contractual expense cap rate for the UBS U.S. Large Cap Equity Fund for the Fund's next fiscal year, which should result in an actual management fee rate and total expenses that would be more comparable to the Fund's peers.

The Board next noted that while the UBS Global Frontier Fund's contractual management fee was higher than the median of the Fund's Lipper expense group, the UBS Global Frontier Fund's actual management fee and its actual total expenses were less than the median of its Lipper expense group.

In considering the fees and expenses of the UBS U.S. Mid Cap Growth Equity Fund, the Board considered that the Fund's contractual management fee was only slightly higher than the median of its Lipper expense group. In addition, the Board noted that the UBS U.S. Mid Cap Growth Equity Fund's actual management fee and actual total expenses compared more favorably to its Lipper peer expense group, ranking in the first quintile of its expense group for actual management fees and the third quintile of its expense group for total expenses.

The Board then considered the fees and expenses for the UBS U.S. Small Cap Growth Fund, noting that, while the Fund's contractual management fee was above the median of its Lipper expense group, the Fund's actual management fee and actual total expenses were in the first quintile of its Lipper expense group and compared very favorably to its peer funds.

The Board then discussed the fees and expenses of the UBS High Yield Fund, noting that the Fund's contractual management fee and total expenses were slightly higher than the Fund's Lipper expense group median. The Board considered, however, that the Fund's actual management fee compared favorably to the Fund's Lipper peer group median, placing in the second quintile of the Fund's Lipper expense group.

The Board also reviewed the management fee of the UBS Absolute Return Bond Fund and noted that the contractual management fee for the UBS Absolute Return Bond Fund was not significantly higher than the median of the Fund's expense group. The Board also considered that the UBS Absolute Return Bond Fund's actual management fee and actual total expenses were in the second and first quintiles, respectively, of the Fund's Lipper expense group.

With respect to the fees and expenses of the UBS Global Bond Fund, the Board noted that the Fund was above the median of its Lipper expense group with respect to contractual management fees. The Board, however, also noted that the Fund's actual management fee and actual total expenses were both lower than the median of its Lipper expense group peers, placing in the second quintile of its expense group in both categories.

The Board also received and considered information about the fee rates charged to other funds and accounts that are managed by the Advisor. After discussing the information about the other funds and accounts with

288

The UBS Funds—Board approval of investment advisory agreements (unaudited)

the Advisor, the Board determined that the fees charged by the Advisor to the Funds were within a reasonable range, giving effect to differences in services performed for such other funds and accounts as compared to such fee rates. The Board, after reviewing all pertinent material, concluded that the management fee payable under each Fund's Advisory Agreement was fair and reasonable, both on an absolute basis and in comparison with the fees of other funds identified in its peer group.

Costs and Profitability. The Board considered the costs of providing services to the Funds and the profitability of the Funds to the Advisor and its affiliates by reviewing the profitability analysis provided by the Advisor, including information about its fee revenues and expenses. The Board reviewed the profitability of each Fund to the Advisor and its affiliates, and the compensation that was received for providing services to each Fund. The profitability analysis, which provided information for the last two calendar years, included schedules relating to the revenue and expenses attributable to: (i) the investment advisory and administration services provided by the Advisor; (ii) the distribution and shareholder services provided by UBS Global AM (US) and UBS Financial Services; (iii) the transfer agency related services provided by UBS Financial S ervices; and (iv) all services provided by the Advisor, UBS Global AM (US), and UBS Financial Services shown on a consolidated basis. In discussing the profitability analysis with the Board, the Advisor, as requested by the Board, provided the Board with a presentation on the methodology utilized in the profitability analysis. The Board noted that the methodology used for the profitability analysis provided to the Board for purposes of its annual review of the Advisory Agreements was reasonable. The Advisor also explained to the Board the reasons for an increase or decrease in profitability of each Fund from last calendar year to this calendar year.

The Board also considered "fall-out" or ancillary benefits to the Advisor or its affiliates as the result of their relationship with the Funds; for example, the ability to attract other clients due to the Advisor's role as investment advisor to the Funds and the research services available to the Advisor through soft dollar brokerage commissions. The Independent Trustees also considered the ancillary benefits received by the Advisor's affiliates, UBS Securities LLC and UBS AG, in the form of commissions for executing securities transactions for the Funds. Upon closely examining the information provided concerning the Advisor's profitability, the Board concluded that the level of profits realized by the Advisor and its affiliates with respect to each Fund, if any, was reasonable in relation to the nature and quality of the services that were provided.

Economies of Scale. The Board also discussed whether economies of scale are realized by the Advisor with respect to each Fund as it grows larger, and the extent to which this is reflected in the level of management fees charged. The Board noted that with respect to each Fund, any actual or potential economies of scale are, or will be, shared with the Fund and its shareholders through existing management fee breakpoints so that as the Fund grows in size, its effective management fee declines. The Board noted that each Fund had a breakpoint schedule that provided for continuing breakpoints past the current asset level for the Fund. Based on each Fund's fees and expenses and the Advisor's profitability analysis, the Board concluded that any actual or potential economies of scale would be reasonably shared with a Fund and its shareholders.

After full consideration of the factors discussed above, with no single factor identified as being of paramount importance, the Board, with the assistance of independent counsel, concluded that the continuation of the Advisory Agreement for each Fund was in the best interests of the Fund and its shareholders.

289

Trustee & Officer information (unaudited)

The Trust is a Delaware statutory trust. Under Delaware law, the Board has overall responsibility for managing the business and affairs of the Trust, including general supervision and review of its investment activities. The Trustees elect the Officers of the Trust, who are responsible for administering the day-to-day operations of the Trust and the Funds.

The table below shows, for each Trustee and Officer, his or her name, address and age, the position held with the Trust, the length of time served as a Trustee or Officer of the Trust, the Trustee's or Officer's principal occupations during the last five years, the number of funds in the UBS Family of Funds overseen by the Trustee or Officer and other directorships held by such Trustee.

The Trust's Statement of Additional Information contains additional information about the Trustees and is available, without charge, upon request, by calling 1-800-647 1568.

Non-interested Trustees:

Name, address and age	Position(s) held with Trust	Term of office(1) and length of time served	Principal occupation(s) during past 5 years	Number of portfolios in fund complex overseen by Trustee	Other directorships held by Trustee
Walter E. Auch; 88 6001 N. 62nd Place Paradise Valley, AZ 85253	Trustee	Since 1994	Mr. Auch is retired (since 1986).	Mr. Auch is a trustee of three investment companies (consisting of 53 portfolios) for which UBS Global AM or one of its affiliates serves as investment advisor, sub-advisor or manager.	Mr. Auch is a Trustee/Director of Advisors Series Trust (32 portfolios) and Consulting Group Capital Market Funds (11 portfolios). Mr. Auch is also a member of the Board of Sound Surgical Technologies.
Adela Cepeda; 51 A.C. Advisory, Inc. 161 No. Clark Street, Suite 4975 Chicago, Illinois 60601	Trustee	Since 2004	Ms. Cepeda is founder and president of A.C. Advisory, Inc. (since 1995).	Ms. Cepeda is a director or trustee of four investment companies (consisting of 54 portfolios) for which UBS Global AM or one of its affiliates serves as investment advisor, sub-advisor or manager.	Ms. Cepeda is a director of the MGI Funds (7 portfolios) (since 2005) director of the Consulting Group Capital Markets Funds (11 portfolios) and director of Amalgamated Bank of Chicago.

290

Trustee & Officer information (unaudited)

Name, address and date of birth	Position(s) held with Fund	Term of office and length of time served		Principal occupation(s) during past 5 years	Number of portfolios in fund complex to be overseen by Nominee	Other directorships held by Nominee
John J. Murphy 268 Main Street P.O. Box 718 Gladstone, NJ 07934 Age 65	Trustee		2009	President, Murphy Capital Management (investment advisor) (since 1983)	Mr. Murphy is a director or trustee of three investment companies (consisting of 53 portfolios) for which UBS Global AM or one of its affiliates serves as investment advisor, sub-advisor or manager.	Mr. Murphy is a Director of the Nicholas Applegate funds (13 funds); a Director of the Legg Mason Equity Funds (47 funds); Trustee, Consulting Group Capital Markets Funds (11 funds).
Abbie J. Smith University of Chicago Booth School of Business 5807 S. Woodlawn Avenue Chicago, IL 60637 Age 56	Trustee		2009	Boris and Irene Stern Professor of Accounting, University of Chicago Booth School of Business (since 1980). Formerly, Marvin Bower Fellow, Harvard Business School (2001-2002). Ms.Smith is also a co-founding partner of Fundamental Investment Advisors, a hedge fund (September 2008).	Ms. Smith is a director or trustee of three investment companies (consisting of 53 portfolios) for which UBS Global AM or one of its affiliates serves as investment advisor, sub-advisor or manager.	Ms. Smith is a Director of HNI Corporation and chair of the human resources and compensation committee (formerly known as HON Industries Inc.) (office furniture)(since 2000) and a director and chair of the audit committee of Ryder System Inc. (transportation, logistics and supply- chain management) (since 2000). In addition, Ms. Smith is a trustee/director (since 2000) and a member of the audit committee (since 2000) and portfolio performance committee (since 2002) of the Dimensional Funds complex (89 Portfolios).

291

Trustee & Officer information (unaudited)

Name, address and age	Position(s) held with Trust	Term of office(1) and length of time served	Principal occupation(s) during past 5 years	Number of portfolios in fund complex overseen by Trustee	Other directorships held by Trustee
Frank K. Reilly; 73 Mendoza College of Business University of Notre Dame Notre Dame, IN 46556-5649	Chairman and Trustee	Since 1992	Mr. Reilly is a Professor of Finance at the University of Notre Dame (since 1982).	Mr. Reilly is a director or trustee of four investment companies (consisting of 54 portfolios) for which UBS Global AM or one of its affiliates serves as investment advisor, sub-advisor or manager.	Mr. Reilly is a Director of Discover Bank, a subsidiary of Discover Financial Services.
Edward M. Roob; 74 c/o UBS Global AM One North Wacker Drive Chicago, IL 60606	Trustee	Since 1995	Mr. Roob is retired (since 1993).	Mr. Roob is a director or trustee of four investment companies (consisting of 54 portfolios) for which UBS Global AM or one of its affiliates serves as investment advisor, sub-advisor or manager.	None.

292

Trustee & Officer information (unaudited)

Name, address and age	Position(s) held with Trust	Term of office(1) and length of time served	Principal occupation(s) during past 5 years	Number of portfolios in fund complex overseen by Trustee	Other directorships held by Trustee
J. Mikesell Thomas; 58 1353 Aster Place Chicago, IL 60610	Trustee	Since 2004	Mr. Thomas is a principal with the investment firm Castle Creek Capital (Since July 2008), President and CEO of First Chicago Bancorp. (Since November 2008) and CEO of First Chicago Bank of Trust (Since November 2008). He is the former President and CEO of Federal Home Loan Bank of Chicago (2004 to March 2008). Mr.Thomas was an Independent financial advisor (2001-2004).	Mr. Thomas is a director or trustee of four investment companies (consisting of 54 portfolios) for which UBS Global AM or one of its affiliates serves as investment advisor, sub-advisor or manager.	Mr. Thomas is a director and chairman of the Audit Committee for Evanston Northwestern Healthcare.

293

Trustee & Officer information (unaudited)

Officers:

Name, address and age	Position(s) held with the Trust	Term of office(1) and length of time served	Principal occupation(s) during past 5 years; number of portfolios in fund complex for which person serves as officer
Joseph J. Allessie*; 44	Vice President and Assistant Secretary	Since 2005	Mr. Allessie is an executive director (since 2007) (prior to which he was a director) and deputy general counsel (since 2005) at UBS Global Asset Management (US) Inc. and UBS Global AM (collectively, "UBS Global AM – Americas region"). Prior to joining UBS Global AM – Americas region, he was senior vice president and general counsel of Kenmar Advisory Corp. (from 2004 to 2005). Prior to that, Mr. Allessie was general counsel and secretary of GAM USA Inc., GAM Investments, GAM Services, GAM Funds, Inc. and the GAM Avalon Funds (from 1999 to 2004). Mr. Allessie is a vice president and assistant secretary of 21 investment companies (consisting of 104 portfolios) for which UBS Global AM – Americas region or one of its affiliates serves as investment advisor, sub-advisor or manager.
Thomas Disbrow*; 43	Vice President, Treasurer and Principal Accounting Officer	Since 2006	Mr. Disbrow is an executive director (since 2007), (prior to which he was a director) and head of the US mutual fund treasury administration department (since September 2006) of UBS Global AM – Americas region. Mr. Disbrow is a vice president and treasurer and/or principal accounting officer of 21 investment companies (consisting of 104 portfolios) for which UBS Global AM – Americas region or one of its affiliates serves as investment advisor, sub-advisor or manager.
Michael J. Flook*; 44	Vice President and Assistant Treasurer	Since 2006	Mr. Flook is an associate director and a senior manager of the US mutual fund treasury administration department of UBS Global AM – Americas region (since 2006). Prior to joining UBS Global AM – Americas region, he was a senior manager with The Reserve (asset management firm) from May 2005 to May 2006. Prior to that he was a senior manager with PFPC Worldwide since October 2000. Mr. Flook is a vice president and assistant treasurer of 21 investment companies (consisting of 104 portfolios) for which UBS Global AM – Americas region or one of its affiliates serves as investment advisor, sub-advisor or manager.

294

Trustee & Officer information (unaudited)

Name, address and age	Position(s) held with the Trust	Term of office(1) and length of time served	Principal occupation(s) during past 5 years; number of portfolios in fund complex for which person serves as officer
Mark F. Kemper**; 51	Vice President and Secretary	Since 1999 and 2004, respectively	Mr. Kemper is a managing director (since 2006) and head of the legal department of UBS Global AM – Americas region (since 2004). Mr. Kemper also is a managing director of UBS Global AM – Americas region (since 2006). He was deputy general counsel of UBS Global Asset Management (Americas) Inc. ("UBS Global AM – Americas") from July 2001 to July 2004. He has been secretary of UBS Global AM – Americas region since 2004, of UBS Global Asset Management Trust Company since 1993 and secretary of UBS Global AM – Americas region (since 2004). Mr. Kemper is secretary of UBS Global AM – Americas region (since 2004). Mr. Kemper is vice president and secretary of 21 investment companies (consisting of 104 portfolios) for which UBS Global AM – Americas region or one of its affiliates serves as investment advisor, sub-advisor or manager.
Joanne M. Kilkeary*; 41	Vice President and Assistant Treasurer	Since 2006	Ms. Kilkeary is a director (since March 2008) (prior to which she was an associate director) (since 2000) and a senior manager (since 2004) of the US mutual fund treasury administration department of UBS Global AM – Americas region. Ms. Kilkeary is a vice president and assistant treasurer of 21 investment companies (consisting of 104 portfolios) for which UBS Global AM – Americas region or one of its affiliates serves as investment advisor, sub-advisor or manager.
Tammie Lee*; 38	Vice President and Assistant Secretary	Since 2005	Ms. Lee is a director and associate general counsel of UBS Global AM – Americas region (since 2005). Prior to joining UBS Global AM – Americas region, she was vice president and counsel at Deutsche Asset Management/Scudder Investments from 2003 to 2005. Prior to that she was assistant vice president and counsel at Deutsche Asset Management/Scudder Investments from 2000 to 2003. Ms. Lee is a vice president and assistant secretary of 21 investment companies (consisting of 104 portfolios) for which UBS Global AM – Americas region or one of its affiliates serves as investment advisor, sub-advisor or manager.

295

Trustee & Officer information (unaudited)

Name, address and age	Position(s) held with the Trust	Term of office(1) and length of time served	Principal occupation(s) during past 5 years; number of portfolios in fund complex for which person serves as officer
Steven J. LeMire*; 40	Vice President and Assistant Treasurer	Since 2007	Mr. LeMire is a director and senior manager of the US mutual fund treasury administration department of UBS Global AM – Americas region (since October 2007). Prior to joining UBS Global AM – Americas region, he was an independent consultant with Third River Capital, LLC (formerly Two Rivers Capital, LLC) (from 2005 to 2007). Prior to that, he was vice president of operations and fund administration with Oberweis Asset Management, Inc. (from 1997 to 2005). Mr. LeMire is a vice president and assistant treasurer of 21 investment companies (consisting of 104 portfolios) for which UBS Global AM – Americas region or one of its affiliates serves as investment advisor, sub-advisor or manager.
Joseph McGill*; 47	Vice President and Chief Compliance Officer	Since 2004	Mr. McGill is a managing director (since 2006) and chief compliance officer (since 2003) of UBS Global AM – Americas region. Prior to joining UBS Global AM – Americas region, he was assistant general counsel at JP Morgan Investment Management (from 1999 to 2003). Mr. McGill is a vice president and chief compliance officer of 21 investment companies (consisting of 104 portfolios) for which UBS Global AM – Americas region or one of its affiliates serves as investment advisor, sub-advisor or manager.
Nancy D. Osborn*; 43	Vice President and Assistant Treasurer	Since 2007	Mrs. Osborn is an associate director and a senior manager of the US mutual fund treasury administration department of UBS Global AM – Americas region (since 2006). Prior to joining UBS Global AM – Americas region, she was an assistant vice president with Brown Brothers Harriman since April 1996. Mrs. Osborn is a vice president and assistant treasurer of 21 investment companies (consisting of 104 portfolios) for which UBS Global AM – Americas region or one of its affiliates serves as investment advisor, sub-advisor or manager.
Eric Sanders*; 43	Vice President and Assistant Secretary	Since 2005	Mr. Sanders is a director and associate general counsel of UBS Global AM – Americas region (since 2005). From 1996 until June 2005, he held various positions at Fred Alger & Company, Incorporated, the most recent being assistant vice president and associate general counsel. Mr. Sanders is a vice president and assistant secretary of 21 investment companies (consisting of 104 portfolios) for which UBS Global AM – Americas region or one of its affiliates serves as investment advisor, sub-advisor or manager.

296

Trustee & Officer information (unaudited)

Name, address and age	Position(s) held with the Trust	Term of office(1) and length of time served	Principal occupation(s) during past 5 years; number of portfolios in fund complex for which person serves as officer
Andrew Shoup*; 53	Vice President and Chief Operating Officer	Since 2006	Mr. Shoup is a managing director and global head of the Fund treasury administration department of UBS Global AM – Americas region (since July 2006). Mr. Shoup is also a director of UBS (IRL) Fund p.l.c. (since December 2008) Prior to joining UBS Global AM – Americas region, he was chief administrative officer for the Legg Mason Partner Funds (formerly Smith Barney, Salomon Brothers, and CitiFunds mutual funds) from November 2003 to July 2006. Prior to that, he held various positions with Citigroup Asset Management and related Companies with their domestic and offshore mutual funds since 1993. Additionally, he has worked for another mutual fund complex as well as spending eleven years in public accounting. Mr. Shoup is a vice president and chief operating officer of 21 investment companies (consisting of 104 portfolios) for which UBS Global AM – Americas region or one of its affiliates serves as investment advisor, sub-advisor or manager.
Kai Sotorp**; 50	President	Since 2006	Mr. Sotorp is Head – Americas for UBS Global Asset Management (since 2004); a member of the UBS Group Managing Board (since 2003) and a member of the UBS Global Asset Management Executive Committee (since 2001). Mr. Sotorp is a board director and president of UBS AM Holdings (USA) Inc. (since 2004). Prior to his current role, Mr. Sotorp was head of UBS Global Asset Management – Asia Pacific (2002-2004), covering Australia, Japan, Hong Kong, Singapore and Taiwan; head of UBS Global Asset Management (Japan) Ltd. (2001-2004); representative director and president of UBS Global Asset Management (Japan) Ltd. (2000-2004); and member of the board of Mitsubishi Corp. – UBS Realty Inc. (2000-2004). Mr. Sotorp is president of 21 investment companies (consisting of 104 portfolios) for which UBS Global Asset Management – Americas region or one of its affiliates serves as investment advisor, sub-advisor or manager.

297

Trustee & Officer information (unaudited)

Name, address and age	Position(s) held with the Trust	Term of office(1) and length of time served	Principal occupation(s) during past 5 years; number of portfolios in fund complex for which person serves as officer
Keith A. Weller*; 48	Vice President and Assistant Secretary	Since 2004	Mr. Weller is an executive director and senior associate general counsel of UBS Global AM – Americas region (since 2005) and has been an attorney with affiliated entities since 1995. Mr. Weller is a vice president and assistant secretary of 21 investment companies (consisting of 104 portfolios) for which UBS Global AM – Americas region or one of its affiliates serves as investment advisor, sub-advisor or manager.

⁽¹⁾  Each Trustee holds office for an indefinite term. Officers of the Trust are appointed by the Trustees and serve at the pleasure of the Board.

*  This person's business address is 51 West 52nd Street, New York, NY 10019-6114.

**  This person's business address is One North Wacker Drive, Chicago, IL 60606.

298

The UBS Funds—Federal tax information (unaudited)

For the year ended June 30, 2009, the percentage of dividends paid that qualify for the 70% dividends received deduction for corporate shareholders, the designation of long-term capital gain and the amounts expected to be passed through to the shareholders as foreign tax credits are approximated as follows:

	Dividends received deduction			15% Long-term capital gain		Foreign tax credit
UBS Dynamic Alpha Fund		—		$	291,230,363	$	—
UBS Global Allocation Fund		13.25	%		153,119,425		—
UBS Global Equity		27.64			—		—
UBS International Equity Fund		—			7,009,513		224,982
UBS U.S. Equity Alpha Fund		88.78			—		—
UBS U.S. Large Cap Equity Fund		70.78			13,964,809		—
UBS U.S. Large Cap Value Equity Fund		100.00			8,771,545		—
UBS U.S. Mid Cap Growth Equity Fund		—			76,707		—

In addition, for the year ended June 30, 2009, gross income derived from sources within foreign countries amounted to $2,726,125 for UBS International Equity Fund.

For the year ended June 30, 2009, the percentage of income earned from direct US treasury obligations approximately amounted to the following:

	Direct US treasury obligations
UBS Dynamic Alpha Fund		6.53	%
UBS Global Allocation Fund		17.53
UBS Global Frontier Fund		32.24
UBS Absolute Return Bond Fund		5.21
UBS Global Bond Fund		10.31
UBS High Yield Fund		6.29
UBS U.S. Bond Fund		21.83

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Item 2.  Code of Ethics.

The registrant has adopted a code of ethics that applies to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions pursuant to Section 406 of the Sarbanes-Oxley Act of 2002.  (The registrant has designated the code of ethics adopted pursuant to Sarbanes-Oxley as a “Code of Conduct” to lessen the risk of confusion with its separate code of ethics adopted pursuant to Rule 17j-1 under the Investment Company Act of 1940, as amended.)

Item 3.  Audit Committee Financial Expert.

The registrant’s Board has determined that the following person serving on the registrant’s Audit Committee is an “audit committee financial expert” as defined in item 3 of Form N-CSR:  J. Mikesell Thomas.  Mr. Thomas is independent as defined in item 3 of Form N-CSR.

Item 4.  Principal Accountant Fees and Services.

(a)Audit Fees:

For the fiscal years ended June 30, 2009 and June 30, 2008, the aggregate Ernst & Young LLP (E&Y) audit fees for professional services rendered to the registrant were approximately $681,000 and $641,800, respectively.

Fees included in the audit fees category are those associated with the annual audits of financial statements and services that are normally provided in connection with statutory and regulatory filings.

(b)Audit-Related Fees:

In each of the fiscal years ended June 30, 2009 and June 30, 2008, the aggregate audit-related fees billed by E&Y for services rendered to the registrant that are reasonably related to the performance of the audits of the financial statements, but not reported as audit fees, were approximately $19,688 and $20,000, respectively.

Fees included in the audit-related category are those associated with (1) the reading and providing of comments on the 2008 and 2007 semiannual financial statements.

There were no audit-related fees required to be approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X during the fiscal years indicated above.

(c)Tax Fees:

In each of the fiscal years ended June 30, 2009 and June 30, 2008, the aggregate tax fees billed by E&Y for professional services rendered to the registrant were approximately $81,750 and $56,957, respectively.

Fees included in the tax fees category comprise all services performed by professional staff in the independent accountant’s tax division except those services related to the audits.  This category comprises fees for review of tax returns.

There were no tax fees required to be approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X during the fiscal years indicated above.

(d)All Other Fees:

In each of the fiscal years ended June 30, 2009 and June 30, 2008, there were no fees billed by E&Y for products and services, other than the services reported in Item 4(a)-(c) above, rendered to the registrant.

Fees included in the all other fees category would consist of services related to internal control reviews, strategy and other consulting, financial information systems design and implementation, consulting on other information systems, and other tax services unrelated to the registrant.

There were no “all other fees” required to be approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X during the fiscal years indicated above.

(e)(1) Audit Committee Pre-Approval Policies and Procedures:

The Audit Committee Charter contains the Audit Committee’s pre-approval policies and procedures.  Reproduced below is an excerpt from the Audit Committee Charter regarding pre-approval policies and procedures:

To carry out its purposes, the Audit Committee shall have the following duties and powers:

(a)   To pre-approve the engagement of, and to recommend to the Board the engagement, retention or termination of, the independent auditors to provide audit, review or attest services to the Trust UBS Funds, and, in connection therewith, to review and evaluate the capabilities and independence of the auditors, and receive the auditors’ specific representations as to their independence. In evaluating the auditor’s qualifications, performance and independence, the Committee must, among other things, obtain and review a report by the auditors, at least annually, describing the following items: (i) all relationships between the independent auditors and the Trust UBS Funds, as well as with the Trust’s UBS Funds, investment advisor or any control affiliate of the investment advisor that provides ongoing services to the Trust UBS Funds; (ii) any material issues raised by the mo st recent internal quality control review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, with respect to one or more independent audits carried out by the firm, and any steps taken to deal with any such issues; and (iii) the audit firm’s internal quality control procedures.

(b)   To pre-approve all non-audit services to be provided to the Trust UBS Funds by the independent auditors when, without such pre-approval, the auditors would not be independent of the Trust UBS Funds under applicable federal securities laws, rules or auditing standards.

(c)   To pre-approve all non-audit services to be provided by the Trust’s UBS Funds independent auditors to the Trust’s UBS Funds investment advisor or to any entity that controls, is controlled by or is under common control with the Trust’s UBS Funds investment

advisor (“advisor affiliate”) and that provides ongoing services to the Trust UBS Funds when, without such pre-approval by the Committee, the auditors would not be independent of the Trust UBS Funds under applicable federal securities laws, rules or auditing standards.

(d)   To establish, if deemed necessary or appropriate as an alternative to Committee pre-approval of services to be provided by the independent auditors as required by paragraphs (b) and (c) above, policies and procedures to permit such services to be pre-approved by other means, such as by action of a designated member or members of the Committee, subject to subsequent Committee review or oversight.

(e)   To consider whether the non-audit services provided by the Trust’s UBS Funds independent auditor to the Trust’s UBS Funds investment advisor or any advisor affiliate that provides on-going services to the Trust UBS Funds, which services were not pre-approved by the Committee, are compatible with maintaining the auditors’ independence.

(e)(2) Services approved pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X:

Audit-Related Fees:

There were no amounts that were approved by the audit committee pursuant to the de minimis exception for the fiscal years ended June 30, 2009 and June 30, 2008 on behalf of the registrant.

There were no amounts that were required to be approved by the audit committee pursuant to the de minimis exception for the fiscal years ended June 30, 2009 and June 30, 2008 on behalf of the registrant’s service providers that relate directly to the operations and financial reporting of the registrant.

Tax Fees:

There were no amounts that were approved by the audit committee pursuant to the de minimis exception for the fiscal years ended June 30, 2009 and June 30, 2008 on behalf of the registrant.

There were no amounts that were required to be approved by the audit committee pursuant to the de minimis exception for the fiscal years ended June 30, 2009 and June 30, 2008 on behalf of the registrant’s service providers that relate directly to the operations and financial reporting of the registrant.

All Other Fees:

There were no amounts that were approved by the audit committee pursuant to the de minimis exception for the fiscal years ended June 30, 2009 and June 30, 2008 on behalf of the registrant.

There were no amounts that were required to be approved by the audit committee pursuant to the de minimis exception for the fiscal years ended June 30, 2009 and June 30, 2008 on behalf of the registrant’s service providers that relate directly to the operations and financial reporting of the registrant.

(f)According to E&Y, for the fiscal year ended June 30, 2009, the percentage of hours spent on the audit of the registrant’s financial statements for the most recent fiscal year that were

attributed to work performed by persons who are not full-time, permanent employees of E&Y was less than 0%.

(g)For the fiscal years ended June 30, 2009 and June 30, 2008, the aggregate fees billed by E&Y of $2,278,338 and $1,794,215, respectively, for non-audit services rendered on behalf of the registrant (“covered”), its investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and any entity controlling, controlled by, or under common control with the adviser (“non-covered”) that provides ongoing services to the registrant for each of the last two fiscal years of the registrant is shown in the table below:

	2009		2008
Covered Services	$	101,438	$	76,957
Non-Covered Services	$	2,176,900	$	1,717,258

(h)The registrant’s audit committee was not required to consider whether the provision of non-audit services that were rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence.

Item 5. Audit Committee of Listed Registrants.

Not applicable to the registrant.

Item 6.  Schedule of Investments.

(a)  Included as part of the report to shareholders filed under Item 1 of this form.

(b)  Not applicable.

Item 7.  Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable to the registrant.

Item 8.  Portfolio Managers of Closed-End Management Investment Companies.

Not applicable to the registrant.

Item 9.  Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

Not applicable to the registrant.

Item 10.  Submission of Matters to a Vote of Security Holders.

The Nominating Committee will consider nominees recommended by Qualifying Fund Shareholders if an Independent Trustee vacancy on the Board occurs. A Qualifying Fund Shareholder is a shareholder that: (i) owns of record, or beneficially through a financial intermediary, 1/2 of 1% or more of the Trust’s outstanding shares and (ii) has been a shareholder of at least 1/2 of 1% of the Trust’s total outstanding shares for 12 months or more prior to submitting the recommendation to the Nominating Committee. In order to recommend a nominee, a Qualifying Fund Shareholder should send a letter to the chairperson of the Nominating Committee, Mr. Walter Auch, care of the Secretary of the UBS Funds at UBS Global Asset Management, One North Wacker Drive, Chicago, Illinois 60606, and indicate on the envelope “Nominating Committee.” The Qualifying Fund Shareholder’s letter should include: (i) the name and address of the Qualifying Fund Shareholder making the recommendation; (ii) the number of shares of each class and series of shares of the Trust which are owned of record and beneficially by such Qualifying Fund Shareholder and the length of time that such shares have been so owned by the Qualifying Fund Shareholder; (iii) a description of all arrangements and understandings between such Qualifying Fund Shareholder and any other person or persons (naming such person or persons) pursuant to which the recommendation is being made; (iv) the name and address of the nominee; and (v) the nominee’s resume or curriculum vitae. The Qualifying Fund Shareholder’s letter must be accompanied by a written consent of the individual to stand for election if nominated for the Board and to serve if elected by shareholders.

Item 11.  Controls and Procedures.

(a)The registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended) are effective based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this document.  The Registrant’s management, including the principal executive officer and the principal financial officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

(b)The registrant’s principal executive officer and principal financial officer are aware of no changes in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal half-year that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 12.  Exhibits.

(a)(1) Code of Ethics as required pursuant to Section 406 of the Sarbanes-Oxley Act of 2002 (and designated by registrant as a “Code of Conduct”) is filed herewith.

(a)(2) Certifications of principal executive officer and principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 is attached hereto as Exhibit EX-99.CERT.

(a)(3) Written solicitation to purchase securities under Rule 23c-1 under the Investment Company Act of 1940 sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons – not applicable to the registrant.

(b)Certifications of principal executive officer and principal financial officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 is attached hereto as Exhibit EX-99.906.CERT.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

The UBS Funds

By:	/s/ Mark E. Carver
	Mark E. Carver
	President
Date:	June 15, 2010

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By:	/s/ Mark E. Carver
	Mark E. Carver
	President
Date:	June 15, 2010

By:	/s/ Thomas Disbrow
	Thomas Disbrow
	Treasurer and Principal Accounting Officer
Date:	June 15, 2010

EX-99.CODEETH

Exhibit 99.CODEETH

UBS GLOBAL ASSET MANAGEMENT FUNDS

CODE OF CONDUCT

INTRODUCTION

This Code of Conduct (“Code”) applies to U.S. registered investment companies (“Funds”) for which UBS Global Asset Management (“UBS Global AM”) acts as advisor, sub-advisor and/or manager where UBS Global AM employees serve as officers of the Funds. This Code shall serve as the code of ethics required by Section 406 of the Sarbanes-Oxley Act.

This Code applies to a Fund’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party.

COMPLIANCE WITH LAWS, RULES AND REGULATIONS

Each person to whom this Code applies (a “Covered Person”) must respect, and comply with, the laws, rules and regulations applicable to a Fund.

It is the personal responsibility of each Covered Person to adhere to the standards and restrictions imposed by those laws, rules and regulations.

INTEGRITY AND CONFLICTS OF INTEREST

Each Covered Person must act ethically, with honesty and integrity, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships. A conflict of interest exists when a person’s private interest interferes, or appears to interfere, in any way with the interests of a Fund.

Any Covered Person who becomes aware of a conflict of interest or potential conflict of interest not addressed by existing policies or procedures (e.g., Rule 17e-1 Procedures) must promptly consult the Compliance Procedure described in this Code.

FAIR DEALING

A Covered Person must not take unfair advantage of a Fund through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other unfair practice.

A Covered Person must respect and promote compliance with applicable insider trading laws, rules and regulations as well as with the internal directives and policies of UBS Global AM concerning the illegal or unethical trading on material non-public information.

FUND OPPORTUNITIES

A Covered Person must abstain from taking for himself or herself personally, or directing to third parties, opportunities that are discovered through the use of

Fund property, information or position, or otherwise competing with the interests of a Fund, unless a Fund has already been offered the opportunity and turned it down or such actions are otherwise consistent with the policies and practices disclosed in the Fund’s disclosure documents or approved by the Fund’s board or otherwise permissible under securities laws and regulations (e.g., soft dollars, trade allocation policies).

PROTECTION AND PROPER USE OF FUND ASSETS

A Covered Person must endeavor to protect a Fund’s assets.

Fund property should not be used for personal use.

DISCLOSURE IN REPORTS AND DOCUMENTS

A Covered Person must see that a Fund discloses information fully, fairly, accurately, timely and understandably in reports and documents that a Fund files with, or submits to, the SEC and in other public communications made by a Fund.

REPORTING ANY VIOLATIONS OF THE CODE

A Covered Person must promptly consult the Compliance Procedure described in this Code about any observed violations of this Code, including any violations of laws, rules, regulations or other legal requirements or when in doubt about the best course of action in a particular situation.

It is the policy of UBS Global AM not to allow retaliation for reports of misconduct by others made in good faith.

Reports may be made anonymously if the situation requires that identity be kept secret.

WAIVERS OF THIS CODE

Any waiver of this Code may be made only by the Board of the relevant Fund or the General Counsel or a Deputy General Counsel of UBS Global AM and will be disclosed as required by applicable law or regulations. Any waiver by the General Counsel or a Deputy General Counsel of UBS Global AM must be reported to the Board of the relevant Fund no later than their next regularly scheduled meeting.

For purposes of this provision, the term “waiver” means the approval of a material departure from a provision in this Code. It also includes an “implicit waiver,” which means the failure to take action within a reasonable period of time regarding a material departure from a provision of the Code that has been made known to an executive officer of a fund or the General Counsel or a Deputy General Counsel of UBS Global AM.

Any person granting a waiver is responsible for promptly alerting the persons responsible for preparing SEC filings so that required disclosure regarding a waiver may be timely included in filings (e.g., Form N-CSR filings).

COMPLIANCE PROCEDURE

If you are unsure about how to handle a situation with regard to this Code or are aware of any violations or apparent violations of this Code promptly contact the General Counsel or a Deputy General Counsel of UBS Global AM.

A Fund’s Board, the General Counsel or a Deputy General Counsel of UBS Global AM has the authority to interpret this Code in any particular situation.

ACCOUNTABILITY FOR ADHERENCE TO THIS CODE

Those who violate the standards in this Code will be subject to disciplinary proceedings or dismissal by UBS Global AM.

A copy of this Code shall be provided to each Covered Person.

NOTE REGARDING INTERPLAY WITH OTHER REQUIREMENTS

This Code deals with the required standards of fairness, honesty and integrity in a universal and general manner. UBS Global AM and its affiliates have issued, and will issue from time to time, more specific directives, policies, principals and procedures to implement such values while reflecting the specific requirements of a business group, business area or a particular jurisdiction. If there is any inconsistency between the requirements of this Code or any other applicable policy, the higher standard shall apply.

This Code is supplemental to, and does not replace, any other code applicable to Covered Persons, such as a code of ethics regarding personal investing or restrictions on the receipt of gifts from third-party vendors or service contractors.

EX-99.CERT

Exhibit EX-99.CERT

Certifications

I, Mark E. Carver, President of The UBS Funds, certify that:

1.I have reviewed this report on Form N-CSR/A of The UBS Funds (the “Registrant”) on behalf of the UBS Dynamic Alpha Fund;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the Registrant, with respect to the UBS Dynamic Alpha Fund, as of, and for, the periods presented in this report;

4.The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements, for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The Registrant’s other certifying officer(s) and I have disclosed to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

By:	/s/ Mark E. Carver
	Mark E. Carver
	President
Date:	June 15, 2010

I, Thomas Disbrow, Treasurer and Principal Accounting Officer of The UBS Funds, certify that:

1.I have reviewed this report on Form N-CSR/A of The UBS Funds (the “Registrant”) on behalf of the UBS Dynamic Alpha Fund;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the Registrant, with respect to the UBS Dynamic Alpha Fund, as of, and for, the periods presented in this report;

4.The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the Registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements, for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5.The Registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

By:	/s/ Thomas Disbrow
	Thomas Disbrow
	Treasurer and Principal Accounting Officer
Date:	June 15, 2010

EX-99.906CERT

Exhibit EX-99.906CERT

Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)

In connection with the attached report of The UBS Funds (the “Registrant”) on Form N-CSR (the “Report”), each of the undersigned officers of the Registrant does hereby certify that, to the best of such officer’s knowledge:

1)The Registrant’s periodic report on Form N-CSR/A on behalf of the UBS Dynamic Alpha Fund for the period ended June 30, 2009 (the “Form N-CSR/A”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; as applicable; and

2)The information contained in the Form N-CSR/A in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant, on behalf of the UBS Dynamic Alpha Fund, as of, and for, the periods presented in the Report.

< td width="672" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:7.0in;">

Dated:	June 15, 2010
By:	/s/ Mark E. Carver
	Mark E. Carver
	President
Dated:	June 15, 2010
By:	/s/ Thomas Disbrow
	Thomas Disbrow
	Treasurer and Principal Accounting Officer

This certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document.