UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES

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 19103-7098
Registrant’s telephone number, including area code:				212-821 3000
Date of fiscal year end:	June 30
Date of reporting period:		December 31, 2010

Item 1.  Reports to Stockholders.

The UBS Funds—Fixed Income

Semiannual Report

December 31, 2010

Table of contents
President's letter	1
Market commentary	2
Fixed Income
UBS Absolute Return Bond Fund	3
UBS Core Plus Bond Fund (formerly, UBS U.S. Bond Fund)	18
UBS Fixed Income Opportunities Fund	31
UBS Global Bond Fund	45
UBS High Yield Fund	57
Explanation of expense disclosure	72
Statement of assets and liabilities	76
Statement of operations	80
Statement of changes in net assets	82
Financial highlights	84
Notes to financial statements	94
General information	116

This page has been left blank intentionally.

President's letter

Dear Shareholder,

In the time since I last wrote to you, we have seen a shift in the investor mindset. Asset flows into equities seem to be turning in a positive direction, as investors appear to be showing interest, once again, in riskier assets. Nonetheless, considering the upward trend in the equity markets and encouraging signs that the economy is on the road to recovery, a surprising number of investors remain sidelined by fear, avoiding "risky" assets in favor of fixed income.

The truth is, market pundits will tell you that, in today's low yield environment, fixed income investing is fraught with its own uncertainties. If rates stay low, so will returns; if bond yields rise, the value of fixed income investments will fall. In short, fixed income may not be the safe harbor that many investors believe it to be.

Fear—arguably, now more than ever, it's one of the biggest obstacles to investor success. That's not to say that when it comes to investing, no fear is a good thing. In fact, fear helps inform an investor's own understanding of the level of risk he or she is willing to assume when it comes to building an investment plan. However, the fear that is so prevalent in the market today has little to do with rational thinking, and everything to do with basic human emotion. In fact, a good portion of investors today are making investment decisions based on their desire to avoid losing money—which turns the whole idea of a long-term investment plan on its head, really.

Irrational fear more often than not has the unfortunate result of leading investors to make the wrong decisions, for the wrong reasons, at the wrong times—often at the expense of their long-term investment success. What can you do to fight it? A key strategy that makes sense in any environment is a diversified portfolio that blends both stocks and bonds. A diversified portfolio can't guarantee against a loss, but it does have the potential to provide you with more consistent returns—making it easier for you to maintain the discipline you need to stay the course to achieve your financial goals.

In 2011, we will continue to build upon our 30-year foundation—growing and evolving to meet not only the challenges of a new market landscape, but also the ever-increasing diversification needs of our clients. At the same time, we will remain resolute in adhering to our disciplined investment approach, so we can seek to avoid the types of traps that can confound fear-driven investors. In doing so, we believe we will be better positioned to provide you, our clients, with the types of investment solutions that will help carry you forward over the next five, 10 or 30 years.

As always, we remain firmly dedicated to your investment success. Thank you for your continued support.

Mark E. Carver
President
The UBS Funds
Managing Director
UBS Global Asset Management (Americas) Inc.

1

The markets in review

Continued Economic Growth

The overall US economy expanded during the six-months ended December 31, 2010. The US economy has now grown for six consecutive quarters, spurred, in part, due to government stimulus programs, as well as the Federal Reserve Board's (the "Fed's") accommodative monetary policy. However, there continued to be several areas of weakness, most notably unemployment that remained above 9%, which held back a more robust expansion. Looking back, gross domestic product ("GDP") growth was 3.7% during the first quarter of 2010. GDP growth was then 1.7% and 2.6%, respectively, during the second and third quarters of the year. The Commerce Department's initial estimate for GDP growth in the fourth quarter is 3.2%.

Economic growth outside the US was largely positive as well during the reporting period. However, there was a significant disparity between the growth rates in the international developed and emerging market countries. The European sovereign debt crisis, which began in Greece and later impacted Ireland, served to temper growth in a number of developed countries in the Eurozone. In contrast, developing countries, including China and India, continued to see their economies expand at a rapid pace.

Risk is rewarded in the fixed income markets

While there were periods of volatility, the spread sectors (non-Treasuries) in general produced positive results during the reporting period. This was driven by signs that the economy appeared to be gaining enough momentum to avoid a double-dip recession. In addition, investor demand for the spread sectors was generally robust as investors looked to generate incremental yield in the low interest rate environment. Also supporting the spread sectors were overall strong corporate profits and indications from the Fed that it was prepared to take further actions to bolster the economy. After declining during the first four months of the reporting period, long-term Treasury yields then moved sharply higher in November and December. This was triggered by optimism for a strengthening economy in 2011 and expectations for higher inflation in the future. During the six months ended December 31, 2010, the overall US bond market (as measured by the Barclays Capital US Aggregate Index¹) returned 1.15%.

Despite giving back a portion of their gains in November, riskier fixed income asset classes generated strong returns, as the BofA Merrill Lynch US High Yield Cash Pay Constrained Index² gained 9.83%, and the J.P. Morgan Emerging Markets Bond Index Global (EMBI Global)³ rose 6.33%.

¹  The Barclays Capital US Aggregate Index is an unmanaged broad-based index designed to measure the US dollar-denominated, investment-grade, fixed rate taxable bond market. 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 and expenses.

²  The BofA Merrill Lynch US High Yield Cash Pay Constrained Index is an unmanaged index of publicly placed non-convertible, coupon-bearing US dollar-denominated below investment grade corporate 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 and expenses.

³  The J.P. Morgan Emerging Markets Bond Index Global (EMBI Global) is an unmanaged index which is designed to track total returns for US-dollar-denominated debt instruments issued by emerging market sovereign and quasi-sovereign entities: Brady bonds, loans and Eurobonds. Investors should note that indices do not reflect the deduction of fees and expenses.

2

UBS Absolute Return Bond Fund

Portfolio performance

For the six months ended December 31, 2010, Class A shares of UBS Absolute Return Bond Fund (the "Fund") returned 2.20% (Class A shares declined 0.33% after the deduction of the maximum sales charge), while Class Y shares returned 2.30%. For purposes of comparison, the BofA Merrill Lynch US Treasury 1-3 Year Index returned 0.47%, and the US LIBOR 3-Month Index (the "Index") returned 0.18% 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 5; 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.)

The Fund generated a positive absolute return during the reporting period. Notably, spread management, sector selection and currency management enhanced the Fund's results.

Derivative instruments are used both for hedging purposes as well as for facilitating positions in currency, duration/yield curve or credit strategies. Instruments used during the period included currency forwards, interest rate futures and swaps, and credit default swaps (both single name and indices). The results of derivatives use during the period were within our expectations.

Portfolio performance summary¹

What worked

•  Sector allocation was rewarded during the period. The Fund had an overweight to non-government bonds, which saw a narrowing of their spread over the six-month period. As a result, corporate bonds and other non-government sectors as a whole outperformed government securities during the reporting period. In particular, overweight positions in financials and securitized assets were supportive for performance.

•  Active currency management was beneficial. Throughout the six-month period, we implemented a number of tactical currency trades to take advantage of opportunities in the foreign exchange markets. We also maintained a well-diversified currency strategy. As a whole, this contributed to the Fund's performance.

What didn't work

•  The Fund's active duration positioning was not rewarded. (Duration is a measure of a portfolio's sensitivity to changes in interest rates.) When the six-month period began, the Fund had a short duration position, which we gradually shifted to be marginally long at the end of the period. On average, duration positioning neither helped nor hurt performance.

  However, yield curve positioning (positioning along the different maturity points) detracted from performance. During the review period, the Fund's portfolio was long the longer maturity part of the curve, and short the short

¹  For a detailed commentary on the market environment in general during the reporting period, see page 2.

3

UBS Absolute Return Bond Fund

maturity part of the curve, in an environment in which the short end did not move, while the long end increased the most. (In other words, the yield curve moved upwards, but was anchored at the short end.)

•  Security selection detracted from performance over the period, due to positioning in fairly conservative names, in an environment of overall recovering spread tightening.

This letter is intended to assist shareholders in understanding how the Fund performed during the six months ended December 31, 2010. The views and opinions in the letter were current as of February 15, 2011. They are not guarantees of future 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.

4

UBS Absolute Return Bond Fund

Average annual total returns for periods ended 12/31/10 (unaudited)

	6 months			1 year			5 years			Inception1
Before deducting maximum sales charge
Class A2		2.20	%		1.06	%		(3.92	)%		(3.17	)%
Class C3		2.00			0.68			(4.24	)		(3.51	)
Class Y4		2.30			1.42			(3.71	)		(2.97	)
After deducting maximum sales charge
Class A2		(0.33	)%		(1.53	)%		(4.39	)%		(3.61	)%
Class C3		1.50			0.20			(4.24	)		(3.51	)
BofA Merrill Lynch US Treasury 1-3 Year Index5		0.47	%		2.35	%		4.17	%		3.92	%
US LIBOR 3-Month Index6		0.18			0.35			3.01			3.12

The annualized gross and net expense ratios, respectively, for each class of shares as in the October 28, 2010 prospectuses were as follows: Class A—1.14% and 1.00%; Class C—1.42% and 1.35%; Class Y—0.80% and 0.80%. 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 UBS Global Asset Management (Americas) Inc., the Fund's investment advisor ("UBS Global AM (Americas)" or 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, interest, taxes, brokerage commissions, extraordinary expenses and securities loan fees and dividend expenses for securities sold short) to the extent necessary so that the Fund's ordinary operating expenses (excluding expenses incurred through investment in other investment companies, interest, taxes, brokerage commissions, extraordinary expenses and securities loan fees and dividend expenses for securities sold short), through the 12-month period ending October 27, 2011, do not exceed 1.00% for Class A shares, 1.35% 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 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 BofA Merrill Lynch US Treasury 1-3 Year Index is an unmanaged index designed to track short-term US Treasury securities with maturities between 1 and 3 years. Investors should note that indices do not reflect the deduction of fees and expenses.

⁶  The US LIBOR 3-Month Index is based on LIBOR, the London Interbank Offered Rate, a short-term interest rate that banks quote to each other and deemed generally representative of current cash rates available. The US LIBOR 3-Month Index is designed to track the interest rate earned on three month inter-bank US dollar denominated deposits. 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. Total returns for periods of less than one year have not been annualized. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://www.ubs.com.

5

UBS Absolute Return Bond Fund

Top ten long-term fixed income holdings (unaudited)

As of December 31, 2010  

	Percentage of net assets
Compagnie de Financement Foncier, 3.625%, due 01/16/12		4.0	%
U.S. Treasury Note, 1.375%, due 03/15/12		3.7
Federal Home Loan Bank, 5.250%, due 06/18/14		3.1
Federal Home Loan Mortgage Corp., 5.000%, due 02/16/17		2.9
Hypothekenbank in Essen AG, 5.250%, due 01/17/11		2.7
Federal National Mortgage Association, 5.000%, due 10/15/11		2.7
Kreditanstalt fuer Wiederaufbau, 3.375%, due 01/16/12		2.6
Federal National Mortgage Association, 4.125%, due 04/15/14		2.2
Kreditanstalt fuer Wiederaufbau, 5.550%, due 06/07/21		2.1
Federal National Mortgage Association Pools, #933765, 4.500%, due 04/01/38		2.1
Total		28.1	%

Industry diversification (unaudited)

As a percentage of net assets as of December 31, 2010

Bonds
Corporate bonds
Aerospace & defense	0.39	%
Building materials	0.25
Commercial banks	9.16
Communications equipment	0.23
Computers & peripherals	0.30
Construction & engineering	1.04
Diversified financial services	9.50
Diversified telecommunication services	2.43
Electric utilities	0.75
Energy	0.07
Food & staples retailing	0.53
Health care providers & services	0.43
Industrial conglomerates	0.29
Insurance	1.30
Media	1.19
Metals & mining	1.02
Oil, gas & consumable fuels	2.47
Personal products	0.60
Pharmaceuticals	0.23
Road & rail	0.45
Sovereign	1.20
Thrifts & mortgage finance	6.67
Tobacco	2.56
Wireless telecommunication services	2.37
Total corporate bonds	45.43	%
Asset-backed securities	2.24
Collateralized debt obligations	1.17
Commercial mortgage-backed security	0.21
Mortgage & agency debt securities	17.12
US government obligation	3.73
Non-US government obligations	17.75
Supranational bonds	4.40
Total bonds	92.05	%
Short-term investment	6.13
Total investments	98.18	%
Cash and other assets, less liabilities	1.82
Net assets	100.00	%

Country exposure, top five (unaudited)

As of December 31, 2010

	Percentage of net assets
United States		41.0	%
Germany		12.5
United Kingdom		8.9
France		5.3
Netherlands		3.9
Total		71.6	%

6

UBS Absolute Return Bond Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Face amount		Value
Bonds: 92.05%
Corporate bonds: 45.43%
Australia: 0.63%
Rio Tinto Finance USA Ltd., 3.500%, due 11/02/20	$	600,000	$	569,561
Westpac Banking Corp., 4.200%, due 02/27/15		350,000		367,344
Total Australia corporate bonds				936,905
Denmark: 0.24%
Dong Energy A/S, 4.875%, due 05/07/14	EUR	250,000		357,690
France: 5.30%
Casino Guichard Perrachon SA, 5.500%, due 01/30/15		550,000		796,628
Compagnie de Financement Foncier, 3.625%, due 01/16/12		4,350,000		5,944,817
Credit Agricole SA, 0.502%, due 03/13/161	$	800,000		783,103
Natixis, 0.539%, due 01/15/191		450,000		384,235
Total France corporate bonds				7,908,783
Germany: 2.69%
Hypothekenbank in Essen AG, 5.250%, due 01/17/112	EUR	3,000,000		4,015,762
Greece: 0.49%
OTE PLC, 5.375%, due 02/14/11		550,000		736,440
Ireland: 0.66%
Allied Irish Banks PLC, 4.500%, due 10/01/12		300,000		306,681
GE Capital UK Funding, 6.000%, due 04/11/13	GBP	400,000		670,529
Total Ireland corporate bonds				977,210
Italy: 1.56%
Intesa Sanpaolo SpA, 6.625%, due 05/08/18	EUR	500,000		658,900
Telecom Italia SpA, 4.750%, due 05/19/14		1,200,000		1,671,312
Total Italy corporate bonds				2,330,212
Luxembourg: 0.56%
ArcelorMittal, 9.000%, due 02/15/15	$	350,000		416,573

	Face amount		Value
GAZ Capital SA for Gazprom, 6.580%, due 10/31/13	GBP	250,000	$	414,136
Total Luxembourg corporate bonds				830,709
Mexico: 0.48%
America Movil SAB de CV, 3.625%, due 03/30/15	$	700,000		719,761
Netherlands: 3.61%
Allianz Finance II BV, 4.750%, due 07/22/19	EUR	850,000		1,185,696
CRH Finance BV, 7.375%, due 05/28/14		250,000		368,752
MDC B.V., 5.750%, due 05/06/143	$	1,650,000		1,788,600
PACCAR Financial Europe BV, 5.125%, due 05/19/11	EUR	350,000		472,032
Rabobank Nederland NV, 4.000%, due 09/10/15	GBP	230,000		371,796
Repsol International Finance BV, 4.750%, due 02/16/17	EUR	300,000		410,403
Scotland International Finance BV, 4.250%, due 05/23/133	$	800,000		792,026
Total Netherlands corporate bonds				5,389,305
Portugal: 0.51%
EDP Finance BV, 5.375%, due 11/02/123		750,000		759,776
Qatar: 0.29%
Qtel International Finance Ltd., 6.500%, due 06/10/143		400,000		438,448
South Korea: 0.36%
Hyundai Capital Services, Inc., 6.000%, due 05/05/153		500,000		541,233
Spain: 0.48%
Telefonica Emisiones SAU, 5.431%, due 02/03/14	EUR	500,000		710,477
Sweden: 0.24%
Vattenfall Treasury AB, 4.250%, due 05/19/14		250,000		353,361
Switzerland: 0.84%
Credit Suisse/London, 6.125%, due 05/16/14		850,000		1,255,098

7

UBS Absolute Return Bond Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Face amount		Value
Bonds—(Continued)
Corporate bonds—(Concluded)
United Kingdom: 8.04%
Anglo American Capital PLC, 9.375%, due 04/08/143	$	450,000	$	541,788
BAA Funding Ltd., 3.975%, due 02/15/141,3	EUR	1,150,000		1,560,380
Barclays Bank PLC, 1.175%, due 04/20/161		600,000		770,387
2.500%, due 01/23/13	$	950,000		965,423
BP Capital Markets PLC, 1.550%, due 08/11/11		100,000		100,452
HSBC Holdings PLC, 4.500%, due 04/30/14	EUR	250,000		352,476
Imperial Tobacco Finance PLC, 8.375%, due 02/17/16		1,200,000		1,953,999
Nationwide Building Society, 4.650%, due 02/25/153	$	550,000		554,481
Reed Elsevier Investments PLC, 5.625%, due 10/20/16	GBP	450,000		754,706
Royal Bank of Scotland Group PLC, 5.250%, due 05/15/13	EUR	1,000,000		1,388,127
Smiths Group PLC, 6.050%, due 05/15/143	$	400,000		431,651
Standard Chartered Bank PLC, 3.850%, due 04/27/153		1,400,000		1,441,392
Vodafone Group PLC, 5.750%, due 03/15/16		650,000		727,687
WPP PLC, 6.625%, due 05/12/16	EUR	300,000		451,723
Total United Kingdom corporate bonds				11,994,672
United States: 18.45%
Altria Group, Inc., 9.250%, due 08/06/19	$	300,000		391,512
American Honda Finance Corp., 3.875%, due 09/16/14	EUR	200,000		280,150
American International Group, Inc., 3.650%, due 01/15/14	$	750,000		762,807
Anadarko Petroleum Corp., 5.750%, due 06/15/14		1,000,000		1,070,436
AT&T, Inc., 4.850%, due 02/15/14		750,000		811,055
Avon Products, Inc., 5.625%, due 03/01/14		810,000		897,535
BAE Systems Holdings, Inc., 4.950%, due 06/01/143		550,000		589,651
Bank of America Corp., 4.900%, due 05/01/13		710,000		740,253
5.650%, due 05/01/18		650,000		664,152

	Face amount		Value
Cellco Partnership, 7.625%, due 12/19/11	EUR	500,000	$	706,368
8.500%, due 11/15/18	$	500,000		654,275
Cisco Systems, Inc., 4.950%, due 02/15/19		310,000		337,827
Citibank Credit Card Issuance Trust, 5.375%, due 04/11/11	EUR	240,000		323,072
Citigroup, Inc., 4.750%, due 05/31/171		400,000		486,593
5.625%, due 08/27/12	$	540,000		566,651
Comcast Corp., 6.300%, due 11/15/17		620,000		709,868
CSX Corp., 5.750%, due 03/15/13		610,000		665,104
DirecTV Financing Co., Inc., 7.625%, due 05/15/16		550,000		609,812
Enterprise Products Operating LLC, 3.700%, due 06/01/15		380,000		391,996
Series I, 5.000%, due 03/01/15		330,000		355,845
ERAC USA Finance Co., 2.750%, due 07/01/133		400,000		407,143
General Electric Capital Corp., 0.424%, due 12/20/131		240,000		233,532
Series A, 3.750%, due 11/14/14		610,000		630,569
6.750%, due 03/15/32		2,250,000		2,547,266
Goldman Sachs Group, Inc., 7.500%, due 02/15/19		1,300,000		1,515,788
Hewlett-Packard Co., 6.125%, due 03/01/14		400,000		452,969
JPMorgan Chase & Co., 3.400%, due 06/24/15		1,350,000		1,376,669
6.300%, due 04/23/19		1,200,000		1,365,906
Morgan Stanley, 5.950%, due 12/28/17		1,300,000		1,375,452
ONEOK Partners LP, 8.625%, due 03/01/19		550,000		686,196
Pfizer, Inc., 3.625%, due 06/03/13	EUR	250,000		346,450
Roche Holdings, Inc., 4.625%, due 03/04/13		450,000		635,019
SLM Corp., 1.300%, due 11/15/111		250,000		320,503
UST, Inc., 6.625%, due 07/15/12	$	1,375,000		1,475,161
Wells Fargo & Co., 5.250%, due 10/23/12		2,000,000		2,144,156
Total United States corporate bonds				27,527,741
Total corporate bonds (cost $65,770,033)				67,783,583

8

UBS Absolute Return Bond Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Face amount		Value
Bonds—(Continued)
Asset-backed securities: 2.24%
Cayman Islands: 0.17%
MBNA America European Structured Offerings, Series 7, 5.450%, due 04/19/11	EUR	190,000	$	256,231
United Kingdom: 0.87%
Chester Asset Receivables Dealings, Series 2004-1, Class A, 0.928%, due 04/15/161	GBP	150,000		225,624
Chester Asset Receivables Dealings 2003-B PLC, Series A, 4.650%, due 07/15/13		240,000		388,079
Chester Asset Receivables Dealings No. 12 PLC, Series A, 6.000%, due 01/18/11		120,000		187,301
Permanent Financing PLC, Series 6, Class 5A2, 0.905%, due 06/10/421,2,5,6	GBP	320,000		493,022
Total United Kingdom asset-backed securities				1,294,026
United States: 1.20%
Bank of America Corp., Series 2008-A5, Class A5, 1.460%, due 12/16/131	$	300,000		301,598
Series 2004-A1, 4.500%, due 01/17/14	EUR	270,000		374,078
Chase Issuance Trust, Series 2007-A16, Class A16, 0.602%, due 06/16/141	$	300,000		300,218
Series 2009-A3, Class A3, 2.400%, due 06/17/13		390,000		393,235
MBNA Credit Card Master Note Trust, Series 2002-A2, Class A, 5.600%, due 07/17/14	EUR	300,000		415,031
Total United States asset-backed securities				1,784,160
Total asset-backed securities (cost $2,828,278)				3,334,417
Collateralized debt obligations: 1.17%
Cayman Islands: 0.58%
Denali Capital CLO VII Ltd., Series 2007-1A, Class B2L, 4.538%, due 01/22/221,3,4,5	$	290,000		150,858

	Face amount		Value
FM Leveraged Capital Fund, Series 2006-2A, Class E, 4.034%, due 11/15/201,4	$	400,000	$	228,000
Galena CDO Ltd., Series II-AIRL, 1.162%, due 04/07/171,3,4,5		1,000,000		366,800
Gresham Street CDO Funding, Series 2003-1X, Class D, 3.536%, due 11/07/331,2,4,5		100,069		10,007
Trimaran CLO Ltd., Series 2007-1A, Class B2L, 3.702%, due 06/15/211,3,4,5		200,000		116,000
Total Cayman Islands collateralized debt obligations				871,665
Netherlands: 0.30%
Harbourmaster CLO Ltd., Series 7A, Class C, 12.000%, due 09/22/223,4,5		300,000		128,285
Highlander Euro CDO, Series 2006-2CA, Class E, due 12/14/223,4,5,7		250,000		143,652
Queen Street CLO, Series 2007-1A, Class F, 6.980%, due 08/15/243,4,5	EUR	350,000		168,374
Total Netherlands collateralized debt obligations				440,311
United States: 0.29%
Ajax Ltd., Series 2A, Class C, 2.765%, due 09/08/321,3,4,5	$	500,000		225,000
Axius Europe CLO SA, Series 2007-1A, Class D, 4.275%, due 11/15/231,3,4,5	EUR	350,000		210,467
Total United States collateralized debt obligations				435,467
Total collateralized debt obligations(cost $4,589,573)				1,747,443
Commercial mortgage-backed security: 0.21%
United States: 0.21%
GS Mortgage Securities Corp. II, Series 2007-GG10, Class A4, 5.807%, due 08/10/451 (cost $225,866)		300,000		313,623

9

UBS Absolute Return Bond Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Face amount		Value
Bonds—(Concluded)
Mortgage & agency debt securities: 17.12%
United States: 17.12%
Federal Home Loan Bank, 5.250%, due 06/18/14	$	4,100,000	$	4,653,734
Federal Home Loan Mortgage Corp.,8 4.750%, due 03/05/12		1,300,000		1,365,125
5.000%, due 02/16/17		3,900,000		4,391,041
Federal Home Loan Mortgage Corp. Gold Pools,8 #G04668, 5.000%, due 03/01/38		746,502		783,624
#G08307, 5.000%, due 11/01/38		1,100,631		1,155,129
Federal National Mortgage Association8 4.125%, due 04/15/14		2,950,000		3,217,338
5.000%, due 10/15/11		3,820,000		3,957,872
Federal National Mortgage Association Pools,8 #992260, 4.000%, due 01/01/39		2,846,942		2,834,975
#933765, 4.500%, due 04/01/38		3,104,663		3,189,743
Total mortgage & agency debt securities (cost $24,453,267)				25,548,581
US government obligation: 3.73%
U.S. Treasury Note, 1.375%, due 03/15/12 (cost $5,540,881)		5,500,000		5,568,321
Non-US government obligations: 17.75%
Canada: 1.26%
Quebec Province, 6.125%, due 01/22/11		1,880,000		1,886,041
Denmark: 0.85%
Government of Denmark, 1.875%, due 03/16/12		1,250,000		1,270,719
Germany: 9.78%
Bundesobligation, 4.000%, due 04/13/12	EUR	1,420,000		1,978,837

	Face amount		Value
Bundesrepublik Deutschland, Series 00, 5.250%, due 01/04/11	EUR	1,050,000	$	1,403,812
Series 01, 5.000%, due 07/04/11		2,200,000		3,004,919
Series 04 4.250%, due 07/04/14		800,000		1,171,229
Kreditanstalt fuer Wiederaufbau, 3.375%, due 01/16/12		2,800,000		3,831,720
5.550%, due 06/07/21	GBP	1,800,000		3,207,412
				14,597,929
Italy: 2.15%
Republic of Italy, 4.500%, due 01/21/15	$	1,565,000		1,607,992
4.750%, due 01/25/16		1,565,000		1,594,453
				3,202,445
Japan: 2.29%
Government of Japan, Series 27 2.500%, due 09/20/37	JPY	134,000,000		1,833,631
Japan Bank for International Cooperation, 5.250%, due 03/23/16	$	1,400,000		1,585,429
				3,419,060
Spain: 1.42%
Instituto de Credito Oficial, 3.000%, due 03/15/11		250,000		250,489
5.375%, due 07/02/12		1,800,000		1,874,394
				2,124,883
Total non-US government obligations (cost $26,114,691)				26,501,077
Supranational bonds: 4.40%
European Investment Bank, 2.500%, due 04/15/12	EUR	1,225,000		1,669,334
6.250%, due 04/15/14	GBP	1,270,000		2,236,548
Inter-American Development Bank, 3.250%, due 11/15/11	$	2,600,000		2,661,667
Total supranational bonds (cost $6,475,234)				6,567,549
Total bonds (cost $135,997,823)				137,364,594

10

UBS Absolute Return Bond Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Shares		Value
Short-term investment: 6.13%
Investment company: 6.13%
UBS Cash Management Prime Relationship Fund9 (cost $9,144,727)		9,144,727	$	9,144,727
Total investments: 98.18%(cost $145,142,550)				146,509,321
Cash and other assets, less liabilities: 1.82%				2,709,854
Net assets: 100.00%			$	149,219,175

Notes to portfolio of investments

Aggregate cost for federal income tax purposes was substantially the same as for book purposes; and net unrealized appreciation consisted of:

Gross unrealized appreciation	$	5,493,630
Gross unrealized depreciation		(4,126,859	)
Net unrealized appreciation of investments	$	1,366,771

¹  Variable or floating rate security. The interest rate shown is the current rate as of December 31, 2010 and changes periodically.

²  Security exempt from registration pursuant to Regulation S under the Securities Act of 1933. Regulation S applies to securities offerings that are made outside of the United States and do not involve direct selling efforts in the United States. At December 31, 2010, the value of these securities amounted to $4,518,791 or 3.03% of net assets.

³  Security exempt from registration pursuant to Rule 144A under 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 December 31, 2010, the value of these securities amounted to $11,356,005 or 7.61% of net assets.

⁴  Security is illiquid. At December 31, 2010, the value of these securities amounted to $1,747,443 or 1.17% of net assets.

11

UBS Absolute Return Bond Fund

Portfolio of investments

December 31, 2010 (unaudited)

⁵  These securities, which represent 1.35% of net assets as of December 31, 2010, are considered restricted. (See restricted securities table below for more information.)

Restricted securities	Acquisition date	Acquisition cost		Acquisition cost as a percentage of net assets			Value 12/31/10		12/31/10 Value as a percentage of net assets
Ajax Ltd., Series 2A, Class C, 2.765%, due 09/08/32	11/08/05	$	487,550		0.33	%	$	225,000		0.15	%
Axius Europe CLO SA, Series 2007-1A, Class D, 4.275%, due 11/15/23	09/28/07 - 11/01/09		466,689		0.31			210,467		0.14
Denali Capital CLO VII Ltd., Series 2007-1A, Class B2L, 4.538%, due 01/22/22	04/27/07		285,865		0.19			150,858		0.10
Galena CDO Ltd., Series II-AIRL, 1.162%, due 04/07/17	03/08/07		1,000,000		0.67			366,800		0.25
Gresham Street CDO Funding, Series 2003-1X, Class D, 3.536%, due 11/07/33	06/10/05 - 02/07/10		105,894		0.07			10,007		0.01
Harbourmaster CLO Ltd., Series 7A, Class C, 12.000%, due 09/22/22	10/31/06		363,746		0.25			128,285		0.09
Highlander Euro CDO, Series 2006-2CA, Class E, due 12/14/22	11/28/06		329,608		0.22			143,652		0.09
Permanent Financing PLC, Series 6, Class 5A2, 0.905%, due 06/10/42	11/19/10		315,456		0.21			493,022		0.33
Queen Street CLO, Series 2007-1A, Class F, 6.980%, due 08/15/24	05/18/07		463,444		0.31			168,374		0.11
Trimaran CLO Ltd., Series 2007-1A, Class B2L, 3.702%, due 06/15/21	03/09/07		198,806		0.13			116,000		0.08
		$	4,017,058		2.69	%	$	2,012,465		1.35	%

⁶  Step bond—Coupon rate increases in increments to maturity. Rate disclosed is as of December 31, 2010. Maturity date disclosed is the ultimate maturity date.

⁷  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.

⁸  On September 7, 2008, the Federal Housing Finance Agency placed the Federal Home Loan Mortgage Corporation and the Federal National Mortgage Association into conservatorship, and the US Treasury guaranteed the debt issued by those organizations.

12

UBS Absolute Return Bond Fund

Portfolio of investments

December 31, 2010 (unaudited)

⁹  The table below details the Fund's investments in a fund that is advised by the same advisor as the Fund. The advisor does not earn a management fee from UBS Cash Management Prime Relationship Fund.

Security description	Value 06/30/10		Purchases during the six months ended 12/31/10		Sales during the six months ended 12/31/10		Value 12/31/10		Income earned from affiliate for the six months ended 12/31/10
UBS Cash Management Prime Relationship Fund	$	5,509,864	$	25,314,744	$	21,679,881	$	9,144,727	$	7,336

CDO  Collateralized debt obligations

CLO  Collateralized loan obligations

GE  General Electric

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 December 31, 2010:

Counterparty	Contracts to deliver		In exchange for		Maturity date	Unrealized appreciation/ (depreciation)
HSBC Bank, PLC London	USD	7,120,424	SEK	48,800,000	01/24/11	$	130,494
JPMorgan Chase Bank	AUD	5,420,000	USD	5,323,660	01/24/11		(205,102	)
JPMorgan Chase Bank	CHF	5,120,000	USD	5,293,752	01/24/11		(183,356	)
JPMorgan Chase Bank	EUR	32,770,000	USD	43,242,571	01/24/11		(547,980	)
JPMorgan Chase Bank	JPY	124,900,000	USD	1,481,891	01/24/11		(56,838	)
JPMorgan Chase Bank	USD	5,380,003	CAD	5,415,000	01/24/11		64,214
JPMorgan Chase Bank	USD	7,200,004	NOK	43,050,000	01/24/11		170,418
Morgan Stanley & Co. Inc.	GBP	14,770,000	USD	23,019,148	01/24/11		(5,805	)
State Street Bank & Trust	CAD	5,462,926	AUD	5,420,000	01/24/11		36,359
Net unrealized depreciation on forward foreign currency contracts						$	(597,596	)

Currency type abbreviations:

AUD  Australian Dollar

CAD  Canadian Dollar

CHF   Swiss Franc

EUR   Euro

GBP   Great Britain Pound

JPY   Japanese Yen

NOK  Norwegian Krone

SEK  Swedish Krona

USD  United States Dollar

13

UBS Absolute Return Bond Fund

Portfolio of investments

December 31, 2010 (unaudited)

Futures contracts

UBS Absolute Return Bond Fund had the following open futures contracts as of December 31, 2010:

	Expiration date	Cost/ (proceeds)			Value			Unrealized appreciation/ (depreciation)
US Treasury futures buy contracts:
US Long Bond, 37 contracts (USD)	March 2011	$	4,650,496		$	4,518,625		$	(131,871	)
US Treasury futures sell contracts:
2 Year US Treasury Notes, 135 contracts (USD)	March 2011		(29,560,575	)		(29,552,344	)		8,231
5 Year US Treasury Notes, 358 contracts (USD)	March 2011		(42,760,677	)		(42,143,313	)		617,364
10 Year US Treasury Notes, 141 contracts (USD)	March 2011		(17,415,476	)		(16,981,687	)		433,789
Interest rate futures buy contracts:
Euro-Buxl, 16 contracts (EUR)	March 2011		2,339,236			2,306,988			(32,248	)
Interest rate futures sell contracts:
Euro-Bobl, 132 contracts (EUR)	March 2011		(21,031,209	)		(20,951,794	)		79,415
Euro-Bund, 27 contracts (EUR)	March 2011		(4,548,003	)		(4,521,197	)		26,806
Euro-Schatz, 41 contracts (EUR)	March 2011		(5,977,802	)		(5,972,199	)		5,603
Long Gilt, 8 contracts (GBP)	March 2011		(1,491,259	)		(1,490,375	)		884
10 Year Japanese Government Bond, 32 contracts (JPY)	March 2011		(5,541,025	)		(5,541,963	)		(938	)
Net unrealized appreciation on futures contracts								$	1,007,035

Currency type abbreviations:

EUR  Euro

GBP  Great Britain Pound

JPY  Japanese Yen

USD  United States Dollar

Swap agreements
Credit default swaps on credit indices—buy protection¹

Counterparty	Notional amount		Termination date	Payments made by the Fund			Payments received by the Fund		Upfront payments (made)/ received		Value			Unrealized depreciation
Goldman Sachs International	EUR	2,400,000	12/20/13		2.2000	%2		—3		—	$	(111,901	)	$	(111,901	)

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 a succession event with respect to the iTraxx Europe HiVol Series 10 Index.

14

UBS Absolute Return Bond Fund

Portfolio of investments

December 31, 2010 (unaudited)

Credit default swaps on corporate issues—buy protection¹

Counterparty	Notional amount		Termination date	Payments made by the Fund2			Payments received by the Fund		Upfront payments (made)/ received			Value			Unrealized appreciation/ (depreciation)
Barclays Bank PLC	EUR	600,000	12/20/15		1.0000	%		—3	$	(14,903	)	$	30,810		$	15,907
Barclays Bank PLC	USD	450,000	12/20/15		1.0000			—4		11,942			(12,229	)		(287	)
Deutsche Bank AG	USD	250,000	12/20/15		1.0000			—4		7,310			(6,794	)		516
Goldman Sachs International	EUR	1,200,000	12/20/15		1.0000			—5		(30,229	)		5,485			(24,744	)
JPMorgan Chase Bank	USD	1,500,000	12/20/15		1.0000			—6		45,168			(48,696	)		(3,528	)
Merrill Lynch International	EUR	500,000	12/20/15		1.0000			—3		(13,077	)		25,675			12,598
Merrill Lynch International	EUR	500,000	12/20/15		1.0000			—7		(2,922	)		12,497			9,575
									$	3,289		$	6,748		$	10,037

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 Bank AG 5.125% bond, due 01/31/13.

⁴  Payment from the counterparty will be received upon the occurrence of bankruptcy and/or restructuring event with respect to the Duke Energy 6.100% bond, due 06/01/37.

⁵  Payment from the counterparty will be received upon the occurrence of bankruptcy and/or restructuring event with respect to the Saint Gobain Neder NV 5.000% bond, due 04/25/14.

⁶  Payment from the counterparty will be received upon the occurrence of bankruptcy and/or restructuring event with respect to the Lockheed Martin Corp. 7.650% bond, due 01/05/16.

⁷  Payment from the counterparty will be received upon the occurrence of bankruptcy and/or restructuring event with respect to the Commerzbank AG 5.500% bond, due 10/25/11.

Credit default swaps on credit indices—sell protection¹

Counterparty	Notional amount		Termination date	Payments made by the Fund		Payments received by the Fund			Upfront payments received		Value		Unrealized appreciation		Credit spread2
JPMorgan Chase Bank	USD	750,000	12/20/15		—3		1.0000	%4	$	2,624	$	5,530	$	8,154		0.8507	%

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 or underlying securities comprising the referenced index.

²  Credit spreads, 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 or other credit event occurring 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 or 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 CDX.NA.IG. Series 15 Index.

⁴  Payments received are based on the notional amount.

15

UBS Absolute Return Bond Fund

Portfolio of investments

December 31, 2010 (unaudited)

Credit default swaps on corporate and sovereign issues—sell protection¹

Counterparty	Notional amount		Termination date	Payments made by the Fund		Payments received by the Fund2			Upfront payments (made)/ received			Value			Unrealized appreciation/ (depreciation)			Credit spread3
Barclays Bank PLC	EUR	600,000	12/20/15		—4		1.0000	%	$	25,854		$	(53,613	)	$	(27,759	)		2.5286	%
Barclays Bank PLC	USD	450,000	12/20/15		—5		1.0000			7,022			(2,220	)		4,802			1.1458
Deutsche Bank AG	USD	250,000	12/20/15		—5		1.0000			3,288			(1,233	)		2,055			1.1458
Goldman Sachs International	EUR	1,200,000	12/20/15		—6		1.0000			61,934			(21,834	)		40,100			1.1163
Goldman Sachs International	USD	800,000	06/20/18		—7		0.5140			—			(135,610	)		(135,610	)		3.4756
Goldman Sachs International	USD	1,600,000	12/20/18		—8		1.1425			—			(45,862	)		(45,862	)		1.5318
Goldman Sachs International	USD	3,000,000	09/20/19		—9		1.0000			(19,160	)		(18,606	)		(37,766	)		1.1075
JPMorgan Chase Bank	USD	1,500,000	03/20/20		—10		1.0000			(2,579	)		(148,602	)		(151,181	)		2.4119
Merrill Lynch International	EUR	500,000	12/20/15		—4		1.0000			22,191			(44,678	)		(22,487	)		2.5286
Merrill Lynch International	EUR	500,000	12/20/15		—11		1.0000			10,602			(14,975	)		(4,373	)		1.5298
									$	109,152		$	(487,233	)	$	(378,081	)

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  Payments received are based on the notional amount.

³  Credit spreads, 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 or other credit event occurring 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 or 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.

⁴  Payment to the counterparty will be made upon the occurrence of bankruptcy and/or restructuring event with respect to the ING Bank NV 5.250% bond, due 01/04/13.

⁵  Payment to the counterparty will be made upon the occurrence of bankruptcy and/or restructuring event with respect to the Southern California Edison 6.650% bond, due 04/01/29.

⁶  Payment to the counterparty will be made upon the occurrence of bankruptcy and/or restructuring event with respect to the Holcim Finance Luxembourg SA 4.375% bond, due 12/09/14.

⁷  Payment to the counterparty will be made upon the occurrence of bankruptcy and/or restructuring event with respect to the Kingdom of Spain 5.500% bond, due 07/30/17.

⁸  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.

⁹  Payment to the counterparty will be made upon the occurrence of bankruptcy and/or restructuring event with respect to the Republic of Austria 5.250% bond, due 01/04/11.

¹⁰  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.

¹¹  Payment to the counterparty will be made upon the occurrence of bankruptcy and/or restructuring event with respect to the Intesa Sanpaolo SpA 4.750% bond, due 06/15/17.

Currency type abbreviations:

EUR  Euro

USD  United States Dollar

16

UBS Absolute Return Bond Fund

Portfolio of investments

December 31, 2010 (unaudited)

Concluded

The following is a summary of the inputs used as of December 31, 2010 in valuing the Fund's investments:

Measurements at 12/31/10
Description	Unadjusted quoted prices in active markets for identical investments (Level 1)		Other significant observable inputs (Level 2)			Unobservable inputs (Level 3)		Total
Corporate bonds	$	—	$	67,783,583		$	—	$	67,783,583
Asset-backed securities		—		3,334,417			—		3,334,417
Collateralized debt obligations		—		—			1,747,443		1,747,443
Commercial mortgage-backed security		—		313,623			—		313,623
Mortgage & agency debt securities		—		25,548,581			—		25,548,581
US government obligation		—		5,568,321			—		5,568,321
Non-US government obligations		—		26,501,077			—		26,501,077
Supranational bonds		—		6,567,549			—		6,567,549
Short-term investment		—		9,144,727			—		9,144,727
Other financial instruments1		1,007,035		(1,184,452	)		—		(177,417	)
Total	$	1,007,035	$	143,577,426		$	1,747,443	$	146,331,904

¹  Other financial instruments include futures contracts, swap agreements 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	$	1,269,921		$	1,269,921
Total gains or losses (realized/unrealized), and premiums/discounts included in earnings		1,575,020			1,575,020
Purchases, sales, issuances, and settlements (net)		(1,097,498	)		(1,097,498	)
Transfers in and/or out of Level 3		—			—
Ending balance		1,747,443			1,747,443
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 12/31/10.		1,578,920			1,578,920

See accompanying notes to financial statements.
17

UBS Core Plus Bond Fund

Portfolio performance

For the six months ended December 31, 2010, Class A shares of UBS Core Plus Bond Fund (the "Fund") (formerly UBS U.S. Bond Fund) returned 2.48% (Class A shares declined 2.13% after the deduction of the maximum sales charge), while Class Y shares returned 2.49%. The Fund's benchmark, the Barclays Capital US Aggregate Index (the "Index"), returned 1.15% 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 20; 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.)

The Fund posted a positive return and outperformed the Index during the reporting period, largely due to sector allocation and security selection.

During the period, certain derivative instruments, namely bond and interest rate futures, were used to facilitate specific duration and yield curve strategies. Credit default swaps were used to implement specific credit-related investment strategies. The results of derivatives use during the period were within our expectations.

Portfolio performance summary¹

What worked

•  The Fund's overweight to the spread sectors (non-US Treasuries) was beneficial during the reporting period.

  – The largest contributor to performance was the Fund's exposure to commercial mortgage-backed securities (CMBS). While CMBS spreads had narrowed significantly during the first six months of 2010, we continued to feel that they were attractively valued given signs that the overall US economy was gaining some momentum and would avoid a double-dip recession. Our CMBS overweight during the period was rewarded as their spreads continued to narrow, in part due to overall robust demand from investors seeking to generate incremental yield in the low interest rate environment. (Spread measures the difference between the yields paid on a security versus those paid on US Treasuries of comparable duration.)

  – An overweight to certain asset-backed securities added value during the reporting period. As was the case with CMBS, we continued to find value in the asset-backed sector and believed that spreads on these securities would narrow further during the reporting period.

  – The Fund's overweight to investment grade corporate bonds enhanced results. We maintained a meaningful exposure in the sector given our expectations for continued economic growth, rising corporate profits, declining default rates and solid investor demand.

  – Out-of-index exposures to high yield bonds and emerging markets debt boosted the Fund's returns. Overall, these riskier asset classes generated strong returns during the period as their spreads narrowed.

¹  For a detailed commentary on the market environment in general during the reporting period, see page 2.

18

UBS Core Plus Bond Fund

•  Security selection was a positive for performance.

  – Notably, the Fund's selection of CMBS was rewarded. Within the sector, we emphasized AAA-rated securities at the top of the capital structure (that is, senior debt).² This portion of the CMBS sector generated the strongest relative results and was least impacted by the potential increase in delinquencies within commercial real estate.

  – Asset-backed security selection added value as well. In particular, the Fund's BBB-rated credit card receivables generated solid results during the review period.³

  – Within the corporate bond sector, the Fund's industrial holdings contributed to results. The spreads of issuers in this sector narrowed as the economy continued to expand, corporate profits generally exceeded expectations and investor demand was typically robust.

•  The Fund's duration positioning modestly contributed to performance. We tactically adjusted the Fund's duration during the reporting period. In particular, we moved from a neutral position versus the Index to a short position, given our belief that yields were unsustainably low. This proved to be the case, as Treasury yields moved sharply higher in November and December 2010. (Duration measures the price sensitivity of a portfolio to interest rate changes.)

What didn't work

•  Certain mortgage-backed securities held by the Fund detracted from performance. During the reporting period, security selection in the mortgage-backed securities sector was a modest drag on the Fund's results.

²  AAA rating 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.

³  Bonds rated BBB are regarded as having an adequate capacity to pay principal and interest.

This letter is intended to assist shareholders in understanding how the Fund performed during the six months ended December 31, 2010. The views and opinions in the letter were current as of February 15, 2011. They are not guarantees of future 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.

19

UBS Core Plus Bond Fund

Average annual total returns for periods ended 12/31/10 (unaudited)

	6 months			1 year			5 years			10 years			Inception1
Before deducting maximum sales charge
Class A2		2.48	%		7.86	%		1.58	%		3.42	%		4.27	%
Class B3		2.08			7.02			0.81			N/A			2.10 6
Class C4		2.23			7.35			1.04			N/A			2.07
Class Y5		2.49			8.01			1.79			3.66			4.75
After deducting maximum sales charge
Class A2		(2.13	)%		2.96	%		0.66	%		2.94	%		3.91	%
Class B3		(2.87	)		2.02			0.49			N/A			2.10 6
Class C4		1.49			6.60			1.04			N/A			2.07
Barclays Capital US Aggregate Index7		1.15	%		6.54	%		5.80	%		5.84	%		6.26	%

The annualized gross and net expense ratios, respectively, for each class of shares as in the October 28, 2010 prospectuses were as follows: Class A—1.41% and 0.66%; Class B—2.24% and 1.41%; Class C—1.88% and 1.16%; Class Y—1.11% and 0.41%. 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 UBS Global Asset Management (Americas) Inc., the Fund's investment advisor ("UBS Global AM (Americas)" or 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, interest, taxes, brokerage commissions and extraordinary expenses) to the extent necessary so that the Fund's ordinary operating expenses (excluding expenses incurred through investment in other investment companies, interest, taxes, brokerage commissions and extraordinary expenses), through the 12-month period ending October 27, 2011, do not exceed 0.64% for Class A shares, 1.39% for Class B shares, 1.14% for Class C shares and 0.39% 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 Core Plus Bond Fund (formerly, 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. Prior to September 30, 2003, Class C shares were subject to a maximum front-end sales charge of 1.00%; this front-end sales charge is not reflected in the average annual total returns presented for the Class C shares shown above.

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  Assumes the conversion of Class B to Class A shares at the end of the sixth year.

⁷  The Barclays Capital US Aggregate Index is an unmanaged broad based index designed to measure the US dollar-denominated, investment-grade, fixed rate taxable bond market. 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 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. Total returns for periods of less than one year have not been annualized. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://www.ubs.com.

20

UBS Core Plus Bond Fund

Top ten fixed income holdings (unaudited)¹

As of December 31, 2010

	Percentage of net assets
US Treasury Notes, 0.500%, due 11/30/12		7.4	%
Federal National Mortgage Association Pools, 5.000%, TBA		6.4
US Treasury Notes, 0.375%, due 10/31/12		4.1
Federal National Mortgage Association Pools, 4.000%, TBA		3.4
Federal National Mortgage Association Pools, 4.500%, TBA		2.9
Federal Home Loan Mortgage Corp., 0.625%, due 12/28/12		2.9
Federal National Mortgage Association, 1.750%, due 05/07/13		2.5
Federal National Mortgage Association, 1.625%, due 10/26/15		2.4
Federal Home Loan Mortgage Corp. Gold Pools, #A90675, 4.500%, due 01/01/40		1.8
US Treasury Notes, 0.875%, due 01/31/12		1.6
Total		35.4	%

¹  Figures represent the direct investments of UBS Core Plus Bond Fund. Figures would be different if a breakdown of the underlying investment companies was included.

21

UBS Core Plus Bond Fund

Industry diversification (unaudited)²

As a percentage of net assets as of December 31, 2010

Bonds
Corporate bonds
Aerospace & defense	0.18	%
Beverages	0.23
Biotechnology	0.32
Building products	0.27
Capital markets	1.53
Chemicals	0.30
Commercial banks	1.74
Commercial services & supplies	0.51
Communications equipment	0.15
Consumer finance	0.65
Diversified financial services	3.27
Diversified media	0.30
Diversified telecommunication services	0.31
Electric utilities	1.54
Energy equipment & services	0.33
Food & staples retailing	1.03
Food products	0.59
Health care providers & services	0.20
Insurance	1.89
Leisure equipment & products	0.12
Media	1.75
Metals & mining	0.53
Multi-utilities	0.10
Oil, gas & consumable fuels	2.88
Paper & forest products	0.18
Pharmaceuticals	0.74
Real estate investment trust (REIT)	0.17
Road & rail	0.25
Software	0.14
Tobacco	0.61
Wireless telecommunication services	1.39
Total corporate bonds	24.20	%
Asset-backed securities	2.32
Commercial mortgage-backed securities	8.67
Mortgage & agency debt securities	42.78
Municipal bonds	1.14
US government obligations	15.35
Supranational bond	0.25
Total bonds	94.71	%
Investment companies
UBS High Yield Relationship Fund	2.96	%
UBS Opportunistic Emerging Markets Debt Relationship Fund	1.05
Total investment companies	4.01	%
Short-term investment	18.32
Investment of cash collateral from securities loaned	0.76
Total investments	117.80	%
Liabilities, in excess of cash and other assets	(17.80	)
Net assets	100.00	%

²  Figures represent the industry breakdown of direct investments of UBS Core Plus Bond Fund. Figures would be different if a breakdown of the underlying investment companies' industry diversification was included.

22

UBS Core Plus Bond Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Face amount		Value
Bonds: 94.71%
Corporate bonds: 24.20%
Australia: 0.15%
Rio Tinto Finance USA Ltd., 9.000%, due 05/01/19	$	50,000	$	67,152
Canada: 0.46%
Canadian Natural Resources Ltd., 5.850%, due 02/01/35		65,000		67,561
Cenovus Energy, Inc., 4.500%, due 09/15/14		95,000		101,797
EnCana Corp., 6.500%, due 05/15/191		30,000		35,558
Total Canada corporate bonds				204,916
Cayman Islands: 0.55%
Transocean, Inc., 6.800%, due 03/15/38		145,000		148,605
Vale Overseas Ltd., 4.625%, due 09/15/201		100,000		99,008
Total Cayman Islands corporate bonds				247,613
France: 0.36%
EDF SA, 4.600%, due 01/27/202		50,000		51,672
France Telecom SA, 2.125%, due 09/16/15		115,000		111,946
Total France corporate bonds				163,618
Isle of Man: 0.16%
AngloGold Ashanti Holdings PLC, 5.375%, due 04/15/20		70,000		72,800
Luxembourg: 0.61%
Covidien International Finance SA, 4.200%, due 06/15/20		90,000		89,977
Telecom Italia Capital SA, 4.950%, due 09/30/14		180,000		184,418
Total Luxembourg corporate bonds				274,395
Mexico: 0.23%
America Movil SAB de CV, 5.000%, due 03/30/20		100,000		103,945
Netherlands: 0.26%
Shell International Finance BV, 3.100%, due 06/28/15		115,000		118,099
Netherlands Antilles: 0.22%
Teva Pharmaceutical Finance II BV, 3.000%, due 06/15/15		95,000		96,660

	Face amount		Value
United Kingdom: 0.54%
AstraZeneca PLC, 6.450%, due 09/15/37	$	40,000	$	47,488
BP Capital Markets PLC, 3.875%, due 03/10/15		120,000		123,779
Royal Bank of Scotland PLC, 5.625%, due 08/24/20		70,000		69,594
Total United Kingdom corporate bonds				240,861
United States: 20.66%
Allied Waste North America, Inc., 6.875%, due 06/01/17		85,000		93,500
Altria Group, Inc., 9.950%, due 11/10/38		55,000		77,502
American International Group, Inc., 6.400%, due 12/15/20		60,000		62,953
Amgen, Inc., 3.450%, due 10/01/20		100,000		95,284
Anadarko Petroleum Corp., 5.950%, due 09/15/16		75,000		80,572
Anheuser-Busch InBev Worldwide, Inc., 4.125%, due 01/15/15		100,000		105,322
Apache Corp., 5.250%, due 02/01/42		115,000		114,280
AvalonBay Communities, Inc., 3.950%, due 01/15/21		80,000		76,319
Bank of America Corp., 5.625%, due 07/01/20		150,000		152,924
5.875%, due 01/05/21		45,000		46,557
6.500%, due 08/01/16		130,000		141,062
Bristol-Myers Squibb Co., 5.875%, due 11/15/36		40,000		44,484
Browning-Ferris Industries, Inc., 7.400%, due 09/15/35		35,000		41,413
Burlington Northern Santa Fe LLC, 5.050%, due 03/01/41		45,000		41,845
6.150%, due 05/01/37		65,000		69,886
Capital One Financial Corp., 7.375%, due 05/23/14		55,000		62,586
Cellco Partnership, 8.500%, due 11/15/18		85,000		111,227
CenterPoint Energy Resources Corp., 6.000%, due 05/15/18		115,000		126,813
Cisco Systems, Inc., 5.900%, due 02/15/39		60,000		66,450
Citigroup, Inc., 5.375%, due 08/09/20		10,000		10,390
6.125%, due 05/15/18		285,000		312,225
8.125%, due 07/15/39		60,000		76,328
Comcast Corp., 6.300%, due 11/15/17		160,000		183,192

23

UBS Core Plus Bond Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Face amount		Value
Bonds—(Continued)
Corporate bonds—(Continued)
United States—(Continued)
ConocoPhillips, 6.500%, due 02/01/39	$	35,000	$	41,619
CVS Caremark Corp., 6.125%, due 09/15/39		160,000		170,953
CVS Pass-Through Trust, 6.036%, due 12/10/28		67,564		69,293
DirecTV Financing Co., Inc., 6.000%, due 08/15/40		70,000		70,275
7.625%, due 05/15/16		105,000		116,419
Dominion Resources, Inc., 5.200%, due 08/15/19		85,000		92,024
Dow Chemical Co., 4.250%, due 11/15/20		70,000		67,053
Duke Energy Carolinas LLC, 5.100%, due 04/15/18		55,000		60,411
ERAC USA Finance Co., 2.750%, due 07/01/132		25,000		25,447
7.000%, due 10/15/372		85,000		91,530
Express Scripts, Inc., 6.250%, due 06/15/14		65,000		72,668
FGI Operating Co., Inc., 10.250%, due 08/01/15		75,000		78,750
FirstEnergy Solutions Corp., 4.800%, due 02/15/15		165,000		173,264
Ford Motor Credit Co. LLC, 7.800%, due 06/01/12		215,000		228,572
General Electric Capital Corp., 2.250%, due 11/09/15		40,000		38,454
6.000%, due 06/15/12		40,000		42,760
Series A, 6.000%, due 08/07/19		230,000		255,896
6.750%, due 03/15/32		260,000		294,351
Georgia-Pacific LLC, 5.400%, due 11/01/202		80,000		79,094
GlaxoSmithKline Capital, Inc., 5.650%, due 05/15/18		60,000		68,606
Goldman Sachs Group, Inc., 6.150%, due 04/01/18		260,000		286,310
7.500%, due 02/15/19		20,000		23,320
Hasbro, Inc., 6.350%, due 03/15/40		55,000		55,654
International Lease Finance Corp., 7.125%, due 09/01/182		80,000		85,000
Jersey Central Power & Light Co., 7.350%, due 02/01/19		60,000		71,005
JP Morgan Chase Capital XXII, Series V, 6.450%, due 02/02/37		225,000		224,122
JPMorgan Chase & Co., 4.250%, due 10/15/20		185,000		180,680
4.400%, due 07/22/20		145,000		142,716

	Face amount		Value
Kinder Morgan Energy Partners LP, 5.800%, due 03/15/35	$	45,000	$	42,863
Kraft Foods, Inc., 6.500%, due 02/09/40		135,000		151,285
Life Technologies Corp., 6.000%, due 03/01/20		45,000		48,201
Massachusetts Mutual Life Insurance Co., 8.875%, due 06/01/392		50,000		66,921
Merrill Lynch & Co., Inc., 6.875%, due 04/25/18		75,000		82,077
MetLife, Inc., 6.400%, due 12/15/36		150,000		141,000
MidAmerican Energy Holding Co., 5.950%, due 05/15/37		40,000		42,193
Morgan Stanley, 5.500%, due 01/26/20		40,000		40,321
Series F, 5.625%, due 09/23/19		100,000		101,968
6.625%, due 04/01/18		200,000		216,954
Mosaic Co., 7.375%, due 12/01/142		65,000		67,283
Motiva Enterprises LLC, 5.750%, due 01/15/202		45,000		50,477
Nationwide Mutual Insurance Co., 9.375%, due 08/15/392		95,000		110,183
NBC Universal, Inc., 5.950%, due 04/01/412		85,000		84,991
News America, Inc., 6.200%, due 12/15/34		35,000		36,749
7.750%, due 12/01/45		60,000		71,309
NuStar Logistics LP, 7.650%, due 04/15/18		100,000		114,597
Oncor Electric Delivery Co. LLC, 6.800%, due 09/01/18		50,000		58,529
ONEOK, Inc., 6.000%, due 06/15/35		60,000		58,123
Oracle Corp., 6.125%, due 07/08/39		55,000		61,721
Owens Corning, 6.500%, due 12/01/16		115,000		121,799
Pacific Gas & Electric Co., 6.050%, due 03/01/34		30,000		32,847
Pacific Life Insurance Co., 9.250%, due 06/15/392		100,000		129,953
Philip Morris International, Inc., 5.650%, due 05/16/18		60,000		67,645
6.375%, due 05/16/38		45,000		52,231
Principal Financial Group, Inc., 8.875%, due 05/15/19		105,000		132,099
Prudential Financial, Inc., 4.500%, due 11/15/20		110,000		107,574
Series C, 5.400%, due 06/13/35		105,000		99,808

24

UBS Core Plus Bond Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Face amount		Value
Bonds—(Continued)
Corporate bonds—(Concluded)
United States—(Concluded)
PSEG Power LLC, 8.625%, due 04/15/31	$	35,000	$	44,951
Qwest Corp., 7.625%, due 06/15/15		125,000		140,938
Reynolds American, Inc., 7.625%, due 06/01/16		65,000		75,545
Sempra Energy, 9.800%, due 02/15/19		35,000		47,053
South Carolina Electric & Gas Co., 6.050%, due 01/15/38		35,000		37,790
Southern Natural Gas Co., 8.000%, due 03/01/32		130,000		148,933
Time Warner Cable, Inc., 6.550%, due 05/01/37		65,000		69,595
6.750%, due 07/01/18		100,000		116,568
Time Warner, Inc., 6.100%, due 07/15/40		35,000		36,725
Verizon Communications, Inc., 6.100%, due 04/15/18		100,000		113,592
Virginia Electric & Power Co., 6.350%, due 11/30/37		30,000		34,340
Wal-Mart Stores, Inc., 3.625%, due 07/08/20		230,000		223,832
Waste Management, Inc., 4.750%, due 06/30/20		90,000		92,280
Williams Partners LP, 4.125%, due 11/15/20		20,000		18,944
6.300%, due 04/15/40		50,000		52,044
WM Wrigley Jr. Co., 3.700%, due 06/30/142		110,000		113,306
WMG Acquisition Corp., 9.500%, due 06/15/16		125,000		134,063
Total United States corporate bonds				9,291,560
Total corporate bonds (cost $10,429,001)				10,881,619
Asset-backed securities: 2.32%
United States: 2.32%
Ameriquest Mortgage Securities, Inc., Series 2005-R6, Class A2, 0.461%, due 08/25/353		70,998		68,684
Citibank Credit Card Issuance Trust, Series 2005-C2, Class C2, 0.731%, due 03/24/173		350,000		328,500
Series 2003-C4, Class C4, 5.000%, due 06/10/15		250,000		262,852

	Face amount		Value
MBNA Credit Card Master Note Trust, Series 2004-C2, Class C2, 1.160%, due 11/15/163	$	350,000	$	338,811
Renaissance Home Equity Loan Trust, Series 2006-4, Class AF1, 5.545%, due 01/25/37		43,629		42,979
Total asset-backed securities (cost $1,008,353)				1,041,826
Commercial mortgage-backed securities: 8.67%
United States: 8.67%
Banc of America Commercial Mortgage, Inc., Series 2007-2, Class AM, 5.699%, due 04/10/493		150,000		143,904
Series 2007-4, Class A4, 5.742%, due 02/10/513		300,000		319,555
Citigroup Commercial Mortgage Trust, Series 2007-C6, Class AM, 5.698%, due 12/10/493		370,000		367,080
Commercial Mortgage Pass-Through Certificates, Series 2006-C8, Class A4, 5.306%, due 12/10/46		200,000		208,597
FDIC Structured Sale Guaranteed Notes, Series 2010-C1, Class A, 2.980%, due 12/06/202,4		400,000		401,108
GE Capital Commercial Mortgage Corp., Series 2007-C1, Class A4, 5.543%, due 12/10/49		250,000		257,401
Greenwich Capital Commercial Funding Corp., Series 2007-GG9, Class AM, 5.475%, due 03/10/39		275,000		274,743
Series 2007-GG11, Class A4, 5.736%, due 12/10/49		275,000		290,579
GS Mortgage Securities Corp. II, Series 2007-GG10, Class A4, 5.807%, due 08/10/451,3		250,000		261,353
JP Morgan Chase Commercial Mortgage Securities Corp., Series 2006-CB17, Class AM, 5.464%, due 12/12/43		150,000		147,387
Series 2006-LDP7, Class AM, 5.872%, due 04/15/45		250,000		259,251
Series 2007-LD12, Class A4, 5.882%, due 02/15/513		325,000		344,095
Morgan Stanley Re-REMIC Trust, Series 2009-GG10, Class A4B, 5.807%, due 08/12/452,3		375,000		372,634

25

UBS Core Plus Bond Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Face amount		Value
Bonds—(Continued)
Commercial mortgage-backed securities—(Concluded)
United States—(Concluded)
TrizecHahn Office Properties, Series 2001-TZHA, Class B4,  6.718%, due 05/15/162	$	250,000	$	253,404
Total commercial  mortgage-backed securities (cost $3,595,824)				3,901,091
Mortgage & agency debt securities: 42.78%
United States: 42.78%
Federal Home Loan Mortgage Corp.5 0.625%, due 12/28/12		1,280,000		1,277,669
Federal Home Loan Mortgage Corp. Gold Pools5 4.000%, TBA		550,000		545,961
#A90660, 4.500%, due 01/01/40		112,840		115,738
#A90675, 4.500%, due 01/01/40		775,208		795,120
#G05249, 5.000%, due 01/01/39		454,335		476,832
#G04567, 5.500%, due 07/01/38		214,651		228,948
#G05267, 5.500%, due 12/01/38		239,453		255,401
#C63008, 6.000%, due 01/01/32		259,798		285,515
#G06019, 6.000%, due 10/01/36		283,390		310,115
#G01717, 6.500%, due 11/01/29		152,944		171,973
Federal National Mortgage Association,5 1.625%, due 10/26/15		1,120,000		1,091,640
1.750%, due 05/07/13		1,115,000		1,138,800
Federal National Mortgage Association Pools,5 3.500%, TBA		450,000		453,094
4.000%, TBA		1,550,000		1,541,766
4.500%, TBA		1,275,000		1,308,668
5.000%, TBA		2,725,000		2,864,656
5.500%, TBA		150,000		160,477
#935520, 4.500%, due 08/01/39		607,170		623,904
#890209, 5.000%, due 05/01/40		491,975		517,570
#AD9114, 5.000%, due 07/01/40		537,565		566,877
#576764, 5.500%, due 09/01/24		133,250		143,043

	Face amount		Value
#688066, 5.500%, due 03/01/33	$	271,632	$	294,398
#688314, 5.500%, due 03/01/33		318,881		345,604
#802481, 5.500%, due 11/01/34		488,193		526,070
#962129, 5.500%, due 03/01/38		382,565		409,557
#995018, 5.500%, due 06/01/38		380,052		407,519
#408267, 6.000%, due 03/01/28		28,251		31,627
#323715, 6.000%, due 05/01/29		27,655		30,966
#522564, 6.000%, due 07/01/29		96,026		105,783
#676733, 6.000%, due 01/01/33		205,870		228,977
#708631, 6.000%, due 06/01/33		49,989		55,942
#AE0405, 6.000%, due 08/01/37		377,508		414,825
#831730, 6.500%, due 09/01/36		312,524		348,477
#894630, 6.500%, due 11/01/36		239,672		267,243
#253824, 7.000%, due 03/01/31		10,201		11,566
First Horizon Asset Securities, Inc., Series 2004-FL1, Class 1A1, 0.531%, due 02/25/353		49,321		39,345
Government National Mortgage Association Pools, #701813, 4.500%, due 04/15/39		630,138		655,077
#G2 2687, 6.000%, due 12/20/28		38,016		41,895
#G2 2794, 6.000%, due 08/20/29		119,356		131,594
WaMu Mortgage Pass-Through Certificates, Series 2007-HY1, Class 3B2, 5.752%, due 02/25/373		1,097,598		17,880
Total mortgage & agency debt securities (cost $19,150,580)				19,238,112
Municipal bonds: 1.14%
Chicago Transit Authority, Series 2008-A, 6.899%, due 12/01/40		60,000		60,055

26

UBS Core Plus Bond Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Face amount		Value
Bonds—(Concluded)
Municipal bonds—(Concluded)
Illinois State Taxable Pension, Series 2003, 5.100%, due 06/01/33	$	115,000	$	86,537
Los Angeles Unified School District, Series 2010, 6.758%, due 07/01/34		110,000		115,027
New Jersey State Turnpike Authority Revenue Bonds, Class F, 7.414%, due 01/01/40		30,000		33,095
New York State Urban Development Corp. Revenue Bonds, 5.770%, due 03/15/39		55,000		54,751
State of California, GO, 6.650%, due 03/01/22		30,000		31,517
7.300%, due 10/01/39		130,000		131,866
Total municipal bonds (cost $530,527)				512,848
US government obligations: 15.35%
US Treasury Notes, 0.375%, due 10/31/12		1,855,000		1,849,348
0.500%, due 11/30/121		3,335,000		3,330,701
0.875%, due 01/31/121		700,000		703,910
1.250%, due 09/30/15		185,000		179,493
1.375%, due 11/30/151		250,000		242,949
2.625%, due 11/15/201		635,000		598,984
Total US government obligations (cost $6,916,083)				6,905,385

	Face amount		Value
Supranational bond: 0.25%
European Investment Bank, 1.250%, due 09/17/13 (cost $109,624)	$	110,000	$	110,102
Total bonds (cost $41,739,992)				42,590,983
Investment companies: 4.01%
UBS High Yield Relationship Fund*6		50,205		1,331,369
UBS Opportunistic Emerging Markets Debt Relationship Fund*6		28,534		473,873
Total investment companies (cost $1,642,561)				1,805,242
Short-term investment: 18.32%
Investment company: 18.32%
UBS Cash Management Prime Relationship Fund6 (cost $8,239,065)		8,239,065		8,239,065
Investment of cash collateral from securities loaned: 0.76%
UBS Private Money Market Fund LLC6 (cost $343,069)		343,069		343,069
Total investments: 117.80% (cost $51,964,687)				52,978,359
Liabilities, in excess of cash and other assets: (17.80)%				(8,004,129	)
Net assets: 100.00%			$	44,974,230

Notes to portfolio of investments

Aggregate cost for federal income tax purposes was substantially the same as for book purposes; and net unrealized appreciation consisted of:

Gross unrealized appreciation	$	1,338,569
Gross unrealized depreciation		(324,897	)
Net unrealized appreciation of investments	$	1,013,672

*  Non-income producing security.

¹  Security, or portion thereof, was on loan at December 31, 2010.

²  Security exempt from registration pursuant to Rule 144A under 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 December 31, 2010, the value of these securities amounted to $1,983,003 or 4.41% of net assets.

³  Variable or floating rate security. The interest rate shown is the current rate as of December 31, 2010 and changes periodically.

⁴  Security is being fair valued by a valuation committee under the direction of the Board of Trustees. At December 31, 2010, the value of this security amounted to $401,108 or 0.89% of net assets.

⁵  On September 7, 2008, the Federal Housing Finance Agency placed the Federal Home Loan Mortgage Corporation and the Federal National Mortgage Association into conservatorship, and the US Treasury guaranteed the debt issued by those organizations.

27

UBS Core Plus Bond Fund

Portfolio of investments

December 31, 2010 (unaudited)

⁶  The table below details the Fund's investments in funds that are advised by the same advisor as the Fund. The advisor does not earn a management fee from the affiliated UBS Relationship Funds.

Security description	Value 06/30/10		Purchases during the six months ended 12/31/10		Sales during the six months ended 12/31/10		Net realized gain during the six months ended 12/31/10		Change in net unrealized appreciation/ (depreciation) during the six months ended 12/31/10		Value 12/31/10		Income earned from affiliate for the six months ended 12/31/10
UBS Cash Management Prime Relationship Fund	$	2,632,182	$	19,822,200	$	14,215,317	$	—	$	—	$	8,239,065	$	7,106
UBS Private Money Market Fund LLC1		197,250		3,276,888		3,131,069		—		—		343,069		412
UBS High Yield Relationship Fund		988,798		450,000		200,000		2,588		89,983		1,331,369		—
UBS Opportunistic Emerging Markets Debt Relationship Fund		417,560		—		—		—		56,313		473,873		—
	$	4,235,790	$	23,549,088	$	17,546,386	$	2,588	$	146,296	$	10,387,376	$	7,518

¹  The advisor does earn a management fee from this affiliated fund, and any income earned is net of expenses. Please see the Notes to financial statements for further information.

GE  General Electric

GO  General Obligation

GS  Goldman Sachs

Re-REMIC  Combined Real Estate Mortgage Investment Conduits

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 Core Plus Bond Fund had the following open futures contracts as of December 31, 2010:

	Expiration date	Cost/ (proceeds)			Value			Unrealized depreciation
US Treasury futures buy contracts:
US Ultra Bond Futures, 10 contracts (USD)	March 2011	$	1,310,094		$	1,270,937		$	(39,157	)
US Treasury futures sell contracts:
US Ultra Bond Futures, 6 contracts (USD)	March 2011		(752,054	)		(762,563	)		(10,509	)
Net unrealized depreciation on futures contracts								$	(49,666	)

Currency type abbreviations:

USD  United States Dollar

28

UBS Core Plus Bond Fund

Portfolio of investments

December 31, 2010 (unaudited)

Swap agreements

UBS Core Plus Bond Fund had outstanding interest rate swap agreements with the following terms as of December 31, 2010:

Interest Rate Swaps

Counterparty	Notional amount		Termination date	Payments made by the Fund1			Payments received by the Fund1			Upfront payments (made)/ received		Value			Unrealized depreciation
Deutsche Bank AG	USD	1,310,000	02/15/36		4.5450	%		0.2856	%2		—	$	(123,917	)	$	(123,917	)

¹  Payments made or received are based on the notional amount.

²  Rate based on 3 month LIBOR (USD BBA).

BBA  British Banker's Association

LIBOR  London Interbank Offered Rate

Credit default swaps on corporate issues—buy protection¹

Counterparty	Notional amount		Termination date	Payments made by the Fund			Payments received by the Fund		Upfront payments received		Value			Unrealized depreciation
Deutsche Bank AG	USD	250,000	12/20/15		1.0000	%2		—3	$	5,969	$	(6,731	)	$	(762	)

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 Amgen Inc. 4.850% bond, due 11/18/14.

Currency type abbreviation:

USD  United States Dollar

Credit default swaps on corporate issues—sell protection¹

Counterparty	Notional amount		Termination date	Payments made by the Fund		Payments received by the Fund			Upfront payments made			Value		Unrealized appreciation		Credit spread2
Deutsche Bank AG	USD	250,000	12/20/15		—3		1.0000	%4	$	(5,716	)	$	5,983	$	267		0.5213	%

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, 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 or other credit event occurring 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

29

UBS Core Plus Bond Fund

Portfolio of investments

December 31, 2010 (unaudited)

Concluded

likelihood or 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 Pfizer Inc. 4.650% bond, due 03/01/18.

⁴  Payments received are based on the notional amount.

Currency type abbreviation:

USD  United States Dollar

The following is a summary of the inputs used as of December 31, 2010 in valuing the Fund's investments:

Measurements at 12/31/10
Description	Unadjusted quoted prices in active markets for identical investments (Level 1)			Other significant observable inputs (Level 2)			Unobservable inputs (Level 3)		Total
Corporate bonds	$	—		$	10,881,619			—	$	10,881,619
Asset-backed securities		—			1,041,826			—		1,041,826
Commercial mortgage-backed securities		—			3,901,091			—		3,901,091
Mortgage & agency debt securities		—			19,238,112			—		19,238,112
Municipal bonds		—			512,848			—		512,848
US government obligations		—			6,905,385			—		6,905,385
Supranational bond		—			110,102			—		110,102
Investment companies		—			1,805,242			—		1,805,242
Short-term investment		—			8,239,065			—		8,239,065
Investment of cash collateral from securities loaned		—			343,069			—		343,069
Other financial instruments1		(49,666	)		(124,665	)		—		(174,331	)
Total	$	(49,666	)	$	52,853,694			—	$	52,804,028

¹  Other financial instruments include open futures contracts and swap agreements.

See accompanying notes to financial statements.
30

UBS Fixed Income Opportunities Fund

Portfolio performance

From its inception on November 29, 2010 through December 31, 2010, Class A shares of UBS Fixed Income Opportunities Fund (the "Fund") returned 2.22% (Class A shares declined 2.36% after the deduction of the maximum sales charge), while Class Y shares returned 2.34%. The Fund's benchmark, the BofA Merrill Lynch US Dollar 3-Month LIBOR Constant Maturity Index (the "Index"), returned 0.03% 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 33; 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.)

The Fund generated a positive return during the reporting period and outperformed the Index, largely due to duration positioning and sector allocation.

Certain derivative instruments, namely bond and interest rate futures, were used to facilitate specific duration and yield curve strategies. Credit default swaps were used to implement specific credit-related investment strategies. The results of derivatives use during the period were within our expectations.

Portfolio performance summary¹

What worked

•  The Fund's duration was the largest contributor to performance. The Fund's duration was generally positioned net short in anticipation that interest rates would move higher. This proved to be the case, as Treasury yields moved sharply higher in December 2010. (Duration measures the price sensitivity of a portfolio to interest rate changes.)

•  The Fund's overweight to certain spread sectors (non-US Treasuries) was beneficial during the reporting period.

  – The Fund's exposure to investment grade credit, particularly in the financials sector, was rewarded as their spreads narrowed in December given another round of quantitative easing by the Federal Reserve Board, and amid expectations for a strengthening economy in 2011. (Spread measures the difference between the yields paid on a security versus those paid on US Treasuries of comparable duration.)

  – An exposure to high yield bonds—in particular securities rated BB and below—was beneficial as investor risk appetite was robust during the reporting period.²

  – Security selection of emerging markets debt boosted the Fund's return as spreads narrowed.

¹  For a detailed commentary on the market environment in general during the reporting period, see page 2.

²  Bonds rated BB and below are considered below investment grade. They are commonly referred to as high yield or "junk" bonds.

31

UBS Fixed Income Opportunities Fund

What didn't work

•  Hedging our credit exposure was a slight drag on performance. We hedged the Fund's investment grade credit positions to manage the Fund's overall risk exposure. While this served its purpose in terms of managing risk, the hedge was a modest negative for performance given the strong results in the credit markets.

This letter is intended to assist shareholders in understanding how the Fund performed from its inception on November 29, 2010 through December 31, 2010. The views and opinions in the letter were current as of February 15, 2011. They are not guarantees of future 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.

32

UBS Fixed Income Opportunities Fund

Total returns for period ended 12/31/10 (unaudited)

	Inception1
Before deducting maximum sales charge
Class A2		2.22	%
Class C3		2.11
Class Y4		2.34
After deducting maximum sales charge
Class A2		(2.36	)%
Class C3		1.36
BofA Merrill Lynch US Dollar 3-Month LIBOR Constant Maturity Index5		0.03	%

The annualized gross and net expense ratios, respectively, for each class of shares as in the November 24, 2010 prospectuses were as follows: Class A—1.60% and 0.95%; Class C—2.10% and 1.45%; Class Y—1.35% and 0.70%. 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 UBS Global Asset Management (Americas) Inc., the Fund's investment advisor ("UBS Global AM (Americas)" or 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, interest, taxes, brokerage commissions, extraordinary expenses and securities loan fees and dividend expenses for securities sold short) to the extent necessary so that the Fund's ordinary operating expenses (excluding expenses incurred through investment in other investment companies, interest, taxes, brokerage commissions, extraordinary expenses and securities loan fees and dividend expenses for securities sold short), through the 24-month period ending October 27, 2012, do not exceed 0.95% for Class A shares, 1.45% for Class C shares and 0.70% 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 Fixed Income Opportunities Fund and the index is November 29, 2010.

²  Maximum sales charge for Class A shares is 4.50%. Class A shares bear ongoing 12b-1 service fees.

³  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.

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 BofA Merrill Lynch US Dollar 3-Month LIBOR Constant Maturity Index is designed to track the performance of a synthetic asset paying Libor to a stated maturity. The index is based on the assumed purchase at par of a synthetic instrument having exactly its stated maturity and with a coupon equal to that day's fixing rate. That issue is assumed to be sold the following business day (priced at a yield equal to the current day fixing rate) and rolled into a new instrument. 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. Total returns for period of less than one year have not been annualized. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://www.ubs.com.

33

UBS Fixed Income Opportunities Fund

Top ten long-term fixed income holdings (unaudited)¹

As of December 31, 2010

	Percentage of net assets
Federal National Mortgage Association Pools, 4.000%, TBA		4.3	%
US Treasury Bonds, PO, 1.212%, due 05/15/40		2.8
Chester Asset Receivables Dealings No. 12 PLC, Series C, 2.190%, due 01/18/11		2.2
Lloyds TSB Bank PLC, 6.500%, due 03/24/20		2.2
Citigroup, Inc., 4.750%, due 05/31/17		2.2
Gazprom OAO Via Morgan Stanley Bank AG, 9.625%, due 03/01/13		2.0
Reynolds American, Inc., 6.750%, due 06/15/17		2.0
Federal Home Loan Bank of Chicago, 5.625%, due 06/13/16		1.9
Morgan Stanley, 6.250%, due 08/28/17		1.9
Anadarko Petroleum Corp., 5.950%, due 09/15/16		1.9
Total		23.4	%

Industry diversification (unaudited)²

As a percentage of net assets as of December 31, 2010

Bonds
Corporate bonds
Broadcasting	0.98	%
Building materials	0.93
Capital markets	2.55
Commercial banks	8.71
Consumer finance	4.57
Containers & packaging	1.21
Diversified financial services	12.83
Electric utilities	2.43
Healthcare	0.98
Insurance	3.29
Media	1.89
Oil, gas & consumable fuels	6.80
Paper	0.71
Road & rail	0.92
Tobacco	2.01
Wireless telecommunication services	1.20
Total corporate bonds	52.01	%
Asset-backed securities	5.39
Collateralized debt obligation	1.64
Commercial mortgage-backed securities	7.03
Mortgage & agency debt securities	7.95
Municipal bonds	6.95
US government obligations	2.80
Non-US government obligation	2.89
Total bonds	86.66	%
Investment company
UBS Opportunistic Emerging Markets Debt Relationship Fund	11.01
Short-term investment	2.06
Options purchased	1.35
Total investments	101.08	%
Liabilities, in excess of cash and other assets	(1.08	)
Net assets	100.00	%

Country exposure, top five (unaudited)¹

As of December 31, 2010

	Percentage of net assets
United States		62.4	%
United Kingdom		8.8
Russia		3.8
Australia		3.7
Ireland		2.7
Total		81.4	%

¹  Figures represent the direct investments of UBS Fixed Income Opportunities Fund. Figures would be different if a breakdown of the underlying investment company was included.

²  Figures represent the industry breakdown of direct investments of UBS Fixed Income Opportunities Fund. Figures would be different if a breakdown of the underlying investment company's industry diversification was included.

34

UBS Fixed Income Opportunities Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Face amount		Value
Bonds: 86.66%
Corporate bonds: 52.01%
Australia: 3.70%
Leighton Finance Ltd., 9.500%, due 07/28/14	AUD	500,000	$	519,580
Sydney Airport Finance Co. Pty Ltd., 8.000%, due 07/06/15		500,000		511,942
Total Australia corporate bonds				1,031,522
Canada: 0.51%
ING Bank of Canada, 4.300%, due 12/05/16	CAD	150,000		142,563
Greece: 1.20%
OTE PLC, 5.375%, due 02/14/11	EUR	250,000		334,745
Ireland: 2.72%
Allied Irish Banks PLC, 1.040%, due 04/11/121		200,000		208,463
Anglo Irish Bank Corp. Ltd., 0.411%, due 11/02/111	$	125,000		88,125
1.143%, due 01/31/111	EUR	100,000		125,612
Ardagh Packaging Finance PLC, 7.375%, due 10/15/172		250,000		336,580
Total Ireland corporate bonds				758,780
Portugal: 1.53%
EDP Finance BV, 4.900%, due 10/01/193		500,000		426,218
Russia: 2.04%
Gazprom OAO Via Morgan Stanley Bank AG, 9.625%, due 03/01/132	$	500,000		566,875
Spain: 0.85%
Santander US Debt SA Unipersonal, 3.724%, due 01/20/153	EUR	250,000		236,865
United Kingdom: 5.22%
Barclays Bank PLC, 5.140%, due 10/14/20	$	250,000		224,937
FCE Bank PLC, 7.125%, due 01/15/13	EUR	250,000		349,109
Lloyds TSB Bank PLC, 6.500%, due 03/24/20		500,000		613,760
Virgin Media Finance PLC, 9.125%, due 08/15/16	$	250,000		266,250
Total United Kingdom corporate bonds				1,454,056

	Face amount		Value
United States: 34.24%
Ally Financial, Inc., 6.625%, due 05/15/12	$	250,000	$	257,717
American General Finance Corp., Series H, 4.000%, due 03/15/11		500,000		496,250
Anadarko Petroleum Corp., 5.950%, due 09/15/16		500,000		537,145
Apria Healthcare Group, Inc., 11.250%, due 11/01/14		250,000		273,125
Cemex Finance LLC, 9.500%, due 12/14/163		250,000		257,812
Chesapeake Energy Corp., 9.500%, due 02/15/15		250,000		281,875
CIT Group, Inc., 7.000%, due 05/01/13		250,000		255,000
Citigroup, Inc., 4.750%, due 05/31/171	EUR	500,000		608,242
DISH DBS Corp., 6.625%, due 10/01/14	$	250,000		259,375
Ford Motor Credit Co. LLC, 12.000%, due 05/15/15		250,000		314,485
Georgia-Pacific LLC, 5.400%, due 11/01/203		200,000		197,736
Goldman Sachs Group, Inc., 4.100%, due 11/03/15	CAD	80,000		79,531
Hertz Corp., 8.875%, due 01/01/14	$	250,000		255,625
International Lease Finance Corp., 5.000%, due 09/15/12		100,000		100,625
JP Morgan Chase Capital XXVII, 7.000%, due 11/01/39		500,000		523,514
Kinder Morgan Finance Co. ULC, 5.700%, due 01/05/16		500,000		506,250
Merrill Lynch & Co., Inc., 6.050%, due 05/16/16		250,000		257,578
6.400%, due 08/28/17		500,000		528,635
Mirant Americas Generation LLC, 8.500%, due 10/01/21		250,000		250,000
Morgan Stanley, 6.250%, due 08/28/17		500,000		538,583
Nationwide Mutual Insurance Co., 9.375%, due 08/15/393		250,000		289,955
Pacific Life Insurance Co., 9.250%, due 06/15/393		250,000		324,883
Prudential Financial, Inc., 6.200%, due 11/15/40		285,000		301,488
Reynolds American, Inc., 6.750%, due 06/15/17		500,000		558,858
SLM Corp., 1.300%, due 11/15/111	EUR	100,000		128,201
5.400%, due 10/25/11	$	500,000		508,823

35

UBS Fixed Income Opportunities Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Face amount		Value
Bonds—(Continued)
Corporate bonds—(Concluded)
United States—(Concluded)
Tennessee Valley Authority., 4.625%, due 09/15/60	$	400,000	$	374,141
Univision Communications, Inc., 12.000%, due 07/01/143		250,000		273,750
Total United States corporate bonds				9,539,202
Total corporate bonds (cost $14,463,332)				14,490,826
Asset-backed securities: 5.39%
United Kingdom: 3.62%
Chester Asset Receivables Dealings No. 12 PLC, Series C, 2.190%, due 01/18/111	GBP	400,000		623,435
Permanent Financing PLC, Series 6, Class 5A2, 0.905%, due 06/10/421,2,5,6		250,000		385,174
				1,008,609
United States: 1.77%
Capital One Multi-Asset Execution Trust, Series 2006-C1, Class C, 0.550%, due 03/17/141	$	250,000		248,650
Citibank Credit Card Issuance Trust, Series 2005-C3, Class C3, 0.670%, due 07/15/141		250,000		245,020
Total United States asset-backed securities				493,670
Total asset-backed securities (cost $1,499,365)				1,502,279
Collateralized debt obligation: 1.64%
United States: 1.64%
GSC Partners CDO Fund Ltd., Series 2003-4A, Class B, 2.223%, due 12/16/151,3,4,7 (cost $455,826)		500,000		455,500
Commercial mortgage-backed securities: 7.03%
United States: 7.03%
Banc of America Commercial Mortgage, Inc., Series 2007-4, Class A4, 5.742%, due 02/10/511		250,000		266,296
Commercial Mortgage Pass Through Certificates, Series 2006-C8, Class AM, 5.347%, due 12/10/46		150,000		144,169

	Face amount		Value
GE Capital Commercial Mortgage Corp., Series 2007-C1, Class A4, 5.543%, due 12/10/49	$	350,000	$	360,361
Greenwich Capital Commercial Funding Corp., Series 2007-GG9, Class AM, 5.475%, due 03/10/39		250,000		249,767
JP Morgan Chase Commercial Mortgage Securities Corp., Series 2007-LD12, Class A4, 5.882%, due 02/15/511		225,000		238,220
Morgan Stanley Re-REMIC Trust, Series 2009-GG10, Class A4B, 5.807%, due 08/12/451,3		450,000		447,161
TrizecHahn Office Properties, Series 2001-TZHA, Class B4, 6.718%, due 05/15/163		250,000		253,404
Total commercial mortgage-backed securities (cost $1,939,948)				1,959,378
Mortgage & agency debt securities: 7.95%
United States: 7.95%
Federal Home Loan Bank of Chicago, 5.625%, due 06/13/16		500,000		541,419
Federal National Mortgage Association, 5.825%, due 10/09/198,9		750,000		473,567
Federal National Mortgage Association Pools, 4.000%, TBA8		1,210,000		1,200,169
Total mortgage & agency debt securities (cost $2,247,903)				2,215,155
Municipal bonds: 6.95%
American Municipal Power-Ohio, Inc., Revenue Bonds, Series 2010, Class B, 7.834%, due 02/15/41		250,000		270,773
Illinois State Taxable Pension, Series 2003, 5.100%, due 06/01/33		250,000		188,125
New York City Transitional Finance Authority, Series 2010, 5.267%, due 05/01/27		250,000		239,767

36

UBS Fixed Income Opportunities Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Face amount		Value
Bonds—(Concluded)
Municipal bonds—(Concluded)
Port Authority of New York & New Jersey, Series 2009, 6.040%, due 12/01/29	$	250,000	$	261,228
State of California, GO bonds, 7.300%, due 10/01/39		500,000		507,175
State of Illinois, GO bonds, Series 2010, 4.421%, due 01/01/15		225,000		226,978
State of Washington, GO bonds, Series 2010, Class F, 5.140%, due 08/01/40		250,000		241,872
Total municipal bonds (cost $1,945,724)				1,935,918
US government obligations: 2.80%
US Treasury Bonds, PO, 1.212%, due 05/15/409 (cost $804,234)		3,000,000		778,233
Non-US government obligation: 2.89%
Greece: 1.09%
Hellenic Republic Government Bond, 4.300%, due 03/20/12	EUR	250,000		304,576
Russia: 1.80%
Federation of Russia, 3.625%, due 04/29/152	$	500,000		500,000
Total non US-government obligations (cost $801,890)				804,576
Total bonds (cost $24,158,222)				24,141,865
	Shares
Investment company: 11.01%
UBS Opportunistic Emerging Markets Debt Relationship Fund*10 (cost $3,000,000)		184,736		3,068,026
Short-term investment: 2.06%
Investment company: 2.06%
UBS Cash Management Prime Relationship Fund10 (cost $574,769)		574,769		574,769

	Number of contracts		Value
Options purchased: 1.35%
Put options: 0.92%
10 Year US Treasury Notes, strike @ USD 119.50, expires January 2011*		56	$	34,125
2 Year US Treasury Notes, strike @ USD 109.00, expires January 2011*		72		5,625
5 Year US Treasury Notes, strike @ USD 117.50, expires January 2011*		200		103,125
90 Day Euro-Dollar Time Deposit, strike @ USD 99.25, expires September 2012*		50		108,437
Japan 10 Year, strike @ JPY 140.00, expires February 2011*		1		4,927
	Notional amount
Options purchased on interest rate swaps: 0.43%
Expiring 11/02/15. If exercised the Fund pays semi annually 6.000% and receives quarterly floating 3 month LIBOR terminating 11/04/25. European style. Counterparty: Deutsche Bank AG*	$	3,050,000		120,513
Total options purchased (cost $409,752)				376,752
Total investments: 101.08% (cost $28,142,743)				28,161,412
Liabilities, in excess of cash and other assets: (1.08)%				(305,093	)
Net assets: 100.00%			$	27,856,319

37

UBS Fixed Income Opportunities Fund

Portfolio of investments

December 31, 2010 (unaudited)

Notes to portfolio of investments

Aggregate cost for federal income tax purposes was substantially the same as for book purposes; and net unrealized appreciation consisted of:

Gross unrealized appreciation	$	314,955
Gross unrealized depreciation		(296,286	)
Net unrealized appreciation of investments	$	18,669

*  Non-income producing security.

¹  Variable or floating rate security. The interest rate shown is the current rate as of December 31, 2010 and changes periodically.

²  Securities exempt from registration pursuant to Regulation S under the Securities Act of 1933. Regulation S applies to securities offerings that are made outside of the United States and do not involve direct selling efforts in the United States. At December 31, 2010, the value of these securities amounted to $1,788,629 or 6.42% of net assets.

³  Security exempt from registration pursuant to Rule 144A under 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 December 31, 2010, the value of these securities amounted to $3,163,284 or 11.36% of net assets.

⁴  Security is illiquid. At December 31, 2010, the value of these securities amounted to $455,500 or 1.64% of net assets.

⁵  This security, which represents 1.38% of net assets as of December 31, 2010, is considered restricted. (See restricted security table below for more information.)

Restricted Security	Acquisition date	Acquisition cost		Acquisition cost as a percentage of net assets			Value 12/31/10		12/31/10 Value as a percentage of net assets
Permanent Financing PLC, Series 6, Class 5A2, 0.905%, due 06/10/42	11/30/10	$	246,822		0.89	%	$	385,174		1.38	%

⁶  Step bond—Coupon rate increases in increments to maturity. Rate disclosed is as of December 31, 2010. Maturity date disclosed is the ultimate maturity date.

⁷  Security is being fair valued by a valuation committee under the direction of the Board of Trustees. At December 31, 2010, the value of this security amounted to $455,500 or 1.64% of net assets.

⁸  On September 7, 2008, the Federal Housing Finance Agency placed the Federal Home Loan Mortgage Corporation and the Federal National Mortgage Association into conservatorship, and the US Treasury guaranteed the debt issued by those organizations.

⁹  Rate shown reflects annualized yield at December 31, 2010 on zero coupon bond.

¹⁰  The table below details the Fund's investments in funds advised by the same advisor as the Fund. The advisor does not earn a management fee from the affiliated UBS Relationship Fund.

Security description	Value 06/30/10		Purchases during the period ended 12/31/10		Sales during the period ended 12/31/10		Change in net unrealized appreciation/ (depreciation) during the period ended 12/31/10		Value 12/31/10		Income earned from affiliate for the period ended 12/31/10
UBS Cash Management Prime Relationship Fund	$	—	$	5,302,612	$	4,727,843	$	—	$	574,769	$	197
UBS Opportunistic Emerging Markets Debt Relationship Fund		—		3,000,000		—		68,026		3,068,026		—
	$	—	$	8,302,612	$	4,727,843	$	68,026	$	3,642,795	$	197

CDO  Collateralized debt obligations

GE  General Electric

GO  General Obligation

38

UBS Fixed Income Opportunities Fund

Portfolio of investments

December 31, 2010 (unaudited)

PO  Principal only security—This security entitles the holder to receive principal payments from an underlying pool of assets. High prepayments return principal faster than expected and cause the yield to increase. Low prepayments return principal slower than expected and cause the yield to decrease.

Re-REMIC  Combined Real Estate Mortgage Investment Conduits

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.

Currency type abbreviations:

AUD  Australian Dollar

CAD  Canadian Dollar

EUR  Euro

GBP  Great Britain Pound

JPY  Japanese Yen

USD  United States Dollar

Forward foreign currency contracts

UBS Fixed Income Opportunities Fund had the following open forward foreign currency contracts as of December 31, 2010:

Counterparty	Contracts to deliver		In exchange for		Maturity date	Unrealized depreciation
Goldman Sachs International	AUD	1,045,000	USD	989,688	03/01/11	$	(71,593	)
Goldman Sachs International	EUR	2,920,000	USD	3,819,827	03/01/11		(81,662	)
Goldman Sachs International	GBP	630,000	USD	977,798	03/01/11		(4,028	)
Goldman Sachs International	JPY	21,000,000	USD	249,155	03/01/11		(9,651	)
Net unrealized depreciation on forward foreign currency contracts						$	(166,934	)

Currency type abbreviations:

AUD  Australian Dollar

EUR  Euro

GBP  Great Britain Pound

JPY  Japanese Yen

USD  United States Dollar

Futures contracts

UBS Fixed Income Opportunities Fund had the following open futures contracts as of December 31, 2010:

	Expiration date	Cost/ (proceeds)			Value			Unrealized appreciation/ (depreciation)
US Treasury futures buy contracts:
US Ultra Bond Futures, 27 contracts (USD)	March 2011	$	3,324,229		$	3,431,531		$	107,302
5 Year US Treasury Notes, 54 contracts (USD)	March 2011		6,331,657			6,356,813			25,156
US Treasury futures sell contracts:
US Long Bond, 13 contracts (USD)	March 2011		(1,575,417	)		(1,587,625	)		(12,208	)
US Ultra Bond Futures, 8 contracts (USD)	March 2011		(993,362	)		(1,016,750	)		(23,388	)
2 Year US Treasury Notes, 17 contracts (USD)	March 2011		(3,725,656	)		(3,721,406	)		4,250
5 Year US Treasury Notes, 26 contracts (USD)	March 2011		(3,113,654	)		(3,060,688	)		52,966
10 Year US Treasury Notes, 10 contracts (USD)	March 2011		(1,202,640	)		(1,204,375	)		(1,735	)
Net unrealized appreciation on futures contracts								$	152,343

Currency type abbreviations:

USD  United States Dollar

39

UBS Fixed Income Opportunities Fund

Portfolio of investments

December 31, 2010 (unaudited)

Options written

UBS Fixed Income Opportunities Fund had the following open options written as of December 31, 2010:

	Expiration date	Premiums received		Value
Call options
5 Year US Treasury Notes, 200 contracts, strike @ USD 118.50	January 2011	$	41,744	$	(54,688	)
Put options
10 Year US Treasury Notes, 56 contracts, strike @ USD 118.00	January 2011		26,568		(14,000	)
5 Year US Treasury Notes, 200 contracts, strike @ USD 116.50	January 2011		68,324		(45,312	)
90 Day Euro-Dollar Time Deposit, 50 contracts, strike @ USD 97.25	September 2012		19,825		(30,000	)
Options written on interest rate swaps
If option exercised the Fund pays semi-annually 7.250% and receives quarterly floating 3 month LIBOR. Underlying interest rate swap terminating 11/04/25. European style. Counterparty: Deutsche Bank AG, Notional Amount USD 3,050,000	November 2015		63,135		(72,362	)
If option exercised the Fund pays semi-annually 8.760% and receives quarterly floating 3 month LIBOR. Underlying interest rate swap terminating 11/04/25. European style. Counterparty: Deutsche Bank AG, Notional Amount USD 3,050,000	November 2015		38,735		(37,145	)
Receiver option written on credit default swap on credit indices
If option exercised 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 CDX.NA.HY Series 15 Index and Fund pays fixed rate of 5.000%. Underlying credit default swap terminating 12/20/15. European style. Counterparty: Morgan Stanley, Notional Amount USD 2,000,000	March 2011		28,200		(4,462	)
Payor option written on credit default swap on credit indices
If option exercised payment from 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 CDX.NA.IG Series 15 Index and Fund receives fixed rate of 1.000%. Underlying credit default swap terminating 12/20/15. European style. Counterparty: Morgan Stanley, Notional Amount USD 2,500,000	March 2011		4,625		(5,129	)
Total options written		$	291,156	$	(263,098	)

Currency type abbreviations:

USD  United States Dollar

Written option activity for the period ended December 31, 2010 for UBS Fixed Income Opportunities Fund was as follows:

	Number of contracts			Amount of premiums received
Options outstanding at June 30, 2010		—		$	—
Options written		823			213,765
Options terminated in closing purchase transactions		(317	)		(57,304	)
Options expired prior to exercise		—			—
Options outstanding at December 31, 2010		506		$	156,461

Swaption activity for the period ended December 31, 2010 for UBS Fixed Income Opportunities Fund was as follows:

	Amount of premiums received
Swaptions outstanding at June 30, 2010	$	—
Swaptions written		134,695
Swaptions terminated in closing purchase transactions		—
Swaptions expired prior to exercise		—
Swaptions outstanding at December 31, 2010	$	134,695

40

UBS Fixed Income Opportunities Fund

Portfolio of investments

December 31, 2010 (unaudited)

Swap agreements

UBS Fixed Income Opportunities Fund had outstanding currency swap agreements with the following terms as of December 31, 2010:

Counterparty	Pay currency	Pay contracts	Receive currency	Receive contracts	Termination date	Pay rate	Receive rate	Upfront payments received		Value			Unrealized appreciation/ (depreciation)
Morgan Stanley	AUD2,059,944			USD2,000,000	10/06/40	4.9600%1	0.3028%2	$13,738		$(132,176)			$(118,438)
Morgan Stanley	USD2,000,000			AUD2,059,944	10/06/20	0.30282	4.96001	9,738		112,771			122,509
								$	23,476	$	(19,405	)	$	4,071

¹  Rate based on 3 month BBSW.

²  Rate based on 3 month USD LIBOR.

BBSW  Bank Bill Swap Reference Rate (Australian Financial Market)

LIBOR  London Interbank Offered Rate

UBS Fixed Income Opportunities Fund had outstanding interest rate swap agreements with the following terms as of December 31, 2010:

Counterparty	Notional amount		Termination date	Payments made by the Fund1			Payments received by the Fund1			Upfront payments (made)/ received			Value			Unrealized appreciation/ (depreciation)
Credit Suisse International	USD	6,100,000	05/31/15		1.6288	%		—	%2	$	—		$	93,295		$	93,295
Deutsche Bank AG	CAD	5,750,000	10/03/13		—3			1.8750			34,361			(40,495	)		(6,134	)
Deutsche Bank AG	CAD	5,150,000	10/03/16		2.4850			—3			(93,265	)		111,217			17,952
Deutsche Bank AG	CAD	1,400,000	10/03/21		—3			3.2600			39,269			(47,467	)		(8,198	)
Deutsche Bank AG	USD	6,250,000	10/05/13		1.1250			—2			(12,500	)		37,198			24,698
Deutsche Bank AG	USD	3,000,000	12/15/15		1.5210			0.30164			(41,000	)		85,407			44,407
Deutsche Bank AG	USD	4,950,000	10/05/16		—2			2.1200			54,000			(148,600	)		(94,600	)
Deutsche Bank AG	USD	1,250,000	09/23/20		2.6900			0.30284			(23,000	)		58,211			35,211
Deutsche Bank AG	USD	1,350,000	10/05/21		2.9750			—2			(45,000	)		85,992			40,992
Deutsche Bank AG	USD	1,450,000	02/15/36		3.6300			0.30284			(50,000	)		101,788			51,788
Deutsche Bank AG	USD	875,000	05/15/40		3.4700			0.28564			(157,000	)		194,265			37,265
Deutsche Bank AG	USD	1,250,000	09/17/40		3.4730			0.30194			(83,000	)		126,461			43,461
JPMorgan Chase Bank	EUR	1,180,000	12/17/15		1.25405			2.6375			—			12,963			12,963
JPMorgan Chase Bank	USD	1,370,000	12/08/15		1.8050			0.30344			—			19,354			19,354
JPMorgan Chase Bank	USD	1,490,000	12/08/20		0.30344			3.1250			—			(26,543	)		(26,543	)
JPMorgan Chase Bank	USD	370,000	12/08/40		3.9975			0.30344			—			6,242			6,242
Merrill Lynch International	CAD	1,340,000	12/15/15		2.6770			1.29576			—			(6,494	)		(6,494	)
Merrill Lynch International	USD	1,410,000	12/16/15		2.2500			0.30194			—			(9,112	)		(9,112	)
Merrill Lynch International	USD	1,550,000	12/16/20		0.30194			3.5500			—			28,687			28,687
Merrill Lynch International	USD	390,000	12/16/40		4.2688			0.30194			—			(11,828	)		(11,828	)
Morgan Stanley	EUR	550,000	10/10/21		—7			2.8010			34,251			(46,261	)		(12,010	)
Morgan Stanley	EUR	250,000	10/10/41		2.8550			—7			(29,658	)		43,142			13,484
Morgan Stanley	USD	3,500,000	09/23/20		2.6900			0.30284			(60,500	)		162,992			102,492
										$	(433,042	)	$	830,414		$	397,372

¹  Payments made or received are based on the notional amount.

41

UBS Fixed Income Opportunities Fund

Portfolio of investments

December 31, 2010 (unaudited)

²  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 December 31, 2010.

³  Rate based on 3 month Canadian Bankers Acceptance. This is a forward starting trade, and as such, a floating rate has not yet been assigned as of December 31, 2010.

⁴  Rate based on 3 month LIBOR (USD BBA).

⁵  Rate based on 6 month EURIBOR.

⁶  Rate based on 3 month Canadian Bankers Acceptance.

⁷  Rate based on 6 month EURIBOR. This is a forward starting trade, and as such, a floating rate has not yet been assigned as of December 31, 2010.

BBA  British Banking Association

EURIBOR  Euro Interbank Offered Rate

LIBOR  London Interbank Offered Rate

UBS Fixed Income Opportunities Fund had outstanding credit default swap agreements with the following terms as of December 31, 2010:

Credit default swaps on credit indices—buy protection¹

Counterparty	Notional amount		Termination date	Payments made by the Fund2			Payments received by the Fund		Upfront payments (made)			Value		Unrealized depreciation
Morgan Stanley	EUR	5,000,000	12/20/15		1.0000	%		—3	$	(24,437	)	$	14,354	$	(10,083	)

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 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 bankruptcy and/or restructuring event with respect to Itraxx Europe Main Series 14 Index.

Credit default swaps on corporate issues—buy protection¹

Counterparty	Notional amount		Termination date	Payments made by the Fund2			Payments received by the Fund		Upfront payments (made)			Value		Unrealized appreciation/ (depreciation)
Morgan Stanley	EUR	500,000	12/20/15		1.0000	%		—3	$	(6,369	)	$	2,285	$	(4,084	)
Morgan Stanley	EUR	500,000	12/20/15		1.0000			—4		(7,868	)		12,497		4,629
									$	(14,237	)	$	14,782	$	545

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 Saint Gobain Neder NV 5.000% bond, due 04/25/14.

⁴  Payment from the counterparty will be received upon the occurrence of bankruptcy and/or restructuring event with respect to the Commerzbank AG 5.500% bond, due 10/25/11.

42

UBS Fixed Income Opportunities Fund

Portfolio of investments

December 31, 2010 (unaudited)

Credit default swaps on corporate issues—sell protection¹

Counterparty	Notional amount		Termination date	Payments made by the Fund		Payments received by the Fund2			Upfront payments received		Value			Unrealized appreciation		Credit spread3
Deutsche Bank AG	EUR	500,000	12/20/15		—4		1.0000	%	$	15,782	$	(14,975	)	$	807		1.5298	%
Deutsche Bank AG	USD	500,000	12/20/15		—5		1.0000			9,062		(8,853	)		209		1.4160
Deutsche Bank AG	USD	500,000	12/20/15		—6		1.0000			24,022		(13,582	)		10,440		1.6389
Morgan Stanley	EUR	500,000	12/20/15		—7		1.0000			15,197		(9,098	)		6,099		1.3523
Morgan Stanley	USD	500,000	12/20/15		—6		1.0000			24,022		(13,582	)		10,440		1.6389
									$	88,085	$	(60,090	)	$	27,995

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  Payments received are based on the notional amount.

³  Credit spreads, 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 or other credit event occurring 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 or 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.

⁴  Payment to the counterparty will be made upon the occurrence of bankruptcy and/or restructuring event with respect to the Intesa Sanpaolo SPA 4.750% bond, due 06/15/17.

⁵  Payment to the counterparty will be made upon the occurrence of bankruptcy and/or restructuring event with respect to the QBE Insurance Group Ltd. 9.750% bond, due 03/14/14.

⁶  Payment to the counterparty will be made upon the occurrence of bankruptcy and/or restructuring event with respect to the MetLife Inc. 5.000% bond, due 06/15/15.

⁷  Payment to the counterparty will be made upon the occurrence of bankruptcy and/or restructuring event with respect to the Holcim Finance Luxembourg SA 4.375% bond, due 12/09/14.

Currency type abbreviations:

AUD  Australian Dollar

CAD  Canadian Dollar

EUR  Euro

USD  United States Dollar

43

UBS Fixed Income Opportunities Fund

Portfolio of investments

December 31, 2010 (unaudited)

Concluded

The following is a summary of the inputs used as of December 31, 2010 in valuing the Fund's investments:

Measurements at 12/31/10
Description	Unadjusted quoted prices in active markets for identical investments (Level 1)		Other significant observable inputs (Level 2)		Unobservable inputs (Level 3)		Total
Corporate bonds	$	—	$	14,490,826	$	—	$	14,490,826
Asset-backed securities		—		1,502,279		—		1,502,279
Collateralized debt obligation		—		—		455,500		455,500
Commercial mortgage-backed securities		—		1,959,378		—		1,959,378
Mortgage & agency debt securities		—		2,215,155		—		2,215,155
Municipal bonds		—		1,935,918		—		1,935,918
US government obligations		—		778,233		—		778,233
Non-US government obligation		—		804,576		—		804,576
Investment company		—		3,068,026		—		3,068,026
Short-term investment		—		574,769		—		574,769
Options purchased		256,239		120,513		—		376,752
Other financial instruments1		8,343		494,023		—		502,366
Total	$	264,582	$	27,943,696	$	455,500	$	28,663,778

¹  Other financial instruments include futures contracts, swap agreements, options written 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 obligation			Total
Assets
Beginning balance	$	—		$	—
Total gains or losses (realized/unrealized), and premiums/discounts included in earnings		—			—
Purchases, sales, issuances, and settlements (net)		455,500			455,500
Transfers in and/or out of Level 3		—			—
Ending balance	$	455,500		$	455,500
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 12/31/10.	$	(326	)	$	(326	)

See accompanying notes to financial statements.
44

UBS Global Bond Fund

Portfolio performance

For the six months ended December 31, 2010, Class A shares of UBS Global Bond Fund (the "Fund") returned 6.31% (Class A shares returned 1.46% after the deduction of the maximum sales charge), while Class Y shares returned 6.35%. The Fund's benchmark, the Barclays Capital Global Aggregate Index (the "Index"), returned 5.87% 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 47; 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.)

The Fund's outperformance was due to a variety of factors, including positioning in the corporate bond sector and, to a lesser extent, currency management.

Portfolio performance summary¹

What worked

•  An overweight to the corporate bond sector was the largest contributor to performance. In particular, our overweight to financials, namely US banks, was rewarded. In addition an overweight to industrials was also beneficial. Spreads in these sectors narrowed given improving corporate profits and generally strong investor demand. (Spread measures the difference between the yields paid on a security versus those paid on US Treasuries of comparable duration.) In addition, uncertainties regarding increased regulations in the US financial sector dissipated during the reporting period.

•  Active currency management generated solid results.

  – Having an underweight in the poor-performing euro during the first half of the reporting period was a positive for results. The euro declined over that timeframe given the negative impact from the European sovereign debt crisis. We later moved to a neutral position versus the Index as the euro, in our view, became more attractively valued.

  – Likewise, an overweight to the Swedish krona and to the Norwegian krone contributed to results, as their economies performed better than a number of other European countries.

What didn't work

•  Overall, our duration positioning detracted from results.

  – In particular, the Fund's duration in the US was shorter than the Index, as we felt US yields would move higher as the US economy continued to expand. This positioning was not rewarded, as yields in the US declined during much of the reporting period. (Duration is a measure of a portfolio's sensitivity to changes in interest rates.)

¹  For a detailed commentary on the market environment in general during the reporting period, see page 2.

45

UBS Global Bond Fund

  – Having a long duration in the UK toward the end of the year was a negative for performance, as yields in the country moved higher given rising inflation expectations. We had moved to a long duration in the UK as we felt inflation expectations were overblown given continued high unemployment in the country. Given this, it was our belief that the Bank of England would keep interest rates on hold and yields would subsequently decline.

This letter is intended to assist shareholders in understanding how the Fund performed during the six months ended December 31, 2010. The views and opinions in the letter were current as of February 15, 2011. They are not guarantees of future 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.

46

UBS Global Bond Fund

Average annual total returns for periods ended 12/31/10 (unaudited)

	6 months			1 year			5 years			10 years			Inception1
Before deducting maximum sales charge
Class A2		6.31	%		4.52	%		2.02	%		N/A			4.48	%
Class B3		5.88			3.71			1.24			N/A			4.316
Class C4		5.91			3.87			1.52			N/A			3.46
Class Y5		6.35			4.77			2.28			4.58	%		4.71
After deducting maximum sales charge
Class A2		1.46	%		(0.24	)%		1.09	%		N/A			3.96	%
Class B3		1.00			(1.02	)		0.95			N/A			4.316
Class C4		5.18			3.16			1.52			N/A			3.46
Barclays Capital Global Aggregate Index7		5.87	%		5.54	%		6.66	%		6.73	%		6.28	%

The annualized gross and net expense ratios, respectively, for each class of shares as in the October 28, 2010 prospectuses were as follows: Class A—2.05% and 1.15%; Class B—2.85% and 1.90%; Class C—2.52% and 1.65%; Class Y—1.73% and 0.90%. 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 UBS Global Asset Management (Americas) Inc., the Fund's investment advisor ("UBS Global AM (Americas)" or 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, interest, taxes, brokerage commissions and extraordinary expenses) to the extent necessary so that the Fund's ordinary operating expenses (excluding expenses incurred through investment in other investment companies, interest, taxes, brokerage commissions and extraordinary expenses), through the 12-month period ending October 27, 2011, do not exceed 1.15% for Class A shares, 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 4.50%. 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. Prior to September 30, 2003, Class C shares were subject to a maximum front-end sales charge of 1.00%; this front-end sales charge is not reflected in the average annual total returns presented for the Class C shares shown above.

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  Assumes the conversion of Class B to Class A shares at the end of the sixth year.

⁷  The Barclays Capital Global Aggregate Index is an unmanaged broad-based, market capitalization weighted index which is designed to measure the broad global markets 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 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. Total returns for periods of less than one year have not been annualized. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://www.ubs.com.

47

UBS Global Bond Fund

Top ten long-term fixed income holdings (unaudited)

As of December 31, 2010

	Percentage of net assets
Government of Japan, 1.800%, due 06/20/17		7.0	%
Government of Japan, 1.900%, due 06/20/25		5.4
European Investment Bank, 6.250%, due 04/15/14		3.1
Instituto de Credito Oficial, 5.375%, due 07/02/12		2.5
Canadian Government Bond, 3.500%, due 06/01/20		2.5
US Treasury Bonds, 4.375%, due 05/15/40		2.3
JPMorgan Chase Commercial Alternative Mortgage Product, Series 2006-CB17, Class A4, 5.429%, due 12/12/43		2.2
Kreditanstalt fuer Wiederaufbau, 5.500%, due 12/07/15		2.1
UK Gilts, 4.750%, due 03/07/20		2.1
Bear Stearns Cos. LLC, 5.700%, due 11/15/14		2.0
Total		31.2	%

Industry diversification (unaudited)

As a percentage of net assets as of December 31, 2010

Bonds
Corporate bonds
Commercial banks	10.45	%
Commercial services & supplies	0.29
Construction & engineering	0.41
Diversified financial services	7.88
Diversified telecommunication services	1.68
Electric utilities	0.47
Food & staples retailing	0.51
Gas utilities	0.41
Insurance	0.65
Leisure equipment & products	0.31
Media	1.64
Metals & mining	0.89
Oil, gas & consumable fuels	2.07
Personal products	0.47
Thrifts & mortgage finance	3.45
Tobacco	1.78
Wireless telecommunication services	1.53
Total corporate bonds	34.89	%
Asset-backed securities	2.29
Collateralized debt obligations	1.20
Commercial mortgage-backed security	2.24
Mortgage & agency debt securities	8.62
US government obligations	5.64
Non-US government obligations	34.41
Supranational bonds	4.61
Total bonds	93.90	%
Short-term investment	3.77
Total investments	97.67	%
Cash and other assets, less liabilities	2.33
Net assets	100.00	%

Country exposure, top five (unaudited)

As of December 31, 2010

	Percentage of net assets
United States		31.3	%
Japan		14.4
United Kingdom		11.5
Germany		8.8
Italy		6.0
Total		72.0	%

48

UBS Global Bond Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Face amount		Value
Bonds: 93.90%
Corporate bonds: 34.89%
Australia: 1.02%
Rio Tinto Finance USA Ltd., 3.500%, due 11/02/20	$	100,000	$	94,927
Westpac Banking Corp., 4.200%, due 02/27/15		70,000		73,469
Total Australia corporate bonds				168,396
Cayman Islands: 0.32%
Vale Overseas Ltd., 5.625%, due 09/15/19		50,000		53,255
France: 1.95%
AXA SA, 6.772%, due 10/16/191,2	GBP	50,000		65,093
Compagnie de Financement Foncier, 4.000%, due 07/21/11	EUR	150,000		203,431
France Telecom SA, 8.500%, due 03/01/31	$	40,000		54,377
Total France corporate bonds				322,901
Germany: 6.07%
Bayerische Landesbank, 3.750%, due 05/23/11	EUR	240,000		323,953
Hypothekenbank in Essen AG, 4.000%, due 11/21/11		240,000		328,104
Kreditanstalt fuer Wiederaufbau, 5.500%, due 12/07/15	GBP	200,000		350,974
Total Germany corporate bonds				1,003,031
Greece: 0.41%
OTE PLC, 5.375%, due 02/14/11	EUR	50,000		66,949
Ireland: 0.51%
GE Capital UK Funding, 6.000%, due 04/11/13	GBP	50,000		83,816
Italy: 0.89%
Telecom Italia SpA, 1.817%, due 06/07/161	EUR	50,000		62,148
7.375%, due 12/15/17	GBP	50,000		84,786
Total Italy corporate bonds				146,934
Jersey (Channel Islands): 0.97%
Travelers Insurance Company Institutional Funding Ltd., 5.750%, due 12/06/11		100,000		160,658

	Face amount		Value
Luxembourg: 0.47%
Enel Finance International SA, 5.625%, due 08/14/24	GBP	50,000	$	77,412
Mexico: 0.62%
America Movil SAB de CV, 3.625%, due 03/30/15	$	100,000		102,823
Netherlands: 0.49%
Rabobank Nederland NV, 4.000%, due 09/10/15	GBP	50,000		80,825
Norway: 0.67%
StatoilHydro ASA, 5.250%, due 04/15/19	$	100,000		111,389
Qatar: 0.66%
Qtel International Finance Ltd., 6.500%, due 06/10/143		100,000		109,612
South Korea: 0.66%
Hyundai Capital Services, Inc., 6.000%, due 05/05/153		100,000		108,247
Spain: 1.24%
Caja de Ahorros y Monte de Piedad de Madrid, 4.125%, due 03/24/36	EUR	150,000		136,904
Gas Natural Capital Markets SA, 5.250%, due 07/09/14		50,000		67,986
Total Spain corporate bonds				204,890
United Kingdom: 4.94%
Aviva PLC, 4.729%, due 11/28/141,2		40,000		42,227
BAA Funding Ltd., 3.975%, due 02/15/141,3		50,000		67,843
Barclays Bank PLC, 4.750%, due 03/15/201,2		40,000		35,011
4.875%, due 12/15/141,2		60,000		62,539
Imperial Tobacco Finance PLC, 8.375%, due 02/17/16		100,000		162,833
Nationwide Building Society, 1.242%, due 12/22/161		200,000		241,203
Tesco PLC, 6.125%, due 02/24/22	GBP	50,000		85,086
WPP PLC, 6.625%, due 05/12/16	EUR	80,000		120,459
Total United Kingdom corporate bonds				817,201

49

UBS Global Bond Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Face amount		Value
Bonds—(Continued)
Corporate bonds—(Concluded)
United States: 13.00%
Alltel Corp., 7.875%, due 07/01/32	$	40,000	$	51,107
Altria Group, Inc., 9.250%, due 08/06/19		100,000		130,504
American Honda Finance Corp., 3.875%, due 09/16/14	EUR	50,000		70,037
Anadarko Petroleum Corp., 5.750%, due 06/15/14	$	100,000		107,044
Avon Products, Inc., 5.625%, due 03/01/14		70,000		77,565
Bank of America Corp., 7.375%, due 05/15/14		125,000		138,948
Bear Stearns Cos. LLC, 5.700%, due 11/15/14		300,000		329,625
Citibank Credit Card Issuance Trust, 5.375%, due 04/11/11	EUR	40,000		53,845
Citigroup, Inc., 4.750%, due 05/31/171		50,000		60,824
5.625%, due 08/27/12	$	70,000		73,455
Comcast Cable Communications LLC, 6.750%, due 01/30/11		150,000		150,705
Enterprise Products Operating LLC, 3.700%, due 06/01/15		30,000		30,947
5.000%, due 03/01/15		20,000		21,566
General Electric Capital Corp., Series A, 6.750%, due 03/15/32		110,000		124,533
Goldman Sachs Group, Inc., 7.500%, due 02/15/19		200,000		233,198
Hasbro, Inc., 6.350%, due 03/15/40		50,000		50,594
Kinder Morgan Energy Partners LP, 5.800%, due 03/15/35		75,000		71,438
Morgan Stanley, 5.450%, due 01/09/17		250,000		259,254
SLM Corp., 1.300%, due 11/15/111	EUR	50,000		64,101
Waste Management, Inc., 7.375%, due 03/11/19	$	40,000		48,404
Total United States corporate bonds				2,147,694
Total corporate bonds (cost $5,813,239)				5,766,033

	Face amount		Value
Asset-backed securities: 2.29%
Cayman Islands: 0.16%
MBNA America European Structured Offerings, Series 7, 5.450%, due 04/19/11	EUR	20,000	$	26,971
United Kingdom: 1.29%
Chester Asset Receivables Dealings, Series 2004-1, Class A, 0.928%, due 04/15/161	GBP	20,000		30,083
Chester Asset Receivables Dealings 2003-B PLC, Series A, 4.650%, due 07/15/13		30,000		48,510
Chester Asset Receivables Dealings No. 12 PLC, Series A, 6.000%, due 01/18/11		20,000		31,217
Permanent Financing PLC, Series 6, Class 5A2, 0.905%, due 06/10/421,4,6,8		40,000		61,628
Whinstone Capital Management Ltd., Series 1A, Class B2, 2.825%, due 10/25/441	EUR	77,108		41,731
Total United Kingdom asset-backed securities				213,169
United States: 0.84%
Bank of America Corp., Series 2004-A1, 4.500%, due 01/17/14		40,000		55,419
MBNA Credit Card Master Note Trust, Series 2002-A2, Class A, 5.600%, due 07/17/14		50,000		69,172
Merrill Lynch Mortgage Investors, Inc., Series 2006-SL1, Class A, 0.441%, due 09/25/361	$	36,028		13,604
Total United States asset-backed securities				138,195
Total asset-backed securities (cost $453,805)				378,335
Collateralized debt obligations: 1.20%
Netherlands: 0.29%
Queen Street CLO, Series 2007-1A, Class F, due 08/15/243,5,6,7		100,000		48,107

50

UBS Global Bond Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Face amount		Value
Bonds—(Continued)
Collateralized debt obligations—(Concluded)
United States: 0.91%
Hewett's Island CDO Ltd., Series 2007-6A, Class D, 2.552%, due 06/09/191,3,5,6	$	250,000	$	150,000
Total collateralized debt obligations (cost $379,920)				198,107
Commercial mortgage-backed security: 2.24%
United States: 2.24%
JPMorgan Chase Commercial Alternative Mortgage Product, Series 2006-CB17, Class A4, 5.429%, due 12/12/43 (cost $329,365)		350,000		371,020
Mortgage & agency debt securities: 8.62%
United States: 8.62%
Federal Home Loan Mortgage Corp. Gold Pools,9 #G04461, 5.000%, due 07/01/38		170,399		178,836
Federal National Mortgage Association Pools,9 #AA5244, 4.000%, due 05/01/39		72,407		72,102
#909356, 5.000%, due 02/01/37		180,251		189,741
#914467, 5.000%, due 04/01/37		142,364		149,816
#928197, 5.500%, due 03/01/37		151,675		162,400
#AC1466, 5.500%, due 08/01/39		186,561		200,853
#900568, 6.000%, due 09/01/36		93,014		101,389
#940642, 6.000%, due 08/01/37		159,592		174,959
#889579, 6.000%, due 05/01/38		125,402		136,458
Government National Mortgage Association Pools, #781276, 6.500%, due 04/15/31		51,049		57,958
Total mortgage & agency debt securities (cost $1,333,996)				1,424,512

	Face amount		Value
US government obligations: 5.64%
US Treasury Bonds, 4.375%, due 05/15/40	$	375,000	$	376,815
US Treasury Notes, 1.375%, due 02/15/12		120,000		121,350
2.625%, due 08/15/20		250,000		237,012
3.625%, due 02/15/20		190,000		197,184
				932,361
Total US government obligations (cost $988,810)				932,361
Non-US government obligations: 34.41%
Canada: 2.51%
Canadian Government Bond, 3.500%, due 06/01/20	CAD	400,000		414,684
Denmark: 0.59%
Government of Denmark, 4.000%, due 11/15/17	DKK	500,000		97,513
Germany: 2.71%
Bundesrepublik Deutschland, 2.250%, due 09/04/20	EUR	75,000		94,730
4.000%, due 01/04/37		80,000		115,628
6.250%, due 01/04/24		135,000		237,382
				447,740
Italy: 5.10%
Buoni Poliennali Del Tesoro, 4.000%, due 09/01/20		200,000		253,095
5.000%, due 08/01/39		235,000		295,481
Republic of Italy, 4.750%, due 01/25/16		290,000		295,458
				844,034
Japan: 14.37%
Government of Japan, 0.800%, due 03/20/13	JPY	25,950,000		323,919
1.800%, due 06/20/17		88,000,000		1,164,904
1.900%, due 06/20/25		68,800,000		886,162
				2,374,985
Netherlands: 0.87%
Government of the Netherlands, 4.000%, due 01/15/37	EUR	100,000		143,654
Spain: 2.97%
Government of Spain, 4.200%, due 07/30/13		55,000		74,151
Instituto de Credito Oficial, 5.375%, due 07/02/12		400,000		416,532
				490,683

51

UBS Global Bond Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Face amount		Value
Bonds—(Concluded)
Non-US government obligations—(Concluded)
United Kingdom: 5.29%
UK Gilts, 2.000%, due 01/22/16	GBP	200,000	$	305,746
4.250%, due 03/07/36		85,000		133,451
4.750%, due 03/07/20		200,000		344,779
5.000%, due 03/07/12		55,000		90,039
				874,015
Total non-US government obligations (cost $5,369,211)				5,687,308
Supranational bonds: 4.61%
European Investment Bank, 6.125%, due 01/23/17	AUD	250,000		250,899
6.250%, due 04/15/14	GBP	290,000		510,708
Total supranational bonds (cost $811,091)				761,607
Total bonds (cost $15,479,437)				15,519,283

	Shares		Value
Short-term investment: 3.77%
Investment company: 3.77%
UBS Cash Management Prime Relationship Fund10 (cost $623,491)		623,491	$	623,491
Total investments: 97.67% (cost $16,102,928)				16,142,774
Cash and other assets, less liabilities: 2.33%				384,483
Net assets: 100.00%			$	16,527,257

Notes to portfolio of investments

Aggregate cost for federal income tax purposes was substantially the same as for book purposes; and net unrealized appreciation consisted of:

Gross unrealized appreciation	$	783,025
Gross unrealized depreciation		(743,179	)
Net unrealized appreciation of investments	$	39,846

¹  Variable or floating rate security. The interest rate shown is the current rate as of December 31, 2010 and changes periodically.

²  Perpetual bond security. The maturity date reflects the next call date.

³  Security exempt from registration pursuant to Rule 144A under 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 December 31, 2010, the value of these securities amounted to $483,809 or 2.93% of net assets.

⁴  Security exempt from registration pursuant to Regulation S under the Securities Act of 1933. Regulation S applies to securities offerings that are made outside of the United States and do not involve direct selling efforts in the United States. At December 31, 2010, the value of this security amounted to $61,628 or 0.37% of net assets.

⁵  Security is illiquid. At December 31, 2010, the value of these securities amounted to $198,107 or 1.20% of net assets.

52

UBS Global Bond Fund

Portfolio of investments

December 31, 2010 (unaudited)

⁶  These securities, which represent 1.57% of net assets as of December 31, 2010, are considered restricted. (See restricted security table below for more information.)

Restricted securities	Acquisition date	Acquisition cost		Acquisition cost as a percentage of net assets			Value 12/31/10		12/31/10 Value as a percentage of net assets
Hewett's Island CDO Ltd., Series 2007-6A, Class D, 2.552%, due 06/09/19	05/09/07 - 09/25/09	$	247,508		1.50	%	$	150,000		0.91	%
Permanent Financing PLC, Series 6, Class 5A2, 0.905%, due 06/10/42	11/19/10		39,432		0.24			61,628		0.37
Queen Street CLO, Series 2007-1A, Class F, due 08/15/24	05/18/07		132,413		0.80			48,107		0.29
		$	419,353		2.54	%	$	259,735		1.57	%

⁷  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.

⁸  Step bond—Coupon rate increases in increments to maturity. Rate disclosed is as of December 31, 2010. Maturity date disclosed is the ultimate maturity date.

⁹  On September 7, 2008, the Federal Housing Finance Agency placed the Federal Home Loan Mortgage Corporation and the Federal National Mortgage Association into conservatorship, and the US Treasury guaranteed the debt issued by those organizations.

¹⁰  The table below details the Fund's investments in a fund that is advised by the same advisor as the Fund. The advisor does not earn a management fee from UBS Cash Management Prime Relationship Fund.

Security description	Value 06/30/10		Purchases during the six months ended 12/31/10		Sales during the six months ended 12/31/10		Value 12/31/10		Income earned from affiliate for the six months ended 12/31/10
UBS Cash Management Prime Relationship Fund	$	570,589	$	3,614,741	$	3,561,840	$	623,491	$	792

CDO  Collateralized debt obligations

CLO  Collateralized loan obligations

GE  General Electric

Currency type abbreviations:

AUD  Australian Dollar

CAD  Canadian Dollar

DKK  Danish Krone

EUR  Euro

GBP  Great Britain Pound

JPY  Japanese Yen

53

UBS Global Bond Fund

Portfolio of investments

December 31, 2010 (unaudited)

Forward foreign currency contracts

UBS Global Bond Fund had the following open forward foreign currency contracts as of December 31, 2010:

Counterparty	Contracts to deliver		In exchange for		Maturity dates	Unrealized appreciation/ (depreciation)
JPMorgan Chase Bank	CAD	425,000	USD	416,375	03/03/11	$	(10,566	)
JPMorgan Chase Bank	EUR	200,000	USD	263,762	03/03/11		(3,461	)
JPMorgan Chase Bank	GBP	1,480,000	USD	2,318,774	03/03/11		12,302
JPMorgan Chase Bank	USD	508,314	CAD	520,000	03/03/11		14,061
JPMorgan Chase Bank	USD	179,838	CHF	180,000	03/03/11		12,795
JPMorgan Chase Bank	USD	733,988	EUR	555,000	03/03/11		7,555
JPMorgan Chase Bank	USD	778,609	JPY	65,300,000	03/03/11		26,167
JPMorgan Chase Bank	USD	214,933	KRW	249,000,000	03/03/11		3,814
JPMorgan Chase Bank	USD	200,389	NOK	1,240,000	03/03/11		11,515
JPMorgan Chase Bank	USD	452,791	SEK	3,190,000	03/03/11		20,561
Net unrealized appreciation on forward foreign currency contracts						$	94,743

Currency type abbreviations:

CAD  Canadian Dollar

CHF  Swiss Franc

EUR  Euro

GBP  Great Britain Pound

JPY  Japanese Yen

KRW  Korean Won

NOK  Norwegian Krone

SEK  Swedish Krona

USD  United States Dollar

Futures contracts

UBS Global Bond Fund had the following open futures contracts as of December 31, 2010:

	Expiration date	Cost/ (proceeds)			Value			Unrealized appreciation/ (depreciation)
US Treasury futures buy contracts:
US Long Bond, 3 contracts (USD)	March 2011	$	377,067		$	366,375		$	(10,692	)
US Treasury futures sell contracts:
5 Year US Treasury Notes, 8 contracts (USD)	March 2011		(955,612	)		(941,750	)		13,862
Net unrealized appreciation on futures contracts								$	3,170

Currency type abbreviation:

USD  United States Dollar

Swap agreements

UBS Global Bond Fund had outstanding credit default swap agreements with the following terms as of December 31, 2010:

54

UBS Global Bond Fund

Portfolio of investments

December 31, 2010 (unaudited)

Credit default swaps on sovereign issues—sell protection¹

Counterparty	Notional amount		Termination date	Payments made by the Fund		Payments received by the Fund			Upfront payments (made)/ received		Value			Unrealized depreciation			Credit spread4
Goldman Sachs International	EUR	280,000	12/20/18		—2		1.2600	%3		—	$	(14,338	)	$	(14,338	)		1.8488	%

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  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.

³  Payments received are based on the notional amount.

⁴  Credit spreads, 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 or other credit event occurring 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 or 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.

Currency type abbreviation:

EUR  Euro

The following is a summary of the inputs used as of December 31, 2010 in valuing the Fund's investments:

Measurements at 12/31/10
Description	Unadjusted quoted prices in active markets for identical investments (Level 1)		Other significant observable inputs (Level 2)		Unobservable inputs (Level 3)		Total
Corporate bonds	$	—	$	5,766,033	$	—	$	5,766,033
Asset-backed securities		—		378,335		—		378,335
Collateralized debt obligations		—		—		198,107		198,107
Commercial mortgage-backed security		—		371,020		—		371,020
Mortgage & agency debt securities		—		1,424,512		—		1,424,512
US government obligations		—		932,361		—		932,361
Non-US government obligations		—		5,687,308		—		5,687,308
Supranational bonds		—		761,607		—		761,607
Short-term investment		—		623,491		—		623,491
Other financial instruments1		3,170		80,405		—		83,575
Total	$	3,170	$	16,025,072	$	198,107	$	16,226,349

¹  Other financial instruments include futures contracts, swap agreements, and forward foreign currency contracts.

55

UBS Global Bond Fund

Portfolio of investments

December 31, 2010 (unaudited)

Concluded

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	$	269,435		$	269,435
Total gains or losses (realized/unrealized), and premiums/discounts included in earnings		30,212			30,212
Purchases, sales, issuances, and settlements (net)		(101,540	)		(101,540	)
Transfers in and/or out of Level 3		—			—
Ending balance	$	198,107		$	198,107
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 12/31/10.	$	11,421		$	11,421

See accompanying notes to financial statements.
56

UBS High Yield Fund

Portfolio performance

For the six months ended December 31, 2010, Class A shares of UBS High Yield Fund (the "Fund") returned 9.70% (Class A shares gained 4.72% after the deduction of the maximum sales charge), while Class Y shares returned 9.92%. The Fund's benchmark, the BofA Merrill Lynch US High Yield Cash Pay Constrained Index (the "Index"), returned 9.83% 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 59; 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.)

The Fund generated a strong absolute return during the reporting period and performed largely in line with the Index. Overall sector allocation was positive for results, while issue selection marginally detracted from performance.

Portfolio performance summary¹

What worked

•  The Fund's positioning in a number of sectors contributed to performance during the reporting period.

  – Our overweight exposure to the industrial sectors was a positive for results. In particular, overweights in gaming and technology were rewarded as their spreads narrowed given improving profits and generally strong investor demand. (Spread measures the difference between the yields paid on a security versus those paid on US Treasuries of comparable duration.)

  – Within the financial sector, an overweight to the insurance subsector aided the Fund's results. During the period, spreads in this space continued to narrow from their elevated levels during the credit crisis.

•  Issue selection contributed positively within the building materials/construction and chemical industries, where we broadly sought to own more defensive names that we expected to be more resilient. Although fundamentals remained weak, strengthening global demand benefited these industries.

•  Overall, the Fund's positioning from a quality perspective enhanced its results. The Fund's modest overweight to securities rated CCC and lower was beneficial for performance, as investor risk appetite was generally robust during the review period.²

What didn't work

•  Issue selection was the largest detractor from the Fund's relative performance. While the Fund's overweight to the industrials sector was a positive for results, this was somewhat offset by security selection—particularly in the gaming subsector.

¹  For a detailed commentary on the market environment in general during the reporting period, see page 2.

²  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.

57

UBS High Yield Fund

•  An underweight in banking was not rewarded, as the sector performed very well during the reporting period. We increased the Fund's exposure to banking as the reporting period progressed, but remained modestly underweight.

•  The Fund's overweight exposure to B-rated bonds negatively contributed to results.³ This segment of the high yield market lagged the index during the reporting period, while lower rated securities outperformed.

³  A bond credit rating assesses the credit worthiness of a debt issue. A B-rated bond is considered to be low grade.

This letter is intended to assist shareholders in understanding how the Fund performed during the six months ended December 31, 2010. The views and opinions in the letter were current as of February 15, 2011. They are not guarantees of future 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.

58

UBS High Yield Fund

Average annual total returns for periods ended 12/31/10 (unaudited)

	6 months			1 year			5 years			10 years			Inception1
Before deducting maximum sales charge
Class A2		9.70	%		13.87	%		6.80	%		7.13	%		5.81	%
Class B3		9.27			13.19			6.03			N/A			7.23 6
Class C4		9.41			13.47			6.30			N/A			7.25
Class Y5		9.92			14.41			7.12			7.43			6.30
After deducting maximum sales charge
Class A2		4.72	%		8.73	%		5.81	%		6.64	%		5.40	%
Class B3		4.27			8.19			5.74			N/A			7.23 6
Class C4		8.66			12.72			6.30			N/A			7.25
BofA Merrill Lynch US High Yield Cash Pay Constrained Index7		9.83	%		15.10	%		8.66	%		8.84	%		6.89	%

The annualized gross and net expense ratios, respectively, for each class of shares as in the October 28, 2010 prospectuses were as follows: Class A—1.38% and 1.20%; Class B—2.20% and 1.95%; Class C—1.88% and 1.70%; Class Y—1.05% 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 UBS Global Asset Management (Americas) Inc., the Fund's investment advisor ("UBS Global AM (Americas)" or 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, interest, taxes, brokerage commissions, extraordinary expenses and securities loan fees and dividend expenses for securities sold short) to the extent necessary so that the Fund's ordinary operating expenses (excluding expenses incurred through investment in other investment companies, interest, taxes, brokerage commissions, extraordinary expenses and securities loan fees and dividend expenses for securities sold short), through the 12-month period ending October 27, 2011, do not exceed 1.20% for Class A shares, 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. Prior to September 30, 2003, Class C shares were subject to a maximum front-end sales charge of 1.00%; this front-end sales charge is not reflected in the average annual total returns presented for the Class C shares shown above.

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  Assumes the conversion of Class B to Class A shares at the end of the sixth year.

⁷  The BofA Merrill Lynch US High Yield Cash Pay Constrained Index is an unmanaged index of publicly placed non-convertible, coupon-bearing US dollar denominated below investment grade corporate 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 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. Total returns for periods of less than one year have not been annualized. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://www.ubs.com.

59

UBS High Yield Fund

Top ten long-term fixed income holdings (unaudited)

As of December 31, 2010

	Percentage of net assets
CIT Group, Inc., 7.000%, due 05/01/17		1.3	%
FireKeepers Development Authority, 13.875%, due 05/01/15		1.2
Caesars Entertainment Operating Co., Inc., 11.250%, due 06/01/17		1.1
Chesapeake Energy Corp., 7.250%, due 12/15/18		1.0
SunGard Data Systems, Inc., 10.250%, due 08/15/15		1.0
Clearwire Communications LLC, 12.000%, due 12/01/15		1.0
Frontier Communications Corp., 9.000%, due 08/15/31		0.9
Apria Healthcare Group, Inc., 11.250%, due 11/01/14		0.9
Intelsat Jackson Holdings SA, 11.250%, due 06/15/16		0.9
CIT Group, Inc., 7.000%, due 05/01/16		0.9
Total		10.2	%

60

UBS High Yield Fund

Industry diversification (unaudited)

As a percentage of net assets as of December 31, 2010

Bonds
Corporate bonds
Aerospace	0.95	%
Air transportation	0.66
Automotive & auto parts distributors	3.20
Banks & thrifts	3.34
Broadcasting	1.97
Building materials	1.68
Cable TV	2.11
Capital goods	0.89
Chemicals	2.39
Commercial banks	0.38
Consumer products	0.40
Containers	2.52
Diversified financial services	5.18
Diversified media	1.46
Electric utilities	4.41
Energy	11.84
Entertainment/film	0.40
Environmental	0.21
Food & drug retail	1.04
Food/beverage/tobacco	2.03
Gaming	6.87
Healthcare	4.87
Homebuilders/real estate	3.04
Hotel	0.36
Insurance	3.83
Leisure	0.85
Machinery	0.96
Metals/mining	1.35
Paper	2.90
Publishing/printing	1.13
Restaurants	0.14
Services	2.62
Steels	1.74
Super retail index	3.78
Technology	5.31
Telecommunications	8.13
Textile/apparel	0.37
Transportation excluding air/rail	0.96
Total corporate bonds	96.27	%
Commercial mortgage-backed securities	0.34
Total bonds	96.61	%
Common stocks	0.07	%
Preferred stock	0.001
Warrants	0.001
Short-term investment	1.81
Total investments	98.49	%
Cash and other assets, less liabilities	1.51
Net assets	100.00	%

¹  Amount represents less than 0.005%.

61

UBS High Yield Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Face amount		Value
Bonds: 96.61%
Corporate bonds: 96.27%
Austria: 0.30%
PE Paper Escrow GmbH, 12.000%, due 08/01/141	$	235,000	$	271,884
Bermuda: 0.58%
Intelsat Bermuda Ltd., 11.250%, due 02/04/17		300,000		327,000
Ship Finance International Ltd., 8.500%, due 12/15/13		190,000		193,325
Total Bermuda corporate bonds				520,325
Canada: 1.20%
Bombardier, Inc., 7.500%, due 03/15/181		110,000		117,975
7.750%, due 03/15/201		150,000		161,625
Nova Chemicals Corp., 8.625%, due 11/01/19		150,000		163,875
OPTI Canada, Inc., 8.250%, due 12/15/14		230,000		163,875
9.000%, due 12/15/121		150,000		150,375
Reliance Intermediate Holdings LP, 9.500%, due 12/15/191		200,000		210,250
Trinidad Drilling Ltd., 7.875%, due 01/15/191		95,000		95,950
Total Canada corporate bonds				1,063,925
Cayman Islands: 0.35%
Sable International Finance Ltd., 7.750%, due 02/15/171		125,000		132,188
Seagate HDD Cayman, 7.750%, due 12/15/181		175,000		177,187
Total Cayman Islands corporate bonds				309,375
China: 0.10%
Sino-Forest Corp., 6.250%, due 10/21/171		90,000		90,788
France: 0.15%
Cie Generale de Geophysique-Veritas, 7.750%, due 05/15/17		135,000		138,375
Germany: 0.09%
Unitymedia Hessen, 8.125%, due 12/01/171		75,000		78,375
Ireland: 0.61%
Anglo Irish Bank Corp. Ltd., 0.411%, due 11/02/112		475,000		334,875

	Face amount		Value
Ardagh Packaging Finance PLC, 7.375%, due 10/15/171	$	200,000	$	206,250
Total Ireland corporate bonds				541,125
Luxembourg: 2.05%
ConvaTec Healthcare E SA, 10.500%, due 12/15/181		200,000		202,750
Expro Finance Luxembourg SCA, 8.500%, due 12/15/161		455,000		434,525
Intelsat Jackson Holdings SA, 7.250%, due 10/15/201		100,000		101,000
11.250%, due 06/15/16		727,000		783,342
Wind Acquisition Finance SA, 11.750%, due 07/15/171		270,000		304,425
Total Luxembourg corporate bonds				1,826,042
Netherlands: 0.80%
ING Groep NV, 5.775%, due 12/08/152,3		245,000		210,700
NXP BV, 7.875%, due 10/15/14		230,000		239,200
9.500%, due 10/15/15		245,000		262,150
Total Netherlands corporate bonds				712,050
Russia: 0.25%
Evraz Group SA, 9.500%, due 04/24/181		200,000		220,760
Spain: 0.28%
Cemex Espana Luxembourg, 9.250%, due 05/12/201		252,000		247,590
United Kingdom: 1.83%
Global Crossing UK Finance PLC, 10.750%, due 12/15/14		300,000		310,500
Hanson Ltd., 6.125%, due 08/15/16		200,000		204,000
HBOS Capital Funding LP, 6.071%, due 06/30/141,2,3		300,000		244,500
Ineos Finance PLC, 9.000%, due 05/15/151		100,000		106,375
Ineos Group Holdings PLC, 8.500%, due 02/15/161		230,000		219,075
Vedanta Resources PLC, 9.500%, due 07/18/181		100,000		109,375
Virgin Media Finance PLC, 9.125%, due 08/15/16		150,000		159,750
9.500%, due 08/15/16		100,000		113,000
Virgin Media Secured Finance PLC, 6.500%, due 01/15/18		150,000		157,875
Total United Kingdom corporate bonds				1,624,450

62

UBS High Yield Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Face amount		Value
Bonds—(Continued)
Corporate bonds—(Continued)
United States: 87.68%
Accellent, Inc., 8.375%, due 02/01/17	$	275,000	$	281,875
ACCO Brands Corp., 10.625%, due 03/15/15		75,000		84,375
Advanced Micro Devices, Inc., 8.125%, due 12/15/17		135,000		143,100
AES Corp., 8.000%, due 06/01/20		550,000		583,000
AGFC Capital Trust I, 6.000%, due 01/15/671,2		125,000		57,500
AK Steel Corp., 7.625%, due 05/15/20		200,000		200,500
Allison Transmission, Inc., 11.000%, due 11/01/151		190,000		207,100
Ally Financial, Inc., 7.500%, due 09/15/201		150,000		157,313
8.000%, due 03/15/20		425,000		464,313
8.000%, due 11/01/31		150,000		161,625
8.300%, due 02/12/15		500,000		550,000
AMC Entertainment, Inc., 8.750%, due 06/01/19		275,000		293,563
American Axle & Manufacturing Holdings, Inc., 9.250%, due 01/15/171		85,000		94,988
American General Finance Corp., 5.625%, due 08/17/11		175,000		172,156
American General Institutional Capital A, 7.570%, due 12/01/451		600,000		601,500
American International Group, Inc., 6.250%, due 03/15/37		175,000		154,761
8.175%, due 05/15/582		130,000		138,425
Ameristar Casinos, Inc., 9.250%, due 06/01/14		225,000		240,750
AMGH Merger Sub, Inc., 9.250%, due 11/01/181		135,000		141,750
Amsted Industries, Inc., 8.125%, due 03/15/181		60,000		63,675
Apria Healthcare Group, Inc., 11.250%, due 11/01/14		750,000		819,375
Aquilex Holdings LLC, 11.125%, due 12/15/16		70,000		70,875
ARAMARK Corp., 8.500%, due 02/01/15		460,000		480,700
ArvinMeritor, Inc., 10.625%, due 03/15/18		150,000		168,750
Ashland, Inc., 9.125%, due 06/01/17		165,000		190,163

	Face amount		Value
Aspect Software, Inc., 10.625%, due 05/15/171	$	60,000	$	61,575
Atlas Pipeline Partners LP, 8.125%, due 12/15/15		275,000		283,250
ATP Oil & Gas Corp., 11.875%, due 05/01/151		50,000		47,250
Avis Budget Car Rental LLC, 9.625%, due 03/15/18		100,000		107,750
Baldor Electric Co., 8.625%, due 02/15/17		110,000		123,200
Ball Corp., 6.750%, due 09/15/20		35,000		36,750
Bank of America Corp., 8.000%, due 01/30/182,3		75,000		75,585
BankAmerica Capital II, 8.000%, due 12/15/26		380,000		382,375
BE Aerospace, Inc., 6.875%, due 10/01/20		175,000		180,688
Beazer Homes USA, Inc., 6.875%, due 07/15/15		15,000		14,513
8.125%, due 06/15/16		150,000		147,375
Belden, Inc., 9.250%, due 06/15/19		100,000		109,625
Berry Petroleum Co., 6.750%, due 11/01/20		100,000		100,500
Berry Plastics Corp., 8.250%, due 11/15/15		125,000		132,500
9.500%, due 05/15/18		150,000		150,375
Biomet, Inc., 10.375%, due 10/15/174		435,000		475,238
Boise Paper Holdings LLC, 9.000%, due 11/01/17		70,000		76,475
Bon-Ton Department Stores, Inc., 10.250%, due 03/15/14		575,000		586,500
Boyd Gaming Corp., 9.125%, due 12/01/181		160,000		158,000
Brocade Communications Systems, Inc., 6.875%, due 01/15/20		50,000		53,250
Brunswick Corp., 11.250%, due 11/01/161		80,000		95,200
Cablevision Systems Corp., 8.625%, due 09/15/17		425,000		462,719
Caesars Entertainment Operating Co., Inc., 10.000%, due 12/15/18		305,000		278,313
11.250%, due 06/01/17		880,000		990,000
Calpine Construction Finance Co. LP, 8.000%, due 06/01/161		200,000		212,500
Calpine Corp., 7.500%, due 02/15/211		285,000		280,725
7.875%, due 07/31/201		470,000		475,875

63

UBS High Yield Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Face amount		Value
Bonds—(Continued)
Corporate bonds—(Continued)
United States—(Continued)
Capella Healthcare, Inc., 9.250%, due 07/01/171	$	55,000	$	58,300
Carriage Services, Inc., 7.875%, due 01/15/15		250,000		251,562
Case New Holland, Inc., 7.875%, due 12/01/171		225,000		245,812
Casella Waste Systems, Inc., 11.000%, due 07/15/14		125,000		138,281
CB Richard Ellis Services, Inc., 11.625%, due 06/15/17		100,000		115,875
Celanese US Holdings LLC, 6.625%, due 10/15/181		95,000		98,087
Cemex Finance LLC, 9.500%, due 12/14/161		200,000		206,250
Cengage Learning Acquisitions, Inc., 10.500%, due 01/15/151		180,000		185,850
Chesapeake Energy Corp., 6.625%, due 08/15/20		130,000		128,050
7.250%, due 12/15/18		850,000		879,750
CIT Group, Inc., 7.000%, due 05/01/13		200,000		204,000
7.000%, due 05/01/16		755,000		757,831
7.000%, due 05/01/17		1,175,000		1,177,937
Citigroup Capital XXI, 8.300%, due 12/21/572		655,000		681,200
Clear Channel Communications, Inc., 5.500%, due 09/15/14		130,000		107,900
6.250%, due 03/15/11		55,000		54,862
7.250%, due 10/15/27		135,000		75,600
10.750%, due 08/01/16		200,000		179,000
Clear Channel Worldwide Holdings, Inc., 9.250%, due 12/15/17		25,000		27,187
Series B, 9.250%, due 12/15/17		105,000		114,975
Clearwater Paper Corp., 7.125%, due 11/01/181		125,000		129,062
Clearwire Communications LLC, 12.000%, due 12/01/151		780,000		841,400
CMP Susquehanna Corp., 16.611%, due 05/15/145,6		50,000		17,750
Community Health Systems, Inc., 8.875%, due 07/15/15		190,000		199,500
Comstock Resources, Inc., 8.375%, due 10/15/17		100,000		100,250
Consol Energy, Inc., 8.000%, due 04/01/171		200,000		213,000
Constellation Brands, Inc., 8.375%, due 12/15/14		350,000		382,375

	Face amount		Value
CPM Holdings, Inc., 10.625%, due 09/01/141	$	150,000	$	160,500
Cricket Communications, Inc., 10.000%, due 07/15/15		125,000		133,906
Crosstex Energy LP, 8.875%, due 02/15/18		280,000		299,950
CSC Holdings LLC, 8.625%, due 02/15/19		125,000		141,250
DAE Aviation Holdings, Inc., 11.250%, due 08/01/151		180,000		186,300
Darling International, Inc., 8.500%, due 12/15/181		40,000		41,700
Delta Air Lines, Inc., 12.250%, due 03/15/151		325,000		366,437
Denbury Resources, Inc., 8.250%, due 02/15/20		125,000		135,625
9.750%, due 03/01/16		335,000		373,525
Developers Diversified Realty Corp., REIT, 9.625%, due 03/15/16		310,000		367,884
Diamond Resorts Corp., 12.000%, due 08/15/181		570,000		570,000
DISH DBS Corp., 6.625%, due 10/01/14		400,000		415,000
7.875%, due 09/01/19		200,000		209,000
Domtar Corp., 10.750%, due 06/01/17		85,000		107,100
DuPont Fabros Technology LP, REIT, 8.500%, due 12/15/17		400,000		428,000
Dycom Investments, Inc., 8.125%, due 10/15/15		175,000		179,812
Dynegy Holdings, Inc., 8.375%, due 05/01/16		160,000		119,600
E*Trade Financial Corp., 12.500%, due 11/30/174		324,000		380,700
Edgen Murray Corp., 12.250%, due 01/15/15		140,000		121,800
Edison Mission Energy, 7.000%, due 05/15/17		555,000		439,837
El Paso Corp., 7.800%, due 08/01/31		640,000		636,636
Encore Acquisition Co., 9.500%, due 05/01/16		175,000		194,250
Energy Future Intermediate Holding Co. LLC, 10.000%, due 12/01/20		431,000		444,479
Energy Transfer Equity LP, 7.500%, due 10/15/20		50,000		51,500
Entravision Communications Corp., 8.750%, due 08/01/171		175,000		184,625
Equinix, Inc., 8.125%, due 03/01/18		250,000		261,250

64

UBS High Yield Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Face amount		Value
Bonds—(Continued)
Corporate bonds—(Continued)
United States—(Continued)
Exopack Holding Corp., 11.250%, due 02/01/14	$	195,000	$	202,312
Ferrellgas Partners-LP, 9.125%, due 10/01/17		435,000		478,500
FireKeepers Development Authority, 13.875%, due 05/01/151		930,000		1,099,725
First Data Corp., 9.875%, due 09/24/15		205,000		195,262
11.250%, due 03/31/16		195,000		170,625
Ford Motor Co., 7.450%, due 07/16/31		415,000		444,569
Ford Motor Credit Co. LLC, 8.700%, due 10/01/14		250,000		281,539
12.000%, due 05/15/15		520,000		654,128
Forest Oil Corp., 8.500%, due 02/15/14		140,000		152,950
Freeport-McMoRan Copper & Gold, Inc., 8.375%, due 04/01/17		210,000		232,313
Freescale Semiconductor, Inc., 9.125%, due 12/15/144		135,000		141,075
9.250%, due 04/15/181		115,000		126,500
10.125%, due 12/15/16		275,000		289,438
10.125%, due 03/15/181		125,000		140,625
10.750%, due 08/01/201		150,000		163,500
Frontier Communications Corp., 8.250%, due 04/15/17		60,000		65,850
8.500%, due 04/15/20		60,000		65,550
9.000%, due 08/15/31		805,000		827,137
FTI Consulting, Inc., 6.750%, due 10/01/201		100,000		99,250
Gannett Co., Inc., 9.375%, due 11/15/17		150,000		167,250
GenOn Energy, Inc., 9.500%, due 10/15/181		140,000		139,125
GenOn Escrow Corp., 9.875%, due 10/15/201		200,000		198,500
Gentiva Health Services, Inc., 11.500%, due 09/01/18		55,000		59,950
Georgia Gulf Corp., 9.000%, due 01/15/171		35,000		37,975
Georgia-Pacific LLC, 5.400%, due 11/01/201		200,000		197,736
8.250%, due 05/01/161		375,000		423,281
8.875%, due 05/15/31		215,000		264,450
Glen Meadow Pass-Through Trust, 6.505%, due 02/12/671,2		200,000		166,000
Global Aviation Holdings, Inc., 14.000%, due 08/15/13		205,000		221,400

	Face amount		Value
Goodyear Tire & Rubber Co., 10.500%, due 05/15/16	$	360,000	$	410,400
Graham Packaging Co. LP, 8.250%, due 10/01/18		45,000		47,250
9.875%, due 10/15/14		545,000		564,075
Graphic Packaging International, Inc., 7.875%, due 10/01/18		120,000		125,700
9.500%, due 06/15/17		55,000		60,019
Gulfmark Offshore, Inc., 7.750%, due 07/15/14		215,000		218,225
GXS Worldwide, Inc., 9.750%, due 06/15/15		175,000		172,813
Harland Clarke Holdings Corp., 9.500%, due 05/15/15		430,000		408,500
Hartford Financial Services Group, Inc., 8.125%, due 06/15/382		460,000		488,750
HCA Holdings, Inc., 7.750%, due 05/15/211		280,000		280,000
Helix Energy Solutions Group, Inc., 9.500%, due 01/15/161		450,000		462,375
Hertz Corp., 7.375%, due 01/15/211		240,000		242,400
Hexion US Finance Corp., 8.875%, due 02/01/18		145,000		154,969
Hilcorp Finance Co., 7.625%, due 04/15/211		90,000		92,925
8.000%, due 02/15/201		85,000		89,994
Host Hotels & Resorts LP, REIT, 9.000%, due 05/15/17		285,000		316,350
Huntsman International LLC, 5.500%, due 06/30/16		150,000		145,125
Icahn Enterprises LP, 8.000%, due 01/15/18		125,000		125,000
ILFC E-Capital Trust I, 5.990%, due 12/21/651,2		320,000		242,259
Inergy LP, 7.000%, due 10/01/181		80,000		80,600
8.250%, due 03/01/16		325,000		338,812
8.750%, due 03/01/15		290,000		308,850
ING Capital Funding Trust III, 3.903%, due 03/31/112,3		215,000		198,337
Ingles Markets, Inc., 8.875%, due 05/15/17		430,000		460,100
Insight Communications Co., Inc., 9.375%, due 07/15/181		50,000		53,250
Interactive Data Corp., 10.250%, due 08/01/181		25,000		27,125
International Lease Finance Corp., 7.125%, due 09/01/181		425,000		451,563
8.625%, due 09/15/151		405,000		435,375
8.750%, due 03/15/171		130,000		139,425

65

UBS High Yield Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Face amount		Value
Bonds—(Continued)
Corporate bonds—(Continued)
United States—(Continued)
Invista, 9.250%, due 05/01/121	$	77,000	$	78,348
Iron Mountain, Inc., 8.375%, due 08/15/21		425,000		455,812
Jabil Circuit, Inc., 8.250%, due 03/15/18		150,000		169,875
Jacobs Entertainment, Inc., 9.750%, due 06/15/14		275,000		267,438
JC Penney Corp., Inc., 7.125%, due 11/15/23		325,000		335,563
K Hovnanian Enterprises, Inc., 10.625%, due 10/15/16		180,000		184,500
KB Home, 5.750%, due 02/01/14		75,000		75,000
5.875%, due 01/15/15		150,000		146,250
6.250%, due 06/15/15		150,000		148,500
KEMET Corp., 10.500%, due 05/01/181		100,000		107,500
Key Energy Services, Inc., 8.375%, due 12/01/14		365,000		385,075
Land O'Lakes Capital Trust I, 7.450%, due 03/15/281		340,000		304,300
Landry's Restaurants, Inc., 11.625%, due 12/01/15		120,000		128,100
Level 3 Financing, Inc., 9.250%, due 11/01/14		110,000		109,175
10.000%, due 02/01/18		150,000		144,000
Levi Strauss & Co., 7.625%, due 05/15/20		200,000		206,500
Libbey Glass, Inc., 10.000%, due 02/15/151		75,000		80,625
Liberty Mutual Group, Inc., 7.800%, due 03/15/371		100,000		98,500
10.750%, due 06/15/581,2		335,000		405,350
Limited Brands, Inc., 7.600%, due 07/15/37		100,000		98,000
8.500%, due 06/15/19		155,000		177,087
Lincoln National Corp., 7.000%, due 05/17/662		550,000		536,250
Linn Energy LLC, 7.750%, due 02/01/211		240,000		246,000
11.750%, due 05/15/17		160,000		183,200
Lyondell Chemical Co., 8.000%, due 11/01/171		270,000		298,687
11.000%, due 05/01/18		250,000		283,125
Macy's Retail Holdings, Inc., 6.375%, due 03/15/37		225,000		220,500
Manitowoc Co., Inc., 8.500%, due 11/01/20		300,000		318,750

	Face amount		Value
Mantech International Corp., 7.250%, due 04/15/18	$	35,000	$	36,575
Marquette Transportation Finance Corp., 10.875%, due 01/15/171		100,000		102,000
Massey Energy Co., 6.875%, due 12/15/13		250,000		253,125
McClatchy Co., 11.500%, due 02/15/17		210,000		235,987
McJunkin Red Man Corp., 9.500%, due 12/15/161		500,000		472,500
MedAssets, Inc., 8.000%, due 11/15/181		225,000		226,125
Media General, Inc., 11.750%, due 02/15/17		150,000		157,687
Mediacom LLC, 9.125%, due 08/15/19		75,000		76,500
Mercer International, Inc., 9.500%, due 12/01/171		140,000		143,850
Meritage Homes Corp., 6.250%, due 03/15/15		100,000		100,500
MGM Resorts International, 9.000%, due 03/15/201		125,000		137,500
10.000%, due 11/01/161		210,000		215,775
10.375%, due 05/15/14		125,000		140,312
11.125%, due 11/15/17		410,000		471,500
13.000%, due 11/15/13		260,000		307,450
Michael Foods, Inc., 9.750%, due 07/15/181		220,000		240,350
Michaels Stores, Inc., 11.375%, due 11/01/16		215,000		234,350
Midwest Gaming Borrower LLC, 11.625%, due 04/15/161		120,000		124,200
Mirant Americas Generation LLC, 9.125%, due 05/01/31		240,000		236,400
Momentive Performance Materials, Inc., 12.500%, due 06/15/14		80,000		89,300
Multiplan, Inc., 9.875%, due 09/01/181		485,000		515,312
Murray Energy Corp., 10.250%, due 10/15/151		210,000		220,500
Mylan, Inc., 7.625%, due 07/15/171		250,000		265,938
Nalco Co., 6.625%, due 01/15/191		250,000		255,625
Navios Maritime Acquisition Corp., 8.625%, due 11/01/171		390,000		398,775
Navios Maritime Holdings, Inc., 8.875%, due 11/01/17		160,000		173,200
Navistar International Corp., 8.250%, due 11/01/21		125,000		134,375

66

UBS High Yield Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Face amount		Value
Bonds—(Continued)
Corporate bonds—(Continued)
United States—(Continued)
NB Capital Trust II, 7.830%, due 12/15/26	$	115,000	$	115,000
Neiman Marcus Group, Inc., 9.000%, due 10/15/154		66,456		69,613
10.375%, due 10/15/15		115,000		121,469
Nexstar Broadcasting, Inc., 8.875%, due 04/15/171		125,000		132,813
Nextel Communications, Inc., Series D, 7.375%, due 08/01/15		250,000		250,313
Nielsen Finance LLC, 7.750%, due 10/15/181		35,000		36,225
11.625%, due 02/01/14		140,000		162,050
12.500%, due 08/01/167		145,000		152,250
Niska Gas Storage US LLC, 8.875%, due 03/15/181		185,000		197,950
North American Energy Alliance LLC, 10.875%, due 06/01/161		200,000		222,000
NRG Energy, Inc., 7.250%, due 02/01/14		350,000		357,000
7.375%, due 02/01/16		100,000		102,500
8.500%, due 06/15/19		100,000		103,250
Omnicare, Inc., 7.750%, due 06/01/20		42,000		43,260
Owens-Brockway Glass Container, Inc., 7.375%, due 05/15/16		120,000		127,500
PAETEC Holding Corp., 9.875%, due 12/01/181		300,000		308,250
Patriot Coal Corp., 8.250%, due 04/30/18		125,000		127,188
Peabody Energy Corp., 6.500%, due 09/15/20		50,000		53,375
Peninsula Gaming LLC, 8.375%, due 08/15/15		100,000		105,125
Petco Animal Supplies, Inc., 9.250%, due 12/01/181		215,000		226,556
Petrohawk Energy Corp., 7.875%, due 06/01/15		200,000		208,250
10.500%, due 08/01/14		445,000		507,300
Pinafore LLC, 9.000%, due 10/01/181		200,000		216,000
Pinnacle Foods Finance LLC, 10.625%, due 04/01/17		230,000		246,100
Plains Exploration & Production Co., 7.625%, due 06/01/18		127,000		133,668
10.000%, due 03/01/16		305,000		340,838
PLY Gem Industries, Inc., 11.750%, due 06/15/13		470,000		502,900
Pokagon Gaming Authority, 10.375%, due 06/15/141		398,000		414,915

	Face amount		Value
Pride International, Inc., 6.875%, due 08/15/20	$	35,000	$	36,312
Prospect Medical Holdings, Inc., 12.750%, due 07/15/14		200,000		220,000
QEP Resources, Inc., 6.875%, due 03/01/21		105,000		110,250
Quicksilver Resources, Inc., 11.750%, due 01/01/16		140,000		163,100
Quiksilver, Inc., 6.875%, due 04/15/15		125,000		122,187
QVC, Inc., 7.125%, due 04/15/171		70,000		73,325
7.500%, due 10/01/191		130,000		136,825
Qwest Communications International, Inc., 7.125%, due 04/01/181		450,000		465,750
Radiation Therapy Services, Inc., 9.875%, due 04/15/171		100,000		99,750
RBS Global, Inc., 8.500%, due 05/01/18		140,000		148,750
Realogy Corp., 10.500%, due 04/15/14		315,000		309,487
Regal Entertainment Group, 9.125%, due 08/15/18		55,000		58,575
Residential Capital LLC, 9.625%, due 05/15/15		125,000		126,250
Reynolds Group Issuer, Inc., 7.750%, due 10/15/161		200,000		211,500
8.500%, due 05/15/181		200,000		201,000
Rite Aid Corp., 9.500%, due 06/15/17		180,000		153,000
10.375%, due 07/15/16		300,000		312,000
Roofing Supply Group LLC, 8.625%, due 12/01/171		180,000		185,400
Royal Caribbean Cruises Ltd., 7.500%, due 10/15/27		190,000		186,437
Ryerson, Inc., 12.000%, due 11/01/15		480,000		502,800
Ryland Group, Inc., 6.625%, due 05/01/20		275,000		270,875
Salem Communications Corp., 9.625%, due 12/15/16		53,000		56,180
Sally Holdings LLC, 10.500%, due 11/15/16		125,000		137,812
SandRidge Energy, Inc., 8.750%, due 01/15/20		210,000		215,775
9.875%, due 05/15/161		190,000		200,925
Sanmina-SCI Corp., 8.125%, due 03/01/16		485,000		489,850
SBA Telecommunications, Inc., 8.250%, due 08/15/19		180,000		196,650

67

UBS High Yield Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Face amount		Value
Bonds—(Continued)
Corporate bonds—(Continued)
United States—(Continued)
Scientific Games Corp., 8.125%, due 09/15/181	$	55,000	$	55,412
Sealy Mattress Co., 10.875%, due 04/15/161		90,000		101,700
Severstal Columbus LLC, 10.250%, due 02/15/181		200,000		211,000
Shingle Springs Tribal Gaming Authority, 9.375%, due 06/15/151		365,000		251,850
Sinclair Television Group, Inc., 9.250%, due 11/01/171		225,000		243,562
Sitel LLC, 11.500%, due 04/01/181		150,000		123,750
Smithfield Foods, Inc., 10.000%, due 07/15/141		190,000		218,975
Solo Cup Co., 8.500%, due 02/15/14		200,000		180,000
Spirit Aerosystems, Inc., 7.500%, due 10/01/17		115,000		119,600
Sprint Capital Corp., 8.750%, due 03/15/32		730,000		737,300
Sprint Nextel Corp., 8.375%, due 08/15/17		300,000		321,750
SPX Corp., 7.625%, due 12/15/14		400,000		435,000
SquareTwo Financial Corp., 11.625%, due 04/01/171		355,000		349,675
Standard Pacific Corp., 10.750%, due 09/15/16		115,000		132,537
SunGard Data Systems, Inc., 10.250%, due 08/15/15		815,000		856,769
Susser Holdings LLC, 8.500%, due 05/15/16		50,000		53,625
Swift Energy Co., 8.875%, due 01/15/20		125,000		135,312
Tenet Healthcare Corp., 8.000%, due 08/01/201		55,000		55,825
Tenneco, Inc., 7.750%, due 08/15/181		55,000		58,300
Terremark Worldwide, Inc., 12.000%, due 06/15/17		170,000		194,650
Tesoro Corp., 9.750%, due 06/01/19		205,000		227,038
Toll Brothers Finance Corp., 8.910%, due 10/15/17		225,000		265,468
Toys R Us Property Co. II LLC, 8.500%, due 12/01/17		505,000		542,875
Trimas Corp., 9.750%, due 12/15/17		30,000		32,850

	Face amount		Value
Triumph Group, Inc., 8.000%, due 11/15/17	$	55,000	$	57,200
TRW Automotive, Inc., 7.000%, due 03/15/141		155,000		165,850
Tube City IMS Corp., 9.750%, due 02/01/15		240,000		248,400
Tunica-Biloxi Gaming Authority, 9.000%, due 11/15/151		600,000		565,500
Tyson Foods, Inc., 10.500%, due 03/01/14		175,000		206,938
Umbrella Acquisition, Inc., 9.750%, due 03/15/154		285,369		308,199
Unisys Corp., 12.750%, due 10/15/141		300,000		354,750
United States Steel Corp., 7.375%, due 04/01/20		150,000		153,750
Universal Hospital Services, Inc., 8.500%, due 06/01/154		130,000		133,575
Univision Communications, Inc., 7.875%, due 11/01/201		35,000		36,750
8.500%, due 05/15/211		185,000		187,313
12.000%, due 07/01/141		200,000		219,000
USG Corp., 8.375%, due 10/15/181		35,000		34,300
9.750%, due 08/01/141		100,000		105,500
Vanguard Health Holding Co. II LLC, 8.000%, due 02/01/18		225,000		230,625
Verso Paper Holdings LLC, 11.500%, due 07/01/14		260,000		285,350
Series B, 11.375%, due 08/01/16		420,000		421,050
Viskase Cos., Inc., 9.875%, due 01/15/181		200,000		208,500
West Corp., 7.875%, due 01/15/191		250,000		254,375
11.000%, due 10/15/16		300,000		325,500
Weyerhaeuser Co., 7.375%, due 03/15/32		170,000		171,851
Whiting Petroleum Corp., 6.500%, due 10/01/18		150,000		151,500
Windstream Corp., 8.625%, due 08/01/16		375,000		394,688
WMG Acquisition Corp., 9.500%, due 06/15/16		435,000		466,538
XL Group PLC, Series E, 6.500%, due 04/15/172,3		465,000		399,900
XM Satellite Radio, Inc., 13.000%, due 08/01/131		115,000		136,850
Yankee Acquisition Corp., Series B, 8.500%, due 02/15/15		90,000		93,600
9.750%, due 02/15/17		245,000		255,413

68

UBS High Yield Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Face amount		Value
Bonds—(Concluded)
Corporate bonds—(Concluded)
United States—(Concluded)
Yonkers Racing Corp., 11.375%, due 07/15/161	$	260,000	$	286,325
Zions Bancorp., 5.500%, due 11/16/15		140,000		136,093
Total United States corporate bonds				78,021,781
Total corporate bonds (cost $78,400,478)				85,666,845
Commercial mortgage-backed securities: 0.34%
United States: 0.34%
GE Capital Commercial Mortgage Corp., Series 2007-C1, Class AJ, 5.677%, due 12/10/492		225,000		130,418
GS Mortgage Securities Corp. II, Series 2007-GG10, Class C, 5.807%, due 08/10/452		425,000		74,026
Wachovia Bank Commercial Mortgage Trust, Series 2007-C33, Class AM, 5.902%, due 02/15/512		100,000		97,655
Total commercial mortgage-backed securities (cost $256,876)				302,099
Total bonds (cost $78,657,354)				85,968,944
	Shares
Common stocks: 0.07%
United States: 0.07%
American Restaurant Group, Inc.*5,6		972		0
Knology, Inc.*		3,926		61,363
Pliant Corp.*5,6,9		1		0
Vertis Holdings, Inc.*5,6		8,952		0
Total common stocks (cost $0)				61,363
Preferred stock: 0.00%8
United States: 0.00%8
CMP Susquehanna Radio Holdings Corp., Series A1,5,6,9 (cost $135)		11,661		117

	Number of warrants		Value
Warrants: 0.00%8
United States: 0.00%8
CMP Susquehanna Radio Holdings Corp., strike @ $0.01, expires 03/26/19*5,6		13,325	$	133
Sabreliner Corp., strike @ $0.01, expires 06/08/18*5,6		8,400		0
Total warrants (cost $153,135)				133
	Shares
Short-term investment: 1.81%
Investment company: 1.81%
UBS Cash Management Prime Relationship Fund10 (cost $1,607,581)		1,607,581		1,607,581
Total investments: 98.49% (cost $80,418,205)				87,638,138
Cash and other assets, less liabilities: 1.51%				1,345,144
Net assets: 100.00%			$	88,983,282

69

UBS High Yield Fund

Portfolio of investments

December 31, 2010 (unaudited)

Notes to portfolio of investments

Aggregate cost for federal income tax purposes was substantially the same as for book purposes and net unrealized appreciation consisted of:

Gross unrealized appreciation	$	8,117,141
Gross unrealized depreciation		(897,208	)
Net unrealized appreciation of investments	$	7,219,933

*  Non-income producing security.

¹  Security exempt from registration pursuant to Rule 144A under 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 December 31, 2010, the value of these securities amounted to $27,907,127 or 31.36% of net assets.

²  Variable or floating rate security. The interest rate shown is the current rate as of December 31, 2010 and changes periodically.

³  Perpetual bond security. The maturity date reflects the next call date.

⁴  PIK—Payment-in kind security. Income may be paid in cash or additional notes, at the discretion of the issuer.

⁵  Security is illiquid. At December 31, 2010, the value of these securities amounted to $18,000 or 0.02% of net assets.

⁶  Security is being fair valued by a valuation committee under the direction of the Board of Trustees. At December 31, 2010, the value of these securities amounted to $18,000 or 0.02% of net assets.

⁷  Step bond—Coupon rate increases in increments to maturity. Rate disclosed is as of December 31, 2010. Maturity date disclosed is the ultimate maturity date.

⁸  Amount represents less than 0.005%.

⁹  These securities, which represent 0.005% of net assets as of December 31, 2010, are considered restricted. (See restricted security table below for more information.)

Restricted security	Acquisition date	Acquisition cost		Acquisition cost as a percentage of net assets			Value 12/31/10		12/31/10 Value as a percentage of net assets
CMP Susquehanna Radio Holdings Corp., Series A,	03/30/09	$	135		0.00	%1	$	117		0.00	%1
Pliant Corp.,	10/02/00		0		0.00			0		0.00
		$	135		0.00	%1	$	117		0.00	%1

¹  Amount represents less than 0.005%.

¹⁰  The table below details the Fund's investments in a fund that is advised by the same advisor as the Fund. The advisor does not earn a management fee from UBS Cash Management Prime Relationship Fund.

Security description	Value 06/30/10		Purchases during the six months ended 12/31/10		Sales during the six months ended 12/31/10		Value 12/31/10		Income earned from affiliate for the six months ended 12/31/10
UBS Cash Management Prime Relationship Fund	$	1,804,675	$	16,862,554	$	17,059,648	$	1,607,581	$	1,826

GE  General Electric

GS  Goldman Sachs

REIT  Real estate investment trust

70

UBS High Yield Fund

Portfolio of investments

December 31, 2010 (unaudited)

The following is a summary of the inputs used as of December 31, 2010 in valuing the Fund's investments:

Measurements at 12/31/10
Description	Unadjusted quoted prices in active markets for identical investments (Level 1)		Other significant observable inputs (Level 2)		Unobservable inputs (Level 3)		Total
Corporate bonds	$	—	$	85,649,095	$	17,750	$	85,666,845
Commercial mortgage-backed securities		—		302,099		—		302,099
Common stocks		61,363		—		0		61,363
Preferred stock		—		—		117		117
Warrants		—		—		133		133
Short-term investment		—		1,607,581		—		1,607,581
Total	$	61,363	$	87,558,775	$	18,000	$	87,638,138

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		Common Stocks		Preferred stocks		Warrants		Total
Assets
Beginning balance	$	17,750	$	0	$	117	$	133	$	18,000
Total gains or losses (realized/unrealized), and premiums/discounts included in earnings		—		—		—		—		—
Purchases, sales, issuances, and settlements (net)		—		—		—		—		—
Transfers in and/or out of Level 3		—		—		—		—		—
Ending balance	$	17,750	$	0	$	117	$	133	$	18,000
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 12/31/10.	$	—	$	—	$	—	$	—	$	—

See accompanying notes to financial statements.
71

The UBS Funds

December 31, 2010 (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, July 1, 2010 to December 31, 2010.

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 July 1, 2010 to December 31, 2010.

72

The UBS Funds

December 31, 2010 (unaudited)

		Beginning account value July 1, 2010		Ending account value December 31, 2010		Expenses paid during period* 07/01/10 – 12/31/10		Expense ratio during period
UBS Absolute Return Bond Fund
Class A	Actual	$	1,000.00	$	1,022.00	$	5.10		1.00	%
	Hypothetical (5% annual return before expenses)		1,000.00		1,020.16		5.09		1.00
Class C	Actual		1,000.00		1,020.00		6.87		1.35
	Hypothetical (5% annual return before expenses)		1,000.00		1,018.40		6.87		1.35
Class Y	Actual		1,000.00		1,023.00		4.13		0.81
	Hypothetical (5% annual return before expenses)		1,000.00		1,021.12		4.13		0.81
UBS Core Plus Bond Fund
Class A	Actual		1,000.00		1,024.80		3.27		0.64
	Hypothetical (5% annual return before expenses)		1,000.00		1,021.98		3.26		0.64
Class B	Actual		1,000.00		1,020.80		7.08		1.39
	Hypothetical (5% annual return before expenses)		1,000.00		1,018.20		7.07		1.39
Class C	Actual		1,000.00		1,022.30		5.81		1.14
	Hypothetical (5% annual return before expenses)		1,000.00		1,019.46		5.80		1.14
Class Y	Actual		1,000.00		1,024.90		1.99		0.39
	Hypothetical (5% annual return before expenses)		1,000.00		1,023.24		1.99		0.39
UBS Fixed Income Opportunities Fund1
Class A	Actual		1,000.00		1,022.20		0.87		0.95
	Hypothetical (5% annual return before expenses)		1,000.00		1,020.42		4.84		0.95
Class C	Actual		1,000.00		1,021.10		1.32		1.45
	Hypothetical (5% annual return before expenses)		1,000.00		1,017.90		7.37		1.45
Class Y	Actual		1,000.00		1,023.40		0.64		0.70
	Hypothetical (5% annual return before expenses)		1,000.00		1,021.68		3.57		0.70

*  Expenses are equal to the Fund's annualized net expense ratios, multiplied by the average account value over the period, multiplied by 184 divided by 365 (to reflect the one-half year period).

¹  UBS Fixed Income Opportunities Fund commenced operations on November 29, 2010. Actual expense is equal to the Fund's annualized net expense ratios from the commencement of investment operations date, multiplied by the average account value over the period, multiplied by 33 divided by 365 (to reflect the actual days in the period). For comparability purposes, hypothetical expense assumes that the Fund was in operation for the entire six-month period ended December 31, 2010. Thus, the hypothetical expense is equal to the Fund's annualized net expense ratio, multiplied by the average account value over the period, multiplied by 184 divided by 365 (to reflect the one-half year period).

73

The UBS Funds

December 31, 2010 (unaudited)

		Beginning account value July 1, 2010		Ending account value December 31, 2010		Expenses paid during period* 07/01/10 – 12/31/10		Expense ratio during period
UBS Global Bond Fund
Class A	Actual	$	1,000.00	$	1,063.10	$	5.98		1.15	%
	Hypothetical (5% annual return before expenses)		1,000.00		1,019.41		5.85		1.15
Class B	Actual		1,000.00		1,058.80		9.86		1.90
	Hypothetical (5% annual return before expenses)		1,000.00		1,015.63		9.65		1.90
Class C	Actual		1,000.00		1,059.10		8.56		1.65
	Hypothetical (5% annual return before expenses)		1,000.00		1,016.89		8.39		1.65
Class Y	Actual		1,000.00		1,063.50		4.68		0.90
	Hypothetical (5% annual return before expenses)		1,000.00		1,020.67		4.58		0.90
UBS High Yield Fund
Class A	Actual		1,000.00		1,097.00		6.34		1.20
	Hypothetical (5% annual return before expenses)		1,000.00		1,019.16		6.11		1.20
Class B	Actual		1,000.00		1,092.70		10.29		1.95
	Hypothetical (5% annual return before expenses)		1,000.00		1,015.38		9.91		1.95
Class C	Actual		1,000.00		1,094.10		8.97		1.70
	Hypothetical (5% annual return before expenses)		1,000.00		1,016.64		8.64		1.70
Class Y	Actual		1,000.00		1,099.20		5.03		0.95
	Hypothetical (5% annual return before expenses)		1,000.00		1,020.42		4.84		0.95

*  Expenses are equal to the Fund's annualized net expense ratios, multiplied by the average account value over the period, multiplied by 184 divided by 365 (to reflect the one-half year period).

74

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75

The UBS Funds

Financial statements

Statement of assets and liabilities
December 31, 2010 (unaudited)

	UBS Absolute Return Bond Fund		UBS Core Plus Bond Fund		UBS Fixed Income Opportunities Fund
Assets:
Investments, at cost:
Unaffiliated issuers	$	135,997,823	$	41,739,992	$	24,567,974
Affiliated issuers		9,144,727		9,881,626		3,574,769
Investments of cash collateral in affiliated issuers received from securities loaned, at cost1		—		343,069		—
Foreign currency, at cost		693,364		—		21,207
	$	145,835,914	$	51,964,687	$	28,163,950
Investments, at value:
Unaffiliated issuers	$	137,364,594	$	42,590,983	$	24,518,617
Affiliated issuers		9,144,727		10,044,307		3,642,795
Investments of cash collateral in affiliated issuers received from securities loaned, at value1		—		343,069		—
Foreign currency, at value		706,496		—		21,544
Receivables:
Interest		2,585,797		229,112		381,744
Foreign tax reclaims		36,805		—		—
Fund shares sold		4,828		40,037		142,482
Investment securities sold		—		491,031		49,500
Due from advisor		—		5,900		8,926
Deferred organizational costs		—		—		49,401
Variation margin		—		27,400		20,375
Cash collateral for futures contracts		853,072		—		—
Outstanding swap agreements, at value2		79,997		5,983		1,309,121
Unrealized appreciation on forward foreign currency contracts		401,485		—		—
Other assets		21,618		34,971		1,298
Total assets		151,199,419		53,812,793		30,145,803
Liabilities:
Payables:
Cash collateral from securities loaned		—		343,069		—
Investment securities purchased		—		7,387,488		1,198,798
Investment advisory and administration fees		76,746		—		—
Fund shares redeemed		17,060		907,032		—
Custody and fund accounting fees		12,988		8,601		3,433
Distribution and service fees		2,376		3,648		405
Trustees' fees		7,314		5,455		2,253
Organizational costs		—		—		54,000
Due to broker		—		5,648		9,646
Due to custodian		—		1,523		47,500
Variation margin		134,601		—		—
Accrued expenses		63,225		45,451		14,351
Options written, at value3		—		—		263,098
Outstanding swap agreements, at value2		666,853		130,648		529,066
Unrealized depreciation on forward foreign currency contracts		999,081		—		166,934
Total liabilities		1,980,244		8,838,563		2,289,484
Net assets	$	149,219,175	$	44,974,230	$	27,856,319

¹  The market value of securities loaned by UBS Core Plus Bond Fund, as of December 31, 2010 was $746,083.

²  Net upfront payments (made) received by UBS Absolute Return Bond Fund, UBS Core Plus Bond Fund and UBS Fixed Income Opportunities Fund were $115,065, $253 and $(360,155), respectively.

³  Premiums received by UBS Fixed Income Opportunities Fund were $291,156.

76

The UBS Funds

Financial statements

	UBS Global Bond Fund		UBS High Yield Fund
Assets:
Investments, at cost:
Unaffiliated issuers	$	15,479,437	$	78,810,624
Affiliated issuers		623,491		1,607,581
Investments of cash collateral in affiliated issuers received from securities loaned, at cost1		—		—
Foreign currency, at cost		204,251		—
	$	16,307,179	$	80,418,205
Investments, at value:
Unaffiliated issuers	$	15,519,283	$	86,030,557
Affiliated issuers		623,491		1,607,581
Investments of cash collateral in affiliated issuers received from securities loaned, at value1		—		—
Foreign currency, at value		207,671		—
Receivables:
Interest		216,664		1,653,634
Foreign tax reclaims		—		—
Fund shares sold		5,818		10,472
Investment securities sold		—		—
Due from advisor		7,026		—
Deferred organizational costs		—		—
Variation margin		875		—
Cash collateral for futures contracts		3,022		—
Outstanding swap agreements, at value2		—		—
Unrealized appreciation on forward foreign currency contracts		108,770		—
Other assets		28,996		38,275
Total assets		16,721,616		89,340,519
Liabilities:
Payables:
Cash collateral from securities loaned		—		—
Investment securities purchased		—		172,813
Investment advisory and administration fees		—		43,466
Fund shares redeemed		104,035		50,694
Custody and fund accounting fees		8,850		6,843
Distribution and service fees		3,028		14,465
Trustees' fees		4,974		6,129
Organizational costs		—		—
Due to broker		—		—
Due to custodian		90		—
Variation margin		—		—
Accrued expenses		45,017		62,827
Options written, at value3		—		—
Outstanding swap agreements, at value2		14,338		—
Unrealized depreciation on forward foreign currency contracts		14,027		—
Total liabilities		194,359		357,237
Net assets	$	16,527,257	$	88,983,282

See accompanying notes to financial statements.
77

The UBS Funds

Financial statements

Statement of assets and liabilities (cont'd)
December 31, 2010 (unaudited)

	UBS Absolute Return Bond Fund1			UBS Core Plus Bond Fund			UBS Fixed Income Opportunities Fund1
Net assets consist of:
Beneficial interest	$	279,378,732		$	80,595,855		$	27,319,047
Accumulated undistributed (distributions in excess of) net investment income		(599,755	)		186,653			35,224
Accumulated net realized gain (loss)		(130,895,944	)		(36,647,872	)		45,626
Net unrealized appreciation		1,336,142			839,594			456,422
Net assets	$	149,219,175		$	44,974,230		$	27,856,319
Class A:
Net assets	$	9,632,230		$	9,385,250		$	1,138,272
Shares outstanding		1,522,718			1,090,675			111,621
Net asset value and redemption proceeds per share	$	6.33		$	8.60		$	10.20
Offering price per share (NAV per share plus maximum sales charge)2	$	6.49		$	9.01		$	10.68
Class B:
Net assets		N/A		$	52,957			N/A
Shares outstanding		N/A			6,146			N/A
Net asset value and offering price per share		N/A		$	8.62			N/A
Redemption proceeds per share (NAV per share less maximum contingent deferred sales charge)2		N/A		$	8.19			N/A
Class C:
Net assets	$	2,562,719		$	2,344,007		$	847,055
Shares outstanding		405,093			273,265			83,113
Net asset value and offering price per share	$	6.33		$	8.58		$	10.19
Redemption proceeds per share (NAV per share less maximum contingent deferred sales charge)2	$	6.30		$	8.52		$	10.11
Class Y:
Net assets	$	137,024,226		$	33,192,016		$	25,870,992
Shares outstanding		21,674,322			3,861,922			2,534,624
Net asset value per share, offering price per share, and redemption proceeds per share2	$	6.32		$	8.59		$	10.21

¹  UBS Absolute Return Bond Fund and UBS Fixed Income Opportunities Fund do not offer Class B shares.

²  For Class A, the maximum sales charge is 4.50% for UBS Global Bond Fund, UBS Core Plus Bond Fund, UBS Fixed Income Opportunities Fund and UBS High Yield Fund and 2.50% for UBS Absolute Return Bond Fund. Classes B, C and Y have no front-end sales charges. For Class A shares of each Fund except UBS Absolute Return Bond Fund, 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 $1,000,000 or more that were not subject to a front-end sales charge made within one year of the purchase date. For Class A shares of UBS Absolute Return Bond Fund, the maximum contingent deferred sales charge of 0.50% 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%. For Class C, the maximum contingent deferred sales charge is 0.75% for UBS Global Bond Fund, UBS Core Plus Bond Fund, UBS Fixed Income Opportunities Fund and UBS High Yield Fund, and 0.50% for UBS Absolute Return Bond Fund. Class Y has no contingent deferred sales charge.

78

The UBS Funds

Financial statements

	UBS Global Bond Fund			UBS High Yield Fund
Net assets consist of:
Beneficial interest	$	32,555,736		$	203,366,319
Accumulated undistributed (distributions in excess of) net investment income		74,400			579,479
Accumulated net realized gain (loss)		(16,230,760	)		(122,182,449	)
Net unrealized appreciation		127,881			7,219,933
Net assets	$	16,527,257		$	88,983,282
Class A:
Net assets	$	6,794,678		$	37,050,358
Shares outstanding		950,933			5,971,106
Net asset value and redemption proceeds per share	$	7.15		$	6.20
Offering price per share (NAV per share plus maximum sales charge)2	$	7.49		$	6.49
Class B:
Net assets	$	113,550		$	751,435
Shares outstanding		15,838			121,033
Net asset value and offering price per share	$	7.17		$	6.21
Redemption proceeds per share (NAV per share less maximum contingent deferred sales charge)2	$	6.81		$	5.90
Class C:
Net assets	$	2,402,821		$	9,398,588
Shares outstanding		337,463			1,513,524
Net asset value and offering price per share	$	7.12		$	6.21
Redemption proceeds per share (NAV per share less maximum contingent deferred sales charge)2	$	7.07		$	6.16
Class Y:
Net assets	$	7,216,208		$	41,782,901
Shares outstanding		873,913			6,678,096
Net asset value per share, offering price per share, and redemption proceeds per share2	$	8.26		$	6.26

See accompanying notes to financial statements.
79

The UBS Funds

Financial statements

Statement of operations
For the six months ended December 31, 2010 (unaudited)

	UBS Absolute Return Bond Fund			UBS Core Plus Bond Fund			UBS Fixed Income Opportunities Fund1
Investment income:
Interest and other	$	2,756,284		$	791,834		$	116,089
Affiliated interest		7,336			7,106			197
Securities lending-net		—			412			—
Total income		2,763,620			799,352			116,286
Expenses:
Advisory and administration		470,749			134,625			16,838
Service and distribution:
Class A		7,905			12,282			147
Class B		—			214			—
Class C		7,387			9,460			257
Transfer agency and related service fees:
Class A		11,025			5,681			15
Class B		—			70			—
Class C		1,936			1,096			16
Class Y		116			12,017			15
Custodian and fund accounting		38,783			25,358			3,433
Federal and state registration		17,764			25,319			—
Professional services		49,741			42,161			10,967
Shareholder reports		8,813			3,659			2,253
Trustees		14,547			10,854			2,253
Amortization of organizational costs		—			—			4,599
Other		10,852			6,429			1,173
Total expenses		639,618			289,225			41,966
Fee waivers and/or expense reimbursements by Advisor		(10,369	)		(175,965	)		(25,294	)
Net expenses		629,249			113,260			16,672
Net investment income		2,134,371			686,092			99,614
Net realized gain (loss) on:
Investments in unaffiliated issuers		(289,371	)		349,910			(11,249	)
Investments in affiliated issuers		—			2,588			—
Futures contracts		(3,076,197	)		(20,338	)		39,086
Options written		—			(32,458	)		28,847
Swap agreements		(30,903	)		6,146			(10,324	)
Forward foreign currency contracts		(2,670,191	)		14,370			—
Foreign currency transactions		382,369			—			(734	)
Net realized gain (loss)		(5,684,293	)		320,218			45,626
Change in net unrealized appreciation/depreciation on:
Investments		5,176,691			194,008			18,669
Futures contracts		2,358,693			(86,422	)		152,343
Options written		—			—			28,058
Swap agreements		(79,293	)		71,694			419,900
Forward foreign currency contracts		(475,288	)		(14,370	)		(166,934	)
Translation of other assets and liabilities denominated in foreign currency		105,610			—			4,386
Change in net unrealized appreciation/depreciation		7,086,413			164,910			456,422
Net realized and unrealized gain		1,402,120			485,128			502,048
Net increase in net assets resulting from operations	$	3,536,491		$	1,171,220		$	601,662

¹  For the period November 29, 2010 (commencement of operations) through December 31, 2010.

80

The UBS Funds

Financial statements

	UBS Global Bond Fund			UBS High Yield Fund
Investment income:
Interest and other	$	340,077		$	4,008,184
Affiliated interest		792			1,826
Securities lending-net		—			—
Total income		340,869			4,010,010
Expenses:
Advisory and administration		64,391			296,970
Service and distribution:
Class A		9,104			47,214
Class B		628			4,240
Class C		8,864			35,014
Transfer agency and related service fees:
Class A		4,478			25,375
Class B		122			1,028
Class C		937			5,959
Class Y		7,649			14,314
Custodian and fund accounting		25,690			20,268
Federal and state registration		21,883			21,856
Professional services		43,289			44,617
Shareholder reports		4,134			20,422
Trustees		9,854			12,216
Amortization of organizational costs		—			—
Other		4,935			8,162
Total expenses		205,958			557,655
Fee waivers and/or expense reimbursements by Advisor		(107,431	)		(53,092	)
Net expenses		98,527			504,563
Net investment income		242,342			3,505,447
Net realized gain (loss) on:
Investments in unaffiliated issuers		95,470			1,851,524
Investments in affiliated issuers		—			—
Futures contracts		(26,913	)		—
Options written		—			—
Swap agreements		1,604			—
Forward foreign currency contracts		(92,009	)		—
Foreign currency transactions		283,034			—
Net realized gain (loss)		261,186			1,851,524
Change in net unrealized appreciation/depreciation on:
Investments		460,132			2,655,732
Futures contracts		4,189			—
Options written		—			—
Swap agreements		1,358			—
Forward foreign currency contracts		125,705			—
Translation of other assets and liabilities denominated in foreign currency		2,913			—
Change in net unrealized appreciation/depreciation		594,297			2,655,732
Net realized and unrealized gain		855,483			4,507,256
Net increase in net assets resulting from operations	$	1,097,825		$	8,012,703

See accompanying notes to financial statements.
81

The UBS Funds

Financial statements

Statement of changes in net assets

	UBS Absolute Return Bond Fund						UBS Core Plus Bond Fund						UBS Fixed Income Opportunities Fund
	Six months ended December 31, 2010 (unaudited)			Year ended June 30, 2010			Six months ended December 31, 2010 (unaudited)			Year ended June 30, 2010			Period ended December 31, 20101 (unaudited)
Operations:
Net investment income	$	2,134,371		$	3,885,147		$	686,092		$	1,906,138		$	99,614
Net realized gain (loss)		(5,684,293	)		(4,186,552	)		320,218			2,124,339			45,626
Change in net unrealized appreciation/depreciation		7,086,413			3,698,343			164,910			2,918,815			456,422
Net increase in net assets from operations		3,536,491			3,396,938			1,171,220			6,949,292			601,662
Dividends and distributions to shareholders by class:
Class A:
Net investment income and net foreign currency gains		(185,649	)		(337,877	)		(335,573	)		(518,764	)		(1,760	)
Return of capital		—			(50,071	)		—			—			—
Total Class A dividends and distributions		(185,649	)		(387,948	)		(335,573	)		(518,764	)		(1,760	)
Class B:
Net investment income and net foreign currency gains		—			—			(1,069	)		(4,783	)		—
Class C:
Net investment income and net foreign currency gains		(45,072	)		(84,610	)		(75,000	)		(138,464	)		(1,690	)
Return of capital		—			(12,539	)		—			—			—
Total Class C dividends and distributions		(45,072	)		(97,149	)		(75,000	)		(138,464	)		(1,690	)
Class Y:
Net investment income and net foreign currency gains		(2,660,565	)		(3,446,259	)		(1,172,600	)		(2,592,086	)		(60,940	)
Return of capital		—			(510,709	)		—			—			—
Total Class Y dividends and distributions		(2,660,565	)		(3,956,968	)		(1,172,600	)		(2,592,086	)		(60,940	)
Decrease in net assets from dividends and distributions		(2,891,286	)		(4,442,065	)		(1,584,242	)		(3,254,097	)		(64,390	)
Beneficial interest transactions:
Proceeds from shares sold		330,743			1,856,827			3,486,438			13,516,769			27,270,956
Shares issued on reinvestment of dividends and distributions		2,864,430			4,394,016			1,510,457			3,123,358			64,390
Cost of shares redeemed		(2,982,601	)		(10,775,409	)		(5,912,497	)		(41,004,427	)		(16,299	)
Redemption fees		505			493			3,654			8,940			—
Net increase (decrease) in net assets resulting from beneficial interest transactions		213,077			(4,524,073	)		(911,948	)		(24,355,360	)		27,319,047
Increase (decrease) in net assets		858,282			(5,569,200	)		(1,324,970	)		(20,660,165	)		27,856,319
Net assets, beginning of period		148,360,893			153,930,093			46,299,200			66,959,365			—
Net assets, end of period	$	149,219,175		$	148,360,893		$	44,974,230		$	46,299,200		$	27,856,319
Net assets include accumulated undistributed (distributions in excess of) net investment income	$	(599,755	)	$	157,160		$	186,653		$	1,084,803		$	35,224

¹  For the period November 29, 2010 (commencement of operations) through December 31, 2010.

82

The UBS Funds

Financial statements

	UBS Global Bond Fund						UBS High Yield Fund
	Six months ended December 31, 2010 (unaudited)			Year ended June 30, 2010			Six months ended December 31, 2010 (unaudited)			Year ended June 30, 2010
Operations:
Net investment income	$	242,342		$	643,076		$	3,505,447		$	8,757,347
Net realized gain (loss)		261,186			1,281,408			1,851,524			3,810,693
Change in net unrealized appreciation/depreciation		594,297			369,576			2,655,732			7,962,022
Net increase in net assets from operations		1,097,825			2,294,060			8,012,703			20,530,062
Dividends and distributions to shareholders by class:
Class A:
Net investment income and net foreign currency gains		(576,613	)		(231,955	)		(1,542,947	)		(3,411,268	)
Return of capital		—			—			—			—
Total Class A dividends and distributions		(576,613	)		(231,955	)		(1,542,947	)		(3,411,268	)
Class B:
Net investment income and net foreign currency gains		(9,053	)		(3,025	)		(31,520	)		(81,622	)
Class C:
Net investment income and net foreign currency gains		(187,308	)		(51,974	)		(358,365	)		(754,944	)
Return of capital		—			—			—			—
Total Class C dividends and distributions		(187,308	)		(51,974	)		(358,365	)		(754,944	)
Class Y:
Net investment income and net foreign currency gains		(536,205	)		(427,927	)		(1,664,613	)		(4,118,309	)
Return of capital		—			—			—			—
Total Class Y dividends and distributions		(536,205	)		(427,927	)		(1,664,613	)		(4,118,309	)
Decrease in net assets from dividends and distributions		(1,309,179	)		(714,881	)		(3,597,445	)		(8,366,143	)
Beneficial interest transactions:
Proceeds from shares sold		752,548			8,359,734			6,800,224			12,200,138
Shares issued on reinvestment of dividends and distributions		1,164,875			673,245			2,809,158			6,616,743
Cost of shares redeemed		(3,187,025	)		(26,950,230	)		(8,350,554	)		(56,934,196	)
Redemption fees		518			540			1,043			9,441
Net increase (decrease) in net assets resulting from beneficial interest transactions		(1,269,084	)		(17,916,711	)		1,259,871			(38,107,874	)
Increase (decrease) in net assets		(1,480,438	)		(16,337,532	)		5,675,129			(25,943,955	)
Net assets, beginning of period		18,007,695			34,345,227			83,308,153			109,252,108
Net assets, end of period	$	16,527,257		$	18,007,695		$	88,983,282		$	83,308,153
Net assets include accumulated undistributed (distributions in excess of) net investment income	$	74,400		$	1,141,237		$	579,479		$	671,477

See accompanying notes to financial statements.
83

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
	Six months ended December 31, 2010			Year ended June 30,
	(unaudited)			2010			2009			2008			2007			2006
Net asset value, beginning of period	$	6.30		$	6.35		$	7.81		$	10.05		$	10.14		$	9.98
Income (loss) from investment operations:
Net investment income1		0.09			0.15			0.13			0.34			0.35			0.28
Net realized and unrealized gain (loss) from investment activities		0.06			(0.02	)		(0.88	)		(2.13	)		(0.06	)		0.18
Total income (loss) from investment operations		0.15			0.13			(0.75	)		(1.79	)		0.29			0.46
Less dividends and distributions:
From net investment income		(0.12	)		(0.16	)		(0.71	)		(0.45	)		(0.30	)		(0.29	)
From return of capital		—			(0.02	)		—			—			—			—
From net realized gains		—			—			—			—			(0.08	)		(0.01	)
Total dividends and distributions		(0.12	)		(0.18	)		(0.71	)		(0.45	)		(0.38	)		(0.30	)
Net asset value, end of period	$	6.33		$	6.30		$	6.35		$	7.81		$	10.05		$	10.14
Total investment return2		2.20	%		1.99	%		(9.48	)%		(18.07	)%		2.87	%		4.65	%
Ratios/Supplemental data:
Net assets, end of period (000's)	$	9,632		$	11,333		$	17,850		$	50,761		$	257,180		$	212,983
Ratios of expenses to average net assets:
Before expense reimbursement/recoupment		1.17	%3		1.14	%		1.12	%		0.99	%		0.95	%		0.96	%
Net of expense reimbursement/recoupment		1.00	%3		1.00	%		1.00	%		0.99	%		0.95	%		0.99	%4
Ratio of net investment income to average net assets		2.67	%3		2.36	%		1.85	%		3.68	%		3.43	%		2.78	%
Portfolio turnover rate		11	%		37	%		99	%		33	%		56	%		96	%
	Class Y

	Six months ended December 31, 2010			Year ended June 30,
	(unaudited)			2010			2009			2008			2007			2006
Net asset value, beginning of period	$	6.30		$	6.34		$	7.81		$	10.05		$	10.15		$	9.98
Income (loss) from investment operations:
Net investment income1		0.09			0.16			0.13			0.36			0.37			0.30
Net realized and unrealized gain (loss) from investment activities		0.05			(0.01	)		(0.88	)		(2.12	)		(0.07	)		0.19
Total income (loss) from investment operations		0.14			0.15			(0.75	)		(1.76	)		0.30			0.49
Less dividends and distributions:
From net investment income		(0.12	)		(0.17	)		(0.72	)		(0.48	)		(0.32	)		(0.31	)
From return of capital		—			(0.02	)		—			—			—			—
From net realized gains		—			—			—			—			(0.08	)		(0.01	)
Total dividends and distributions		(0.12	)		(0.19	)		(0.72	)		(0.48	)		(0.40	)		(0.32	)
Net asset value, end of period	$	6.32		$	6.30		$	6.34		$	7.81		$	10.05		$	10.15
Total investment return2		2.30	%		2.34	%		(9.32	)%		(17.92	)%		2.96	%		4.94	%
Ratios/Supplemental data:
Net assets, end of period (000's)	$	137,024		$	133,822		$	130,933		$	187,445		$	259,089		$	232,208
Ratios of expenses to average net assets:
Before expense reimbursement		0.81	%3		0.80	%		0.83	%		0.76	%		0.75	%		0.77	%
Net of expense reimbursement		0.81	%3		0.80	%		0.83	%		0.76	%		0.75	%		0.77	%
Ratio of net investment income to average net assets		2.86	%3		2.56	%		1.94	%		3.92	%		3.63	%		3.00	%
Portfolio turnover rate		11	%		37	%		99	%		33	%		56	%		96	%

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

84

UBS Absolute Return Bond Fund

Financial highlights

	Class C
	Six months ended December 31, 2010			Year ended June 30,
	(unaudited)			2010			2009			2008			2007			2006
Net asset value, beginning of period	$	6.30		$	6.35		$	7.81		$	10.04		$	10.14		$	9.98
Income (loss) from investment operations:
Net investment income1		0.07			0.13			0.10			0.31			0.31			0.24
Net realized and unrealized gain (loss) from investment activities		0.07			(0.03	)		(0.87	)		(2.12	)		(0.06	)		0.18
Total income (loss) from investment operations		0.14			0.10			(0.77	)		(1.81	)		0.25			0.42
Less dividends and distributions:
From net investment income		(0.11	)		(0.13	)		(0.69	)		(0.42	)		(0.27	)		(0.25	)
From return of capital		—			(0.02	)		—			—			—			—
From net realized gains		—			—			—			—			(0.08	)		(0.01	)
Total dividends and distributions		(0.11	)		(0.15	)		(0.69	)		(0.42	)		(0.35	)		(0.26	)
Net asset value, end of period	$	6.33		$	6.30		$	6.35		$	7.81		$	10.04		$	10.14
Total investment return2		2.00	%		1.61	%		(9.81	)%		(18.27	)%		2.42	%		4.30	%
Ratios/Supplemental data:
Net assets, end of period (000's)	$	2,563		$	3,206		$	5,147		$	9,971		$	37,548		$	30,618
Ratios of expenses to average net assets:
Before expense reimbursement/recoupment		1.44	%3		1.42	%		1.42	%		1.32	%		1.29	%		1.32	%
Net of expense reimbursement/recoupment		1.35	%3		1.35	%		1.35	%		1.32	%		1.30	%4		1.35	%4
Ratio of net investment income to average net assets		2.32	%3		2.01	%		1.46	%		3.35	%		3.07	%		2.42	%
Portfolio turnover rate		11	%		37	%		99	%		33	%		56	%		96	%

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  Annualized.

⁴  The investment manager recouped expenses previously reimbursed by the investment manager on behalf of the Fund, not to exceed the expense cap.

See accompanying notes to financial statements.
85

UBS Core Plus Bond Fund

Financial highlights

The table below sets forth financial data for one share of beneficial interest outstanding throughout each period presented.

	Class A
	Six months ended December 31, 2010			Year ended June 30,
	(unaudited)			2010			2009			2008			2007			2006
Net asset value, beginning of period	$	8.69		$	8.17		$	9.13		$	10.46		$	10.27		$	10.73
Income (loss) from investment operations:
Net investment income1		0.12			0.28			0.23			0.25			0.32			0.40
Net realized and unrealized gain (loss) from investment activities		0.08			0.73			(0.56	)		(1.06	)		0.24			(0.42	)
Net increase from payment by Advisor		—			—			—			—			0.003			—
Total income (loss) from investment operations		0.20			1.01			(0.33	)		(0.81	)		0.56			(0.02	)
Redemption fees		0.003			0.003			0.01			0.01			—			—
Less dividends and distributions:
From net investment income		(0.29	)		(0.49	)		(0.64	)		(0.53	)		(0.37	)		(0.44	)
Net asset value, end of period	$	8.60		$	8.69		$	8.17		$	9.13		$	10.46		$	10.27
Total investment return2		2.48	%		12.72	%		(3.29	)%		(8.03	)%		5.39	%		(0.07	)%
Ratios/Supplemental data:
Net assets, end of period (000's)	$	9,385		$	8,956		$	9,128		$	9,330		$	29,356		$	31,285
Ratios of expenses to average net assets:
Before expense reimbursement		1.43	%4		1.39	%		1.27	%		1.02	%		1.07	%		1.07	%
Net of expense reimbursement		0.64	%4		0.64	%		0.85	%		0.85	%		0.85	%		0.85	%
Ratio of net investment income to average net assets		2.77	%4		3.30	%		2.71	%		2.05	%		3.08	%		3.79	%
Portfolio turnover rate		211	%		283	%		247	%		192	%		209	%		229	%
	Class B
	Six months ended December 31, 2010			Year ended June 30,
	(unaudited)			2010			2009			2008			2007			2006
Net asset value, beginning of period	$	8.70		$	8.18		$	9.14		$	10.47		$	10.28		$	10.74
Income (loss) from investment operations:
Net investment income1		0.09			0.21			0.16			0.18			0.25			0.32
Net realized and unrealized gain (loss) from investment activities		0.09			0.74			(0.54	)		(1.07	)		0.23			(0.42	)
Net increase from payment by Advisor		—			—			—			—			0.003			—
Total income (loss) from investment operations		0.18			0.95			(0.38	)		(0.89	)		0.48			(0.10	)
Redemption fees		—			—			0.003			0.01			—			—
Less dividends and distributions:
From net investment income		(0.26	)		(0.43	)		(0.58	)		(0.45	)		(0.29	)		(0.36	)
Net asset value, end of period	$	8.62		$	8.70		$	8.18		$	9.14		$	10.47		$	10.28
Total investment return2		2.08	%		11.85	%		(4.01	)%		(8.72	)%		4.70	%		(0.93	)%
Ratios/Supplemental data:
Net assets, end of period (000's)	$	53		$	56		$	109		$	250		$	442		$	808
Ratios of expenses to average net assets:
Before expense reimbursement		2.39	%4		2.22	%		2.10	%		1.91	%		1.84	%		1.83	%
Net of expense reimbursement		1.39	%4		1.39	%		1.60	%		1.60	%		1.60	%		1.60	%
Ratio of net investment income to average net assets		2.05	%4		2.52	%		1.89	%		1.77	%		2.39	%		3.04	%
Portfolio turnover rate		211	%		283	%		247	%		192	%		209	%		229	%

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

86

UBS Core Plus Bond Fund

Financial highlights

	Class C
	Six months ended December 31, 2010			Year ended June 30,
	(unaudited)			2010			2009			2008			2007			2006
Net asset value, beginning of period	$	8.66		$	8.15		$	9.12		$	10.45		$	10.26		$	10.72
Income (loss) from investment operations:
Net investment income1		0.10			0.24			0.19			0.20			0.27			0.34
Net realized and unrealized gain (loss) from investment activities		0.09			0.72			(0.57	)		(1.05	)		0.24			(0.41	)
Net increase from payment by Advisor		—			—			—			—			0.003			—
Total income (loss) from investment operations		0.19			0.96			(0.38	)		(0.85	)		0.51			(0.07	)
Redemption fees		0.003			0.003			0.01			—			—			—
Less dividends and distributions:
From net investment income		(0.27	)		(0.45	)		(0.60	)		(0.48	)		(0.32	)		(0.39	)
Net asset value, end of period	$	8.58		$	8.66		$	8.15		$	9.12		$	10.45		$	10.26
Total investment return2		2.23	%		12.06	%		(3.76	)%		(8.58	)%		4.98	%		(0.67	)%
Ratios/Supplemental data:
Net assets, end of period (000's)	$	2,344		$	2,628		$	2,574		$	1,117		$	1,525		$	1,530
Ratios of expenses to average net assets:
Before expense reimbursement		1.90	%4		1.86	%		1.76	%		1.58	%		1.55	%		1.56	%
Net of expense reimbursement		1.14	%4		1.14	%		1.35	%		1.35	%		1.35	%		1.35	%
Ratio of net investment income to average net assets		2.28	%4		2.80	%		2.35	%		2.01	%		2.56	%		3.29	%
Portfolio turnover rate		211	%		283	%		247	%		192	%		209	%		229	%
	Class Y
	Six months ended December 31, 2010			Year ended June 30,
	(unaudited)			2010			2009			2008			2007			2006
Net asset value, beginning of period	$	8.68		$	8.16		$	9.13		$	10.46		$	10.27		$	10.72
Income (loss) from investment operations:
Net investment income1		0.13			0.30			0.24			0.28			0.34			0.42
Net realized and unrealized gain (loss) from investment activities		0.09			0.74			(0.55	)		(1.06	)		0.25			(0.41	)
Net increase from payment by Advisor		—			—			—			—			0.003			—
Total income (loss) from investment operations		0.22			1.04			(0.31	)		(0.78	)		0.59			0.01
Redemption fees		0.003			0.003			—			—			—			—
Less dividends and distributions:
From net investment income		(0.31	)		(0.52	)		(0.66	)		(0.55	)		(0.40	)		(0.46	)
Net asset value, end of period	$	8.59		$	8.68		$	8.16		$	9.13		$	10.46		$	10.27
Total investment return2		2.49	%		13.02	%		(3.15	)%		(7.78	)%		5.76	%		0.14	%
Ratios/Supplemental data:
Net assets, end of period (000's)	$	33,192		$	34,659		$	55,149		$	102,473		$	163,172		$	105,526
Ratios of expenses to average net assets:
Before expense reimbursement		1.13	%4		1.09	%		0.96	%		0.78	%		0.76	%		0.82	%
Net of expense reimbursement		0.39	%4		0.39	%		0.60	%		0.60	%		0.60	%		0.60	%
Ratio of net investment income to average net assets		3.03	%4		3.53	%		2.88	%		2.77	%		3.27	%		4.04	%
Portfolio turnover rate		211	%		283	%		247	%		192	%		209	%		229	%

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  Annualized.

See accompanying notes to financial statements.
87

UBS Fixed Income Opportunities 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			Class Y
	For the period ended December 31, 20103 (unaudited)			For the period ended December 31, 20103 (unaudited)			For the period ended December 31, 20103 (unaudited)
Net asset value, beginning of period	$	10.00		$	10.00		$	10.00
Income from investment operations:
Net investment income1		0.05			0.05			0.04
Net realized and unrealized gain from investment activities		0.17			0.16			0.19
Total income from investment operations		0.22			0.21			0.23
Less dividends and distributions:
From net investment income		(0.02	)		(0.02	)		(0.02	)
Net asset value, end of period	$	10.20		$	10.19		$	10.21
Total investment return2		2.22	%		2.11	%		2.34	%
Ratios/Supplemental data:
Net assets, end of period (000's)	$	1,138		$	847		$	25,871
Ratios of expenses to average net assets:
Before expense reimbursement		2.06	%4		2.55	%4		1.79	%4
Net of expense reimbursement		0.95	%4		1.45	%4		0.70	%4
Ratio of net investment income to average net assets		5.61	%4		5.03	%4		4.24	%4
Portfolio turnover rate		1	%		1	%		1	%

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 November 29, 2010 (commencement of operations) through December 31, 2010.

⁴  Annualized.

See accompanying notes to financial statements.
88

This page has been left blank intentionally.

89

UBS Global Bond Fund

Financial highlights

The table below sets forth financial data for one share of beneficial interest outstanding throughout each period presented.

	Class A
	Six months ended December 31, 2010			Year ended June 30,
	(unaudited)			2010			2009			2008			2007			2006
Net asset value, beginning of period	$	7.33		$	7.12		$	9.17		$	9.41		$	9.50		$	9.83
Income (loss) from investment operations:
Net investment income1		0.10			0.18			0.22			0.27			0.26			0.19
Net realized and unrealized gain (loss) from investment activities		0.35			0.25			(0.92	)		(0.08	)		(0.10	)		(0.15	)
Total income (loss) from investment operations		0.45			0.43			(0.70	)		0.19			0.16			0.04
Less dividends and distributions:
From net investment income		(0.63	)		(0.22	)		(1.35	)		(0.43	)		(0.25	)		(0.37	)
Net asset value, end of period	$	7.15		$	7.33		$	7.12		$	9.17		$	9.41		$	9.50
Total investment return2		6.31	%		5.94	%		(7.66	)%		1.94	%		1.67	%		0.51	%
Ratios/Supplemental data:
Net assets, end of period (000's)	$	6,795		$	7,240		$	7,930		$	12,123		$	14,093		$	15,546
Ratios of expenses to average net assets:
Before expense reimbursement		2.33	%3		2.05	%		1.68	%		1.31	%		1.40	%		1.48	%
Net of expense reimbursement		1.15	%3		1.15	%		1.15	%		1.15	%		1.15	%		1.15	%
Ratio of net investment income to average net assets		2.69	%3		2.34	%		2.90	%		2.81	%		2.67	%		1.97	%
Portfolio turnover rate		30	%		61	%		116	%		137	%		74	%		114	%
	Class B
	Six months ended December 31, 2010			Year ended June 30,
	(unaudited)			2010			2009			2008			2007			2006
Net asset value, beginning of period	$	7.35		$	7.14		$	9.20		$	9.43		$	9.52		$	9.85
Income (loss) from investment operations:
Net investment income1		0.07			0.12			0.17			0.20			0.18			0.12
Net realized and unrealized gain (loss) from investment activities		0.35			0.25			(0.93	)		(0.08	)		(0.09	)		(0.15	)
Total income (loss) from investment operations		0.42			0.37			(0.76	)		0.12			0.09			(0.03	)
Less dividends and distributions:
From net investment income		(0.60	)		(0.16	)		(1.30	)		(0.35	)		(0.18	)		(0.30	)
Net asset value, end of period	$	7.17		$	7.35		$	7.14		$	9.20		$	9.43		$	9.52
Total investment return2		5.88	%		5.14	%		(8.45	)%		1.27	%		0.90	%		(0.26	)%
Ratios/Supplemental data:
Net assets, end of period (000's)	$	114		$	146		$	122		$	131		$	215		$	420
Ratios of expenses to average net assets:
Before expense reimbursement		3.15	%3		2.85	%		2.55	%		2.20	%		2.17	%		2.25	%
Net of expense reimbursement		1.90	%3		1.90	%		1.90	%		1.90	%		1.90	%		1.90	%
Ratio of net investment income to average net assets		1.93	%3		1.59	%		2.15	%		2.06	%		1.92	%		1.22	%
Portfolio turnover rate		30	%		61	%		116	%		137	%		74	%		114	%

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  Annualized.

90

UBS Global Bond Fund

Financial highlights

	Class C
	Six months ended December 31, 2010			Year ended June 30,
	(unaudited)			2010			2009			2008			2007			2006
Net asset value, beginning of period	$	7.31		$	7.09		$	9.15		$	9.38		$	9.47		$	9.81
Income (loss) from investment operations:
Net investment income1		0.08			0.14			0.18			0.22			0.21			0.14
Net realized and unrealized gain (loss) from investment activities		0.34			0.26			(0.92	)		(0.07	)		(0.10	)		(0.15	)
Total income (loss) from investment operations		0.42			0.40			(0.74	)		0.15			0.11			(0.01	)
Less dividends and distributions:
From net investment income		(0.61	)		(0.18	)		(1.32	)		(0.38	)		(0.20	)		(0.33	)
Net asset value, end of period	$	7.12		$	7.31		$	7.09		$	9.15		$	9.38		$	9.47
Total investment return2		5.91	%		5.58	%		(8.27	)%		1.56	%		1.17	%		(0.09	)%
Ratios/Supplemental data:
Net assets, end of period (000's)	$	2,403		$	2,242		$	1,856		$	1,716		$	1,491		$	2,426
Ratios of expenses to average net assets:
Before expense reimbursement		2.79	%3		2.52	%		2.17	%		1.79	%		1.77	%		1.88	%
Net of expense reimbursement		1.65	%3		1.65	%		1.65	%		1.65	%		1.65	%		1.65	%
Ratio of net investment income to average net assets		2.19	%3		1.84	%		2.37	%		2.31	%		2.17	%		1.47	%
Portfolio turnover rate		30	%		61	%		116	%		137	%		74	%		114	%
	Class Y
	Six months ended December 31, 2010			Year ended June 30,
	(unaudited)			2010			2009			2008			2007			2006
Net asset value, beginning of period	$	8.37		$	8.10		$	10.24		$	10.45		$	10.51		$	10.84
Income (loss) from investment operations:
Net investment income1		0.13			0.22			0.28			0.32			0.31			0.23
Net realized and unrealized gain (loss) from investment activities		0.40			0.28			(1.05	)		(0.08	)		(0.10	)		(0.17	)
Total income (loss) from investment operations		0.53			0.50			(0.77	)		0.24			0.21			0.06
Less dividends and distributions:
From net investment income		(0.64	)		(0.23	)		(1.37	)		(0.45	)		(0.27	)		(0.39	)
Net asset value, end of period	$	8.26		$	8.37		$	8.10		$	10.24		$	10.45		$	10.51
Total investment return2		6.35	%		6.33	%		(7.54	)%		2.28	%		2.03	%		0.65	%
Ratios/Supplemental data:
Net assets, end of period (000's)	$	7,216		$	8,379		$	24,437		$	52,620		$	107,465		$	80,536
Ratios of expenses to average net assets:
Before expense reimbursement		2.15	%3		1.73	%		1.44	%		1.04	%		1.03	%		1.16	%
Net of expense reimbursement		0.90	%3		0.90	%		0.90	%		0.90	%		0.90	%		0.90	%
Ratio of net investment income to average net assets		2.94	%3		2.60	%		3.15	%		3.06	%		2.93	%		2.22	%
Portfolio turnover rate		30	%		61	%		116	%		137	%		74	%		114	%

See accompanying notes to financial statements.
91

UBS High Yield Fund

Financial highlights

The table below sets forth financial data for one share of beneficial interest outstanding throughout each period presented.

	Class A
	Six months ended December 31, 2010			Year ended June 30,
	(unaudited)			2010			2009			2008			2007			2006
Net asset value, beginning of period	$	5.89		$	5.16		$	6.19		$	6.92		$	6.89		$	7.14
Income (loss) from investment operations:
Net investment income1		0.24			0.57			0.50			0.51			0.50			0.55
Net realized and unrealized gain (loss) from investment activities		0.32			0.71			(1.00	)		(0.75	)		0.08			(0.24	)
Total income (loss) from investment operations		0.56			1.28			(0.50	)		(0.24	)		0.58			0.31
Less dividends and distributions:
From net investment income		(0.25	)		(0.55	)		(0.53	)		(0.49	)		(0.55	)		(0.56	)
Net asset value, end of period	$	6.20		$	5.89		$	5.16		$	6.19		$	6.92		$	6.89
Total investment return2		9.70	%		25.49	%		(7.12	)%		(3.55	)%		8.60	%		4.48	%
Ratios/Supplemental data:
Net assets, end of period (000's)	$	37,050		$	36,334		$	39,859		$	40,582		$	45,031		$	51,121
Ratios of expenses to average net assets:
Before expense reimbursement		1.35	%3		1.38	%		1.33	%		1.29	%		1.28	%		1.37	%
Net of expense reimbursement		1.20	%3		1.20	%		1.20	%		1.20	%		1.20	%		1.20	%
Ratio of net investment income to average net assets		7.91	%3		9.80	%		9.96	%		7.81	%		7.16	%		7.86	%
Portfolio turnover rate		30	%		61	%		92	%		39	%		46	%		64	%
	Class B
	Six months ended December 31, 2010			Year ended June 30,
	(unaudited)			2010			2009			2008			2007			2006
Net asset value, beginning of period	$	5.90		$	5.16		$	6.20		$	6.93		$	6.89		$	7.14
Income (loss) from investment operations:
Net investment income1		0.22			0.52			0.46			0.46			0.45			0.50
Net realized and unrealized gain (loss) from investment activities		0.32			0.73			(1.01	)		(0.75	)		0.09			(0.25	)
Total income (loss) from investment operations		0.54			1.25			(0.55	)		(0.29	)		0.54			0.25
Less dividends and distributions:
From net investment income		(0.23	)		(0.51	)		(0.49	)		(0.44	)		(0.50	)		(0.50	)
Net asset value, end of period	$	6.21		$	5.90		$	5.16		$	6.20		$	6.93		$	6.89
Total investment return2		9.27	%		24.76	%		(7.98	)%		(4.27	)%		7.93	%		3.69	%
Ratios/Supplemental data:
Net assets, end of period (000's)	$	751		$	921		$	900		$	1,480		$	2,386		$	2,497
Ratios of expenses to average net assets:
Before expense reimbursement		2.21	%3		2.20	%		2.15	%		2.07	%		2.04	%		2.09	%
Net of expense reimbursement		1.95	%3		1.95	%		1.95	%		1.95	%		1.95	%		1.95	%
Ratio of net investment income to average net assets		7.17	%3		9.05	%		9.01	%		7.02	%		6.42	%		7.11	%
Portfolio turnover rate		30	%		61	%		92	%		39	%		46	%		64	%

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  Annualized.

92

UBS High Yield Fund

Financial highlights

	Class C
	Six months ended December 31, 2010			Year ended June 30,
	(unaudited)			2010			2009			2008			2007			2006
Net asset value, beginning of period	$	5.90		$	5.16		$	6.19		$	6.93		$	6.89		$	7.14
Income (loss) from investment operations:
Net investment income1		0.23			0.54			0.48			0.48			0.47			0.52
Net realized and unrealized gain (loss) from investment activities		0.32			0.72			(1.01	)		(0.76	)		0.08			(0.25	)
Total income (loss) from investment operations		0.55			1.26			(0.53	)		(0.28	)		0.55			0.27
Less dividends and distributions:
From net investment income		(0.24	)		(0.52	)		(0.50	)		(0.46	)		(0.51	)		(0.52	)
Net asset value, end of period	$	6.21		$	5.90		$	5.16		$	6.19		$	6.93		$	6.89
Total investment return2		9.41	%		25.07	%		(7.60	)%		(4.03	)%		8.05	%		3.95	%
Ratios/Supplemental data:
Net assets, end of period (000's)	$	9,399		$	8,902		$	7,072		$	8,453		$	11,330		$	12,177
Ratios of expenses to average net assets:
Before expense reimbursement		1.84	%3		1.88	%		1.86	%		1.79	%		1.78	%		1.86	%
Net of expense reimbursement		1.70	%3		1.70	%		1.70	%		1.70	%		1.70	%		1.70	%
Ratio of net investment income to average net assets		7.41	%3		9.27	%		9.41	%		7.31	%		6.66	%		7.36	%
Portfolio turnover rate		30	%		61	%		92	%		39	%		46	%		64	%
	Class Y
	Six months ended December 31, 2010			Year ended June 30,
	(unaudited)			2010			2009			2008			2007			2006
Net asset value, beginning of period	$	5.94		$	5.20		$	6.23		$	6.96		$	6.92		$	7.17
Income (loss) from investment operations:
Net investment income1		0.25			0.59			0.52			0.53			0.52			0.57
Net realized and unrealized gain (loss) from investment activities		0.33			0.71			(1.01	)		(0.75	)		0.09			(0.24	)
Total income (loss) from investment operations		0.58			1.30			(0.49	)		(0.22	)		0.61			0.33
Less dividends and distributions:
From net investment income		(0.26	)		(0.56	)		(0.54	)		(0.51	)		(0.57	)		(0.58	)
Net asset value, end of period	$	6.26		$	5.94		$	5.20		$	6.23		$	6.96		$	6.92
Total investment return2		9.92	%		25.80	%		(6.83	)%		(3.28	)%		8.98	%		4.72	%
Ratios/Supplemental data:
Net assets, end of period (000's)	$	41,783		$	37,152		$	61,421		$	99,538		$	47,768		$	33,015
Ratios of expenses to average net assets:
Before expense reimbursement		1.04	%3		1.05	%		1.06	%		0.99	%		0.98	%		1.06	%
Net of expense reimbursement		0.95	%3		0.95	%		0.95	%		0.95	%		0.95	%		0.95	%
Ratio of net investment income to average net assets		8.16	%3		10.08	%		10.07	%		8.13	%		7.43	%		8.11	%
Portfolio turnover rate		30	%		61	%		92	%		39	%		46	%		64	%

See accompanying notes to financial statements.
93

The UBS Funds

Notes to financial statements (unaudited)

1. Organization and significant accounting policies

The UBS Funds (the "Trust") is registered with the Securities and Exchange Commission ("SEC") 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 15 Funds available for investment, each having its own investment objectives and policies: The following five funds are covered in this report: UBS Absolute Return Bond Fund, UBS Core Plus Bond Fund (formerly UBS U.S. Bond Fund), UBS Fixed Income Opportunities Fund, UBS Global Bond Fund and UBS High Yield Fund (each a "Fund", and collectively, the "Funds").

Each of the Funds is classified as a "diversified" investment company with the exception of 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 C and Class Y shares. For each Fund except UBS Absolute Return Bond Fund and UBS Fixed Income Opportunities Fund, Class B shares are offered only to existing Class B shareholders with respect to the reinvestment of dividends and distributions and exchanges of Class B shares of the Funds for Class B shares of other series of the UBS Family of Funds. "UBS Family of Funds" include other UBS Funds, PACE Select funds and other funds for which UBS Global Asset Management (US) Inc. ("UBS Global AM (US)") serves as principal underwriter. UBS Absolute Return Bond Fund and UBS Fixed Income Opportunities Fund do not offer Class B shares. 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 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 Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") is the exclusive reference of authoritative US generally accepted accounting principles ("GAAP") recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the SEC under authority of federal laws are also sources of authoritative GAAP for SEC registrants. The Funds' financial statements are prepared in accordance with GAAP, which may require the use of management estimates and assumptions. 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, where available, for its portfolio securities. The Funds normally obtain market values for their securities and other instruments from independent pricing sources and broker-dealers. Independent pricing sources may use reported last sale prices, official market closing prices, current market quotations or valuations from computerized "matrix"

94

The UBS Funds

Notes to financial statements (unaudited)

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 and other instruments also may be valued based on appraisals derived from information concerning the security or instrument or similar securities or instruments received from recognized dealers in those holdings. Securities and instruments 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 on the valuation date available prior to valuation. Securities and instruments which are listed on US and foreign stock exchanges normally are valued at the market closing price, the last sale price on the day the securities are valued or, lacking any sales on such day, at the last available bid price. In cases where securities or instruments are traded on more than one exchange, the securities or instruments are valued on the exchange designated as the primary market by UBS Global Asset Management (Americas) Inc. ("UBS Global AM" or the "Advisor"), 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 not readily available from an independent pricing source for a particular security or instrument, that security or instrument is valued at fair value as determined in good faith 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. Foreign currency exchange rates are generally determined as of the close of the New York Stock Exchange ("NYSE").

Certain securities or instruments 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 net asset value. 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 or instruments, the Fund may adjust the previous closing prices to reflect what the Board believes to be the fair value of these securities or instruments as of 4:00 p.m. Eastern Time.

Certain Funds may use a systematic fair valuation model provided by an independent third party to value securities or instruments 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. The systematic fair valuation model may use calculations based on indices of domestic securities and other appropriate indicators, such as prices of relevant ADRs and futures contracts. If a security or instrument is valued at a "fair value," that value is likely to be different from the last quoted market price for the security or instrument. The use of the fair valuation model result in securities being transferred between Level 1 and Level 2 at reporting periods.

The amortized cost method of valuation, which approximates market value, generally is used to value short-term debt instruments with 60 days or less remaining to maturity, unless the Board determines that this does not represent fair value. Investments in open-end investment companies are valued at the daily closing net asset value of the respective investment company. Pursuant to the Funds' adoption of the use of the practical expedient within ASC Topic 820, investments in non-registered investment companies are also valued at the daily net asset value. All investments quoted in foreign currencies will be valued daily in US dollars on the basis of the foreign currency exchange rates prevailing at the time such valuation is determined by the Funds' custodian.

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.

95

The UBS Funds

Notes to financial statements (unaudited)

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 Statement 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.

GAAP requires disclosure regarding 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—Unadjusted 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.

Level 3—Unobservable inputs inclusive of the Fund's own assumptions in determining the fair value of investments.

A fair value hierarchy has been included near the end of each Fund's Portfolio of investments.

In January 2010, FASB issued Accounting Standards Update No. 2010-06 "Improving Disclosures about Fair Value Measurements" (ASU No. 2010-06"). ASU No. 2010-06 requires reporting entities to make new disclosures about amounts and reasons for significant transfer in and out of Level 1 and Level 2 fair value measurements as well as inputs and valuation techniques used to measure fair value for both recurring and nonrecurring fair value measurements that fall in either Level 2 or Level 3, including information on purchases, sales, issuances and settlements on a gross basis in the reconciliation of activity in Level 3 fair value measurements. The new and revised disclosures have been implemented for annual and interim periods beginning after December 15, 2009 except for the disclosures surrounding purchases, sales, issuances and settlements on a gross basis in the reconciliation of Level 3 fair value measurements, which are effective for annual and interim periods beginning after December 15, 2010. Management is currently evaluating the impact the adoption of the remaining portion of ASU No. 2010-06 may have on the Funds' financial statement disclosures.

The provisions of ASC Topic 815 "Derivatives and Hedging" ("ASC Topic 815") require qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of gains and losses on derivative instruments and disclosures about credit risk related contingent features in derivative agreements. Since investment companies value their derivatives at fair value and recognize changes in fair value through the statement of operations, they do not qualify for hedge accounting under ASC Topic 815. Accordingly, even though a fund's investments in derivatives may represent economic hedges, they are considered to be non-hedge transactions for purposes of disclosure under ASC Topic 815. ASC Topic 815 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. Details of this disclosure can be found below as well as in the Portfolio of investments. The volume of derivatives that is presented in the Portfolio of investments of each Fund is consistent with the derivative activity during the period ended December 31, 2010. The Funds may be sellers of protection through credit default swap agreements which are by nature credit-risk contingent (the terms of these agreements can be found within the Portfolio of investments, with further discussion in the Notes to financial statements); however, the Funds are not aware of any additional credit-risk contingent features on other derivative contracts held by the Funds.

96

The UBS Funds

Notes to financial statements (unaudited)

Disclosure of derivatives by underlying risk for each Fund as of and for the period ended December 31, 2010 is as follows:

Asset derivatives

	Interest rate risk		Credit risk		Foreign exchange risk		Total
UBS Absolute Return Bond Fund
Forward contracts1	$	—	$	—	$	401,485	$	401,485
Futures contracts2		1,172,092		—		—		1,172,092
Swap agreements1		—		79,997		—		79,997
Total value	$	1,172,092	$	79,997	$	401,485	$	1,653,574

¹  Statement of assets and liabilities location: Unrealized appreciation on forward foreign currency contracts and outstanding swap agreements, at value.

²  Includes cumulative appreciation of futures contracts as reported in the futures contracts table in the Portfolio of investments, but only the unpaid variation margin is reported within the Statement of assets and liabilities.

Liability derivatives

	Interest rate risk			Credit risk			Foreign exchange risk			Total
UBS Absolute Return Bond Fund
Forward contracts1	$	—		$	—		$	(999,081	)	$	(999,081	)
Futures contracts2		(165,057	)		—			—			(165,057	)
Swap agreements1		—			(666,853	)		—			(666,853	)
Total value	$	(165,057	)	$	(666,853	)	$	(999,081	)	$	(1,830,991	)

¹  Statement of assets and liabilities location: Unrealized depreciation on forward foreign currency contracts and outstanding swap agreements, at value.

²  Includes cumulative depreciation of futures contracts as reported in the futures contracts table in the Portfolio of investments, but only the unpaid variation margin is reported within the Statement of assets and liabilities.

Activities in derivative instruments during the period ended December 31, 2010, were as follows:

	Interest rate risk			Credit risk			Foreign exchange risk			Total
UBS Absolute Return Bond Fund
Net realized loss1
Forward contracts	$	—		$	—		$	(2,670,191	)	$	(2,670,191	)
Futures contracts		(3,076,197	)		—			—			(3,076,197	)
Swap agreements		—			(30,903	)		—			(30,903	)
Total net realized loss	$	(3,076,197	)	$	(30,903	)	$	(2,670,191	)	$	(5,777,291	)
Net change in unrealized appreciation/depreciation2
Forward contracts	$	—		$	—		$	(475,288	)	$	(475,288	)
Futures contracts		2,358,693			—			—			2,358,693
Swap agreements		—			(79,293	)		—			(79,293	)
Total net change in unrealized appreciation/depreciation	$	2,358,693		$	(79,293	)	$	(475,288	)	$	1,804,112

¹  Statement of operations location: Net realized gain (loss) on futures contracts, swap agreements and forward foreign currency contracts.

²  Statement of operations location: Change in net unrealized appreciation/depreciation on futures contracts, swap agreements and forward foreign currency contracts.

97

The UBS Funds

Notes to financial statements (unaudited)

Asset derivatives

	Credit risk		Total
UBS Core Plus Bond Fund
Swap agreements1	$	5,983	$	5,983

¹  Statement of assets and liabilities location: Outstanding swap agreements, at value.

Liability derivatives

	Interest rate risk			Credit risk			Total
UBS Core Plus Bond Fund
Futures contracts1	$	(49,666	)	$	—		$	(49,666	)
Swap agreements2		(123,917	)		(6,731	)		(130,648	)
Total value	$	(173,583	)	$	(6,731	)	$	(180,314	)

¹  Includes cumulative depreciation of futures contracts as reported in the futures contracts table in the Portfolio of investments, but only the unpaid variation margin is reported within the Statement of assets and liabilities.

²  Statement of assets and liabilities location: Outstanding swap agreements, at value.

Activities in derivative instruments during the period ended December 31, 2010, were as follows:

	Interest rate risk			Credit risk			Foreign exchange risk			Total
UBS Core Plus Bond Fund
Net realized gain (loss)1
Forward contracts	$	—		$	—		$	14,370		$	14,370
Futures contracts		(20,338	)		—			—			(20,338	)
Options purchased2		15,239			—			—			15,239
Options written		(32,458	)		—			—			(32,458	)
Swap agreements		6,146			—			—			6,146
Total net realized gain (loss)	$	(31,411	)	$	—		$	14,370		$	(17,041	)
Net change in unrealized appreciation/depreciation3
Forward contracts	$	—		$	—		$	(14,370	)	$	(14,370	)
Futures contracts		(86,422	)		—			—			(86,422	)
Swap agreements		72,189			(495	)		—			71,694
Total net change in unrealized appreciation/depreciation	$	(14,233	)	$	(495	)	$	(14,370	)	$	(29,098	)

¹  Statement of operations location: Net realized gain (loss) on futures contracts, options written, swap agreements and forward foreign currency contracts.

²  Realized and unrealized gain (loss) is included in net realized gain (loss) from investments and net change in unrealized appreciation/depreciation on investments.

³  Statement of operations location: Change in net unrealized appreciation/depreciation on futures contracts, forward foreign currency contracts and swap agreements.

98

The UBS Funds

Notes to financial statements (unaudited)

Asset derivatives

	Interest rate risk		Credit risk		Foreign exchange risk		Total
UBS Fixed Income Opportunities Fund
Futures contracts2	$	189,674	$	—	$	—	$	189,674
Options purchased1		376,752		—		—		376,752
Swap agreements1		1,167,214		29,136		112,771		1,309,121
Total value	$	1,733,640	$	29,136	$	112,771	$	1,875,547

¹  Statement of assets and liabilities location: Investments in securities of unaffiliated issuers, at value and outstanding swap agreements, at value.

²  Includes cumulative appreciation of futures contracts as reported in the futures contracts table in the Portfolio of investments, but only the unpaid variation margin is reported within the Statement of assets and liabilities.

Liability derivatives

	Interest rate risk			Credit risk			Foreign exchange risk			Total
UBS Fixed Income Opportunities Fund
Forward contracts1	$	—		$	—		$	(166,934	)	$	(166,934	)
Futures contracts2		(37,331	)		—			—			(37,331	)
Options written1		(253,507	)		(9,591	)		—			(263,098	)
Swap agreements1		(336,801	)		(60,090	)		(132,175	)		(529,066	)
Total value	$	(627,639	)	$	(69,681	)	$	(299,109	)	$	(996,429	)

¹  Statement of assets and liabilities location: Unrealized depreciation on forward foreign currency contracts, outstanding swap agreements, at value and options written, at value.

²  Includes cumulative depreciation of futures contracts as reported in the futures contracts table in the Portfolio of investments, but only the unpaid variation margin is reported within the Statement of assets and liabilities.

99

The UBS Funds

Notes to financial statements (unaudited)

Activities in derivative instruments during the period ended December 31, 2010, were as follows:

	Interest rate risk			Equity risk			Credit risk			Foreign exchange risk			Total
UBS Fixed Income Opportunities Fund
Net realized gain (loss)1
Futures contracts	$	39,741		$	(655	)	$	—		$	—		$	39,086
Options purchased2		(13,249	)		—			—			—			(13,249	)
Options written		28,847			—			—			—			28,847
Swap agreements		2,400			—			(12,665	)		(59	)		(10,324	)
Total net realized gain (loss)	$	57,739		$	(655	)	$	(12,665	)	$	(59	)	$	44,360
Net change in unrealized appreciation/depreciation3
Forward contracts	$	—		$	—		$	—		$	(166,934	)	$	(166,934	)
Futures contracts		152,343			—			—			—			152,343
Options purchased2		(33,000	)		—						—			(33,000	)
Oprtions written		4,824			—			23,234			—			28,058
Swap agreements		397,372			—			18,457			4,071			419,900
Total net change in unrealized appreciation/depreciation	$	521,539		$	—		$	41,691		$	(162,863	)	$	400,367

¹  Statement of operations location: Net realized gain (loss) on futures contracts, options written and swap agreements.

²  Realized and unrealized gain (loss) is included in net realized gain (loss) from investments and net change in unrealized appreciation/depreciation from investments.

³  Statement of operations location: Change in net unrealized appreciation/depreciation on futures contracts, options written, swap agreements and forward foreign currency contracts.

Asset derivatives

	Interest rate risk		Credit risk		Foreign exchange risk		Total
UBS Global Bond Fund
Forward contracts1	$	—	$	—	$	108,770	$	108,770
Futures contracts2		13,862		—		—		13,862
Total value	$	13,862	$	—	$	108,770	$	122,632

¹  Statement of assets and liabilities location: Unrealized appreciation on forward foreign currency contracts.

²  Includes cumulative appreciation of futures contracts as reported in the futures contracts table in the Portfolio of investments, but only the unpaid variation margin is reported within the Statement of assets and liabilities.

Liability derivatives

	Interest rate risk			Credit risk			Foreign exchange risk			Total
UBS Global Bond Fund
Forward contracts1	$	—		$	—		$	(14,027	)	$	(14,027	)
Futures contracts2		(10,692	)		—			—			(10,692	)
Swap agreements1		—			(14,338	)		—			(14,338	)
Total value	$	(10,692	)	$	(14,338	)	$	(14,027	)	$	(39,057	)

¹  Statement of assets and liabilities location: Unrealized depreciation on forward foreign currency contracts and outstanding swap agreements, at value.

²  Includes cumulative depreciation of futures contracts as reported in the futures contracts table in the Portfolio of investments, but only the unpaid variation margin is reported within the Statement of assets and liabilities.

100

The UBS Funds

Notes to financial statements (unaudited)

Activities in derivative instruments during the period ended December 31, 2010, were as follows:

	Interest rate risk			Credit risk		Foreign exchange risk			Total
UBS Global Bond Fund
Net realized gain (loss)1
Forward contracts	$	—		$	—	$	(92,009	)	$	(92,009	)
Futures contracts		(26,913	)		—		—			(26,913	)
Swap agreements		—			1,604		—			1,604
Total net realized gain (loss)	$	(26,913	)	$	1,604	$	(92,009	)	$	(117,318	)
Net change in unrealized appreciation/depreciation2
Forward contracts	$	—		$	—	$	125,705		$	125,705
Futures contracts		4,189			—		—			4,189
Swap agreements		—			1,358		—			1,358
Total net change in unrealized appreciation/depreciation	$	4,189		$	1,358	$	125,705		$	131,252

¹  Statement of operations location: Net realized gain (loss) on futures contracts, swap agreements and forward foreign currency contracts.

²  Statement of operations location: Change in net 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 in each Fund's Notes to portfolio of investments.

C. Investment transactions, investment income and expenses: Investment transactions are recorded on the trade date. Realized gains and losses from investment and foreign exchange transactions are calculated using the identified cost method. 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.

D. Foreign currency translation: The Funds use the foreign currency exchange rates determined as of the close of regular trading on the NYSE. For purposes of calculating the US dollar equivalent value of a non US dollar denominated obligation, foreign currency amounts are translated into US dollars on the following basis: (1) market value of investment securities and other assets and liabilities—at the exchange rates prevailing at the end of each Fund's fiscal period; and (2) purchases and sales of investment securities and income and expenses—at the rates of exchange prevailing on the respective dates of such transactions.

Although the net assets and the market value of each Fund's portfolio are presented at the foreign exchange rates at the end of each Fund's fiscal period, the Funds do not generally isolate the effect of fluctuations in foreign exchange rates from the effect of the changes in market prices of securities. However, the Funds do isolate the effect of fluctuations in foreign exchange rates when determining the gain or loss upon the sale or maturity of foreign currency-denominated securities pursuant to US federal income tax regulations. Certain foreign exchange gains and losses included in realized and unrealized gains and losses are included in or are a reduction of ordinary income in accordance with US federal income tax regulations.

101

The UBS Funds

Notes to financial statements (unaudited)

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, manage currency risk or to gain exposure to a currency without purchasing securities denominated in that currency. Forward foreign currency contracts involve, to varying degrees, elements of market risk (specifically foreign currency risk).

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 utilization 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 unrealized gains or losses on foreign forward currency contracts by the Funds. Realized gains and losses include net gains and losses recognized by each Fund on contracts which have been sold or matured.

F. Futures contracts: Each Fund may purchase or sell financial futures contracts. The Funds may purchase or sell futures contracts to increase or reduce their exposure to an asset class without purchasing or selling the underlying securities, either as a hedge or to enhance the Fund's overall total return, income or realize gains. Using financial futures contracts involves various market risks, including interest rate 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. To the extent that market prices move in an unexpected direction, there is a risk that a Fund will not achieve the anticipated benefits of the futures contract or may realize a loss.

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.

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 the Funds' records 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, total return, and credit default swap agreements. The Funds expect to enter into these transactions to

102

The UBS Funds

Notes to financial statements (unaudited)

preserve a return or spread on a particular investment or to hedge a portion of the portfolio's duration, to protect against any increase in the price of securities a Fund anticipates purchasing at a later date, to gain exposure to certain markets in the most economical way possible or in an attempt to enhance income or gains.

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 itself 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.

Certain Funds may enter into currency swap agreements with another party in order to receive or pay amounts based on changes in currency exchange rates to protect itself from or take advantage of exchange rate fluctuations. The Fund utilizes currency swaps to earn income and enhance returns as well as to manage the risk profile of the Fund. 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 currency exchange rate(s) for a specified amount. Currency swap agreements are subject to general market risk, liquidity risk, counterparty risk, foreign exchange risk and interest rate risk.

Credit default swap agreements involve commitments to make or receive payments in the event of a default or other credit event of a referenced security. As a buyer, a Fund would make periodic payments to the counterparty, and a Fund would receive payments only upon the occurrence of a credit event. If no credit event occurs, a Fund will lose its periodic stream of payments over the term of the contract. However, if a credit event does occur, a Fund typically would receive full notional value for a reference obligation that may have little or no value. As a seller, a Fund would receive periodic payments from the counterparty, and a Fund would make payments only upon the occurrence of a credit event. If no credit event occurs, a Fund will gain the periodic stream of payments it received over the term of the contract. However, if a credit event occurs, a 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 a 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 corporate issues or sovereign issues of an emerging market 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 obligations may be delivered in lieu of the specific referenced obligation. The ability to deliver other obligations may result in delivery of a security with a value other than had been anticipated (such as a party's right to choose the deliverable obligation with the lowest value following a credit event). A Fund may use credit default swaps on corporate issues or sovereign issues of an emerging market country to provide a measure of protection against defaults of the issuers (i.e., to reduce risk where a Fund owns or has exposure to the referenced obligation) or to take an active long or short position with respect to the likelihood of a particular issuer's default.

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. Notional amounts of all credit default swap agreements outstanding as of December 31, 2010 for which a Fund is the seller of protection are disclosed under the section "Credit default swaps on corporate and sovereign issues—sell protection" in the Notes to Portfolio 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.

103

The UBS Funds

Notes to financial statements (unaudited)

The use of swap agreements 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 a Fund will be less favorable than it would have been if this investment technique was never used. Swap agreements 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, a Fund would consider the creditworthiness of the counterparty to a swap agreement in evaluating potential credit risk.

A Fund accrues for interim payments on swap agreements on a daily basis, with the net amount recorded within unrealized appreciation/depreciation of swap agreements on the Statement 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 Statement 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, foreign currencies and interest rate swaps (commonly referred to as swaptions), in order to gain exposure to or protect against changes in the markets or in an attempt to enhance income or gains. 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 security 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 a 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.

In writing an option, the Fund bears the market risk of an unfavorable change in the price of the derivative instrument, security, index or currency underlying the written option. Exercise of an option written by the 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 purchase put and call options on foreign or US securities, indices, foreign currencies and interest rate swaps (commonly referred to as swaptions), as well as exchange listed call options on particular market segment indices to achieve temporary exposure to a specific security, currency, 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. The risk associated with purchasing put and call options is limited to the premium paid. Premiums 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.

104

The UBS Funds

Notes to financial statements (unaudited)

K. Short sales: Occasionally, UBS Absolute Return Bond Fund and UBS High Yield Fund may 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 a Fund shorts a security while 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. A Fund will realize a gain or loss upon closing of the short sale (returning the security to the counterparty by way of purchase or delivery of a long position owned). The Fund is liable to the lender for any dividends payable on securities while those securities are in a short position. These dividends are booked as an expense of the Funds. The Fund designates collateral consisting of cash, US government securities or other liquid assets sufficient to collateralize the market value of short positions. The Fund is charged a securities loan fee in connection with short sale transactions.

For the period ended December 31, 2010, there were no short positions held by either of these Funds.

L. Dividends and distributions: It is the Funds' policy to distribute their respective net investment income monthly except UBS Absolute Return Bond Fund and UBS Fixed Income Opportunities Fund which will distribute their net investment income, if any, quarterly. Net realized capital gains, if any, are paid annually. Dividends and distributions to shareholders are recorded on the ex-distribution date. The amount of dividends from net investment income and distributions from net realized capital gains and/or return of capital is determined in accordance with US federal income tax regulations, which may differ from GAAP. These "book/tax" differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature, such amounts are reclassified within the capital accounts based on their federal tax-basis treatment; temporary differences do not require reclassification.

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 the Funds invest. The ability of the issuers of debt securities held by a Fund to meet their obligations may be affected by economic and political developments particular to a specific industry, country, state or region.

N. Redemption fees: Each class of each series of the UBS Funds will impose 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 retained by the Funds are disclosed in the Statement of changes in net assets. For the period ended December 31, 2010, redemption fees represent less than $0.005 per share.

105

The UBS Funds

Notes to financial statements (unaudited)

2. Investment advisory fees and other transactions with affiliates

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 $1.0 billion			$1.0 billion to $1.5 billion			$1.5 billion to $2.0 billion			$2.0 billion and over
UBS Absolute Return Bond Fund		0.550	%		0.500	%		0.475	%		0.450	%		0.425	%
UBS Core Plus Bond Fund		0.500			0.475			0.450			0.425			0.400
UBS Fixed Income Opportunities Fund		0.650			0.650			0.650			0.650			0.650
UBS Global Bond Fund		0.650			0.650			0.650			0.600			0.550
UBS High Yield Fund		0.600			0.550			0.525			0.525			0.525

For UBS Core Plus Bond Fund, UBS Fixed Income Opportunities Fund and UBS Global Bond Fund, the Advisor has agreed to waive its fees and/or reimburse expenses (excluding expenses incurred through investment in other investment companies, interest, taxes, brokerage commissions and extraordinary expenses) to the extent necessary so that the Fund's operating expenses (excluding expenses incurred through investment in other investment companies, interest, taxes, brokerage commissions and extraordinary expenses) do not exceed the expense limit of each Fund as indicated in the table. For UBS Absolute Return Bond Fund and UBS High Yield Fund, the Advisor has agreed to waive its fees and/or reimburse expenses (excluding expenses incurred through investment in other investment companies, interest, taxes, brokerage commissions, extraordinary expenses and securities loan fees and dividend expense for securities sold short) to the extent necessary so that the Fund's operating expenses (excluding expenses incurred through investment in other investment companies, interest, taxes, brokerage commissions, extraordinary expenses and securities loan fees and dividend expense for securities sold short) do not exceed the expense limit of each Fund as indicated in the table. Investment advisory fees, including the dollar amount waived or reimbursed, for the period ended December 31, 2010, 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 Absolute Return Bond Fund		1.00	%		N/A*			1.35	%		0.85	%	$	414,259	$	10,369
UBS Core Plus Bond Fund		0.64			1.39	%		1.14			0.39			117,065		175,965
UBS Fixed Income Opportunities Fund		0.95			N/A*			1.45			0.70			15,096		25,294
UBS Global Bond Fund		1.15			1.90			1.65			0.90			57,735		107,431
UBS High Yield Fund		1.20			1.95			1.70			0.95			263,973		53,092

*  UBS Absolute Return Bond Fund and UBS Fixed Income Opportunities Fund do not offer Class B shares.

106

The UBS Funds

Notes to financial statements (unaudited)

Each Fund will reimburse the Advisor for expenses it reimburses for a period of three years following such expense reimbursements, provided that the reimbursement by a Fund of the Advisor will not cause the total operating expense ratio to exceed the contractual limit as then may be in effect for the Fund. The expenses waived for the period ended December 31, 2010 are subject to repayment through June 30, 2014. At December 31, 2010, 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, 2011		Expires June 30, 2012		Expires June 30, 2013		Expires June 30, 2014
UBS Absolute Return Bond Fund—Class A	$	65,798	$	—	$	35,057	$	21,740	$	9,001
UBS Absolute Return Bond Fund—Class C		9,191		—		4,733		3,090		1,368
UBS Core Plus Bond Fund—Class A		169,231		27,421		34,710		68,455		38,645
UBS Core Plus Bond Fund—Class B		2,806		1,126		738		728		214
UBS Core Plus Bond Fund—Class C		37,948		3,008		6,551		18,828		9,561
UBS Core Plus Bond Fund—Class Y		983,252		278,613		275,353		301,741		127,545
UBS Fixed Income Opportunities Fund—Class A		651		—		—		—		651
UBS Fixed Income Opportunities Fund—Class C		378		—		—		—		378
UBS Fixed Income Opportunities Fund—Class Y		24,265		—		—		—		24,265
UBS Global Bond Fund—Class A		187,444		20,765		50,263		73,286		43,130
UBS Global Bond Fund—Class B		3,359		460		761		1,350		788
UBS Global Bond Fund—Class C		43,178		2,242		8,446		18,996		13,494
UBS Global Bond Fund—Class Y		534,429		135,610		217,046		131,754		50,019
UBS High Yield Fund—Class A		173,312		35,260		46,068		63,865		28,119
UBS High Yield Fund—Class B		7,696		2,204		2,019		2,384		1,089
UBS High Yield Fund—Class C		40,722		8,511		10,727		14,851		6,633
UBS High Yield Fund—Class Y		164,253		26,868		75,272		44,862		17,251

Each Fund pays 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 period ended December 31, 2010, the Funds owed and incurred administrative fees as follows:

Fund	Administrative fees owed		Administrative fees incurred
UBS Absolute Return Bond Fund	$	9,505	$	56,490
UBS Core Plus Bond Fund		2,906		17,560
UBS Fixed Income Opportunities Fund		1,691		1,742
UBS Global Bond Fund		1,053		6,656
UBS High Yield Fund		5,671		32,997

The Funds may invest in certain affiliated investment companies also advised or managed by the Advisor. Investments in affiliated investment companies for the period ended December 31, 2010 have been included near the end of each Fund's Portfolio of investments.

The Funds may invest in 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 Statement of operations. Amounts relating to those investments at December 31, 2010 and for the period ended have been included near the end of each Fund's Portfolio of investments.

107

The UBS Funds

Notes to financial statements (unaudited)

Under normal conditions, the Funds invest cash collateral from securities lending activities into an affiliated private money market fund, UBS Private Money Market Fund LLC ("Private Money Market"), which operates in compliance with most of the substantive provisions of Rule 2a-7 of the 1940 Act. 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. UBS Global AM 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 order to maintain operating expenses at a certain level. Distributions received from Private Money Market, net of fee rebates paid to borrowers, are reflected as securities lending-net in the Statement of operations. Amounts relating to those investments at December 31, 2010 and for the period then ended have been included near the end of each Fund's Portfolio of investments.

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 Absolute Return Bond Fund		0.15	%		N/A*			0.50	%
UBS Core Plus Bond Fund		0.25			1.00	%		0.75
UBS Fixed Income Opportunities Fund		0.25			N/A*			0.75
UBS Global Bond Fund		0.25			1.00			0.75
UBS High Yield Fund		0.25			1.00			0.75

*  UBS Absolute Return Bond Fund and UBS Fixed Income Opportunities Fund do not offer Class B shares.

108

The UBS Funds

Notes to financial statements (unaudited)

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 December 31, 2010, certain Funds owed UBS Global AM (US) service and distribution fees, and for the period ended December 31, 2010, 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 Absolute Return Bond Fund—Class A	$	1,244	$	118
UBS Absolute Return Bond Fund—Class C		1,132		—
UBS Core Plus Bond Fund—Class A		2,120		593
UBS Core Plus Bond Fund—Class B		30		167
UBS Core Plus Bond Fund—Class C		1,498		97
UBS Fixed Income Opportunities Fund—Class A		147		—
UBS Fixed Income Opportunities Fund—Class C		258		—
UBS Global Bond Fund—Class A		1,452		136
UBS Global Bond Fund—Class B		96		—
UBS Global Bond Fund—Class C		1,480		4
UBS High Yield Fund—Class A		7,842		8,111
UBS High Yield Fund—Class B		639		2,548
UBS High Yield Fund—Class C		5,984		130

4. Transfer agency and related services fees

UBS Financial Services Inc. provides certain services pursuant to a delegation of authority from BNY Mellon Investment Servicing ("BNY Mellon"), each Fund's transfer agent, and is compensated for these services by BNY Mellon, not the Funds.

For the period ended December 31, 2010, UBS Financial Services Inc. received from BNY Mellon, not the Funds, total services fees as follows:

Fund	Amount paid
UBS Absolute Return Bond Fund	$	5,717
UBS Core Plus Bond Fund		1,588
UBS Fixed Income Opportunities Fund		19
UBS Global Bond Fund		2,555
UBS High Yield Fund		11,437

5. Securities lending

Each Fund may lend 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, cash equivalents or US government securities in an amount at least equal to 102% of the market value of the securities loaned with respect to domestic securities and 105% of the market value of the securities loaned with respect to foreign securities, 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, the Fund may bear the risk of delay in recovery of, or even loss of rights in, the securities loaned should the borrower fail financially. The Fund receives compensation for lending its securities from interest or dividends earned on the cash, cash

109

The UBS Funds

Notes to financial statements (unaudited)

equivalents or US government securities held as collateral, net of fee rebates paid to the borrower plus reasonable administrative and custody fees.

UBS Core Plus Bond Fund loaned securities to certain qualified broker-dealers, with the Funds' custodian acting as the Funds' lending agent. Cash collateral received is invested in Private Money Market, which is included in the Portfolio(s) of investments. In addition, UBS Core Plus Bond Fund received US Government Agency securities as collateral amounting to $419,894. The market value of loaned securities and related collateral outstanding at December 31, 2010, were as follows:

Fund	Market value of securities loaned		Market value of collateral received from securities loaned		Market value of investments of cash collateral received
UBS Core Plus Bond Fund	$	746,083	$	762,963	$	343,069

6. Purchases and sales of securities

For the period ended December 31, 2010, 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 Absolute Return Bond Fund	$	12,455,875	$	18,283,072
UBS Core Plus Bond Fund		56,650,856		53,083,170
UBS Fixed Income Opportunities Fund		26,393,953		49,500
UBS Global Bond Fund		4,076,419		6,940,298
UBS High Yield Fund		26,189,249		25,023,327

For the period ended December 31, 2010, aggregate purchases and sales of US Government and agency securities, excluding short-term investments, were as follows:

Fund	Purchases		Sales proceeds
UBS Absolute Return Bond Fund	$	3,040,078	$	2,538,859
UBS Core Plus Bond Fund		37,773,143		41,885,154
UBS Fixed Income Opportunities Fund		801,054		—
UBS Global Bond Fund		973,554		551,775

7. Federal income taxes

It is each Fund's policy to comply with all requirements of the Internal Revenue 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.

110

The UBS Funds

Notes to financial statements (unaudited)

The tax character of distributions paid during the fiscal year ended June 30, 2010 were as follows:

	2010
Fund	Distributions paid from ordinary income		Return of capital		Total distributions paid
UBS Absolute Return Bond Fund	$	3,868,746	$	573,319	$	4,442,065
UBS Core Plus Bond Fund		3,254,097		—		3,254,097
UBS Global Bond Fund		714,881		—		714,881
UBS High Yield Fund		8,366,143		—		8,366,143

The tax character of distributions paid and components of accumulated earnings/(deficit) on a tax basis for the current fiscal year will be determined after the Trust's fiscal year ending June 30, 2011.

At June 30, 2010, 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, 2011		June 30, 2012		June 30, 2013		June 30, 2014		June 30, 2015		June 30, 2016		June 30, 2017		June 30, 2018
UBS Absolute Return Bond Fund	$	—	$	—	$	—	$	—	$	564,587	$	8,900,102	$	70,926,250	$	38,038,802
UBS Core Plus Bond Fund		—		—		—		353,828		1,283,441		—		3,069,977		32,070,048
UBS Global Bond Fund		—		—		—		—		359,497		577,591		3,369,482		12,176,817
UBS High Yield Fund		37,425,637		15,791,570		11,067,780		22,213,870		5,885,761		1,000,707		4,782,241		25,725,339

UBS High Yield Fund had capital loss carryforwards in the amount of $6,612,767 that expired as of June 30, 2010.

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, 2010, the following Funds incurred, and elected to defer, losses of the following:

Fund	Net capital losses
UBS Absolute Return Bond Fund	$	6,910,577

As of and during the period ended December 31, 2010, the Funds did not have any liabilities for any unrecognized tax benefits. The Funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of operations. During the period, the Funds did not incur any interest or penalties.

Each of the tax years in the four year period ended June 30, 2010, or since inception in the case of UBS Fixed Income Opportunities Fund, remains subject to examination by the Internal Revenue Service and state taxing authorities.

111

The UBS Funds

Notes to financial statements (unaudited)

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 request of shareholders and other temporary or emergency purposes. Interest on amounts borrowed is calculated based on the prevailing rates in effect at the time of borrowing. 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. There were no borrowings from the Committed Credit Facility during the period ended December 31, 2010.

9. Shares of beneficial interest

For the period ended December 31, 2010, transactions in shares of beneficial interest for each of the Funds were as follows:

UBS Absolute Return Bond Fund

	Class A						Class C						Class Y
	Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		44,447		$	283,067			7,293		$	46,331			139		$	1,345
Shares repurchased		(346,759	)		(2,209,719	)		(117,668	)		(749,837	)		(3,625	)		(23,045	)
Dividends reinvested		25,797			163,408			6,387			40,457			420,361			2,660,565
Redemption fees		—			179			—			326			—			—
Net increase (decrease)		(276,515	)	$	(1,763,065	)		(103,988	)	$	(662,723	)		416,875		$	2,638,865

UBS Core Plus Bond Fund

	Class A						Class B
	Shares			Amount			Shares			Amount
Shares sold		237,359		$	2,081,252			2,327		$	19,968
Shares repurchased		(212,009	)		(1,848,719	)		(1,090	)		(9,592	)
Shares converted from Class B to Class A		1,644			14,372			(1,642	)		(14,372	)
Dividends reinvested		32,845			284,165			116			1,005
Redemption fees		—			407			—			—
Net increase (decrease)		59,839		$	531,477			(289	)	$	(2,991	)

	Class C						Class Y
	Shares			Amount			Shares			Amount
Shares sold		189		$	1,534			156,328		$	1,369,312
Shares repurchased		(38,095	)		(334,301	)		(422,412	)		(3,705,513	)
Dividends reinvested		7,776			67,013			133,916			1,158,274
Redemption fees		—			315			—			2,932
Net decrease		(30,130	)	$	(265,439	)		(132,168	)	$	(1,174,995	)

112

The UBS Funds

Notes to financial statements (unaudited)

UBS Fixed Income Opportunities Fund

	Class A						Class C				Class Y
	Shares			Amount			Shares		Amount		Shares		Amount
Shares sold		113,051		$	1,139,212			82,947	$	844,310		2,528,626	$	25,287,434
Shares repurchased		(1,603	)		(16,299	)		—		—		—		—
Dividends reinvested		173			1,760			166		1,690		5,998		60,940
Redemption fees		—			—			—		—		—		—
Net increase		111,621		$	1,124,673			83,113	$	846,000		2,534,624	$	25,348,374

UBS Global Bond Fund

	Class A						Class B
	Shares			Amount			Shares			Amount
Shares sold		20,394		$	153,868			—		$	—
Shares repurchased		(132,490	)		(1,011,721	)		—			—
Shares converted from Class B to Class A		5,163			39,322			(5,144	)		(39,322	)
Dividends reinvested		70,095			499,076			1,136			8,105
Redemption fees		—			—			—			4
Net decrease		(36,838	)	$	(319,455	)		(4,008	)	$	(31,213	)

	Class C						Class Y
	Shares			Amount			Shares			Amount
Shares sold		21,612		$	157,943			45,338		$	401,415
Shares repurchased		(13,062	)		(99,278	)		(232,868	)		(2,036,704	)
Dividends reinvested		22,061			156,246			60,903			501,448
Redemption fees		—			—			—			514
Net increase (decrease)		30,611		$	214,911			(126,627	)	$	(1,133,327	)

UBS High Yield Fund

	Class A						Class B
	Shares			Amount			Shares			Amount
Shares sold		182,139		$	1,118,455			—		$	—
Shares repurchased		(543,448	)		(3,351,291	)		(28,609	)		(174,447	)
Shares converted from Class B to Class A		8,900			55,227			(8,894	)		(55,227	)
Dividends reinvested		157,658			964,565			2,287			13,985
Redemption fees		—			815			—			—
Net decrease		(194,751	)	$	(1,212,229	)		(35,216	)	$	(215,689	)

	Class C						Class Y
	Shares			Amount			Shares			Amount
Shares sold		63,369		$	389,819			839,549		$	5,236,723
Shares repurchased		(91,910	)		(565,863	)		(680,370	)		(4,203,726	)
Dividends reinvested		32,569			199,500			264,328			1,631,108
Redemption fees		—			228			—			—
Net increase		4,028		$	23,684			423,507		$	2,664,105

113

The UBS Funds

Notes to financial statements (unaudited)

For the year ended June 30, 2010, transactions in shares of beneficial interest for each of the Funds were as follows:

UBS Absolute Return Bond Fund

	Class A						Class C						Class Y
	Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		217,038		$	1,401,201			70,592		$	455,064			20		$	562
Shares repurchased		(1,285,276	)		(8,274,781	)		(385,497	)		(2,484,236	)		(2,543	)		(16,392	)
Dividends reinvested		55,176			353,982			12,969			83,173			617,551			3,956,861
Redemption fees		—			493			—			—			—			—
Net increase (decrease)		(1,013,062	)	$	(6,519,105	)		(301,936	)	$	(1,945,999	)		615,028		$	3,941,031

UBS Core Plus Bond Fund

	Class A						Class B
	Shares			Amount			Shares			Amount
Shares sold		262,271		$	2,233,905			—		$	—
Shares repurchased		(404,919	)		(3,461,690	)		(1,035	)		(8,898	)
Shares converted from Class B to Class A		6,393			54,084			(6,386	)		(54,084	)
Dividends reinvested		50,240			425,583			519			4,384
Redemption fees		—			2,823			—			—
Net decrease		(86,015	)	$	(745,295	)		(6,902	)	$	(58,598	)

	Class C						Class Y
	Shares			Amount			Shares			Amount
Shares sold		59,234		$	502,420			1,273,659		$	10,726,360
Shares repurchased		(86,427	)		(734,856	)		(4,338,818	)		(36,744,899	)
Dividends reinvested		14,810			125,041			303,875			2,568,350
Redemption fees		—			201			—			5,916
Net decrease		(12,383	)	$	(107,194	)		(2,761,284	)	$	(23,444,273	)

UBS Global Bond Fund

	Class A						Class B
	Shares			Amount			Shares			Amount
Shares sold		251,384		$	1,895,900			3,919		$	30,661
Shares repurchased		(406,539	)		(3,054,815	)		(733	)		(5,816	)
Shares converted from Class B to Class A		841			6,421			(838	)		(6,421	)
Dividends reinvested		28,230			211,673			369			2,775
Redemption fees		—			12			—			—
Net increase (decrease)		(126,084	)	$	(940,809	)		2,717		$	21,199

	Class C						Class Y
	Shares			Amount			Shares			Amount
Shares sold		84,908		$	637,045			680,645		$	5,789,707
Shares repurchased		(45,365	)		(342,107	)		(2,744,310	)		(23,541,071	)
Dividends reinvested		5,755			43,010			48,617			415,787
Redemption fees		—			4			—			524
Net increase (decrease)		45,298		$	337,952			(2,015,048	)	$	(17,335,053	)

114

The UBS Funds

Notes to financial statements (unaudited)

UBS High Yield Fund

	Class A						Class B
	Shares			Amount			Shares			Amount
Shares sold		932,338		$	5,419,062			4,005		$	22,493
Shares repurchased		(2,860,458	)		(15,823,923	)		(22,957	)		(127,320	)
Shares converted from Class B to Class A		6,102			35,866			(6,102	)		(35,866	)
Dividends reinvested		360,925			2,087,179			6,853			39,638
Redemption fees		—			2,539			—			—
Net decrease		(1,561,093	)	$	(8,279,277	)		(18,201	)	$	(101,055	)

	Class C						Class Y
	Shares			Amount			Shares			Amount
Shares sold		279,977		$	1,626,635			872,636		$	5,096,082
Shares repurchased		(217,274	)		(1,264,177	)		(7,136,983	)		(39,682,910	)
Dividends reinvested		76,798			444,474			697,236			4,045,452
Redemption fees		—			83			—			6,819
Net increase (decrease)		139,501		$	807,015			(5,567,111	)	$	(30,534,557	)

115

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 UBS's Web site: www.ubs.com/ubsglobalam-proxy, or on the EDGAR Database on the SEC's Web site (http://www.sec.gov).

116

The UBS Funds

Funds' privacy notice

This notice describes the privacy policy of the UBS Family of Funds, the PACE Funds and all closed-end funds managed by UBS Global Asset Management (collectively, the "Funds"). The Funds are committed to protecting the personal information that they collect about individuals who are prospective, current or former investors.

The Funds collect personal information in order to process requests and transactions and to provide customer service. Personal information, which is obtained from applications, may include name(s), address, social security number or tax identification number, bank account information, other Fund holdings and any affiliation the person has with UBS Financial Services Inc. or its subsidiaries ("Personal Information"). The Funds limit access to Personal Information to those individuals who need to know that information in order to process transactions and service accounts. These individuals are required to maintain and protect the confidentiality of Personal Information. The Funds maintain physical, electronic and procedural safeguards to protect Personal Information. The Funds may share Personal Information described above with their affiliates for marketing and other business purposes, such as to facilitate the servicing of accounts. The Funds may share Personal Information described above with a non-affiliated third party if the entity is under contract to perform transaction processing or to service and maintain shareholder accounts on behalf of the Funds and otherwise as permitted by law. Any such contract will include provisions designed to ensure that the third party will uphold and maintain privacy standards when handling Personal Information. The Funds may also disclose Personal Information to regulatory authorities as required by applicable law. Except as described in this privacy notice, the Funds will not use Personal Information for any other purpose unless the Funds describe how such Personal Information will be used and clients are given an opportunity to decline approval of such use of Personal Information relating to them. The Funds endeavor to keep their customer files complete and accurate. The Funds should be notified if any Personal Information needs to be corrected or updated. Please call 1-800-647 1568 with any questions or concerns regarding your Personal Information or this privacy notice.

Privacy Notice
This privacy notice is not a part of the shareholder report.

117

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The UBS Funds—Equities

Semiannual Report

December 31, 2010

Table of contents
President's letter	1
Market commentary	2
Equities
UBS Global Equity Fund	3
UBS International Equity Fund	11
UBS Market Neutral Multi-Strategy Fund	21
UBS U.S. Equity Alpha Fund	44
UBS U.S. Large Cap Equity Fund	54
UBS U.S. Large Cap Value Equity Fund	63
UBS U.S. Small Cap Growth Fund	71
Explanation of expense disclosure	79
Statement of assets and liabilities	84
Statement of operations	88
Statement of changes in net assets	90
Financial highlights	94
Notes to financial statements	108
General information	127

This page has been left blank intentionally.

President's letter

Dear Shareholder,

In the time since I last wrote to you, we have seen a shift in the investor mindset. Asset flows into equities seem to be turning in a positive direction, as investors appear to be showing interest, once again, in riskier assets. Nonetheless, considering the upward trend in the equity markets and encouraging signs that the economy is on the road to recovery, a surprising number of investors remain sidelined by fear, avoiding "risky" assets in favor of fixed income.

The truth is, market pundits will tell you that, in today's low yield environment, fixed income investing is fraught with its own uncertainties. If rates stay low, so will returns; if bond yields rise, the value of fixed income investments will fall. In short, fixed income may not be the safe harbor that many investors believe it to be.

Fear—arguably, now more than ever, it's one of the biggest obstacles to investor success. That's not to say that when it comes to investing, no fear is a good thing. In fact, fear helps inform an investor's own understanding of the level of risk he or she is willing to assume when it comes to building an investment plan. However, the fear that is so prevalent in the market today has little to do with rational thinking, and everything to do with basic human emotion. In fact, a good portion of investors today are making investment decisions based on their desire to avoid losing money—which turns the whole idea of a long-term investment plan on its head, really.

Irrational fear more often than not has the unfortunate result of leading investors to make the wrong decisions, for the wrong reasons, at the wrong times—often at the expense of their long-term investment success. What can you do to fight it? A key strategy that makes sense in any environment is a diversified portfolio that blends both stocks and bonds. A diversified portfolio can't guarantee against a loss, but it does have the potential to provide you with more consistent returns—making it easier for you to maintain the discipline you need to stay the course to achieve your financial goals.

In 2011, we will continue to build upon our 30-year foundation—growing and evolving to meet not only the challenges of a new market landscape, but also the ever-increasing diversification needs of our clients. At the same time, we will remain resolute in adhering to our disciplined investment approach, so we can seek to avoid the types of traps that can confound fear-driven investors. In doing so, we believe we will be better positioned to provide you, our clients, with the types of investment solutions that will help carry you forward over the next five, 10 or 30 years.

As always, we remain firmly dedicated to your investment success. Thank you for your continued support.

Mark E. Carver
President
The UBS Funds
Managing Director
UBS Global Asset Management (Americas) Inc.

1

The markets in review

Continued Economic Growth

The overall US economy expanded during the six-months ended December 31, 2010. The US economy has now grown for six consecutive quarters, spurred, in part, due to government stimulus programs, as well as the Federal Reserve Board's (the "Fed's") accommodative monetary policy. However, there continued to be several areas of weakness, most notably unemployment that remained above 9%, which held back a more robust expansion. Looking back, gross domestic product ("GDP") growth was 3.7% during the first quarter of 2010. GDP growth was then 1.7% and 2.6%, respectively, during the second and third quarters of the year. The Commerce Department's initial estimate for GDP growth in the fourth quarter is 3.2%.

Economic growth outside the US was largely positive as well during the reporting period. However, there was a significant disparity between the growth rates in the international developed and emerging market countries. The European sovereign debt crisis, which began in Greece and later impacted Ireland, served to temper growth in a number of developed countries in the Eurozone. In contrast, developing countries, including China and India, continued to see their economies expand at a rapid pace.

The global equity markets end the period with a sharp rally

After a weak first half of 2010, the global stock market generated outstanding results during the reporting period. This was largely due to a strong rally in the fourth quarter. In the US, the S&P 500 Index¹ (the "Index") declined nearly 7% during the first half of the year. However, the market then rebounded and the Index posted positive returns in five of the six months covered by this report. All told, the Index gained 23.27% during the six-months ended December 31, 2010. The market's turnaround was due to several factors, including better than expected corporate profits, a second round of quantitative easing by the Fed and an extension of the Bush-era tax cuts.

International developed equities, as measured by the MSCI EAFE Index (net),² also posted strong returns during the reporting period, gaining 24.18%. While international developed equities lost ground in August and November given concerns regarding the European debt crisis, this was more than offset by their gains during the other four months covered by this report. Emerging market equities (as measured by the MSCI Emerging Markets Index³) performed even better, as they gained 26.86% over the same period. Robust economic growth, overall strong demand and rising commodity prices supported emerging market equity prices.

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 and expenses.

²  The MSCI EAFE Index (net) is an index of stocks from 22 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. The Index is constructed and managed with a view to being fully investable from the perspective of international institutional investors. Investors should note that indices do not reflect the deduction of fees and expenses.

³  The MSCI Emerging Markets Index is a market capitalization-weighted index composed of companies representative of the market structure of 21 emerging market countries in Europe, Latin America and the Pacific Basin. The Index is constructed and managed with a view to being fully investable from the perspective of international institutional investors. Investors should note that indices do not reflect the deduction of fees and expenses.

2

UBS Global Equity Fund

Portfolio performance

For the six months ended December 31, 2010, Class A shares of UBS Global Equity Fund (the "Fund") returned 24.43% (Class A shares returned 17.62% after the deduction of the maximum sales charge), while Class Y shares returned 24.63%. The Fund's benchmark, the MSCI World Free Index (net) (the "Index"), returned 23.96% 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 5; 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.)

The Fund outperformed its benchmark Index during the reporting period, primarily due to stock selection decisions.

Portfolio performance summary¹

What worked

•  Overall, individual stock selection had a positive impact on performance.

  – Naspers, an attractively valued South African Internet and traditional publishing company produced strong results during the reporting period. (For details, see "Portfolio highlights.")

  – Our holding of multinational mining company Rio Tinto, headquartered in Australia, was a positive for performance. The company benefited as commodity prices moved higher given continued strong demand from emerging market countries such as China. (For details, see "Portfolio highlights.")

  – We held a position in Australian airline Qantas Airways.² The company's shares rallied from depressed levels as the airline industry appeared to recover during the reporting period.

  – Owning US company Autodesk, a global leader in 3D design and engineering software, was rewarded given strong demand for its products amid an upturn in corporate capital spending. We are optimistic on the company's future operating leverage given its excellent cost management, coupled with a pending recovery in their end markets from a very low base.

•  Stock selection decisions positively contributed to relative performance in a number of sectors. The Fund's sector allocations are a byproduct of our bottom-up stock selection process. Overall, during the reporting period we positioned the Fund in anticipation of a continued economic recovery. In particular, stock selection was beneficial in the consumer discretionary, financial and information technology sectors.

What didn't work

•  Several individual stocks were negative for performance during the period.

  – China Mengniu Dairy, a manufacturing and distribution company of dairy products in China, detracted from performance. Its shares declined, along with the overall Chinese stock market during the period, given concerns over whether the government could orchestrate a soft landing for its economy. (For details, see "Portfolio highlights.")

  – CRH, an Ireland-based building materials company, generated poor results as management did not effectively manage its business plan. We subsequently sold the Fund's position. (For details, see "Portfolio highlights.")

¹  For a detailed commentary on the market environment in general during the reporting period, see page 2.

²  As of December 31, 2010, this position was no longer held by the Fund.

3

UBS Global Equity Fund

  – The Fund's holding in US financial company Bank of America was a detractor from performance. We sold the position given the ongoing issues in the company's mortgage portfolio. (For details, see "Portfolio highlights.")

  – Owning shares of Hewlett-Packard was not beneficial for results. This US information technology company suffered due to the negative publicity surrounding the firing of its Chief Executive Officer. (For details, see "Portfolio highlights.")

•  Stock selection in the materials, consumer staples and energy sectors negatively contributed to the Fund's results. A number of individual Fund holdings led to overall negative performance in these sectors.

Portfolio highlights

•  Naspers is a South Africa-based multinational media company. We believe it offers an attractive exposure to the media industry in the underdeveloped and growing African continent and the BRIC countries (Brazil, Russia, India and China). A large portion of the company's current profits come from pay television, which is being used to help finance the expansion of its Internet business.

•  Rio Tinto, an Australian mining company, in our opinion has one of the best growth profiles in its industry, and is highly leveraged to rising iron ore prices. We believe its projects are of high quality and long life expectancy, and it has a solid balance sheet, strong pipeline and refocused management. In addition, Rio Tinto has reduced its debt, which should enable the company to reinitiate stalled growth projects.

•  China Mengniu Dairy is a quality dairy brand in China that provides a broad range of milk, dairy and ice cream products. The company is growing along with Chinese food consumption. In addition, we believe the company could benefit from efforts to upgrade Chinese diets.

•  CRH is a global building materials company. We eliminated the Fund's position because its growth in the highly competitive paving business was counter to our expectations, and we lost faith in management's ability to make value-added acquisitions.

•  Bank of America is a very broad-based US bank that is rationalizing its business portfolio. We sold the shares to pursue what we felt were better opportunities within the sector, and which do not have the same level of mortgage-related risks.

•  Hewlett-Packard is a US-based global computer, printer and services company. The company benefits from its strong industry position, and we believe it is well-positioned to capitalize on the expected recovery in information technology capital spending.

This letter is intended to assist shareholders in understanding how the Fund performed during the six months ended December 31, 2010. The views and opinions in the letter were current as of February 15, 2011. They are not guarantees of future 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.

4

UBS Global Equity Fund

Average annual total returns for periods ended 12/31/10 (unaudited)

	6 months			1 year			5 years			10 years			Inception1
Before deducting maximum sales charge
Class A2		24.43	%		10.08	%		2.77	%		3.21	%		4.09	%
Class B3		23.88			9.25			2.00			N/A			4.32 6
Class C4		23.87			9.26			1.98			N/A			4.03
Class Y5		24.63			10.61			3.10			3.57			6.19
After deducting maximum sales charge
Class A2		17.62	%		4.04	%		1.61	%		2.64	%		3.65	%
Class B3		18.88			4.25			1.63			N/A			4.32 6
Class C4		22.87			8.26			1.98			N/A			4.03
MSCI World Free Index (net)7		23.96	%		11.76	%		2.43	%		2.31	%		5.92	%

The annualized gross and net expense ratios, respectively, for each class of shares as in the October 28, 2010 prospectuses were as follows: Class A—1.55% and 1.50%; Class B—2.27% and 2.25%; Class C—2.34% and 2.25%; Class Y—1.15% and 1.15%. 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 UBS Global Asset Management (Americas) Inc., the Fund's investment advisor ("UBS Global AM (Americas)" or 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, interest, taxes, brokerage commissions and extraordinary expenses) to the extent necessary so that the Fund's ordinary operating expenses (excluding expenses incurred through investment in other investment companies, interest, taxes, brokerage commissions and extraordinary expenses), through the 12-month period ending October 27, 2011, do not exceed 1.50% for Class A shares, 2.25% for Class B 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 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. Prior to September 30, 2003, Class C shares were subject to a maximum front-end sales charge of 1.00%; this front-end sales charge is not reflected in the average annual total returns presented for the Class C shares shown above.

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  Assumes the conversion of Class B to Class A shares at the end of the sixth year.

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 May 2010, the index consisted of 24 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 is constructed and managed with a view to being fully investable from the perspective of international institutional investors. 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. Total returns for periods of less than one year have not been annualized. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://www.ubs.com.

5

UBS Global Equity Fund

Top ten equity holdings (unaudited)

As of December 31, 2010

	Percentage of net assets
Microsoft Corp.		2.8	%
Citigroup, Inc.		2.1
BP PLC		2.0
Novartis AG		1.8
Apple, Inc.		1.7
Lowe's Cos., Inc.		1.7
Petrominerales Ltd.		1.7
Rio Tinto Ltd.		1.7
HeidelbergCement AG		1.6
HON HAI Precision Industry Co., Ltd.		1.6
Total		18.7	%

Country exposure, top five (unaudited)

As of December 31, 2010

	Percentage of net assets
United States		38.5	%
Japan		9.7
United Kingdom		8.4
Canada		5.3
China		5.0
Total		66.9	%

Industry diversification (unaudited)

As a percentage of net assets as of December 31, 2010

Common stocks
Airlines	0.75	%
Automobiles	2.37
Biotechnology	1.24
Building products	1.34
Capital markets	4.33
Chemicals	3.44
Commercial banks	7.96
Commercial services & supplies	1.28
Communications equipment	0.96
Computers & peripherals	3.09
Construction & engineering	1.49
Construction materials	2.46
Diversified financial services	2.93
Diversified telecommunication services	1.26
Electric utilities	0.76
Electronic equipment, instruments & components	2.50
Energy equipment & services	1.69
Food & staples retailing	2.18
Food products	1.88
Health care equipment & supplies	1.24
Health care providers & services	4.07
Hotels, restaurants & leisure	1.35
Household durables	1.20
Industrial conglomerates	1.40
Insurance	4.38
Internet software & services	1.38
IT services	1.21
Leisure equipment & products	0.67
Media	4.06
Metals & mining	2.87
Multi-utilities	1.28
Office electronics	1.16
Oil, gas & consumable fuels	9.36
Pharmaceuticals	2.99
Professional services	1.07
Real estate management & development	1.92
Semiconductors & semiconductor equipment	1.14
Software	4.02
Specialty retail	1.68
Tobacco	1.36
Trading companies & distributors	2.68
Wireless telecommunication services	1.85
Total common stocks	98.25	%
Participation note	0.53
Short-term investment	0.80
Investment of cash collateral from securities loaned	1.23
Total investments	100.81	%
Liabilities, in excess of cash and other assets	(0.81	)
Net assets	100.00	%

6

UBS Global Equity Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Shares		Value
Common stocks: 98.25%
Australia: 2.69%
Orica Ltd.		50,873	$	1,295,619
Rio Tinto Ltd.		23,650		2,067,453
Total Australia common stocks				3,363,072
Brazil: 1.22%
Vale SA ADR		44,100		1,524,537
Canada: 5.24%
Cenovus Energy, Inc.		44,100		1,476,062
Petrominerales Ltd.1		62,500		2,084,381
Research In Motion Ltd.*		20,400		1,191,419
Suncor Energy, Inc.		46,800		1,801,774
Total Canada common stocks				6,553,636
China: 4.98%
AIA Group Ltd.*		527,255		1,482,159
China Construction Bank Corp., H Shares		1,553,450		1,393,005
China Mengniu Dairy Co., Ltd.		356,000		943,495
New World Development Ltd.		900,000		1,690,510
Sino-Ocean Land Holdings Ltd.		1,096,500		718,040
Total China common stocks				6,227,209
Denmark: 1.49%
FLSmidth & Co. A/S		19,549		1,864,463
Finland: 0.74%
Sampo Oyj, Class A		34,432		922,530
France: 1.10%
Carrefour SA		33,288		1,372,293
Germany: 3.73%
Fresenius Medical Care AG & Co. KGaA		21,949		1,267,955
HeidelbergCement AG		32,483		2,035,790
Metro AG		18,764		1,351,005
Total Germany common stocks				4,654,750
India: 1.21%
Infosys Technology Ltd. ADR		19,800		1,506,384
Indonesia: 1.10%
Bank Rakyat Indonesia PT		1,181,500		1,376,887
Ireland: 2.07%
Covidien PLC		33,904		1,548,057
James Hardie Industries SE CDI*		150,076		1,040,714
Total Ireland common stocks				2,588,771

	Shares		Value
Japan: 9.70%
ITOCHU Corp.		141,400	$	1,431,590
KDDI Corp.		191		1,103,325
Mitsubishi Corp.		70,400		1,905,890
Nissan Motor Co., Ltd.*		151,400		1,441,461
ORIX Corp.		10,820		1,064,808
Ricoh Co., Ltd.		99,000		1,451,041
Sankyo Co., Ltd.		14,800		835,793
Shin-Etsu Chemical Co., Ltd.		22,800		1,235,620
Sumitomo Mitsui Financial Group, Inc.		46,400		1,652,775
Total Japan common stocks				12,122,303
Malaysia: 0.62%
Petronas Chemicals Group Bhd*		434,400		777,651
Netherlands: 2.93%
ASML Holding NV		36,848		1,423,036
LyondellBasell Industries NV, Class A*		28,625		984,700
Wolters Kluwer NV		57,144		1,252,329
Total Netherlands common stocks				3,660,065
Norway: 2.13%
Petroleum Geo-Services ASA*		69,754		1,086,049
Telenor ASA		97,019		1,576,234
Total Norway common stocks				2,662,283
Russia: 2.02%
Mobile Telesystems OJSC ADR		57,900		1,208,373
Sberbank of Russia*		387,258		1,319,388
Total Russia common stocks				2,527,761
South Africa: 1.55%
Naspers Ltd., Class N		32,943		1,940,074
Switzerland: 2.91%
Novartis AG		39,066		2,295,911
SGS SA		801		1,344,138
Total Switzerland common stocks				3,640,049
Taiwan: 2.51%
AU Optronics Corp.*		1,099,000		1,142,102
HON HAI Precision Industry Co., Ltd.		492,840		1,986,134
Total Taiwan common stocks				3,128,236
Thailand: 1.48%
Bank of Ayudhya PCL		2,187,900		1,850,770
United Kingdom: 8.38%
Barclays PLC		276,619		1,128,435
BP PLC		338,059		2,453,764
GlaxoSmithKline PLC		74,411		1,438,576

7

UBS Global Equity Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Shares		Value
Common stocks—(Concluded)
United Kingdom—(Concluded)
Lloyds Banking Group PLC*		1,223,076	$	1,252,832
Man Group PLC		343,303		1,584,321
Prudential PLC		129,546		1,349,194
Tullow Oil PLC		64,502		1,268,126
Total United Kingdom common stocks				10,475,248
United States: 38.45%
Aflac, Inc.		30,300		1,709,829
Altria Group, Inc.		69,100		1,701,242
American Electric Power Co., Inc.		26,400		949,872
AmerisourceBergen Corp.		35,100		1,197,612
Apple, Inc.*		6,700		2,161,152
Autodesk, Inc.*		38,700		1,478,340
Bank of New York Mellon Corp.		65,000		1,963,000
Carnival Corp.		36,700		1,692,237
Citigroup, Inc.*		548,800		2,595,824
Comcast Corp., Class A		85,800		1,885,026
EOG Resources, Inc.		16,800		1,535,688
Fortune Brands, Inc.		24,800		1,494,200
General Motors Co.*		41,348		1,524,087
Gilead Sciences, Inc.*		42,800		1,551,072
Goldman Sachs Group, Inc.		11,100		1,866,576
Google, Inc., Class A*		2,900		1,722,513
Helmerich & Payne, Inc.		21,100		1,022,928
Hess Corp.		14,100		1,079,214
Hewlett-Packard Co.		40,300		1,696,630
Kraft Foods, Inc., Class A		44,300		1,395,893
Lowe's Cos., Inc.		83,600		2,096,688
MDU Resources Group, Inc.		79,000		1,601,330
Microsoft Corp.		127,200		3,551,424
Owens Corning*		53,900		1,678,985

	Shares		Value
Republic Services, Inc.		53,400	$	1,594,524
Southwest Airlines Co.		72,200		937,156
Textron, Inc.		74,100		1,751,724
UnitedHealth Group, Inc.		35,300		1,274,683
Universal Health Services, Inc., Class B		30,800		1,337,336
Total United States common stocks				48,046,785
Total common stocks (cost $100,515,872)				122,785,757
Participation note: 0.53%
India: 0.53%
Housing Development & Infrastructure Limited, expires 08/10/12* (cost $959,885)		151,614		661,012
Short-term investment: 0.80%
Investment company: 0.80%
UBS Cash Management Prime Relationship Fund2 (cost $993,097)		993,097		993,097
Investment of cash collateral from securities loaned: 1.23%
UBS Private Money Market Fund LLC2 (cost $1,539,915)		1,539,915		1,539,915
Total investments: 100.81% (cost $104,008,769)				125,979,781
Liabilities, in excess of cash and other assets: (0.81)%				(1,010,942	)
Net assets: 100.00%			$	124,968,839

Notes to portfolio of investments

Aggregate cost for federal income tax purposes was substantially the same as for book purposes; and net unrealized appreciation consisted of:

Gross unrealized appreciation	$	23,248,298
Gross unrealized depreciation		(1,277,286	)
Net unrealized appreciation of investments	$	21,971,012

*  Non-income producing security.

¹  Security, or portion thereof, was on loan at December 31, 2010.

8

UBS Global Equity Fund

Portfolio of investments

December 31, 2010 (unaudited)

²  The table below details the Fund's investments in funds advised by the same advisor as the Fund. The advisor does not earn a management fee from the affiliated UBS Relationship Funds.

Security description	Value 06/30/10		Purchases during the six months ended 12/31/10		Sales during the six months ended 12/31/10		Value 12/31/10		Income earned from affiliate for the six months ended 12/31/10
UBS Cash Management Prime Relationship Fund	$	760,855	$	19,744,230	$	19,511,988	$	993,097	$	939
UBS Private Money Market Fund LLC1		2,220,517		20,372,428		21,053,030		1,539,915		8,151
	$	2,981,372	$	40,116,658	$	40,565,018	$	2,533,012	$	9,090

¹  The advisor does earn a management fee from this affiliated fund, and any income earned is net of expenses. Please see the Notes to financial statements for further information.

ADR  American depositary receipt

CDI  Chess depositary interest

OJSC  Open joint stock company

Forward foreign currency contracts

UBS Global Equity Fund had the following open forward foreign currency contracts as of December 31, 2010:

Counterparty	Contracts to deliver		In exchange for		Maturity date	Unrealized appreciation/ (depreciation)
JPMorgan Chase Bank	AUD	3,210,000	USD	3,059,355	03/03/11	$	(199,887	)
JPMorgan Chase Bank	BRL	2,190,000	USD	1,244,318	03/03/11		(58,155	)
JPMorgan Chase Bank	CAD	2,400,000	USD	2,346,064	03/03/11		(64,898	)
JPMorgan Chase Bank	DKK	8,070,000	USD	1,431,632	03/03/11		(14,885	)
JPMorgan Chase Bank	GBP	735,000	USD	1,155,443	03/03/11		10,000
JPMorgan Chase Bank	HKD	21,615,000	USD	2,785,948	03/03/11		3,739
JPMorgan Chase Bank	HKD	6,905,000	USD	888,190	03/03/11		(598	)
JPMorgan Chase Bank	MYR	1,952,000	USD	618,995	03/03/11		(11,686	)
JPMorgan Chase Bank	NOK	13,020,000	USD	2,115,987	03/03/11		(109,012	)
JPMorgan Chase Bank	THB	49,900,000	USD	1,650,132	03/03/11		(3,429	)
JPMorgan Chase Bank	TWD	51,700,000	USD	1,710,222	03/03/11		(65,323	)
JPMorgan Chase Bank	USD	3,226,609	EUR	2,435,000	03/03/11		26,827
JPMorgan Chase Bank	USD	652,083	GBP	415,000	03/03/11		(5,336	)
JPMorgan Chase Bank	USD	1,824,344	GBP	1,175,000	03/03/11		6,808
JPMorgan Chase Bank	USD	1,025,283	HKD	7,960,000	03/03/11		(699	)
JPMorgan Chase Bank	USD	1,558,743	JPY	130,300,000	03/03/11		47,112
JPMorgan Chase Bank	USD	1,249,029	KRW	1,447,000,000	03/03/11		22,162
JPMorgan Chase Bank	USD	2,494,824	MXN	31,450,000	03/03/11		41,042
JPMorgan Chase Bank	USD	3,927,497	SEK	27,670,000	03/03/11		178,350
JPMorgan Chase Bank	USD	3,495,153	SGD	4,615,000	03/03/11		100,904
JPMorgan Chase Bank	ZAR	11,080,000	USD	1,527,619	03/03/11		(140,466	)
Morgan Stanley & Co. Inc.	EUR	1,270,000	USD	1,679,001	03/03/11		(17,863	)
Net unrealized depreciation on forward foreign currency contracts						$	(255,293	)

9

UBS Global Equity Fund

Portfolio of investments

December 31, 2010 (unaudited)

Concluded

Currency type abbreviations:

AUD  Australian Dollar

BRL  Brazilian Real

CAD  Canadian Dollar

DKK  Danish Krone

EUR  Euro

GBP  Great Britain Pound

HKD  Hong Kong Dollar

JPY  Japanese Yen

KRW  Korean Won

MXN  Mexican Peso

MYR  Malaysian Ringgit

NOK  Norwegian Krone

SEK  Swedish Krona

SGD  Singapore Dollar

THB  Thai Baht

TWD  New Taiwan Dollar

USD  United States Dollar

ZAR  South African Rand

The following is a summary of the inputs used as of December 31, 2010 in valuing the Fund's investments:

Measurements at 12/31/10
Description	Unadjusted quoted prices in active markets for identical investments (Level 1)		Other significant observable inputs (Level 2)			Unobservable inputs (Level 3)		Total
Common stocks	$	120,934,987	$	1,850,770		$	—	$	122,785,757
Participation note		—		661,012			—		661,012
Short-term investment		—		993,097			—		993,097
Investment of cash collateral from securities loaned		—		1,539,915			—		1,539,915
Other financial instruments1		—		(255,293	)		—		(255,293	)
Total	$	120,934,987	$	4,789,501		$	—	$	125,724,488

¹  Other financial instruments include forward foreign currency contracts.

See accompanying notes to financial statements.
10

UBS International Equity Fund

Portfolio performance

For the six months ended December 31, 2010, Class A shares of UBS International Equity Fund (the "Fund") returned 26.42% (Class A shares returned 19.39% after the deduction of the maximum sales charge), while Class Y shares returned 26.59%. The Fund's benchmark, the MSCI World Free ex USA Index (net) (the "Index"), returned 24.46% 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 13; 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.)

The Fund outperformed its benchmark Index during the reporting period, primarily due to stock selection.

Portfolio performance summary¹

What worked

•  Overall, individual stock selection had a positive impact on performance.

  – Naspers, an attractively valued South African Internet and traditional publishing company produced strong results during the reporting period. (For details, see "Portfolio highlights.")

  – Our holding of Denmark mining and machinery company FLSmidth & Co. was a positive for performance. It benefited as demand for its products remained strong from emerging market countries such as China. (For details, see "Portfolio highlights.")

  – We held a position in Norway-based Petroleum Geo-Services, which helps energy companies find oil and gas reserves offshore. The company benefited given an increase in global oil exploration. (For details, see "Portfolio highlights.")

  – Owning Volkswagen was rewarded given strong demand for its automobiles in China, Germany and a number of other European countries. The company also benefited from productivity enhancements and plans to increase its presence in the US. (For details, see "Portfolio highlights.")

•  Stock selection decisions positively contributed to relative performance in a number of sectors. The Fund's sector allocations are a byproduct of our bottom-up stock selection process. Overall, during the reporting period we positioned the Fund in anticipation of a continued economic recovery. In particular, stock selection was beneficial in the consumer discretionary, materials and telecommunication services sectors. A lack of utilities holdings in the Fund led to an underweight position in the sector. This was a positive for results as utilities lagged the benchmark during the reporting period.

What didn't work

•  Several individual stocks were negative for performance during the period.

  – China Mengniu Dairy, a manufacturing and distribution company of dairy products in China, detracted from performance. Its shares declined, along with the overall Chinese stock market during the period, given concerns whether the government could orchestrate a soft landing for its economy. (For details, see "Portfolio highlights.")

  – Lloyds Banking Group, the UK-based financial services organization, generated poor results as it missed earnings expectations. We believe this was partially due to the negative repercussions from the European sovereign debt crisis.

¹  For a detailed commentary on the market environment in general during the reporting period, see page 2.

11

UBS International Equity Fund

  – The Fund's position in Japanese financial company Nomura Holdings² was a detractor from performance. The company made a number of significant acquisitions during the reporting period, and increased spending to grow its presence in the US. Neither of these initiatives have yet to boost the company's earnings. (For details, see "Portfolio highlights.")

  – Owning shares of Mitsui O.S.K. Lines² was not beneficial for results. Mitsui is the world's largest operator of iron-ore vessels. It has a substantial business presence in China, which is the world's biggest steelmaker and buyer of iron ore. The company saw its shares decline when concerns rose that China's economy could decelerate.

•  Stock selection in the financial and information technology sectors negatively contributed to the Fund's results. A number of individual Fund holdings led to overall negative performance in both sectors.

Portfolio highlights

  – Naspers is a South Africa-based multinational media company. We believe it offers an attractive exposure to the media industry in the underdeveloped and growing African continent and the BRIC countries (Brazil, Russia, India and China). A large portion of the company's current profits come from pay television, which is being used to help finance the expansion of its Internet business.

  – FLSmidth & Co. is a leading supplier of equipment and services to the global cement and minerals industry. FLSmidth's history is in the global cement industry, where it holds 38% global (ex-China) market share. Largely through acquisition over the last decade, FLSmidth has been building a strong franchise in mining capital equipment. We believe the company is well-positioned to benefit from a return of capital spending in the industry.

  – Petroleum Geo-Services is a global oilfield services, seismic and exploration service company. We believe the company's technical expertise and staff puts it in a good position to benefit as major oil companies seek to expand and replace their reserves.

  – Volkswagen is a global automobile company with a broad mix of mass market and luxury brands. We believe the company is well positioned to benefit from a rebound in demand in developed markets and continued growth in China.

  – China Mengniu Dairy is a quality dairy brand in China that provides a broad range of milk, dairy and ice cream products. The company is growing along with Chinese food consumption. In addition, we believe the company could benefit from efforts to upgrade Chinese diets.

  – Nomura Holdings is a brokerage and investment banking firm in Japan. The stock underperformed along with the Japanese equity market. While we believe it is attractively valued, the company's leverage to market exposure has hurt the stock.

²  As of December 31, 2010, this position was no longer held by the Fund.

This letter is intended to assist shareholders in understanding how the Fund performed during the six months ended December 31, 2010. The views and opinions in the letter were current as of February 15, 2011. They are not guarantees of future 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.

12

UBS International Equity Fund

Average annual total returns for periods ended 12/31/10 (unaudited)

	6 months			1 year			5 years			10 years			Inception1
Before deducting maximum sales charge
Class A2		26.42	%		12.03	%		3.10	%		3.36	%		3.46	%
Class B3		26.06			11.38			2.34			N/A			5.90 6
Class C4		26.03			11.25			2.33			N/A			5.58
Class Y5		26.59			12.39			3.32			3.58			5.09
After deducting maximum sales charge
Class A2		19.39	%		5.94	%		1.95	%		2.78	%		3.03	%
Class B3		21.06			6.38			2.04			N/A			5.90 6
Class C4		25.03			10.25			2.33			N/A			5.58
MSCI World Free ex USA Index (net)7		24.46	%		8.95	%		3.05	%		3.98	%		5.46	%

The annualized gross and net expense ratios, respectively, for each class of shares as in the October 28, 2010 prospectuses were as follows: Class A—1.76% and 1.25%; Class B—2.56% and 2.00%; Class C—2.56% and 2.00%; Class Y—1.55% and 1.00%. Net expenses reflect fee waivers and/or expense reimbursements, if any, pursuant to an agreement that is in effect to cap the expenses. UBS Global Asset Management (Americas) Inc., the Fund's investment advisor ("UBS Global AM (Americas)" or the "Advisor"), has agreed irrevocably to waive its fees and reimburse certain expenses (excluding expenses incurred through investment in other investment companies, interest, taxes, brokerage commissions and extraordinary expenses) so that the Fund's ordinary operating expenses (excluding expenses incurred through investment in other investment companies, interest, taxes, brokerage commissions and extraordinary expenses) 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. Prior to September 30, 2003, Class C shares were subject to a maximum front-end sales charge of 1.00%; this front-end sales charge is not reflected in the average annual total returns presented for the Class C shares shown above.

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  Assumes the conversion of Class B to Class A shares at the end of the sixth year.

⁷  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 May 2010, 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 is constructed and managed with a view to being fully investable from the perspective of international institutional investors. 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. Total returns for periods of less than one year have not been annualized. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://www.ubs.com.

13

UBS International Equity Fund

Top ten equity holdings (unaudited)

As of December 31, 2010

	Percentage of net assets
Mitsubishi Corp.		1.8	%
Vodafone Group PLC		1.8
Novartis AG		1.7
Rio Tinto PLC		1.5
FLSmidth & Co. A/S		1.4
BP PLC		1.4
THK Co., Ltd.		1.4
Lloyds Banking Group PLC		1.3
BNP Paribas		1.2
Nissan Motor Co., Ltd.		1.1
Total		14.6	%

Country exposure, top five (unaudited)

As of December 31, 2010

	Percentage of net assets
United Kingdom		17.6	%
Japan		16.1
China		7.7
Germany		6.6
Switzerland		6.3
Total		54.3	%

14

UBS International Equity Fund

Industry diversification (unaudited)

As a percentage of net assets as of December 31, 2010

Common stocks
Aerospace & defense	0.32	%
Airlines	1.22
Auto components	0.89
Automobiles	2.59
Beverages	0.50
Building products	1.35
Capital markets	1.33
Chemicals	4.00
Commercial banks	13.95
Communications equipment	0.58
Computers & peripherals	0.52
Construction & engineering	1.61
Construction materials	1.65
Diversified financial services	2.09
Diversified telecommunication services	1.53
Electric utilities	1.46
Electronic equipment, instruments & components	1.72
Energy equipment & services	2.20
Food & staples retailing	2.06
Food products	2.70
Health care equipment & supplies	0.31
Health care providers & services	0.64
Hotels, restaurants & leisure	1.12
Household products	0.51
Industrial conglomerates	0.17
Insurance	3.00
Internet software & services	0.40
IT services	1.04
Leisure equipment & products	0.48
Machinery	5.37
Marine	0.73
Media	1.88
Metals & mining	8.26
Office electronics	1.50
Oil, gas & consumable fuels	7.61
Pharmaceuticals	4.70
Professional services	0.77
Real estate management & development	1.29
Semiconductors & semiconductor equipment	2.02
Software	0.90
Specialty retail	0.43
Textiles, apparel & luxury goods	1.70
Tobacco	0.80
Trading companies & distributors	2.45
Wireless telecommunication services	3.83
Total common stocks	96.18	%
Preferred stock	0.85	%
Participation note	0.33
Short-term investment	2.22
Investment of cash collateral from securities loaned	2.87
Total investments	102.45	%
Liabilities, in excess of cash and other assets	(2.45	)
Net assets	100.00	%

15

UBS International Equity Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Shares		Value
Common stocks: 96.18%
Australia: 4.19%
Alumina Ltd.		32,098	$	81,418
BHP Billiton Ltd.		1,969		91,129
Incitec Pivot Ltd.		52,336		211,976
Mount Gibson Iron Ltd.*		53,934		116,947
National Australia Bank Ltd.		10,634		257,772
Orica Ltd.		10,303		262,394
Qantas Airways Ltd.*		76,366		198,392
Total Australia common stocks				1,220,028
Austria: 0.27%
Raiffeisen Bank International AG		1,409		77,197
Belgium: 0.50%
Anheuser-Busch InBev NV		2,568		146,873
Brazil: 1.10%
Vale SA ADR		9,300		321,501
Canada: 6.30%
Canadian Oil Sands Ltd.		5,300		140,989
EnCana Corp.1		4,200		122,879
Lundin Mining Corp.*		14,500		105,874
Petrominerales Ltd.		9,500		316,826
Research In Motion Ltd.*		2,900		169,368
Suncor Energy, Inc.		8,400		323,395
Teck Resources Ltd., Class B1		4,800		298,292
Toronto-Dominion Bank		2,700		201,624
TransCanada Corp.1		4,100		156,652
Total Canada common stocks				1,835,899
China: 7.67%
AIA Group Ltd.*		73,038		205,316
Baidu, Inc. ADR*		1,200		115,836
China Construction Bank Corp., H Shares		325,280		291,684
China Everbright Ltd.		54,000		121,995
China Mengniu Dairy Co., Ltd.		57,000		151,065
China Merchants Bank Co., Ltd., H Shares		86,759		218,996
China National Building Material Co., Ltd., H Shares		44,000		100,875
Dongfeng Motor Group Co., Ltd., H Shares		42,000		72,406
Focus Media Holding Ltd. ADR*		2,600		57,018
Fushan International Energy Group Ltd.		110,000		75,430
Hong Kong Exchanges & Clearing Ltd.		10,900		247,230
New World Development Ltd.		98,000		184,078
Pacific Basin Shipping Ltd.		157,000		104,427
Shangri-La Asia Ltd.		36,000		97,725
Sino-Ocean Land Holdings Ltd.		189,500		124,094
Sun Hung Kai Properties Ltd.		4,000		66,437
Total China common stocks				2,234,612

	Shares		Value
Denmark: 2.28%
Danisco A/S		879	$	80,367
FLSmidth & Co. A/S		4,414		420,980
Novo Nordisk A/S, Class B		1,437		162,041
Total Denmark common stocks				663,388
Finland: 0.76%
Sampo Oyj, Class A		8,309		222,622
France: 2.01%
BNP Paribas		5,356		340,755
Carrefour SA		4,565		188,192
Valeo SA*		1,018		57,767
Total France common stocks				586,714
Germany: 5.77%
Bayer AG		2,838		209,721
Bayerische Motoren Werke AG		1,028		80,843
Dialog Semiconductor PLC*		2,950		67,134
E.ON AG		7,520		230,473
Fresenius Medical Care AG & Co. KGaA		3,234		186,823
GEA Group AG		3,995		115,472
HeidelbergCement AG		3,906		244,799
MAN SE		1,086		129,144
Metro AG		4,110		295,919
ThyssenKrupp AG		2,926		121,152
Total Germany common stocks				1,681,480
India: 2.12%
ICICI Bank Ltd. ADR		3,600		182,304
Infosys Technology Ltd. ADR		4,000		304,320
Tata Motors Ltd. ADR1		4,500		132,030
Total India common stocks				618,654
Indonesia: 1.29%
Astra International Tbk PT		21,500		130,169
Bank Rakyat Indonesia PT		210,000		244,728
Total Indonesia common stocks				374,897
Ireland: 1.00%
James Hardie Industries SE CDI*		19,260		133,560
Ryanair Holdings PLC ADR		5,100		156,876
Total Ireland common stocks				290,436
Israel: 0.81%
Teva Pharmaceutical Industries Ltd. ADR		1,800		93,834
Teva Pharmaceutical Industries Ltd.		2,737		143,464
Total Israel common stocks				237,298
Italy: 0.68%
Saipem SpA		4,031		198,443

16

UBS International Equity Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Shares		Value
Common stocks—(Continued)
Japan: 16.06%
Asahi Glass Co., Ltd.		28,000	$	327,282
Canon, Inc.1		3,900		202,229
Disco Corp.		2,000		121,443
Fanuc Corp.		1,000		153,590
Ibiden Co., Ltd.		2,900		91,511
Isuzu Motors Ltd.		30,000		136,347
ITOCHU Corp.		19,500		197,426
KDDI Corp.		33		190,627
Komatsu Ltd.		5,400		163,417
Makino Milling Machine Co., Ltd.*		15,000		123,599
Mitsubishi Corp.		19,000		514,374
Mitsubishi UFJ Financial Group, Inc.		24,200		130,851
Nippon Sheet Glass Co., Ltd.		25,000		67,434
Nippon Yusen KK		24,000		106,417
Nissan Motor Co., Ltd.		35,000		333,231
NTT DoCoMo, Inc.		43		75,100
ORIX Corp.		2,430		239,139
Ricoh Co., Ltd.		16,000		234,512
Sankyo Co., Ltd.		2,500		141,181
Shin-Etsu Chemical Co., Ltd.		3,500		189,679
Sony Financial Holdings, Inc.		50		202,303
Sumitomo Mitsui Financial Group, Inc.		6,800		242,217
THK Co., Ltd.		17,400		400,121
Toshiba Corp.		18,000		97,992
Total Japan common stocks				4,682,022
Luxembourg: 0.99%
ArcelorMittal		7,568		287,010
Malaysia: 0.44%
Malayan Banking Bhd		7,400		20,399
Petronas Chemicals Group Bhd*		60,700		108,664
Total Malaysia common stocks				129,063
Netherlands: 3.78%
ASML Holding NV		7,361		284,275
Fugro NV CVA		1,117		91,798
Gemalto NV		1,234		52,512
Koninklijke Philips Electronics NV NY Shares		1,600		49,120
LyondellBasell Industries NV, Class A*		3,900		134,160
Royal Dutch Shell PLC, Class A		6,224		207,517
Unilever NV CVA		3,203		99,728
Wolters Kluwer NV		8,291		181,700
Total Netherlands common stocks				1,100,810
Norway: 2.23%
Petroleum Geo-Services ASA*		14,257		221,977
Telenor ASA		17,959		291,773
Yara International ASA		2,373		137,255
Total Norway common stocks				651,005

	Shares		Value
Russia: 2.24%
Mechel OAO ADR		4,000	$	116,920
Mobile Telesystems OJSC ADR		6,550		136,698
NovaTek OAO GDR		1,022		122,129
Sberbank of Russian Federation*		51,162		174,309
VTB Bank OJSC GDR		15,566		102,580
Total Russia common stocks				652,636
Singapore: 1.79%
Biosensors International Group Ltd.*		103,000		90,692
DBS Group Holdings Ltd.		14,159		157,990
Golden Agri-Resources Ltd.		248,000		154,596
Olam International Ltd.		48,000		117,443
Total Singapore common stocks				520,721
South Africa: 1.76%
MTN Group Ltd.		9,912		202,257
Naspers Ltd., Class N		5,292		311,656
Total South Africa common stocks				513,913
South Korea: 0.78%
Hyundai Heavy Industries Co., Ltd.*		294		114,761
Hyundai Mobis*		449		112,556
Total South Korea common stocks				227,317
Spain: 0.96%
Inditex SA		1,665		124,664
Telefonica SA		6,824		154,702
Total Spain common stocks				279,366
Sweden: 1.50%
Autoliv, Inc.		1,100		86,834
Skandinaviska Enskilda Banken AB, Class A		13,661		113,949
Volvo AB, Class B*		13,484		237,576
Total Sweden common stocks				438,359
Switzerland: 6.31%
Cie Financiere Richemont SA, Class A		4,584		269,647
Clariant AG*		5,984		121,216
GAM Holding AG*		7,571		125,104
Nestle SA		5,139		300,920
Novartis AG		8,601		505,481
SGS SA		133		223,184
Swatch Group AG		2,771		223,458
Temenos Group AG*		1,706		70,977
Total Switzerland common stocks				1,839,987
Taiwan: 1.80%
AU Optronics Corp.*		115,000		119,510
HON HAI Precision Industry Co., Ltd.		72,624		292,673

17

UBS International Equity Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Shares		Value
Common stocks—(Concluded)
Taiwan—(Concluded)
Taiwan Semiconductor Manufacturing Co., Ltd. ADR		9,000	$	112,860
Total Taiwan common stocks				525,043
Thailand: 1.20%
Italian-Thai Development PCL*		318,200		48,978
Kasikornbank PCL		69,200		299,572
Total Thailand common stocks				348,550
United Kingdom: 17.59%
Acergy SA		5,277		129,324
Anglo American PLC*		1,867		97,091
Barclays PLC		51,692		210,872
BG Group PLC		7,662		154,818
BP PLC		56,411		409,453
Carnival PLC		4,929		229,161
Cobham PLC		29,759		94,418
GlaxoSmithKline PLC		13,269		256,527
HSBC Holdings PLC		17,772		180,409
Imperial Tobacco Group PLC		7,596		233,069
Lloyds Banking Group PLC*		364,847		373,723
Man Group PLC		56,607		261,238
Prudential PLC		23,818		248,059
Reckitt Benckiser Group PLC		2,689		147,783
Rio Tinto PLC		6,185		432,635
Sage Group PLC		45,130		192,370
Scottish & Southern Energy PLC		10,161		194,065
Standard Chartered PLC		8,965		241,179
Tullow Oil PLC		13,291		261,304

	Shares		Value
Vodafone Group PLC		198,084	$	512,045
Xstrata PLC		11,357		266,574
Total United Kingdom common stocks				5,126,117
Total common stocks (cost $20,223,126)				28,031,961
Preferred stock: 0.85%
Germany: 0.85%
Volkswagen AG, Preference Shares (cost $141,249)		1,530		248,207
Participation note: 0.33%
India: 0.33%
Housing Development & Infrastructure Limited, expires 08/10/12* (cost $139,284)		22,000		95,916
Short-term investment: 2.22%
Investment company: 2.22%
UBS Cash Management Prime Relationship Fund2 (cost $646,228)		646,228		646,228
Investment of cash collateral from securities loaned: 2.87%
UBS Private Money Market Fund LLC2 (cost $835,957)		835,957		835,957
Total investments: 102.45% (cost $21,985,844)				29,858,269
Liabilities, in excess of cash and other assets: (2.45)%				(713,513	)
Net assets: 100.00%			$	29,144,756

Notes to portfolio of investments

Aggregate cost for federal income tax purposes was substantially the same as for book purposes; and net unrealized appreciation consisted of:

Gross unrealized appreciation	$	8,153,588
Gross unrealized depreciation		(281,163	)
Net unrealized appreciation of investments	$	7,872,425

*  Non-income producing security.

¹  Security, or portion thereof, was on loan at December 31, 2010.

18

UBS International Equity Fund

Portfolio of investments

December 31, 2010 (unaudited)

²  The table below details the Fund's investments in funds advised by the same advisor as the Fund. The advisor does not earn a management fee from the affiliated UBS Relationship Fund.

Security description	Value 06/30/10		Purchases during the six months ended 12/31/10		Sales during the six months ended 12/31/10		Value 12/31/10		Income earned from affiliate for the six months ended 12/31/10
UBS Cash Management Prime Relationship Fund	$	722,032	$	7,059,111	$	7,134,915	$	646,228	$	714
UBS Private Money Market Fund LLC1		471,729		4,807,286		4,443,058		835,957		5,079
	$	1,193,761	$	11,866,397	$	11,577,973	$	1,482,185	$	5,793

¹  The advisor does earn a management fee from this affiliated fund, and any income earned is net of expenses. Please see the Notes to financial statements for further information.

ADR  American depositary receipt

CDI  Chess depositary interest

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.

Forward foreign currency contracts

UBS International Equity Fund had the following open forward foreign currency contracts as of December 31, 2010:

Counterparty	Contracts to deliver		In exchange for		Maturity date	Unrealized appreciation/ (depreciation)
JPMorgan Chase Bank	AUD	360,000	USD	348,726	03/03/11	$	(16,796	)
JPMorgan Chase Bank	BRL	340,000	USD	193,182	03/03/11		(9,029	)
JPMorgan Chase Bank	CAD	145,000	USD	141,741	03/03/11		(3,921	)
JPMorgan Chase Bank	EUR	565,000	USD	741,360	03/03/11		(13,544	)
JPMorgan Chase Bank	GBP	155,000	USD	242,845	03/03/11		1,288
JPMorgan Chase Bank	HKD	1,360,000	USD	175,290	03/03/11		235
JPMorgan Chase Bank	JPY	33,900,000	USD	407,311	03/03/11		(10,483	)
JPMorgan Chase Bank	NOK	2,270,000	USD	366,842	03/03/11		(21,080	)
JPMorgan Chase Bank	THB	7,880,000	USD	260,582	03/03/11		(542	)
JPMorgan Chase Bank	TWD	11,600,000	USD	383,725	03/03/11		(14,656	)
JPMorgan Chase Bank	ZAR	3,230,000	USD	445,326	03/03/11		(40,948	)
JPMorgan Chase Bank	USD	214,269	AUD	215,000	03/03/11		4,029
JPMorgan Chase Bank	USD	601,888	CHF	600,000	03/03/11		40,222
JPMorgan Chase Bank	USD	1,359,648	EUR	1,030,000	03/03/11		16,549
JPMorgan Chase Bank	USD	240,621	GBP	155,000	03/03/11		936
JPMorgan Chase Bank	USD	174,964	HKD	1,360,000	03/03/11		91
JPMorgan Chase Bank	USD	1,478,931	JPY	123,200,000	03/03/11		39,421
JPMorgan Chase Bank	USD	181,269	KRW	210,000,000	03/03/11		3,216
JPMorgan Chase Bank	USD	168,966	MXN	2,130,000	03/03/11		2,780
JPMorgan Chase Bank	USD	167,938	PLN	515,000	03/03/11		5,390
JPMorgan Chase Bank	USD	411,628	SEK	2,900,000	03/03/11		18,692
Net unrealized appreciation on forward foreign currency contracts						$	1,850

19

UBS International Equity Fund

Portfolio of investments

December 31, 2010 (unaudited)

Concluded

Currency type abbreviations:

AUD  Australian Dollar

BRL  Brazilian Real

CAD  Canadian Dollar

CHF  Swiss Franc

EUR  Euro

GBP  Great Britain Pound

HKD  Hong Kong Dollar

JPY  Japanese Yen

KRW  Korean Won

MXN  Mexican Peso

NOK  Norwegian Krone

PLN  Polish Zloty

SEK  Swedish Krona

THB  Thai Baht

TWD  New Taiwan Dollar

USD  United States Dollar

ZAR  South African Rand

The following is a summary of the inputs used as of December 31, 2010 in valuing the Fund's investments:

Measurements at 12/31/10
Description	Unadjusted quoted prices in active markets for identical investments (Level 1)		Other significant observable inputs (Level 2)		Unobservable inputs (Level 3)		Total
Common stocks	$	27,683,411	$	348,550	$	—	$	28,031,961
Preferred stock		248,207		—		—		248,207
Participation note		—		95,916		—		95,916
Short-term investment		—		646,228		—		646,228
Investment of cash collateral from securities loaned		—		835,957		—		835,957
Other financial instruments1		—		1,850		—		1,850
Total	$	27,931,618	$	1,928,501	$	—	$	29,860,119

¹  Other financial instruments include forward foreign currency contracts.

See accompanying notes to financial statements.
20

UBS Market Neutral Multi-Strategy Fund

Portfolio performance

For the six months ended December 31, 2010, Class A shares of UBS Market Neutral Multi-Strategy Fund (the "Fund") declined 1.50% (Class A shares declined 6.90% after the deduction of the maximum sales charge), while Class Y shares declined 1.30%. The Fund's benchmark, the Citigroup Three-Month US Treasury Bill Index (the "Index"), returned 0.08% 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 23; 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.)

The Fund generated a negative return during the reporting period and lagged the Index. The Fund's portfolio is allocated among four unique components, or "sleeves," consisting of US fundamental, European fundamental, global quantitative and event-driven disciplines. The Fund's underperformance was driven by the negative returns generated by the European fundamental sleeve.

During the reporting period Japanese futures were used to hedge stock-specific exposure. Currency forwards were used to reduce an unwanted currency exposure. The results of derivatives use during the period were within our expectations.

Portfolio performance summary¹

What worked

•  The global quantitative sleeve was the largest contributor to performance during the reporting period. The global quantitative sleeve is based on our proprietary multi-factor model that captures key fundamental-driven investment themes: valuation, capital use, quality, growth and market behavior. Each factor is designed to have zero correlation to all other factors.

Overall, the sleeve performed well during the reporting period, although returns from the various factors were widely dispersed, with capital use and quality being the most positive contributors to performance. On an industry level, materials and industrials were the largest positive contributors. Materials was primarily driven by strategic positions in companies exposed to base metals. Industrials benefited from positions in Swedish, German and UK companies exposed to construction in emerging markets. On a country level, China (short position) and Hong Kong (long position) contributed most positively. The strategy positioning remains with relatively small sector bets, heavily weighted towards value factors, and short China and selected European financials.

•  Overall, the event-driven sleeve added value over the six months ended December 31, 2010. The event-driven sleeve seeks to identify and capitalize on specific events, such as changes in major global equity indices.

Most of the indices covered by the strategy positively contributed to performance during the reporting period. Morgan Stanley Capital International (MSCI) semi-annual review, with index changes effective on December 1, 2010, was the dominating contributor to performance. In addition, the strategy benefited from positions triggered by changes to the Russell and Standard & Poor (S&P) indices. In contrast, changes to the STOXX and FTSE UK indices were a slight drag on performance during the reporting period.

¹  For a detailed commentary on the market environment in general during the reporting period, see page 2.

21

UBS Market Neutral Multi-Strategy Fund

•  Certain components of the US fundamental sleeve added value. Taking long positions in stocks that were identified as offering the most potential, and taking short positions in stocks that offered the least potential, was sometimes rewarded. However, this was largely offset by macro-driven factors and a high correlation among US stocks during the reporting period.

•  Our strategic allocation among the various sleeves was beneficial. In particular, allocating a larger portion of the Fund's portfolio to the global quantitative sleeve, and a smaller portion to the European fundamental sleeve, was a positive for performance.

What didn't work

•  The European fundamental sleeve produced poor results and detracted from results. Within this sleeve, having an overweight to higher quality companies and an underweight to more cyclical companies was a negative for performance. As the reporting period progressed, investor risk aversion abated, which resulted in the outperformance of lower quality companies. In addition, robust growth in emerging market countries led to strong results for cyclical European companies.

This letter is intended to assist shareholders in understanding how the Fund performed during the six months ended December 31, 2010. The views and opinions in the letter were current as of February 15, 2011. They are not guarantees of future 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.

22

UBS Market Neutral Multi-Strategy Fund

Total returns for periods ended 12/31/10 (unaudited)

	6 months			Inception1
Before deducting maximum sales charge
Class A2		(1.50	)%		(1.50	)%
Class C3		(1.80	)		(1.80	)
Class Y4		(1.30	)		(1.30	)
After deducting maximum sales charge
Class A2		(6.90	)%		(6.90	)%
Class C3		(2.78	)		(2.78	)
Citigroup Three-Month US Treasury Bill Index5		0.08	%		0.08	%

The annualized gross and net expense ratios, respectively, for each class of shares as in the October 28, 2010 prospectuses were as follows: Class A—4.13% and 3.55%; Class C—4.88% and 4.30%; Class Y—3.88% and 3.30%. 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 UBS Global Asset Management (Americas) Inc., the Fund's investment advisor ("UBS Global AM (Americas)" or 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, interest, taxes, brokerage commissions, extraordinary expenses, and securities loan fees and dividend expenses for securities sold short) to the extent necessary so that the Fund's ordinary operating expenses (excluding expenses incurred through investment in other investment companies, interest, taxes, brokerage commissions, extraordinary expenses, and securities loan fees and dividend expenses for securities sold short), through the 12-month period ending October 27, 2011, do not exceed 1.75% for Class A shares, 2.50% for Class C shares and 1.50% 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 Market Neutral Multi-Strategy Fund and the index is June 30, 2010.

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 Citigroup Three-Month US Treasury Bill Index is an unmanaged index reflecting monthly return equivalents of yield averages that are not marked to the market and an average of the last three 3-month T-bill month-end rates. 3-month T-bills are the short-term debt obligations of the US government. 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. Total returns for periods of less than one year have not been annualized. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://www.ubs.com.

23

UBS Market Neutral Multi-Strategy Fund

Top ten equity holdings (unaudited)^1,2

As of December 31, 2010

	Percentage of net assets
Apple, Inc.		0.9	%
Illinois Tool Works, Inc.		0.9
Ultra Petroleum Corp.		0.8
FedEx Corp.		0.8
Danaher Corp.		0.6
Broadcom Corp., Class A		0.6
Avon Products, Inc.		0.6
Kloeckner & Co. SE		0.6
Fortune Brands, Inc.		0.6
General Dynamics Corp.		0.6
Total		7.0	%

¹  Only long positions are considered for top ten holdings.

²  Figures represent the direct investments of UBS Market Neutral Multi-Strategy Fund. Figures would be different if a breakdown of the underlying investment companies was included.

24

UBS Market Neutral Multi-Strategy Fund

Industry diversification (unaudited)¹

As a percentage of net assets as of December 31, 2010

Common stocks
Aerospace & defense	1.55	%
Air freight & logistics	1.79
Airlines	0.77
Auto components	1.08
Automobiles	0.67
Beverages	1.21
Biotechnology	1.54
Building products	0.47
Capital markets	1.13
Chemicals	3.20
Commercial banks	2.42
Commercial services & supplies	0.22
Communications equipment	0.86
Computers & peripherals	1.53
Construction & engineering	0.55
Construction materials	0.19
Consumer finance	0.19
Containers & packaging	0.37
Distributors	0.02
Diversified consumer services	0.15
Diversified financial services	1.08
Diversified telecommunication services	0.58
Electric utilities	2.75
Electrical equipment	0.86
Electronic equipment, instruments & components	1.56
Energy equipment & services	1.85
Food & staples retailing	1.34
Food products	2.77
Gas utilities	0.38
Health care equipment & supplies	1.73
Health care providers & services	1.24
Hotels, restaurants & leisure	2.17
Household durables	0.94
Household products	0.83
Independent power producers & energy traders	0.29
Industrial conglomerates	0.29
Insurance	2.67
Internet & catalog retail	0.63
Internet software & services	0.41
IT services	0.93
Leisure equipment & products	0.43
Life sciences tools & services	0.68
Machinery	5.76
Marine	0.14
Media	2.61
Metals & mining	2.86
Multiline retail	0.37
Multi-utilities	0.95
Office electronics	0.08
Oil, gas & consumable fuels	5.40
Paper & forest products	0.35
Personal products	0.77
Pharmaceuticals	2.01
Professional services	0.29	%
Real estate investment trust (REIT)	1.13
Real estate management & development	1.12
Road & rail	1.93
Semiconductors & semiconductor equipment	2.71
Software	3.10
Specialty retail	1.79
Textiles, apparel & luxury goods	1.20
Thrifts & mortgage finance	0.11
Tobacco	0.32
Trading companies & distributors	1.19
Transportation infrastructure	0.28
Water utilities	0.08
Wireless telecommunication services	1.02
Total common stocks	83.89	%
Preferred stocks	0.55
Investment companies
SPDR S&P 500 ETF Trust	0.63
SPDR S&P MidCap 400 ETF Trust	0.10
Total investment companies	0.73	%
Short-term investment	34.10
Total investments before investments sold short	119.27	%
Investments sold short
Common stocks
Aerospace & defense	(1.36	)
Air freight & logistics	(1.47	)
Airlines	(0.55	)
Auto components	(0.56	)
Automobiles	(0.90	)
Beverages	(1.70	)
Biotechnology	(0.65	)
Building products	(0.45	)
Capital markets	(0.97	)
Chemicals	(3.18	)
Commercial banks	(2.74	)
Commercial services & supplies	(0.56	)
Communications equipment	(0.79	)
Computers & peripherals	(1.66	)
Construction & engineering	(0.89	)
Construction materials	(0.33	)
Containers & packaging	(0.25	)
Distributors	(0.28	)
Diversified consumer services	(0.09	)
Diversified financial services	(0.69	)
Diversified telecommunication services	(1.09	)
Electric utilities	(1.83	)
Electrical equipment	(1.77	)
Electronic equipment, instruments & components	(1.00	)
Energy equipment & services	(1.18	)

25

UBS Market Neutral Multi-Strategy Fund

Industry diversification (unaudited)¹

As a percentage of net assets as of December 31, 2010

Investments sold short—(Concluded)
Common stocks—(Concluded)
Food & staples retailing	(1.38	)%
Food products	(2.84	)
Gas utilities	(0.25	)
Health care equipment & supplies	(1.08	)
Health care providers & services	(1.33	)
Health care technology	(0.17	)
Hotels, restaurants & leisure	(2.10	)
Household durables	(0.71	)
Household products	(0.52	)
Independent power producers & energy traders	(0.72	)
Industrial conglomerates	(0.23	)
Insurance	(2.58	)
Internet & catalog retail	(0.38	)
Internet software & services	(0.62	)
IT services	(1.06	)
Leisure equipment & products	(0.38	)
Life sciences tools & services	(1.16	)
Machinery	(5.45	)
Marine	(0.88	)
Media	(2.45	)
Metals & mining	(3.26	)
Multiline retail	(0.96	)
Multi-utilities	(1.77	)
Oil, gas & consumable fuels	(5.66	)
Paper & forest products	(0.31	)
Personal products	(0.26	)
Pharmaceuticals	(2.23	)
Professional services	(0.36	)
Real estate investment trust (REIT)	(1.79	)
Real estate management & development	(0.67	)
Road & rail	(1.41	)
Semiconductors & semiconductor equipment	(2.81	)
Software	(2.36	)
Specialty retail	(2.26	)
Textiles, apparel & luxury goods	(0.87	)
Thrifts & mortgage finance	(0.32	)
Trading companies & distributors	(0.93	)
Transportation infrastructure	(0.51	)
Water utilities	(0.41	)
Wireless telecommunication services	(0.38	)
Total common stocks	(82.76	)%
Rights	(0.00	)2
Total investments sold short	(82.76	)%
Total investments, net of investments sold short	36.51
Cash and other assets, less liabilities	63.49
Net assets	100.00	%

¹  Figures represent the industry breakdown of direct investments of UBS Market Neutral Multi-Strategy Fund. Figures would be different if a breakdown of the underlying investment companies' industry diversification was included.

²  Amount represents less than 0.005%.

26

UBS Market Neutral Multi-Strategy Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Shares		Value
Common stocks: 83.89%
Australia: 0.62%
ASX Ltd. NPV		602	$	23,201
BHP Billiton Ltd.		498		23,048
Caltex Australia Ltd.		1,487		21,855
Challenger Ltd.		6,170		29,660
Energy Resources of Australia Ltd.		1,585		18,043
Equinox Minerals Ltd.*		3,634		22,264
Fortescue Metals Group Ltd.*		3,163		21,158
Total Australia common stocks				159,229
Austria: 0.74%
Bwin Interactive Entertainment AG		558		21,989
Erste Group Bank AG		485		22,774
IMMOFINANZ AG NPV*		5,881		25,062
OMV AG NPV		522		21,694
Strabag SE		784		21,477
Voestalpine AG NPV		1,156		55,071
Wiener Staedtische Versicherung AG		448		23,285
Total Austria common stocks				191,352
Belgium: 0.20%
Delhaize Group SA		326		24,078
Mobistar SA		403		26,124
Total Belgium common stocks				50,202
Bermuda: 0.15%
Aspen Insurance Holdings Ltd.1		700		20,034
Endurance Specialty Holdings Ltd.1		400		18,428
Total Bermuda common stocks				38,462
Brazil: 0.19%
Banco Bradesco SA ADR1		1,110		22,522
Cia Energetica de Minas Gerais ADR1		1,600		26,544
Total Brazil common stocks				49,066
Canada: 2.70%
Agrium, Inc.		300		27,607
Brookfield Properties Corp.		2,000		35,321
Canadian Tire Corp. Ltd., Class A		300		20,574
Centerra Gold, Inc.		1,100		21,949
CGI Group, Inc., Class A*		1,700		29,408
CI Financial Corp.*		1,000		22,629
Domtar Corp.1		300		22,776
Eldorado Gold Corp.		1,100		20,467
Empire Co., Ltd., Class A		400		22,456
Genworth MI Canada, Inc.		1,000		27,748
Goldcorp, Inc.		400		18,457
Gran Tierra Energy, Inc.*		2,700		21,968
Groupe Aeroplan, Inc.		1,600		21,997
Industrial Alliance Insurance & Financial Services, Inc.		700		25,915

	Shares		Value
Lululemon Athletica, Inc.*1		300	$	20,526
Manulife Financial Corp.		2,100		36,221
Open Text Corp.*		500		22,996
Petrominerales Ltd.		1,300		43,355
Potash Corp of Saskatchewan, Inc.		160		24,854
Precision Drilling Corp.*		2,900		28,000
Research In Motion Ltd.*		300		17,521
Saputo, Inc.		700		27,865
Teck Resources Ltd., Class B		1,000		62,144
TMX Group, Inc.1		700		26,020
Valeant Pharmaceuticals International, Inc.1		712		20,142
Yamana Gold, Inc.		2,000		25,686
Total Canada common stocks				694,602
Cayman Islands: 0.16%
Fufeng Group Ltd.		24,000		21,027
Kingboard Laminates Holdings Ltd.		20,500		20,836
Total Cayman Islands common stocks				41,863
China: 3.25%
Agile Property Holdings Ltd.		14,000		20,605
Cathay Pacific Airways Ltd.		12,000		33,115
Cheung Kong Infrastructure Holdings Ltd.		11,000		50,381
China Everbright Ltd.		10,000		22,592
China Merchants Bank Co., Ltd., H Shares		7,500		18,931
China Oilfield Services Ltd., H Shares		14,000		30,331
China Petroleum & Chemical Corp. ADR1		200		19,138
China Resources Cement Holdings Ltd.*		32,000		24,290
China Unicom Hong Kong Ltd.		18,000		25,751
China Wireless Technologies Ltd.		28,000		17,471
China Yurun Food Group Ltd.		7,000		23,010
CNOOC Ltd.		10,000		23,724
CNOOC Ltd. ADR1		100		23,837
CSR Corp. Ltd., H Shares		17,000		22,352
Fantasia Holdings Group Co., Ltd.		143,000		24,469
Hong Kong Exchanges & Clearing Ltd.		1,000		22,682
Hongkong Electric Holdings Ltd.		4,000		25,216
Jiangsu Expressway Co., Ltd., H Shares		22,000		25,190
Link		13,000		40,391
Longfor Properties Co., Ltd.		21,000		29,233
Noble Group Ltd.		13,000		21,982
NWS Holdings Ltd.		21,000		31,880
PICC Property & Casualty Co., Ltd., H Shares*		14,000		20,281
SA SA International Holdings Ltd.		26,000		16,223
Shangri-La Asia Ltd.		10,000		27,146
Sino-Forest Corp.*		1,000		23,424

27

UBS Market Neutral Multi-Strategy Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Shares		Value
Common stocks—(Continued)
China—(Concluded)
Sinopec Yizheng Chemical Fibre Co., Ltd., H Shares*		40,000	$	20,379
Sun Hung Kai Properties Ltd.		1,000		16,609
Swire Pacific Ltd., Class A		1,000		16,442
Tencent Holdings Ltd.		1,200		26,076
United Laboratories International Holdings Ltd.		10,000		20,533
Weichai Power Co., Ltd., H Shares		2,000		12,312
Wheelock & Co., Ltd..		4,000		16,185
Wynn Macau Ltd.		9,600		21,490
Zhaojin Mining Industry Co., Ltd.		6,000		24,547
Total China common stocks				838,218
Denmark: 0.97%
A.P. Moeller - Maersk A/S, Class B		2		18,110
Carlsberg A/S, Class B		151		15,119
Coloplast A/S, Class B		297		40,359
FLSmidth & Co. A/S		248		23,653
H Lundbeck A/S		1,262		23,982
Jyske Bank A/S*		1,328		61,662
Novo Nordisk A/S, Class B		405		45,669
Topdanmark A/S*		169		22,344
Total Denmark common stocks				250,898
Finland: 0.35%
Metso Oyj		402		22,454
Orion Oyj, Class B		980		21,438
UPM-Kymmene Oyj		1,278		22,577
Wartsila Oyj		320		24,417
Total Finland common stocks				90,886
France: 1.69%
BNP Paribas		290		18,450
Bureau Veritas SA		277		20,995
Casino Guichard Perrachon SA		217		21,154
CNP Assurances		1,158		20,898
Eurazeo		296		21,949
France Telecom SA		1,108		23,090
Hermes International NPV		574		120,233
Metropole Television SA		807		19,519
Publicis Groupe SA		520		27,100
Schneider Electric SA		656		98,181
Societe Generale		383		20,585
Valeo SA*		413		23,436
Total France common stocks				435,590
Germany: 2.98%
Adidas AG		396		25,871
Allianz SE1		211		25,075
Axel Springer AG NPV		138		22,498

	Shares		Value
Bayerische Motoren Werke AG		300	$	23,592
Celesio AG		301		7,481
Deutsche Lufthansa AG*		963		21,047
Deutsche Post AG		3,195		54,222
Deutsche Telekom AG		1,563		20,166
Hannover Rueckversicherung AG		393		21,078
HeidelbergCement AG		427		26,761
Henkel AG & Co KGaA		2,282		117,754
Kloeckner & Co. SE*		5,367		150,646
Lanxess AG		301		23,772
Linde AG		155		23,519
Muenchener Rueckversicherungs-Gesellschaft AG		178		26,985
SAP AG		228		11,608
Symrise AG		1,011		27,729
ThyssenKrupp AG		508		21,034
Vossloh AG NPV		909		116,004
Total Germany common stocks				766,842
India: 0.07%
Tata Motors Ltd. ADR1		600		17,604
Ireland: 0.74%
Covidien PLC1		2,200		100,452
Icon PLC ADR*1		1,000		21,900
Seagate Technology PLC*1		4,600		69,138
Total Ireland common stocks				191,490
Isle of Man: 0.23%
Playtech Ltd.		9,114		60,249
Israel: 0.20%
Check Point Software Technologies Ltd.*1		1,100		50,886
Italy: 0.44%
Enel SpA		5,746		28,717
Finmeccanica SpA		2,046		23,253
Intesa Sanpaolo SpA		8,208		22,266
Parmalat SpA		7,918		21,691
Tod's SpA		179		17,677
Total Italy common stocks				113,604
Japan: 8.18%
77 Bank Ltd.		4,000		21,234
Aeon Co. Ltd.		2,300		28,782
Aeon Credit Service Co., Ltd.		1,600		22,624
Aisin Seiki Co., Ltd.		700		24,770
Ajinomoto Co., Inc.		2,000		20,840
Alps Electric Co., Ltd.		1,900		22,045
Aozora Bank Ltd.		11,000		22,761
Asahi Glass Co., Ltd.		2,000		23,377

28

UBS Market Neutral Multi-Strategy Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Shares		Value
Common stocks—(Continued)
Japan—(Concluded)
Asahi Kasei Corp.		3,000	$	19,584
Canon, Inc.		400		20,742
Central Japan Railway Co.		3		25,126
Chubu Electric Power Co., Inc.		700		17,209
Cosmo Oil Co. Ltd.		10,000		32,763
Dai Nippon Printing Co., Ltd.		1,000		13,622
Daicel Chemical Industries Ltd.		3,000		21,912
Daihatsu Motor Co., Ltd.		2,000		30,693
Dainippon Sumitomo Pharma Co., Ltd.		2,000		18,180
Daito Trust Construction Co., Ltd.		300		20,544
Daiwa Securities Group, Inc.		4,000		20,594
Dentsu, Inc.		800		24,841
DIC Corp.		11,000		24,658
Fuji Electric Holdings Co., Ltd.		7,000		21,813
Fuji Heavy Industries Ltd.		3,000		23,279
Fukuyama Transporting Co., Ltd.		4,000		21,283
Funai Consulting Co., Ltd.		4,800		30,565
Hitachi Ltd.		5,000		26,666
Honda Motor Co., Ltd.		600		23,759
Idemitsu Kosan Co., Ltd.		300		31,851
Isuzu Motors Ltd.		5,000		22,725
ITOCHU Corp.		3,000		30,373
Kamigumi Co., Ltd.		3,000		25,200
Kao Corp.		800		21,559
Kawasaki Heavy Industries Ltd.		7,000		23,537
KDDI Corp.		3		17,330
Kinden Corp.		3,000		27,713
Komatsu Ltd.		1,000		30,262
Kuraray Co., Ltd.		1,500		21,505
Kyocera Corp.		200		20,421
Makino Milling Machine Co., Ltd.*		3,000		24,720
Marubeni Corp.		4,000		28,132
Maruichi Steel Tube Ltd.		1,000		21,247
MEIJI Holdings Co., Ltd.		500		22,601
Minebea Co., Ltd.		4,000		25,225
Mitsubishi Electric Corp.		3,000		31,482
Mitsubishi Materials Corp.*		7,000		22,330
Mitsubishi UFJ Financial Group, Inc.		4,400		23,791
Mitsubishi UFJ Lease & Finance Co., Ltd.		570		22,606
Mitsui & Co., Ltd.		1,200		19,820
Mitsui Chemicals, Inc.		7,000		25,089
Mitsui Mining & Smelting Co., Ltd.		7,000		23,106
Murata Manufacturing Co., Ltd.		400		28,033
NHK Spring Co., Ltd.		2,000		21,751
Nidec Corp.		200		20,224
Nippon Building Fund, Inc.		3		30,780
Nippon Meat Packers, Inc.		2,000		26,136
Nippon Shokubai Co., Ltd.		2,000		20,692
Nippon Telegraph & Telephone Corp.		1,300		58,844
Nippon Yusen KK		4,000		17,736
Nishi-Nippon City Bank Ltd.		9,000		27,380

	Shares		Value
Nissan Chemical Industries Ltd.		2,000	$	25,939
Nissan Motor Co., Ltd.		2,400		22,850
Nisshin Steel Co., Ltd.		10,000		22,293
Nitto Denko Corp.		600		28,267
NOK Corp.		1,100		22,924
NSK Ltd.		3,000		27,122
NTN Corp.		4,000		21,234
NTT Data Corp.		6		20,774
Ohashi Technica, Inc.*		700		5,130
Oriental Land Co., Ltd.		200		18,524
Osaka Gas Co., Ltd.		6,000		23,279
S.T. Corporation NPV*		2,900		33,468
Sapporo Hokuyo Holdings, Inc.		4,200		19,658
Sega Sammy Holdings, Inc.		2,300		43,768
Seino Holdings Corp.		3,000		20,618
SMC Corp.		100		17,133
Softbank Corp.		600		20,774
Sony Corp.		600		21,631
Sumitomo Corp.		1,700		24,058
Sumitomo Electric Industries Ltd.		1,700		23,619
Sumitomo Heavy Industries Ltd.		3,000		19,288
Sumitomo Mitsui Financial Group, Inc.		600		21,372
Sumitomo Trust & Banking Co., Ltd.		4,000		25,225
Taisei Corp.		10,000		23,402
TDK Corp.		300		20,877
Tosoh Corp.		7,000		22,761
Ube Industries Ltd.		8,000		24,042
Yamada Denki Co., Ltd.		400		27,294
Yamaguchi Financial Group, Inc.		2,000		20,249
Total Japan common stocks				2,106,040
Luxembourg: 0.18%
ArcelorMittal		658		24,954
Tenaris SA		903		22,143
Total Luxembourg common stocks				47,097
Mexico: 0.21%
Fomento Economico Mexicano SAB de CV ADR1		300		16,776
Fresnillo PLC		1,466		38,124
Total Mexico common stocks				54,900
Netherlands: 2.11%
Aegon NV*		3,470		21,219
ASML Holding NV		665		25,682
Core Laboratories NV1		200		17,810
Heineken NV		1,270		62,266
LyondellBasell Industries NV, Class A*1		700		24,080
Randstad Holding NV*		421		22,222
Reed Elsevier NV		6,907		85,440
Royal Dutch Shell PLC, Class B		645		21,269
TNT NV		4,530		119,556

29

UBS Market Neutral Multi-Strategy Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Shares		Value
Common stocks—(Continued)
Netherlands—(Concluded)
Unilever NV CVA		4,593	$	143,007
Total Netherlands common stocks				542,551
Norway: 0.36%
Cermaq ASA*		1,495		23,059
DnB NOR ASA		1,273		17,868
Petroleum Geo-Services ASA*		1,624		25,285
Yara International ASA		450		26,028
Total Norway common stocks				92,240
Russia: 0.23%
Gazprom OAO ADR		836		21,109
United Co. RUSAL PLC*		24,000		36,805
Total Russia common stocks				57,914
Singapore: 0.52%
Avago Technologies Ltd.1		800		22,776
Golden Agri-Resources Ltd.		39,000		24,311
SembCorp Marine Ltd.		8,000		33,475
UOL Group Ltd.		7,000		25,909
Yangzijiang Shipbuilding Holdings Ltd.		19,000		28,278
Total Singapore common stocks				134,749
Spain: 0.48%
Abertis Infraestructuras SA		1,132		20,353
Criteria Caixacorp SA		3,128		16,645
Fomento de Construcciones y Contratas SA		711		18,679
Mapfre SA		6,570		18,244
Red Electrica Corp. SA		400		18,815
Repsol YPF SA		1,080		30,091
Total Spain common stocks				122,827
Sweden: 1.96%
Alfa Laval AB		1,280		26,968
Assa Abloy AB, Class B		3,515		99,038
Atlas Copco AB, Class B		1,952		44,144
Autoliv, Inc.		300		23,682
Boliden AB		1,301		26,443
Electrolux AB		778		22,094
Investor AB, Class B		1,052		22,508
Kinnevik Investment AB, Class B		1,023		20,838
Millicom International Cellular SA SDR		274		26,318
Ratos AB, Class B		604		22,361
Scania AB, Class B		1,119		25,739
Securitas AB, Class B		1,888		22,078
Skandinaviska Enskilda Banken AB, Class A		2,746		22,905
SKF AB, Class B		809		23,047
Svenska Cellulosa AB, Class B		1,375		21,712

	Shares		Value
Tele2 AB, Class B		1,032	$	21,420
Volvo AB, Class B*		1,852		32,631
Total Sweden common stocks				503,926
Switzerland: 1.37%
Cie Financiere Richemont SA, Class A		379		22,294
Ferrexpo PLC		4,228		27,416
GAM Holding AG*		1,005		16,607
Givaudan SA		58		62,590
Nestle SA		2,532		148,264
STMicroelectronics NV		3,113		32,193
Sulzer AG		147		22,404
Transocean Ltd.*1		300		20,853
Total Switzerland common stocks				352,621
United Kingdom: 5.81%
3i Group PLC		4,178		21,398
Acergy SA ADR1		900		21,906
AstraZeneca PLC		518		23,599
Balfour Beatty PLC		5,555		27,100
BG Group PLC		1,033		20,873
British Airways PLC*		5,003		21,256
British Land Co., PLC		32		262
Ensco International PLC ADR1		700		37,366
Firstgroup PLC		4,573		28,398
Halma PLC		21,551		120,625
Home Retail Group PLC		22,471		66,040
ICAP PLC		2,749		22,930
Intercontinental Hotels Group PLC		1,062		20,581
International Power PLC		7,153		48,802
Jardine Lloyd Thompson Group PLC		12,769		125,222
Kazakhmys		867		21,817
Kingfisher PLC		4,951		20,332
Legal & General Group		14,191		21,406
Marks & Spencer Group PLC		4,517		25,987
Pearson PLC		1,678		26,371
Premier Oil PLC*		806		24,504
Reckitt Benckiser Group PLC		782		42,977
Rio Tinto PLC		345		24,133
Rolls-Royce Group PLC*		2,147		20,854
Sage Group PLC		27,517		117,293
Scottish & Southern Energy PLC		1,176		22,460
Soco International PLC*		6,600		38,032
Stagecoach Group PLC		32,885		108,797
Tesco PLC		13,528		89,639
TUI Travel PLC		12,428		47,705
Vodafone Group PLC		40,803		105,475
Weir Group PLC		813		22,562
William Hill PLC		23,562		62,708
Willis Group Holdings PLC1		600		20,778
WPP PLC		2,239		27,560
Total United Kingdom common stocks				1,497,748

30

UBS Market Neutral Multi-Strategy Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Shares		Value
Common stocks—(Continued)
United States: 46.80%
ACE Ltd.1		400	$	24,900
Activision Blizzard, Inc.1		1,800		22,392
Adobe Systems, Inc.*		3,000		92,340
Advance Auto Parts, Inc.1		400		26,460
Aegerion Pharmaceuticals, Inc.*		2,400		34,008
Aflac, Inc.1		1,200		67,716
Agilent Technologies, Inc.*1		500		20,715
Alexandria Real Estate Equities, Inc.1		300		21,978
Alexion Pharmaceuticals, Inc.*1		1,400		112,770
Allergan, Inc.1		2,000		137,340
Amazon.com, Inc.*1		300		54,000
Ameren Corp.1		900		25,371
American Capital Ltd.*1		2,900		21,924
American Electric Power Co., Inc.1		3,900		140,322
American International Group, Inc.*1		400		23,048
American Water Works Co., Inc.		800		20,232
Ameriprise Financial, Inc.1		400		23,020
Amgen, Inc.*1		400		21,960
Amylin Pharmaceuticals, Inc.*		2,600		38,246
Amyris, Inc.*		1,300		34,684
Anacor Pharmaceuticals, Inc.*		5,700		30,609
Annaly Capital Management, Inc.1		1,000		17,920
AnnTaylor Stores Corp.*1		1,000		27,390
Apache Corp.1		200		23,846
Apartment Investment & Management Co., Class A1		900		23,256
Apollo Group, Inc., Class A*1		1,000		39,490
Apple, Inc.*1		720		232,243
Arch Coal, Inc.1		2,200		77,132
Assured Guaranty Ltd.1		1,200		21,240
Autodesk, Inc.*1		3,800		145,160
Avon Products, Inc.		5,300		154,018
Baker Hughes, Inc.1		1,400		80,038
Bank of New York Mellon Corp.1		1,400		42,280
Baxter International, Inc.1		700		35,434
Becton Dickinson & Co.1		700		59,164
Berry Petroleum Co., Class A1		600		26,220
Bill Barrett Corp.*1		700		28,791
Biogen Idec, Inc.*1		300		20,115
Body Central Corp.*		2,000		28,540
Boeing Co.1		300		19,578
Boise, Inc.1		5,700		45,201
Boston Scientific Corp.*		2,500		18,925
Bravo Brio Restaurant Group, Inc.*		1,500		28,755
Broadcom Corp., Class A1		3,600		156,780
Bruker Corp.*1		1,500		24,900
C.H. Robinson Worldwide, Inc.		300		24,057
C.R. Bard, Inc.1		200		18,354
Cablevision Systems Corp., Class A1		600		20,304
Calpine Corp.*		2,000		26,680

	Shares		Value
Campus Crest Communities, Inc.		2,200	$	30,844
Cardinal Health, Inc.		700		26,817
CareFusion Corp.*1		500		12,850
Carnival Corp.1		1,300		59,943
Caterpillar, Inc.		200		18,732
CBL & Associates Properties, Inc.1		1,600		28,000
CBS Corp., Class B1		2,200		41,910
Celanese Corp., Series A		2,500		102,925
Celgene Corp.*		400		23,656
Cephalon, Inc.*		400		24,688
CF Industries Holdings, Inc.1		200		27,030
Cie Generale de Geophysique-Veritas ADR*1		900		27,531
Cimarex Energy Co.1		500		44,265
Cisco Systems, Inc.*1		3,400		68,782
Citigroup, Inc.*1		4,900		23,177
Citrix Systems, Inc.*1		400		27,364
City National Corp.1		400		24,544
Cliffs Natural Resources, Inc.1		300		23,403
CMS Energy Corp1		1,200		22,320
Coach, Inc.1		1,000		55,310
Coca-Cola Co.1		300		19,731
Coca-Cola Enterprises, Inc.1		894		22,377
Comcast Corp., Class A		2,500		54,925
Complete Genomics, Inc.*		4,200		31,374
Complete Production Services, Inc.*1		800		23,640
Computer Sciences Corp.1		600		29,760
Concho Resources, Inc.*1		300		26,301
ConocoPhillips		400		27,240
Cooper Tire & Rubber Co.1		1,000		23,580
Coresite Realty Corp.		2,200		30,008
Corn Products International, Inc.1		500		23,000
Corning, Inc.		1,200		23,184
Crown Castle International Corp.*		1,000		43,830
Crown Holdings, Inc.*1		700		23,366
CSX Corp.		300		19,383
Cubist Pharmaceuticals, Inc.*1		1,000		21,400
Cummins, Inc.1		200		22,002
Cypress Semiconductor Corp.*1		1,300		24,154
Cytec Industries, Inc.1		400		21,224
Danaher Corp.		3,500		165,095
Darden Restaurants, Inc.1		500		23,220
Deckers Outdoor Corp.*1		300		23,922
Deere & Co.		300		24,915
Dillard's, Inc., Class A1		600		22,764
Dolby Laboratories, Inc., Class A*1		1,000		66,700
Dover Corp.		2,100		122,745
Dresser-Rand Group, Inc.*1		600		25,554
DTE Energy Co.1		400		18,128
Eastman Chemical Co.1		200		16,816
Eastman Kodak Co.*		3,900		20,904
eBay, Inc.*1		900		25,047

31

UBS Market Neutral Multi-Strategy Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Shares		Value
Common stocks—(Continued)
United States—(Continued)
Edison International1		3,200	$	123,520
Edwards Lifesciences Corp.*1		300		24,252
El Paso Corp.1		1,700		23,392
Endo Pharmaceuticals Holdings, Inc.*1		500		17,855
Energen Corp.1		500		24,130
Energy XXI Bermuda Ltd.*1		800		22,136
Entergy Corp.1		300		21,249
EOG Resources, Inc.		530		48,447
Equity Residential1		500		25,975
Estee Lauder Cos., Inc., Class A1		300		24,210
ExamWorks Group, Inc.*		1,500		27,720
Exelon Corp.1		2,800		116,592
Expeditors International Washington, Inc.		500		27,300
F5 Networks, Inc.*1		300		39,048
FedEx Corp.		2,300		213,923
Fidelity National Information Services, Inc.1		2,900		79,431
Fifth Third Bancorp1		1,200		17,616
FirstEnergy Corp.1		3,200		118,464
Flextronics International Ltd.*		3,500		27,475
FMC Corp.1		200		15,978
Ford Motor Co.*		1,500		25,185
Forest Laboratories, Inc.*		700		22,386
Forest Oil Corp.*1		600		22,782
Fortinet, Inc.*1		700		22,645
Fortune Brands, Inc.		2,500		150,625
Freeport-McMoRan Copper & Gold, Inc.		200		24,018
Fresh Market, Inc.*		700		28,840
GameStop Corp., Class A*1		1,800		41,184
Gardner Denver, Inc.1		300		20,646
General Dynamics Corp.1		2,100		149,016
General Electric Co.1		1,200		21,948
Genzyme Corp.*1		500		35,600
Gilead Sciences, Inc.*1		300		10,872
Goldman Sachs Group, Inc.1		360		60,538
Goodrich Corp.		200		17,614
Google, Inc., Class A*1		50		29,699
Halliburton Co.1		600		24,498
Hartford Financial Services Group, Inc.1		700		18,543
Health Management Associates, Inc., Class A*1		3,100		29,574
Hershey Co.		400		18,860
Hess Corp.1		700		53,578
Hewlett-Packard Co.		1,500		63,150
Hologic, Inc.*1		1,100		20,702
Home Depot, Inc.1		3,400		119,204
Hormell Foods Corp.		400		20,504
Humana, Inc.*		400		21,896
Huntington Bancshares, Inc.		3,600		24,732
Hyatt Hotels Corp., Class A*1		500		22,880

	Shares		Value
Illinois Tool Works, Inc.		4,200	$	224,280
Illumina, Inc.*1		300		19,002
Inphi Corp.*		1,600		32,144
Integrys Energy Group, Inc.		300		14,553
International Business Machines Corp.		540		79,250
International Game Technology		700		12,383
Interpublic Group of Cos., Inc.*1		9,500		100,890
Intersil Corp., Class A1		6,700		102,309
Intuit, Inc.*		400		19,720
JB Hunt Transport Services, Inc.1		1,100		44,891
JM Smucker Co.1		300		19,695
Johnson & Johnson1		700		43,295
Johnson Controls, Inc.1		2,300		87,860
JPMorgan Chase & Co.1		500		21,210
Kellogg Co.		400		20,432
Kennametal, Inc.1		600		23,676
KeyCorp1		3,000		26,550
Keyw Holding Corp.*		2,100		30,807
Kinetic Concepts, Inc.*1		600		25,128
Kraft Foods, Inc., Class A		1,700		53,567
Kroger Co.1		4,700		105,092
Lam Research Corp.*1		500		25,890
Las Vegas Sands Corp.*1		2,400		110,280
Legg Mason, Inc.1		600		21,762
Liberty Global, Inc., Class A*1		700		24,766
Liberty Media Corp.*1		1,400		22,078
Life Technologies Corp.*1		500		27,750
Lowe's Cos., Inc.1		2,600		65,208
LSI Corp.*1		3,900		23,361
Lubrizol Corp.1		200		21,376
Macy's, Inc.1		1,000		25,300
Marvell Technology Group Ltd.*1		4,600		85,330
Mattel, Inc.1		900		22,887
McGraw-Hill Cos., Inc.1		600		21,846
McKesson Corp.1		1,000		70,380
MDU Resources Group, Inc.		3,800		77,026
Mead Johnson Nutrition Co.1		400		24,900
Medco Health Solutions, Inc., Class A*1		800		49,016
Medtronic, Inc.1		900		33,381
Merck & Co., Inc.1		1,300		46,852
Microsoft Corp.1		4,000		111,680
Molson Coors Brewing Co., Class B1		900		45,171
Murphy Oil Corp.1		300		22,365
Nalco Holding Co.1		700		22,358
National Oilwell Varco, Inc.1		300		20,175
National Semiconductor Corp.1		3,600		49,536
Netflix, Inc.*		100		17,570
Netspend Holdings, Inc.*		2,000		25,640
Newfield Exploration Co.*1		300		21,633
Newmont Mining Corp.1		300		18,429
News Corp., Class B1		1,400		22,988
NII Holdings, Inc.*1		500		22,330
Noble Corp.1		700		25,039

32

UBS Market Neutral Multi-Strategy Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Shares		Value
Common stocks—(Concluded)
United States—(Concluded)
Norfolk Southern Corp.1		600	$	37,692
Northrop Grumman Corp.1		2,100		136,038
Oceaneering International, Inc.*1		300		22,089
Oil States International, Inc.*1		400		25,636
Omnicom Group, Inc.1		800		36,640
Oracle Corp.1		800		25,040
PACCAR, Inc.		1,400		80,388
Pacific Biosciences of California, Inc.*		2,000		31,820
Pall Corp.1		1,200		59,496
Panera Bread Co., Class A*1		200		20,242
Parker Hannifin Corp.		300		25,890
Peabody Energy Corp.1		1,200		76,776
PepsiCo, Inc.		1,450		94,728
PetroChina Co. Ltd. ADR1		200		26,298
Pfizer, Inc.		2,500		43,775
Philip Morris International, Inc.1		1,400		81,942
PMC - Sierra, Inc.*1		2,600		22,334
PNC Financial Services Group, Inc.		300		18,216
Polaris Industries, Inc.1		300		23,406
Primo Water Corp.*		2,300		32,683
Procter & Gamble Co.1		800		51,464
Protective Life Corp.1		800		21,312
Prudential Financial, Inc.1		400		23,484
Public Storage1		200		20,284
QUALCOMM, Inc.1		1,000		49,490
Rayonier, Inc.1		700		36,764
ResMed, Inc.*1		700		24,248
Riverbed Technology, Inc.*1		800		28,136
Rockwell Automation, Inc.		400		28,684
Rockwood Holdings, Inc.*1		600		23,472
Ross Stores, Inc.1		300		18,975
RR Donnelley & Sons Co.1		1,200		20,964
Ryder System, Inc.1		2,300		121,072
SanDisk Corp.*1		600		29,916
SeaCube Container Leasing Ltd.		2,100		29,526
Sempra Energy		1,600		83,968
Signature Bank*1		400		20,000
Silgan Holdings, Inc.1		700		25,067
SL Green Realty Corp.1		300		20,253
SM Energy Co.1		400		23,572
Smithfield Foods, Inc.*		1,000		20,630
Southwest Airlines Co.1		8,000		103,840
Southwest Gas Corp.1		800		29,336
Starbucks Corp.1		900		28,917
Stone Energy Corp.*1		1,000		22,290
Sunoco, Inc.1		1,100		44,341
Symantec Corp.*1		2,100		35,154
Teleflex, Inc.1		300		16,143
Teradyne, Inc.*1		1,800		25,272
Texas Instruments, Inc.1		1,600		52,000
Textron, Inc.1		1,000		23,640

	Shares		Value
TIBCO Software, Inc.*1		2,600	$	51,246
Tiffany & Co.1		400		24,908
Time Warner, Inc.1		1,000		32,170
Timken Co.1		600		28,638
TJX Cos., Inc.		400		17,756
Tower International, Inc.*		1,700		30,073
Travelers Cos., Inc.		400		22,284
TRW Automotive Holdings Corp.*1		400		21,080
Tupperware Brands Corp.1		500		23,835
Tyco Electronics Ltd.1		700		24,780
Tyson Foods, Inc., Class A		1,600		27,552
UGI Corp.1		700		22,106
Ultra Petroleum Corp.*1		4,500		214,965
Union Pacific Corp.1		500		46,330
United Continental Holdings, Inc.*1		829		19,747
United Parcel Service, Inc., Class B1		300		21,774
United States Steel Corp.		500		29,210
United Therapeutics Corp.*1		400		25,288
UnitedHealth Group, Inc.1		1,400		50,554
Universal Health Services, Inc., Class B1		500		21,710
US Bancorp		600		16,182
Valero Energy Corp.1		1,200		27,744
Varian Medical Systems, Inc.*1		300		20,784
Veeco Instruments, Inc.*1		500		21,480
Vera Bradley, Inc.*		700		23,100
Viacom, Inc., Class B1		1,600		63,376
W&T Offshore, Inc.1		1,300		23,231
Walgreen Co.1		600		23,376
Walter Energy, Inc.1		300		38,352
WellPoint, Inc.*1		300		17,058
Wells Fargo & Co.1		2,000		61,980
Werner Enterprises, Inc.1		1,000		22,600
Westlake Chemical Corp.1		600		26,082
Weyerhaeuser Co.1		1,200		22,716
Whirlpool Corp.1		300		26,649
Whiting Petroleum Corp.*1		200		23,438
Williams-Sonoma, Inc.1		800		28,552
Wynn Resorts Ltd.1		300		31,152
Zogenix, Inc.*		4,900		27,783
Total United States common stocks				12,056,679
Total common stocks (cost $18,938,642)				21,610,335
Preferred stocks: 0.55%
Germany: 0.47%
Fresenius SE, Preference shares		587		50,257
Henkel AG & Co KGaA, Preference shares		336		20,894
ProSiebenSat.1 Media AG, Preference shares		710		21,348
Volkswagen AG, Preference Shares		173		28,065
Total Germany preferred stocks				120,564

33

UBS Market Neutral Multi-Strategy Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Shares			Value
Preferred stocks—(Concluded)
Italy: 0.08%
Telecom Italia SpA		19,723		$	21,401
Total preferred stocks (cost $127,920)					141,965
Investment companies: 0.73%
SPDR S&P 500 ETF Trust		1,300			163,514
SPDR S&P MidCap 400 ETF Trust		150			24,702
Total investment companies (cost $188,268)					188,216
Short-term investment: 34.10%
Investment company: 34.10%
UBS Cash Management Prime Relationship Fund2 (cost $8,784,814)		8,784,814			8,784,814
Total investments before investments sold short: 119.27% (cost $28,039,644)					30,725,330
Investments sold short: (82.76)%
Common stocks: (82.76)%
Austria: (0.09)%
Verbund - Oesterreichische Elektrizitaetswirtschafts AG, Class A		(656	)		(24,440	)
Belgium: (0.38)%
Belgacom SA		(569	)		(19,104	)
Cie Nationale a Portefeuille		(408	)		(19,955	)
Colruyt SA		(738	)		(37,524	)
Solvay SA		(205	)		(21,847	)
Total Belgium common stocks					(98,430	)
Bermuda: (0.67)%
Central European Media Enterprises Ltd., Class A		(1,200	)		(24,420	)
Everest Re Group Ltd.		(300	)		(25,446	)
Frontline Ltd.		(830	)		(21,408	)
Genpact Ltd.		(1,800	)		(27,360	)
Li & Fung Ltd.		(4,000	)		(23,209	)
Orient-Express Hotels Ltd., Class A		(1,900	)		(24,681	)
White Mountains Insurance Group Ltd.		(75	)		(25,170	)
Total Bermuda common stocks					(171,694	)
Brazil: (0.12)%
Petroleo Brasileiro SA ADR		(800	)		(30,272	)
Canada: (3.18)%
Barrick Gold Corp.		(400	)		(21,370	)
Bombardier, Inc., Class B		(4,600	)		(23,178	)
Canadian Imperial Bank of Commerce		(300	)		(23,634	)

	Shares			Value
Canadian Pacific Railway Ltd.		(300	)	$	(19,497	)
Cenovus Energy, Inc.		(900	)		(30,124	)
Crescent Point Energy Corp.		(500	)		(22,222	)
Crew Energy, Inc.		(1,100	)		(21,130	)
Enbridge, Inc.		(400	)		(22,637	)
EnCana Corp.		(800	)		(23,405	)
Ensign Energy Services, Inc.		(1,800	)		(27,209	)
Gildan Activewear, Inc.		(700	)		(19,959	)
Great-West Lifeco, Inc.		(800	)		(21,241	)
Husky Energy, Inc.		(800	)		(21,362	)
IAMGOLD Corp.		(1,500	)		(26,778	)
Imperial Oil Ltd.		(1,100	)		(44,894	)
Intact Financial Corp.		(400	)		(20,461	)
InterOil Corp.		(300	)		(21,621	)
Ivanhoe Mines Ltd.		(900	)		(20,819	)
Magna International, Inc.		(400	)		(20,883	)
Manitoba Telecom Services, Inc.		(900	)		(25,797	)
Niko Resources Ltd.		(300	)		(31,131	)
Onex Corp.		(700	)		(21,282	)
Osisko Mining Corp.		(1,400	)		(20,444	)
Power Financial Corp.		(700	)		(21,634	)
Progress Energy Resources Corp.		(2,100	)		(26,823	)
RioCan Real Estate Investment Trust		(1,000	)		(22,126	)
Ritchie Bros Auctioneers, Inc.		(1,300	)		(29,967	)
Sherritt International Corp.		(3,100	)		(26,407	)
Shoppers Drug Mart Corp.		(700	)		(27,830	)
Silver Wheaton Corp.		(600	)		(23,522	)
SNC-Lavalin Group, Inc.		(400	)		(24,045	)
TransAlta Corp.		(1,100	)		(23,398	)
TransCanada Corp.		(500	)		(19,104	)
Viterra, Inc.		(2,400	)		(22,400	)
Total Canada common stocks					(818,334	)
China: (4.01)%
Alibaba.com Ltd.		(14,500	)		(26,005	)
Aluminum Corp of China Ltd., H Shares		(26,000	)		(23,716	)
Angang Steel Co., Ltd., H Shares		(16,000	)		(24,496	)
Anta Sports Products Ltd.		(13,000	)		(20,639	)
China Agri-Industries Holdings Ltd.		(15,000	)		(17,021	)
China Coal Energy Co., H Shares		(15,000	)		(23,428	)
China COSCO Holdings Co., Ltd., H Shares		(22,000	)		(23,322	)
China Dongxiang Group Co.		(56,000	)		(24,207	)
China Foods Ltd.		(36,000	)		(22,972	)
China High Speed Transmission Equipment Group Co., Ltd.		(12,000	)		(18,588	)
China Life Insurance Co., Ltd., H Shares		(5,000	)		(20,424	)
China Longyuan Power Group Corp., H Shares		(22,000	)		(20,124	)
China Molybdenum Co., Ltd., H Shares		(26,000	)		(23,917	)
China National Materials Co., Ltd.		(18,000	)		(14,520	)
China Resources Land Ltd.		(12,000	)		(21,923	)

34

UBS Market Neutral Multi-Strategy Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Shares			Value
Investments sold short—(Continued)
Common stocks—(Continued)
China—(Concluded)
China Resources Power Holdings Co., Ltd.		(12,000	)	$	(21,737	)
China Shipping Development Co., Ltd., H Shares		(18,000	)		(23,991	)
Citic Resources Holdings Ltd.		(82,000	)		(18,462	)
Datang International Power Generation Co., Ltd., H Shares		(74,000	)		(25,991	)
Dongfeng Motor Group Co., Ltd., H Shares		(4,000	)		(6,896	)
Foxconn International Holdings Ltd.		(36,000	)		(25,149	)
Fushan International Energy Group Ltd.		(30,000	)		(20,572	)
Giant Interactive Group, Inc. ADR		(3,200	)		(22,784	)
GOME Electrical Appliances Holdings Ltd.		(47,000	)		(16,931	)
Guangzhou Automobile Group Co., Ltd., H Shares		(20,000	)		(27,583	)
Guangzhou R&F Properties Co., Ltd., H Shares		(15,200	)		(21,745	)
Hidili Industry International Development Ltd.		(24,000	)		(20,286	)
Hong Kong & China Gas Co., Ltd.		(19,000	)		(44,782	)
Industrial & Commercial Bank of China, H Shares		(31,000	)		(23,092	)
Jiangxi Copper Co. Ltd., H Shares		(7,000	)		(23,010	)
Melco Crown Entertainment Ltd. ADR		(4,100	)		(26,076	)
Mindray Medical International Ltd. ADR		(800	)		(21,120	)
Nine Dragons Paper Holdings Ltd.		(19,000	)		(26,840	)
Parkson Retail Group Ltd.		(15,500	)		(23,890	)
Ping An Insurance Group Co. of China Ltd., H Shares		(2,000	)		(22,360	)
Renhe Commercial Holdings Co., Ltd.		(114,000	)		(19,946	)
Ruinian International Ltd.		(34,000	)		(23,577	)
Shandong Weigao Group Medical Polymer Co., Ltd., H Shares		(8,000	)		(22,694	)
Sinofert Holdings Ltd.		(46,000	)		(23,791	)
Stella International Holdings Ltd.		(8,500	)		(16,950	)
Tsingtao Brewery Co., Ltd., H Shares		(4,000	)		(20,945	)
Wumart Stores, Inc., H Shares		(9,000	)		(22,185	)
Yingde Gases		(24,500	)		(21,780	)
Yue Yuen Industrial Holdings Ltd.		(6,500	)		(23,373	)
Zhuzhou CSR Times Electric Co. Ltd., H Shares		(7,000	)		(27,513	)
Zijin Mining Group Co. Ltd., H Shares		(22,000	)		(20,407	)
Total China common stocks					(1,031,760	)
Denmark: (0.77)%
DSV A/S		(5,996	)		(132,539	)
Tryg A/S		(441	)		(20,358	)
Vestas Wind Systems A/S		(1,417	)		(44,735	)
Total Denmark common stocks					(197,632	)

	Shares			Value
Finland: (1.75)%
Kesko Oyj, Class B		(2,002	)	$	(93,447	)
Kone OYJ, Class B		(395	)		(21,958	)
Nokia Oyj		(2,127	)		(21,999	)
Outokumpu Oyj		(7,049	)		(130,744	)
Rautaruukki Oyj NPV		(1,463	)		(34,232	)
Sampo Oyj, Class A		(771	)		(20,657	)
Wartsila Oyj		(1,691	)		(129,028	)
Total Finland common stocks					(452,065	)
France: (2.87)%
Alcatel-Lucent		(8,636	)		(25,158	)
BioMerieux		(222	)		(21,899	)
Carrefour SA		(636	)		(26,219	)
Cie de Saint-Gobain		(1,501	)		(77,223	)
Edenred		(998	)		(23,625	)
EDF SA		(3,741	)		(153,447	)
Eramet		(80	)		(27,421	)
Iliad SA		(196	)		(21,320	)
JCDecaux SA		(4,416	)		(135,873	)
Lafarge SA		(459	)		(28,779	)
Lagardere SCA		(515	)		(21,217	)
Pernod-Ricard SA		(1,181	)		(111,040	)
Peugeot SA		(574	)		(21,792	)
Thales SA		(542	)		(18,965	)
Vallourec SA		(253	)		(26,573	)
Total France common stocks					(740,551	)
Germany: (1.91)%
BASF SE		(111	)		(8,855	)
Beiersdorf AG NPV		(388	)		(21,530	)
Commerzbank AG		(3,064	)		(22,740	)
Daimler AG		(319	)		(21,625	)
Fraport AG Frankfurt Airport Services Worldwide		(501	)		(31,573	)
GEA Group AG		(952	)		(27,517	)
Hamburger Hafen und Logistik AG		(507	)		(23,408	)
K&S AG NPV		(244	)		(18,377	)
Linde AG		(418	)		(63,426	)
MAN SE		(223	)		(26,519	)
Puma AG Rudolf Dassler Sport		(69	)		(22,867	)
SGL Carbon SE NPV		(660	)		(23,826	)
Suedzucker AG		(1,333	)		(35,492	)
Wacker Chemie AG		(826	)		(144,154	)
Total Germany common stocks					(491,909	)
Ireland: (0.33)%
Elan Corp. PLC		(4,031	)		(22,355	)
Ingersoll-Rand PLC		(800	)		(37,672	)
Ryanair Holdings PLC		(5,102	)		(25,703	)
Total Ireland common stocks					(85,730	)

35

UBS Market Neutral Multi-Strategy Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Shares			Value
Investments sold short—(Continued)
Common stocks—(Continued)
Israel: (0.08)%
Teva Pharmaceutical Industries Ltd. ADR		(400	)	$	(20,852	)
Italy: (1.01)%
Assicurazioni Generali SpA		(1,245	)		(23,641	)
Autogrill SpA		(1,668	)		(23,560	)
Banca Monte dei Paschi di Siena SpA		(18,789	)		(21,367	)
Banca Popolare di Milano Scarl		(5,999	)		(21,003	)
Banco Popolare SC		(3,941	)		(17,853	)
Bulgari SpA		(1,913	)		(20,668	)
Flat SpA		(985	)		(20,310	)
Luxottica Group SpA		(818	)		(24,923	)
Mediolanum SpA		(5,323	)		(21,997	)
Pirelli & Co SpA NPV		(634	)		(5,126	)
Saras Raffinerie Sarde SpA		(10,102	)		(21,261	)
Terna-Rete Elettrica Nazionale SpA		(4,348	)		(18,360	)
Unione di Banche Italiane SCPA		(2,366	)		(20,709	)
Total Italy common stocks					(260,778	)
Japan: (7.90)%
Advantest Corp.		(1,100	)		(24,889	)
Air Water, Inc.		(1,000	)		(12,773	)
Alfresa Holdings Corp.		(500	)		(22,201	)
All Nippon Airways Co. Ltd.		(8,000	)		(29,856	)
Benesse Holdings, Inc.		(500	)		(23,032	)
Canon Marketing Japan, Inc.		(1,600	)		(22,781	)
Chugai Pharmaceutical Co., Ltd.		(1,200	)		(22,022	)
Chugoku Electric Power Co., Inc.		(1,200	)		(24,387	)
Dai-ichi Life Insurance Co., Ltd.		(18	)		(29,243	)
Dowa Holdings Co., Ltd.		(4,000	)		(26,259	)
Fast Retailing Co., Ltd.		(200	)		(31,851	)
Furukawa Electric Co., Ltd.		(5,000	)		(22,478	)
GS Yuasa Corp.		(4,000	)		(27,688	)
Hakuhodo DY Holdings, Inc.		(330	)		(18,921	)
Hitachi Chemical Co., Ltd.		(1,200	)		(24,845	)
Hokkaido Electric Power Co., Inc.		(1,200	)		(24,535	)
Inpex Corp.		(4	)		(23,427	)
Japan Prime Realty Investment Corp.		(9	)		(27,713	)
Juroku Bank Ltd.		(9,000	)		(28,821	)
Kajima Corp.		(9,000	)		(23,944	)
Kansai Paint Co., Ltd.		(2,000	)		(19,362	)
Kawasaki Kisen Kaisha Ltd.		(5,000	)		(21,986	)
Keihin Electric Express Railway Co., Ltd.		(3,000	)		(26,493	)
Keio Corp.		(3,000	)		(20,471	)
Keyence Corp.		(100	)		(28,969	)
Kikkoman Corp.		(2,000	)		(22,417	)
Kintetsu Corp.		(7,000	)		(21,899	)
Koito Manufacturing Co., Ltd.		(2,000	)		(31,285	)
Kurita Water Industries Ltd.		(800	)		(25,205	)
Lawson, Inc.		(500	)		(24,726	)

	Shares			Value
Matsui Securities Co., Ltd.		(2,800	)	$	(19,934	)
MISUMI Group, Inc.		(900	)		(22,425	)
Mitsubishi Estate Co., Ltd.		(2,000	)		(37,098	)
Mitsubishi Heavy Industries Ltd.		(8,000	)		(30,053	)
Mitsubishi Motors Corp.		(19,000	)		(27,614	)
Mitsui Engineering & Shipbuilding Co., Ltd.		(8,000	)		(21,185	)
Mitsui Sumitomo Insurance Group Holdings, Inc.		(900	)		(22,558	)
Mizuho Trust & Banking Co., Ltd.		(23,000	)		(23,796	)
Mori Seiki Co., Ltd.		(1,900	)		(22,536	)
Namco Bandai Holdings, Inc.		(2,300	)		(24,703	)
NGK Insulators Ltd.		(2,000	)		(32,640	)
Nikon Corp.		(1,100	)		(22,314	)
Nintendo Co., Ltd.		(100	)		(29,351	)
Nippon Sheet Glass Co., Ltd.		(4,000	)		(10,790	)
Nippon Steel Corp.		(6,000	)		(21,579	)
Nissha Printing Co., Ltd.		(900	)		(23,888	)
Nomura Research Institute Ltd.		(900	)		(20,042	)
Obayashi Corp.		(6,000	)		(27,639	)
Olympus Corp.		(700	)		(21,192	)
Ono Pharmaceutical Co., Ltd.		(400	)		(18,672	)
Oracle Corp. Japan		(500	)		(24,572	)
OSAKA Titanium Technologies Co., Ltd.		(500	)		(23,618	)
Otsuka Corp.		(400	)		(27,294	)
Panasonic Corp.		(1,000	)		(14,201	)
Santen Pharmaceutical Co., Ltd.		(700	)		(24,313	)
Secom Co., Ltd.		(400	)		(18,943	)
Sekisui House Ltd.		(2,000	)		(20,224	)
Senshu Ikeda Holdings, Inc.		(16,700	)		(23,860	)
Shin-Etsu Chemical Co., Ltd.		(500	)		(27,097	)
Shinko Electric Industries Co., Ltd.		(1,800	)		(20,175	)
Shinsei Bank Ltd.		(23,000	)		(30,028	)
Showa Shell Sekiyu KK		(3,000	)		(27,491	)
Square Enix Holdings Co., Ltd.		(1,400	)		(24,831	)
Sumco Corp.		(1,800	)		(25,718	)
Sumitomo Chemical Co., Ltd.		(6,000	)		(29,560	)
Sumitomo Metal Industries Ltd.		(11,000	)		(27,097	)
Suruga Bank Ltd.		(2,000	)		(18,623	)
Suzuki Motor Corp.		(900	)		(22,170	)
Taiheiyo Cement Corp.		(17,000	)		(21,776	)
Taiyo Nippon Sanso Corp.		(3,000	)		(26,493	)
Tobu Railway Co., Ltd.		(4,000	)		(22,466	)
Tokio Marine Holdings, Inc.		(700	)		(20,925	)
Tokuyama Corp.		(5,000	)		(25,865	)
Tokyo Steel Manufacturing Co., Ltd.		(2,000	)		(21,825	)
TonenGeneral Sekiyu KK		(3,000	)		(32,812	)
Toray Industries, Inc.		(8,000	)		(47,789	)
Toshiba Corp.		(4,000	)		(21,776	)
Toyo Seikan Kaisha Ltd.		(1,300	)		(24,738	)
Toyoda Gosei Co., Ltd.		(900	)		(21,139	)
Toyota Industries Corp.		(800	)		(24,841	)

36

UBS Market Neutral Multi-Strategy Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Shares			Value
Investments sold short—(Continued)
Common stocks—(Continued)
Japan—(Concluded)
Trend Micro, Inc.		(800	)	$	(26,417	)
Yakult Honsha Co., Ltd.		(800	)		(23,047	)
Yaskawa Electric Corp.		(3,000	)		(28,378	)
Total Japan common stocks					(2,034,590	)
Jersey (Channel Islands): (0.11)%
Heritage Oil PLC		(4,200	)		(29,382	)
Luxembourg: (0.22)%
AZ Electronic Materials SA		(6,416	)		(31,010	)
L'Occitane International SA		(9,750	)		(26,969	)
Total Luxembourg common stocks					(57,979	)
Netherlands: (1.16)%
Akzo Nobel NV		(456	)		(28,326	)
Eurocommercial Properties NV		(845	)		(38,894	)
European Aeronautic Defence & Space Co. NV		(856	)		(19,949	)
ING Groep NV CVA		(2,518	)		(24,496	)
Koninklijke KPN NV		(1,320	)		(19,262	)
Koninklijke Vopak NV		(456	)		(21,541	)
QIAGEN NV		(1,193	)		(23,323	)
Reed Elsevier NV		(1,627	)		(20,126	)
SNS REAAL NV		(4,980	)		(21,229	)
TNT NV		(1,004	)		(26,497	)
Unilever NV CVA		(701	)		(21,826	)
VistaPrint NV		(700	)		(32,200	)
Total Netherlands common stocks					(297,669	)
New Zealand: (0.10)%
Auckland International Airport Ltd.		(297	)		(504	)
Contact Energy Ltd.		(5,284	)		(25,651	)
Total New Zealand common stocks					(26,155	)
Norway: (0.10)%
Renewable Energy Corp. ASA		(8,335	)		(25,412	)
Portugal: (0.29)%
Brisa Auto-Estradas de Portugal SA		(7,931	)		(55,312	)
Portugal Telecom, SGPS, SA		(1,625	)		(18,197	)
Total Portugal common stocks					(73,509	)
Singapore: (1.13)%
Ascendas Real Estate Investment Trust		(18,000	)		(29,033	)
CapitaLand Ltd.		(9,000	)		(26,018	)
CapitaMall Trust		(16,000	)		(24,311	)
CapitaMalls Asia Ltd.		(15,000	)		(22,675	)
Global Logistic Properties Ltd.		(13,000	)		(21,880	)
Indofood Agri Resources Ltd.		(10,000	)		(21,818	)

	Shares			Value
Neptune Orient Lines Ltd.		(13,000	)	$	(22,083	)
Olam International Ltd.		(9,000	)		(22,020	)
Singapore Exchange Ltd.		(4,000	)		(26,244	)
Singapore Telecommunications Ltd.		(11,000	)		(26,143	)
StarHub Ltd.		(11,000	)		(22,543	)
Wilmar International Ltd.		(6,000	)		(26,322	)
Total Singapore common stocks					(291,090	)
Spain: (0.95)%
Acerinox SA		(1,824	)		(31,991	)
ACS Actividades de Construccion y Servicios SA		(405	)		(18,983	)
Banco de Valencia SA		(6,322	)		(27,710	)
Bankinter SA		(4,845	)		(26,907	)
EDP Renovaveis SA		(2,904	)		(16,830	)
Gestevision Telecinco SA		(2,882	)		(31,696	)
Grifols SA		(1,566	)		(21,345	)
Iberdrola Renovables SA		(5,965	)		(21,171	)
Telefonica SA		(970	)		(21,990	)
Zardoya Otis SA		(1,852	)		(26,085	)
Total Spain common stocks					(244,708	)
Sweden: (2.64)%
Alfa Laval AB		(6,536	)		(137,704	)
Atlas Copco AB, Class A		(4,364	)		(110,112	)
CDON Group AB		(268	)		(1,239	)
Getinge AB, Class B		(990	)		(20,740	)
Hennes & Mauritz AB, Class B		(3,567	)		(118,800	)
Holmen AB, Class B		(848	)		(27,915	)
Modern Times Group AB, Class B		(268	)		(17,732	)
Sandvik AB		(1,283	)		(25,009	)
Skanska AB, Class B		(5,167	)		(102,408	)
SKF AB, Class B		(4,184	)		(119,194	)
Total Sweden common stocks					(680,853	)
Switzerland: (2.07)%
ABB Ltd.		(4,474	)		(99,672	)
Adecco SA		(327	)		(21,421	)
Credit Suisse Group AG		(506	)		(20,386	)
Givaudan SA		(26	)		(28,058	)
Kuehne & Nagel International AG		(960	)		(133,476	)
Lindt & Spruengli AG		(1	)		(32,192	)
Lonza Group AG		(254	)		(20,361	)
Nobel Biocare Holding AG		(1,368	)		(25,794	)
Novartis AG		(480	)		(28,210	)
Roche Holding AG (Non-voting)		(181	)		(26,521	)
SGS SA		(15	)		(25,171	)
Sika AG		(10	)		(21,936	)
Sonova Holding AG		(157	)		(20,267	)
Weatherford International Ltd.		(1,300	)		(29,640	)
Total Switzerland common stocks					(533,105	)

37

UBS Market Neutral Multi-Strategy Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Shares			Value
Investments sold short—(Continued)
Common stocks—(Continued)
Taiwan: (0.09)%
Uni-President China Holdings Ltd.		(41,000	)	$	(21,943	)
United Kingdom: (2.26)%
Autonomy Corp. PLC		(1,157	)		(27,149	)
BP PLC		(3,131	)		(22,726	)
British Land Co., PLC		(2,805	)		(22,938	)
Capital Shopping Centres Group PLC		(3,908	)		(25,444	)
IMI PLC		(2,089	)		(30,778	)
Invensys PLC		(3,848	)		(21,250	)
London & Stamford Property PLC		(14,856	)		(30,342	)
Prudential PLC		(2,180	)		(22,704	)
SABMiller PLC		(4,217	)		(148,359	)
Standard Chartered PLC		(787	)		(21,172	)
Standard Life PLC		(8,097	)		(27,268	)
Tullow Oil PLC		(1,102	)		(21,666	)
WH Smith PLC		(6,169	)		(46,840	)
Whitbread PLC		(4,091	)		(114,171	)
Total United Kingdom common stocks					(582,807	)
United States: (46.57)%
3M Co.		(700	)		(60,410	)
Acuity Brands, Inc.		(100	)		(5,767	)
Adobe Systems, Inc.		(700	)		(21,546	)
Advanced Micro Devices, Inc.		(7,100	)		(58,078	)
Air Products & Chemicals, Inc.		(300	)		(27,285	)
AK Steel Holding Corp.		(1,600	)		(26,192	)
Akamai Technologies, Inc.		(1,100	)		(51,755	)
Alcoa, Inc.		(1,400	)		(21,546	)
Alliant Energy Corp.		(2,700	)		(99,279	)
Alliant Techsystems, Inc.		(300	)		(22,329	)
Alpha Natural Resources, Inc.		(400	)		(24,012	)
Altera Corp.		(2,800	)		(99,624	)
AMB Property Corp.		(800	)		(25,368	)
Amedisys, Inc.		(800	)		(26,800	)
American Superconductor Corp.		(1,100	)		(31,449	)
American Water Works Co., Inc.		(2,200	)		(55,638	)
Amphenol Corp., Class A		(600	)		(31,668	)
AMR Corp.		(3,400	)		(26,486	)
Amylin Pharmaceuticals, Inc.		(1,600	)		(23,536	)
Anadarko Petroleum Corp.		(300	)		(22,848	)
AON Corp.		(500	)		(23,005	)
Aqua America, Inc.		(2,200	)		(49,456	)
Archer-Daniels-Midland Co. NPV		(1,100	)		(33,088	)
AT&T, Inc.		(800	)		(23,504	)
Auxilium Pharmaceuticals, Inc.		(1,000	)		(21,100	)
Avon Products, Inc.		(800	)		(23,248	)
Bally Technologies, Inc.		(600	)		(25,314	)
BancorpSouth, Inc.		(1,500	)		(23,925	)
Bank of Hawaii Corp.		(400	)		(18,884	)
BB&T Corp.		(800	)		(21,032	)

	Shares			Value
Beckman Coulter, Inc.		(300	)	$	(22,569	)
Berkshire Hathaway, Inc., Class B		(400	)		(32,044	)
Best Buy Co., Inc.		(1,900	)		(65,151	)
Bio-Reference Labs, Inc.		(1,800	)		(39,924	)
BlackRock, Inc.		(200	)		(38,116	)
Blackstone Group LP		(1,900	)		(26,885	)
BMC Software, Inc.		(4,000	)		(188,560	)
Booz Allen Hamilton Holding Corp.		(1,100	)		(21,373	)
BorgWarner, Inc.		(300	)		(21,708	)
Boston Properties, Inc.		(200	)		(17,220	)
Boston Scientific Corp.		(3,400	)		(25,738	)
BRE Properties, Inc.		(500	)		(21,750	)
Bristol-Myers Squibb Co.		(2,200	)		(58,256	)
Brookdale Senior Living, Inc.		(1,000	)		(21,410	)
Brown-Forman Corp., Class B		(1,900	)		(132,278	)
Brunswick Corp.		(1,100	)		(20,614	)
C.H. Robinson Worldwide, Inc.		(2,200	)		(176,418	)
Cabot Oil & Gas Corp.		(600	)		(22,710	)
Cadence Design Systems, Inc.		(3,700	)		(30,562	)
Calpine Corp.		(2,200	)		(29,348	)
Campbell Soup Co.		(800	)		(27,800	)
Cardinal Health, Inc.		(1,100	)		(42,141	)
Caterpillar, Inc.		(1,100	)		(103,026	)
Celgene Corp.		(700	)		(41,398	)
CenturyLink, Inc.		(800	)		(36,936	)
Cephalon, Inc.		(600	)		(37,032	)
Charles River Laboratories International, Inc.		(3,200	)		(113,728	)
Charles Schwab Corp.		(1,700	)		(29,087	)
Chesapeake Energy Corp.		(2,500	)		(64,775	)
Chevron Corp.		(600	)		(54,750	)
Chipotle Mexican Grill, Inc.		(100	)		(21,266	)
Choice Hotels International, Inc.		(600	)		(22,962	)
Church & Dwight Co., Inc.		(300	)		(20,706	)
Cia de Minas Buenaventura SA ADR		(400	)		(19,584	)
Cincinnati Bell, Inc.		(11,100	)		(31,080	)
Clean Energy Fuels Corp.		(1,600	)		(22,144	)
Clear Channel Outdoor Holdings, Inc., Class A		(1,700	)		(23,868	)
Clorox Co.		(1,400	)		(88,592	)
Cobalt International Energy, Inc.		(2,300	)		(28,083	)
Cognizant Technology Solutions Corp., Class A		(200	)		(14,658	)
Comcast Corp., Class A		(1,000	)		(21,970	)
Commercial Metals Co.		(1,500	)		(24,885	)
Compuware Corp.		(3,900	)		(45,513	)
Comstock Resources, Inc.		(900	)		(22,104	)
ConocoPhillips		(700	)		(47,670	)
CONSOL Energy, Inc.		(700	)		(34,118	)
Consolidated Edison, Inc.		(2,300	)		(114,011	)
Constellation Energy Group, Inc.		(900	)		(27,567	)
Con-way, Inc.		(700	)		(25,599	)
CoreLogic, Inc.		(1,400	)		(25,928	)

38

UBS Market Neutral Multi-Strategy Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Shares			Value
Investments sold short—(Continued)
Common stocks—(Continued)
United States—(Continued)
Corning, Inc.		(2,600	)	$	(50,232	)
Covance, Inc.		(600	)		(30,846	)
Crane Co.		(500	)		(20,535	)
Crown Castle International Corp.		(500	)		(21,915	)
CSX Corp.		(700	)		(45,227	)
Danaher Corp.		(400	)		(18,868	)
DaVita, Inc.		(300	)		(20,847	)
Deere & Co.		(500	)		(41,525	)
Dell, Inc.		(10,200	)		(138,210	)
Delta Air Lines, Inc.		(4,700	)		(59,220	)
DENTSPLY International, Inc.		(700	)		(23,919	)
Diebold, Inc.		(1,500	)		(48,075	)
Discovery Communications, Inc., Class A		(500	)		(20,850	)
DISH Network Corp., Class A		(1,500	)		(29,490	)
Dollar General Corp.		(1,600	)		(49,072	)
Dominion Resources, Inc.		(600	)		(25,632	)
Dover Corp.		(400	)		(23,380	)
DR Horton, Inc.		(1,700	)		(20,281	)
DreamWorks Animation SKG, Inc., Class A		(700	)		(20,629	)
Duke Energy Corp.		(2,600	)		(46,306	)
Duke Realty Corp.		(1,900	)		(23,674	)
Dun & Bradstreet Corp.		(300	)		(24,627	)
Ecolab, Inc.		(500	)		(25,210	)
EI Du Pont de Nemours & Co.		(1,100	)		(54,868	)
Electronic Arts, Inc.		(3,200	)		(52,416	)
Eli Lilly & Co.		(4,400	)		(154,176	)
EMC Corp.		(5,100	)		(116,790	)
Emerson Electric Co.		(1,100	)		(62,887	)
Emulex Corp.		(2,200	)		(25,652	)
EOG Resources, Inc.		(300	)		(27,423	)
EQT Corp.		(1,200	)		(53,808	)
Equinix, Inc.		(300	)		(24,378	)
Expedia, Inc.		(1,100	)		(27,599	)
Expeditors International Washington, Inc.		(2,900	)		(158,340	)
Express Scripts, Inc.		(400	)		(21,620	)
Exterran Holdings, Inc.		(1,000	)		(23,950	)
Exxon Mobil Corp.		(400	)		(29,248	)
Fastenal Co.		(300	)		(17,973	)
Federated Investors, Inc., Class B		(900	)		(23,553	)
FedEx Corp.		(200	)		(18,602	)
First Horizon National Corp.		(4,000	)		(47,120	)
First Solar, Inc.		(200	)		(26,028	)
FirstMerit Corp.		(1,200	)		(23,748	)
Fiserv, Inc.		(800	)		(46,848	)
Flextronics International Ltd.		(5,200	)		(40,820	)
Flowers Foods, Inc.		(2,000	)		(53,820	)
Ford Motor Co.		(4,900	)		(82,271	)

	Shares			Value
Forest Laboratories, Inc.		(2,400	)	$	(76,752	)
Fortune Brands, Inc.		(300	)		(18,075	)
Freeport-McMoRan Copper & Gold, Inc.		(400	)		(48,036	)
Frontier Oil Corp.		(1,300	)		(23,413	)
Gap, Inc.		(2,800	)		(61,992	)
Genworth Financial, Inc., Class A		(1,800	)		(23,652	)
Goodrich Corp.		(1,600	)		(140,912	)
Goodyear Tire & Rubber Co.		(1,800	)		(21,330	)
Great Plains Energy, Inc.		(1,600	)		(31,024	)
Green Mountain Coffee Roasters, Inc.		(800	)		(26,288	)
GSI Commerce, Inc.		(1,100	)		(25,520	)
Hasbro, Inc.		(600	)		(28,308	)
HCP, Inc.		(1,200	)		(44,148	)
Health Care REIT, Inc.		(400	)		(19,056	)
Helix Energy Solutions Group, Inc.		(2,100	)		(25,494	)
Hershey Co.		(1,900	)		(89,585	)
Hewlett-Packard Co.		(1,000	)		(42,100	)
Honeywell International, Inc.		(1,000	)		(53,160	)
Hormell Foods Corp.		(700	)		(35,882	)
Hospira, Inc.		(1,400	)		(77,966	)
Hudson City Bancorp, Inc.		(2,300	)		(29,302	)
Human Genome Sciences, Inc.		(900	)		(21,501	)
Humana, Inc.		(600	)		(32,844	)
Huntington Bancshares, Inc.		(6,700	)		(46,029	)
IDEX Corp.		(600	)		(23,472	)
Illinois Tool Works, Inc.		(500	)		(26,700	)
Integrys Energy Group, Inc.		(400	)		(19,404	)
Intel Corp.		(5,700	)		(119,871	)
International Business Machines Corp.		(300	)		(44,028	)
International Game Technology		(3,200	)		(56,608	)
Intrepid Potash, Inc.		(700	)		(26,103	)
Intuitive Surgical, Inc.		(200	)		(51,550	)
Invesco Ltd.		(1,000	)		(24,060	)
ITT Corp.		(800	)		(41,688	)
Jabil Circuit, Inc.		(1,400	)		(28,126	)
Jarden Corp.		(700	)		(21,609	)
JC Penney Co., Inc.		(1,300	)		(42,003	)
Jefferies Group, Inc.		(800	)		(21,304	)
Joy Global, Inc.		(600	)		(52,050	)
Kellogg Co.		(500	)		(25,540	)
Kimberly-Clark Corp.		(400	)		(25,216	)
Kinder Morgan Management LLC		(307	)		(20,532	)
Knight Transportation, Inc.		(1,100	)		(20,900	)
Kraft Foods, Inc., Class A		(800	)		(25,208	)
Laboratory Corp. of America Holdings		(200	)		(17,584	)
Lamar Advertising Co., Class A		(2,900	)		(115,536	)
Landstar System, Inc.		(600	)		(24,564	)
Leucadia National Corp.		(700	)		(20,426	)
Linear Technology Corp.		(800	)		(27,672	)
LKQ Corp.		(1,100	)		(24,992	)
Loews Corp.		(800	)		(31,128	)
Longtop Financial Technologies Ltd. ADR		(800	)		(28,944	)
Louisiana-Pacific Corp.		(2,800	)		(26,488	)

39

UBS Market Neutral Multi-Strategy Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Shares			Value
Investments sold short—(Continued)
Common stocks—(Continued)
United States—(Continued)
Manitowoc Co., Inc.		(1,900	)	$	(24,909	)
Marsh & McLennan Cos., Inc.		(1,000	)		(27,340	)
Martin Marietta Materials, Inc.		(200	)		(18,448	)
Masco Corp.		(2,300	)		(29,118	)
McDonald's Corp.		(900	)		(69,084	)
MDU Resources Group, Inc.		(1,000	)		(20,270	)
MedAssets, Inc.		(1,100	)		(22,209	)
MEMC Electronic Materials, Inc.		(2,000	)		(22,520	)
Meredith Corp.		(700	)		(24,255	)
MetLife, Inc.		(600	)		(26,664	)
MetroPCS Communications, Inc.		(1,800	)		(22,734	)
Mettler-Toledo International, Inc.		(100	)		(15,121	)
MGM Resorts International		(3,100	)		(46,035	)
Micron Technology, Inc.		(3,000	)		(24,060	)
Mohawk Industries, Inc.		(400	)		(22,704	)
Molex, Inc.		(1,000	)		(22,720	)
Molycorp, Inc.		(200	)		(9,980	)
Monsanto Co.		(400	)		(27,856	)
Motorola, Inc.		(7,800	)		(70,746	)
MSCI, Inc., Class A		(600	)		(23,376	)
National Fuel Gas Co.		(300	)		(19,686	)
Navistar International Corp.		(900	)		(52,119	)
NCR Corp.		(1,900	)		(29,203	)
NetApp, Inc.		(600	)		(32,976	)
NetFlix, Inc.		(400	)		(70,280	)
New York Times Co., Class A		(2,300	)		(22,540	)
Nordstrom, Inc.		(1,100	)		(46,618	)
Northern Trust Corp.		(400	)		(22,164	)
Novellus Systems, Inc.		(2,400	)		(77,568	)
NSTAR		(2,500	)		(105,475	)
Nuance Communications, Inc.		(1,500	)		(27,270	)
Nucor Corp.		(700	)		(30,674	)
Nvidia Corp.		(900	)		(13,860	)
NYSE Euronext		(700	)		(20,986	)
Occidental Petroleum Corp.		(1,700	)		(166,770	)
Office Depot, Inc.		(4,800	)		(25,920	)
Old Republic International Corp.		(2,000	)		(27,260	)
Olin Corp.		(1,600	)		(32,832	)
Omnicare, Inc.		(900	)		(22,851	)
O'Reilly Automotive, Inc.		(1,450	)		(87,609	)
Owens-Illinois, Inc.		(700	)		(21,490	)
PACCAR, Inc.		(400	)		(22,968	)
Parexel International Corp.		(1,300	)		(27,599	)
Parker Hannifin Corp.		(500	)		(43,150	)
Patriot Coal Corp.		(1,300	)		(25,181	)
Patterson Cos., Inc.		(800	)		(24,504	)
Paychex, Inc.		(700	)		(21,637	)
Penford Corp.		(5,250	)		(32,078	)
Penske Automotive Group, Inc.		(1,200	)		(20,904	)
Pentair, Inc.		(600	)		(21,906	)

	Shares			Value
People's United Financial, Inc.		(1,700	)	$	(23,817	)
PepsiCo, Inc.		(400	)		(26,132	)
Petrohawk Energy Corp.		(1,400	)		(25,550	)
Pfizer, Inc.		(1,300	)		(22,763	)
Phillips-Van Heusen Corp.		(400	)		(25,204	)
Pioneer Natural Resources Co.		(700	)		(60,774	)
Plum Creek Timber Co., Inc.		(700	)		(26,215	)
PNC Financial Services Group, Inc.		(1,000	)		(60,720	)
Potlatch Corp.		(600	)		(19,530	)
Pride International, Inc.		(700	)		(23,100	)
Progress Energy, Inc.		(400	)		(17,392	)
Progressive Corp.		(900	)		(17,883	)
Pulte Homes, Inc.		(3,100	)		(23,312	)
Quality Systems, Inc.		(300	)		(20,946	)
Quanta Services, Inc.		(1,700	)		(33,864	)
Quicksilver Resources, Inc.		(2,400	)		(35,376	)
Rambus, Inc.		(2,700	)		(55,296	)
Range Resources Corp.		(700	)		(31,486	)
Red Hat, Inc.		(800	)		(36,520	)
Regal Entertainment Group, Class A		(1,600	)		(18,784	)
Regency Centers Corp.		(500	)		(21,120	)
Regions Financial Corp.		(10,200	)		(71,400	)
Republic Services, Inc.		(900	)		(26,874	)
Robert Half International, Inc.		(700	)		(21,420	)
Rockwell Automation, Inc.		(1,300	)		(93,223	)
Sara Lee Corp.		(1,400	)		(24,514	)
SBA Communications Corp., Class A		(700	)		(28,658	)
SCANA Corp.		(500	)		(20,300	)
Schlumberger Ltd.		(1,100	)		(91,850	)
Scripps Networks Interactive, Inc., Class A		(400	)		(20,700	)
Sears Holdings Corp.		(1,200	)		(88,500	)
Sempra Energy		(400	)		(20,992	)
Skechers U.S.A., Inc., Class A		(1,100	)		(22,000	)
Smithfield Foods, Inc.		(3,100	)		(63,953	)
Southern Co.		(2,700	)		(103,221	)
Southwestern Energy Co.		(600	)		(22,458	)
Spectra Energy Corp.		(2,000	)		(49,980	)
Spirit Aerosystems Holdings, Inc., Class A		(1,400	)		(29,134	)
SPX Corp.		(300	)		(21,447	)
Stanley Black & Decker, Inc.		(300	)		(20,061	)
Staples, Inc.		(900	)		(20,493	)
Starwood Hotels & Resorts Worldwide, Inc.		(1,000	)		(60,780	)
Steel Dynamics, Inc.		(1,200	)		(21,960	)
Stericycle, Inc.		(300	)		(24,276	)
SunPower Corp., Class A		(1,600	)		(20,528	)
Superior Energy Services, Inc.		(700	)		(24,493	)
Sysco Corp.		(800	)		(23,520	)
Talbots, Inc.		(2,100	)		(17,892	)
TCF Financial Corp.		(1,500	)		(22,215	)
TD Ameritrade Holding Corp.		(1,400	)		(26,586	)

40

UBS Market Neutral Multi-Strategy Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Shares			Value
Investments sold short—(Concluded)
Common stocks—(Concluded)
United States—(Concluded)
Tellabs, Inc.		(4,300	)	$	(29,154	)
Temple-Inland, Inc.		(900	)		(19,116	)
Terex Corp.		(800	)		(24,832	)
TFS Financial Corp.		(3,362	)		(30,325	)
Thermo Fisher Scientific, Inc.		(1,200	)		(66,432	)
Thomson Reuters Corp.		(600	)		(22,362	)
Tidewater, Inc.		(600	)		(32,304	)
TiVo, Inc.		(2,600	)		(22,438	)
TJX Cos., Inc.		(500	)		(22,195	)
Toll Brothers, Inc.		(1,200	)		(22,800	)
Transatlantic Holdings, Inc.		(400	)		(20,648	)
Travelers Cos., Inc.		(1,200	)		(66,852	)
Tyson Foods, Inc., Class A		(3,200	)		(55,104	)
UDR, Inc.		(1,000	)		(23,520	)
Unit Corp.		(500	)		(23,240	)
Urban Outfitters, Inc.		(600	)		(21,486	)
US Bancorp		(800	)		(21,576	)
Varian Semiconductor Equipment Associates, Inc.		(700	)		(25,879	)
VCA Antech, Inc.		(1,100	)		(25,619	)
Verizon Communications, Inc.		(1,100	)		(39,358	)
Vertex Pharmaceuticals, Inc.		(700	)		(24,521	)
Viasat, Inc.		(700	)		(31,087	)
Vulcan Materials Co.		(400	)		(17,744	)
Walt Disney Co.		(600	)		(22,506	)
WellCare Health Plans, Inc.		(800	)		(24,176	)
Wendy's/Arby's Group, Inc., Class A		(5,200	)		(24,024	)
Western Union Co.		(1,200	)		(22,284	)
Whole Foods Market, Inc.		(1,500	)		(75,885	)
WW Grainger, Inc.		(1,300	)		(179,543	)
Xcel Energy, Inc.		(1,200	)		(28,260	)
Xilinx, Inc.		(800	)		(23,184	)
Yum! Brands, Inc.		(500	)		(24,525	)
Total United States common stocks					(11,996,388	)
Total common stocks (proceeds $18,861,131)					(21,320,037	)

	Number of rights			Value
Rights: (0.00)%3
Canada: (0.00)%3
Ivanhoe Mines Ltd., expires 01/26/11* (proceeds $0)		(900	)	$	(1,213	)
Total investments sold short (proceeds $18,861,131)					(21,321,250	)
Total investments, net of investments sold short: 36.51%					9,404,080
Cash and other assets, less liabilities: 63.49%					16,356,603
Net assets: 100.00%				$	25,760,683

Notes to portfolio of investments

Aggregate cost for federal income tax purposes, before investments sold short, was substantially the same as for book purposes; and net unrealized appreciation consisted of:

Gross unrealized appreciation	$	2,785,434
Gross unrealized depreciation		(99,748	)
Net unrealized appreciation of investments	$	2,685,686

*  Non-income producing security.

¹  All or a portion of these securities have been designated as collateral for open short positions.

41

UBS Market Neutral Multi-Strategy Fund

Portfolio of investments

December 31, 2010 (unaudited)

²  The table below details the Fund's investment in a fund that is advised by the same advisor as the Fund. The advisor does not earn a management fee from UBS Cash Management Prime Relationship Fund.

Security description	Value 06/30/10		Purchases during the six months ended 12/31/10		Sales during the six months ended 12/31/10		Value 12/31/10		Income earned from affiliate for the six months ended 12/31/10
UBS Cash Management Prime Relationship Fund	$	—	$	47,923,930	$	39,139,116	$	8,784,814	$	7,827

³  Amount represents less than 0.005%.

ADR  American depositary receipt

CVA  Dutch certification—depository certificate

ETF  Exchange Traded Fund

NPV  No Par Value

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.

REIT  Real estate investment trust

SDR  Swedish depository receipts

SPDR  Standard & Poor's Depository Receipts

Forward foreign currency contracts

UBS Market Neutral Multi-Strategy Fund had the following open forward foreign currency contracts as of December 31, 2010:

Counterparty	Contracts to deliver		In exchange for		Maturity date	Unrealized appreciation/ (depreciation)
Credit Suisse First Boston	USD	198,359	JPY	16,200,000	01/05/11	$	1,175
JPMorgan Chase Bank	GBP	900,000	USD	1,443,614	03/03/11		41,030
JPMorgan Chase Bank	JPY	30,300,000	USD	364,535	03/03/11		(8,892	)
JPMorgan Chase Bank	SEK	900,000	USD	129,826	03/03/11		(3,721	)
JPMorgan Chase Bank	USD	284,909	CHF	280,000	03/03/11		14,742
JPMorgan Chase Bank	USD	538,869	GBP	340,000	03/03/11		(9,004	)
JPMorgan Chase Bank	USD	46,529	JPY	3,800,000	01/05/11		276
JPMorgan Chase Bank	USD	364,424	JPY	30,300,000	03/03/11		9,002
JPMorgan Chase Bank	USD	599,317	SEK	4,130,000	03/03/11		13,518
Net unrealized appreciation on forward foreign currency contracts						$	58,126

Currency type abbreviations:

CHF   Swiss Franc

GBP   Great Britain Pound

JPY   Japanese Yen

SEK   Swedish Krona

USD   United States Dollar

42

UBS Market Neutral Multi-Strategy Fund

Portfolio of investments

December 31, 2010 (unaudited)

Concluded

Futures contracts

UBS Market Neutral Multi-Strategy Fund had the following open futures contracts as of December 31, 2010:

	Expiration date	Cost/ (proceeds)			Value			Unrealized appreciation/ (depreciation)
Index futures buy contracts:
FTSE 100 Index, 1 contract (GBP)	March 2011	$	90,997		$	91,878		$	881
Mini TPX Index, 3 contracts (JPY)	March 2011		33,405			33,107			(298	)
S&P SmallCap 600 E-MINI, 1 contract (USD)	March 2011		41,943			41,500			(443	)
Index futures sell contracts:
Russell 2000 Mini Index, 7 contracts (USD)	March 2011		(544,639	)		(547,610	)		(2,971	)
TOPIX Index, 1 contract (JPY)	March 2011		(111,512	)		(110,358	)		1,154
Net unrealized depreciation on futures contracts								$	(1,677	)

Currency type abbreviations:

GBP   Great Britain Pound

JPY   Japanese Yen

USD   United States Dollar

The following is a summary of the inputs used as of December 31, 2010 in valuing the Fund's investments:

Measurements at 12/31/10
Description	Unadjusted quoted prices in active markets for (Level 1)			Other significant identical investments (Level 2)			Unobservable observable inputs (Level 3)		inputs Total
Common stocks	$	21,610,335		$	—		$	—	$	21,610,335
Common stocks sold short		(21,320,037	)		—			—		(21,320,037	)
Rights sold short		—			(1,213	)		—		(1,213	)
Preferred stocks		141,965			—			—		141,965
Investment companies		188,216			—			—		188,216
Short-term investment		—			8,784,814			—		8,784,814
Other financial instruments1		(1,677	)		58,126			—		56,449
Total	$	618,802		$	8,841,727		$	—	$	9,460,529

¹  Other financial instruments include futures contracts and forward foreign currency contracts.

See accompanying notes to financial statements.
43

UBS U.S. Equity Alpha Fund

Portfolio performance

For the six months ended December 31, 2010, Class A shares of UBS U.S. Equity Alpha Fund (the "Fund") returned 21.83% (Class A shares returned 15.09% after the deduction of the maximum sales charge), while Class Y shares returned 22.05%. The Fund's benchmark, the Russell 1000 Index (the "Index"), returned 24.03% 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 47; please note that the Fund's returns do not reflect the deduction of taxes that an investor would pay on Fund distributions or the redemption of Fund shares, while the Index returns do not reflect the deduction of fees and expenses.)

The Fund's underperformance versus the benchmark Index was due to stock selection and industry allocation.

Portfolio performance summary¹

What worked

•  Industry allocation and stock selection within financials was successful during the period. Industry allocation within consumer discretionary was also successful. The Fund took several strong positions relative to the benchmark, and these were rewarded.

  – The Fund was underweight to financials, a weighting that contributed to active performance when that sector lagged the market during the period. The decision not to hold Berkshire Hathaway in the Fund also made a positive contribution. The Fund's insurance holdings, particularly Principal Financial Group and AFLAC, also contributed.

  – The Fund had an overweight position to the consumer discretionary sector, which outperformed as investors began to feel more confident about the economic recovery. The second round of quantitative easing by the Federal Reserve, the extension of unemployment benefits and the continuation of the Bush-era tax cuts all helped the market move higher during the six months.

•  Several stock holdings contributed positively to returns. The period was marked by unusually high correlations between stocks and market sectors. In a few cases, however, value events occurred that helped some stocks distinguish themselves.

  – The Fund's position in Fortune Brands made a significant contribution to returns. (For details, see "Portfolio highlights.")

  – Carnival Corp.'s news regarding the fire on one of its ships was a one-time incident that caused some volatility in share price performance during the period. But when the company reported strong earnings results, the stock moved higher. As the economy has continued to recover, Carnival has benefitted from an increasing demand for cruises, improving pricing power and low supply growth. (For additional details, see "Portfolio highlights.")

¹  For a detailed commentary on the market environment in general during the reporting period, see page 2.

44

UBS U.S. Equity Alpha Fund

•  Within technology, several positions were positive for performance.

  – Autodesk performed strongly as a way to profit from cyclical growth, and we trimmed the position in December. The demand for Autodesk's design software increased, which helped to move the company's earnings higher. The stock also benefited from improving industry trends, specifically hiring and spending, as the economic recovery continued.

  – Intuit was another successful holding during the review period. The company is the biggest provider of tax and personal finance software. Intuit reported higher forecasts that topped estimates during the third quarter, and announced plans for a $2 billion stock buyback. We sold out of our position after the stock performed well.

•  A short position in Amedisys contributed positively to relative returns. The Fund shorted Amedisys, a decision that was positive for performance when the company's shares experienced their sharpest decline in four years. The home health-care provider preannounced earnings that were worse than expected due to a large decline in recertification trends. In addition, Amedisys suspended their annual guidance, and the SEC is investigating the company. Our investment thesis for Amedisys was proven correct, and we sold out of the position before period-end.

What didn't work

•  Short positions in Netflix and Ford were the largest detractors from Fund performance during the six months.

  – Although Netflix was the largest detractor over the review period, our investment thesis started to work in December. After a US regulator endorsed higher fees for heavy web users, the stock traded lower on the news. (For details, see "Portfolio highlights.")

  – A short position in Ford Motor also detracted from the Fund's performance. The stock rose when Ford announced that its US sales had increased 46% in September, from a year earlier. We believe, however, that the current stock price reflects a long-term outcome that is unlikely to justify its valuation. (For details, see "Portfolio highlights.")

•  Hewlett-Packard was a negative contributor to relative returns. Shares of Hewlett-Packard tumbled after CEO Mark Hurd stepped down amid allegations of misconduct. We believe that this dramatic news may catch headlines in the short term, but that in the long term, strong execution and earnings visibility will be more important.

•  The Fund's position in Bank of America detracted from performance. Like many financial stocks, Bank of America has struggled for some time. We believe the company faces earnings headwinds in the near term, and we therefore sold the stock in order to pursue other opportunities in the sector.

•  Industry group weightings that hindered the Fund's performance included underweights to economically sensitive sectors. Over the review period, materials was the best-performing sector in the Index. The Fund was underweight to materials stocks, however, which detracted from results.

45

UBS U.S. Equity Alpha Fund

Portfolio highlights

•  Rumors of a breakup plan pushed shares of Fortune Brands higher in November. Later in the quarter, the company announced plans to split the company into as many as three separate businesses. The company intends to spin off its home and security unit to shareholders, and either sell or spin off its golf division. This would allow Fortune to focus on its successful wine and spirits division. We believe that the company's current earnings power and valuation are being negatively impacted by the housing market downturn and soft economy. We have confidence in management's ability to weather the current housing market challenge, given its good track record in past downturns.

•  We believe Carnival can benefit from increased consumer demand, and that sentiment on demand is too negative. We believe consumer demand has room to rise—even in a slow growth scenario—given the relative importance of vacations in consumer spending priorities, the value proposition of cruising and the relatively low penetration rates of cruising, particularly in Europe. Our research indicates that supply growth will slow significantly after 2011, even with a couple of new ship orders by smaller competitors. In any case, we believe Carnival's management has levers to pull that can offset margin pressures from higher fuel prices as the global economy recovers.

•  The Fund is short Netflix, reflecting our belief that the company faces serious headwinds in the intermediate term. These obstacles include the "net neutrality" proposal by the Federal Communications Commission, which calls for allowing network providers to manage traffic through pricing. We believe this would benefit broadband providers such as Comcast, while harming Netflix. In addition, the company's business offers low barriers to entry, and Netflix has a deficient library of content.

•  Ford, a short position in the portfolio, has been able to take advantage of the current environment to regain some of the market share it had given up over the last few years. The company was able to avert bankruptcy this past year, and has a solid lineup of new vehicles coming out in showrooms during the next few years. In addition, CEO Alan Mulally's turnaround efforts have exceeded expectations to date. We believe, however, that the stock price reflects these developments and more. While we expect to see tremendous operating and financial leverage as the economic recovery plays out, we do not expect the market to pay very much for Ford's earnings, nor do we expect those earnings to be sustainable.

This letter is intended to assist shareholders in understanding how the Fund performed during the six months ended December 31, 2010. The views and opinions in the letter were current as of February 15, 2011. They are not guarantees of future 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.

46

UBS U.S. Equity Alpha Fund

Average annual total returns for periods ended 12/31/10 (unaudited)

	6 months			1 year			Inception1
Before deducting maximum sales charge
Class A2		21.83	%		7.83	%		(1.80	)%
Class C3		21.50			7.12			(2.51	)
Class Y4		22.05			8.02			(1.56	)
After deducting maximum sales charge
Class A2		15.09	%		1.91	%		(3.09	)%
Class C3		20.50			6.12			(2.51	)
Russell 1000 Index5		24.03	%		16.10	%		1.20	%

The annualized gross and net expense ratios, respectively, for each class of shares as in the October 28, 2010 prospectuses were as follows: Class A—2.47% and 2.27%; Class C—3.30% and 3.01%; Class Y—2.19% and 2.03%. 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 UBS Global Asset Management (Americas) Inc., the Fund's investment advisor ("UBS Global AM (Americas)" or 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, interest, taxes, brokerage commissions, extraordinary expenses and securities loan fees and dividend expenses for securities sold short) to the extent necessary so that the Fund's ordinary operating expenses (excluding expenses incurred through investment in other investment companies, interest, taxes, brokerage commissions, extraordinary expenses and securities loan fees and dividend expenses for securities sold short), through the 12-month period ending October 27, 2011, 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 all shares of UBS U.S. Equity Alpha Fund 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 is designed to measure the performance of the large-cap segment of the US equity universe. It is a subset of the Russell 3000 Index and includes approximately 1,000 of the largest securities based on a combination of their market cap and current index membership. The Russell 1000 represents approximately 92% of the Russell 3000 Index. The Russell 1000 Index is constructed to provide a comprehensive and unbiased barometer for the large-cap segment and is completely reconstituted annually to ensure new and growing equities are reflected. 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. Total returns for periods of less than one year have not been annualized. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://www.ubs.com.

47

UBS U.S. Equity Alpha Fund

Top ten equity holdings (unaudited)^1,2

As of December 31, 2010

	Percentage of net assets
Exxon Mobil Corp.		5.0	%
Procter & Gamble Co.		3.2
Apple, Inc.		3.2
Wells Fargo & Co.		2.9
PepsiCo, Inc.		2.6
AT&T, Inc.		2.4
JPMorgan Chase & Co.		2.3
Kroger Co.		2.2
General Dynamics Corp.		2.1
Adobe Systems, Inc.		2.1
Total		28.0	%

¹  Only long positions are considered for top ten holdings.

²  Figures represent the direct investments of UBS U.S. Equity Alpha Fund. Figures would be different if a breakdown of the underlying investment company was included.

48

UBS U.S. Equity Alpha Fund

Industry diversification (unaudited)¹

As a percentage of net assets as of December 31, 2010

Common stocks
Aerospace & defense	3.27	%
Air freight & logistics	1.79
Airlines	0.91
Auto components	1.49
Automobiles	1.46
Beverages	2.61
Biotechnology	1.66
Capital markets	3.96
Chemicals	3.03
Commercial banks	4.48
Communications equipment	3.71
Computers & peripherals	6.07
Diversified consumer services	0.75
Diversified financial services	3.24
Diversified telecommunication services	2.43
Electric utilities	4.08
Energy equipment & services	3.79
Food & staples retailing	2.19
Food products	1.24
Health care equipment & supplies	6.21
Health care providers & services	1.75
Hotels, restaurants & leisure	2.76
Household durables	1.43
Household products	3.23
Insurance	5.06
Internet & catalog retail	0.52
IT services	1.17
Machinery	5.33
Media	5.50
Metals & mining	1.20
Multi-utilities	0.76
Oil, gas & consumable fuels	8.82
Personal products	1.28
Pharmaceuticals	4.75
Road & rail	1.62
Semiconductors & semiconductor equipment	4.24
Software	6.82
Specialty retail	3.42
Total common stocks	118.03	%
Investment company
SPDR S&P 500 ETF Trust	1.98	%
Short-term investment	1.45
Total investments before investments sold short	121.46	%
Investments sold short
Common stocks
Aerospace & defense	(0.90	)
Automobiles	(0.89	)
Beverages	(0.53	)
Commercial banks	(0.53	)
Computers & peripherals	(0.92	)
Diversified telecommunication services	(0.95	)
Energy equipment & services	(0.71	)
Hotels, restaurants & leisure	(0.72	)
Household products	(0.60	)
Insurance	(0.67	)
Internet & catalog retail	(0.83	)
IT services	(0.54	)
Media	(1.21	)
Multiline retail	(1.25	)
Multi-utilities	(1.78	)
Oil, gas & consumable fuels	(1.62	)
Pharmaceuticals	(1.28	)
Semiconductors & semiconductor equipment	(0.71	)
Software	(1.37	)
Specialty retail	(1.27	)
Trading companies & distributors	(0.73	)
Water utilities	(1.21	)
Total investments sold short	(21.22	)%
Total investments, net of investments sold short	100.24
Liabilities, in excess of cash and other assets	(0.24	)
Net assets	100.00	%

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

49

UBS U.S. Equity Alpha Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Shares		Value
Common stocks: 118.03%
Aerospace & defense: 3.27%
General Dynamics Corp.1		11,200	$	794,752
Raytheon Co.1		9,700		449,498
				1,244,250
Air freight & logistics: 1.79%
FedEx Corp.1		7,300		678,973
Airlines: 0.91%
Southwest Airlines Co.1		26,600		345,268
Auto components: 1.49%
Johnson Controls, Inc.1		14,800		565,360
Automobiles: 1.46%
General Motors Co.*1		15,100		556,586
Beverages: 2.61%
PepsiCo, Inc.1		15,200		993,016
Biotechnology: 1.66%
Alexion Pharmaceuticals, Inc.*1		2,600		209,430
Amgen, Inc.*1		6,000		329,400
Amylin Pharmaceuticals, Inc.*1		6,400		94,144
				632,974
Capital markets: 3.96%
Bank of New York Mellon Corp.1		17,906		540,761
Goldman Sachs Group, Inc.1		3,600		605,376
Morgan Stanley1		13,200		359,172
				1,505,309
Chemicals: 3.03%
Air Products & Chemicals, Inc.1		2,100		190,995
Celanese Corp., Series A1		4,800		197,616
Dow Chemical Co.1		11,100		378,954
Monsanto Co.1		5,500		383,020
				1,150,585
Commercial banks: 4.48%
US Bancorp1		22,200		598,734
Wells Fargo & Co.1		35,700		1,106,343
				1,705,077
Communications equipment: 3.71%
Cisco Systems, Inc.*1		30,800		623,084
QUALCOMM, Inc.1		15,900		786,891
				1,409,975

	Shares		Value
Computers & peripherals: 6.07%
Apple, Inc.*1		3,800	$	1,225,728
Hewlett-Packard Co.1		16,700		703,070
Seagate Technology PLC*1		25,300		380,259
				2,309,057
Diversified consumer services: 0.75%
Apollo Group, Inc., Class A*1		7,200		284,328
Diversified financial services: 3.24%
Citigroup, Inc.*1		79,100		374,143
JPMorgan Chase & Co.1		20,200		856,884
				1,231,027
Diversified telecommunication services: 2.43%
AT&T, Inc.1		31,400		922,532
Electric utilities: 4.08%
American Electric Power Co., Inc.1		19,300		694,414
Edison International1		9,600		370,560
FirstEnergy Corp.1		13,100		484,962
				1,549,936
Energy equipment & services: 3.79%
Baker Hughes, Inc.1		12,800		731,776
Noble Corp.1		19,800		708,246
				1,440,022
Food & staples retailing: 2.19%
Kroger Co.1		37,200		831,792
Food products: 1.24%
Kellogg Co.1		9,200		469,936
Health care equipment & supplies: 6.21%
Baxter International, Inc.1		7,500		379,650
Boston Scientific Corp.*1		35,300		267,221
Covidien PLC1		15,200		694,032
Medtronic, Inc.1		19,100		708,419
Zimmer Holdings, Inc.*1		5,800		311,344
				2,360,666
Health care providers & services: 1.75%
UnitedHealth Group, Inc.1		18,400		664,424
Hotels, restaurants & leisure: 2.76%
Carnival Corp.1		16,200		746,982
International Game Technology1		17,200		304,268
				1,051,250
Household durables: 1.43%
Fortune Brands, Inc.1		9,000		542,250

50

UBS U.S. Equity Alpha Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Shares		Value
Common stocks—(Concluded)
Household products: 3.23%
Procter & Gamble Co.1		19,100	$	1,228,703
Insurance: 5.06%
Aflac, Inc.1		12,300		694,089
MetLife, Inc.1		16,200		719,928
Principal Financial Group, Inc.1		15,600		507,936
				1,921,953
Internet & catalog retail: 0.52%
Amazon.com, Inc.*1		1,100		198,000
IT services: 1.17%
Visa, Inc., Class A1		6,300		443,394
Machinery: 5.33%
Dover Corp.1		9,500		555,275
Illinois Tool Works, Inc.1		14,300		763,620
PACCAR, Inc.1		6,600		378,972
Pall Corp.1		6,600		327,228
				2,025,095
Media: 5.50%
Comcast Corp., Class A1		34,400		755,768
Interpublic Group of Cos., Inc.*		16,545		175,708
Time Warner, Inc.1		18,700		601,579
Viacom, Inc., Class B1		14,100		558,501
				2,091,556
Metals & mining: 1.20%
Steel Dynamics, Inc.1		25,000		457,500
Multi-utilities: 0.76%
MDU Resources Group, Inc.1		14,300		289,861
Oil, gas & consumable fuels: 8.82%
Exxon Mobil Corp.1		26,000		1,901,120
Hess Corp.1		5,300		405,662
Marathon Oil Corp.1		10,700		396,221
Ultra Petroleum Corp.*1		13,600		649,672
				3,352,675
Personal products: 1.28%
Avon Products, Inc.1		16,700		485,302
Pharmaceuticals: 4.75%
Allergan, Inc.1		7,100		487,557
Johnson & Johnson1		10,600		655,610
Merck & Co., Inc.1		18,400		663,136
				1,806,303

	Shares			Value
Road & rail: 1.62%
Ryder System, Inc.1		11,700		$	615,888
Semiconductors & semiconductor equipment: 4.24%
Applied Materials, Inc.1		26,700			375,135
Broadcom Corp., Class A1		7,400			322,270
Intersil Corp., Class A1		22,100			337,467
Marvell Technology Group Ltd.*1		11,800			218,890
National Semiconductor Corp.1		26,100			359,136
					1,612,898
Software: 6.82%
Adobe Systems, Inc.*1		25,700			791,046
Autodesk, Inc.*1		17,000			649,400
Microsoft Corp.1		21,600			603,072
Symantec Corp.*1		32,900			550,746
					2,594,264
Specialty retail: 3.42%
GameStop Corp., Class A*1		18,900			432,432
Home Depot, Inc.1		8,200			287,492
Lowe's Cos., Inc.1		23,100			579,348
					1,299,272
Total common stocks (cost $37,672,847)					44,867,257
Investment company: 1.98%
SPDR S&P 500 ETF Trust (cost $754,108)		6,000			754,680
Short-term investment: 1.45%
Investment company: 1.45%
UBS Cash Management Prime Relationship Fund2 (cost $549,430)		549,430			549,430
Total investments before investments sold short: 121.46% (cost $38,976,385)					46,171,367
Investments sold short: (21.22)%
Common stocks: (21.22)%
Aerospace & defense: (0.90)%
Goodrich Corp.		(3,900	)		(343,473	)
Automobiles: (0.89)%
Ford Motor Co.		(20,100	)		(337,479	)
Beverages: (0.53)%
Constellation Brands, Inc., Class A		(9,100	)		(201,565	)
Commercial banks: (0.53)%
BB&T Corp.		(7,600	)		(199,804	)

51

UBS U.S. Equity Alpha Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Shares			Value
Investments sold short—(Concluded)
Common stocks—(Concluded)
Computers & peripherals: (0.92)%
EMC Corp.		(6,800	)	$	(155,720	)
NetApp, Inc.		(3,500	)		(192,360	)
					(348,080	)
Diversified telecommunication services: (0.95)%
Qwest Communications International, Inc.		(47,600	)		(362,236	)
Energy equipment & services: (0.71)%
Halliburton Co.		(6,600	)		(269,478	)
Hotels, restaurants & leisure: (0.72)%
Starwood Hotels & Resorts Worldwide, Inc.		(4,500	)		(273,510	)
Household products: (0.60)%
Church & Dwight Co., Inc.		(3,300	)		(227,766	)
Insurance: (0.67)%
Travelers Cos., Inc.		(4,600	)		(256,266	)
Internet & catalog retail: (0.83)%
NetFlix, Inc.		(1,800	)		(316,260	)
IT services: (0.54)%
Cognizant Technology Solutions Corp., Class A		(2,800	)		(205,212	)
Media: (1.21)%
Discovery Communications, Inc., Class A		(4,900	)		(204,330	)
Lamar Advertising Co., Class A		(6,400	)		(254,976	)
					(459,306	)
Multiline retail: (1.25)%
Dollar General Corp.		(9,300	)		(285,231	)
Sears Holdings Corp.		(2,600	)		(191,750	)
					(476,981	)
Multi-utilities: (1.78)%
Consolidated Edison, Inc.		(5,700	)		(282,549	)
Integrys Energy Group, Inc.		(4,800	)		(232,848	)
NSTAR		(3,800	)		(160,322	)
					(675,719	)
Oil, gas & consumable fuels: (1.62)%
Occidental Petroleum Corp.		(2,900	)		(284,490	)
Pioneer Natural Resources Co.		(3,800	)		(329,916	)
					(614,406	)

	Shares			Value
Pharmaceuticals: (1.28)%
Eli Lilly & Co.		(7,700	)	$	(269,808	)
Hospira, Inc.		(3,900	)		(217,191	)
					(486,999	)
Semiconductors & semiconductor equipment: (0.71)%
Novellus Systems, Inc.		(8,400	)		(271,488	)
Software: (1.37)%
BMC Software, Inc.		(6,800	)		(320,552	)
Compuware Corp.		(17,100	)		(199,557	)
					(520,109	)
Specialty retail: (1.27)%
O'Reilly Automotive, Inc.		(4,600	)		(277,932	)
TJX Cos., Inc.		(4,600	)		(204,194	)
					(482,126	)
Trading companies & distributors: (0.73)%
WW Grainger, Inc.		(2,000	)		(276,220	)
Water utilities: (1.21)%
American Water Works Co., Inc.		(9,100	)		(230,139	)
Aqua America, Inc.		(10,200	)		(229,296	)
					(459,435	)
Total investments sold short (proceeds $6,142,247)					(8,063,918	)
Total investments, net of investments sold short: 100.24%					38,107,449
Liabilities, in excess of cash and other assets: (0.24)%					(93,036	)
Net assets: 100.00%				$	38,014,413

52

UBS U.S. Equity Alpha Fund

Portfolio of investments

December 31, 2010 (unaudited)

Concluded

Notes to portfolio of investments

Aggregate cost for federal income tax purposes, before investments sold short, was substantially the same as for book purposes; and net unrealized appreciation consisted of:

Gross unrealized appreciation	$	7,799,896
Gross unrealized depreciation		(604,914	)
Net unrealized appreciation of investments	$	7,194,982

*  Non-income producing security.

¹  All or a portion of these securities have been designated as collateral for open short positions.

²  The table below details the Fund's investments in a fund that is advised by the same advisor as the Fund. The advisor does not earn a management fee from the affiliated UBS Cash Management Prime Relationship Fund.

Security description	Value 06/30/10		Purchases during the six months ended 12/31/10		Sales during the six months ended 12/31/10		Value 12/31/10		Income earned from affiliate for the six months ended 12/31/10
UBS Cash Management Prime Relationship Fund	$	443,436	$	10,423,803	$	10,317,809	$	549,430	$	550

ETF  Exchange Traded Fund

SPDR  Standard & Poor's Depository Receipts

The following is a summary of the inputs used as of December 31, 2010 in valuing the Fund's investments:

Measurements at 12/31/10
Description	Unadjusted quoted prices in active markets for identical investments (Level 1)			Other significant observable inputs (Level 2)		Unobservable inputs (Level 3)		Total
Common stocks	$	44,867,257		$	—		—	$	44,867,257
Common stocks sold short		(8,063,918	)		—		—		(8,063,918	)
Investment company		754,680			—		—		754,680
Short-term investment		—			549,430		—		549,430
Total	$	37,558,019		$	549,430		—	$	38,107,449

See accompanying notes to financial statements.
53

UBS U.S. Large Cap Equity Fund

Portfolio performance

For the six months ended December 31, 2010, Class A shares of UBS U.S. Large Cap Equity Fund (the "Fund") returned 23.31% (Class A shares returned 16.57% after the deduction of the maximum sales charge), while Class Y shares returned 23.40%. The Fund's benchmark, the Russell 1000 Index (the "Index"), returned 24.03% 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 57; please note that the Fund's returns do not reflect the deduction of taxes that an investor would pay on Fund distributions or the redemption of Fund shares, while the Index returns do not reflect the deduction of fees and expenses.)

The Fund's underperformance versus the Index was mostly due to industry allocation. Stock selection was positive for the six months.

Portfolio performance summary¹

What worked

•  Industry allocation and stock selection within consumer discretionary and financials were successful during the period. The Fund took several strong positions relative to the benchmark, and these were rewarded.

  – The Fund was underweight to financials, a weighting that contributed to active performance when that sector lagged the market during the period. The decision not to hold Berkshire Hathaway in the Fund also made a positive contribution. The Fund's insurance holdings, particularly Principal Financial Group and AFLAC, also contributed positively.

  – The Fund had an overweight position to the consumer discretionary sector, which outperformed as investors began to feel more confident about the economic recovery. The second round of quantitative easing by the Federal Reserve, the extension of unemployment benefits and the continuation of the Bush-era tax cuts all helped the market move higher during the six months.

•  Several stock holdings contributed positively to returns. The period was marked by unusually high correlations between stocks and market sectors. In a few cases, however, value events occurred that helped some stocks distinguish themselves.

  – The Fund's position in Fortune Brands made a significant contribution to returns. (For details, see "Portfolio highlights.")

  – Carnival Corp.'s news regarding the fire on one of its ships was a one-time incident that caused some volatility in share price performance during the period. But when the company reported strong earnings results, the stock moved higher. As the economy has continued to recover, Carnival has benefitted from an increasing demand for cruises, improving pricing power and low supply growth. (For additional details, see "Portfolio highlights.")

¹  For a detailed commentary on the market environment in general during the reporting period, see page 2.

54

UBS U.S. Large Cap Equity Fund

•  Within technology, several positions were positive for performance.

  – Autodesk performed strongly, and we trimmed the position in December. The demand for Autodesk's design software increased, which helped to move the company's earnings higher. The stock also benefited from improving industry trends, specifically hiring and spending, as the economic recovery continued.

  – Intuit was another successful holding during the review period. The company is the biggest provider of tax and personal finance software. Intuit reported higher forecasts that topped estimates during the third quarter, and announced plans for a $2 billion stock buyback. We sold out of our position after the stock performed well.

What didn't work

•  The largest detractor from Fund performance during the six months was Bank of America. Like many financial stocks, Bank of America has struggled for some time. We believe the company faces earnings headwinds in the near term, and we therefore sold the stock in order to pursue other opportunities in the sector.

•  Hewlett-Packard was a negative contributor to relative returns. Shares of Hewlett-Packard tumbled after CEO Mark Hurd stepped down amid allegations of misconduct. We believe that this dramatic news may catch headlines in the short term, but that in the long term, strong execution and earnings visibility will be more important.

•  Apollo Group detracted from Fund performance during the six months. Apollo specializes in providing higher education programs for working adults. The for-profit education sector came under intense regulatory scrutiny during the fourth quarter, and the company's share price underperformed. (For details, see "Portfolio highlights.")

•  Industry group weightings that hindered the Fund included underweights to economically sensitive sectors. Over the review period, materials was the best-performing sector in the Index. The Fund was underweight to materials stocks, however, which detracted from results.

Portfolio highlights

•  Rumors of a breakup plan pushed shares of Fortune Brands higher in November. Later in the quarter, the company announced plans to split the company into as many as three separate businesses. The company intends to spin off its home and security unit to shareholders, and either sell or spin off its golf division. This would allow Fortune to focus on its successful wine and spirits division. We believe that the company's current earnings power and valuation are being negatively impacted by the housing market downturn and soft economy. We have confidence in management's ability to weather the current housing market challenge, given its good track record in past downturns.

•  We believe Carnival can benefit from increased consumer demand, and that sentiment on demand is too negative. We believe consumer demand has room to rise—even in a slow growth scenario—given the relative importance of vacations in consumer spending priorities, the value proposition of cruising and the relatively low penetration rates of cruising, particularly in Europe. Our research indicates that supply growth will slow significantly after 2011, even with a couple of new ship orders by smaller competitors. In any case, we believe Carnival's management has levers to pull that can offset margin pressures from higher fuel prices as the global economy recovers.

55

UBS U.S. Large Cap Equity Fund

•  Apollo Group suffered a sharp decline in enrollment in 2010 versus the prior year, after it altered its enrollment practices. Concerns about student loan defaults and possible government regulation put pressure on the stock for much of the year. Over the past few years, we believe Apollo has worked hard to put the long-term success of the student at the heart of the company's own long-term success, and has been implementing investments to back that up.

This letter is intended to assist shareholders in understanding how the Fund performed during the six months ended December 31, 2010. The views and opinions in the letter were current as of February 15, 2011. They are not guarantees of future 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.

56

UBS U.S. Large Cap Equity Fund

Average annual total returns for periods ended 12/31/10 (unaudited)

	6 months			1 year			5 years			10 years			Inception1
Before deducting maximum sales charge
Class A2		23.31	%		13.14	%		0.37	%		3.24	%		4.05	%
Class B3		22.80			12.29			(0.39	)		N/A			3.63 6
Class C4		22.88			12.34			(0.36	)		N/A			3.09
Class Y5		23.40			13.39			0.64			3.54			7.90
After deducting maximum sales charge
Class A2		16.57	%		6.93	%		(0.76	)%		2.66	%		3.61	%
Class B3		17.80			7.29			(0.75	)		N/A			3.63 6
Class C4		21.88			11.34			(0.36	)		N/A			3.09
Russell 1000 Index7		24.03	%		16.10	%		2.59	%		1.83	%		8.21	%

The annualized gross and net expense ratios, respectively, for each class of shares as in the October 28, 2010 prospectuses were as follows: Class A—1.33% and 1.20%; Class B—2.10% and 1.95%; Class C—2.01% and 1.95%; 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 UBS Global Asset Management (Americas) Inc., the Fund's investment advisor ("UBS Global AM (Americas)" or 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, interest, taxes, brokerage commissions and extraordinary expenses) to the extent necessary so that the Fund's ordinary operating expenses (excluding expenses incurred through investment in other investment companies, interest, taxes, brokerage commissions and extraordinary expenses), through the 12-month period ending October 27, 2011, do not exceed 1.20% for Class A shares, 1.95% for Class B shares, 1.95% 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 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. Prior to September 30, 2003, Class C shares were subject to a maximum front-end sales charge of 1.00%; this front-end sales charge is not reflected in the average annual total returns presented for the Class C shares shown above.

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  Assumes the conversion of Class B to Class A shares at the end of the sixth year.

⁷  The Russell 1000 Index is designed to measure the performance of the large-cap segment of the US equity universe. It is a subset of the Russell 3000 Index and includes approximately 1,000 of the largest securities based on a combination of their market cap and current index membership. The Russell 1000 represents approximately 92% of the Russell 3000 Index. The Russell 1000 Index is constructed to provide a comprehensive and unbiased barometer for the large-cap segment and is completely reconstituted annually to ensure new and growing equities are reflected. 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. Total returns for periods of less than one year have not been annualized. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://www.ubs.com.

57

UBS U.S. Large Cap Equity Fund

Top ten equity holdings (unaudited)

As of December 31, 2010

	Percentage of net assets
Exxon Mobil Corp.		4.2	%
Apple, Inc.		3.2
Wells Fargo & Co.		2.4
JPMorgan Chase & Co.		2.3
AT&T, Inc.		2.1
Carnival Corp.		2.0
Comcast Corp., Class A		2.0
Johnson & Johnson		2.0
General Dynamics Corp.		1.9
Aflac, Inc.		1.9
Total		24.0	%

Industry diversification (unaudited)

As a percentage of net assets as of December 31, 2010

Common stocks
Aerospace & defense	2.72	%
Air freight & logistics	1.39
Airlines	0.88
Auto components	1.44
Automobiles	1.13
Beverages	1.87
Biotechnology	2.37
Capital markets	3.17
Chemicals	2.15
Commercial banks	3.92
Communications equipment	3.29
Computers & peripherals	5.60
Diversified consumer services	0.67
Diversified financial services	3.25
Diversified telecommunication services	2.07
Electric utilities	2.59
Energy equipment & services	2.78
Food & staples retailing	1.42
Food products	1.05
Health care equipment & supplies	4.34
Health care providers & services	1.63
Hotels, restaurants & leisure	2.79
Household durables	1.76
Household products	1.78
Insurance	4.19
IT services	0.91
Machinery	4.83
Media	4.93
Oil, gas & consumable fuels	8.30
Personal products	1.33
Pharmaceuticals	4.88
Road & rail	0.96
Semiconductors & semiconductor equipment	4.04
Software	5.58
Specialty retail	2.22
Total common stocks	98.23	%
Short-term investment	1.95
Investment of cash collateral from securities loaned	0.18
Total investments	100.36	%
Liabilities, in excess of cash and other assets	(0.36	)
Net assets	100.00	%

58

UBS U.S. Large Cap Equity Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Shares		Value
Common stocks: 98.23%
Aerospace & defense: 2.72%
General Dynamics Corp.		65,700	$	4,662,072
Raytheon Co.		39,800		1,844,332
				6,506,404
Air freight & logistics: 1.39%
FedEx Corp.		35,900		3,339,059
Airlines: 0.88%
Southwest Airlines Co.		162,100		2,104,058
Auto components: 1.44%
Johnson Controls, Inc.		90,100		3,441,820
Automobiles: 1.13%
General Motors Co.*		73,500		2,709,210
Beverages: 1.87%
PepsiCo, Inc.		68,700		4,488,171
Biotechnology: 2.37%
Alexion Pharmaceuticals, Inc.*		16,300		1,312,965
Amgen, Inc.*		37,300		2,047,770
Amylin Pharmaceuticals, Inc.*1		41,100		604,581
Genzyme Corp.*		24,000		1,708,800
				5,674,116
Capital markets: 3.17%
Bank of New York Mellon Corp.		91,383		2,759,766
Goldman Sachs Group, Inc.		18,300		3,077,328
Morgan Stanley		63,908		1,738,937
				7,576,031
Chemicals: 2.15%
Celanese Corp., Series A		28,700		1,181,579
Dow Chemical Co.		60,600		2,068,884
Monsanto Co.		27,300		1,901,172
				5,151,635
Commercial banks: 3.92%
US Bancorp		133,000		3,587,010
Wells Fargo & Co.		187,400		5,807,526
				9,394,536
Communications equipment: 3.29%
Cisco Systems, Inc.*		199,500		4,035,885
QUALCOMM, Inc.		77,800		3,850,322
				7,886,207

	Shares		Value
Computers & peripherals: 5.60%
Apple, Inc.*		23,500	$	7,580,160
Hewlett-Packard Co.		86,800		3,654,280
Seagate Technology		143,700		2,159,811
				13,394,251
Diversified consumer services: 0.67%
Apollo Group, Inc., Class A*		40,400		1,595,396
Diversified financial services: 3.25%
Citigroup, Inc.*		503,200		2,380,136
JPMorgan Chase & Co.		127,300		5,400,066
				7,780,202
Diversified telecommunication services: 2.07%
AT&T, Inc.		168,800		4,959,344
Electric utilities: 2.59%
American Electric Power Co., Inc.		110,800		3,986,584
FirstEnergy Corp.		59,700		2,210,094
				6,196,678
Energy equipment & services: 2.78%
Baker Hughes, Inc.		55,300		3,161,501
Noble Corp.		97,400		3,483,998
				6,645,499
Food & staples retailing: 1.42%
Kroger Co.		151,500		3,387,540
Food products: 1.05%
Kellogg Co.		49,200		2,513,136
Health care equipment & supplies: 4.34%
Baxter International, Inc.		43,500		2,201,970
Boston Scientific Corp.*		159,800		1,209,686
Covidien PLC		83,500		3,812,610
Medtronic, Inc.		85,000		3,152,650
				10,376,916
Health care providers & services: 1.63%
UnitedHealth Group, Inc.		107,800		3,892,658
Hotels, restaurants & leisure: 2.79%
Carnival Corp.		104,100		4,800,051
International Game Technology		106,800		1,889,292
				6,689,343
Household durables: 1.76%
Fortune Brands, Inc.		69,800		4,205,450

59

UBS U.S. Large Cap Equity Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Shares		Value
Common stocks—(Concluded)
Household products: 1.78%
Procter & Gamble Co.		66,100	$	4,252,213
Insurance: 4.19%
Aflac, Inc.		80,000		4,514,400
MetLife, Inc.		76,700		3,408,548
Principal Financial Group, Inc.		64,400		2,096,864
				10,019,812
IT services: 0.91%
Visa, Inc., Class A		30,900		2,174,742
Machinery: 4.83%
Dover Corp.		62,300		3,641,435
Illinois Tool Works, Inc.		83,200		4,442,880
PACCAR, Inc.		20,850		1,197,207
Pall Corp.		46,200		2,290,596
				11,572,118
Media: 4.93%
Comcast Corp., Class A		218,000		4,789,460
Interpublic Group of Cos., Inc.*		63,800		677,556
Time Warner, Inc.		115,400		3,712,418
Viacom, Inc., Class B		66,000		2,614,260
				11,793,694
Oil, gas & consumable fuels: 8.30%
Exxon Mobil Corp.		136,800		10,002,816
Hess Corp.		42,900		3,283,566
Marathon Oil Corp.		74,700		2,766,141
Ultra Petroleum Corp.*1		79,977		3,820,502
				19,873,025
Personal products: 1.33%
Avon Products, Inc.		109,800		3,190,788
Pharmaceuticals: 4.88%
Allergan, Inc.		53,300		3,660,111
Johnson & Johnson		77,300		4,781,005
Merck & Co., Inc.		89,600		3,229,184
				11,670,300
Road & rail: 0.96%
Ryder System, Inc.		43,800		2,305,632

	Shares		Value
Semiconductors & semiconductor equipment: 4.04%
Applied Materials, Inc.		104,100	$	1,462,605
Broadcom Corp., Class A		59,300		2,582,515
Intersil Corp., Class A		124,400		1,899,588
Marvell Technology Group Ltd.*		97,300		1,804,915
National Semiconductor Corp.		139,400		1,918,144
				9,667,767
Software: 5.58%
Adobe Systems, Inc.*		144,100		4,435,398
Autodesk, Inc.*		69,300		2,647,260
Microsoft Corp.		137,800		3,847,376
Symantec Corp.*		145,500		2,435,670
				13,365,704
Specialty retail: 2.22%
GameStop Corp., Class A*		95,300		2,180,464
Lowe's Cos., Inc.		124,900		3,132,492
				5,312,956
Total common stocks (cost $193,814,101)				235,106,411
Short-term investment: 1.95%
Investment company: 1.95%
UBS Cash Management Prime Relationship Fund2 (cost $4,665,034)		4,665,034		4,665,034
Investment of cash collateral from securities loaned: 0.18%
UBS Private Money Market Fund LLC2 (cost $441,875)		441,875		441,875
Total investments: 100.36%(cost $198,921,010)				240,213,320
Liabilities, in excess of cash and other assets: (0.36)%				(852,159	)
Net assets: 100.00%			$	239,361,161

60

UBS U.S. Large Cap Equity Fund

Portfolio of investments

December 31, 2010 (unaudited)

Notes to portfolio of investments

Aggregate cost for federal income tax purposes was substantially the same as for book purposes; and net unrealized appreciation consisted of:

Gross unrealized appreciation	$	44,594,474
Gross unrealized depreciation		(3,302,164	)
Net unrealized appreciation of investments	$	41,292,310

*  Non-income producing security.

¹  Security, or portion thereof, was on loan at December 31, 2010.

²  The table below details the Fund's investments in funds advised by the same advisor as the Fund. The advisor does not earn a management fee from the affiliated UBS Relationship Fund.

Security description	Value 06/30/10		Purchases during the six months ended 12/31/10		Sales during the six months ended 12/31/10		Value 12/31/10		Income earned from affiliate for the six months ended 12/31/10
UBS Cash Management Prime Relationship Fund	$	5,489,875	$	21,554,746	$	22,379,587	$	4,665,034	$	4,836
UBS Private Money Market Fund LLC1		—		27,334,813		26,892,938		441,875		446
	$	5,489,875	$	48,889,559	$	49,272,525	$	5,106,909	$	5,282

¹  The advisor does earn a management fee from this affiliated fund, and any income earned is net of expenses. Please see the Notes to financial statements in the most recent shareholder report for further information.

Futures contracts

UBS U.S. Large Cap Equity Fund had the following open futures contracts as of December 31, 2010:

	Expiration date	Cost		Value		Unrealized appreciation
Index futures buy contracts:
S&P 500 Index, 5 contracts (USD)	March 2011	$	1,563,767	$	1,566,250	$	2,483

Currency type abbreviation:

USD  United States Dollar

61

UBS U.S. Large Cap Equity Fund

Portfolio of investments

December 31, 2010 (unaudited)

Concluded

The following is a summary of the inputs used as of December 31, 2010 in valuing the Fund's investments:

Measurements at 12/31/10
Description	Unadjusted quoted prices in active markets for identical investments (Level 1)		Other significant observable inputs (Level 2)		Unobservable inputs (Level 3)		Total
Common stocks	$	235,106,411	$	—	$	—	$	235,106,411
Short-term investment		—		4,665,034		—		4,665,034
Investment of cash collateral from securities loaned		—		441,875		—		441,875
Other financial instruments1		2,483		—		—		2,483
Total	$	235,108,894	$	5,106,909	$	—	$	240,215,803

¹  Other financial instruments include futures contracts.

See accompanying notes to financial statements.
62

UBS U.S. Large Cap Value Equity Fund

Portfolio performance

For the six months ended December 31, 2010, Class A shares of UBS U.S. Large Cap Value Equity Fund (the "Fund") returned 21.71% (Class A shares returned 15.02% after the deduction of the maximum sales charge), while Class Y shares returned 22.09%. The Fund's benchmark, the Russell 1000 Value Index (the "Index"), returned 21.74% 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 66; please note that the Fund's returns do not reflect the deduction of taxes that an investor would pay on Fund distributions or the redemption of Fund shares, while the Index returns do not reflect the deduction of fees and expenses.)

The Fund performed in line with the Index. Performance was driven primarily by industry allocation, while stock selection generated positive results as well.

Portfolio performance summary¹

What worked

•  Industry allocation and stock selection within consumer discretionary and financials were successful during the period. The Fund took several strong positions relative to the benchmark, and these were rewarded.

  – The Fund was underweight to financials, a weighting that contributed to active performance when that sector lagged the market during the period. The decision not to hold Berkshire Hathaway in the Fund also made a positive contribution. The Fund's insurance holdings, particularly Principal Financial Group and AFLAC, also contributed.

  – The Fund had an overweight position to the consumer discretionary sector, which outperformed as investors began to feel more confident about the economic recovery. The second round of quantitative easing by the Federal Reserve, the extension of unemployment benefits and the continuation of the Bush-era tax cuts all helped the market move higher during the six months.

•  Several stock holdings contributed positively to returns. The period was marked by unusually high correlations between stocks and market sectors. In a few cases, however, value events occurred that helped some stocks distinguish themselves.

  – Carnival Corp. was the largest contributor to Fund returns during the six months. News regarding the fire on one of Carnival's ships was a one-time incident that caused some volatility in share price performance during the period. But when the company reported strong earnings results, the stock moved higher. As the economy has continued to recover, Carnival has benefitted from an increasing demand for cruises, improving pricing power and low supply growth. (For additional details, see "Portfolio highlights.")

  – The Fund's position in Fortune Brands made a significant contribution to returns. (For details, see "Portfolio highlights.")

¹  For a detailed commentary on the market environment in general during the reporting period, see page 2.

63

UBS U.S. Large Cap Value Equity Fund

•  Several energy stocks benefited Fund returns. Cyclical sectors such as energy and materials were some of the best performing sectors during the period.

  – The Fund's position in Baker Hughes made a positive contribution for the period when rising oil prices and the increasing number of US oil rigs helped to move the company's share price higher.

  – We bought shares of Anadarko Petroleum² when its price declined during the oil spill in the Gulf of Mexico. Because the company was a drilling partner of BP, investors feared it would face steep financial penalties. We believed the company bore limited exposure to the spill, and initiated a new position. When the crisis passed, the stock recovered strongly, and our position was rewarded.

•  Within technology, several positions were positive for performance. Notably, Autodesk² performed strongly, and we trimmed the position in December. The demand for Autodesk's design software increased, which helped to move the company's earnings higher. The stock also benefited from improving industry trends, specifically hiring and spending, as the economic recovery continued.

What didn't work

•  The largest detractor from Fund performance during the six months was Bank of America. Like many financial stocks, Bank of America has struggled for some time. We believe the company faces earnings headwinds in the near term, and we therefore sold the stock in order to pursue other opportunities in the sector.

•  Hewlett-Packard was a negative contributor to relative returns. Shares of Hewlett-Packard tumbled after CEO Mark Hurd stepped down amid allegations of misconduct. We believe that this dramatic news may catch headlines in the short term, but that in the long term, strong execution and earnings visibility will be more important.

•  Stock selection within the utilities sector made a negative contribution to performance. Defensive sectors lagged the market meaningfully as the economy began to recover.

  – Names such as FirstEnergy detracted from relative returns. We recently completed a major review of the power generation industry, including numerous covered utility companies with exposure to wholesale power generation prices. The study provides a framework for forecasting normal power prices by region. It incorporates our normal gas price outlook, which was recently revised downward, and our coal price forecasts. The lower normal power prices that resulted from our study have generally decreased the investment opportunity for many of the Fund's utility holdings.

•  Covidien had a negative impact on Fund returns, as well. After a disappointing third quarter, Covidien performed significantly better in the fourth quarter due to an improved operating environment and signs of price stability. (For details, see "Portfolio highlights.")

•  Industry group weightings that hindered the Fund included underweights to economically sensitive sectors.

  – Over the review period, materials was the best-performing sector in the Index. The Fund was underweight to materials stocks, which detracted from results.

  – An underweight to telecommunications services companies such as Verizon Communications (not held in the portfolio) also detracted from relative returns.

²  As of December 31, 2010, this position was no longer held by the fund.

64

UBS U.S. Large Cap Value Equity Fund

Portfolio highlights

•  We believe Carnival can benefit from increased consumer demand, and that sentiment on demand is too negative. We believe consumer demand has room to rise—even in a slow growth scenario—given the relative importance of vacations in consumer spending priorities, the value proposition of cruising and the relatively low penetration rates of cruising, particularly in Europe. Our research indicates that supply growth will slow significantly after 2011, even with a couple of new ship orders by smaller competitors. In any case, we believe Carnival's management has levers to pull that can offset margin pressures from higher fuel prices as the global economy recovers.

•  Rumors of a breakup plan pushed shares of Fortune Brands higher in November. Later in the quarter, the company announced plans to split the company into as many as three separate businesses. The company intends to spin off its home and security unit to shareholders, and either sell or spin off its golf division. This would allow Fortune to focus on its successful wine and spirits division. We believe that the company's current earnings power and valuation are being negatively impacted by the housing market downturn and soft economy. We have confidence in management's ability to weather the current housing market challenge, given its good track record in past downturns.

•  Although Covidien is experiencing volume issues, we expect them to be transient, as patients can only delay surgical procedures for so long. Covidien's pharmaceuticals business faces increased pricing pressure with its generic narcotics. We believe that three new products which are in the early days of being rolled out, as well as additional new drugs expected next year, should offset these pricing issues. Pharmaceuticals represents less than 20% of Covidien's sales and profits. We own the stock for what we believe is its solid franchise in devices, rather than for its pharmaceuticals business.

This letter is intended to assist shareholders in understanding how the Fund performed during the six months ended December 31, 2010. The views and opinions in the letter were current as of February 15, 2011. They are not guarantees of future 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.

65

UBS U.S. Large Cap Value Equity Fund

Average annual total returns for periods ended 12/31/10 (unaudited)

	6 month			1 year			5 years			Inception1
Before deducting maximum sales charge
Class A2		21.71	%		10.51	%		(0.84	)%		3.11	%
Class B3		21.36			9.74			(1.55	)		2.96 6
Class C4		21.29			9.49			(1.58	)		2.61
Class Y5		22.09			10.92			(0.53	)		3.19
After deducting maximum sales charge
Class A2		15.02	%		4.46	%		(1.96	)%		2.47	%
Class B3		16.36			4.74			(1.83	)		2.96 6
Class C4		20.29			8.49			(1.58	)		2.61
Russell 1000 Value Index7		21.74	%		15.51	%		1.28	%		3.57	%

The annualized gross and net expense ratios, respectively, for each class of shares as in the October 28, 2010 prospectuses were as follows: Class A—1.62% and 1.21%; Class B—2.63% and 1.96%; Class C—2.42% and 1.96%; Class Y—1.51% and 0.96%. 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 UBS Global Asset Management (Americas) Inc., the Fund's investment advisor ("UBS Global AM (Americas)" or 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, interest, taxes, brokerage commissions and extraordinary expenses) to the extent necessary so that the Fund's ordinary operating expenses (excluding expenses incurred through investment in other investment companies, interest, taxes, brokerage commissions and extraordinary expenses), through the 12-month period ending October 27, 2011, do not exceed 1.20% for Class A shares, 1.95% for Class B shares, 1.95% 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 dates 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. Prior to September 30, 2003, Class C shares were subject to a maximum front-end sales charge of 1.00%; this front-end sales charge is not reflected in the average annual total returns presented for the Class C shares shown above.

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  Assumes the conversion of Class B to Class A shares at the end of the sixth year.

⁷  The Russell 1000 Value Index is designed to measure the performance of the large-cap value segment of the US equity universe. It includes those Russell 1000 companies with lower price-to-book ratios and lower expected growth values. The Russell 1000 Value Index is constructed to provide a comprehensive and unbiased barometer for the large-cap value segment. The Index is completely reconstituted annually to ensure new and growing equities are included and that the represented companies continue to reflect value characteristics. 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. Total returns for periods of less than one year have not been annualized. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit http://www.ubs.com.

66

UBS U.S. Large Cap Value Equity Fund

Top ten equity holdings (unaudited)¹

As of December 31, 2010

	Percentage of net assets
Exxon Mobil Corp.		4.4	%
Wells Fargo & Co.		3.8
Procter & Gamble Co.		3.7
JPMorgan Chase & Co.		3.6
AT&T, Inc.		3.4
Johnson & Johnson		3.1
Carnival Corp.		2.5
Comcast Corp., Class A		2.4
US Bancorp		2.4
Time Warner, Inc.		2.3
Total		31.6	%

Industry diversification (unaudited)²

As a percentage of net assets as of December 31, 2010

Common stocks
Aerospace & defense	3.05	%
Air freight & logistics	1.50
Airlines	0.69
Auto components	1.55
Automobiles	1.34
Beverages	1.64
Biotechnology	1.05
Capital markets	4.07
Chemicals	1.87
Commercial banks	6.18
Computers & peripherals	1.87
Diversified consumer services	0.55
Diversified financial services	5.10
Diversified telecommunication services	3.36
Electric utilities	4.78
Energy equipment & services	3.37
Food & staples retailing	1.96
Food products	0.96
Health care equipment & supplies	5.09
Health care providers & services	2.05
Hotels, restaurants & leisure	2.46
Household durables	1.60
Household products	3.70
Insurance	5.54
Machinery	3.71
Media	6.94
Metals & mining	1.27
Oil, gas & consumable fuels	7.32
Personal products	0.97
Pharmaceuticals	5.30
Road & rail	1.07
Semiconductors & semiconductor equipment	1.86
Software	2.33
Specialty retail	2.87
Total common stocks	98.97	%
Investment company
SPDR S&P 500 ETF Trust	0.83
Short-term investment	1.07
Total investments	100.87	%
Liabilities, in excess of cash and other assets	(0.87	)
Net assets	100.00	%

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

²  Figures represent the industry breakdown of direct investments of 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.

67

UBS U.S. Large Cap Value Equity Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Shares		Value
Common stocks: 98.97%
Aerospace & defense: 3.05%
General Dynamics Corp.		15,400	$	1,092,784
Raytheon Co.		11,200		519,008
				1,611,792
Air freight & logistics: 1.50%
FedEx Corp.		8,500		790,585
Airlines: 0.69%
Southwest Airlines Co.		28,300		367,334
Auto components: 1.55%
Johnson Controls, Inc.		21,500		821,300
Automobiles: 1.34%
General Motors Co.*		19,200		707,712
Beverages: 1.64%
PepsiCo, Inc.		13,300		868,889
Biotechnology: 1.05%
Amgen, Inc.*		10,100		554,490
Capital markets: 4.07%
Bank of New York Mellon Corp.		26,200		791,240
Goldman Sachs Group, Inc.		5,800		975,328
Morgan Stanley		14,200		386,382
				2,152,950
Chemicals: 1.87%
Celanese Corp., Series A,		6,500		267,605
Dow Chemical Co.		21,100		720,354
				987,959
Commercial banks: 6.18%
US Bancorp		46,600		1,256,802
Wells Fargo & Co.		64,800		2,008,152
				3,264,954
Computers & peripherals: 1.87%
Hewlett-Packard Co.		14,500		610,450
Seagate Technology PLC*		25,000		375,750
				986,200
Diversified consumer services: 0.55%
Apollo Group, Inc., Class A*		7,400		292,226
Diversified financial services: 5.10%
Citigroup, Inc.*		167,800		793,694
JPMorgan Chase & Co.		44,870		1,903,386
				2,697,080

	Shares		Value
Diversified telecommunication services: 3.36%
AT&T, Inc.		60,350	$	1,773,083
Electric utilities: 4.78%
American Electric Power Co., Inc.		28,100		1,011,038
Edison International		13,200		509,520
FirstEnergy Corp.		27,100		1,003,242
				2,523,800
Energy equipment & services: 3.37%
Baker Hughes, Inc.		14,400		823,248
Noble Corp.		26,700		955,059
				1,778,307
Food & staples retailing: 1.96%
Kroger Co.		46,200		1,033,032
Food products: 0.96%
Kellogg Co.		9,900		505,692
Health care equipment & supplies: 5.09%
Baxter International, Inc.		10,300		521,386
Boston Scientific Corp.*		66,500		503,405
Covidien PLC		22,600		1,031,916
Medtronic, Inc.		17,100		634,239
				2,690,946
Health care providers & services: 2.05%
UnitedHealth Group, Inc.		30,000		1,083,300
Hotels, restaurants & leisure: 2.46%
Carnival Corp.		28,200		1,300,302
Household durables: 1.60%
Fortune Brands, Inc.		14,000		843,500
Household products: 3.70%
Procter & Gamble Co.		30,400		1,955,632
Insurance: 5.54%
Aflac, Inc.		19,500		1,100,385
MetLife, Inc.		22,000		977,680
Principal Financial Group, Inc.		26,000		846,560
				2,924,625
Machinery: 3.71%
Dover Corp.		15,500		905,975
Illinois Tool Works, Inc.		19,700		1,051,980
				1,957,955
Media: 6.94%
Comcast Corp., Class A		58,700		1,289,639
Interpublic Group of Cos., Inc.*		16,200		172,044

68

UBS U.S. Large Cap Value Equity Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Shares		Value
Common stocks—(Concluded)
Media—(Concluded)
Time Warner, Inc.		38,100	$	1,225,677
Viacom, Inc., Class B		24,700		978,367
				3,665,727
Metals & mining: 1.27%
Steel Dynamics, Inc.		36,800		673,440
Oil, gas & consumable fuels: 7.32%
Exxon Mobil Corp.		31,850		2,328,872
Hess Corp.		8,000		612,320
Ultra Petroleum Corp.*		19,400		926,738
				3,867,930
Personal products: 0.97%
Avon Products, Inc.		17,600		511,456
Pharmaceuticals: 5.30%
Johnson & Johnson		26,800		1,657,580
Merck & Co., Inc.		31,700		1,142,468
				2,800,048
Road & rail: 1.07%
Ryder System, Inc.		10,700		563,248
Semiconductors & semiconductor equipment: 1.86%
Applied Materials, Inc.		24,900		349,845
Marvell Technology Group Ltd.*		16,400		304,220
National Semiconductor Corp.		24,000		330,240
				984,305

	Shares		Value
Software: 2.33%
Adobe Systems, Inc.*		26,600	$	818,748
Symantec Corp.*		24,600		411,804
				1,230,552
Specialty retail: 2.87%
GameStop Corp., Class A*		23,100		528,528
Lowe's Cos., Inc.		39,300		985,644
				1,514,172
Total common stocks (cost $46,131,173)				52,284,523
Investment company: 0.83%
SPDR S&P 500 ETF Trust (cost $439,247)		3,500		440,230
Short-term investment: 1.07%
Investment company: 1.07%
UBS Cash Management Prime Relationship Fund1 (cost $565,627)		565,627		565,627
Total investments: 100.87% (cost $47,136,047)				53,290,380
Liabilities, in excess of cash and other assets: (0.87)%				(459,380	)
Net assets: 100.00%			$	52,831,000

Notes to portfolio of investments

Aggregate cost for federal income tax purposes was substantially the same as for book purposes; and net unrealized appreciation consisted of:

Gross unrealized appreciation	$	6,481,829
Gross unrealized depreciation		(327,496	)
Net unrealized appreciation of investments	$	6,154,333

*  Non-income producing security.

69

UBS U.S. Large Cap Value Equity Fund

Portfolio of investments

December 31, 2010 (unaudited)

Concluded

¹  The table below details the Fund's investments in funds advised by the same advisor as the Fund. The advisor does not earn a management fee from the affiliated UBS Relationship Fund.

Security description	Value 06/30/10		Purchases during the six months ended 12/31/10		Sales during the six months ended 12/31/10		Value 12/31/10		Income earned from affiliate for the six months ended 12/31/10
UBS Cash Management Prime Relationship Fund	$	2,293,816	$	6,765,737	$	8,493,926	$	565,627	$	692
UBS Private Money Market LLC1		—		9,577,023		9,577,023		—		123
	$	2,293,816	$	16,342,760	$	18,070,949	$	565,627	$	815

¹  The advisor does earn a management fee from this affiliated fund, and any income earned is net of expenses. Please see the Notes to financial statements for further information.

ETF  Exchange Traded Fund

SPDR  Standard & Poor's Depository Receipts

The following is a summary of the inputs used as of December 31, 2010 in valuing the Fund's investments:

Measurements at 12/31/10
Description	Unadjusted quoted prices in active markets for identical investments (Level 1)		Other significant observable inputs (Level 2)		Unobservable inputs (Level 3)		Total
Common stocks	$	52,284,523	$	—		—	$	52,284,523
Investment company		440,230		—		—		440,230
Short-term investment		—		565,627		—		565,627
Total	$	52,724,753	$	565,627		—	$	53,290,380

See accompanying notes to financial statements.
70

UBS U.S. Small Cap Growth Fund

Portfolio performance

For the six months ended December 31, 2010, Class A Shares of UBS U.S. Small Cap Growth Fund (the "Fund") returned 37.17% (Class A shares returned 29.59% after the deduction of the maximum sales charge), while Class Y shares returned 37.36%. The Fund's benchmark, the Russell 2000 Growth Index (the "Index"), returned 32.14% 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 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.)

The Fund outperformed its benchmark largely due to stock selection.

Portfolio performance summary¹

What worked

•  The information technology sector was the Fund's largest source of relative outperformance during the period. An overweight to the sector relative to the benchmark, as well as positive stock selection, made strong contributions to Fund returns.

  – Successful names included F5 Networks,² an internet solutions provider. The company's shares outperformed after F5 reported better-than-expected results in June and raised earnings guidance for the next two quarters. (For details, see "Portfolio highlights.")

  – ArcSight² was another positive contributor during the six months. The company, which provides security and compliance management solutions, rose during the period on news that it would be acquired.

•  Stock selection in the health care sector was positive for performance, as well. The Fund maintained an underweight to health care relative to the benchmark, and avoided several stocks that suffered sharp declines during the period.

  – Among the Fund's successful positions was Questcor Pharmaceuticals, which produces drugs for central nervous system disorders. (For details, see "Portfolio highlights.")

•  The Fund's underweight to consumer staples stocks contributed to relative returns.

  – We seek out companies with attractive business models, sustainable competitive advantages and the ability to take market share. Our sector allocation is a by-product of our bottom up company research.

  – The consumer staples sector lagged the broad market during a strong period for equity returns. The Fund benefited from its reduced exposure to these stocks relative to the benchmark.

¹  For a detailed commentary on the market environment in general during the reporting period, see page 2.

²  As of December 31, 2010, this position was no longer held by the Fund.

71

UBS U.S. Small Cap Growth Fund

What didn't work

•  Stock selection within the industrials sector detracted from relative returns. The Fund held Landstar System and Knight Transportation, two short-haul truck carriers. Shares of both companies were up during the period, but not enough to keep pace with the more cyclically-geared transportation names, which rallied strongly as economic recovery improved.

•  The Fund's consumer discretionary stocks underperformed the market during the six months.

  – Our bottom-up research has identified names within the sector whose earnings growth, we believe, is misunderstood in this challenging time for consumers.

  – Two apparel retailers, Talbots and Men's Wearhouse, disappointed Wall Street by posting earnings that were lower-than-expected. (For details, see "Portfolio highlights.")

•  The Fund's small cash position was a hindrance during the period. In a market that rallies more than 30% in six months, any cash position can hold back returns. The Fund must maintain some cash holdings to fund purchases and redemptions, but this negatively affected relative performance during the review period.

Portfolio highlights

•  The Fund benefited from holding F5 Networks, a provider of integrated internet traffic management solutions. The company's software-based solutions manage, control and optimize internet traffic and content for its customers, while at the same time offering a layer of security protection. During the period, the company strengthened its security and WAN (Wide Area Network) optimization capabilities through a series of acquisitions. We sold the position when it became too big from a market capitalization standpoint, in accordance with portfolio guidelines.

•  Questcor Pharmaceuticals is a specialty pharmaceutical company focused on providing prescription drugs for central nervous system disorders. The company's Acthar product recently received FDA approval for the treatment of infantile spasms. Shares rose as investors focused on the growth prospects for the drug.

•  Talbots, a specialty retailer of women's apparel and accessories, saw its shares fall during the period after reporting disappointing sales and earnings. Investors were also concerned with the company's higher inventory levels.

This letter is intended to assist shareholders in understanding how the Fund performed during the six months ended December 31, 2010. The views and opinions in the letter were current as of February 15, 2011. They are not guarantees of future 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 U.S. Small Cap Growth Fund

Average annual total returns for periods ended 12/31/10 (unaudited)

	6 months			1 year			5 years			10 years			Inception1
Before deducting maximum sales charge
Class A2		37.17	%		38.21	%		3.05	%		3.70	%		7.87	%
Class B3		36.70			37.26			2.32			N/A			5.79 6
Class C4		36.58			37.27			2.30			N/A			5.31
Class Y5		37.36			38.62			3.33			3.98			6.34
After deducting maximum sales charge
Class A2		29.59	%		30.64	%		1.89	%		3.12	%		7.36	%
Class B3		31.70			32.26			1.96			N/A			5.79 6
Class C4		35.58			36.27			2.30			N/A			5.31
Russell 2000 Growth Index7		32.14	%		29.09	%		5.30	%		3.78	%		3.08	%

The annualized gross and net expense ratios, respectively, for each class of shares as in the October 28, 2010 prospectuses were as follows: Class A—1.61% and 1.41%; Class B—2.92% and 2.16%; Class C—2.51% and 2.16%; Class Y—1.22% and 1.16%. 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 UBS Global Asset Management (Americas) Inc., the Fund's investment advisor ("UBS Global AM (Americas)" or 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, interest, taxes, brokerage commissions, extraordinary expenses and securities loan fees and dividend expenses for securities sold short) to the extent necessary so that the Fund's ordinary operating expenses (excluding expenses incurred through investment in other investment companies, interest, taxes, brokerage commissions , extraordinary expenses and securities loan fees and dividend expenses for securities sold short), through the 12-month period ending October 27, 2011, do not exceed 1.40% for Class A shares, 2.15% for Class B 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 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. Prior to September 30, 2003, Class C shares were subject to a maximum front-end sales charge of 1.00%; this front-end sales charge is not reflected in the average annual total returns presented for the Class C shares shown above.

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  Assumes the conversion of Class B to Class A shares at the end of the sixth year.

⁷  The Russell 2000 Growth Index is designed to measure the performance of the small-cap growth segment of the US equity universe. It includes those Russell 2000 companies with higher price-to-book ratios and higher forecasted growth values. The Russell 2000 Growth Index is constructed to provide a comprehensive and unbiased barometer for the small-cap growth segment. The Index is completely reconstituted annually to ensure larger stocks do not distort the performance and characteristics of the true small-cap opportunity set and that the represented companies continue to reflect growth characteristics. 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.

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. Total returns for periods of less than one year have not been annualized. 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 U.S. Small Cap Growth Fund

Top ten equity holdings (unaudited)¹

As of December 31, 2010

	Percentage of net assets
Finisar Corp.		2.1	%
Tenneco, Inc.		2.0
Riverbed Technology, Inc.		1.9
Imax Corp.		1.9
Solutia, Inc.		1.8
SM Energy Co.		1.8
Whiting Petroleum Corp.		1.7
Acme Packet, Inc.		1.6
Rovi Corp.		1.6
Cavium Networks, Inc.		1.6
Total		18.0	%

Industry diversification (unaudited)²

As a percentage of net assets as of December 31, 2010

Common stocks
Aerospace & defense	0.96	%
Air freight & logistics	1.38
Auto components	3.22
Biotechnology	6.22
Chemicals	1.79
Commercial banks	0.30
Commercial services & supplies	1.22
Communications equipment	7.76
Construction & engineering	1.88
Consumer finance	0.70
Containers & packaging	1.46
Distributors	1.00
Electrical equipment	4.19
Electronic equipment, instruments & components	1.15
Energy equipment & services	2.74
Food & staples retailing	2.49
Food products	2.87
Health care equipment & supplies	4.51
Health care providers & services	2.72
Health care technology	1.28
Hotels, restaurants & leisure	6.15
Household durables	0.60
Internet & catalog retail	0.84
Internet software & services	0.82
Media	2.94
Metals & mining	0.60
Oil, gas & consumable fuels	5.99
Pharmaceuticals	5.04
Real estate investment trust (REIT)	1.63
Road & rail	2.26
Semiconductors & semiconductor equipment	8.03
Software	8.17
Specialty retail	4.36
Textiles, apparel & luxury goods	1.38
Total common stocks	98.65	%
Investment company
iShares Russell 2000 Growth Index Fund	0.34
Short-term investment	1.67
Investment of cash collateral from securities loaned	6.17
Total investments	106.83	%
Liabilities, in excess of cash and other assets	(6.83	)
Net assets	100.00	%

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

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

74

UBS U.S. Small Cap Growth Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Shares		Value
Common stocks: 98.65%
Aerospace & defense: 0.96%
DigitalGlobe, Inc.*		46,500	$	1,474,515
Air freight & logistics: 1.38%
Hub Group, Inc., Class A*		60,600		2,129,484
Auto components: 3.22%
Cooper Tire & Rubber Co.		77,400		1,825,092
Tenneco, Inc.*		75,900		3,124,044
				4,949,136
Biotechnology: 6.22%
Cepheid, Inc.*		76,500		1,740,375
Emergent Biosolutions, Inc.*		47,900		1,123,734
Enzon Pharmaceuticals, Inc.*1		54,900		668,133
Incyte Corp. Ltd.*		54,700		905,832
Micromet, Inc.*1		92,300		749,476
Pharmasset, Inc.*		29,100		1,263,231
Regeneron Pharmaceuticals, Inc.*		36,200		1,188,446
Seattle Genetics, Inc.*1		64,100		958,295
Theravance, Inc.*		38,800		972,716
				9,570,238
Chemicals: 1.79%
Solutia, Inc.*		119,600		2,760,368
Commercial banks: 0.30%
Columbia Banking System, Inc.		22,300		469,638
Commercial services & supplies: 1.22%
Clean Harbors, Inc.*		13,000		1,093,040
Tetra Tech, Inc.*		31,400		786,884
				1,879,924
Communications equipment: 7.76%
Acme Packet, Inc.*		46,600		2,477,256
Blue Coat Systems, Inc.*		34,000		1,015,580
Finisar Corp.*		109,521		3,251,678
Polycom, Inc.*		56,900		2,217,962
Riverbed Technology, Inc.*		84,600		2,975,382
				11,937,858
Construction & engineering: 1.88%
EMCOR Group, Inc.*		74,300		2,153,214
Orion Marine Group, Inc.*		63,300		734,280
				2,887,494
Consumer finance: 0.70%
Netspend Holdings, Inc.*1		84,500		1,083,290

	Shares		Value
Containers & packaging: 1.46%
Rock-Tenn Co., Class A		41,656	$	2,247,341
Distributors: 1.00%
LKQ Corp.*		67,900		1,542,688
Electrical equipment: 4.19%
EnerSys*		64,300		2,065,316
Regal-Beloit Corp.		36,200		2,416,712
Woodward Governor Co.		52,300		1,964,388
				6,446,416
Electronic equipment, instruments & components: 1.15%
Tech Data Corp.*		40,100		1,765,202
Energy equipment & services: 2.74%
Dril-Quip, Inc.*		27,000		2,098,440
Key Energy Services, Inc.*		163,700		2,124,826
				4,223,266
Food & staples retailing: 2.49%
Fresh Market, Inc.*		47,600		1,961,120
United Natural Foods, Inc.*		51,100		1,874,348
				3,835,468
Food products: 2.87%
Diamond Foods, Inc.1		46,000		2,446,280
TreeHouse Foods, Inc.*		38,500		1,966,965
				4,413,245
Health care equipment & supplies: 4.51%
DexCom, Inc.*		113,500		1,549,275
HeartWare International, Inc.*		12,100		1,059,597
ResMed, Inc.*1		44,900		1,555,336
Thoratec Corp.*		41,800		1,183,776
Zoll Medical Corp.*		43,000		1,600,890
				6,948,874
Health care providers & services: 2.72%
Emergency Medical Services Corp., Class A*		23,100		1,492,491
HMS Holdings Corp.*		26,645		1,725,797
Mednax, Inc.*		14,400		968,976
				4,187,264
Health care technology: 1.28%
MedAssets, Inc.*		41,900		845,961
SXC Health Solutions Corp.*		26,332		1,128,590
				1,974,551

75

UBS U.S. Small Cap Growth Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Shares		Value
Common stocks—(Concluded)
Hotels, restaurants & leisure: 6.15%
BJ's Restaurants, Inc.*		42,000	$	1,488,060
Buffalo Wild Wings, Inc.*		26,400		1,157,640
Panera Bread Co., Class A*		9,700		981,737
Texas Roadhouse, Inc.*		103,836		1,782,864
The Cheesecake Factory, Inc.*		61,700		1,891,722
WMS Industries, Inc.*		47,900		2,166,996
				9,469,019
Household durables: 0.60%
Ryland Group, Inc.		53,800		916,214
Internet & catalog retail: 0.84%
E-Commerce China Dangdang, Inc. ADR*1		48,000		1,299,360
Internet software & services: 0.82%
VistaPrint NV*		27,500		1,265,000
Media: 2.94%
Imax Corp.*		105,700		2,964,885
National CineMedia, Inc.		78,400		1,560,944
				4,525,829
Metals & mining: 0.60%
Steel Dynamics, Inc.		50,800		929,640
Oil, gas & consumable fuels: 5.99%
Approach Resources, Inc.*		71,400		1,649,340
Resolute Energy Corp.*1		148,100		2,185,956
SM Energy Co.		46,100		2,716,673
Whiting Petroleum Corp.*		22,700		2,660,213
				9,212,182
Pharmaceuticals: 5.04%
Inspire Pharmaceuticals, Inc.*		108,000		907,200
MAP Pharmaceuticals, Inc.*		56,870		952,004
Nektar Therapeutics*		78,400		1,007,440
Questcor Pharmaceuticals, Inc.*		150,400		2,215,392
Salix Pharmaceuticals Ltd.*		25,300		1,188,088
Viropharma, Inc.*		85,600		1,482,592
				7,752,716
Real estate investment trust (REIT): 1.63%
BioMed Realty Trust, Inc.		37,900		706,835
DuPont Fabros Technology, Inc.1		39,100		831,657
Franklin Street Properties Corp.		67,600		963,300
				2,501,792

	Shares		Value
Road & rail: 2.26%
Knight Transportation, Inc.		82,300	$	1,563,700
Landstar System, Inc.		46,700		1,911,898
				3,475,598
Semiconductors & semiconductor equipment: 8.03%
Atheros Communications, Inc.*		21,200		761,504
Cavium Networks, Inc.*		65,200		2,456,736
Cirrus Logic, Inc.*1		98,600		1,575,628
Cymer, Inc.*		31,700		1,428,719
Mellanox Technologies Ltd.*		55,692		1,457,460
SemiLEDs Corp.*		23,100		671,055
Skyworks Solutions, Inc.*		77,000		2,204,510
Veeco Instruments, Inc.*1		41,800		1,795,728
				12,351,340
Software: 8.17%
Factset Research Systems, Inc.		22,300		2,090,848
NICE Systems Ltd. ADR*		56,600		1,975,340
Radiant Systems, Inc.*		109,200		2,137,044
Rovi Corp.*		39,900		2,474,199
Synchronoss Technologies, Inc.*		64,400		1,720,124
Ultimate Software Group, Inc.*		44,704		2,173,955
				12,571,510
Specialty retail: 4.36%
Chico's FAS, Inc.		119,500		1,437,585
Children's Place Retail Stores, Inc.*		20,500		1,017,620
Talbots, Inc.*		128,100		1,091,412
The Men's Wearhouse, Inc.		84,100		2,100,818
Wet Seal, Inc., Class A*		288,500		1,067,450
				6,714,885
Textiles, apparel & luxury goods: 1.38%
Phillips-Van Heusen Corp.		33,600		2,117,136
Total common stocks (cost $106,208,192)				151,828,481
Investment company: 0.34%
iShares Russell 2000 Growth Index Fund1 (cost $529,049)		6,000		524,520
Short-term investment: 1.67%
Investment company: 1.67%
UBS Cash Management Prime Relationship Fund2 (cost $2,564,785)		2,564,785		2,564,785

76

UBS U.S. Small Cap Growth Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Shares		Value
Investment of cash collateral from securities loaned: 6.17%
UBS Private Money Market Fund LLC2 (cost $9,490,655)		9,490,655	$	9,490,655
Total investments: 106.83% (cost $118,792,681)				164,408,441
Liabilities, in excess of cash and other assets: (6.83)%				(10,510,911	)
Net assets: 100.00%			$	153,897,530

Notes to portfolio of investments

Aggregate cost for federal income tax purposes was substantially the same as for book purposes; and net unrealized appreciation consisted of:

Gross unrealized appreciation	$	48,564,748
Gross unrealized depreciation		(2,948,988	)
Net unrealized appreciation of investments	$	45,615,760

*  Non-income producing security.

¹  Security, or portion thereof, was on loan at December 31, 2010.

77

UBS U.S. Small Cap Growth Fund

Portfolio of investments

December 31, 2010 (unaudited)

Concluded

²  The table below details the Fund's investments in funds advised by the same advisor as the Fund. The advisor does not earn a management fee from the affiliated UBS Relationship Fund.

Security description	Value 06/30/10		Purchases during the six months ended 12/31/10		Sales during the six months ended 12/31/10		Value 12/31/10		Income earned from affiliate for the six months ended 12/31/10
UBS Cash Management Prime Relationship Fund	$	2,089,534	$	27,832,476	$	27,357,225	$	2,564,785	$	2,612
UBS Private Money Market Fund LLC1		6,773,043		61,831,659		59,114,047		9,490,655		104,146
	$	8,862,577	$	89,664,135	$	86,471,272	$	12,055,440	$	106,758

¹  The advisor does earn a management fee from this affiliated fund, and any income earned is net of expenses. Please see the Notes to financial statements for further information.

ADR  American depositary receipt

The following is a summary of the inputs used as of December 31, 2010 in valuing the Fund's investments:

Measurements at 12/31/10
Description	Unadjusted quoted prices in active markets for identical investments (Level 1)		Other significant observable inputs (Level 2)		Unobservable inputs (Level 3)		Total
Common stocks	$	151,828,481	$	—	$	—	$	151,828,481
Investment company		524,520		—		—		524,520
Short-term investment		—		2,564,785		—		2,564,785
Investment of cash collateral from securities loaned		—		9,490,655		—		9,490,655
Total	$	152,353,001	$	12,055,440	$	—	$	164,408,441

See accompanying notes to financial statements.
78

The UBS Funds

December 31, 2010 (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, July 1, 2010 to December 31, 2010.

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 July 1, 2010 to December 31, 2010.

79

The UBS Funds

December 31, 2010 (unaudited)

		Beginning account value July 1, 2010		Ending account value December 31, 2010		Expenses paid during period* 07/01/10 – 12/31/10		Expense ratio during period
UBS Global Equity Fund
Class A	Actual	$	1,000.00	$	1,244.30	$	8.49		1.50	%
	Hypothetical (5% annual return before expenses)		1,000.00		1,017.64		7.63		1.50
Class B	Actual		1,000.00		1,238.80		12.70		2.25
	Hypothetical (5% annual return before expenses)		1,000.00		1,013.86		11.42		2.25
Class C	Actual		1,000.00		1,238.70		12.70		2.25
	Hypothetical (5% annual return before expenses)		1,000.00		1,013.86		11.42		2.25
Class Y	Actual		1,000.00		1,246.30		6.57		1.16
	Hypothetical (5% annual return before expenses)		1,000.00		1,019.36		5.90		1.16
UBS International Equity Fund
Class A	Actual		1,000.00		1,264.20		7.13		1.25
	Hypothetical (5% annual return before expenses)		1,000.00		1,018.90		6.36		1.25
Class B	Actual		1,000.00		1,260.60		11.40		2.00
	Hypothetical (5% annual return before expenses)		1,000.00		1,015.12		10.16		2.00
Class C	Actual		1,000.00		1,260.30		11.39		2.00
	Hypothetical (5% annual return before expenses)		1,000.00		1,015.02		10.16		2.00
Class Y	Actual		1,000.00		1,265.90		5.71		1.00
	Hypothetical (5% annual return before expenses)		1,000.00		1,020.16		5.09		1.00
UBS Market Neutral Multi-Strategy Fund
Class A	Actual		1,000.00		985.00		18.86		3.77
	Hypothetical (5% annual return before expenses)		1,000.00		1,006.20		19.06		3.77
Class C	Actual		1,000.00		982.00		22.63		4.53
	Hypothetical (5% annual return before expenses)		1,000.00		1,002.37		22.86		4.53
Class Y	Actual		1,000.00		987.00		17.18		3.43
	Hypothetical (5% annual return before expenses)		1,000.00		1,007.91		17.36		3.43

*  Expenses are equal to the Fund's annualized net expense ratios, multiplied by the average account value over the period, multiplied by 184 divided by 365 (to reflect the one-half year period).

80

The UBS Funds

December 31, 2010 (unaudited)

		Beginning account value July 1, 2010		Ending account value December 31, 2010		Expenses paid during period* 07/01/10 – 12/31/10		Expense ratio during period
UBS U.S. Equity Alpha Fund
Class A	Actual	$	1,000.00	$	1,218.30	$	11.41		2.04	%
	Hypothetical (5% annual return before expenses)		1,000.00		1,014.92		10.36		2.04
Class C	Actual		1,000.00		1,215.00		15.58		2.79
	Hypothetical (5% annual return before expenses)		1,000.00		1,011.14		14.14		2.79
Class Y	Actual		1,000.00		1,220.50		10.02		1.79
	Hypothetical (5% annual return before expenses)		1,000.00		1,016.18		9.10		1.79
UBS U.S. Large Cap Equity Fund
Class A	Actual		1,000.00		1,233.10		6.75		1.20
	Hypothetical (5% annual return before expenses)		1,000.00		1,019.16		6.11		1.20
Class B	Actual		1,000.00		1,228.00		10.95		1.95
	Hypothetical (5% annual return before expenses)		1,000.00		1,015.38		9.91		1.95
Class C	Actual		1,000.00		1,228.80		10.95		1.95
	Hypothetical (5% annual return before expenses)		1,000.00		1,015.38		9.91		1.95
Class Y	Actual		1,000.00		1,234.00		5.35		0.95
	Hypothetical (5% annual return before expenses)		1,000.00		1,020.42		4.84		0.95
UBS U.S. Large Cap Value Equity Fund
Class A	Actual		1,000.00		1,217.10		6.71		1.20
	Hypothetical (5% annual return before expenses)		1,000.00		1,019.16		6.11		1.20
Class B	Actual		1,000.00		1,213.60		10.88		1.95
	Hypothetical (5% annual return before expenses)		1,000.00		1,015.38		9.91		1.95
Class C	Actual		1,000.00		1,212.90		10.88		1.95
	Hypothetical (5% annual return before expenses)		1,000.00		1,015.38		9.91		1.95
Class Y	Actual		1,000.00		1,220.90		5.32		0.95
	Hypothetical (5% annual return before expenses)		1,000.00		1,020.42		4.84		0.95

*  Expenses are equal to the Fund's annualized net expense ratios, multiplied by the average account value over the period, multiplied by 184 divided by 365 (to reflect the one-half year period).

81

The UBS Funds

December 31, 2010 (unaudited)

		Beginning account value July 1, 2010		Ending account value December 31, 2010		Expenses paid during period* 07/01/10 – 12/31/10		Expense ratio during period
UBS U.S. Small Cap Growth Fund
Class A	Actual	$	1,000.00	$	1,371.70	$	8.37		1.40	%
	Hypothetical (5% annual return before expenses)		1,000.00		1,018.15		7.12		1.40
Class B	Actual		1,000.00		1,367.00		12.83		2.15
	Hypothetical (5% annual return before expenses)		1,000.00		1,014.37		10.92		2.15
Class C	Actual		1,000.00		1,365.80		12.82		2.15
	Hypothetical (5% annual return before expenses)		1,000.00		1,014.37		10.92		2.15
Class Y	Actual		1,000.00		1,373.60		6.88		1.15
	Hypothetical (5% annual return before expenses)		1,000.00		1,019.41		5.85		1.15

*  Expenses are equal to the Fund's annualized net expense ratios, multiplied by the average account value over the period, multiplied by 184 divided by 365 (to reflect the one-half year period).

82

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83

The UBS Funds

Financial statements

Statement of assets and liabilities
December 31, 2010 (unaudited)

	UBS Global Equity Fund		UBS International Equity Fund		UBS Market Neutral Multi-Strategy Fund		UBS U.S. Equity Alpha Fund
Assets:
Investments, at cost:
Unaffiliated issuers	$	101,475,757	$	20,503,659	$	19,254,830	$	38,426,955
Affiliated issuers		993,097		646,228		8,784,814		549,430
Investments of cash collateral in affiliated issuers received from securities loaned, at cost1		1,539,915		835,957		—		—
Foreign currency, at cost		817,632		144,366		63,147		—
	$	104,826,401	$	22,130,210	$	28,102,791	$	38,976,385
Investments, at value:
Unaffiliated issuers	$	123,446,769	$	28,376,084	$	21,940,516	$	45,621,937
Affiliated issuers		993,097		646,228		8,784,814		549,430
Investments of cash collateral in affiliated issuers received from securities loaned, at value1		1,539,915		835,957		—		—
Foreign currency, at value		832,163		148,494		65,263		—
Cash		—		—		1,335		—
Receivables:
Foreign tax reclaims		357,857		109,998		841		—
Dividends		160,686		27,788		21,074		42,125
Interest		5,632		118		1,498		60
Fund shares sold		1,470		5,012		22,403		1,000
Investment securities sold		—		—		734,784		24,461
Prepaid organizational costs		—		—		38,562		—
Variation margin		—		—		70,461		—
Cash collateral for futures contracts		—		—		57,083		—
Cash collateral for securities sold short		—		—		16,610,660		293,860
Unrealized appreciation on forward foreign currency contracts		436,944		132,849		79,743		—
Other assets		34,148		30,970		2,890		26,661
Total assets		127,808,681		30,313,498		48,431,927		46,559,534
Liabilities:
Payables:
Cash collateral from securities loaned		1,539,915		835,957		—		—
Investment securities purchased		—		—		1,235,139		87,417
Investment advisory and administration fee		88,981		1,454		12,166		18,955
Fund shares redeemed		357,040		100,574		—		288,766
Custody and fund accounting fees		10,933		8,587		18,425		11,118
Distribution and service fees		35,556		2,714		1,881		9,673
Trustees' fees		6,717		5,132		5,107		5,578
Dividends payable for securities sold short		—		—		16,595		1,178
Accrued expenses		108,463		83,325		39,064		58,518
Securities sold short, at value2		—		—		21,321,250		8,063,918
Unrealized depreciation on forward foreign currency contracts		692,237		130,999		21,617		—
Total liabilities		2,839,842		1,168,742		22,671,244		8,545,121
Net assets	$	124,968,839	$	29,144,756	$	25,760,683	$	38,014,413

¹  The market value of securities loaned by UBS Global Equity Fund, UBS International Equity Fund, UBS U.S. Large Cap Equity Fund and UBS U.S. Small Cap Growth Fund as of December 31, 2010 was $1,490,749, $805,141, $431,825 and $9,176,900, respectively.

²  Proceeds from securities sold short by UBS Market Neutral Multi-Strategy Fund and UBS U.S. Equity Alpha Fund were $18,861,131 and $6,142,247, respectively.

84

The UBS Funds

Financial statements

	UBS U.S. Large Cap Equity Fund		UBS U.S. Large Cap Value Equity Fund		UBS U.S. Small Cap Growth Fund
Assets:
Investments, at cost:
Unaffiliated issuers	$	193,814,101	$	46,570,420	$	106,737,241
Affiliated issuers		4,665,034		565,627		2,564,785
Investments of cash collateral in affiliated issuers received from securities loaned, at cost1		441,875		—		9,490,655
Foreign currency, at cost		—		—		—
	$	198,921,010	$	47,136,047	$	118,792,681
Investments, at value:
Unaffiliated issuers	$	235,106,411	$	52,724,753	$	152,353,001
Affiliated issuers		4,665,034		565,627		2,564,785
Investments of cash collateral in affiliated issuers received from securities loaned, at value1		441,875		—		9,490,655
Foreign currency, at value		—		—		—
Cash		—		—		—
Receivables:
Foreign tax reclaims		—		—		—
Dividends		166,572		48,079		21,154
Interest		516		93		12,004
Fund shares sold		193,791		5,016		441,705
Investment securities sold		152,014		48,956		3,233,189
Prepaid organizational costs		—		—		—
Variation margin		110,625		—		—
Cash collateral for futures contracts		35		—		—
Cash collateral for securities sold short		—		—		—
Unrealized appreciation on forward foreign currency contracts		—		—		—
Other assets		44,143		29,021		42,757
Total assets		240,881,016		53,421,545		168,159,250
Liabilities:
Payables:
Cash collateral from securities loaned		441,875		—		9,490,655
Investment securities purchased		461,643		103,808		3,751,207
Investment advisory and administration fee		157,770		17,969		115,146
Fund shares redeemed		296,665		381,603		756,138
Custody and fund accounting fees		15,557		6,832		9,408
Distribution and service fees		8,603		14,317		10,030
Trustees' fees		8,667		5,522		6,947
Dividends payable for securities sold short		—		—		—
Accrued expenses		129,075		60,494		122,189
Securities sold short, at value2		—		—		—
Unrealized depreciation on forward foreign currency contracts		—		—		—
Total liabilities		1,519,855		590,545		14,261,720
Net assets	$	239,361,161	$	52,831,000	$	153,897,530

See accompanying notes to financial statements.
85

The UBS Funds

Financial statements

Statement of assets and liabilities (continued)
December 31, 2010 (unaudited)

	UBS Global Equity Fund			UBS International Equity Fund			UBS Market Neutral Multi-Strategy Fund			UBS U.S. Equity Alpha Fund
Net assets consist of:
Beneficial interest	$	145,337,871		$	37,477,774		$	26,105,636		$	59,726,302
Accumulated undistributed (distributions in excess of) net investment income		(248,216	)		(19,177	)		(239,406	)		10,013
Accumulated net realized loss		(41,902,931	)		(16,222,425	)		(388,118	)		(26,995,213	)
Net unrealized appreciation		21,782,115			7,908,584			282,571			5,273,311
Net assets	$	124,968,839		$	29,144,756		$	25,760,683		$	38,014,413
Class A:
Net assets	$	72,431,920		$	8,821,605		$	4,981,087		$	19,873,480
Shares outstanding		5,768,524			1,088,942			505,577			2,326,631
Net asset value and redemption proceeds per share	$	12.56		$	8.10		$	9.85		$	8.54
Offering price per share (NAV per share plus maximum sales charge)2	$	13.29		$	8.57		$	10.42		$	9.04
Class B:
Net assets	$	699,942		$	48,027			N/A			N/A
Shares outstanding		56,857			5,772			N/A			N/A
Net asset value and offering price per share	$	12.31		$	8.32			N/A			N/A
Redemption proceeds per share (NAV per share less maximum contingent deferred sales charge)2	$	11.69		$	7.90			N/A			N/A
Class C:
Net assets	$	23,190,317		$	1,032,752		$	920,368		$	6,258,235
Shares outstanding		1,918,441			129,952			93,696			743,612
Net asset value and offering price per share	$	12.09		$	7.95		$	9.82		$	8.42
Redemption proceeds per share (NAV per share less maximum contingent deferred sales charge)2	$	11.97		$	7.87		$	9.72		$	8.34
Class Y:
Net assets	$	28,646,660		$	19,242,372		$	19,859,228		$	11,882,698
Shares outstanding		2,221,344			2,366,283			2,012,541			1,392,660
Net asset value per share, offering price per share, and redemption proceeds per share2	$	12.90		$	8.13		$	9.87		$	8.53

¹  UBS Market Neutral Multi-Strategy 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 share's 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 $1,000,000 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%. Class Y has no contingent deferred sales charge.

86

The UBS Funds

Financial statements

	UBS U.S. Large Cap Equity Fund			UBS U.S. Large Cap Value Equity Fund			UBS U.S. Small Cap Growth Fund
Net assets consist of:
Beneficial interest	$	409,848,739		$	71,117,242		$	163,990,915
Accumulated undistributed (distributions in excess of) net investment income		917,174			199,265			(423,920	)
Accumulated net realized loss		(212,699,545	)		(24,639,840	)		(55,285,225	)
Net unrealized appreciation		41,294,793			6,154,333			45,615,760
Net assets	$	239,361,161		$	52,831,000		$	153,897,530
Class A:
Net assets	$	24,399,124		$	45,495,976		$	35,491,050
Shares outstanding		1,554,136			7,075,513			2,440,456
Net asset value and redemption proceeds per share	$	15.70		$	6.43		$	14.54
Offering price per share (NAV per share plus maximum sales charge)2	$	16.61		$	6.80		$	15.39
Class B:
Net assets	$	159,353		$	92,881		$	61,702
Shares outstanding		10,380			14,471			4,565
Net asset value and offering price per share	$	15.35		$	6.42		$	13.52
Redemption proceeds per share (NAV per share less maximum contingent deferred sales charge)2	$	14.58		$	6.10		$	12.84
Class C:
Net assets	$	3,748,418		$	5,516,285		$	2,872,880
Shares outstanding		246,684			874,974			213,054
Net asset value and offering price per share	$	15.20		$	6.30		$	13.48
Redemption proceeds per share (NAV per share less maximum contingent deferred sales charge)2	$	15.05		$	6.24		$	13.35
Class Y:
Net assets	$	211,054,266		$	1,725,858		$	115,471,898
Shares outstanding		13,347,482			266,876			7,643,704
Net asset value per share, offering price per share, and redemption proceeds per share2	$	15.81		$	6.47		$	15.11

See accompanying notes to financial statements.
87

The UBS Funds

Financial statements

Statement of operations
For the six months ended December 31, 2010 (unaudited)

	UBS Global Equity Fund			UBS International Equity Fund			UBS Market Neutral Multi-Strategy Fund			UBS U.S. Equity Alpha Fund
Investment income:
Dividends	$	930,251		$	228,985		$	190,694		$	477,182
Interest and other		244			30			21			—
Affiliated interest		939			714			7,827			550
Securities lending-net		8,151			5,079			—			—
Foreign tax withheld		(21,229	)		(9,043	)		(5,443	)		—
Total income		918,356			225,765			193,099			477,732
Expenses:
Advisory and administration		505,301			124,861			163,155			222,410
Service and distribution:
Class A		89,463			9,996			4,873			28,259
Class B		3,627			794			—			—
Class C		113,042			4,794			3,208			33,401
Transfer agency and related service fees:
Class A		66,739			3,147			2,369			9,186
Class B		502			139			—			—
Class C		25,248			638			653			5,415
Class Y		10,640			28,817			1,485			11,408
Custodian and fund accounting		31,564			25,721			37,681			32,790
Federal and state registration		22,185			21,682			439			16,348
Professional services		49,103			47,642			42,563			41,945
Shareholder reports		23,362			2,286			1,945			4,843
Trustees		13,293			10,177			10,096			10,845
Interest expense		—			141			—			—
Dividend expense and security loan fees for securities sold short		—			—			239,735			111,753
Amortization of organizational costs		—			—			39,200			—
Other		17,074			12,168			10,435			7,776
Total expenses		971,143			293,003			557,837			536,379
Fee waivers and/or expense reimbursements by Advisor		(11,486	)		(134,421	)		(125,332	)		(104,007	)
Net expenses		959,657			158,582			432,505			432,372
Net investment income (loss)		(41,301	)		67,183			(239,406	)		45,360
Net realized gain (loss) on:
Investments in unaffiliated issuers		9,736,463			2,957,630			2,448,685			3,709,581
Futures contracts		—			—			14,394			—
Securities sold short		—			—			(2,830,464	)		(1,248,864	)
Forward foreign currency contracts		(188,151	)		102,365			1,944			—
Foreign currency transactions		34,761			(24,187	)		(22,677	)		—
Net realized gain (loss)		9,583,073			3,035,808			(388,118	)		2,460,717
Change in net unrealized appreciation/depreciation on:
Investments		16,913,523			3,466,953			2,685,686			6,456,313
Futures contracts		—			—			(1,677	)		—
Securities sold short		—			—			(2,460,119	)		(818,951	)
Forward foreign currency contracts		(362,024	)		(64,343	)		58,126			—
Translation of other assets and liabilities denominated in foreign currency		46,470			13,224			555			—
Change in net unrealized appreciation		16,597,969			3,415,834			282,571			5,637,362
Net realized and unrealized gain (loss)		26,181,042			6,451,642			(105,547	)		8,098,079
Net increase (decrease) in net assets resulting from operations	$	26,139,741		$	6,518,825		$	(344,953	)	$	8,143,439

88

The UBS Funds

Financial statements

	UBS U.S. Large Cap Equity Fund			UBS U.S. Large Cap Value Equity Fund			UBS U.S. Small Cap Growth Fund
Investment income:
Dividends	$	2,069,628		$	523,950		$	248,784
Interest and other		—			—			—
Affiliated interest		4,836			692			2,612
Securities lending-net		446			123			104,146
Foreign tax withheld		—			—			—
Total income		2,074,910			524,765			355,542
Expenses:
Advisory and administration		902,236			198,000			625,848
Service and distribution:
Class A		30,575			55,085			39,706
Class B		804			483			325
Class C		18,302			26,398			12,930
Transfer agency and related service fees:
Class A		14,907			28,972			45,793
Class B		169			200			214
Class C		2,449			4,854			4,678
Class Y		67,708			2,646			53,162
Custodian and fund accounting		43,601			20,165			26,905
Federal and state registration		25,012			20,655			22,524
Professional services		43,205			45,877			41,945
Shareholder reports		6,356			9,356			6,521
Trustees		17,098			10,919			13,703
Interest expense		300			—			—
Dividend expense and security loan fees for securities sold short		—			—			—
Amortization of organizational costs		—			—			—
Other		16,003			6,480			13,282
Total expenses		1,188,725			430,090			907,536
Fee waivers and/or expense reimbursements by Advisor		(31,510	)		(105,083	)		(75,080	)
Net expenses		1,157,215			325,007			832,456
Net investment income (loss)		917,695			199,758			(476,914	)
Net realized gain (loss) on:
Investments in unaffiliated issuers		14,863,449			(703,540	)		16,881,829
Futures contracts		255,154			—			—
Securities sold short		—			—			—
Forward foreign currency contracts		—			—			—
Foreign currency transactions		—			—			—
Net realized gain (loss)		15,118,603			(703,540	)		16,881,829
Change in net unrealized appreciation/depreciation on:
Investments		32,150,322			10,463,446			26,009,824
Futures contracts		177,125			—			—
Securities sold short		—			—			—
Forward foreign currency contracts		—			—			—
Translation of other assets and liabilities denominated in foreign currency		—			—			—
Change in net unrealized appreciation		32,327,447			10,463,446			26,009,824
Net realized and unrealized gain (loss)		47,446,050			9,759,906			42,891,653
Net increase (decrease) in net assets resulting from operations	$	48,363,745		$	9,959,664		$	42,414,739

See accompanying notes to financial statements.
89

The UBS Funds

Financial statements

Statement of changes in net assets

	UBS Global Equity Fund						UBS International Equity Fund						UBS Market Neutral Multi-Strategy Fund
	Six months ended December 31, 2010 (unaudited)			Year ended June 30, 2010			Six months ended December 31, 2010 (unaudited)			Year ended June 30, 2010			Six months ended December 31, 2010 (unaudited)
Operations:
Net investment income (loss)	$	(41,301	)	$	602,937		$	67,183		$	442,387		$	(239,406	)
Net realized gain (loss)		9,583,073			27,141,705			3,035,808			19,806,830			(388,118	)
Change in net unrealized appreciation/depreciation		16,597,969			(3,256,800	)		3,415,834			(9,002,969	)		282,571
Net increase (decrease) in net assets from operations		26,139,741			24,487,842			6,518,825			11,246,248			(344,953	)
Dividends and distributions to shareholders by class:
Class A:
Net investment income and net foreign currency gains		(1,879,257	)		(1,823,227	)		(283,789	)		(502,754	)		—
Class B:
Net investment income and net foreign currency gains		(9,881	)		(16,105	)		—			(14,771	)		—
Class C:
Net investment income and net foreign currency gains		(440,427	)		(531,429	)		(24,784	)		(58,439	)		—
Class Y:
Net investment income and net foreign currency gains		(789,580	)		(1,055,564	)		(650,195	)		(2,971,270	)		—
Decrease in net assets from dividends and distributions		(3,119,145	)		(3,426,325	)		(958,768	)		(3,547,234	)		—
Beneficial interest transactions:
Proceeds from shares sold		1,073,124			5,126,587			1,616,831			5,021,294			27,484,400
Shares issued on reinvestment of dividends and distributions		2,899,995			3,259,302			929,545			3,488,259			—
Cost of shares redeemed		(13,464,463	)		(80,709,652	)		(5,634,595	)		(65,141,997	)		(1,384,071	)
Redemption fees		587			2,824			545			42			5,307
Net increase (decrease) in net assets resulting from beneficial interest transactions		(9,490,757	)		(72,320,939	)		(3,087,674	)		(56,632,402	)		26,105,636
Increase (decrease) in net assets		13,529,839			(51,259,422	)		2,472,383			(48,933,388	)		25,760,683
Net assets, beginning of period		111,439,000			162,698,422			26,672,373			75,605,761			—
Net assets, end of period	$	124,968,839		$	111,439,000		$	29,144,756		$	26,672,373		$	25,760,683
Net assets include accumulated undistributed (distributions in excess of) net investment income	$	(248,216	)	$	2,912,230		$	(19,177	)	$	872,408		$	(239,406	)

90

The UBS Funds

Financial statements

	UBS U.S. Equity Alpha Fund						UBS U.S. Large Cap Equity Fund
	Six months ended December 31, 2010 (unaudited)			Year ended June 30, 2010			Six months ended December 31, 2010 (unaudited)			Year ended June 30, 2010
Operations:
Net investment income (loss)	$	45,360		$	(50,043	)	$	917,695		$	1,698,358
Net realized gain (loss)		2,460,717			30,810,569			15,118,603			23,744,545
Change in net unrealized appreciation/depreciation		5,637,362			(6,659,609	)		32,327,447			13,507,829
Net increase (decrease) in net assets from operations		8,143,439			24,100,917			48,363,745			38,950,732
Dividends and distributions to shareholders by class:
Class A:
Net investment income and net foreign currency gains		—			—			(114,184	)		(615,929	)
Class B:
Net investment income and net foreign currency gains		—			—			—			(1,397	)
Class C:
Net investment income and net foreign currency gains		—			—			—			(72,171	)
Class Y:
Net investment income and net foreign currency gains		(35,347	)		—			(1,583,968	)		(5,270,317	)
Decrease in net assets from dividends and distributions		(35,347	)		—			(1,698,152	)		(5,959,814	)
Beneficial interest transactions:
Proceeds from shares sold		990,385			7,197,109			24,153,461			27,903,444
Shares issued on reinvestment of dividends and distributions		35,347			—			1,683,135			5,904,189
Cost of shares redeemed		(13,000,732	)		(127,363,698	)		(48,656,445	)		(108,531,808	)
Redemption fees		988			1,582			6,182			31,717
Net increase (decrease) in net assets resulting from beneficial interest transactions		(11,974,012	)		(120,165,007	)		(22,813,667	)		(74,692,458	)
Increase (decrease) in net assets		(3,865,920	)		(96,064,090	)		23,851,926			(41,701,540	)
Net assets, beginning of period		41,880,333			137,944,423			215,509,235			257,210,775
Net assets, end of period	$	38,014,413		$	41,880,333		$	239,361,161		$	215,509,235
Net assets include accumulated undistributed (distributions in excess of) net investment income	$	10,013		$	—		$	917,174		$	1,697,631

See accompanying notes to financial statements.
91

The UBS Funds

Financial statements

Statement of changes in net assets (continued)

	UBS U.S. Large Cap Value Equity Fund						UBS U.S. Small Cap Growth Fund
	Six months ended December 31, 2010 (unaudited)			Year ended June 30, 2010			Six months ended December 31, 2010 (unaudited)			Year ended June 30, 2010
Operations:
Net investment income (loss)	$	199,758		$	425,248		$	(476,914	)	$	(1,373,343	)
Net realized gain (loss)		(703,540	)		(1,295,466	)		16,881,829			15,023,871
Change in net unrealized appreciation/depreciation		10,463,446			6,741,046			26,009,824			24,224,475
Net increase in net assets from operations		9,959,664			5,870,828			42,414,739			37,875,003
Dividends and distributions to shareholders by class:
Class A:
Net investment income and net foreign currency gains		(399,917	)		(1,002,633	)		—			—
Class B:
Net investment income and net foreign currency gains		—			(896	)		—			—
Class C:
Net investment income and net foreign currency gains		(5,988	)		(78,334	)		—			—
Class Y:
Net investment income and net foreign currency gains		(19,421	)		(54,618	)		—			—
Decrease in net assets from dividends and distributions		(425,326	)		(1,136,481	)		—			—
Beneficial interest transactions:
Proceeds from shares sold		172,643			749,584			15,116,669			29,302,395
Shares issued on reinvestment of dividends and distributions		373,491			1,014,890			—			—
Cost of shares redeemed		(4,760,077	)		(10,789,645	)		(29,360,325	)		(119,644,217	)
Redemption fees		165			364			5,727			19,963
Net decrease in net assets resulting from beneficial interest transactions		(4,213,778	)		(9,024,807	)		(14,237,929	)		(90,321,859	)
Increase (decrease) in net assets		5,320,560			(4,290,460	)		28,176,810			(52,446,856	)
Net assets, beginning of year		47,510,440			51,800,900			125,720,720			178,167,576
Net assets, end of period	$	52,831,000		$	47,510,440		$	153,897,530		$	125,720,720
Net assets include accumulated undistributed (distributions in excess of) net investment income	$	199,265		$	424,833		$	(423,920	)	$	52,994

92

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93

UBS Global Equity Fund

Financial highlights

The table below sets forth financial data for one share of beneficial interest outstanding throughout each period presented.

	Class A
	Six months ended			Year ended June 30,
	December 31, 2010
	(unaudited)			2010			2009			2008			2007			2006
Net asset value, beginning of period	$	10.36		$	9.46		$	13.54		$	15.47		$	12.99		$	11.63
Income (loss) from investment operations:
Net investment income (loss)1		(0.00	)3		0.05			0.10			0.15			0.13			0.11
Net realized and unrealized gain (loss) from investment activities		2.53			1.12			(3.57	)		(2.08	)		2.47			1.32
Total income (loss) from investment operations		2.53			1.17			(3.47	)		(1.93	)		2.60			1.43
Less dividends and distributions:
From net investment income		(0.33	)		(0.27	)		(0.61	)		—			(0.12	)		(0.07	)
Net asset value, end of period	$	12.56		$	10.36		$	9.46		$	13.54		$	15.47		$	12.99
Total investment return2		24.43	%		12.05	%		(24.86	)%		(12.48	)%		20.11	%		12.35	%
Ratios/Supplemental data:
Net assets, end of period (000's)	$	72,432		$	64,979		$	72,280		$	117,601		$	168,208		$	173,052
Ratios of expenses to average net assets:
Before expense reimbursement		1.52	%4		1.55	%		1.48	%		1.31	%		1.35	%		1.37	%
Net of expense reimbursement		1.50	%4		1.50	%		1.25	%		1.25	%		1.25	%		1.25	%
Ratio of net investment income (loss) to average net assets		(0.00	)%4,5		0.47	%		1.10	%		0.98	%		0.91	%		0.88	%
Portfolio turnover rate		35	%		83	%		76	%		66	%		32	%		48	%
	Class B
	Six months ended			Year ended June 30,
	December 31, 2010
	(unaudited)			2010			2009			2008			2007			2006
Net asset value, beginning of period	$	10.08		$	9.22		$	13.13		$	15.11		$	12.69		$	11.39
Income (loss) from investment operations:
Net investment income (loss)1		(0.04	)		(0.04	)		0.02			0.02			0.01			0.02
Net realized and unrealized gain (loss) from investment activities		2.45			1.09			(3.43	)		(2.00	)		2.43			1.28
Total income (loss) from investment operations		2.41			1.05			(3.41	)		(1.98	)		2.44			1.30
Less dividends and distributions:
From net investment income		(0.18	)		(0.19	)		(0.50	)		—			(0.02	)		—
Net asset value, end of period	$	12.31		$	10.08		$	9.22		$	13.13		$	15.11		$	12.69
Total investment return2		23.88	%		11.27	%		(25.39	)%		(13.10	)%		19.25	%		11.41	%
Ratios/Supplemental data:
Net assets, end of period (000's)	$	700		$	733		$	1,254		$	3,814		$	7,439		$	13,672
Ratios of expenses to average net assets:
Before expense reimbursement/recoupment		2.22	%4		2.27	%		2.25	%		2.05	%		2.17	%		2.35	%
Net of expense reimbursement/recoupment		2.25	%4,6		2.25	%		2.00	%		2.00	%		2.00	%		2.00	%
Ratio of net investment income (loss) to average net assets		(0.75	)%4		(0.34	)%		0.26	%		0.17	%		0.10	%		0.13	%
Portfolio turnover rate		35	%		83	%		76	%		66	%		32	%		48	%

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.

94

UBS Global Equity Fund

Financial highlights

	Class C
	Six months ended			Year ended June 30,
	December 31, 2010
	(unaudited)			2010			2009			2008			2007			2006
Net asset value, beginning of period	$	9.94		$	9.13		$	13.05		$	15.02		$	12.65		$	11.35
Income (loss) from investment operations:
Net investment income (loss)1		(0.04	)		(0.03	)		0.03			0.03			0.02			0.02
Net realized and unrealized gain (loss) from investment activities		2.42			1.07			(3.44	)		(2.00	)		2.42			1.28
Total income (loss) from investment operations		2.38			1.04			(3.41	)		(1.97	)		2.44			1.30
Less dividends and distributions:
From net investment income		(0.23	)		(0.23	)		(0.51	)		—			(0.07	)		—
Net asset value, end of period	$	12.09		$	9.94		$	9.13		$	13.05		$	15.02		$	12.65
Total investment return2		23.87	%		11.29	%		(25.46	)%		(13.12	)%		19.28	%		11.45	%
Ratios/Supplemental data:
Net assets, end of period (000's)	$	23,190		$	20,499		$	22,519		$	35,900		$	52,378		$	56,836
Ratios of expenses to average net assets:
Before expense reimbursement		2.30	%4		2.34	%		2.30	%		2.11	%		2.14	%		2.20	%
Net of expense reimbursement		2.25	%4		2.25	%		2.00	%		2.00	%		2.00	%		2.00	%
Ratio of net investment income (loss) to average net assets		(0.75	)%4		(0.28	)%		0.34	%		0.23	%		0.16	%		0.13	%
Portfolio turnover rate		35	%		83	%		76	%		66	%		32	%		48	%
	Class Y
	Six months ended			Year ended June 30,
	December 31, 2010
	(unaudited)			2010			2009			2008			2007			2006
Net asset value, beginning of period	$	10.65		$	9.69		$	13.84		$	15.78		$	13.23		$	11.83
Income (loss) from investment operations:
Net investment income (loss)1		0.02			0.08			0.13			0.19			0.17			0.15
Net realized and unrealized gain (loss) from investment activities		2.60			1.16			(3.63	)		(2.13	)		2.52			1.34
Total income (loss) from investment operations		2.62			1.24			(3.50	)		(1.94	)		2.69			1.49
Less dividends and distributions:
From net investment income		(0.37	)		(0.28	)		(0.65	)		—			(0.14	)		(0.09	)
Net asset value, end of period	$	12.90		$	10.65		$	9.69		$	13.84		$	15.78		$	13.23
Total investment return2		24.63	%		12.51	%		(24.52	)%		(12.29	)%		20.44	%		12.67	%
Ratios/Supplemental data:
Net assets, end of period (000's)	$	28,647		$	25,227		$	66,646		$	164,307		$	180,027		$	180,990
Ratios of expenses to average net assets:
Before expense reimbursement/recoupment		1.16	%4		1.15	%		1.08	%		0.96	%		0.99	%		0.99	%
Net of expense reimbursement/recoupment		1.16	%4		1.15	%		1.00	%		1.00	%6		0.99	%		0.99	%
Ratio of net investment income (loss) to average net assets		0.34	%4		0.67	%		1.27	%		1.29	%		1.16	%		1.14	%
Portfolio turnover rate		35	%		83	%		76	%		66	%		32	%		48	%

³  Amount represents less than $0.005 per share.

⁴  Annualized.

⁵  Amount represents less than 0.005%.

⁶  The investment manager recouped expenses previously reimbursed by the manager on behalf of the Fund, not to exceed the expense cap in effect at the time of reimbursement.

See accompanying notes to financial statements.
95

UBS International Equity Fund

Financial highlights

The table below sets forth financial data for one share of beneficial interest outstanding throughout each period presented.

	Class A
	Six months ended			Year ended June 30,
	December 31, 2010
	(unaudited)			2010			2009			2008			2007			2006
Net asset value, beginning of period	$	6.62		$	6.48		$	9.97		$	12.99		$	10.98		$	9.48
Income (loss) from investment operations:
Net investment income (loss)1		0.01			0.06			0.10			0.17			0.17			0.16
Net realized and unrealized gain (loss) from investment activities		1.73			0.54			(2.89	)		(1.83	)		2.47			1.81
Total income (loss) from investment operations		1.74			0.60			(2.79	)		(1.66	)		2.64			1.97
Less dividends and distributions:
From net investment income		(0.26	)		(0.46	)		(0.16	)		(0.20	)		(0.11	)		(0.10	)
From net realized gains		—			—			(0.54	)		(1.16	)		(0.52	)		(0.37	)
Total dividends and distributions		(0.26	)		(0.46	)		(0.70	)		(1.36	)		(0.63	)		(0.47	)
Net asset value, end of period	$	8.10		$	6.62		$	6.48		$	9.97		$	12.99		$	10.98
Total investment return2		26.42	%		8.65	%		(26.75	)%		(13.93	)%		(24.84	)%		20.93	%
Ratios/Supplemental data:
Net assets, end of period (000's)	$	8,822		$	6,875		$	7,809		$	17,023		$	26,564		$	23,539
Ratios of expenses to average net assets:
Before expense reimbursement		2.04	%3		1.76	%		1.57	%		1.32	%		1.38	%4		1.48	%
Net of expense reimbursement		1.25	%3		1.25	%		1.25	%		1.25	%		1.26	%4		1.25	%
Ratio of net investment income (loss) to average net assets		0.32	%3		0.83	%		1.50	%		1.43	%		1.42	%		1.52	%
Portfolio turnover rate		37	%		71	%		124	%		55	%		72	%		69	%
	Class B
	Six months ended			Year ended June 30,
	December 31, 2010
	(unaudited)			2010			2009			2008			2007			2006
Net asset value, beginning of period	$	6.60		$	6.49		$	9.79		$	12.81		$	10.82		$	9.34
Income (loss) from investment operations:
Net investment income (loss)1		(0.01	)		0.01			0.06			0.08			0.06			0.08
Net realized and unrealized gain (loss) from investment activities		1.73			0.54			(2.82	)		(1.79	)		2.46			1.77
Total income (loss) from investment operations		1.72			0.55			(2.76	)		(1.71	)		2.52			1.85
Less dividends and distributions:
From net investment income		—			(0.44	)		—			(0.15	)		(0.01	)		—
From net realized gains		—			—			(0.54	)		(1.16	)		(0.52	)		(0.37	)
Total dividends and distributions		—			(0.44	)		(0.54	)		(1.31	)		(0.53	)		(0.37	)
Net asset value, end of period	$	8.32		$	6.60		$	6.49		$	9.79		$	12.81		$	10.82
Total investment return2		26.06	%		7.85	%		(27.30	)%		(14.55	)%		23.97	%		19.86	%
Ratios/Supplemental data:
Net assets, end of period (000's)	$	48		$	208		$	218		$	324		$	555		$	732
Ratios of expenses to average net assets:
Before expense reimbursement		2.89	%3		2.56	%		2.52	%		2.25	%		2.25	%4		2.22	%
Net of expense reimbursement		2.00	%3		2.00	%		2.00	%		2.00	%		2.01	%4		2.00	%
Ratio of net investment income (loss) to average net assets		(0.33	)%3		0.08	%		0.93	%		0.67	%		0.51	%		0.77	%
Portfolio turnover rate		37	%		71	%		124	%		55	%		72	%		69	%

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

96

UBS International Equity Fund

Financial highlights

	Class C
	Six months ended			Year ended June 30,
	December 31, 2010
	(unaudited)			2010			2009			2008			2007			2006
Net asset value, beginning of period	$	6.47		$	6.34		$	9.69		$	12.71		$	10.76		$	9.30
Income (loss) from investment operations:
Net investment income (loss)1		(0.02	)		0.01			0.05			0.09			0.08			0.08
Net realized and unrealized gain (loss) from investment activities		1.70			0.53			(2.80	)		(1.79	)		2.42			1.77
Total income (loss) from investment operations		1.68			0.54			(2.75	)		(1.70	)		2.50			1.85
Less dividends and distributions:
From net investment income		(0.20	)		(0.41	)		(0.06	)		(0.16	)		(0.03	)		(0.02	)
From net realized gains		—			—			(0.54	)		(1.16	)		(0.52	)		(0.37	)
Total dividends and distributions		(0.20	)		(0.41	)		(0.60	)		(1.32	)		(0.55	)		(0.39	)
Net asset value, end of period	$	7.95		$	6.47		$	6.34		$	9.69		$	12.71		$	10.76
Total investment return2		26.03	%		7.86	%		(27.33	)%		(14.51	)%		23.85	%		19.93	%
Ratios/Supplemental data:
Net assets, end of period (000's)	$	1,033		$	866		$	914		$	1,949		$	2,576		$	2,412
Ratios of expenses to average net assets:
Before expense reimbursement		2.84	%3		2.56	%		2.38	%		2.13	%		2.16	%4		2.17	%
Net of expense reimbursement		2.00	%3		2.00	%		2.00	%		2.00	%		2.01	%4		2.01	%
Ratio of net investment income (loss) to average net assets		(0.42	)%3		0.10	%		0.75	%		0.75	%		0.66	%		0.77	%
Portfolio turnover rate		37	%		71	%		124	%		55	%		72	%		69	%
	Class Y
	Six months ended			Year ended June 30,
	December 31, 2010
	(unaudited)			2010			2009			2008			2007			2006
Net asset value, beginning of period	$	6.65		$	6.51		$	10.05		$	13.07		$	11.04		$	9.55
Income (loss) from investment operations:
Net investment income (loss)1		0.02			0.06			0.12			0.21			0.20			0.19
Net realized and unrealized gain (loss) from investment activities		1.74			0.57			(2.91	)		(1.85	)		2.49			1.79
Total income (loss) from investment operations		1.76			0.63			(2.79	)		(1.64	)		2.69			1.98
Less dividends and distributions:
From net investment income		(0.28	)		(0.49	)		(0.21	)		(0.22	)		(0.14	)		(0.12	)
From net realized gains		—			—			(0.54	)		(1.16	)		(0.52	)		(0.37	)
Total dividends and distributions		(0.28	)		(0.49	)		(0.75	)		(1.38	)		(0.66	)		(0.49	)
Net asset value, end of period	$	8.13		$	6.65		$	6.51		$	10.05		$	13.07		$	11.04
Total investment return2		26.59	%		8.94	%		(26.62	)%		(13.63	)%		24.83	%		21.22	%
Ratios/Supplemental data:
Net assets, end of period (000's)	$	19,242		$	18,724		$	66,665		$	129,573		$	172,150		$	147,397
Ratios of expenses to average net assets:
Before expense reimbursement		2.01	%3		1.55	%		1.42	%		1.13	%		1.16	%4		1.19	%
Net of expense reimbursement		1.00	%3		1.00	%		1.00	%		1.00	%		1.01	%4		1.00	%
Ratio of net investment income (loss) to average net assets		0.58	%3		0.84	%		1.81	%		1.79	%		1.63	%		1.77	%
Portfolio turnover rate		37	%		71	%		124	%		55	%		72	%		69	%

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  Annualized.

⁴  Includes interest expense of 0.01%.

See accompanying notes to financial statements.
97

UBS Market Neutral Multi-Strategy 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			Class Y
	Six months ended December 31, 2010 (unaudited)			Six months ended December 31, 2010 (unaudited)			Six months ended December 31, 2010 (unaudited)
Net asset value, beginning of period	$	10.00		$	10.00		$	10.00
Income (loss) from investment operations:
Net investment loss1		(0.11	)		(0.15	)		(0.09	)
Net realized and unrealized gain (loss) from investment activities		(0.05	)		(0.03	)		(0.04	)
Total loss from investment operations		(0.16	)		(0.18	)		(0.13	)
Redemption fees		0.01			—			—
Net asset value, end of period	$	9.85		$	9.82		$	9.87
Total investment return2		(1.50	)%		(1.80	)%		(1.30	)%
Ratios/Supplemental data:
Net assets, end of period (000's)	$	4,981		$	920		$	19,859
Ratios of expenses to average net assets:
Before expense reimbursement and after dividend expense and security loan fees for securities sold short		4.85	%3		5.67	%3		4.43	%3
Net of expense reimbursement and after dividend expense and security loan fees for securities sold short		3.77	%3		4.53	%3		3.43	%3
Net of expense reimbursement and before dividend expense and security loan fees for securities sold short		1.75	%3		2.50	%3		1.50	%3
Ratio of net investment loss to average net assets		(2.16	)%3		(2.99	)%3		(1.87	)%3
Portfolio turnover rate		262	%		262	%		262	%

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  Annualized.

See accompanying notes to financial statements.
98

This page has been left blank intentionally.

99

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
	Six months ended December 31, 2010			Year ended June 30,									For the period ended
	(unaudited)			2010			2009			2008			June 30, 20073
Net asset value, beginning of period	$	7.01		$	6.31		$	8.82		$	11.55		$	10.00
Income (loss) from investment operations:
Net investment income (loss)1		0.01			(0.01	)		0.04			0.05			0.02
Net realized and unrealized gain (loss) from investment activities		1.52			0.71			(2.48	)		(2.10	)		1.55
Total income (loss) from investment operations		1.53			0.70			(2.44	)		(2.05	)		1.57
Less dividends and distributions:
From net investment income		—			—			(0.07	)		(0.03	)		(0.01	)
From net realized gains		—			—			—			(0.65	)		(0.01	)
Total dividends and distributions		—			—			(0.07	)		(0.68	)		(0.02	)
Net asset value, end of period	$	8.54		$	7.01		$	6.31		$	8.82		$	11.55
Total investment return2		21.83	%		11.09	%		(27.52	)%		(18.49	)%		15.73	%
Ratios/Supplemental data:
Net assets, end of period (000's)	$	19,873		$	22,938		$	33,137		$	93,344		$	187,444
Ratios of expenses to average net assets:
Before expense reimbursement and after dividend expense and security loan fees for securities sold short		2.50	%4		2.44	%		2.47	%		1.93	%		1.93	%4
Net of expense reimbursement and after dividend expense and security loan fees for securities sold short		2.04	%4		2.24	%		2.24	%		1.93	%		1.88	%4
Net of expense reimbursement and before dividend expense and security loan fees for securities sold short		1.50	%4		1.50	%		1.50	%		1.50	%		1.50	%4
Ratio of net investment income (loss) to average net assets		0.27	%4		(0.10	)%		0.63	%		0.47	%		0.30	%4
Portfolio turnover rate		41	%		130	%		154	%		72	%		81	%

	Class Y
	Six months ended December 31, 2010			Year ended June 30,									For the period ended
	(unaudited)			2010			2009			2008			June 30, 20073
Net asset value, beginning of period	$	7.01		$	6.30		$	8.82		$	11.55		$	10.00
Income (loss) from investment operations:
Net investment income1		0.02			0.01			0.005			0.08			0.04
Net realized and unrealized gain (loss) from investment activities		1.53			0.70			(2.41	)		(2.10	)		1.54
Total income (loss) from investment operations		1.55			0.71			(2.41	)		(2.02	)		1.58
Less dividends and distributions:
From net investment income		(0.03	)		—			(0.11	)		(0.06	)		(0.02	)
From net realized gains		—			—			—			(0.65	)		(0.01	)
Total dividends and distributions		(0.03	)		—			(0.11	)		(0.71	)		(0.03	)
Net asset value, end of period	$	8.53		$	7.01		$	6.30		$	8.82		$	11.55
Total investment return2		22.05	%		11.27	%		(27.22	)%		(18.34	)%		15.88	%
Ratios/Supplemental data:
Net assets, end of period (000's)	$	11,883		$	12,132		$	95,804		$	9,121		$	5,405
Ratios of expenses to average net assets:
Before expense reimbursement and after dividend expense and security loan fees for securities sold short		2.35	%4		2.16	%		2.33	%		1.70	%		1.67	%4
Net of expense reimbursement and after dividend expense and security loan fees for securities sold short		1.79	%4		2.00	%		2.25	%		1.70	%		1.67	%4
Net of expense reimbursement and before dividend expense and security loan fees for securities sold short		1.25	%4		1.25	%		1.25	%		1.25	%		1.25	%4
Ratio of net investment income to average net assets		0.51	%4		0.12	%		0.07	%		0.74	%		0.43	%4
Portfolio turnover rate		41	%		130	%		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.

100

UBS U.S. Equity Alpha Fund

Financial highlights

	Class C
	Six months ended December 31, 2010			Year ended June 30,									For the period ended
	(unaudited)			2010			2009			2008			June 30, 20073
Net asset value, beginning of period	$	6.93		$	6.29		$	8.74		$	11.50		$	10.00
Income (loss) from investment operations:
Net investment income (loss)1		(0.02	)		(0.06	)		(0.01	)		(0.03	)		(0.04	)
Net realized and unrealized gain (loss) from investment activities		1.51			0.70			(2.44	)		(2.08	)		1.55
Total income (loss) from investment operations		1.49			0.64			(2.45	)		(2.11	)		1.51
Less dividends and distributions:
From net investment income		—			—			—			—			—
From net realized gains		—			—			—			(0.65	)		(0.01	)
Total dividends and distributions		—			—			—			(0.65	)		(0.01	)
Net asset value, end of period	$	8.42		$	6.93		$	6.29		$	8.74		$	11.50
Total investment return2		21.50	%		10.18	%		(28.03	)%		(19.11	)%		15.12	%
Ratios/Supplemental data:
Net assets, end of period (000's)	$	6,258		$	6,810		$	9,003		$	22,823		$	42,750
Ratios of expenses to average net assets:
Before expense reimbursement and after dividend expense and security loan fees for securities sold short		3.33	%4		3.27	%		3.30	%		2.74	%		2.72	%4
Net of expense reimbursement and after dividend expense and security loan fees for securities sold short		2.79	%4		2.98	%		2.99	%		2.68	%		2.64	%4
Net of expense reimbursement and before dividend expense and security loan fees for securities sold short		2.25	%4		2.25	%		2.25	%		2.25	%		2.25	%4
Ratio of net investment income (loss) to average net assets		(0.49	)%4		(0.85	)%		(0.12	)%		(0.28	)%		(0.44	)%4
Portfolio turnover rate		41	%		130	%		154	%		72	%		81	%

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.

See accompanying notes to financial statements.
101

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 period presented.

	Class A
	Six months ended			Year ended June 30,
	December 31, 2010
	(unaudited)			2010			2009			2008			2007			2006
Net asset value, beginning of period	$	12.79		$	11.48		$	16.63		$	21.19		$	18.24		$	17.27
Income (loss) from investment operations:
Net investment income (loss)1		0.04			0.06			0.13			0.16			0.15			0.10
Net realized and unrealized gain (loss) from investment activities		2.94			1.54			(4.84	)		(3.68	)		3.52			1.39
Total income (loss) from investment operations		2.98			1.60			(4.71	)		(3.52	)		3.67			1.49
Less dividends and distributions:
From net investment income		(0.07	)		(0.29	)		(0.07	)		(0.16	)		(0.10	)		(0.11	)
From net realized gains		—			—			(0.37	)		(0.88	)		(0.62	)		(0.41	)
Total dividends and distributions		(0.07	)		(0.29	)		(0.44	)		(1.04	)		(0.72	)		(0.52	)
Net asset value, end of period	$	15.70		$	12.79		$	11.48		$	16.63		$	21.19		$	18.24
Total investment return2		23.31	%		13.75	%		(28.04	)%		(17.17	)%		20.39	%		8.62	%
Ratios/Supplemental data:
Net assets, end of period (000's)	$	24,399		$	23,164		$	34,406		$	90,558		$	158,138		$	88,968
Ratios of expenses to average net assets:
Before expense reimbursement/recoupment		1.28	%4		1.33	%		1.28	%		1.16	%		1.18	%		1.20	%
Net of expense reimbursement/recoupment		1.20	%4		1.20	%		1.28	%		1.16	%		1.18	%		1.24	%5
Ratio of net investment income (loss) to average net assets		0.59	%4		0.47	%		1.05	%		0.83	%		0.75	%		0.54	%
Portfolio turnover rate		23	%		50	%		62	%		47	%		34	%		50	%
	Class B
	Six months ended			Year ended June 30,
	December 31, 2010
	(unaudited)			2010			2009			2008			2007			2006
Net asset value, beginning of period	$	12.50		$	11.14		$	16.20		$	20.66		$	17.84		$	16.94
Income (loss) from investment operations:
Net investment Income (loss)1		(0.01	)		(0.04	)		0.04			0.01			0.003			(0.04	)
Net realized and unrealized gain (loss) from investment activities		2.86			1.49			(4.71	)		(3.58	)		3.44			1.35
Total income (loss) from investment operations		2.85			1.45			(4.67	)		(3.57	)		3.44			1.31
Less dividends and distributions:
From net investment income		—			(0.09	)		(0.02	)		(0.01	)		—			—
From net realized gains		—			—			(0.37	)		(0.88	)		(0.62	)		(0.41	)
Total dividends and distributions		—			(0.09	)		(0.39	)		(0.89	)		(0.62	)		(0.41	)
Net asset value, end of period	$	15.35		$	12.50		$	11.14		$	16.20		$	20.66		$	17.84
Total investment return2		22.80	%		12.96	%		(28.61	)%		(17.79	)%		19.50	%		7.73	%
Ratios/Supplemental data:
Net assets, end of period (000's)	$	159		$	170		$	265		$	635		$	870		$	989
Ratios of expenses to average net assets:
Before expense reimbursement/recoupment		2.11	%4		2.10	%		2.02	%		1.93	%		1.95	%		1.92	%
Net of expense reimbursement/recoupment		1.95	%4		1.95	%		2.02	%		1.93	%		1.95	%		2.01	%5
Ratio of net investment income (loss) to average net assets		(0.15	)%4		(0.28	)%		0.33	%		0.07	%		(0.01	)%		(0.23	)%
Portfolio turnover rate		23	%		50	%		62	%		47	%		34	%		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 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.

102

UBS U.S. Large Cap Equity Fund

Financial highlights

	Class C
	Six months ended			Year ended June 30,
	December 31, 2010
	(unaudited)			2010			2009			2008			2007			2006
Net asset value, beginning of period	$	12.37		$	11.14		$	16.21		$	20.66		$	17.83		$	16.93
Income (loss) from investment operations:
Net investment income (loss)1		(0.01	)		(0.04	)		0.04			0.02			0.003			(0.04	)
Net realized and unrealized gain (loss) from investment activities		2.84			1.50			(4.71	)		(3.59	)		3.45			1.36
Total income (loss) from investment operations		2.83			1.46			(4.67	)		(3.57	)		3.45			1.32
Less dividends and distributions:
From net investment income		—			(0.23	)		(0.03	)		—			—			(0.01	)
From net realized gains		—			—			(0.37	)		(0.88	)		(0.62	)		(0.41	)
Total dividends and distributions		—			(0.23	)		(0.40	)		(0.88	)		(0.62	)		(0.42	)
Net asset value, end of period	$	15.20		$	12.37		$	11.14		$	16.21		$	20.66		$	17.83
Total investment return2		22.88	%		12.92	%		(28.57	)%		(17.76	)%		19.56	%		7.79	%
Ratios/Supplemental data:
Net assets, end of period (000's)	$	3,748		$	3,539		$	4,719		$	6,382		$	10,591		$	5,977
Ratios of expenses to average net assets:
Before expense reimbursement/recoupment		2.04	%4		2.01	%		1.96	%		1.91	%		1.92	%		1.96	%
Net of expense reimbursement/recoupment		1.95	%4		1.95	%		1.96	%		1.91	%		1.92	%		1.98	%5
Ratio of net investment income (loss) to average net assets		(0.17	)%4		(0.28	)%		0.35	%		0.09	%		0.01	%		(0.20	)%
Portfolio turnover rate		23	%		50	%		62	%		47	%		34	%		50	%
	Class Y
	Six months ended			Year ended June 30,
	December 31, 2010
	(unaudited)			2010			2009			2008			2007			2006
Net asset value, beginning of period	$	12.91		$	11.62		$	16.85		$	21.44		$	18.43		$	17.42
Income (loss) from investment operations:
Net investment Income (loss)1		0.06			0.10			0.17			0.22			0.21			0.15
Net realized and unrealized gain (loss) from investment activities		2.96			1.56			(4.91	)		(3.72	)		3.56			1.40
Total income (loss) from investment operations		3.02			1.66			(4.74	)		(3.50	)		3.77			1.55
Less dividends and distributions:
From net investment income		(0.12	)		(0.37	)		(0.12	)		(0.21	)		(0.14	)		(0.13	)
From net realized gains		—			—			(0.37	)		(0.88	)		(0.62	)		(0.41	)
Total dividends and distributions		(0.12	)		(0.37	)		(0.49	)		(1.09	)		(0.76	)		(0.54	)
Net asset value, end of period	$	15.81		$	12.91		$	11.62		$	16.85		$	21.44		$	18.43
Total investment return2		23.40	%		14.04	%		(27.85	)%		(16.87	)%		20.73	%		8.91	%
Ratios/Supplemental data:
Net assets, end of period (000's)	$	211,054		$	188,636		$	217,821		$	645,803		$	833,023		$	543,099
Ratios of expenses to average net assets:
Before expense reimbursement/recoupment		0.97	%4		0.99	%		0.96	%		0.87	%		0.89	%		0.92	%
Net of expense reimbursement/recoupment		0.95	%4		0.95	%		0.96	%		0.87	%		0.89	%		0.97	%5
Ratio of net investment income (loss) to average net assets		0.83	%4		0.72	%		1.39	%		1.13	%		1.04	%		0.81	%
Portfolio turnover rate		23	%		50	%		62	%		47	%		34	%		50	%

³  Amount represents less than $0.005 per share.

⁴  Annualized.

⁵  The investment manager recouped expenses previously reimbursed by the investment manager on behalf of the Fund, not to exceed the expense cap in effect at the time of reimbursement.

See accompanying notes to financial statements.
103

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 period presented.

	Class A
	Six months ended			Year ended June 30,
	December 31, 2010
	(unaudited)			2010			2009			2008			2007			2006
Net asset value, beginning of period	$	5.33		$	4.94		$	8.42		$	11.66		$	10.54		$	10.48
Income (loss) from investment operations:
Net investment income1		0.03			0.05			0.11			0.14			0.13			0.11
Net realized and unrealized gain (loss) from investment activities		1.13			0.46			(2.66	)		(2.25	)		2.03			1.12
Total income (loss) from investment operations		1.16			0.51			(2.55	)		(2.11	)		2.16			1.23
Less dividends and distributions:
From net investment income		(0.06	)		(0.12	)		(0.06	)		(0.14	)		(0.11	)		(0.12	)
From net realized gains		—			—			(0.87	)		(0.99	)		(0.93	)		(1.05	)
Total dividends and distributions		(0.06	)		(0.12	)		(0.93	)		(1.13	)		(1.04	)		(1.17	)
Net asset value, end of period	$	6.43		$	5.33		$	4.94		$	8.42		$	11.66		$	10.54
Total investment return2		21.71	%		10.16	%		(29.74	)%		(19.38	)%		21.20	%		12.13	%
Ratios/Supplemental data:
Net assets, end of period (000's)	$	45,496		$	41,012		$	43,951		$	78,989		$	113,213		$	105,709
Ratios of expenses to average net assets:
Before expense reimbursement		1.60	%4		1.61	%		1.52	%		1.32	%		1.29	%		1.31	%
Net of expense reimbursement		1.20	%4		1.20	%		1.10	%		1.10	%		1.10	%		1.10	%
Ratio of net investment income to average net assets		0.85	%4		0.83	%		1.89	%		1.35	%		1.12	%		1.07	%
Portfolio turnover rate		40	%		70	%		67	%		52	%		27	%		41	%
	Class B
	Six months ended December 31, 2010			Year ended June 30,
	(unaudited)			2010			2009			2008			2007			2006
Net asset value, beginning of period	$	5.29		$	4.87		$	8.33		$	11.50		$	10.39		$	10.31
Income (loss) from investment operations:
Net investment income1		0.003			0.003			0.06			0.06			0.04			0.03
Net realized and unrealized gain (loss) from investment activities		1.13			0.45			(2.62	)		(2.21	)		2.00			1.10
Total income (loss) from investment operations		1.13			0.45			(2.56	)		(2.15	)		2.04			1.13
Less dividends and distributions:
From net investment income		—			(0.03	)		(0.03	)		(0.03	)		—			—
From net realized gains		—			—			(0.87	)		(0.99	)		(0.93	)		(1.05	)
Total dividends and distributions		—			(0.03	)		(0.90	)		(1.02	)		(0.93	)		(1.05	)
Net asset value, end of period	$	6.42		$	5.29		$	4.87		$	8.33		$	11.50		$	10.39
Total investment return2		21.36	%		9.18	%		(30.23	)%		(19.92	)%		20.21	%		11.25	%
Ratios/Supplemental data:
Net assets, end of period (000's)	$	93		$	94		$	247		$	471		$	1,061		$	1,978
Ratios of expenses to average net assets:
Before expense reimbursement		2.63	%4		2.62	%		2.48	%		2.17	%		2.19	%		2.15	%
Net of expense reimbursement		1.95	%4		1.95	%		1.85	%		1.85	%		1.85	%		1.85	%
Ratio of net investment income to average net assets		0.09	%4		0.09	%		1.14	%		0.59	%		0.39	%		0.32	%
Portfolio turnover rate		40	%		70	%		67	%		52	%		27	%		41	%

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

104

UBS U.S. Large Cap Value Equity Fund

Financial highlights

	Class C
	Six months ended			Year ended June 30,
	December 31, 2010
	(unaudited)			2010			2009			2008			2007			2006
Net asset value, beginning of period	$	5.20		$	4.83		$	8.26		$	11.42		$	10.34		$	10.30
Income (loss) from investment operations:
Net investment income1		0.003			0.003			0.06			0.06			0.04			0.03
Net realized and unrealized gain (loss) from investment activities		1.11			0.45			(2.60	)		(2.18	)		1.99			1.10
Total income (loss) from investment operations		1.11			0.45			(2.54	)		(2.12	)		2.03			1.13
Less dividends and distributions:
From net investment income		(0.01	)		(0.08	)		(0.02	)		(0.05	)		(0.02	)		(0.04	)
From net realized gains		—			—			(0.87	)		(0.99	)		(0.93	)		(1.05	)
Total dividends and distributions		(0.01	)		(0.08	)		(0.89	)		(1.04	)		(0.95	)		(1.09	)
Net asset value, end of period	$	6.30		$	5.20		$	4.83		$	8.26		$	11.42		$	10.34
Total investment return2		21.29	%		9.08	%		(30.25	)%		(19.83	)%		20.24	%		11.26	%
Ratios/Supplemental data:
Net assets, end of period (000's)	$	5,516		$	4,889		$	5,429		$	9,795		$	15,919		$	15,683
Ratios of expenses to average net assets:
Before expense reimbursement		2.40	%4		2.41	%		2.33	%		2.10	%		2.06	%		2.08	%
Net of expense reimbursement		1.95	%4		1.95	%		1.85	%		1.85	%		1.85	%		1.85	%
Ratio of net investment income to average net assets		0.10	%4		0.08	%		1.13	%		0.60	%		0.37	%		0.32	%
Portfolio turnover rate		40	%		70	%		67	%		52	%		27	%		41	%
	Class Y
	Six months ended December 31, 2010			Year ended June 30,
	(unaudited)			2010			2009			2008			2007			2006
Net asset value, beginning of period	$	5.36		$	4.97		$	8.46		$	11.71		$	10.58		$	10.52
Income (loss) from investment operations:
Net investment income1		0.03			0.06			0.12			0.16			0.15			0.14
Net realized and unrealized gain (loss) from investment activities		1.15			0.47			(2.67	)		(2.25	)		2.05			1.12
Total income (loss) from investment operations		1.18			0.53			(2.55	)		(2.09	)		2.20			1.26
Less dividends and distributions:
From net investment income		(0.07	)		(0.14	)		(0.07	)		(0.17	)		(0.14	)		(0.15	)
From net realized gains		—			—			(0.87	)		(0.99	)		(0.93	)		(1.05	)
Total dividends and distributions		(0.07	)		(0.14	)		(0.94	)		(1.16	)		(1.07	)		(1.20	)
Net asset value, end of period	$	6.47		$	5.36		$	4.97		$	8.46		$	11.71		$	10.58
Total investment return2		22.09	%		10.39	%		(29.53	)%		(19.15	)%		21.52	%		12.37	%
Ratios/Supplemental data:
Net assets, end of period (000's)	$	1,726		$	1,515		$	2,174		$	5,694		$	9,074		$	7,172
Ratios of expenses to average net assets:
Before expense reimbursement		1.54	%4		1.50	%		1.45	%		1.13	%		1.06	%		1.06	%
Net of expense reimbursement		0.95	%4		0.95	%		0.85	%		0.85	%		0.85	%		0.85	%
Ratio of net investment income to average net assets		1.10	%4		1.07	%		2.08	%		1.60	%		1.36	%		1.32	%
Portfolio turnover rate		40	%		70	%		67	%		52	%		27	%		41	%

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  Annualized.

See accompanying notes to financial statements.
105

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 period presented.

	Class A
	Six months ended			Year ended June 30,
	December 31, 2010
	(unaudited)			2010			2009			2008			2007			2006
Net asset value, beginning of period	$	10.60		$	8.56		$	13.31		$	15.94		$	14.41		$	13.65
Income (loss) from investment operations:
Net investment loss1		(0.05	)		(0.10	)		(0.06	)		(0.12	)		(0.14	)		(0.12	)
Net realized and unrealized gain (loss) from investment activities		3.99			2.14			(4.69	)		(1.47	)		2.14			1.45
Total income (loss) from investment operations		3.94			2.04			(4.75	)		(1.59	)		2.00			1.33
Less dividends and distributions:
From net realized gains		—			—			0.003			(1.04	)		(0.47	)		(0.57	)
Net asset value, end of period	$	14.54		$	10.60		$	8.56		$	13.31		$	15.94		$	14.41
Total investment return2		37.17	%		23.83	%		(35.68	)%		(10.25	)%		14.18	%		9.88	%
Ratios/Supplemental data:
Net assets, end of period (000's)	$	35,491		$	28,586		$	41,141		$	92,759		$	149,362		$	151,731
Ratios of expenses to average net assets:
Before expense reimbursement		1.65	%4		1.60	%		1.67	%		1.47	%		1.65	%		1.50	%
Net of expense reimbursement		1.40	%4		1.40	%		1.28	%		1.28	%		1.28	%		1.28	%
Ratio of net investment loss to average net assets		(0.88	)%4		(1.00	)%		(0.60	)%		(0.81	)%		(0.93	)%		(0.82	)%
Portfolio turnover rate		31	%		72	%		73	%		51	%		34	%		49	%
	Class B
	Six months ended			Year ended June 30,
	December 31, 2010
	(unaudited)			2010			2009			2008			2007			2006
Net asset value, beginning of period	$	9.89		$	8.05		$	12.59		$	15.25		$	13.91		$	13.29
Income (loss) from investment operations:
Net investment loss1		(0.09	)		(0.17	)		(0.12	)		(0.22	)		(0.24	)		(0.22	)
Net realized and unrealized gain (loss) from investment activities		3.72			2.01			(4.42	)		(1.40	)		2.05			1.41
Total income (loss) from investment operations		3.63			1.84			(4.54	)		(1.62	)		1.81			1.19
Less dividends and distributions:
From net realized gains		—			—			0.003			(1.04	)		(0.47	)		(0.57	)
Net asset value, end of period	$	13.52		$	9.89		$	8.05		$	12.59		$	15.25		$	13.91
Total investment return2		36.70	%		22.86	%		(36.06	)%		(10.94	)%		13.32	%		9.09	%
Ratios/Supplemental data:
Net assets, end of period (000's)	$	62		$	74		$	177		$	661		$	1,798		$	5,598
Ratios of expenses to average net assets:
Before expense reimbursement		2.76	%4		2.91	%		2.55	%		2.20	%		2.29	%		2.39	%
Net of expense reimbursement		2.15	%4		2.15	%		2.03	%		2.03	%		2.03	%		2.03	%
Ratio of net investment loss to average net assets		(1.63	)%4		(1.75	)%		(1.38	)%		(1.58	)%		(1.69	)%		(1.57	)%
Portfolio turnover rate		31	%		72	%		73	%		51	%		34	%		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 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  Annualized.

106

UBS U.S. Small Cap Growth Fund

Financial highlights

	Class C
	Six months ended			Year ended June 30,
	December 31, 2010
	(unaudited)			2010			2009			2008			2007			2006
Net asset value, beginning of period	$	9.87		$	8.03		$	12.57		$	15.23		$	13.89		$	13.28
Income (loss) from investment operations:
Net investment loss1		(0.09	)		(0.17	)		(0.12	)		(0.21	)		(0.24	)		(0.22	)
Net realized and unrealized gain (loss) from investment activities		3.70			2.01			(4.42	)		(1.41	)		2.05			1.40
Total income (loss) from investment operations		3.61			1.84			(4.54	)		(1.62	)		1.81			1.18
Less dividends and distributions:
From net realized gains		—			—			0.003			(1.04	)		(0.47	)		(0.57	)
Net asset value, end of period	$	13.48		$	9.87		$	8.03		$	12.57		$	15.23		$	13.89
Total investment return2		36.58	%		22.91	%		(36.11	)%		(10.95	)%		13.33	%		9.02	%
Ratios/Supplemental data:
Net assets, end of period (000's)	$	2,873		$	2,336		$	2,471		$	6,042		$	7,877		$	8,329
Ratios of expenses to average net assets:
Before expense reimbursement		2.47	%4		2.50	%		2.45	%		2.25	%		2.28	%		2.31	%
Net of expense reimbursement		2.15	%4		2.15	%		2.03	%		2.03	%		2.03	%		2.03	%
Ratio of net investment loss to average net assets		(1.63	)%4		(1.75	)%		(1.38	)%		(1.55	)%		(1.68	)%		(1.57	)%
Portfolio turnover rate		31	%		72	%		73	%		51	%		34	%		49	%
	Class Y
	Six months ended			Year ended June 30,
	December 31, 2010
	(unaudited)			2010			2009			2008			2007			2006
Net asset value, beginning of period	$	11.00		$	8.86		$	13.74		$	16.38		$	14.75		$	13.93
Income (loss) from investment operations:
Net investment loss1		(0.04	)		(0.08	)		(0.03	)		(0.08	)		(0.10	)		(0.08	)
Net realized and unrealized gain (loss) from investment activities		4.15			2.22			(4.85	)		(1.52	)		2.20			1.47
Total income (loss) from investment operations		4.11			2.14			(4.88	)		(1.60	)		2.10			1.39
Less dividends and distributions:
From net realized gains		—			—			0.003			(1.04	)		(0.47	)		(0.57	)
Net asset value, end of period	$	15.11		$	11.00		$	8.86		$	13.74		$	16.38		$	14.75
Total investment return2		37.36	%		24.15	%		(35.51	)%		(10.03	)%		14.54	%		10.12	%
Ratios/Supplemental data:
Net assets, end of period (000's)	$	115,472		$	94,725		$	134,378		$	272,666		$	303,029		$	269,696
Ratios of expenses to average net assets:
Before expense reimbursement		1.21	%4		1.21	%		1.25	%		1.12	%		1.18	%		1.13	%
Net of expense reimbursement		1.15	%4		1.15	%		1.03	%		1.03	%		1.03	%		1.03	%
Ratio of net investment loss to average net assets		(0.63	)%4		(0.74	)%		(0.36	)%		(0.55	)%		(0.68	)%		(0.57	)%
Portfolio turnover rate		31	%		72	%		73	%		51	%		34	%		49	%

See accompanying notes to financial statements.
107

The UBS Funds

Notes to financial statements (unaudited)

1. Organization and significant accounting policies

The UBS Funds (the "Trust") is registered with the Securities and Exchange Commission ("SEC") 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 15 Funds available for investment, each having its own investment objectives and policies. The following seven funds are covered in this report: UBS Global Equity Fund, UBS International Equity Fund, UBS Market Neutral Multi-Strategy Fund, UBS U.S. Equity Alpha Fund, UBS U.S. Large Cap Equity Fund, UBS U.S. Large Cap Value Equity Fund, and UBS U.S. Small Cap Growth Fund (each a "Fund", and collectively, the "Funds").

Each of the Funds is classified as a "diversified" investment company for purposes of the 1940 Act. Each Fund currently offers Class A, Class C and Class Y shares. For each Fund, except UBS U.S. Equity Alpha Fund and UBS Market Neutral Multi-Strategy Fund, Class B shares are offered only to existing Class B shareholders with respect to the reinvestment of dividends and distributions and exchanges of Class B shares of the Funds for Class B shares of other series of the UBS Family of Funds. "UBS Family of Funds" include other UBS Funds, PACE Select funds and other funds for which UBS Global Asset Management (US) Inc. ("UBS Global AM (US)") serves as principal underwriter. UBS U.S. Equity Alpha Fund and UBS Market Neutral Multi-Strategy Fund do not offer Class B shares. 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 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 Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") is the exclusive reference of authoritative US generally accepted accounting principles ("GAAP") recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the SEC under authority of federal laws are also sources of authoritative GAAP for SEC registrants. The Funds' financial statements are prepared in accordance with GAAP, which may require the use of management estimates and assumptions. 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, where available, for its portfolio securities. The Funds normally obtain market values for their securities and other instruments from independent pricing sources and broker-dealers. Independent pricing sources may use reported last sale prices, official market closing prices, current market quotations or valuations from computerized "matrix" systems that derive values based on comparable securities or instruments. A matrix system incorporates parameters

108

The UBS Funds

Notes to financial statements (unaudited)

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 and other instruments also may be valued based on appraisals derived from information concerning the security or instrument or similar securities or instruments received from recognized dealers in those holdings. Securities and instruments 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 on the valuation date available prior to valuation. Securities and instruments which are listed on US and foreign stock exchanges normally are valued at the market closing price, the last sale price on the day the securities are valued or, lacking any sales on such day, at the last available bid price. In cases where securities or instruments are traded on more than one exchange, the securities or instruments are valued on the exchange designated as the primary market by UBS Global Asset Management (Americas) Inc. ("UBS Global AM" or the "Advisor"), 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 not readily available from an independent pricing source for a particular security or instrument, that security or instrument is valued at fair value as determined in good faith 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. Foreign currency exchange rates are generally determined as of the close of the New York Stock Exchange ("NYSE").

Certain securities or instruments 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 net asset value. 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 or instruments, the Fund may adjust the previous closing prices to reflect what the Board believes to be the fair value of these securities or instruments as of 4:00 p.m. Eastern Time.

Certain Funds may use a systematic fair valuation model provided by an independent third party to value securities or instruments 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. The systematic fair valuation model may use calculations based on indices of domestic securities and other appropriate indicators, such as prices of relevant ADRs and futures contracts. If a security or instrument is valued at a "fair value," that value is likely to be different from the last quoted market price for the security or instrument. The use of the fair valuation model may result in securities being transferred between Level 1 and Level 2 at reporting periods.

The amortized cost method of valuation, which approximates market value, generally is used to value short-term debt instruments with 60 days or less remaining to maturity, unless the Board determines that this does not represent fair value. Investments in open-end investment companies are valued at the daily closing net asset value of the respective investment company. Pursuant to the Funds' adoption of the use of the practical expedient within ASC Topic 820, investments in non-registered investment companies are also valued at the daily net asset value. All investments quoted in foreign currencies will be valued daily in US dollars on the basis of the foreign currency exchange rates prevailing at the time such valuation is determined by the Funds' custodian.

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.

109

The UBS Funds

Notes to financial statements (unaudited)

GAAP requires disclosure regarding 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—Unadjusted 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.

Level 3—Unobservable inputs inclusive of the Fund's own assumptions in determining the fair value of investments.

A fair value hierarchy has been included near the end of each Fund's Portfolio of investments.

In January 2010, FASB issued Accounting Standards Update No. 2010-06 "Improving Disclosures about Fair Value Measurements" ("ASU No. 2010-06"). ASU No. 2010-06 requires reporting entities to make new disclosures about amounts and reasons for significant transfer in and out of Level 1 and Level 2 fair value measurements as well as inputs and valuation techniques used to measure fair value for both recurring and nonrecurring fair value measurements that fall in either Level 2 or Level 3, including information on purchases, sales, issuances and settlements on a gross basis in the reconciliation of activity in Level 3 fair value measurements. The new and revised disclosures have been implemented for annual and interim periods beginning after December 15, 2009 except for the disclosures surrounding purchases, sales, issuances and settlements on a gross basis in the reconciliation of Level 3 fair value measurements, which are effective for annual and interim periods beginning after December 15, 2010. Management is currently evaluating the impact the adoption of the remaining portions of ASU No. 2010-06 may have on the Funds' financial statement disclosures.

The provisions of ASC Topic 815 "Derivatives and Hedging" ("ASC Topic 815") require qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of gains and losses on derivative instruments and disclosures about credit-risk related contingent features in derivative agreements. Since investment companies value their derivatives at fair value and recognize changes in fair value through the statement of operations, they do not qualify for hedge accounting under ASC Topic 815. Accordingly, even though a fund's investments in derivatives may represent economic hedges, they are considered to be non-hedge transactions for purposes of disclosure under ASC Topic 815. ASC Topic 815 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. Details of this disclosure can be found below as well as in the Portfolio of investments. The volume of derivatives that is presented in the Portfolio of investments of each Fund is consistent with the derivative activity during the year ended December 31, 2010.

110

The UBS Funds

Notes to financial statements (unaudited)

Disclosure of derivatives by underlying risk for each Fund as of and for the period ended December 31, 2010 is as follows:

Asset derivatives

	Equity risk		Foreign exchange risk		Total
UBS Market Neutral Multi-Strategy Fund
Forward contracts1	$	—	$	79,743	$	79,743
Futures contracts2		2,035		—		2,035
Total value	$	2,035	$	79,743	$	81,778

¹  Statement of assets and liabilities location: Unrealized appreciation on forward foreign currency contracts.

²  Includes cumulative appreciation of futures contracts as reported in the futures contracts table in the Portfolio of investments, but only the unpaid variation margin is reported within the Statement of assets and liabilities.

Liability derivatives

	Equity risk			Foreign exchange risk			Total
UBS Market Neutral Multi-Strategy Fund
Forward contracts1	$	—		$	(21,617	)	$	(21,617	)
Futures contracts2		(3,712	)		—			(3,712	)
Total value	$	(3,712	)	$	(21,617	)	$	(25,329	)

¹  Statement of assets and liabilities location: Unrealized depreciation on forward foreign currency contracts.

²  Includes cumulative depreciation of futures contracts as reported in the futures contracts table in the Portfolio of investments, but only the unpaid variation margin is reported within the Statement of assets and liabilities.

Activities in derivative instruments during the period ended December 31, 2010, were as follows:

	Equity risk			Foreign exchange risk		Total
UBS Market Neutral Multi-Strategy Fund
Net realized gain1
Forward contracts	$	—		$	1,944	$	1,944
Futures contracts		14,394			—		14,394
Total net realized gain	$	14,394		$	1,944	$	16,338
Net change in unrealized appreciation/depreciation2
Forward contracts	$	—		$	58,126	$	58,126
Futures contracts		(1,677	)		—		(1,677	)
Total net change in unrealized appreciation/depreciation	$	(1,677	)	$	58,126	$	56,449

¹  Statement of operations location: Net realized gain (loss) on futures contracts and forward foreign currency contracts.

²  Statement of operations location: Change in net unrealized appreciation/depreciation on futures contracts 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 in each Fund's Notes to portfolio of investments.

111

The UBS Funds

Notes to financial statements (unaudited)

C. Investment transactions, investment income and expenses: Investment transactions are recorded on the trade date. Realized gains and losses from investment and foreign exchange transactions are calculated using the identified cost method. 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.

D. Foreign currency translation: The Funds use the foreign currency exchange rates determined as of the close of regular trading on the NYSE. For purposes of calculating the US dollar equivalent value of a non US dollar denominated obligation, foreign currency amounts are translated into US dollars on the following basis: (1) market value of investment securities and other assets and liabilities—at the exchange rates prevailing at the end of each Fund's fiscal period; and (2) purchases and sales of investment securities and income and expenses—at the rates of exchange prevailing on the respective dates of such transactions.

Although the net assets and the market value of each Fund's portfolio are presented at the foreign exchange rates at the end of each Fund's fiscal period, the Funds do not generally isolate the effect of fluctuations in foreign exchange rates from the effect of the changes in market prices of securities. However, the Funds do isolate the effect of fluctuations in foreign exchange rates when determining the gain or loss upon the sale or maturity of foreign currency-denominated securities pursuant to US federal income tax regulations. Certain foreign exchange gains and losses included in realized and unrealized gains and losses are included in or are a reduction of ordinary income in accordance with US federal income tax regulations.

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, manage currency risk or to gain exposure to a currency without purchasing securities denominated in that currency. Forward foreign currency contracts involve, to varying degrees, elements of market risk (specifically foreign currency risk).

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 utilization 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 unrealized gains or losses on foreign forward currency contracts by the Funds. Realized gains and losses include net gains and losses recognized by each Fund on contracts which have been sold or matured.

F. Futures contracts: Each Fund may purchase or sell financial futures contracts. The Funds may purchase or sell futures contracts to increase or reduce their exposure to an asset class without purchasing or selling the underlying

112

The UBS Funds

Notes to financial statements (unaudited)

securities, either as a hedge or to enhance income or realize gains. Using financial futures contracts involves various market risks, including interest rate 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. To the extent that market prices move in an unexpected direction, there is a risk that a Fund will not achieve the anticipated benefits of the futures contract or may realize a loss.

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.

G. Short sales: UBS U.S. Equity Alpha Fund, UBS U.S. Small Cap Growth Fund and UBS Market Neutral Multi-Strategy Fund may each enter into short sales whereby it sells a security it generally does 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 a Fund shorts a security while 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. A Fund will realize a gain or loss upon closing of the short sale (returning the security to the lender by way of purchase or delivery of a long position owned). A Fund is liable to the lender for any dividends payable or other corporate actions on securities while those securities are in a short position. These dividends are booked as an expense or liability of the Fund. Each Fund segregates collateral consisting of cash, US government securities or other liquid assets sufficient to collateralize the market value of short positions. Each Fund is charged a securities loan fee in connection with short sale transactions. Due to the independence of portfolio management teams that manage the various Fund components, it is likely that UBS Market Neutral Multi-Strategy Fund will, at times, hold the same security both long and short (which may technically result in a "short against the box").

H. Dividends and distributions: It is the Funds' policy to distribute their respective net investment income and net capital gains, if any, annually. Dividends and distributions to shareholders are recorded on the ex-distribution date. The amount of dividends from net investment income and distributions from net realized capital gains and/or return of capital is determined in accordance with US federal income tax regulations, which may differ from GAAP. These "book/tax" differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature, such amounts are reclassified within the capital accounts based on their federal tax-basis treatment; temporary differences do not require reclassification.

I. 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 the Funds 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. In addition, small cap

113

The UBS Funds

Notes to financial statements (unaudited)

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 a Fund to meet their obligations may be affected by economic and political developments particular to a specific industry, country, state or region.

J. Commission recapture program: The Funds participate in a brokerage commission recapture program, whereby the 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 period ended December 31, 2010, the following Funds recorded recaptured commissions which are reflected on the Statement of operations within the net realized gains (losses) on investment activities:

Fund	Amount
UBS Global Equity Fund	$	6,032
UBS U.S. Equity Alpha Fund		4,592
UBS U.S. Large Cap Equity Fund		15,253
UBS U.S. Large Cap Value Equity Fund		5,132

K. Redemption fees: Each class of each series of The UBS Funds will impose 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 retained by the Funds are disclosed in the Statement of changes in net assets.

2. Investment advisory fees and other transactions with affiliates

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 $1.0 billion			$1.0 billion to $1.5 billion			$1.5 billion to $2.0 billion			$2.0 billion and over
UBS International Equity Fund		0.800	%		0.750	%		0.700	%		0.675	%		0.650	%
UBS U.S. Equity Alpha Fund		1.000			0.900			0.850			0.850			0.850
UBS U.S. Large Cap Equity Fund		0.700			0.650			0.600			0.575			0.550
UBS U.S. Large Cap Value Equity Fund		0.700			0.650			0.600			0.575			0.550
UBS U.S. Small Cap Growth Fund		0.850			0.850			0.825			0.825			0.825

	$0 to $250 mm			$250 mm to $500 mm			$500 mm to $1.0 billion			$1.0 billion and over
UBS Global Equity Fund		0.750	%		0.700	%		0.680	%		0.650	%
UBS Market Neutral Multi-Strategy Fund		1.250			1.250			1.250			1.250

114

The UBS Funds

Notes to financial statements (unaudited)

For UBS Global Equity Fund, UBS International Equity Fund, UBS U.S. Large Cap Equity Fund and UBS U.S. Large Cap Value Equity Fund, the Advisor has agreed to waive its fees and/or reimburse expenses (excluding expenses incurred through investment in other investment companies, interest, taxes, brokerage commissions and extraordinary expenses) to the extent necessary so that the Fund's operating expenses (excluding expenses incurred through investment in other investment companies, interest, taxes, brokerage commissions and extraordinary expenses) do not exceed the expense limit of each Fund as indicated in the table. For UBS Market Neutral Multi-Strategy Fund, UBS U.S. Equity Alpha Fund and UBS U.S. Small Cap Growth Fund, the Advisor has agreed to waive its fees and/or reimburse expenses (excluding expenses incurred through investment in other investment companies, interest, taxes, brokerage commissions, extraordinary expenses and securities loan fees and dividend expenses for securities sold short) to the extent necessary so that the Fund's operating expenses (excluding expenses incurred through investment in other investment companies, interest, taxes, brokerage commissions, extraordinary expenses and securities loan fees and dividend expense for securities sold short) do not exceed the expense limit of each Fund as indicated in the table. Investment advisory fees, including the dollar amount waived or reimbursed, for the period ended December 31, 2010, 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 Global Equity Fund		1.50	%		2.25	%		2.25	%		1.25	%	$	459,3431	$	11,486
UBS International Equity Fund		1.25			2.00			2.00			1.00			114,152		134,421
UBS Market Neutral Multi-Strategy Fund		1.75			N/A*			2.50			1.50			153,920		125,332
UBS U.S. Equity Alpha Fund		1.50			N/A*			2.25			1.25			206,893		104,007
UBS U.S. Large Cap Equity Fund		1.20			1.95			1.95			0.95			814,923		31,510
UBS U.S. Large Cap Value Equity Fund		1.20			1.95			1.95			0.95			178,839		105,083
UBS U.S. Small Cap Growth Fund		1.40			2.15			2.15			1.15			575,067		75,080

*  UBS Market Neutral Multi-Strategy Fund and UBS U.S. Equity Alpha Fund do not offer Class B shares.

¹  Includes recoupment of $119.

115

The UBS Funds

Notes to financial statements (unaudited)

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, provided that the reimbursement by a Fund of the Advisor will not cause the total operating expense ratio to exceed the contractual limit as then may be in effect for the Fund. The expenses waived for the period ended December 31, 2010 are subject to repayment through June 30, 2014. At December 31, 2010, 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, 2011		Expires June 30, 2012		Expires June 30, 2013		Expires June 30, 2014
UBS Global Equity Fund—Class A	$	315,433	$	91,547	$	183,038	$	35,216	$	5,632
UBS Global Equity Fund—Class B		8,418		2,660		5,646		112		—
UBS Global Equity Fund—Class C		145,474		46,114		71,037		22,469		5,854
UBS Global Equity Fund—Class Y		76,072		—		76,072		—		—
UBS Market Neutral Multi-Strategy Fund—Class A		21,089		—		—		—		21,089
UBS Market Neutral Multi-Strategy Fund—Class C		3,666		—		—		—		3,666
UBS Market Neutral Multi-Strategy Fund—Class Y		100,577		—		—		—		100,577
UBS U.S. Equity Alpha Fund—Class A		239,087		5,169		117,100		65,040		51,778
UBS U.S. Equity Alpha Fund—Class C		105,688		21,407		40,859		25,435		17,987
UBS U.S. Equity Alpha Fund—Class Y		134,830		292		23,783		76,513		34,242
UBS U.S. Large Cap Equity Fund—Class A		49,119		—		—		39,880		9,239
UBS U.S. Large Cap Equity Fund—Class B		449		—		—		318		131
UBS U.S. Large Cap Equity Fund—Class C		4,245		—		—		2,660		1,585
UBS U.S. Large Cap Equity Fund—Class Y		105,361		—		—		84,806		20,555
UBS U.S. Large Cap Value Equity Fund—Class A		727,111		217,979		224,763		196,379		87,990
UBS U.S. Large Cap Value Equity Fund—Class B		6,047		2,454		2,049		1,215		329
UBS U.S. Large Cap Value Equity Fund—Class C		101,737		32,231		30,998		26,605		11,903
UBS U.S. Large Cap Value Equity Fund—Class Y		54,395		21,042		16,498		11,994		4,861
UBS U.S. Small Cap Growth Fund—Class A		545,459		213,353		218,473		74,652		38,981
UBS U.S. Small Cap Growth Fund—Class B		4,622		1,801		1,681		940		200
UBS U.S. Small Cap Growth Fund—Class C		42,919		15,477		14,437		8,898		4,107
UBS U.S. Small Cap Growth Fund—Class Y		737,867		270,369		356,380		79,326		31,792

Each Fund pays 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 period ended December 31, 2010, the Funds owed and incurred administrative fees as follows:

Fund	Administrative fees owed		Administrative fees incurred
UBS Global Equity Fund	$	7,968	$	45,958
UBS International Equity Fund		1,833		10,709
UBS Market Neutral Multi-Strategy Fund		1,655		9,235
UBS U.S Equity Alpha Fund		2,458		15,517
UBS U.S. Large Cap Equity Fund		15,058		87,313
UBS U.S. Large Cap Value Equity Fund		3,354		19,161
UBS U.S. Small Cap Growth Fund		9,700		50,781

The Funds may invest in certain affiliated investment companies also advised or managed by the Advisor. Investments in affiliated investment companies for the period ended December 31, 2010 have been included near the end of each Fund's Portfolio of investments.

116

The UBS Funds

Notes to financial statements (unaudited)

The Funds may invest in 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 Statement of operations.

Under normal conditions, the Funds invest cash collateral from securities lending activities into an affiliated private money market fund, UBS Private Money Market Fund LLC ("Private Money Market"), which operates in compliance with most of the substantive provisions of Rule 2a-7 of the 1940 Act. 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. UBS Global AM 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 order to maintain operating expenses at a certain level. Distributions received from Private Money Market, net of fee rebates paid to borrowers, are reflected as securities lending-net in the Statement of operations.

The following Funds have incurred brokerage commissions with UBS AG, an affiliated broker-dealer. Amounts relating to those transactions for the period ended December 31, 2010, were as follows:

Fund	UBS AG
UBS International Equity Fund	$	434
UBS Market Neutral Multi-Strategy Fund		8,914
UBS U.S. Equity Alpha Fund		75
UBS U.S. Large Cap Equity Fund		445
UBS U.S. Large Cap Value Equity Fund		153
UBS U.S. Small Cap Growth Fund		326

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 Global Equity Fund		0.25	%		1.00	%		1.00	%
UBS International Equity Fund		0.25			1.00			1.00
UBS Market Neutral Multi-Strategy Fund		0.25			N/A*			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 Value Equity Fund		0.25			1.00			1.00
UBS U.S. Small Cap Growth Fund		0.25			1.00			1.00

*  UBS Market Neutral Multi-Strategy Fund and UBS U.S. Equity Alpha Fund do not offer Class B shares.

117

The UBS Funds

Notes to financial statements (unaudited)

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 December 31, 2010, certain Funds owed UBS Global AM (US) service and distribution fees, and for the period ended December 31, 2010, 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 Global Equity Fund—Class A	$	15,443	$	1,098
UBS Global Equity Fund—Class B		586		160
UBS Global Equity Fund—Class C		19,527		23
UBS International Equity Fund—Class A		1,836		1,004
UBS International Equity Fund—Class B		40		1,474
UBS International Equity Fund—Class C		838		18
UBS Market Neutral Multi-Strategy Fund—Class A		1,097		17,257
UBS Market Neutral Multi-Strategy Fund—Class C		784		—
UBS U.S. Equity Alpha Fund—Class A		4,326		1,636
UBS U.S. Equity Alpha Fund—Class C		5,347		26
UBS U.S. Large Cap Equity Fund—Class A		5,340		366
UBS U.S. Large Cap Equity Fund—Class B		133		561
UBS U.S. Large Cap Equity Fund—Class C		3,130		51
UBS U.S. Large Cap Value Equity Fund—Class A		9,618		466
UBS U.S. Large Cap Value Equity Fund—Class B		78		30
UBS U.S. Large Cap Value Equity Fund—Class C		4,621		—
UBS U.S. Small Cap Growth Fund—Class A		7,543		1,421
UBS U.S. Small Cap Growth Fund—Class B		52		69
UBS U.S. Small Cap Growth Fund—Class C		2,435		—

4. Transfer agency and related services fees

UBS Financial Services Inc. provides certain services pursuant to a delegation of authority from BNY Mellon Investment Servicing ("BNY Mellon"), each Fund's transfer agent, and is compensated for these services by BNY Mellon, not the Funds.

For the period ended December 31, 2010, UBS Financial Services Inc. received from BNY Mellon, not the Funds, total services fees as follows:

Fund	Amount paid
UBS Global Equity Fund	$	36,516
UBS International Equity Fund		2,081
UBS Market Neutral Multi-Strategy Fund		780
UBS U.S. Equity Alpha Fund		6,536
UBS U.S. Large Cap Equity Fund		2,862
UBS U.S. Large Cap Value Equity Fund		10,837
UBS U.S. Small Cap Growth Fund		7,120

5. Securities lending

Each Fund may lend 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, cash equivalents or US government securities in an amount at least equal to 102% of the market value of the securities loaned with respect to domestic securities and 105% of the

118

The UBS Funds

Notes to financial statements (unaudited)

market value of the securities loaned with respect to foreign securities, 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, the Fund may bear the risk of delay in recovery of, or even loss of rights in, the securities loaned should the borrower fail financially. The Fund receives compensation for lending its securities from interest or dividends earned on the cash, cash equivalents or US government securities held as collateral, net of fee rebates paid to the borrower plus reasonable administrative and custody fees.

UBS Global Equity Fund, UBS International Equity Fund, UBS U.S. Large Cap Equity Fund, UBS U.S. Large Cap Value Equity 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 Private Money Market, which is included in the Portfolio(s) of investments. The value of loaned securities and related collateral outstanding at December 31, 2010, were as follows:

Fund	Market value of securities loaned		Market value of collateral received from securities loaned		Market value of investments of cash collateral received
UBS Global Equity Fund	$	1,490,749	$	1,539,915	$	1,539,915
UBS International Equity Fund		805,141		835,957		835,957
UBS U.S. Large Cap Equity Fund		431,825		441,875		441,875
UBS U.S. Small Cap Growth Fund		9,176,900		9,490,655		9,490,655

6. Purchases and sales of securities

For the period ended December 31, 2010, 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 Global Equity Fund	$	41,205,951	$	54,735,169
UBS International Equity Fund		9,906,358		13,554,809
UBS Market Neutral Multi-Strategy Fund		95,756,047		94,980,569
UBS U.S. Equity Alpha Fund		23,818,142		36,318,204
UBS U.S. Large Cap Equity Fund		51,642,888		74,378,361
UBS U.S. Large Cap Value Equity Fund		19,406,654		23,185,220
UBS U.S. Small Cap Growth Fund		41,596,474		56,516,544

7. Federal income taxes

It is each Fund's policy to comply with all requirements of the Internal Revenue 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.

119

The UBS Funds

Notes to financial statements (unaudited)

The tax character of distributions paid during the fiscal year ended June 30, 2010 were as follows:

	2010
Fund	Distributions paid from ordinary income
UBS Global Equity Fund	$	3,426,325
UBS International Equity Fund		3,547,234
UBS U.S. Large Cap Equity Fund		5,959,814
UBS U.S. Large Cap Value Equity Fund		1,136,481

The tax character of distributions paid and components of accumulated earnings/(deficit) on a tax basis for the current fiscal year will be determined after the Trust's fiscal year ending June 30, 2011.

At June 30, 2010, 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, 2011			June 30, 2012		June 30, 2013		June 30, 2014		June 30, 2015		June 30, 2016		June 30, 2017			June 30, 2018
UBS Global Equity Fund	$	(4,283,846	)1		—		—		—		—		—	$	(14,741,673	)	$	(29,963,354	)
UBS International Equity Fund		—			—		—		—		—		—		(5,638,290	)		(12,259,376	)
UBS U.S. Equity Alpha Fund		—			—		—		—		—		—		(15,530,495	)		(12,503,688	)
UBS U.S. Large Cap Equity Fund		—			—		—		—		—		—		(52,072,835	)		(167,517,489	)
UBS U.S. Large Cap Value Equity Fund		—			—		—		—		—		—		(2,034,727	)		(20,216,588	)
UBS U.S. Small Cap Growth Fund		—			—		—		—		—		—		(10,194,467	)		(61,451,890	)

¹  Due to a merger with UBS Strategy Fund, utilization of capital loss carryforwards in subsequent years may be limited.

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, 2010, the following Funds incurred, and elected to defer, losses of the following:

Fund	Net capital losses
UBS U.S. Large Cap Value Equity Fund	$	904,956

As of and during the period ended December 31, 2010, the Funds did not have any liabilities for any unrecognized tax benefits. The Funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of operations. During the period, the Funds did not incur any interest or penalties.

Each of the tax years in the four year period ended June 30, 2010, or since inception for UBS Market Neutral Multi-Strategy Fund, remains subject to examination by the Internal Revenue Service and state taxing authorities.

120

The UBS Funds

Notes to financial statements (unaudited)

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 request of shareholders and other temporary or emergency purposes. Interest on amounts borrowed is calculated based on the prevailing rates in effect at the time of borrowing. 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 period ended December 31, 2010, were as follows:

Fund	Average daily borrowings		Number of days Outstanding		Interest expense		Weighted average annualized interest rate
UBS International Equity Fund	$	1,013,000		5	$	141		1.00	%
UBS U.S. Large Cap Equity Fund		10,813,369		1		300		1.00

There were no borrowings from the Committed Credit Facility outstanding as of December 31, 2010.

9. Shares of beneficial interest

For the period ended December 31, 2010, transactions in shares of beneficial interest for each of the Funds were as follows:

UBS Global Equity Fund

	Class A						Class B
	Shares			Amount			Shares			Amount
Shares sold		18,821		$	222,522			325		$	3,954
Shares repurchased		(669,496	)		(8,010,237	)		(6,179	)		(70,751	)
Shares converted from Class B to Class A		9,972			113,537			(10,264	)		(113,537	)
Dividends reinvested		137,883			1,709,749			234			2,843
Redemption fees		—			505			—			—
Net decrease		(502,820	)	$	(5,963,924	)		(15,884	)	$	(177,491	)

	Class C						Class Y
	Shares			Amount			Shares			Amount
Shares sold		6,547		$	74,776			52,237		$	658,335
Shares repurchased		(183,092	)		(2,094,066	)		(261,358	)		(3,175,872	)
Dividends reinvested		33,701			402,393			61,666			785,010
Redemption fees		—			—			—			82
Net decrease		(142,844	)	$	(1,616,897	)		(147,455	)	$	(1,732,445	)

121

The UBS Funds

Notes to financial statements (unaudited)

UBS International Equity Fund

	Class A						Class B
	Shares			Amount			Shares			Amount
Shares sold		131,033		$	1,028,589			—		$	—
Shares repurchased		(116,830	)		(883,737	)		(23,366	)		(185,992	)
Shares converted from Class B to Class A		2,283			15,333			(2,291	)		(15,333	)
Dividends reinvested		34,276			272,493			—			—
Redemption fees		—			2			—			—
Net increase (decrease)		50,762		$	432,680			(25,657	)	$	(201,325	)

	Class C						Class Y
	Shares			Amount			Shares			Amount
Shares sold		14,770		$	110,306			59,911		$	462,603
Shares repurchased		(21,735	)		(159,919	)		(587,355	)		(4,389,614	)
Dividends reinvested		3,173			24,751			79,236			632,301
Redemption fees		—			—			—			543
Net decrease		(3,792	)	$	(24,862	)		(448,208	)	$	(3,294,167	)

UBS Market Neutral Multi-Strategy Fund

	Class A						Class C				Class Y
	Shares			Amount			Shares		Amount		Shares		Amount
Shares sold		645,633		$	6,424,119			93,696	$	930,360		2,012,541	$	20,129,921
Shares repurchased		(140,056	)		(1,384,071	)		—		—		—		—
Redemption fees		—			5,307			—		—		—		—
Net increase		505,577		$	5,045,355			93,696	$	930,360		2,012,541	$	20,129,921

UBS U.S. Equity Alpha Fund

	Class A						Class C						Class Y
	Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		99,454		$	788,481			1,598		$	11,854			24,667		$	190,050
Shares repurchased		(1,046,438	)		(8,308,250	)		(240,703	)		(1,861,892	)		(366,434	)		(2,830,590	)
Dividends reinvested		—			—			—			—			4,203			35,347
Redemption fees		—			5			—			70			—			913
Net decrease		(946,984	)	$	(7,519,764	)		(239,105	)	$	(1,849,968	)		(337,564	)	$	(2,604,280	)

122

The UBS Funds

Notes to financial statements (unaudited)

UBS U.S. Large Cap Equity Fund

	Class A						Class B
	Shares			Amount			Shares			Amount
Shares sold		159,140		$	2,360,146			—		$	—
Shares repurchased		(422,664	)		(6,192,410	)		(2,927	)		(37,544	)
Shares converted from Class B to Class A		282			3,945			(289	)		(3,945	)
Dividends reinvested		6,676			103,343			—			—
Redemption fees		—			1,029			—			—
Net decrease		(256,566	)	$	(3,723,947	)		(3,216	)	$	(41,489	)

	Class C						Class Y
	Shares			Amount			Shares			Amount
Shares sold		6,893		$	96,760			1,530,200		$	21,692,610
Shares repurchased		(46,214	)		(640,185	)		(2,897,206	)		(41,782,361	)
Dividends reinvested		—			—			101,334			1,579,792
Redemption fees		—			—			—			5,153
Net decrease		(39,321	)	$	(543,425	)		(1,265,672	)	$	(18,504,806	)

UBS U.S. Large Cap Value Equity Fund

	Class A						Class B
	Shares			Amount			Shares			Amount
Shares sold		12,810		$	77,354			—		$	—
Shares repurchased		(694,130	)		(4,158,881	)		(1,408	)		(8,321	)
Shares converted from Class B to Class A		1,903			11,441			(1,919	)		(11,441	)
Dividends reinvested		55,116			348,885			—			—
Redemption fees		—			6			—			—
Net decrease		(624,301	)	$	(3,721,195	)		(3,327	)	$	(19,762	)

	Class C						Class Y
	Shares			Amount			Shares			Amount
Shares sold		12,267		$	72,921			1,864		$	10,927
Shares repurchased		(78,028	)		(457,190	)		(20,445	)		(124,244	)
Dividends reinvested		878			5,453			3,007			19,153
Redemption fees		—			159			—			—
Net decrease		(64,883	)	$	(378,657	)		(15,574	)	$	(94,164	)

123

The UBS Funds

Notes to financial statements (unaudited)

UBS U.S. Small Cap Growth Fund

	Class A						Class B
	Shares			Amount			Shares			Amount
Shares sold		275,657		$	3,492,737			—		$	—
Shares repurchased		(533,262	)		(6,656,709	)		(975	)		(9,947	)
Shares converted from Class B to Class A		1,772			21,316			(1,903	)		(21,316	)
Redemption fees		—			32			—			—
Net decrease		(255,833	)	$	(3,142,624	)		(2,878	)	$	(31,263	)

	Class C						Class Y
	Shares			Amount			Shares			Amount
Shares sold		5,115		$	65,458			866,608		$	11,537,158
Shares repurchased		(28,798	)		(337,891	)		(1,834,616	)		(22,334,462	)
Redemption fees		—			—			—			5,695
Net decrease		(23,683	)	$	(272,433	)		(968,008	)	$	(10,791,609	)

For the year ended June 30, 2010, transactions in shares of beneficial interest for each of the Funds were as follows:

UBS Global Equity Fund

	Class A						Class B
	Shares			Amount			Shares			Amount
Shares sold		145,285		$	1,671,360			370		$	3,963
Shares repurchased		(1,710,774	)		(19,257,996	)		(12,210	)		(130,804	)
Shares converted from Class B to Class A		50,653			548,079			(52,051	)		(548,079	)
Dividends reinvested		148,169			1,703,949			610			6,849
Redemption fees		—			2,645			—			—
Net decrease		(1,366,667	)	$	(15,331,963	)		(63,281	)	$	(668,071	)

	Class C						Class Y
	Shares			Amount			Shares			Amount
Shares sold		51,808		$	561,877			198,746		$	2,341,308
Shares repurchased		(500,865	)		(5,481,257	)		(4,795,448	)		(55,291,516	)
Dividends reinvested		44,968			498,254			89,155			1,050,250
Redemption fees		—			179			—			—
Net decrease		(404,089	)	$	(4,420,947	)		(4,507,547	)	$	(51,899,958	)

124

The UBS Funds

Notes to financial statements (unaudited)

UBS International Equity Fund

	Class A						Class B
	Shares			Amount			Shares			Amount
Shares sold		69,558		$	517,761			—		$	—
Shares repurchased		(302,849	)		(2,206,513	)		(3,341	)		(24,442	)
Shares converted from Class B to Class A		872			6,532			(873	)		(6,532	)
Dividends reinvested		65,443			477,730			2,021			14,771
Redemption fees		—			18			—			—
Net decrease		(166,976	)	$	(1,204,472	)		(2,193	)	$	(16,203	)

	Class C						Class Y
	Shares			Amount			Shares			Amount
Shares sold		27,365		$	195,421			574,341		$	4,301,580
Shares repurchased		(45,826	)		(325,595	)		(8,401,530	)		(62,578,915	)
Dividends reinvested		8,153			58,374			401,282			2,937,384
Redemption fees	—						24			—
Net decrease		(10,308	)	$	(71,776	)		(7,425,907	)	$	(55,339,951	)

UBS U.S. Equity Alpha Fund

	Class A						Class C						Class Y
	Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		425,830		$	3,263,919			32,228		$	247,136			582,815		$	3,686,054
Shares repurchased		(2,400,367	)		(18,257,508	)		(480,716	)		(3,582,496	)		(14,052,092	)		(105,523,694	)
Redemption fees		—			1,576			—			6			—			—
Net decrease		(1,974,537	)	$	(14,992,013	)		(448,488	)	$	(3,335,354	)		(13,469,277	)	$	(101,837,640	)

UBS U.S. Large Cap Equity Fund

	Class A						Class B
	Shares			Amount			Shares			Amount
Shares sold		211,919		$	2,862,468			—		$	—
Shares repurchased		(1,441,915	)		(19,457,342	)		(8,841	)		(110,351	)
Shares converted from Class B to Class A		1,396			18,466			(1,434	)		(18,466	)
Dividends reinvested		42,141			581,128			86			1,161
Redemption fees		—			1,524			—			—
Net decrease		(1,186,459	)	$	(15,993,756	)		(10,189	)	$	(127,656	)

	Class C						Class Y
	Shares			Amount			Shares			Amount
Shares sold		29,251		$	383,526			1,787,956		$	24,638,984
Shares repurchased		(171,958	)		(2,193,369	)		(6,301,552	)		(86,752,280	)
Dividends reinvested		5,224			69,956			377,838			5,251,944
Redemption fees		—			334			—			29,859
Net decrease		(137,483	)	$	(1,739,553	)		(4,135,758	)	$	(56,831,493	)

125

The UBS Funds

Notes to financial statements (unaudited)

UBS U.S. Large Cap Value Equity Fund

	Class A						Class B
	Shares			Amount			Shares			Amount
Shares sold		50,208		$	292,843			—		$	—
Shares repurchased		(1,420,888	)		(8,212,013	)		(6,448	)		(36,185	)
Shares converted from Class B to Class A		26,216			152,591			(26,548	)		(152,591	)
Dividends reinvested		151,731			886,108			122			713
Redemption fees		—			208			—			—
Net decrease		(1,192,733	)	$	(6,880,263	)		(32,874	)	$	(188,063	)

	Class C						Class Y
	Shares			Amount			Shares			Amount
Shares sold		21,177		$	122,270			31,414		$	181,880
Shares repurchased		(219,077	)		(1,252,208	)		(195,293	)		(1,136,648	)
Dividends reinvested		12,907			73,960			9,218			54,109
Redemption fees		—			53			—			103
Net decrease		(184,993	)	$	(1,055,925	)		(154,661	)	$	(900,556	)

UBS U.S. Small Cap Growth Fund

	Class A						Class B
	Shares			Amount			Shares			Amount
Shares sold		606,902		$	6,271,903			—		$	—
Shares repurchased		(2,724,947	)		(27,696,331	)		(3,736	)		(35,773	)
Shares converted from Class B to Class A		10,168			100,987			(10,847	)		(100,987	)
Redemption fees		—			1,782			—			—
Net decrease		(2,107,877	)	$	(21,321,659	)		(14,583	)	$	(136,760	)

	Class C						Class Y
	Shares			Amount			Shares			Amount
Shares sold		8,354		$	82,926			2,133,702		$	22,846,579
Shares repurchased		(79,320	)		(756,398	)		(8,682,682	)		(91,054,728	)
Redemption fees		—			9			—			18,172
Net decrease		(70,966	)	$	(673,463	)		(6,548,980	)	$	(68,189,977	)

126

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 UBS's Web site: www.ubs.com/ubsglobalam-proxy, or on the EDGAR Database on the SEC's Web site (http://www.sec.gov).

127

The UBS Funds

Funds' privacy notice

This notice describes the privacy policy of the UBS Family of Funds, the PACE Funds and all closed-end funds managed by UBS Global Asset Management (collectively, the "Funds"). The Funds are committed to protecting the personal information that they collect about individuals who are prospective, current or former investors.

The Funds collect personal information in order to process requests and transactions and to provide customer service. Personal information, which is obtained from applications, may include name(s), address, social security number or tax identification number, bank account information, other Fund holdings and any affiliation the person has with UBS Financial Services Inc. or its subsidiaries ("Personal Information"). The Funds limit access to Personal Information to those individuals who need to know that information in order to process transactions and service accounts. These individuals are required to maintain and protect the confidentiality of Personal Information. The Funds maintain physical, electronic and procedural safeguards to protect Personal Information. The Funds may share Personal Information described above with their affiliates for marketing and other business purposes, such as to facilitate the servicing of accounts. The Funds may share Personal Information described above with a non-affiliated third party if the entity is under contract to perform transaction processing or to service and maintain shareholder accounts on behalf of the Funds and otherwise as permitted by law. Any such contract will include provisions designed to ensure that the third party will uphold and maintain privacy standards when handling Personal Information. The Funds may also disclose Personal Information to regulatory authorities as required by applicable law. Except as described in this privacy notice, the Funds will not use Personal Information for any other purpose unless the Funds describe how such Personal Information will be used and clients are given an opportunity to decline approval of such use of Personal Information relating to them. The Funds endeavor to keep their customer files complete and accurate. The Funds should be notified if any Personal Information needs to be corrected or updated. Please call 1-800-647 1568 with any questions or concerns regarding your Personal Information or this privacy notice.

Privacy Notice
This privacy notice is not a part of the shareholder report.

128

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The UBS Funds—Asset Allocation

Semiannual Report

December 31, 2010

Table of contents
President's letter	1
Market commentary	2
Asset Allocations
UBS Dynamic Alpha Fund	4
UBS Global Allocation Fund	34
UBS Global Frontier Fund	50
Explanation of expense disclosure	59
Statement of assets and liabilities	61
Statement of operations	63
Statement of changes in net assets	64
Financial highlights	66
Notes to financial statements	72
General information	91

This page intentionally left blank.

President's letter

Dear Shareholder,

In the time since I last wrote to you, we have seen a shift in the investor mindset. Asset flows into equities seem to be turning in a positive direction, as investors appear to be showing interest, once again, in riskier assets. Nonetheless, considering the upward trend in the equity markets and encouraging signs that the economy is on the road to recovery, a surprising number of investors remain sidelined by fear, avoiding "risky" assets in favor of fixed income.

The truth is, market pundits will tell you that, in today's low yield environment, fixed income investing is fraught with its own uncertainties. If rates stay low, so will returns; if bond yields rise, the value of fixed income investments will fall. In short, fixed income may not be the safe harbor that many investors believe it to be.

Fear—arguably, now more than ever, it's one of the biggest obstacles to investor success. That's not to say that when it comes to investing, no fear is a good thing. In fact, fear helps inform an investor's own understanding of the level of risk he or she is willing to assume when it comes to building an investment plan. However, the fear that is so prevalent in the market today has little to do with rational thinking, and everything to do with basic human emotion. In fact, a good portion of investors today are making investment decisions based on their desire to avoid losing money—which turns the whole idea of a long-term investment plan on its head, really.

Irrational fear more often than not has the unfortunate result of leading investors to make the wrong decisions, for the wrong reasons, at the wrong times—often at the expense of their long-term investment success. What can you do to fight it? A key strategy that makes sense in any environment is a diversified portfolio that blends both stocks and bonds. A diversified portfolio can't guarantee against a loss, but it does have the potential to provide you with more consistent returns—making it easier for you to maintain the discipline you need to stay the course to achieve your financial goals.

In 2011, we will continue to build upon our 30-year foundation—growing and evolving to meet not only the challenges of a new market landscape, but also the ever-increasing diversification needs of our clients. At the same time, we will remain resolute in adhering to our disciplined investment approach, so we can seek to avoid the types of traps that can confound fear-driven investors. In doing so, we believe we will be better positioned to provide you, our clients, with the types of investment solutions that will help carry you forward over the next five, 10 or 30 years.

As always, we remain firmly dedicated to your investment success. Thank you for your continued support.

Mark E. Carver
President
The UBS Funds
Managing Director
UBS Global Asset Management (Americas) Inc.

1

The markets in review

Continued economic growth

The overall US economy expanded during the six-months ended December 31, 2010. The US economy has now grown for six consecutive quarters, spurred, in part, due to government stimulus programs, as well as the Federal Reserve Board's (the "Fed's") accommodative monetary policy. However, there continued to be several areas of weakness, most notably unemployment that remained above 9%, which held back a more robust expansion. Looking back, gross domestic product ("GDP") growth was 3.7% during the first quarter of 2010. GDP growth was then 1.7% and 2.6%, respectively, during the second and third quarters of the year. The Commerce Department's initial estimate for GDP growth in the fourth quarter is 3.2%.

Economic growth outside the US was largely positive as well during the reporting period. However, there was a significant disparity between the growth rates in the international developed and emerging market countries. The European sovereign debt crisis, which began in Greece and later impacted Ireland, served to temper growth in a number of developed countries in the Eurozone. In contrast, developing countries, including China and India, continued to see their economies expand at a rapid pace.

The global equity markets end the period with a sharp rally

After a weak first half of 2010, the global stock market generated outstanding results during the reporting period. This was largely due to a strong rally in the fourth quarter. In the US, the S&P 500 Index¹ (the "Index") declined nearly 7% during the first half of the year. However, the market then rebounded and the Index posted positive returns in five of the six months covered by this report. All told, the Index gained 23.27% during the six-months ended December 31, 2010. The market's turnaround was due to several factors, including better than expected corporate profits, a second round of quantitative easing by the Fed and an extension of the Bush-era tax cuts.

International developed equities, as measured by the MSCI EAFE Index (net),² also posted strong returns during the reporting period, gaining 24.18%. While international developed equities lost ground in August and November given concerns regarding the European debt crisis, this was more than offset by their gains during the other four months covered by this report. Emerging market equities (as measured by the MSCI Emerging Markets Index³) performed even better, gaining 26.86% over the same period. Robust economic growth, overall strong demand and rising commodity prices supported emerging market equity prices.

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 and expenses.

²  The MSCI EAFE Index (net) is an index of stocks from 22 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. The index is constructed and managed with a view of being fully investable from the perspective of international institutional investors. Investors should note that indices do not reflect the deduction of fees and expenses.

³  The MSCI Emerging Markets Index is a market capitalization-weighted index composed of companies representative of the market structure of 21 emerging market countries in Europe, Latin America and the Pacific Basin. The index is constructed and managed with a view of being fully investable from the perspective of international institutional investors. Investors should note that indices do not reflect the deduction of fees and expenses.

2

The markets in review

Risk is rewarded in the fixed income markets

While there were periods of volatility, the spread sectors (non-Treasuries) in general produced positive results during the reporting period. This was driven by signs that the economy appeared to be gaining enough momentum to avoid a double-dip recession. In addition, investor demand for the spread sectors was generally robust as investors looked to generate incremental yield in the low interest rate environment. Also supporting the spread sectors were overall strong corporate profits and indications from the Fed that it was prepared to take further actions to bolster the economy. After declining during the first four months of the reporting period, long-term Treasury yields then moved sharply higher in November and December. This was triggered by optimism for a strengthening economy in 2011 and expectations for higher inflation in the future. During the six months ended December 31, 2010, the overall US bond market (as measured by the Barclays Capital US Aggregate Index⁴) returned 1.15%.

Despite giving back a portion of their gains in November, riskier fixed income asset classes generated strong returns, as the BofA Merrill Lynch US High Yield Cash Pay Constrained Index⁵ gained 9.83%, and the J.P. Morgan Emerging Markets Bond Index Global (EMBI Global)⁶ rose 6.33%.

⁴  The Barclays Capital US Aggregate Index is an unmanaged broad-based index designed to measure the US dollar-denominated, investment-grade, fixed rate taxable bond market. 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 and expenses.

⁵  The BofA Merrill Lynch US High Yield Cash Pay Constrained Index is an unmanaged index of publicly placed non-convertible, coupon-bearing US dollar-denominated below investment grade corporate 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 and expenses.

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

3

UBS Dynamic Alpha Fund

Portfolio performance

For the six months ended December 31, 2010, Class A shares of UBS Dynamic Alpha Fund (the "Fund") returned 6.17% (Class A shares returned 0.26% after the deduction of the maximum sales charge), while Class Y shares returned 6.28%. For purposes of comparison, the BofA Merrill Lynch US Treasury 1-5 Year Index returned 0.64% over the same time period, the MSCI World Free Index (net) returned 23.96% and the US Consumer Price Index (CPI) rose 0.56%. (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.)

The Fund's solid absolute performance was primarily due to market allocation decisions.

Portfolio performance summary¹

What worked

•  The Fund's overweight to risk assets made a significant contribution to performance during the six months.

  – The Fund was overweight to equities throughout the period, finishing the six months at a 44% long equity allocation. This position was rewarded as the global economic landscape improved considerably following the recent "Great Recession."

  – Within equities, the Fund was overweight to US versus European stocks. The six-month period saw a large divergence between strong returns in the US, with much lower growth in Europe.

•  A relative value trade in European equities contributed positively to performance.

  – The Fund took a long position in the equities of core European countries such as Germany, while selling short the equities of peripheral European economies like Spain. This strategy was successful as sovereign debt concerns flared anew toward the end of the reporting period, when Ireland received bailout assistance.

•  Security selection made a positive contribution to relative performance during the six months.

  – A major driver of outperformance was the Fixed Income Best Ideas portion of the Fund. This sleeve—a duration-neutral portfolio that invests in global bonds—performed strongly during the period.

¹  For a detailed commentary on the market environment in general during the reporting period, see page 2.

4

UBS Dynamic Alpha Fund

What didn't work

•  The Fund's currency strategy detracted slightly from performance.

  – The Fund sold short several higher-yielding commodity currencies, including the Australian dollar and the New Zealand dollar, because our research indicated that they were mispriced. However, these currencies tend to be highly correlated with risk assets, which outperformed at the end of the review period. As these commodity currencies rose, the Fund's short positions were negatively impacted.

•  Derivatives use across currencies had a negative impact on performance. During the review period, the Fund used derivatives for risk management purposes and as part of the Fund's investment strategies to enhance return across markets and currencies. Performance across market allocation was positively impacted by the use of derivatives, while currency was negatively impacted.

This letter is intended to assist shareholders in understanding how the Fund performed during the six months ended December 31, 2010. The views and opinions in the letter were current as of February 15, 2011. They are not guarantees of future 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 12/31/10 (unaudited)

	6 months			1 year			5 years			Inception1
Before deducting maximum sales charge
Class A2		6.17	%		1.88	%		0.89	%		2.21	%
Class B3		5.93			1.27			0.10			1.42
Class C4		5.88			1.22			0.12			1.42
Class Y5		6.28			2.22			1.19			2.51
After deducting maximum sales charge
Class A2		0.26	%		(3.73	)%		(0.25	)%		1.24	%
Class B3		0.93			(3.71	)		(0.12	)		1.32
Class C4		4.88			0.23			0.12			1.42
BofA Merrill Lynch US Treasury 1-5 Year Index6		0.64	%		3.61	%		4.86	%		4.34	%
MSCI World Free Index (net)7		23.96			11.76			2.43			4.03
US Consumer Price Index (CPI)8		0.56			1.50			2.18			2.38

The annualized gross and net expense ratios, respectively, for each class of shares as in the October 28, 2010 prospectuses were as follows: Class A—1.98% and 1.96%; Class B—2.82% and 2.71%; Class C—2.74% and 2.71%; Class Y—1.66% and 1.66%. 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 UBS Global Asset Management (Americas) Inc., the Fund's investment advisor ("UBS Global AM (Americas)" or 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, interest, taxes, brokerage commissions, extraordinary expenses and securities loan fees and dividend expenses for securities sold short) to the extent necessary so that the Fund's ordinary operating expenses (excluding expenses incurred through investment in other investment companies, interest, taxes, brokerage commissions, extraordinary expenses and securities loan fees and dividend expenses for securities sold short), through the 12-month period ending October 27, 2011, 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 BofA Merrill Lynch US Treasury 1-5 Year Index is an unmanaged index designed to track US Treasury securities with maturities between 1 and 5 years. Investors should note that indices do not reflect the deduction of fees and expenses.

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 May 2010, the index consisted of 24 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 is constructed and managed with a view to being fully investable from the perspective of international institutional investors. 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 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. Total returns for periods of less than one year have not been annualized. 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

Top ten equity holdings (unaudited)^1,2

As of December 31, 2010

	Percentage of net assets
Apple, Inc.		1.4	%
Sage Group PLC		1.0
Nestle SA		0.9
Illinois Tool Works, Inc.		0.9
Novartis AG		0.8
Amazon.com, Inc.		0.7
Allergan, Inc.		0.7
Vodafone Group PLC		0.7
Danaher Corp.		0.7
Google, Inc., Class A		0.7
Total		8.5	%

Country exposure, top five (unaudited)^2,3

As of December 31, 2010

	Percentage of net assets
United States		20.2	%
United Kingdom		10.4
Switzerland		4.9
Netherlands		3.2
Germany		3.1
Total		41.8	%

Top ten long-term fixed income holdings (unaudited)²

As of December 31, 2010

	Percentage of net assets
Federal National Mortgage Association Pool, 4.000%, TBA		0.5	%
US Treasury Bonds, PO, 3.861%, due 08/15/29		0.3
State of California, GO, 7.300%, due 10/01/39		0.3
Federal Home Loan Bank of Chicago, 5.625%, due 06/13/16		0.3
Shasta CLO Ltd., due 04/20/13		0.3
Harbourmaster CLO Ltd., Series 7A, Class C, 12.000%, due 09/22/22		0.3
Highlander Euro CDO, Series 2006-2CA, Class F1, due 12/14/22		0.3
Greenwich Capital Commercial Funding Corp., Series 2007-GG9, Class AM, 5.475%, due 03/10/39		0.2
Citigroup, Inc., 4.750%, due 05/31/17		0.2
Federal National Mortgage Association, 5.976%, due 10/19/19		0.2
Total		2.9	%

¹  Only long positions are considered for top ten holdings.

²  Figures represent the direct investments of UBS Dynamic Alpha Fund. Figures would be different if a breakdown of the underlying investment companies was included.

³  This table includes long and short positions.

7

UBS Dynamic Alpha Fund

Industry diversification (unaudited)¹

As a percentage of net assets as of December 31, 2010

Common stocks
Aerospace & defense	1.74	%
Air freight & logistics	1.41
Airlines	0.29
Auto components	0.43
Automobiles	0.32
Beverages	1.47
Biotechnology	0.54
Building products	0.74
Capital markets	0.80
Chemicals	1.88
Commercial banks	3.85
Communications equipment	1.26
Computers & peripherals	2.53
Construction & engineering	0.31
Construction materials	0.48
Diversified consumer services	0.04
Diversified financial services	0.90
Diversified telecommunication services	1.08
Electric utilities	1.77
Electrical equipment	0.57
Electronic equipment, instruments & components	0.42
Energy equipment & services	1.26
Food & staples retailing	1.11
Food products	2.33
Gas utilities	0.16
Health care equipment & supplies	1.09
Health care providers & services	0.58
Hotels, restaurants & leisure	1.46
Household durables	0.65
Household products	0.57
Industrial conglomerates	0.04
Insurance	1.60
Internet & catalog retail	1.06
Internet software & services	1.15
IT services	0.55
Life sciences tools & services	0.22
Machinery	3.49
Marine	0.09
Media	2.00
Metals & mining	2.07
Multi-utilities	0.46
Office electronics	0.16
Oil, gas & consumable fuels	4.08
Personal products	0.44
Pharmaceuticals	3.61
Professional services	0.07
Real estate management & development	0.05
Road & rail	1.21
Semiconductors & semiconductor equipment	1.63
Software	2.70
Specialty retail	0.88	%
Textiles, apparel & luxury goods	0.74
Tobacco	0.59
Trading companies & distributors	0.42
Wireless telecommunication services	1.36
Total common stocks	62.71	%
Preferred stock	0.68
Bonds
Corporate bonds
Broadcasting	0.14
Building materials	0.03
Building products	0.07
Capital markets	0.16
Chemicals	0.06
Commercial banks	1.00
Construction materials	0.11
Consumer finance	0.43
Containers & packaging	0.25
Diversified financial services	0.79
Diversified telecommunication services	0.08
Electric utilities	0.17
Energy—exploration & production	0.13
Health care providers & services	0.06
Healthcare	0.15
Hotels, restaurants & leisure	0.13
Household durables	0.06
Insurance	0.16
Media	0.11
Metals & mining	0.11
Oil, gas & consumable fuels	0.67
Paper & forest products	0.14
Pharmaceuticals	0.13
Road & rail	0.11
Specialty retail	0.06
Tobacco	0.07
Wireless telecommunication services	0.10
Total corporate bonds	5.48	%
Asset-backed securities	0.82
Collateralized debt obligations	2.11
Commercial mortgage-backed securities	1.26
Mortgage & agency debt securities	1.19
Municipal bonds	0.33
US government obligation	0.31
Non-US government obligation	0.04
Total bonds	11.54	%

8

UBS Dynamic Alpha Fund

Industry diversification (unaudited)¹

As a percentage of net assets as of December 31, 2010

Investment companies
UBS Global Corporate Bond Relationship Fund	10.19	%
UBS Opportunistic Emerging Markets Debt Relationship Fund	2.65
UBS U.S. Equity Alpha Relationship Fund	12.65
Total investment companies	25.49	%
Short-term investment	5.58
Options purchased	0.67
Investment of cash collateral from securities loaned	0.61
Total investments before investments sold short	107.28	%
Investments sold short
Common stocks
Aerospace & defense	(0.66	)
Air freight & logistics	(0.95	)
Airlines	(0.17	)
Automobiles	(0.23	)
Beverages	(0.33	)
Biotechnology	(0.22	)
Chemicals	(0.17	)
Commercial banks	(0.31	)
Communications equipment	(0.21	)
Computers & peripherals	(0.84	)
Diversified telecommunication services	(0.21	)
Electric utilities	(0.36	)
Electrical equipment	(0.44	)
Electronic equipment, instruments & components	(0.26	)
Energy equipment & services	(0.18	)
Food & staples retailing	(0.21	)
Food products	(0.93	)
Health care equipment & supplies	(0.17	)
Health care providers & services	(0.50	)
Hotels, restaurants & leisure	(0.36	)
Household products	(0.30	)%
Independent power producers & energy traders	(0.08	)
Industrial conglomerates	(0.12	)
Insurance	(0.19	)
Internet & catalog retail	(0.20	)
Internet software & services	(0.15	)
IT services	(0.31	)
Leisure equipment & products	(0.07	)
Life sciences tools & services	(0.54	)
Machinery	(0.93	)
Media	(0.44	)
Metals & mining	(0.12	)
Multiline retail	(0.41	)
Multi-utilities	(0.97	)
Oil, gas & consumable fuels	(1.55	)
Pharmaceuticals	(0.95	)
Road & rail	(0.12	)
Semiconductors & semiconductor equipment	(1.19	)
Software	(0.69	)
Specialty retail	(0.66	)
Thrifts & mortgage finance	(0.09	)
Trading companies & distributors	(0.52	)
Water utilities	(0.30	)
Wireless telecommunication services	(0.06	)
Total investments sold short	(18.67	)%
Total investments, net of investments sold short	88.61
Cash and other assets, less liabilities	11.39
Net assets	100.00	%

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

9

UBS Dynamic Alpha Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Shares		Value
Common stocks: 62.71%
Australia: 0.47%
Alumina Ltd.		120,116	$	304,679
BHP Billiton Ltd.		7,532		348,594
Incitec Pivot Ltd.1		200,222		810,957
Mount Gibson Iron Ltd.*		202,175		438,383
National Australia Bank Ltd.		15,389		373,035
Total Australia common stocks				2,275,648
Austria: 0.43%
bwin Interactive Entertainment AG		7,202		283,813
Erste Group Bank AG1		11,405		535,551
Raiffeisen Bank International AG		5,329		291,967
Wiener Staedtische Versicherung AG		18,524		962,792
Total Austria common stocks				2,074,123
Belgium: 0.12%
Anheuser-Busch InBev NV		9,808		560,955
Canada: 0.48%
Lundin Mining Corp.*		51,300		374,573
Potash Corp. of Saskatchewan, Inc.		5,400		836,082
Teck Resources Ltd., Class B1		17,900		1,112,382
Total Canada common stocks				2,323,037
China: 1.25%
Baidu, Inc. ADR*		15,700		1,515,521
China Everbright Ltd.		204,000		460,869
China National Building Material Co., Ltd., H Shares		156,000		357,647
Dongfeng Motor Group Co., Ltd., H Shares		154,000		265,490
Focus Media Holding Ltd. ADR*		39,900		875,007
Fushan International Energy Group Ltd.		414,000		283,890
Hong Kong Exchanges & Clearing Ltd.		40,400		916,339
Shangri-La Asia Ltd.		134,000		363,755
Sina Corp.*		10,700		736,374
Sun Hung Kai Properties Ltd.		14,000		232,529
Total China common stocks				6,007,421
Denmark: 0.53%
Danisco A/S		3,180		290,747
FLSmidth & Co. A/S		6,307		601,523
Jyske Bank A/S*		22,741		1,055,910
Novo Nordisk A/S, Class B		5,480		617,943
Total Denmark common stocks				2,566,123
Finland: 0.39%
Sampo Oyj, Class A		71,075		1,904,299

	Shares		Value
France: 0.90%
BNP Paribas		3,358	$	213,640
Bouygues SA		16,391		706,491
Carrefour SA		18,112		746,665
LVMH Moet Hennessy Louis Vuitton SA		3,194		525,408
Remy Cointreau SA		3,569		252,532
Sanofi-Aventis SA		12,134		775,872
Schneider Electric SA		4,209		629,942
Societe Generale		5,206		279,802
Valeo SA*		3,697		209,790
Total France common stocks				4,340,142
Germany: 2.32%
Allianz SE		4,795		569,824
Bayer AG		14,856		1,097,820
Bayerische Motoren Werke AG		3,846		302,454
Deutsche Post AG		102,658		1,742,210
Dialog Semiconductor PLC*		11,200		254,880
E.ON AG		53,608		1,642,980
GEA Group AG		15,153		437,985
HeidelbergCement AG		16,112		1,009,779
Linde AG		4,011		608,617
MAN SE		4,192		498,501
Muenchener Rueckversicherungs- Gesellschaft AG		4,089		619,906
SAP AG		33,335		1,697,186
Sky Deutschland AG*		95,626		216,468
ThyssenKrupp AG		11,100		459,598
Total Germany common stocks				11,158,208
Greece: 0.22%
Hellenic Telecommunications Organization SA		127,790		1,046,794
Guernsey: 0.01%
Resolution Ltd.		17,509		63,905
India: 0.24%
ICICI Bank Ltd. ADR		13,400		678,576
Tata Motors Ltd. ADR1		17,000		498,780
Total India common stocks				1,177,356
Ireland: 0.75%
Covidien PLC2		30,000		1,369,800
CRH PLC		45,808		948,805
Experian PLC		29,215		363,482
Seagate Technology PLC*2		62,800		943,884
Total Ireland common stocks				3,625,971

10

UBS Dynamic Alpha Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Shares		Value
Common stocks—(Continued)
Israel: 0.08%
Teva Pharmaceutical Industries Ltd. ADR		7,000	$	364,910
Italy: 1.03%
ENI SpA		95,040		2,075,212
Finmeccanica SpA		90,912		1,033,236
Saipem SpA		15,104		743,559
UniCredit SpA		533,204		1,102,982
Total Italy common stocks				4,954,989
Japan: 1.61%
Asahi Glass Co., Ltd.		38,000		444,168
Canon, Inc.1		14,800		767,435
Disco Corp.		7,800		473,630
FANUC Corp.		3,600		552,925
Ibiden Co., Ltd.		10,800		340,801
Isuzu Motors Ltd.		113,000		513,573
Komatsu Ltd.		20,500		620,378
Makino Milling Machine Co., Ltd.*1		55,000		453,196
Mitsubishi Corp.		23,400		633,492
Mitsubishi UFJ Financial Group, Inc.		90,600		489,881
Nippon Sheet Glass Co., Ltd.		96,000		258,948
Nippon Yusen KK		93,000		412,366
Nissan Motor Co., Ltd.		43,200		411,302
NTT DoCoMo, Inc.		162		282,936
THK Co., Ltd.		32,200		740,453
Toshiba Corp.		68,000		370,193
Total Japan common stocks				7,765,677
Luxembourg: 0.28%
ArcelorMittal		35,478		1,345,475
Malaysia: 0.02%
Malayan Banking Bhd		28,100		77,461
Netherlands: 2.19%
ASML Holding NV		28,889		1,115,666
Fugro NV, CVA		4,188		344,180
Gemalto NV		4,374		186,133
Heineken NV		30,016		1,471,650
Hunter Douglas NV		8,330		440,469
ING Groep NV CVA*		123,628		1,202,686
Koninklijke Philips Electronics NV NY Shares		5,800		178,060
Ordina NV*		43,032		211,498
Reed Elsevier NV		102,269		1,265,081
Royal Dutch Shell PLC, Class A		75,935		2,531,776
TNT NV		46,060		1,215,612
Unilever NV CVA		12,152		378,362
Total Netherlands common stocks				10,541,173

	Shares		Value
Norway: 0.78%
Petroleum Geo-Services ASA*		66,818	$	1,040,336
Telenor ASA		135,260		2,197,522
Yara International ASA		8,656		500,664
Total Norway common stocks				3,738,522
Portugal: 0.28%
Portugal Telecom, SGPS, SA		121,647		1,362,227
Russia: 0.26%
Mechel OAO ADR		14,800		432,604
NovaTek OAO GDR		3,825		457,088
VTB Bank OJSC GDR		55,151		363,445
Total Russia common stocks				1,253,137
Singapore: 0.18%
Biosensors International Group Ltd.*		371,000		326,669
Golden Agri-Resources Ltd.		853,000		531,733
Total Singapore common stocks				858,402
South Korea: 0.18%
Hyundai Heavy Industries Co., Ltd.*		1,099		428,987
Hyundai Mobis*		1,670		418,640
Total South Korea common stocks				847,627
Spain: 0.89%
Acciona SA		7,886		558,517
Banco Santander SA		182,560		1,934,075
Enagas SA		38,329		763,932
Inditex SA		6,229		466,383
Telefonica SA		25,566		579,590
Total Spain common stocks				4,302,497
Sweden: 1.29%
Assa Abloy AB, Class B		102,263		2,881,333
Autoliv, Inc.		4,200		331,548
Nordea Bank AB		86,951		945,703
Skandinaviska Enskilda Banken AB, Class A		49,014		408,835
Swedish Match AB		24,942		722,043
Volvo AB, Class B*		51,593		909,023
Total Sweden common stocks				6,198,485
Switzerland: 4.91%
ABB Ltd.*		58,957		1,313,449
Cie Financiere Richemont SA, Class A		16,924		995,529
Clariant AG*		22,431		454,378
Credit Suisse Group AG		30,932		1,246,212
GAM Holding AG*		27,868		460,493

11

UBS Dynamic Alpha Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Shares		Value
Common stocks—(Continued)
Switzerland—(Concluded)
Givaudan SA		2,376	$	2,564,047
Nestle SA		75,736		4,434,809
Nobel Biocare Holding AG		94,198		1,776,161
Novartis AG		68,869		4,047,435
Roche Holding AG		6,547		999,905
Roche Holding AG (Non-voting)		14,342		2,101,448
Swatch Group AG		10,597		854,560
Temenos Group AG*		6,044		251,456
Xstrata PLC		91,629		2,150,739
Total Switzerland common stocks				23,650,621
Taiwan: 0.09%
Taiwan Semiconductor Manufacturing Co., Ltd. ADR		33,700		422,598
Thailand: 0.04%
Italian-Thai Development PCL*		1,200,300		184,753
United Kingdom: 9.83%
Acergy SA		19,182		470,095
Amlin PLC		27,372		174,501
Anglo American PLC		17,492		909,650
BAE Systems PLC		236,060		1,214,536
Barclays PLC		605,459		2,469,900
BG Group PLC		29,224		590,498
BP PLC		306,288		2,223,158
Cattles PLC*3,4		404,007		0
Diageo PLC		135,432		2,502,152
Ensco International PLC ADR2		9,300		496,434
Firstgroup PLC		140,349		871,553
GlaxoSmithKline PLC		55,792		1,078,618
Halma PLC		141,747		793,382
Hiscox Ltd.		52,789		313,905
HSBC Holdings PLC		239,126		2,427,440
Imperial Tobacco Group PLC		44,119		1,353,707
Jardine Lloyd Thompson Group PLC		61,465		602,771
Kingfisher PLC		158,442		650,669
Lloyds Banking Group PLC*		1,850,460		1,895,479
Pearson PLC		76,814		1,207,188
Prudential PLC		145,757		1,518,028
Reckitt Benckiser Group PLC		38,661		2,124,742
Reed Elsevier PLC		156,067		1,317,600
Rio Tinto PLC		8,211		574,351
Sage Group PLC		1,077,902		4,594,643
Sportingbet PLC		459,730		442,244
Stagecoach Group PLC		424,279		1,403,689
Standard Chartered PLC		73,012		1,964,189
Tesco PLC		301,325		1,996,632
Tullow Oil PLC		43,404		853,334
Unilever PLC		95,059		2,909,293
Vodafone Group PLC		1,337,673		3,457,868

	Shares		Value
William Hill PLC		232,093	$	617,688
Wolseley PLC*		42,996		1,371,537
Total United Kingdom common stocks				47,391,474
United States: 30.66%
Adobe Systems, Inc.*2		41,100		1,265,058
Aflac, Inc.2		15,900		897,237
Agilent Technologies, Inc.*		25,100		1,039,893
Alexion Pharmaceuticals, Inc.*2		18,800		1,514,340
Allergan, Inc.2		50,700		3,481,569
Amazon.com, Inc.*2		19,900		3,582,000
American Electric Power Co., Inc.2		52,800		1,899,744
American Tower Corp., Class A*		11,200		578,368
Amylin Pharmaceuticals, Inc.*2		37,000		544,270
Anadarko Petroleum Corp.		13,700		1,043,392
Apollo Group, Inc., Class A*2		5,000		197,450
Apple, Inc.*2		20,400		6,580,224
Arch Coal, Inc.2		20,300		711,718
Autodesk, Inc.*2		43,700		1,669,340
Avon Products, Inc.2		72,500		2,106,850
Baker Hughes, Inc.2		19,000		1,086,230
Bank of New York Mellon Corp.2		18,600		561,720
Baxter International, Inc.2		9,100		460,642
Becton Dickinson & Co.2		5,300		447,956
BlackRock, Inc.		3,500		667,030
Boston Scientific Corp.*2		33,100		250,567
Broadcom Corp., Class A2		43,500		1,894,425
C.H. Robinson Worldwide, Inc.		12,800		1,026,432
CareFusion Corp.*2		6,900		177,330
Carnival Corp.2		17,600		811,536
Celanese Corp., Series A		34,000		1,399,780
Cisco Systems, Inc.*2		46,200		934,626
CME Group, Inc.		2,800		900,900
Coca-Cola Co.2		4,400		289,388
Comcast Corp., Class A2		33,900		744,783
Concho Resources, Inc.*		11,300		990,671
CONSOL Energy, Inc.		19,900		969,926
Crown Castle International Corp.*2		50,500		2,213,415
CVS Caremark Corp.		33,100		1,150,887
Danaher Corp.2		71,900		3,391,523
Discovery Communications, Inc., Class A*		27,400		1,142,580
Dolby Laboratories, Inc., Class A*2		13,500		900,450
Dover Corp.2		27,800		1,624,910
Edison International2		42,500		1,640,500
EMC Corp.*		99,500		2,278,550
EOG Resources, Inc.2		7,800		712,998
Exelon Corp.2		30,600		1,274,184
Express Scripts, Inc.*		14,300		772,915

12

UBS Dynamic Alpha Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Shares		Value
Common stocks—(Concluded)
United States—(Concluded)
F5 Networks, Inc.*		4,800	$	624,768
FedEx Corp.2		30,700		2,855,407
Fidelity National Information Services, Inc.2		39,400		1,079,166
FirstEnergy Corp.2		43,300		1,602,966
Fortune Brands, Inc.2		33,600		2,024,400
Freeport-McMoRan Copper & Gold, Inc.		10,000		1,200,900
GameStop Corp., Class A*2		25,000		572,000
General Dynamics Corp.2		28,100		1,993,976
Genzyme Corp.*2		6,100		434,320
Gilead Sciences, Inc.*2		4,300		155,832
Goldman Sachs Group, Inc.		5,500		924,880
Google, Inc., Class A*2		5,600		3,326,232
Hess Corp.2		5,100		390,354
Hewlett-Packard Co.2		20,100		846,210
Home Depot, Inc.2		46,200		1,619,772
Illinois Tool Works, Inc.2		77,200		4,122,480
IntercontinentalExchange, Inc.*		5,000		595,750
International Game Technology2		70,000		1,238,300
Interpublic Group of Cos., Inc.*		129,000		1,369,980
Intersil Corp., Class A2		91,900		1,403,313
JB Hunt Transport Services, Inc.2		14,800		603,988
Johnson & Johnson2		10,100		624,685
Johnson Controls, Inc.2		29,500		1,126,900
JPMorgan Chase & Co.2		5,900		250,278
Juniper Networks, Inc.*		30,700		1,133,444
Kellogg Co.2		32,400		1,654,992
Kraft Foods, Inc., Class A2		23,500		740,485
Kroger Co.2		64,400		1,439,984
Las Vegas Sands Corp.*		23,400		1,075,230
Lowe's Cos., Inc.2		34,800		872,784
Marvell Technology Group Ltd.*2		48,900		907,095
MasterCard, Inc., Class A2		3,100		694,741
McDonald's Corp.		28,200		2,164,632
McKesson Corp.2		8,900		626,382
MDU Resources Group, Inc.2		52,400		1,062,148
Mead Johnson Nutrition Co.2		5,100		317,475
Medco Health Solutions, Inc., Class A*2		6,900		422,763
Medtronic, Inc.2		11,900		441,371
Merck & Co., Inc.2		18,000		648,720
Microsoft Corp.2		43,100		1,203,352
Molson Coors Brewing Co., Class B2		13,000		652,470
National Semiconductor Corp.2		48,900		672,864
NIKE, Inc., Class B		13,700		1,170,254
Noble Corp.2		8,900		318,353
Norfolk Southern Corp.2		8,500		533,970
Northrop Grumman Corp.2		23,700		1,535,286

	Shares		Value
Occidental Petroleum Corp.		20,800	$	2,040,480
Omnicom Group, Inc.2		11,100		508,380
Oracle Corp.		43,100		1,349,030
PACCAR, Inc.2		18,700		1,073,754
Pall Corp.2		16,400		813,112
Parker Hannifin Corp.		8,200		707,660
Peabody Energy Corp.2		9,300		595,014
PepsiCo, Inc.2		19,900		1,300,067
Pfizer, Inc.2		34,400		602,344
Philip Morris International, Inc.2		13,300		778,449
Praxair, Inc.		6,800		649,196
Precision Castparts Corp.		8,000		1,113,680
Priceline.com, Inc.*2		3,900		1,558,245
Procter & Gamble Co.2		9,600		617,568
QUALCOMM, Inc.2		54,100		2,677,409
Red Hat, Inc.*		11,400		520,410
Riverbed Technology, Inc.*		18,800		661,196
Roper Industries, Inc.		10,900		833,087
Ryder System, Inc.2		31,700		1,668,688
SanDisk Corp.*		18,200		907,452
Schlumberger Ltd.		18,400		1,536,400
Sempra Energy2		21,600		1,133,568
Sherwin-Williams Co.		15,300		1,281,375
Southwest Airlines Co.2		108,700		1,410,926
Sunoco, Inc.2		14,400		580,464
Symantec Corp.*2		29,300		490,482
Teradata Corp.*		17,100		703,836
Texas Instruments, Inc.2		22,300		724,750
Time Warner Cable, Inc.		2		132
Time Warner, Inc.2		4,800		154,416
Tupperware Brands Corp.2		6,400		305,088
Ultra Petroleum Corp.*2		60,700		2,899,639
Union Pacific Corp.		7,800		722,748
United Technologies Corp.2		19,200		1,511,424
UnitedHealth Group, Inc.2		19,100		689,701
US Bancorp2		8,000		215,760
Viacom, Inc., Class B2		21,400		847,654
Watson Pharmaceuticals, Inc.*		17,500		903,875
WellPoint, Inc.*2		4,800		272,928
Wells Fargo & Co.2		27,100		839,829
Whirlpool Corp.2		4,400		390,852
Total United States common stocks				147,695,027
Total common stocks (cost $251,584,506)				302,079,037

13

UBS Dynamic Alpha Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Shares		Value
Preferred stock: 0.68%
Germany: 0.68%
Henkel AG & Co KGaA, Preference shares (cost $1,790,962)		52,303	$	3,252,447
	Face amount
Bonds: 11.54%
Corporate bonds: 5.48%
Australia: 0.11%
Leighton Finance Ltd., 9.500%, due 07/28/14	AUD	250,000		259,790
Wesfarmers Ltd., 8.250%, due 09/11/14		250,000		264,375
Total Australia corporate bonds				524,165
Bermuda: 0.03%
Validus Holdings Ltd., 8.875%, due 01/26/40	$	150,000		159,901
Canada: 0.04%
ING Bank of Canada, 4.300%, due 12/05/16	CAD	200,000		190,084
France: 0.06%
Credit Agricole SA, 6.637%, due 05/31/175,6,7	$	300,000		257,250
Germany: 0.11%
HeidelbergCement AG, 8.000%, due 01/31/17	EUR	350,000		499,275
Greece: 0.03%
OTE PLC, 5.375%, due 02/14/11		125,000		167,373
Ireland: 0.25%
Allied Irish Banks PLC, 1.040%, due 04/11/126		500,000		521,157
Anglo Irish Bank Corp. Ltd., 0.411%, due 11/02/116	$	250,000		176,250
1.143%, due 01/31/116	EUR	250,000		314,031
Ardagh Packaging Finance PLC, 7.375%, due 10/15/17		150,000		201,948
Total Ireland corporate bonds				1,213,386
Luxembourg: 0.10%
GAZ Capital SA for Gazprom, 6.580%, due 10/31/13	GBP	300,000		496,963

	Face amount		Value
Portugal: 0.11%
EDP Finance BV, 4.900%, due 10/01/195	$	600,000	$	511,462
United Kingdom: 0.41%
Barclays Bank PLC, 5.140%, due 10/14/20		275,000		247,430
FCE Bank PLC, 7.125%, due 01/16/12	EUR	350,000		479,398
7.125%, due 01/15/13		250,000		349,108
Lloyds TSB Bank PLC, 5.800%, due 01/13/205	$	600,000		592,419
Virgin Media Finance PLC, 9.125%, due 08/15/16		275,000		292,875
Total United Kingdom corporate bonds				1,961,230
United States: 4.23%
Ally Financial, Inc., 6.625%, due 05/15/12		150,000		154,630
American General Finance Corp., 4.000%, due 03/15/111		600,000		595,500
5.625%, due 08/17/11		300,000		295,125
Anadarko Petroleum Corp., 5.950%, due 09/15/16		300,000		322,287
Apria Healthcare Group, Inc., 11.250%, due 11/01/14		650,000		710,125
Axcan Intermediate Holdings, Inc., 12.750%, due 03/01/16		600,000		616,500
Biomet, Inc., 10.375%, due 10/15/178		250,000		273,125
Boise Cascade LLC, 7.125%, due 10/15/14		700,000		684,250
Cemex Finance LLC, 9.500%, due 12/14/165		150,000		154,687
Chesapeake Energy Corp., 9.500%, due 02/15/15		250,000		281,875
Citigroup, Inc., 4.750%, due 05/31/176	EUR	900,000		1,094,835
Crown Americas LLC, 7.625%, due 05/15/17	$	650,000		698,750
Discover Financial Services, 10.250%, due 07/15/19		300,000		372,364
DISH DBS Corp., 6.625%, due 10/01/14		250,000		259,375
FireKeepers Development Authority, 13.875%, due 05/01/155		300,000		354,750
FirstEnergy Solutions Corp., 6.800%, due 08/15/39		280,000		271,377

14

UBS Dynamic Alpha Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Face amount		Value
Bonds—(Continued)
Corporate bonds—(Concluded)
United States—(Concluded)
Ford Motor Credit Co. LLC, 12.000%, due 05/15/15	$	650,000	$	817,660
Frontier Communications Corp., 8.250%, due 05/01/14		250,000		276,875
Goldman Sachs Group, Inc., 4.100%, due 11/03/15	CAD	200,000		198,827
Hertz Corp., 8.875%, due 01/01/14	$	500,000		511,250
International Lease Finance Corp., 5.000%, due 09/15/12		250,000		251,562
8.625%, due 09/15/155		675,000		725,625
JP Morgan Chase Capital XXVII, 7.000%, due 11/01/39		400,000		418,811
Kinder Morgan Energy Partners LP, 7.300%, due 08/15/33		700,000		779,172
Kinder Morgan Finance Co. ULC, 5.700%, due 01/05/16		587,500		594,844
Merrill Lynch & Co., Inc., 6.400%, due 08/28/17		700,000		740,090
Momentive Performance Materials, Inc., 11.500%, due 12/01/16		250,000		271,250
Morgan Stanley, 7.300%, due 05/13/19		600,000		675,383
Owens Corning, 6.500%, due 12/01/16		300,000		317,736
Owens-Brockway Glass Container, Inc., 7.375%, due 05/15/16		300,000		318,750
Pacific Bell Telephone Co., 7.125%, due 03/15/26		350,000		404,052
Pacific Life Insurance Co., 9.250%, due 06/15/395		500,000		649,767
Petrohawk Energy Corp., 10.500%, due 08/01/14		550,000		627,000
Plains Exploration & Production Co., 7.750%, due 06/15/15		450,000		469,125
Reynolds American, Inc., 6.750%, due 06/15/17		300,000		335,315
Ryerson, Inc., 12.000%, due 11/01/15		500,000		523,750
SLM Corp., 1.300%, due 11/15/116	EUR	250,000		320,503
SunTrust Bank, 7.250%, due 03/15/18	$	300,000		332,637

	Face amount		Value
Tennessee Valley Authority., 4.625%, due 09/15/60	$	600,000	$	561,212
Univision Communications, Inc., 12.000%, due 07/01/145		600,000		657,000
Wachovia Capital Trust III, 5.800%, due 03/15/116,7		300,000		260,250
Wells Fargo Capital XIII, 7.700%, due 03/26/136,7		300,000		310,125
Williams Cos., Inc., 8.750%, due 03/15/32		241,000		294,849
Yankee Acquisition Corp., 8.500%, due 02/15/15		300,000		312,000
Yonkers Racing Corp., 11.375%, due 07/15/165		270,000		297,338
Total United States corporate bonds				20,392,313
Total corporate bonds(cost $25,755,687)				26,373,402
Asset-backed securities: 0.82%
Cayman Islands: 0.16%
Commercial Industrial Finance Corp., Series 2007-1A, Class A1LB, 0.626%, due 05/10/213,5,6,9		1,000,000		783,900
United Kingdom: 0.16%
Chester Asset Receivables Dealings, Series 2004-1, Class C, 1.638%, due 04/15/166	GBP	170,000		244,183
Chester Asset Receivables Dealings No. 12 PLC, Series C, 2.190%, due 01/18/116		320,000		498,748
Total United Kingdom asset-backed securities				742,931
United States: 0.50%
Ameriquest Mortgage Securities, Inc., Series 2005-R6, Class A2, 0.461%, due 08/25/356	$	83,527		80,805
Citibank Credit Card Issuance Trust, Series 2008-C6, Class C6, 6.300%, due 06/20/14		200,000		211,565
First Franklin Mortgage Loan Asset Backed Certificates, Series 2006-FF15, Class A3, 0.311%, due 11/25/366		47,577		47,174

15

UBS Dynamic Alpha Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Face amount		Value
Bonds—(Continued)
Asset-backed securities—(Concluded)
United States—(Concluded)
Home Equity Asset Trust, Series 2006-3, Class 2A3, 0.441%, due 07/25/366	$	317,624	$	306,009
Home Equity Mortgage Trust, Series 2006-6, Class 2A1, 0.361%, due 03/25/376		2,528,942		171,336
MBNA Credit Card Master Note Trust, Series 2003-C7, Class C7, 1.610%, due 03/15/166		375,000		370,576
Nomura Asset Acceptance Corp., Series 2006-S4, Class A1, 0.431%, due 08/25/363,6		1,041,890		329,102
Popular ABS Mortgage Pass-Through Trust, Series 2006-E, Class A1, 0.351%, due 01/25/376		13,553		13,506
Renaissance Home Equity Loan Trust, Series 2006-4, Class AV1, 0.331%, due 01/25/376		31,402		31,175
Series 2005-3, Class AF3, 4.814%, due 11/25/3510		51,746		50,090
Residential Asset Securities Corp., Series 2006-KS2, Class A3, 0.451%, due 03/25/366		326,019		311,072
Series 2005-KS11, Class AI3, 0.461%, due 12/25/356		34,054		33,451
SACO I Trust, Series 2006-3, Class A1, 0.621%, due 04/25/366		1,601,104		461,934
Soundview Home Equity Loan Trust, Series 2006-OPT3, Class 2A2, 0.371%, due 06/25/366		4,583		4,560
Total United States asset-backed securities				2,422,355
Total asset-backed securities(cost $6,837,768)				3,949,186
Collateralized debt obligations: 2.11%
Cayman Islands: 0.66%
Avenue CLO Fund Ltd., Series 2007-5I, Class SUB, due 04/25/193,11		2,200,000		880,000
FM Leveraged Capital Fund II, due 11/20/203,5,6,9,11		5,300,000		378,950

	Face amount		Value
Harbourview CLO VI Ltd., Series 6A, Class SUB, due 12/27/193,5,9,11	$	1,200,000	$	612,000
LNR CDO Ltd., Series 2006-1A, Class FFX, 7.592%, due 05/28/433,5,9		8,000,000		0
Shasta CLO Ltd., due 04/20/133,5,6,9,11		2,000,000		1,300,000
Total Cayman Islands collateralized debt obligations				3,170,950
Ireland: 0.20%
Eurocredit CDO BV, Series VI-X, Class SUB, due 01/16/223,6,11		2,500,000		968,818
Luxembourg: 0.03%
Ashwell Rated SA, 6.625%, due 12/22/773,4,5,6,9	GBP	1,950,000		30
GSC European CDO SA, Series I-RA, Class SUB, due 12/15/223,5,6,9,11	EUR	2,400,000		160,356
Total Luxembourg collateralized debt obligations				160,386
Netherlands: 1.01%
Ares Euro CLO BV, Series 2007-1A, Class G1, 13.138%, due 05/15/243,5,6,9		1,400,000		598,662
Harbourmaster CLO Ltd., Series 7A, Class C, 12.000%, due 09/22/223,5,9		3,000,000		1,282,848
Highlander Euro CDO, Series 2006-2CA, Class F1, due 12/14/223,5,9,11,12		3,000,000		1,242,759
Prospero CLO I BV, Series I-A, Class A2, 0.829%, due 03/20/173,5,6,9	$	1,000,000		817,500
Regent's Park CDO BV, Series 1A, Class F, 6.465%, due 01/26/233,5,6,9	EUR	2,000,000		935,410
Total Netherlands collateralized debt obligations				4,877,179
United States: 0.21%
Cent CDO Ltd., Series 2006-12A, Class INC, 0.540%, due 11/18/203,11	$	2,000,000		1,000,000
Total collateralized debt obligations(cost $43,408,117)				10,177,333

16

UBS Dynamic Alpha Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Face amount		Value
Bonds—(Continued)
Commercial mortgage-backed securities: 1.26%
United States: 1.26%
Banc of America Commercial Mortgage, Inc., Series 2007-2, Class AM, 5.699%, due 04/10/496	$	450,000	$	431,713
Series 2007-4, Class A4, 5.742%, due 02/10/516		400,000		426,073
Citigroup Commercial Mortgage Trust, Series 2007-C6, Class AM, 5.698%, due 12/10/496		650,000		644,870
Commercial Mortgage Pass Through Certificates, Series 2006-C8, Class AM, 5.347%, due 12/10/46		300,000		288,339
GE Capital Commercial Mortgage Corp., Series 2007-C1, Class A4, 5.543%, due 12/10/49		400,000		411,841
Greenwich Capital Commercial Funding Corp., Series 2007-GG9, Class AM, 5.475%, due 03/10/39		1,200,000		1,198,881
Series 2006-GG7, Class A4, 5.883%, due 07/10/386		900,000		981,899
JP Morgan Chase Commercial Mortgage Securities Corp., Series 2006-CB17, Class AM, 5.464%, due 12/12/43		300,000		294,775
Series 2007-LD12, Class A4, 5.882%, due 02/15/516		825,000		873,472
Morgan Stanley Re-REMIC Trust, Series 2009-GG10, Class A4B, 5.807%, due 08/12/455,6		500,000		496,845
Total commercial mortgage-backed securities(cost $4,909,423)				6,048,708
Mortgage & agency debt securities: 1.19%
United States: 1.19%
American Home Mortgage Investment Trust, Series 2006-3, Class 4A, 0.451%, due 11/25/356		2,607,823		624,782
Countrywide Alternative Loan Trust, Series 2006-45T1, Class M1, 6.000%, due 02/25/37		42,493		4

	Face amount		Value
Credit Suisse Mortgage Capital Certificates, Series 2006-4, Class CB1, 5.603%, due 05/25/366	$	624,152	$	3,745
Series 2006-7, Class B1, 5.848%, due 08/25/366		179,360		2,353
Federal Home Loan Bank of Chicago, 5.625%, due 06/13/16		1,300,000		1,407,690
Federal National Mortgage Association, 5.976%, due 10/09/1912,13		1,700,000		1,073,419
Federal National Mortgage Association Pool, 4.000%, TBA13		2,325,000		2,306,109
GSR Mortgage Loan Trust, Series 2006-5F, Class B1, 6.056%, due 06/25/366		954,956		29,978
Harborview Mortgage Loan Trust, Series 2005-3, Class 2A1A, 0.501%, due 06/19/356		252,692		171,217
Structured Adjustable Rate Mortgage Loan Trust, Series 2005-7, Class B11, 3.162%, due 04/25/356		1,678,671		58,101
WaMu Mortgage Pass-Through Certificates, Series 2006-AR16, Class 3B1, 5.581%, due 12/25/366		1,296,576		27,215
Wells Fargo Mortgage Backed Securities Trust, Series 2006-AR12, Class 2B1, 5.928%, due 09/25/366		249,711		2,497
Series 2006-18, Class B1, 6.000%, due 12/26/36		1,169,655		9,026
Total mortgage & agency debt securities(cost $8,021,498)				5,716,136
Municipal bonds: 0.33%
State of California, GO, 7.300%, due 10/01/39		1,425,000		1,445,449
State of Illinois, GO, Series 2010, 4.421%, due 01/01/15		165,000		166,450
Total municipal bonds(cost $1,601,585)				1,611,899

17

UBS Dynamic Alpha Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Face amount		Value
Bonds—(Concluded)
US government obligation: 0.31%
US Treasury Bonds, PO, 3.861%, due 08/15/2912 (cost $1,692,446)	$	3,500,000	$	1,499,855
Non-US government obligation: 0.04%
Greece: 0.04%
Hellenic Republic Government Bond, 4.300%, due 03/20/12 (cost $208,379)	EUR	160,000		194,929
Total bonds (cost $92,434,903)				55,571,448
	Shares
Investment companies: 25.49%
UBS Global Corporate Bond Relationship Fund*14		4,518,395		49,072,477
UBS Opportunistic Emerging Markets Debt Relationship Fund*14		769,619		12,781,528
UBS U.S. Equity Alpha Relationship Fund*14		5,383,420		60,908,010
Total investment companies (cost $99,777,283)				122,762,015
Short-term investment: 5.58%
Investment company: 5.58%
UBS Cash Management Prime Relationship Fund14 (cost $26,894,610)		26,894,610		26,894,610
	Number of contracts
Options purchased: 0.67%
Call option: 0.42%
S&P 500 Index, strike @ USD 1,175.00, expires March 2011*		213		2,040,540
Put options: 0.14%
10 Year US Treasury Notes, strike @ USD 119.50, expires January 2011*		120		73,125
2 Year US Treasury Notes, strike @ USD 109.00, expires January 2011*		138		10,781

	Number of contracts		Value
5 Year US Treasury Notes, strike @ USD 117.50, expires January 2011*		120	$	61,875
90 Day Euro-Dollar Futures, strike @ USD 96.00, expires March 2011*		161		1,006
90 Day Euro-Dollar Futures, strike @ USD 95.00, expires June 2011*		144		900
90 Day Euro-Dollar Futures, strike @ USD 96.00, expires September 2011*		528		6,600
90 Day Euro-Dollar Time Deposit, strike @ USD 99.25, expires September 2012*		232		503,150
Japan 10 Year, strike @ JPY 140.00, expires January 2011*		2		9,854
	Face amount covered by contracts
Foreign Exchange Option, Buy AUD/USD, strike @ AUD 0.94, expires January 2011*	$	10,451,000		8,199
Foreign Exchange Option, Buy AUD/USD, strike @ AUD 0.91, expires January 2011*		10,544,000		6,589
	Notional amount
Options purchased on interest rate swaps: 0.11%
Expiring 04/15/11. If option exercised the Fund pays monthly floating 28 day MEXIBOR and receives monthly 4.860%. Underlying interest rate swap terminating 04/15/13. European style. Counterparty: Deutsche Bank AG*	MXN	1,472,000,000		16,746
Expiring 04/18/11. If option exercised the Fund pays monthly floating 28 day MEXIBOR and receives monthly 4.870%. Underlying interest rate swap terminating 04/16/13. European style. Counterparty: Deutsche Bank AG*		1,472,000,000		19,189

18

UBS Dynamic Alpha Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Notional amount		Value
Options purchased—(Concluded)
Options purchased on interest rate swaps—(Concluded)
Expiring 04/27/11. If option exercised the Fund pays 4.035% and receives semi-annually floating 6 month LIBOR. Underlying interest rate swap terminating 04/27/18. European style. Counterparty: Deutsche Bank AG*	GBP	6,500,000	$	18,656
Expiring 04/29/11. If option exercised the Fund pays monthly floating 28 day MEXIBOR and receives monthly 4.920%. Underlying interest rate swap terminating 04/29/13. European style. Counterparty: Citi Bank Bank NA*	MXN	1,570,400,000		60,955
Expiring 05/05/11. If option exercised the Fund pays monthly floating 28 day MEXIBOR and receives monthly 5.160%. Underlying interest rate swap terminating 05/03/13. European style. Counterparty: Deutsche Bank AG*		1,470,500,000		99,416
Expiring 06/08/11. If option exercised the Fund pays 1.990% and receives quarterly floating 3 month LIBOR. Underlying interest rate swap terminating 06/30/13. European style. Counterparty: Deutsche Bank AG*	$	32,500,000		33,603
Expiring 04/18/11. If option exercised the Fund pays fixed 6.000% and receives quarterly 3 month LIBOR. Underlying interest rate swap terminating 02/15/11. European style. Counterparty: Deutsche Bank AG*		7,050,000		278,566
Total options purchased (cost $4,368,888)				3,249,750

	Shares			Value
Investment of cash collateral from securities loaned: 0.61%
UBS Private Money Market Fund LLC,14 (cost $2,930,382)	$	2,930,382		$	2,930,382
Total investments before investments sold short: 107.28% (cost $479,781,534)					516,739,689
Investments sold short: (18.67)%
Common stocks: (18.67)%
Ireland: (0.11)%
Ingersoll-Rand PLC		(11,000	)		(517,990	)
Switzerland: (0.05)%
Mettler-Toledo International, Inc.		(1,700	)		(257,057	)
United States: (18.51)%
3M Co.		(6,700	)		(578,210	)
Advanced Micro Devices, Inc.		(95,500	)		(781,190	)
Akamai Technologies, Inc.		(15,000	)		(705,750	)
Alliant Energy Corp.		(29,900	)		(1,099,423	)
Altera Corp.		(38,100	)		(1,355,598	)
Amedisys, Inc.		(9,400	)		(314,900	)
American Water Works Co., Inc.		(30,100	)		(761,229	)
Aqua America, Inc.		(29,200	)		(656,416	)
Archer-Daniels-Midland Co. NPV		(5,200	)		(156,416	)
Best Buy Co., Inc.		(25,100	)		(860,679	)
Bio-Reference Labs, Inc.		(24,200	)		(536,756	)
BMC Software, Inc.		(53,700	)		(2,531,418	)
Bristol-Myers Squibb Co.		(28,600	)		(757,328	)
Brown-Forman Corp., Class B		(22,900	)		(1,594,298	)
C.H. Robinson Worldwide, Inc.		(30,100	)		(2,413,719	)
Calpine Corp.		(29,200	)		(389,528	)
Cardinal Health, Inc.		(14,000	)		(536,340	)
Caterpillar, Inc.		(15,200	)		(1,423,632	)
Celgene Corp.		(9,900	)		(585,486	)
CenturyLink, Inc.		(10,500	)		(484,785	)
Cephalon, Inc.		(7,900	)		(487,588	)
Charles River Laboratories International, Inc.		(31,300	)		(1,112,402	)
Chesapeake Energy Corp.		(33,500	)		(867,985	)
Chevron Corp.		(8,500	)		(775,625	)
Church & Dwight Co., Inc.		(4,300	)		(296,786	)
Clorox Co.		(18,500	)		(1,170,680	)
Cognizant Technology Solutions Corp., Class A		(3,400	)		(249,186	)
Compuware Corp.		(24,300	)		(283,581	)
ConocoPhillips		(9,300	)		(633,330	)
CONSOL Energy, Inc.		(9,700	)		(472,778	)
Consolidated Edison, Inc.		(31,600	)		(1,566,412	)
Corning, Inc.		(35,200	)		(680,064	)
Covance, Inc.		(7,700	)		(395,857	)
CSX Corp.		(9,100	)		(587,951	)

19

UBS Dynamic Alpha Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Shares			Value
Investments sold short—(Concluded)
Common stocks—(Concluded)
United States—(Concluded)
Deere & Co.		(6,300	)	$	(523,215	)
Dell, Inc.		(98,400	)		(1,333,320	)
Delta Air Lines, Inc.		(63,800	)		(803,880	)
Diebold, Inc.		(19,900	)		(637,795	)
Discovery Communications, Inc., Class A		(6,600	)		(275,220	)
Dollar General Corp.		(11,800	)		(361,906	)
Duke Energy Corp.		(19,500	)		(347,295	)
EI Du Pont de Nemours & Co.		(16,000	)		(798,080	)
Eli Lilly & Co.		(59,200	)		(2,074,368	)
EMC Corp.		(69,000	)		(1,580,100	)
Emerson Electric Co.		(14,100	)		(806,097	)
EQT Corp.		(9,500	)		(425,980	)
Expeditors International Washington, Inc.		(40,100	)		(2,189,460	)
Express Scripts, Inc.		(5,000	)		(270,250	)
Fiserv, Inc.		(10,600	)		(620,736	)
Flextronics International Ltd.		(70,900	)		(556,565	)
Flowers Foods, Inc.		(27,000	)		(726,570	)
Ford Motor Co.		(66,300	)		(1,113,177	)
Forest Laboratories, Inc.		(31,600	)		(1,010,568	)
Freeport-McMoRan Copper & Gold, Inc.		(4,900	)		(588,441	)
Gap, Inc.		(38,400	)		(850,176	)
Goodrich Corp.		(21,100	)		(1,858,277	)
Hasbro, Inc.		(7,500	)		(353,850	)
Hershey Co.		(25,700	)		(1,211,755	)
Honeywell International, Inc.		(13,700	)		(728,292	)
Hormell Foods Corp.		(9,500	)		(486,970	)
Hospira, Inc.		(13,100	)		(729,539	)
Hudson City Bancorp, Inc.		(32,700	)		(416,598	)
Humana, Inc.		(8,500	)		(465,290	)
Integrys Energy Group, Inc.		(4,500	)		(218,295	)
Intel Corp.		(77,900	)		(1,638,237	)
International Business Machines Corp.		(4,300	)		(631,068	)
Intuitive Surgical, Inc.		(3,100	)		(799,025	)
ITT Corp.		(11,000	)		(573,210	)
JC Penney Co., Inc.		(8,100	)		(261,711	)
Joy Global, Inc.		(8,100	)		(702,675	)
Laboratory Corp. of America Holdings		(3,100	)		(272,552	)
Lamar Advertising Co., Class A		(39,300	)		(1,565,712	)
Linear Technology Corp.		(10,600	)		(366,654	)
McDonald's Corp.		(11,700	)		(898,092	)
MetroPCS Communications, Inc.		(23,600	)		(298,068	)
Micron Technology, Inc.		(41,000	)		(328,820	)
Motorola, Inc.		(71,700	)		(650,319	)
Navistar International Corp.		(12,100	)		(700,711	)

	Shares			Value
NetApp, Inc.		(8,500	)	$	(467,160	)
NetFlix, Inc.		(5,600	)		(983,920	)
Nordstrom, Inc.		(7,600	)		(322,088	)
Novellus Systems, Inc.		(32,600	)		(1,053,632	)
NSTAR		(34,300	)		(1,447,117	)
Nvidia Corp.		(11,500	)		(177,100	)
Occidental Petroleum Corp.		(23,200	)		(2,275,920	)
O'Reilly Automotive, Inc.		(19,000	)		(1,147,980	)
Parker Hannifin Corp.		(6,600	)		(569,580	)
Pioneer Natural Resources Co.		(10,000	)		(868,200	)
PNC Financial Services Group, Inc.		(14,100	)		(856,152	)
Quicksilver Resources, Inc.		(32,800	)		(483,472	)
Red Hat, Inc.		(10,800	)		(493,020	)
Regions Financial Corp.		(91,500	)		(640,500	)
Rockwell Automation, Inc.		(18,000	)		(1,290,780	)
Sara Lee Corp.		(19,500	)		(341,445	)
Schlumberger Ltd.		(10,300	)		(860,050	)
Sears Holdings Corp.		(14,400	)		(1,062,000	)
Smithfield Foods, Inc.		(41,500	)		(856,145	)
Southern Co.		(36,600	)		(1,399,218	)
Spectra Energy Corp.		(26,600	)		(664,734	)
Starwood Hotels & Resorts Worldwide, Inc.		(13,200	)		(802,296	)
Tellabs, Inc.		(58,000	)		(393,240	)
Thermo Fisher Scientific, Inc.		(15,800	)		(874,688	)
TJX Cos., Inc.		(6,300	)		(279,657	)
Travelers Cos., Inc.		(16,400	)		(913,644	)
Tyson Foods, Inc., Class A		(43,100	)		(742,182	)
Verizon Communications, Inc.		(15,100	)		(540,278	)
Walt Disney Co.		(7,500	)		(281,325	)
Whole Foods Market, Inc.		(20,200	)		(1,021,918	)
WW Grainger, Inc.		(18,300	)		(2,527,413	)
Xcel Energy, Inc.		(15,700	)		(369,735	)
Total United States common stocks					(89,158,834	)
Total common stocks and investments sold short (proceeds $(65,367,865))					(89,933,881	)
Total investments, net of investments sold short: 88.61%					426,805,808
Cash and other assets, less liabilities: 11.39%					54,876,079
Net assets: 100.00%				$	481,681,887

20

UBS Dynamic Alpha Fund

Portfolio of investments

December 31, 2010 (unaudited)

Notes to portfolio of investments

Aggregate cost for federal income tax purposes, before investments sold short, was substantially the same as for book purposes; and net unrealized appreciation consisted of:

Gross unrealized appreciation	$	84,437,205
Gross unrealized depreciation		(47,479,050	)
Net unrealized appreciation of investments	$	36,958,155

*  Non-income producing security.

¹  Security, or portion thereof, was on loan at December 31, 2010.

²  All or a portion of these securities have been designated as collateral for open short positions.

³  Security is illiquid. At December 31, 2010, the value of these securities amounted to $11,290,335 or 2.34% of net assets.

⁴  Security is being fair valued by a valuation committee under the direction of the Board of Trustees. At December 31, 2010, the value of these securities amounted to $30 or 0.00% of net assets.

⁵  Security exempt from registration pursuant to Rule 144A under 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 December 31, 2010, the value of these securities amounted to $12,809,558 or 2.66% of net assets.

⁶  Variable or floating rate security. The interest rate shown is the current rate as of December 31, 2010 and changes periodically.

⁷  Perpetual bond security. The maturity date reflects the next call date.

⁸  PIK—Payment-in kind security. Income may be paid in cash or additional notes, at the discretion of the issuer.

⁹  These securities, which represent 1.68% of net assets as of December 31, 2010, are considered restricted. (See restricted securities table below for more information.)

Restricted securities	Acquisition date	Acquisition cost		Acquisition cost as a percentage of net assets			Value 12/31/10		12/31/10 Value as a percentage of net assets
Ares Euro CLO BV, Series 2007-1A, Class G1, 13.138%, due 05/15/24	03/26/07	$	1,863,680		0.39	%	$	598,662		0.12	%
Ashwell Rated SA, 6.625%, due 12/22/77	01/29/07		3,660,332		0.76			30		0.001
Commercial Industrial Finance Corp., Series 2007-1A, Class A1LB, 0.626%, due 05/10/21	09/30/09		692,500		0.14			783,900		0.16
FM Leveraged Capital Fund II, due 11/20/20	10/31/06		5,300,000		1.10			378,950		0.08
GSC European CDO SA, Series I-RA, Class SUB, due 12/15/22	12/01/06		3,200,760		0.66			160,356		0.03
Harbourmaster CLO Ltd., Series 7A, Class C, 12.000%, due 09/22/22	10/31/06		3,637,455		0.76			1,282,848		0.27
Harbourview CLO VI Ltd., Series 6A, Class SUB, due 12/27/19	10/20/06		1,128,000		0.23			612,000		0.13
Highlander Euro CDO, Series 2006-2CA, Class F1, due 12/14/22	11/28/06		3,840,472		0.80			1,242,759		0.26
LNR CDO Ltd., Series 2006-1A, Class FFX, 7.592%, due 05/28/43	11/03/06		8,138,056		1.69			0		0.00
Prospero CLO I BV, Series I-A, Class A2, 0.829%, due 03/20/17	10/29/09		760,000		0.16			817,500		0.17
Regent's Park CDO BV, Series 1A, Class F, 6.465%, due 01/26/23	09/25/06		2,551,500		0.53			935,410		0.19
Shasta CLO Ltd., due 04/20/13	12/20/06		1,900,000		0.39			1,300,000		0.27
		$	36,672,755		7.61	%	$	8,112,415		1.68	%

¹  Amount represents less than 0.005%.

21

UBS Dynamic Alpha Fund

Portfolio of investments

December 31, 2010 (unaudited)

¹⁰  Step bond—Coupon rate increases in increments to maturity. Rate disclosed is as of December 31, 2010. Maturity date disclosed is the ultimate maturity date.

¹¹  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.

¹²  Rate shown reflects annualized yield at December 31, 2010 on zero coupon bond.

¹³  On September 7, 2008, the Federal Housing Finance Agency placed the Federal Home Loan Mortgage Corporation and the Federal National Mortgage Association into conservatorship, and the US Treasury guaranteed the debt issued by those organizations.

¹⁴  The table below details the Fund's investments in funds advised by the same advisor as the Fund. The advisor does not earn a management fee from the affiliated UBS Relationship Funds.

Security description	Value 06/30/10		Purchases during the six months ended 12/31/10		Sales during the six months ended 12/31/10		Net realized gain during the six months ended 12/31/10		Change in net unrealized appreciation/ depreciation during the six months ended 12/31/10		Value 12/31/10		Income earned from affiliate for the six months ended 12/31/10
UBS Cash Management Prime Relationship Fund	$	30,452,523	$	182,631,389	$	186,189,302	$	—	$	—	$	26,894,610	$	34,557
UBS Private Money Market Fund LLC1		4,355,230		31,662,039		33,086,887		—		—		2,930,382		27,323
UBS Global Corporate Bond Relationship Fund		53,202,142		—		6,250,000		552,020		1,568,315		49,072,477		—
UBS Opportunistic Emerging Markets Debt Relationship Fund		17,369,977		—		6,500,000		1,858,834		52,717		12,781,528		—
UBS U.S. Equity Alpha Relationship Fund		62,547,042		—		15,000,000		3,203,557		10,157,411		60,908,010		—
	$	167,926,914	$	214,293,428	$	247,026,189	$	5,614,411	$	11,778,443	$	152,587,007	$	61,880

¹  The adviser does earn a management fee from this affiliated fund, and any income earned is net of expenses. Please see the Notes to financial statements for further information.

ABS  Asset-backed securities

ADR  American depositary receipt

CDO  Collateralized debt obligations

CLO  Collateralized loan obligations

CVA  Dutch certification—depository certificate

GDR  Global depositary receipt

GE  General Electric

GO  General Obligation

GSR  Goldman Sachs Residential

LIBOR  London Interbank Offered Rate

MEXIBOR  Mexican Interbank Offered Rate

NPV  No Par Value

OJSC  Open joint stock company

PO  Principal only security—This security entitles the holder to receive principal payments from an underlying pool of assets. High prepayments return principal faster than expected and cause the yield to increase. Low prepayments return principal slower than expected and cause the yield to decrease.

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.

Re-REMIC  Combined Real Estate Mortgage Investment Conduit

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.

22

UBS Dynamic Alpha Fund

Portfolio of investments

December 31, 2010 (unaudited)

Currency type abbreviations:

AUD  Australian Dollar

CAD  Canadian Dollar

EUR  Euro

GBP  Great Britain Pound

JPY  Japanese Yen

USD  United States Dollar

Forward foreign currency contracts

UBS Dynamic Alpha Fund had the following open forward foreign currency contracts as of December 31, 2010:

Counterparty	Contracts to deliver		In exchange for		Maturity date	Unrealized appreciation/ (depreciation)
Goldman Sachs International	AUD	48,840,000	USD	46,593,360	03/03/11	$	(2,995,845	)
Goldman Sachs International	TRY	11,524,509	USD	7,360,000	03/03/11		(52,569	)
JPMorgan Chase Bank	AUD	480,000	USD	465,162	03/02/11		(22,259	)
JPMorgan Chase Bank	CAD	410,000	USD	405,108	03/02/11		(6,774	)
JPMorgan Chase Bank	CHF	2,500,000	USD	2,497,088	03/03/11		(178,368	)
JPMorgan Chase Bank	DKK	15,470,000	USD	2,746,429	03/03/11		(26,511	)
JPMorgan Chase Bank	EUR	480,000	USD	642,360	03/02/11		1,023
JPMorgan Chase Bank	GBP	695,000	USD	1,095,198	03/02/11		12,083
JPMorgan Chase Bank	NOK	12,360,000	USD	1,997,430	03/03/11		(114,780	)
JPMorgan Chase Bank	USD	231,926	CAD	235,000	03/02/11		4,153
JPMorgan Chase Bank	USD	1,661,808	EUR	1,260,000	03/02/11		21,702
JPMorgan Chase Bank	USD	8,318,321	EUR	6,300,000	03/03/11		99,193
JPMorgan Chase Bank	USD	2,417,795	GBP	1,550,000	03/03/11		(2,234	)
JPMorgan Chase Bank	USD	44,762,192	KRW	51,857,000,000	03/03/11		794,234
JPMorgan Chase Bank	USD	47,185,444	MXN	595,150,000	03/03/11		802,491
JPMorgan Chase Bank	USD	15,983,560	MYR	50,556,000	03/03/11		350,824
JPMorgan Chase Bank	USD	32,206,417	TWD	973,600,000	03/03/11		1,230,137
Morgan Stanley & Co. Inc.	CAD	34,620,000	USD	33,762,434	03/03/11		(1,015,691	)
Morgan Stanley & Co. Inc.	CHF	17,460,000	USD	17,414,548	03/03/11		(1,270,840	)
Morgan Stanley & Co. Inc.	EUR	108,505,000	USD	143,209,462	03/03/11		(1,765,516	)
Morgan Stanley & Co. Inc.	GBP	37,575,000	USD	58,902,758	03/03/11		344,876
Morgan Stanley & Co. Inc.	NZD	83,815,000	USD	62,518,866	03/03/11		(2,489,725	)
Morgan Stanley & Co. Inc.	TRY	32,445,000	USD	21,475,377	03/03/11		606,740
Morgan Stanley & Co. Inc.	USD	8,095,119	JPY	677,100,000	03/03/11		249,658
Morgan Stanley & Co. Inc.	USD	20,879,103	PLN	64,245,000	03/03/11		743,187
Morgan Stanley & Co. Inc.	USD	23,505,406	SEK	165,880,000	03/03/11		1,108,903
Morgan Stanley & Co. Inc.	USD	30,228,610	SGD	39,880,000	03/03/11		846,312
Morgan Stanley & Co. Inc.	USD	42,912,444	TRY	64,890,000	03/03/11		(1,175,170	)
Royal Bank of Scotland	EUR	7,975,000	USD	10,613,585	03/02/11		(41,972	)
Royal Bank of Scotland	USD	4,955,442	GBP	3,190,000	03/03/11		15,939
Net unrealized depreciation on forward foreign currency contracts						$	(3,926,799	)

23

UBS Dynamic Alpha Fund

Portfolio of investments

December 31, 2010 (unaudited)

Currency type abbreviations:

AUD  Australian Dollar

CAD  Canadian Dollar

CHF  Swiss Franc

DKK  Danish Krone

EUR  Euro

GBP  Great Britain Pound

JPY  Japanese Yen

KRW  Korean Won

MXN  Mexican Peso

MYR  Malaysian Ringgit

NOK  Norwegian Krone

NZD  New Zealand Dollar

PLN  Polish Zloty

SEK  Swedish Krona

SGD  Singapore Dollar

TRY  Turkish Lira

TWD  New Taiwan Dollar

USD  United States Dollar

Futures contracts

UBS Dynamic Alpha Fund had the following open futures contracts as of December 31, 2010:

	Expiration date	Cost/ (proceeds)			Value			Unrealized appreciation/ (depreciation)
US Treasury futures buy contracts:
US Ultra Bond Futures, 124 contracts (USD)	March 2011	$	15,941,379		$	15,759,625		$	(181,754	)
5 Year US Treasury Notes, 343 contracts (USD)	March 2011		40,269,985			40,377,531			107,546
US Treasury futures sell contracts:
US Long Bond, 5 contracts (USD)	March 2011		(605,930	)		(610,625	)		(4,695	)
10 Year US Treasury Notes, 116 contracts (USD)	March 2011		(13,852,254	)		(13,970,750	)		(118,496	)
Index futures buy contracts:
Amsterdam Exchange Index, 85 contracts (EUR)	January 2011		8,003,639			8,060,027			56,388
CAC 40 Euro Index, 153 contracts (EUR)	January 2011		7,942,040			7,788,671			(153,369	)
DAX Index, 330 contracts (EUR)	March 2011		77,101,116			76,366,539			(734,577	)
MSCI Singapore Index, 31 contracts (SGD)	January 2011		1,789,724			1,828,090			38,366
NIKKEI 225 Index, 119 contracts (JPY)	March 2011		14,870,666			14,964,774			94,108
SPI 200 Index, 61 contracts (AUD)	March 2011		7,437,075			7,377,712			(59,363	)
Index futures sell contracts:
Dow Jones EURO STOXX 50 Index, 662 contracts (EUR)	March 2011		(25,195,733	)		(24,716,579	)		479,154
FTSE 100 Index, 198 contracts (GBP)	March 2011		(17,993,115	)		(18,191,797	)		(198,682	)
FTSE/MIB Index, 78 contracts (EUR)	March 2011		(10,805,924	)		(10,529,977	)		275,947
Hang Seng Stock Index, 33 contracts (HKD)	January 2011		(4,859,839	)		(4,886,656	)		(26,817	)
IBEX 35 Index, 578 contracts (EUR)	January 2011		(76,232,846	)		(75,623,863	)		608,983
OMXS 30 Index, 93 contracts (SEK)	January 2011		(1,593,658	)		(1,599,860	)		(6,202	)
S&P 500 Index, 100 contracts (USD)	March 2011		(30,897,150	)		(31,325,000	)		(427,850	)
Interest rate futures buy contracts:
Euro-Bund, 140 contracts (EUR)	March 2011		23,521,203			23,443,246			(77,957	)
Interest rate futures sell contracts:
Japanese 10 Year Bond, 4 contracts (JPY)	March 2011		(6,906,320	)		(6,927,454	)		(21,134	)
Net unrealized depreciation on futures contracts								$	(350,404	)

Currency type abbreviations:

AUD  Australian Dollar

EUR  Euro

GBP  Great Britain Pound

HKD  Hong Kong Dollar

JPY  Japanese Yen

SEK  Swedish Krona

SGD  Singapore Dollar

USD  United States Dollar

24

UBS Dynamic Alpha Fund

Portfolio of investments

December 31, 2010 (unaudited)

Options written

UBS Dynamic Alpha Fund had the following open options written as of December 31, 2010:

	Expiration date	Premiums received		Value
Call options
5 Year US Treasury Notes, 120 contracts, strike @ USD 118.50	January 2011	$	24,110	$	(32,813	)
Foreign Exchange Option, Sell AUD/USD, $10,451,000 face amount covered by contracts, strike @ AUD 1.02	January 2011		131,088		(94,098	)
Foreign Exchange Option, Sell AUD/USD, $10,544,000 face amount covered by contracts, strike @ AUD 1.01	January 2011		129,105		(183,637	)
Put options
10 Year US Treasury Notes, 120 contracts, strike @ USD 118.00	January 2011		56,930		(30,000	)
5 Year US Treasury Notes, 120 contracts, strike @ USD 116.50	January 2011		37,238		(27,187	)
90 Day Euro-Dollar Futures, 528 contracts, strike @ USD 95.00	September 2011		394,152		(3,300	)
90 Day Euro-Dollar Time Deposit, 232 contracts, strike @ USD 97.25	September 2012		45,588		(139,200	)
Options written on interest rate swaps
If option exercised the Fund pays semi-annually 3.150% and receives quarterly floating 3 month LIBOR. Underlying interest rate swap terminating 03/23/21. European style. Counterparty: Deutsche Bank AG, Notional Amount USD 69,075,000	March 2011		1,039,579		(2,359,560	)
If option exercised the Fund pays monthly 5.360% and receives monthly floating 28 day MEXIBOR. Underlying interest rate swap terminating 04/15/13. European style. Counterparty: Deutsche Bank AG, Notional Amount MXN 1,472,000,000	April 2011		286,103		(979,629	)
If option exercised the Fund pays monthly 5.370% and receives monthly floating 28 day MEXIBOR. Underlying interest rate swap terminating 04/16/13. European style. Counterparty: Deutsche Bank AG, Notional Amount MXN 1,472,000,000	April 2011		321,944		(975,805	)
If option exercised the Fund pays monthly 5.420% and receives monthly floating 28 day MEXIBOR. Underlying interest rate swap terminating 04/29/13. European style. Counterparty: Deutsche Bank AG, Notional Amount MXN 1,570,400,000	April 2011		298,598		(1,052,455	)
If option exercised the Fund pays semi-annually 5.660% and receives monthly floating 28 day MEXIBOR. Underlying interest rate swap terminating 05/03/13. European style. Counterparty: Deutsche Bank AG, Notional Amount MXN 1,470,500,000	May 2011		358,558		(716,696	)
If option exercised the Fund pays semi-annually 1.550% and receives quarterly floating 3 month LIBOR. Underlying interest rate swap terminating 06/10/12. European style. Counterparty: Merrill Lynch International, Notional Amount USD 64,025,000	June 2011		266,504		(25,187	)
If option exercised the Fund pays semi-annually 7.250% and receives quarterly floating 3 month LIBOR. Underlying interest rate swap terminating 11/04/25. European style. Counterparty: Deutsche Bank AG, Notional Amount USD 7,050,000	November 2015		129,720		(167,266	)
If option exercised the Fund pays semi-annually 8.760% and receives quarterly floating 3 month LIBOR. Underlying interest rate swap terminating 11/04/25. European style. Counterparty: Deutsche Bank AG, Notional Amount USD 7,050,000	November 2015		83,895		(85,861	)
Receiver options written on credit default swaps on credit indices
If option exercised payment to 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 CDX.NA.HY Series 15 Index and Fund pays fixed rate of 5.000%. Underlying credit default swap terminating 12/20/15. European style. Counterparty: Credit Suisse International, Notional Amount USD 6,500,000	March 2011		69,225		(14,503	)
Payor options written on credit default swaps on credit indices
If option exercised 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 CDX.NA.IG Series 15 Index and Fund receives fixed rate of 1.000%. Underlying credit default swap terminating 12/20/15. European style. Counterparty: Barclays UK, Notional Amount USD 6,500,000	March 2011		13,650		(13,334	)
Total options written		$	3,685,987	$	(6,900,531	)

25

UBS Dynamic Alpha Fund

Portfolio of investments

December 31, 2010 (unaudited)

LIBOR  London Interbank Offered Rate

MEXIBOR  Mexican Interbank Offered Rate

Currency type abbreviations:

AUD  Australian Dollar

MXN  Mexican Peso

USD  United States Dollar

Written option activity for the period ended December 31, 2010 for UBS Dynamic Alpha Fund was as follows:

	Number of contracts			Amount of premiums received
Options outstanding at June 30, 2010		2,678		$	1,073,661
Options written		10,853			2,235,715
Options terminated in closing purchase transactions		(12,411	)		(2,751,358	)
Options expired prior to exercise		—			—
Options outstanding at December 31, 2010		1,120		$	558,018

Swaption and Foreign exchange option activity for the period ended December 31, 2010 for UBS Dynamic Alpha Fund was as follows:

	Amount of premiums received
Swaptions and Foreign exchange options outstanding at June 30, 2010	$	779,716
Swaptions and Foreign exchange options written		3,264,608
Swaptions and Foreign exchange options terminated in closing purchase transactions		(758,819	)
Swaptions and Foreign exchange options expired prior to exercise		(157,536	)
Swaptions and Foreign exchange options outstanding at December 31, 2010	$	3,127,969

Swap agreements

UBS Dynamic Alpha Fund had outstanding currency swap agreements with the following terms as of December 31, 2010:

Counterparty	Pay currency	Pay contracts		Receive currency	Receive contracts		Termination date	Pay rate			Receive rate			Upfront payments (made)/ received			Value			Unrealized appreciation/ (depreciation)
Citigroup Global
Markets Ltd.	AUD		5,581,635	USD		5,019,743	02/25/40		4.9767	%1		0.2844	%2	$	(966,150	)	$	(313,074	)	$	(1,279,224	)
Deutsche Bank AG	EUR	5,238,268		USD	7,200,000		03/16/20	0.88353			0.30192			—			153,632			153,632
Deutsche Bank AG	USD	7,200,000		EUR	5,238,268		03/16/40	0.30192			1.05853			—			(180,282)			(180,282)
Merrill Lynch International	USD	5,019,743		AUD	5,581,635		02/25/20	0.28442			5.46921			966,150			261,826			1,227,976
Merrill Lynch International	USD	7,292,501		CAD	7,416,473		03/16/20	0.30192			1.41574			129,128			55,168			184,296
Merrill Lynch International	CAD	7,416,473		USD	7,292,501		03/16/40	1.21074			0.30192			(129,128)			(63,374)			(192,502)
														$	—		$	(86,104	)	$	(86,104	)

¹  Based on 3 month BBSW.

²  Based on 3 month USD LIBOR.

³  Based on 3 month EURIBOR.

⁴  Based on the 3 month Canadian Bankers Acceptance.

26

UBS Dynamic Alpha Fund

Portfolio of investments

December 31, 2010 (unaudited)

BBSW  Bank Bill Swap Reference Rate (Australian Financial Market)

EURIBOR  Euro Interbank Offered Rate

LIBOR  London Interbank Offered Rate

Currency type abbreviations:

AUD  Australian Dollar

CAD  Canadian Dollar

EUR  Euro

USD  United States Dollar

UBS Dynamic Alpha Fund had outstanding interest rate swap agreements with the following terms as of December 31, 2010:

Counterparty	Notional amount		Termination date	Payments made by the Fund1			Payments received by the Fund1			Upfront payments (made)/ received			Value			Unrealized appreciation/ (depreciation)
Citigroup Global Markets Ltd.	USD	27,444,000	08/31/14		2.6325	%		0.2944	%2	$	—		$	(1,281,017	)	$	(1,281,017	)
Citigroup Global Markets Ltd.	USD	20,960,000	11/15/16		4.0000			0.28562			—			(1,882,678	)		(1,882,678	)
Citigroup Global Markets Ltd.	USD	7,029,000	02/15/36		4.6680			0.28562			—			(808,165	)		(808,165	)
Credit Suisse International	EUR	10,670,000	04/13/15		1.20403			2.4430			(340,303	)		302,080			(38,223	)
Credit Suisse International	EUR	5,140,000	04/13/20		3.3300			1.20403			247,389			(210,855	)		36,534
Credit Suisse International	USD	25,400,000	05/31/15		1.6288			—4			—			388,474			388,474
Deutsche Bank AG	AUD	11,800,000	09/21/19		5.08175			5.9700			—			(23,936	)		(23,936	)
Deutsche Bank AG	AUD	6,310,000	09/21/39		5.6200			5.08175			(3,103	)		172,005			168,902
Deutsche Bank AG	CAD	12,950,000	10/03/13		—6			1.8750			—			(91,202	)		(91,202	)
Deutsche Bank AG	CAD	11,550,000	10/03/16		2.4850			—6			—			249,428			249,428
Deutsche Bank AG	CAD	3,200,000	10/03/21		—6			3.2600			—			(108,496	)		(108,496	)
Deutsche Bank AG	GBP	8,750,000	04/13/15		2.9375			1.02757			—			(342,134	)		(342,134	)
Deutsche Bank AG	GBP	4,250,000	04/13/20		1.02757			3.8660			—			257,945			257,945
Deutsche Bank AG	USD	52,156,800	12/21/15		2.1750			0.30382			—			(122,410	)		(122,410	)
Deutsche Bank AG	USD	20,268,000	02/15/17		0.28562			3.4175			—			1,263,021			1,263,021
Deutsche Bank AG	USD	11,000,000	10/01/18		4.5460			0.29002			—			(1,345,092	)		(1,345,092	)
Deutsche Bank AG	USD	57,294,400	12/21/20		0.30382			3.4350			—			448,349			448,349
Deutsche Bank AG	USD	8,051,000	02/15/36		4.5450			0.28562			—			(761,570	)		(761,570	)
Deutsche Bank AG	USD	360,000	04/01/39		4.5690			—4			—			(25,736	)		(25,736	)
Deutsche Bank AG	USD	524,000	09/15/39		4.3500			0.30162			—			(29,761	)		(29,761	)
Deutsche Bank AG	USD	990,000	10/01/39		4.0580			0.30282			—			(2,858	)		(2,858	)
Deutsche Bank AG	USD	14,242,900	12/21/40		4.1444			0.30382			—			(110,562	)		(110,562	)
Goldman Sachs International	CHF	50,000,000	09/15/20		1.9525			0.24678			—			400,028			400,028
Goldman Sachs International	EUR	4,650,000	10/10/21		—9			2.7950			—			(394,244	)		(394,244	)
Goldman Sachs International	EUR	2,050,000	10/10/41		2.8550			—9			—			353,762			353,762

27

UBS Dynamic Alpha Fund

Portfolio of investments

December 31, 2010 (unaudited)

Counterparty	Notional amount		Termination date	Payments made by the Fund1			Payments received by the Fund1			Upfront payments (made)/ received			Value			Unrealized appreciation/ (depreciation)
JPMorgan Chase Bank	EUR	4,680,000	12/17/15		1.2540	%3		2.6375	%	$	—		$	51,411		$	51,411
JPMorgan Chase Bank	USD	5,870,000	12/08/15		1.8050			0.30342			—			82,926			82,926
JPMorgan Chase Bank	USD	119,500,000	11/24/18		0.270610			0.28442			—			351,878			351,878
JPMorgan Chase Bank	USD	6,380,000	12/08/20		0.30342			3.1250			—			(113,655	)		(113,655	)
JPMorgan Chase Bank	USD	1,570,000	12/08/40		3.9975			0.30342			—			26,486			26,486
Merrill Lynch International	CAD	13,150,000	12/03/12		—6			1.5950			—			(51,693	)		(51,693	)
Merrill Lynch International	CAD	11,700,000	12/03/15		2.3150			1.297911			—			135,508			135,508
Merrill Lynch International	CAD	5,290,000	12/15/15		2.6770			1.295711			—			(25,635	)		(25,635	)
Merrill Lynch International	CAD	14,650,000	03/09/19		3.3960			1.295711			(7,060	)		(363,555	)		(370,615	)
Merrill Lynch International	CAD	3,250,000	12/03/20		—6			3.1850			—			(50,724	)		(50,724	)
Merrill Lynch International	CAD	7,700,000	03/09/29		1.295711			4.1880			35,443			309,733			345,176
Merrill Lynch International	JPY	2,051,000,000	06/18/12		—12			0.4738			—			37,297			37,297
Merrill Lynch International	JPY	1,380,000,000	06/18/15		0.6600			0.347513			—			(106,187	)		(106,187	)
Merrill Lynch International	JPY	338,000,000	06/18/20		—12			1.3013			—			76,992			76,992
Merrill Lynch International	USD	119,500,000	11/24/11		0.28442			0.413410			—			128,839			128,839
Merrill Lynch International	USD	14,100,000	10/05/13		1.1300			—4			—			82,529			82,529
Merrill Lynch International	USD	5,600,000	12/16/15		2.2500			0.30192			—			(36,191	)		(36,191	)
Merrill Lynch International	USD	11,150,000	10/05/16		—4			2.1300			—			(329,480	)		(329,480	)
Merrill Lynch International	USD	6,150,000	12/16/20		0.30192			3.5500			—			113,823			113,823
Merrill Lynch International	USD	3,100,000	10/05/21		2.9863			—4			—			194,493			194,493
Merrill Lynch International	USD	2,970,000	08/15/29		4.2625			0.28562			—			(174,867	)		(174,867	)
Merrill Lynch International	USD	3,250,000	02/15/36		—4			3.9750			—			(61,397	)		(61,397	)
Merrill Lynch International	USD	4,080,000	06/15/39		3.6250			0.30162			—			323,226			323,226
Merrill Lynch International	USD	1,550,000	12/16/40		4.2688			0.30192			—			(47,009	)		(47,009	)
										$	(67,634	)	$	(3,150,876	)	$	(3,218,510	)

¹  Payments made or received are based on the notional amount.

²  Rate based on 3 month LIBOR (USD BBA).

³  Rate based on 6 month EURIBOR.

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 December 31, 2010.

⁵  Rate based on 6 month BBSW.

⁶  Rate based on 3 month Canadian Bankers Acceptance. This is a forward starting trade, and as such, a floating rate has not yet been assigned as of December 31, 2010.

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

⁸  Rate based on 6 month LIBOR (CHF BBA).

⁹  Rate based on 6 month EURIBOR. This is a forward starting trade, and as such, a floating rate has not yet been assigned as of December 31, 2010.

¹⁰  Rate based on 1 month LIBOR (USD BBA).

¹¹  Rate based on 3 month Canadian Bankers Acceptance.

¹²  Rate based on 6 month LIBOR (JPY BBA). This is a forward starting trade, and as such, a floating rate has not yet been assigned as of December 31, 2010.

¹³  Rate based on 6 month LIBOR (JPY BBA).

28

UBS Dynamic Alpha Fund

Portfolio of investments

December 31, 2010 (unaudited)

BBA  British Banking Association

BBSW  Bank Bill Swap Reference Rate (Australian Financial Market)

EURIBOR  Euro Interbank Offered Rate

LIBOR  London Interbank Offered Rate

Currency type abbreviations:

AUD  Australian Dollar

CAD  Canadian Dollar

CHF  Swiss Franc

EUR  Euro

GBP  Great Britain Pound

JPY  Japanese Yen

USD  United States Dollar

Credit default swaps on credit indices—buy protection¹

Counterparty	Notional amount		Termination date	Payments made by the Fund2			Payments received by the Fund		Upfront payments (made)/ received			Value			Unrealized appreciation/ (depreciation)
Citigroup Global Markets Ltd.	USD	3,750,000	06/20/15		5.0000	%		—3	$	(117,188	)	$	(171,511	)	$	(288,699	)
Deutsche Bank AG	USD	9,680,000	12/20/12		0.6000			—4		—			24,835			24,835
Deutsche Bank AG	USD	5,500,000	06/20/15		5.0000			—3		(173,021	)		(251,549	)		(424,570	)
Goldman Sachs International	USD	4,960,000	12/20/13		1.5000			—5		(120,094	)		(106,034	)		(226,128	)
Goldman Sachs International	USD	8,460,000	06/20/14		5.0000			—6		(1,322,463	)		(546,835	)		(1,869,298	)
Goldman Sachs International	USD	12,500,000	12/20/15		5.0000			—7		1,799,306			(1,710,769	)		88,537
Merrill Lynch International	EUR	3,750,000	06/20/15		1.0000			—8		12,904			(3,629	)		9,275
Merrill Lynch International	EUR	13,000,000	12/20/15		1.0000			—9		(69,853	)		37,321			(32,532	)
									$	9,591		$	(2,728,171	)	$	(2,718,580	)

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 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.HY Series 14 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 CDX.NA.IG Series 9 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.IG Series 11 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.NA.HY Series 12 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.EM Series 14 Index.

⁸  Payment from the counterparty will be received upon the occurrence of a succession event with respect to the iTraxx Europe Series 13 Index.

⁹  Payment from the counterparty will be received upon the occurrence of a succession event with respect to the iTraxx Europe Series 14 Index.

29

UBS Dynamic Alpha Fund

Portfolio of investments

December 31, 2010 (unaudited)

Credit default swaps on corporate and sovereign issues—buy protection¹

Counterparty	Notional amount		Termination date	Payments made by the Fund2			Payments received by the Fund		Upfront payments (made)/ received			Value			Unrealized appreciation/ (depreciation)
Citigroup Global Markets Ltd.	EUR	1,000,000	12/20/15		1.0000	%		—3	$	(18,770	)	$	4,571		$	(14,199	)
Citigroup Global Markets Ltd.	USD	600,000	09/20/14		5.0000			—4		(53,000	)		(90,591	)		(143,591	)
Citigroup Global Markets Ltd.	USD	2,600,000	12/20/14		1.0000			—5		29,397			(13,984	)		15,413
Deutsche Bank AG	USD	3,000,000	12/20/14		1.0000			—6		47,207			(39,907	)		7,300
Deutsche Bank AG	USD	750,000	09/20/15		1.0000			—7		5,012			10,726			15,738
Merrill Lynch International	USD	1,265,000	12/20/13		3.0500			—8		—			(96,215	)		(96,215	)
Merrill Lynch International	USD	2,740,000	06/20/15		1.0000			—9		53,128			127,799			180,927
Merrill Lynch International	USD	2,740,000	06/20/15		0.2500			—10		(37,017	)		86,570			49,553
Morgan Stanley	EUR	1,000,000	12/20/15		1.0000			—11		(7,090	)		24,993			17,903
									$	18,867		$	13,962		$	32,829

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 Saint Gobain Nederland BV 5.000% bond, due 04/25/14.

⁴  Payment from the counterparty will be received upon the occurrence of bankruptcy and/or restructuring event with respect to the Textron Financial Corp. 5.125% bond, due 08/15/14.

⁵  Payment from the counterparty will be received upon the occurrence of bankruptcy and/or restructuring event with respect to the Wells Fargo & Company 0.702% bond, due 10/28/15.

⁶  Payment from the counterparty will be received upon the occurrence of bankruptcy and/or restructuring event with respect to the JPMorgan Chase & Co. 4.750% bond, due 03/01/15.

⁷  Payment from the counterparty will be received upon the occurrence of bankruptcy and/or restructuring event with respect to the Motorola Solutions Inc. 6.500% bond, due 09/01/25.

⁸  Payment from the counterparty will be received upon the occurrence of bankruptcy and/or restructuring event with respect to the American Express Co. 4.875% bond, due 07/15/13.

⁹  Payment from the counterparty will be received upon the occurrence of bankruptcy and/or restructuring event with respect to the Belgium Kingdom 4.250% bond, due 9/28/14.

¹⁰  Payment from the counterparty will be received upon the occurrence of bankruptcy and/or restructuring event with respect to the Government of France 4.250% bond, due 4/25/19.

¹¹  Payment from the counterparty will be received upon the occurrence of bankruptcy and/or restructuring event with respect to the Commerzbank AG 5.500% bond, due 10/25/11.

Credit default swaps on credit indices—sell protection¹

Counterparty	Notional amount		Termination date	Payments made by the Fund		Payments received by the Fund2			Upfront payments (made)/ received			Value		Unrealized appreciation/ (depreciation)		Credit spread3
Citigroup Global Markets Ltd.	USD	9,250,000	06/20/15		—4		5.0000	%	$	154,965		$	423,060	$	578,025		3.8934	%
Deutsche Bank AG	EUR	24,200,000	06/20/14		—5		1.8500			(1,003,906	)		1,080,139		76,233		0.8687
Deutsche Bank AG	USD	12,896,000	06/20/14		—6		1.0000			170,743			160,635		331,378		3.8934
Deutsche Bank AG	USD	37,550,000	06/20/15		—4		5.0000			659,733			1,717,395		2,377,128		3.8934

30

UBS Dynamic Alpha Fund

Portfolio of investments

December 31, 2010 (unaudited)

Counterparty	Notional amount		Termination date	Payments made by the Fund		Payments received by the Fund2			Upfront payments (made)/ received			Value			Unrealized appreciation/ (depreciation)			Credit spread3
Deutsche Bank AG	USD	13,550,000	06/20/15		—4		5.0000	%	$	159,965		$	619,726		$	779,691			3.8934	%
Deutsche Bank AG	USD	9,500,000	07/25/45		—7		0.5400			—			(5,460,658	)		(5,460,658	)		—
Goldman Sachs International	USD	6,500,000	06/20/15		—8		1.0000			14,442			61,832			76,274			0.7861
Merrill Lynch International	EUR	15,000,000	06/20/15		—9		1.0000			(72,316	)		14,516			(57,800	)		0.9905
Merrill Lynch International	USD	3,100,000	07/25/45		—7		0.5400			—			(1,781,899	)		(1,781,899	)		—
									$	83,626		$	(3,165,254	)	$	(3,081,628	)

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 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 received are based on the notional amount.

³  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 or other credit event occurring 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 or 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.

⁴  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 14 Index.

⁵  Payment to the counterparty will be made upon the occurrence of a succession event with respect to the iTraxx Europe Series 11 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 failure to pay, obligation acceleration, repudiation or restructuring of the referenced obligation specified in the Dow Jones ABX-HE-A Series 6 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 CDX.NA.IG Series 14 Index.

⁹  Payment to the counterparty will be made upon the occurrence of a succession event with respect to the iTraxx Europe Series 13 Index.

Credit default swaps on corporate and sovereign issues—sell protection¹

Counterparty	Notional amount		Termination date	Payments made by the Fund		Payments received by the Fund2			Upfront payments (made)/ received			Value			Unrealized appreciation/ (depreciation)			Credit spread3
Citigroup Global Markets Ltd.	EUR	1,000,000	12/20/15		—4		1.0000	%	$	47,182		$	(18,195	)	$	28,987			1.3523	%
Citigroup Global Markets Ltd.	USD	1,000,000	03/20/15		—5		1.0000			38,346			(16,904	)		21,442			1.4305
Credit Suisse International	EUR	4,700,000	12/20/15		—6		0.2500			54,276			(45,359	)		8,917			0.4204
Deutsche Bank AG	EUR	1,000,000	12/20/15		—7		1.0000			23,681			(29,951	)		(6,270	)		1.5298
Deutsche Bank AG	USD	600,000	09/20/11		—8		5.0000			5,929			22,162			28,091			0.1579
Deutsche Bank AG	USD	1,265,000	12/20/13		—9		5.3500			—			158,583			158,583			1.1310
Deutsche Bank AG	USD	1,400,000	12/20/13		—10		4.0800			—			116,117			116,117			1.2952
Deutsche Bank AG	USD	6,500,000	03/20/15		—11		1.0000			(70,881	)		111,244			40,363			0.5915
Deutsche Bank AG	USD	675,000	06/20/15		—12		1.0000			87,610			(192,661	)		(105,051	)		10.5277

31

UBS Dynamic Alpha Fund

Portfolio of investments

December 31, 2010 (unaudited)

Counterparty	Notional amount		Termination date	Payments made by the Fund		Payments received by the Fund2			Upfront payments (made)/ received		Value			Unrealized appreciation/ (depreciation)		Credit spread3
Deutsche Bank AG	USD	1,500,000	09/20/15		—13		1.0000	%	$	37,947	$	(23,435	)	$	14,512		1.4160	%
Merrill Lynch International	USD	600,000	09/20/14		—14		5.0000			13,250		72,790			86,040		1.8147
Morgan Stanley	USD	500,000	12/20/15		—5		1.0000			20,389		(13,582	)		6,807		1.6389
									$	257,729	$	140,809		$	398,538

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  Payments received are based on the notional amount.

³  Credit spreads, 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 or other credit event occurring 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 or 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.

⁴  Payment to the counterparty will be made upon the occurrence of bankruptcy and/or restructuring event with respect to the Holcim Finance Luxembourg SA 4.375% bond, due 12/09/14.

⁵  Payment to the counterparty will be made upon the occurrence of bankruptcy and/or restructuring event with respect to the MetLife, Inc. 5.000% bond, due 06/15/15.

⁶  Payment to the counterparty will be made upon the occurrence of bankruptcy and/or restructuring event with respect to the United States Treasury Notes 4.875% bond, due 08/15/16.

⁷  Payment to the counterparty will be made upon the occurrence of bankruptcy and/or restructuring event with respect to the Intesa Sanpaolo SPA 4.750% bond, due 06/15/17.

⁸  Payment to the counterparty will be made upon the occurrence of bankruptcy and/or restructuring event with respect to the BP Capital Markets America, Inc. 4.200% bond, due 06/15/18.

⁹  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.

¹⁰  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.

¹¹  Payment to the counterparty will be made upon the occurrence of bankruptcy and/or restructuring event with respect to the Government of Japan 2.000% bond, due 03/21/22.

¹²  Payment to the counterparty will be made upon the occurrence of bankruptcy and/or restructuring event with respect to the Helenic Republic 5.900% bond,due 10/22/22.

¹³  Payment to the counterparty will be made upon the occurrence of bankruptcy and/or restructuring event with respect to the QBE Insurance Group Ltd. 9.750% bond,due 03/14/14.

¹⁴  Payment to the counterparty will be made upon the occurrence of bankruptcy and/or restructuring event with respect to the Bombardier, Inc. 6.750% bond, due 05/01/12.

Currency type abbreviations:

EUR  Euro

USD  United States Dollar

32

UBS Dynamic Alpha Fund

Portfolio of investments

December 31, 2010 (unaudited)

Concluded

The following is a summary of the inputs used as of December 31, 2010 in valuing the Fund's investments:

Measurements at 12/31/10
Description	Unadjusted quoted prices in active markets for identical investments (Level 1)			Other significant observable inputs (Level 2)			Unobservable inputs (Level 3)		Total
Common stocks	$	301,894,284		$	184,753		$	0	$	302,079,037
Common stocks sold short		(89,933,881	)		—			—		(89,933,881	)
Preferred stock		3,252,447			—			—		3,252,447
Corporate bonds		—			26,373,402			—		26,373,402
Asset-backed securities		—			3,165,286			783,900		3,949,186
Collateralized debt obligations		—			—			10,177,333		10,177,333
Commercial mortgage-backed securities		—			6,048,708			—		6,048,708
Mortgage & agency debt securities		—			5,716,136			—		5,716,136
Municipal bonds		—			1,611,899			—		1,611,899
US government obligation		—			1,499,855			—		1,499,855
Non-US government obligation		—			194,929			—		194,929
Investment companies		—			122,762,015			—		122,762,015
Short-term investment		—			26,894,610			—		26,894,610
Options purchased		2,707,831			541,919			—		3,249,750
Investment of cash collateral from securities loaned		—			2,930,382			—		2,930,382
Other financial instruments1		(582,904	)		(19,570,464	)		—		(20,153,368	)
Total	$	217,337,777		$	178,353,430		$	10,961,233	$	406,652,440

¹  Other financial instruments include open futures contracts, swap agreements, options written 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)
	Common stock		Asset-backed securities		Collateralized debt obligations			Total
Assets
Beginning balance	$	0	$	766,614	$	9,334,600		$	10,101,214
Total gains or losses (realized/unrealized), and premiums/discounts included in earnings		—		17,286		6,453,915			6,471,201
Purchases, sales, issuances, and settlements (net)		—		—		(5,611,182	)		(5,611,182	)
Transfers in and/or out of Level 3		—		—		—			—
Ending balance	$	0	$	783,900	$	10,177,333		$	10,961,233
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 12/31/10.	$	0	$	7,439	$	8,024,961		$	8,032,400

See accompanying notes to financial statements.
33

UBS Global Allocation Fund

Portfolio performance

For the six months ended December 31, 2010, Class A shares of UBS Global Allocation Fund (the "Fund") returned 20.37% (Class A shares returned 13.80% after the deduction of the maximum sales charge), while Class Y shares returned 20.48%. The Fund's benchmark, the GSMI Mutual Fund Index (the "Index"), returned 17.40% over the same time period.

For comparison purposes, the Russell 3000 Index returned 24.46%, the MSCI World Free Index (net) returned 23.96%, and the Citigroup World Government Bond Index returned 6.28% 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.)

The Fund's outperformance versus the Index was due primarily to market allocation decisions and currency strategy.

Portfolio performance summary¹

What worked

•  The Fund's overweight to risk assets made a significant contribution to relative performance during the six months.

  – The Fund was overweight to equities throughout the period, finishing the six months at a 70% equity allocation, versus the Index weight of 65%. This position was rewarded as the global economic landscape improved considerably following the recent "Great Recession."

  – Within equities, the Fund was overweight to US versus European stocks. The six-month period saw a large divergence between strong returns in the US, with lower growth in Europe.

  – The Fund's European equity positions emphasized core European countries such as Germany, while underweighting lower-growth economies like Spain. This weighting was successful as sovereign debt concerns continued into the second half of the reporting period.

•  The Fund had significant exposure to investment grade corporate bonds, which was positive for performance.

  – We find US and European investment grade corporate credit to be attractive. We believe that healthier balance sheets, coupled with strong corporate profits, should benefit credit.

  – We de-emphasized Treasuries in favor of corporate bonds, and benefited when corporate bonds posted higher returns during the six months.

¹  For a detailed commentary on the market environment in general during the reporting period, see page 2.

34

UBS Global Allocation Fund

•  The Fund's currency strategy was positive for performance.

  – We underweighted the euro in the Fund, versus other European currencies. This position was rewarded as sovereign debt concerns in Europe caused the euro to decline, and other European currencies to strenghten.

  – The Fund was also overweight to other European currencies, as well. In particular, we believed the Swedish krona and the Swiss franc were undervalued relative to the euro. We believed they had the potential to appreciate further, and this proved to be the case during the review period.

•  Derivatives use contributed to Fund performance. During the review period, the Fund used derivatives for risk management purposes and as part of the Fund's investment strategies to enhance return across markets and currencies. Our use of derivatives had a positive impact on performance across both market allocation and currencies.

What didn't work

•  Security selection and sector allocation in US equities made negative contributions to performance during the period.

  – Defensive sectors lagged the market meaningfully as the economy began to recover. As a result, an overweight to the utilities sector made a negative contribution to performance.

  – The Fund was underweight materials and telecommunications stocks, which rallied in the second half of the review period. We believe that, while the economy is improving, these areas appear to be already pricing in a strong global economic environment.

  – In the growth sleeve of the Fund, individual holdings in the financials and consumer staples sectors detracted from performance. Additionally, the Fund's health care holdings, as well as an overweight to the healthcare sector, were also headwinds for performance.

This letter is intended to assist shareholders in understanding how the Fund performed during the six months ended December 31, 2010. The views and opinions in the letter were current as of February 15, 2011. They are not guarantees of future 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 12/31/10 (unaudited)

	6 months			1 year			5 years			10 years			Inception1
Before deducting maximum sales charge
Class A2		20.37	%		11.85	%		2.84	%		5.80	%		5.56	%
Class B3		19.75			10.82			1.99			N/A			5.796
Class C4		19.70			10.89			2.03			N/A			5.62
Class Y5		20.48			12.11			3.12			6.06			7.45
After deducting maximum sales charge
Class A2		13.80	%		5.73	%		1.69	%		5.20	%		5.12	%
Class B3		14.75			5.82			1.71			N/A			5.796
Class C4		18.70			9.89			2.03			N/A			5.62
Russell 3000 Index7		24.46	%		16.93	%		2.74	%		2.16	%		8.61	%
MSCI World Free Index (net)8		23.96			11.76			2.43			2.31			6.93
Citigroup World Government Bond Index9		6.28			5.17			7.09			7.00			6.32
GSMI Mutual Fund Index10		17.40			11.02			4.86			5.03			7.89

The annualized gross and net expense ratios, respectively, for each class of shares as in the October 28, 2010 prospectuses were as follows: Class A—1.27% and 1.27%; Class B—2.15% and 2.15%; Class C—2.06% and 2.06%; Class Y—0.99% and 0.99%. 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 UBS Global Asset Management (Americas) Inc., the Fund's investment advisor ("UBS Global AM (Americas)" or 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, interest, taxes, brokerage commissions and extraordinary expenses) to the extent necessary so that the Fund's ordinary operating expenses (excluding expenses incurred through investment in other investment companies, interest, taxes, brokerage commissions and extraordinary expenses), through the 12-month period ending October 27, 2011, 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 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. Prior to September 30, 2003, Class C shares were subject to a maximum front-end sales charge of 1.00%; this front-end sales charge is not reflected in the average annual total returns presented for the Class C shares shown above.

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  Assumes the conversion of Class B to Class A shares at the end of the sixth year.

⁷  The Russell 3000 Index is designed to measure the performance of the largest 3,000 US companies representing approximately 98% of the investable US equity market. The Russell 3000 Index is constructed to provide a comprehensive, unbiased, and stable barometer of the broad market and is completely reconstituted annually to ensure new and growing equities are reflected. Investors should note that indices do not reflect the deduction of fees and expenses.

⁸  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 May 2010, the index consisted of 24 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 is constructed and managed with a view to being fully investable from the perspective of international institutional investors. Investors should note that indices do not reflect the deduction of fees and expenses.

⁹  The Citigroup World Government Bond Index is an unmanaged broad-based market capitalization-weighted index composed of straight (i.e., not floating rate or index-linked) government bonds with a one-year minimum maturity. The index is designed to track the government bond markets of 22 developed countries. Investors should note that indices do not reflect the deduction of fees and expenses.

¹⁰  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, 15% Citigroup US Government Bond Index, 2% J.P. Morgan Emerging Markets Bond Index Global (EMBI Global),and 3% BofA 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% BofA Merrill Lynch US High Yield Cash Pay Constrained Index replaced the 3% BofA 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 and 15% Citigroup US Government Bond Index replaced the 9% Citigroup World Government Bond ex US Index and the 21% Citigroup Broad Investment Grade Index. 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. Total returns for periods of less than one year have not been annualized. 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

Top ten equity holdings (unaudited)¹

As of December 31, 2010

	Percentage of net assets
Apple, Inc.		1.2	%
Exxon Mobil Corp.		0.9
Wells Fargo & Co.		0.6
JPMorgan Chase & Co.		0.6
Illinois Tool Works, Inc.		0.6
AT&T, Inc.		0.5
QUALCOMM, Inc.		0.5
Procter & Gamble Co.		0.5
Johnson & Johnson		0.5
Allergan, Inc.		0.5
Total		6.4	%

Country exposure, top five (unaudited)²

As of December 31, 2010

	Percentage of net assets
United States		37.7	%
United Kingdom		3.9
Japan		2.8
Germany		2.5
China		2.0
Total		48.9	%

Top ten long-term fixed income holdings (unaudited)¹

As of December 31, 2010

	Percentage of net assets
US Treasury Notes, 0.500%, due 11/30/12		1.9	%
US Treasury Notes, 2.625%, due 04/30/16		1.0
US Treasury Notes, 0.375%, due 10/31/12		0.7
US Treasury Bonds, 8.000%, due 11/15/21		0.7
US Treasury Notes, 2.750%, due 10/31/13		0.7
US Treasury Notes, 3.125%, due 04/30/17		0.6
US Treasury Notes, 2.500%, due 04/30/15		0.5
US Treasury Notes, 2.625%, due 11/15/20		0.3
US Treasury Bonds, 6.250%, due 08/15/23		0.3
US Treasury Bonds, 3.875%, due 08/15/40		0.3
Total		7.0	%

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

²  Figures represent the direct investments of UBS Global Allocation Fund. If a breakdown of the underlying investment companies was included, the country exposure percentages would be as follows: United States 48.3%, United Kingdom 7.4%, Japan 5.5%, China 3.8%, Germany 3.1%.

37

UBS Global Allocation Fund

Industry diversification (unaudited)¹

As a percentage of net assets as of December 31, 2010

Common stocks
Aerospace & defense	1.09	%
Air freight & logistics	0.53
Airlines	0.50
Auto components	0.32
Automobiles	0.77
Beverages	0.66
Biotechnology	0.43
Building products	0.29
Capital markets	1.54
Chemicals	1.50
Commercial banks	3.09
Communications equipment	1.34
Computers & peripherals	2.14
Construction & engineering	0.28
Construction materials	0.39
Distributors	0.06
Diversified consumer services	0.14
Diversified financial services	1.44
Diversified telecommunication services	0.81
Electric utilities	1.24
Electrical equipment	0.12
Electronic equipment, instruments & components	0.12
Energy equipment & services	1.19
Food & staples retailing	1.22
Food products	0.58
Health care equipment & supplies	1.00
Health care providers & services	0.69
Hotels, restaurants & leisure	1.52
Household durables	0.37
Household products	0.53
Industrial conglomerates	0.22
Insurance	1.90
Internet & catalog retail	0.71
Internet software & services	0.91
IT services	0.41
Leisure equipment & products	0.11
Life sciences tools & services	0.15
Machinery	2.06
Media	1.73
Metals & mining	1.67
Office electronics	0.42
Oil, gas & consumable fuels	4.23
Personal products	0.42
Pharmaceuticals	2.44
Professional services	0.19
Real estate management & development	0.26
Road & rail	0.39
Semiconductors & semiconductor equipment	0.97
Software	1.44	%
Specialty retail	0.61
Textiles, apparel & luxury goods	0.19
Tobacco	0.20
Trading companies & distributors	0.53
Wireless telecommunication services	0.92
Total common stocks	48.98	%
Preferred stock	0.21
Bonds
Corporate bonds
Commercial banks	0.14
Diversified financial services	0.11
Wireless telecommunication services	0.03
Total corporate bonds	0.28	%
Mortgage & agency debt securities	0.11
US government obligations	7.61
Non-US government obligations	2.62
Supranational bond	0.04
Total bonds	10.66	%
Investment companies
UBS Credit Bond Relationship Fund	4.10
UBS Emerging Markets Equity Relationship Fund	5.24
UBS Global (ex-U.S.) All Cap Growth Relationship Fund	14.95
UBS Global Corporate Bond Relationship Fund	4.08
UBS High Yield Relationship Fund	4.05
UBS Small-Cap Equity Relationship Fund	2.03
Total investment companies	34.45	%
Rights	0.002
Warrants	0.19
Short-term investment	3.86
Investment of cash collateral from securities loaned	1.16
Total investments	99.51	%
Cash and other assets, less liabilities	0.49
Net assets	100.00	%

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

²  Amount represents less than 0.005%.

38

UBS Global Allocation Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Shares		Value
Common stocks: 48.98%
Australia: 0.60%
National Australia Bank Ltd.		90,462	$	2,192,831
Orica Ltd.		112,870		2,874,542
Qantas Airways Ltd.*		836,423		2,172,953
QBE Insurance Group Ltd.		71,021		1,318,421
Total Australia common stocks				8,558,747
Belgium: 0.19%
Anheuser-Busch InBev NV		47,766		2,731,912
Brazil: 0.61%
Banco Bradesco SA ADR1		30,564		620,143
BM&F Bovespa SA		72,000		569,494
Cia de Bebidas das Americas ADR		36,500		1,132,595
Cosan Ltd., Class A		48,400		659,208
Diagnosticos da America SA		40,000		542,169
Itau Unibanco Holding SA ADR		30,580		734,226
MMX Mineracao e Metalicos SA*		75,159		508,455
Petroleo Brasileiro SA ADR		51,300		1,941,192
Tam SA ADR		25,800		627,714
Vale SA ADR		39,000		1,348,230
Total Brazil common stocks				8,683,426
Canada: 1.68%
Canadian Oil Sands Trust		62,800		1,670,582
EnCana Corp.1		48,200		1,410,176
Petrobank Energy & Resources Ltd.*		53,100		1,348,461
Petrominerales Ltd.		32,603		1,087,326
Potash Corp. of Saskatchewan, Inc.		11,400		1,765,062
Research In Motion Ltd.*		46,900		2,739,096
Suncor Energy, Inc.		94,100		3,622,798
Teck Resources Ltd., Class B1		70,800		4,399,811
Toronto-Dominion Bank		45,300		3,382,807
TransCanada Corp.1		65,600		2,506,431
Total Canada common stocks				23,932,550
China: 2.03%
Agile Property Holdings Ltd.		414,000		609,325
AIA Group Ltd.*		913,317		2,567,412
Angang Steel Co., Ltd., H Shares		530,000		811,419
Baidu, Inc. ADR*		37,000		3,571,610
BBMG Corp., H Shares		628,000		851,575
China Coal Energy Co., H Shares		347,000		541,964
China Liansu Group Holdings Ltd.*		1,854,000		1,493,161

	Shares		Value
China Oilfield Services Ltd., H Shares		588,000	$	1,273,919
Chongqing Machinery & Electric Co., Ltd., H Shares		2,138,000		797,679
CNOOC Ltd.		566,000		1,342,765
CSR Corp. Ltd., H Shares		607,000		798,109
Focus Media Holding Ltd. ADR*		63,000		1,381,590
Guangzhou Automobile Group Co., Ltd., H Shares		416,000		573,734
Industrial & Commercial Bank of China, H Shares		354,000		263,696
International Mining Machinery Holdings Ltd.*		878,500		710,910
Jardine Matheson Holdings Ltd.		52,000		2,288,000
Melco Crown Entertainment Ltd. ADR*1		221,000		1,405,560
New World Development Ltd.		1,292,000		2,426,822
Shougang Concord International Enterprises Co., Ltd.*		1,550,000		225,337
Sina Corp.*1		22,900		1,575,978
Tencent Holdings Ltd.		40,200		873,531
Xingda International Holdings Ltd.		1,312,000		1,417,867
Yanzhou Coal Mining Co., Ltd., H Shares		224,000		684,438
Zhongsheng Group Holdings Ltd.*		185,500		403,323
Total China common stocks				28,889,724
Cyprus: 0.06%
Globaltrans Investment PLC GDR2		49,899		848,283
Denmark: 0.21%
FLSmidth & Co. A/S		31,679		3,021,348
Finland: 0.21%
Sampo Oyj, Class A		109,723		2,939,788
France: 0.46%
BNP Paribas		59,956		3,814,475
Carrefour SA		67,662		2,789,356
Total France common stocks				6,603,831
Germany: 1.17%
Bayer AG		35,136		2,596,459
E.ON AG		103,838		3,182,431
Fresenius Medical Care AG & Co. KGaA		35,475		2,049,329
HeidelbergCement AG		47,169		2,956,198

39

UBS Global Allocation Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Shares		Value
Common stocks—(Continued)
Germany—(Concluded)
MAN SE		16,957	$	2,016,481
Metro AG		53,720		3,867,831
Total Germany common stocks				16,668,729
India: 0.24%
HDFC Bank Ltd. ADR1		3,900		651,729
ICICI Bank Ltd. ADR		12,700		643,128
Infosys Technology Ltd. ADR1		12,900		981,432
Reliance Industries Ltd. GDR3		10,314		490,121
Tata Motors Ltd. ADR1		23,400		686,556
Total India common stocks				3,452,966
Indonesia: 0.11%
Astra International Tbk PT		249,500		1,510,569
Ireland: 0.80%
Covidien PLC		115,900		5,291,994
James Hardie Industries SE CDI*		237,180		1,644,745
Ryanair Holdings PLC ADR		58,300		1,793,308
Seagate Technology PLC*		173,400		2,606,202
Total Ireland common stocks				11,336,249
Japan: 2.78%
Asahi Glass Co., Ltd.		233,000		2,723,451
Canon, Inc.1		63,600		3,297,894
ITOCHU Corp.		232,700		2,355,948
Kao Corp.		80,000		2,155,931
KDDI Corp.		375		2,166,215
Mitsubishi Corp.		160,600		4,347,811
Nissan Motor Co., Ltd.		378,000		3,598,891
ORIX Corp.		33,740		3,320,392
Ricoh Co., Ltd.		189,000		2,770,169
Sankyo Co., Ltd.		28,000		1,581,229
Shin-Etsu Chemical Co., Ltd.		43,800		2,373,691
Sony Financial Holdings, Inc.		677		2,739,186
Sumitomo Mitsui Financial Group, Inc.		99,300		3,537,081
THK Co., Ltd.		115,600		2,658,273
Total Japan common stocks				39,626,162
Kazakhstan: 0.04%
Eurasian Natural Resources Corp.		38,422		627,791
Luxembourg: 0.19%
ArcelorMittal		70,670		2,680,103
Malaysia: 0.25%
Axiata Group Bhd*		539,100		830,461

	Shares		Value
Bumiputra-Commerce Holdings Bhd		258,100	$	711,480
Gamuda Bhd		232,100		286,785
KNM Group Bhd*		838,000		771,824
Malayan Banking Bhd		359,100		989,898
Total Malaysia common stocks				3,590,448
Netherlands: 0.51%
ASML Holding NV		71,677		2,768,099
LyondellBasell Industries NV, Class A*		44,700		1,537,680
New World Resources NV, Class A		58,545		877,177
Wolters Kluwer NV		91,361		2,002,206
Total Netherlands common stocks				7,185,162
Norway: 0.45%
Petroleum Geo-Services ASA*		160,039		2,491,760
Telenor ASA		239,350		3,888,635
Total Norway common stocks				6,380,395
Peru: 0.03%
Credicorp Ltd.		3,300		392,403
Philippines: 0.21%
Alliance Global Group, Inc.		3,418,000		975,234
Megaworld Corp.		13,979,000		791,324
Metropolitan Bank & Trust		484,150		795,681
Universal Robina Corp.		503,200		401,435
Total Philippines common stocks				2,963,674
Russia: 0.21%
Mechel OAO ADR		56,900		1,663,187
Mobile Telesystems OJSC ADR		23,600		492,532
Uralkali GDR2		24,276		891,415
Total Russia common stocks				3,047,134
Singapore: 0.25%
DBS Group Holdings Ltd.		188,280		2,100,884
Olam International Ltd.1		594,000		1,453,353
Total Singapore common stocks				3,554,237
South Africa: 0.30%
African Bank Investments Ltd.		135,134		794,906
Barloworld Ltd.		73,724		749,830
Impala Platinum Holdings Ltd.		9,021		319,018
Imperial Holdings Ltd.		43,071		833,502
JD Group Ltd.		64,730		569,919
Shoprite Holdings Ltd.		63,306		957,638
Total South Africa common stocks				4,224,813

40

UBS Global Allocation Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Shares		Value
Common stocks—(Continued)
South Korea: 0.59%
Basic House Co., Ltd.*		8,577	$	138,302
Doosan Infracore Co. Ltd.*		29,930		738,426
Glovis Co., Ltd.*		7,081		929,658
Hyundai Engineering & Construction Co., Ltd.*		11,269		717,904
Hyundai Heavy Industries Co., Ltd.*		4,165		1,625,778
Hyundai Motor Co.*		10,597		1,620,037
KB Financial Group, Inc.*		9,832		519,799
KIWOOM Securities Co., Ltd.		16,393		839,222
LG Chem Ltd.*		1,923		662,519
Samsung Electro-Mechanics Co. Ltd.*		5,674		619,945
Total South Korea common stocks				8,411,590
Spain: 0.13%
Acciona SA		25,312		1,792,695
Switzerland: 0.94%
Credit Suisse Group AG		78,123		3,147,479
Novartis AG		81,002		4,760,492
Roche Holding AG		19,255		2,821,321
SGS SA		1,602		2,688,276
Total Switzerland common stocks				13,417,568
Taiwan: 0.27%
Formosa Chemicals & Fibre Corp.		201,000		676,974
HON HAI Precision Industry Co., Ltd.		67,640		272,588
Largan Precision Co., Ltd.		34,000		845,437
Powertech Technology, Inc.		166,000		552,261
Uni-President Enterprises Corp.		662,600		982,884
Yuanta Financial Holding Co., Ltd.		635,000		474,783
Total Taiwan common stocks				3,804,927
Thailand: 0.15%
Bangkok Bank PCL		120,700		603,966
Home Product Center PCL		950,494		277,470
Thanachart Capital PCL		458,100		547,076
Tisco Financial Group PCL NVDR		558,600		755,115
Total Thailand common stocks				2,183,627
Turkey: 0.03%
Turkiye Garanti Bankasi AS		91,485		463,350

	Shares		Value
United Kingdom: 3.31%
Barclays PLC		625,986	$	2,553,638
BP PLC		838,103		6,083,278
British Sky Broadcasting Group PLC		155,272		1,781,742
Carnival PLC		58,811		2,734,262
Cobham PLC		356,158		1,130,007
GlaxoSmithKline PLC		159,016		3,074,231
Imperial Tobacco Group PLC		91,235		2,799,372
Lloyds Banking Group PLC*		3,537,837		3,623,908
Man Group PLC		697,589		3,219,329
Prudential PLC		294,473		3,066,874
Rio Tinto PLC		72,989		5,105,509
Sage Group PLC		603,786		2,573,686
Scottish & Southern Energy PLC		127,602		2,437,067
Tullow Oil PLC		103,631		2,037,411
Vodafone Group PLC		1,893,820		4,895,502
Total United Kingdom common stocks				47,115,816
United States: 29.97%
Adobe Systems, Inc.*		177,600		5,466,528
Aflac, Inc.		107,300		6,054,939
Agilent Technologies, Inc.*		53,200		2,204,076
Alexion Pharmaceuticals, Inc.*		14,300		1,151,865
Allergan, Inc.		104,300		7,162,281
Amazon.com, Inc.*		37,900		6,822,000
American Electric Power Co., Inc.		150,700		5,422,186
American Tower Corp., Class A*		24,000		1,239,360
Amgen, Inc.*		52,200		2,865,780
Amylin Pharmaceuticals, Inc.*		35,300		519,263
Anadarko Petroleum Corp.		29,200		2,223,872
Apollo Group, Inc., Class A*		49,400		1,950,806
Apple, Inc.*		51,800		16,708,608
Applied Materials, Inc.		138,700		1,948,735
AT&T, Inc.		262,600		7,715,188
Autodesk, Inc.*		60,200		2,299,640
Avon Products, Inc.		130,200		3,783,612
Baker Hughes, Inc.		75,500		4,316,335
Bank of New York Mellon Corp.		130,002		3,926,061
Baxter International, Inc.		58,000		2,935,960
BlackRock, Inc.		7,400		1,410,292
Boston Scientific Corp.*		264,000		1,998,480
Broadcom Corp., Class A		51,900		2,260,245
C.H. Robinson Worldwide, Inc.		27,300		2,189,187
Carnival Corp.		145,400		6,704,394
Celanese Corp, Series A		37,500		1,543,875
Cisco Systems, Inc.*		174,600		3,532,158
Citigroup, Inc.*		770,100		3,642,573
CME Group, Inc.		5,900		1,898,325
Comcast Corp., Class A		301,100		6,615,167

41

UBS Global Allocation Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Shares		Value
Common stocks—(Concluded)
United States—(Concluded)
Concho Resources, Inc.*		24,100	$	2,112,847
CONSOL Energy, Inc.		42,300		2,061,702
Crown Castle International Corp.*		80,400		3,523,932
CVS Caremark Corp.		70,600		2,454,762
Danaher Corp.		52,500		2,476,425
Discovery Communications, Inc., Class A*		58,500		2,439,450
Dover Corp.		84,300		4,927,335
Dow Chemical Co.		92,900		3,171,606
Edison International		25,500		984,300
EMC Corp.*		211,700		4,847,930
Express Scripts, Inc.*		30,500		1,648,525
Exxon Mobil Corp.		180,900		13,227,408
F5 Networks, Inc.*		10,200		1,327,632
FedEx Corp.		47,500		4,417,975
FirstEnergy Corp.1		104,400		3,864,888
Fortune Brands, Inc.		87,500		5,271,875
Freeport-McMoRan Copper & Gold, Inc.		21,300		2,557,917
GameStop Corp., Class A*		127,400		2,914,912
General Dynamics Corp.		86,800		6,159,328
General Motors Co.*		101,300		3,733,918
Genzyme Corp.*		21,000		1,495,200
Goldman Sachs Group, Inc.		38,800		6,524,608
Google, Inc., Class A*		11,800		7,008,846
Hess Corp.		52,700		4,033,658
Hewlett-Packard Co.		103,700		4,365,770
Illinois Tool Works, Inc.		152,000		8,116,800
IntercontinentalExchange, Inc.*		10,700		1,274,905
International Game Technology		222,400		3,934,256
Interpublic Group of Cos., Inc.*		86,300		916,506
Intersil Corp., Class A		109,000		1,664,430
Johnson & Johnson		119,300		7,378,705
Johnson Controls, Inc.		120,800		4,614,560
JPMorgan Chase & Co.		196,700		8,344,014
Juniper Networks, Inc.*		65,600		2,421,952
Kellogg Co.		120,500		6,155,140
Kroger Co.		220,800		4,937,088
Las Vegas Sands Corp.*		50,000		2,297,500
Lowe's Cos., Inc.		184,300		4,622,244
Marathon Oil Corp.		65,300		2,418,059
Marvell Technology Group Ltd.*		116,500		2,161,075
MasterCard, Inc., Class A		6,520		1,461,197
McDonald's Corp.		60,100		4,613,276
Medtronic, Inc.		107,400		3,983,466
Merck & Co., Inc.		138,900		5,005,956
MetLife, Inc.		109,400		4,861,736
Microsoft Corp.		120,600		3,367,152

	Shares		Value
Monsanto Co.		23,900	$	1,664,396
Morgan Stanley		82,800		2,252,988
National Semiconductor Corp.		168,300		2,315,808
NIKE, Inc., Class B		29,300		2,502,806
Noble Corp.		136,300		4,875,451
Occidental Petroleum Corp.		44,000		4,316,400
Oracle Corp.		91,900		2,876,470
PACCAR, Inc.		17,850		1,024,947
Pall Corp.		40,400		2,003,032
Parker Hannifin Corp.		17,400		1,501,620
PepsiCo, Inc.		85,600		5,592,248
Praxair, Inc.		14,400		1,374,768
Precision Castparts Corp.		17,000		2,366,570
Priceline.com, Inc.*		8,200		3,276,310
Principal Financial Group, Inc.		105,700		3,441,592
Procter & Gamble Co.		116,300		7,481,579
QUALCOMM, Inc.		154,100		7,626,409
Raytheon Co.		56,200		2,604,308
Red Hat, Inc.*		24,400		1,113,860
Riverbed Technology, Inc.*		40,000		1,406,800
Roper Industries, Inc.		23,200		1,773,176
Ryder System, Inc.		58,700		3,089,968
SanDisk Corp.*		38,600		1,924,596
Schlumberger Ltd.		39,100		3,264,850
Sherwin-Williams Co.		32,700		2,738,625
Southwest Airlines Co.		195,100		2,532,398
Steel Dynamics, Inc.		70,600		1,291,980
Symantec Corp.*		173,600		2,906,064
Teradata Corp.*		36,500		1,502,340
Time Warner, Inc.		174,200		5,604,014
Ultra Petroleum Corp.*		106,900		5,106,613
Union Pacific Corp.		16,700		1,547,422
United Technologies Corp.		40,900		3,219,648
UnitedHealth Group, Inc.		151,700		5,477,887
US Bancorp		205,900		5,553,123
Viacom, Inc., Class B		105,200		4,166,972
Visa, Inc., Class A		27,000		1,900,260
Watson Pharmaceuticals, Inc.*		37,300		1,926,545
Wells Fargo & Co.		287,700		8,915,823
Total United States common stocks				426,675,223
Total common stocks (cost $569,930,587)				697,315,240
Preferred stock: 0.21%
Germany: 0.21%
Volkswagen AG, Preference shares
(cost $1,695,778)		18,176		2,948,635

42

UBS Global Allocation Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Face amount		Value
Bonds: 10.66%
Corporate bonds: 0.28%
France: 0.01%
Societe Generale, 3.750%, due 08/21/14	EUR	100,000	$	136,694
Ireland: 0.01%
GE Capital European Funding, 4.875%, due 03/06/13		100,000		140,517
Netherlands: 0.01%
Rabobank Nederland NV, 4.125%, due 01/14/20		100,000		134,431
Norway: 0.01%
DnB NOR Bank ASA, 4.500%, due 05/29/14		130,000		184,598
Sweden: 0.01%
Nordea Bank AB, 4.500%, due 05/12/14		130,000		184,251
Switzerland: 0.01%
Credit Suisse/London, 4.750%, due 08/05/19		100,000		136,850
United Kingdom: 0.18%
Barclays Bank PLC, 4.875%, due 08/13/19		120,000		163,276
Lloyds TSB Bank PLC, 6.750%, due 10/24/18	GBP	100,000		162,582
Network Rail Infrastructure Finance PLC, 4.875%, due 03/07/12		600,000		973,443
Royal Bank of Scotland PLC, 4.125%, due 11/14/11		230,000		368,047
5.375%, due 09/30/19	EUR	150,000		191,025
Vodafone Group PLC, 3.625%, due 11/29/12		280,000		386,624
Wellcome Trust Finance, 4.750%, due 05/28/21	GBP	215,000		350,141
Total United Kingdom corporate bonds				2,595,138
United States: 0.04%
Citigroup, Inc., 5.500%, due 11/18/15		100,000		161,215
Goldman Sachs Group, Inc., 5.125%, due 10/23/19	EUR	150,000		195,709
Morgan Stanley, 5.500%, due 10/02/17		125,000		169,024
Total United States corporate bonds				525,948
Total corporate bonds (cost $4,152,389)				4,038,427

	Face amount		Value
Mortgage & agency debt securities: 0.11%
United States: 0.11%
Federal Home Loan Mortgage Corp. Gold Pools, #G00194, 7.500%, due 02/01/244	$	64,834	$	73,826
Government National Mortgage Association, Series 2001-35, Class AZ, 6.500%, due 08/20/31		1,350,571		1,439,475
Total mortgage & agency debt securities (cost $1,480,265)				1,513,301
US government obligations: 7.61%
US Treasury Bonds, 3.875%, due 08/15/401		4,465,000		4,112,685
5.375%, due 02/15/31		1,500,000		1,751,016
6.125%, due 11/15/27		3,000,000		3,768,750
6.250%, due 08/15/23		3,500,000		4,399,062
8.000%, due 11/15/21		7,360,000		10,409,800
US Treasury Notes, 0.375%, due 10/31/121		10,570,000		10,537,793
0.500%, due 11/30/121		27,765,000		27,729,211
1.250%, due 09/30/15		870,000		844,104
1.375%, due 11/30/151		1,810,000		1,758,953
2.500%, due 04/30/151		6,225,000		6,435,579
2.625%, due 04/30/16		14,000,000		14,331,408
2.625%, due 11/15/201		4,795,000		4,523,032
2.750%, due 10/31/13		9,000,000		9,460,548
3.125%, due 04/30/17		8,000,000		8,289,376
Total US government obligations (cost $108,653,300)				108,351,317
Non-US government obligations: 2.62%
Australia: 0.02%
Government of Australia, 4.500%, due 10/21/14	AUD	225,000		223,613
Austria: 0.14%
Government of Austria, 4.000%, due 09/15/163	EUR	610,000		873,523
4.150%, due 03/15/373		785,000		1,095,928
				1,969,451
Belgium: 0.07%
Government of Belgium, 3.500%, due 03/28/15		790,000		1,073,317
Canada: 0.08%
Government of Canada, 3.750%, due 06/01/19	CAD	170,000		180,181
5.250%, due 06/01/12		935,000		988,723
				1,168,904

43

UBS Global Allocation Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Face amount		Value
Bonds—(Concluded)
Non-US government obligations—(Concluded)
Denmark: 0.04%
Government of Denmark, 4.000%, due 11/15/17	DKK	2,700,000	$	526,573
Finland: 0.07%
Government of Finland, 4.375%, due 07/04/19	EUR	667,000		979,695
France: 0.13%
Government of France, 4.000%, due 04/25/14		680,000		979,043
4.000%, due 04/25/55		630,000		855,423
				1,834,466
Germany: 1.12%
Bundesobligation, 2.250%, due 04/10/15		2,385,000		3,260,251
4.000%, due 04/13/12		1,755,000		2,445,675
4.000%, due 10/11/13		315,000		454,513
Bundesrepublik Deutschland, 3.500%, due 01/04/16		2,635,000		3,776,117
3.750%, due 01/04/19		970,000		1,387,918
4.000%, due 01/04/37		1,720,000		2,486,011
5.000%, due 07/04/12		210,000		298,482
Kreditanstalt fuer Wiederaufbau, 3.875%, due 07/04/13		970,000		1,376,370
5.500%, due 06/05/14	AUD	420,000		424,588
				15,909,925
Ireland: 0.02%
Government of Ireland, 3.900%, due 03/05/12	EUR	170,000		220,483
Italy: 0.27%
Buoni Poliennali Del Tesoro, 3.750%, due 08/01/21		540,000		665,404
4.000%, due 02/01/17		1,330,000		1,767,877
5.000%, due 08/01/34		1,105,000		1,408,097
				3,841,378
Mexico: 0.05%
Mexican Bonos, Series M, 8.000%, due 06/11/20	MXN	8,500,000		737,156
Netherlands: 0.06%
Government of Netherlands, 4.250%, due 07/15/13	EUR	645,000		930,272

	Face amount		Value
Spain: 0.13%
Government of Spain, 3.900%, due 10/31/12	EUR	1,220,000	$	1,640,084
4.200%, due 01/31/37		220,000		225,864
				1,865,948
Sweden: 0.03%
Government of Sweden, 6.750%, due 05/05/14	SEK	2,320,000		391,871
United Kingdom: 0.39%
UK Gilts, 2.000%, due 01/22/16	GBP	1,355,000		2,071,428
2.750%, due 01/22/15		765,000		1,225,690
4.250%, due 12/07/49		450,000		715,276
4.750%, due 12/07/38		935,000		1,593,184
				5,605,578
Total non-US government obligations(cost $37,232,812)				37,278,630
Supranational bond: 0.04%
European Investment Bank, 5.375%, due 10/15/12 (cost $542,883)		390,000		559,074
Total bonds (cost $152,061,649)				151,740,749
	Shares
Investment companies: 34.45%
UBS Credit Bond Relationship Fund*5		4,122,673		58,421,570
UBS Emerging Markets Equity Relationship Fund*5		1,870,546		74,630,126
UBS Global (ex-U.S.) All Cap Growth Relationship Fund*5		14,761,707		212,797,385
UBS Global Corporate Bond Relationship Fund*5		5,351,787		58,123,613
UBS High Yield Relationship Fund*5		2,171,223		57,578,224
UBS Small-Cap Equity Relationship Fund*5		514,661		28,919,298
Total investment companies (cost $352,342,036)				490,470,216

44

UBS Global Allocation Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Number of rights		Value
Rights: 0.00%6
Philippines: 0.00%6
Metropolitan Bank & Trust, expires 01/14/11*7,8 (cost $0)	$	55,362	$	27,801
	Number of warrants
Warrants: 0.19%
India: 0.03%
India Infoline Ltd., strike @ USD 0.000001, expires 09/21/20*		224,772		412,949
Russia: 0.16%
Aeroflot—Russian Airlines OJSC, strike @ USD 0.00001, expires 04/08/13*		313,645		815,477
Sberbank of Russia, strike @ USD 0.00001, expires 11/05/12*		418,953		1,427,373
Total Russia warrants				2,242,850
Total warrants (cost $2,511,691)				2,655,799

	Shares		Value
Short-term investment: 3.86%
Investment company: 3.86%
UBS Cash Management Prime Relationship Fund5 (cost $54,890,749)		54,890,749	$	54,890,749
Investment of cash collateral from securities loaned: 1.16%
UBS Private Money Market Fund LLC5 (cost $16,533,673)		16,533,673		16,533,673
Total investments: 99.51% (cost $1,149,966,163)				1,416,582,862
Cash and other assets, less liabilities: 0.49%				6,912,374
Net assets: 100.00%			$	1,423,495,236

Notes to portfolio of investments

Aggregate cost for federal income tax purposes was substantially the same as for book purposes; and net unrealized appreciation consisted of:

Gross unrealized appreciation	$	274,458,076
Gross unrealized depreciation		(7,841,377	)
Net unrealized appreciation of investments	$	266,616,699

*  Non-income producing security.

¹  Security, or portion thereof, was on loan at December 31, 2010.

²  Security exempt from registration pursuant to Regulation S under the Securities Act of 1933. Regulation S applies to securities offerings that are made outside of the United States and do not involve direct selling efforts in the United States. At December 31, 2010, the value of these securities amounted to $1,739,698 or 0.12% of net assets.

³  Security exempt from registration pursuant to Rule 144A under 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 December 31, 2010, the value of these securities amounted to $2,459,572 or 0.17% of net assets.

⁴  On September 7, 2008, the Federal Housing Finance Agency placed the Federal Home Loan Mortgage Corporation and the Federal National Mortgage Association into conservatorship, and the US Treasury guaranteed the debt issued by those organizations.

45

UBS Global Allocation Fund

Portfolio of investments

December 31, 2010 (unaudited)

⁵  The table below details the Fund's investments in funds advised by the same advisor as the Fund. The advisor does not earn a management fee from the affiliated UBS Relationship Funds.

Security description	Value 06/30/10		Purchases during the six months ended 12/31/10		Sales during the six months ended 12/31/10		Net realized gain during the six months ended 12/31/10		Change in net unrealized appreciation/ depreciation during the six months ended 12/31/10			Value 12/31/10		Income earned from affiliate for the six months ended 12/31/10
UBS Cash Management Prime Relationship Fund	$	17,046,965	$	248,509,688	$	210,665,904	$	—	$	—		$	54,890,749	$	43,142
UBS Private Money Market Fund LLC1		10,789,467		81,709,084		75,964,878		—		—			16,533,673		80,187
UBS Credit Bond Relationship Fund		74,925,815		—		19,500,000		4,140,119		(1,144,364	)		58,421,570		—
UBS Emerging Markets Equity Relationship Fund		62,461,477		—		4,000,000		1,664,125		14,504,524			74,630,126		—
UBS Global (ex-U.S.) All Cap Growth Relationship Fund		193,561,579		—		33,000,000		8,251,306		43,984,500			212,797,385		—
UBS Global Corporate Bond Relationship Fund		116,724,130		—		62,900,000		4,784,230		(484,747	)		58,123,613		—
UBS High Yield Relationship Fund		37,881,974		20,000,000		5,000,000		1,719,872		2,976,378			57,578,224		—
UBS Small-Cap Equity Relationship Fund		31,361,478		—		10,000,000		2,794,596		4,763,224			28,919,298		—
	$	544,752,885	$	350,218,772	$	421,030,782	$	23,354,248	$	64,599,515		$	561,894,638	$	123,329

¹  The adviser does earn a management fee from this affiliated fund, and any income earned is net of expenses. Please see the Notes to financial statements for further information.

⁶  Amount represents less than 0.005%.

⁷  Security is illiquid. At December 31, 2010, the value of this security amounted to $27,801 or 0.00% of net assets.

⁸  Security is being fair valued by a valuation committee under the direction of the Board of Trustees. At December 31, 2010, the value of this security amounted to $27,801 or 0.00% of net assets.

ADR  American depositary receipt

CDI  Chess depositary interest

GDR  Global depositary receipt

GE  General Electric

NVDR  Non voting depository 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 abbreviations:

AUD  Australian Dollar

CAD  Canadian Dollar

DKK  Danish Krone

EUR  Euro

GBP  Great Britain Pound

MXN  Mexican Peso

SEK  Swedish Krona

46

UBS Global Allocation Fund

Portfolio of investments

December 31, 2010 (unaudited)

Forward foreign currency contracts

UBS Global Allocation Fund had the following open forward foreign currency contracts as of December 31, 2010:

Counterparty	Contracts to deliver		In exchange for		Maturity date	Unrealized appreciation/ (depreciation)
Barclays Bank PLC	EUR	7,390,000	USD	9,688,187	03/03/11	$	(185,691	)
Barclays Bank PLC	HKD	91,375,000	USD	11,777,178	03/03/11		15,700
Goldman Sachs International	JPY	585,000,000	USD	7,180,954	03/03/11		(28,755	)
JPMorgan Chase Bank	CHF	5,690,000	USD	5,684,884	03/03/11		(404,455	)
JPMorgan Chase Bank	EUR	10,630,000	USD	14,035,841	03/03/11		(167,043	)
JPMorgan Chase Bank	GBP	2,581,420	USD	3,999,035	03/03/11		(23,919	)
JPMorgan Chase Bank	USD	13,719,465	KRW	15,894,000,000	03/03/11		243,430
JPMorgan Chase Bank	USD	15,510,981	MXN	195,640,000	03/03/11		263,798
JPMorgan Chase Bank	USD	18,061,528	TWD	546,000,000	03/03/11		689,867
Morgan Stanley & Co. Inc.	CAD	8,580,000	USD	8,367,466	03/03/11		(251,723	)
Morgan Stanley & Co. Inc.	NOK	54,550,000	USD	8,801,652	03/03/11		(520,442	)
Morgan Stanley & Co. Inc.	USD	12,022,360	EUR	9,105,000	03/03/11		142,952
Morgan Stanley & Co. Inc.	USD	9,405,630	GBP	6,000,000	03/03/11		(55,070	)
Morgan Stanley & Co. Inc.	USD	116,147,197	JPY	9,714,900,000	03/03/11		3,582,038
Morgan Stanley & Co. Inc.	USD	13,643,159	PLN	41,980,000	03/03/11		485,625
Morgan Stanley & Co. Inc.	USD	35,415,397	SEK	249,930,000	03/03/11		1,670,775
Morgan Stanley & Co. Inc.	USD	29,584,319	SGD	39,030,000	03/03/11		828,273
Net unrealized appreciation on forward foreign currency contracts						$	6,285,360

Currency type abbreviations:

CAD  Canadian Dollar

CHF  Swiss Franc

EUR  Euro

GBP  Great Britain Pound

HKD  Hong Kong Dollar

JPY  Japanese Yen

KRW  Korean Won

MXN  Mexican Peso

NOK  Norwegian Krone

PLN  Polish Zloty

SEK  Swedish Krona

SGD  Singapore Dollar

TWD  New Taiwan Dollar

USD  United States Dollar

47

UBS Global Allocation Fund

Portfolio of investments

December 31, 2010 (unaudited)

Futures contracts

UBS Global Allocation Fund had the following open futures contracts as of December 31, 2010:

	Expiration date	Cost/ (proceeds)			Value			Unrealized appreciation/ (depreciation)
US Treasury futures sell contracts:
10 Year US Treasury Notes, 55 contracts (USD)	March 2011	$	(6,831,513	)	$	(6,624,063	)	$	207,450
Index futures buy contracts:
Amsterdam Exchange Index, 154 contracts (EUR)	January 2011		14,500,712			14,602,873			102,161
DAX Index, 186 contracts (EUR)	March 2011		43,456,992			43,042,958			(414,034	)
Dow Jones EURO STOXX 50 Index, 759 contracts (EUR)	March 2011		28,886,267			28,338,193			(548,074	)
FTSE 100 Index, 233 contracts (GBP)	March 2011		21,203,561			21,407,519			203,958
Index futures sell contracts:
FTSE/MIB Index, 158 contracts (EUR)	March 2011		(21,888,963	)		(21,329,954	)		559,009
IBEX 35 Index, 266 contracts (EUR)	January 2011		(35,082,937	)		(34,802,678	)		280,259
Russell 2000 Mini Index, 370 contracts (USD)	March 2011		(28,280,388	)		(28,945,100	)		(664,712	)
S&P 500 Index, 135 contracts (USD)	March 2011		(8,462,407	)		(8,457,750	)		4,657
S&P Toronto Stock Exchange 60 Index, 192 contracts (CAD)	March 2011		(29,144,118	)		(29,625,505	)		(481,387	)
Interest rate futures buy contracts:
Euro-Bund, 137 contracts (EUR)	March 2011		23,082,837			22,940,890			(141,947	)
Long Gilt, 30 contracts (GBP)	March 2011		5,592,296			5,588,906			(3,390	)
Net unrealized depreciation on futures contracts								$	(896,050	)

Currency type abbreviations:

CAD  Canadian Dollar

EUR  Euro

GBP  Great Britain Pound

USD  United States Dollar

48

UBS Global Allocation Fund

Portfolio of investments

December 31, 2010 (unaudited)

Concluded

The following is a summary of the inputs used as of December 31, 2010 in valuing the Fund's investments:

Measurements at 12/31/10
Description	Unadjusted quoted prices in active markets for identical investments (Level 1)			Other significant observable inputs (Level 2)		Unobservable inputs (Level 3)		Total
Common stocks	$	694,503,899		$	2,811,341		—	$	697,315,240
Preferred stock		2,948,635			—		—		2,948,635
Corporate bonds		—			4,038,427		—		4,038,427
Mortgage & agency debt securities		—			1,513,301		—		1,513,301
US government obligations		—			108,351,317		—		108,351,317
Non-US government obligations		—			37,278,630		—		37,278,630
Supranational bond		—			559,074		—		559,074
Investment companies		—			490,470,216		—		490,470,216
Rights		—			27,801		—		27,801
Warrants		—			2,655,799		—		2,655,799
Short-term investment		—			54,890,749		—		54,890,749
Investment of cash collateral from securities loaned		—			16,533,673		—		16,533,673
Other financial instruments1		(896,050	)		6,285,360		—		5,389,310
Total	$	696,556,484		$	725,415,688		—	$	1,421,972,172

¹  Other financial instruments include open futures contracts and forward foreign currency contracts.

See accompanying notes to financial statements.
49

UBS Global Frontier Fund

Portfolio performance

For the six months ended December 31, 2010, Class A shares of UBS Global Frontier Fund (the "Fund") returned 29.34% (Class A shares returned 22.19% after the deduction of the maximum sales charge), while Class Y shares returned 29.47%. The Fund's benchmark, the GSMI Mutual Fund Index (the "Index"), returned 17.40% over the same time period. For comparison purposes, the MSCI World Free Index (net) returned 23.96%. (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 deduction of fees and expenses.)

The Fund's outperformance was due primarily to market allocation decisions and leverage positioning.

Portfolio performance summary¹

What worked

•  The Fund's overweight to risk assets made a significant contribution to relative performance during the six months.

  – The Fund was overweight to equities throughout the period, finishing the six months at a 70% equity allocation, versus the Index weight of 65%. This position was rewarded as the global economic landscape improved considerably following the recent "Great Recession."

  – Within equities, the Fund was overweight to US versus European stocks. The six-month period saw a large divergence between strong returns in the US, with much lower growth in Europe.

  – The Fund's European equity positions emphasized core European countries such as Germany, while underweighting lower-growth economies like Spain. This weighting was successful as sovereign debt concerns continued into the second half of the reporting period.

•  The Fund had significant exposure to investment grade corporate bonds, which was positive for performance.

  – We find US and European investment grade corporate credit to be attractive. We believe that healthier balance sheets, coupled with strong corporate profits, should benefit credit.

  – We de-emphasized Treasuries in favor of corporate bonds, and benefited when corporate bonds posted higher returns during the six months.

•  The Fund's currency strategy was positive for performance.

  – We underweighted the euro in the Fund, versus other European currencies. This position was rewarded as sovereign debt concerns in Europe caused the euro to decline, and other European currencies to strengthen.

  – The Fund was also overweight to other European currencies, as well. In particular, we believed the Swedish krona and the Swiss franc were undervalued relative to the euro. We believed they had the potential to appreciate further, and this proved to be the case during the review period.

¹  For a detailed commentary on the market environment in general during the reporting period, see page 2.

50

UBS Global Frontier Fund

•  The Fund's leverage strategy magnified positive performance during the period.

  – We held the amount of leverage in the Fund at its maximum level of 50% to the asset mix for the six-month period. This allowed us to take further advantage of the runup in the prices of global equities, and magnified the impact of our underweight to fixed income. We remain convinced that riskier assets like equities and investment grade corporate bonds offer attractive absolute and risk-adjusted potential returns.

•  Derivatives use contributed to Fund performance. During the review period, the Fund used derivatives for risk management purposes and as part of the Fund's investment strategies to enhance return across markets and currencies. Our use of derivatives had a positive impact on performance across both market allocation and currencies.

What didn't work

•  Security selection and sector allocation in US equities made negative contributions to performance during the period.

  – Defensive sectors lagged the market meaningfully as the economy began to recover. As a result, an overweight to the utilities sector made a negative contribution to performance.

  – The Fund was underweight materials and telecommunications stocks, which rallied in the second half of the year. We believe that, while the economy is improving, these areas appear to be already pricing in a strong global economic environment.

  – In the growth sleeve of the Fund, individual holdings in the financials and consumer staples sectors detracted from performance. Additionally, the Fund's health care holdings, as well as an overweight to the healthcare sector, were also headwinds for performance.

This letter is intended to assist shareholders in understanding how the Fund performed during the six months ended December 31, 2010. The views and opinions in the letter were current as of February 15, 2011. They are not guarantees of future 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 12/31/10 (unaudited)

	6 months			1 year			Inception1
Before deducting maximum sales charge
Class A2		29.34	%		15.62	%		(3.47	)%
Class C3		28.90	%		14.72	%		(4.17	)%
Class Y4		29.47	%		15.92	%		(3.21	)%
After deducting maximum sales charge
Class A2		22.19	%		9.28	%		(5.04	)%
Class C3		27.90	%		13.72	%		(4.17	)%
MSCI World Free Index (net)5		23.96	%		11.76	%		(3.68	)%
GSMI Mutual Fund Index6		17.40	%		11.02	%		1.51	%

The annualized gross and net expense ratios, respectively, for each class of shares as in the October 28, 2010 prospectuses were as follows: Class A—1.75% and 1.53%; Class C—2.54% and 2.28%; Class Y—1.48% and 1.28%. 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 UBS Global Asset Management (Americas) Inc., the Fund's investment advisor ("UBS Global AM (Americas)" or 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, interest, taxes, brokerage commissions, extraordinary expenses and securities loan fees and dividend expenses for securities sold short) to the extent necessary so that the Fund's ordinary operating expenses (excluding expenses incurred through investment in other investment companies, interest, taxes, brokerage commissions, extraordinary expenses and securities loan fees and dividend expenses for securities sold short), through the 12-month period ending October 27, 2011, 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 May 2010, the index consisted of 24 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 is constructed and managed with a view to being fully investable from the perspective of international institutional investors. 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, 15% Citigroup US Government Bond Index, 2% J.P. Morgan Emerging Markets Bond Index Global (EMBI Global),and 3% BofA 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% BofA Merrill Lynch US High Yield Cash Pay Constrained Index replaced the 3% BofA 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 and 15% Citigroup US Government Bond Index replaced the 9% Citigroup World Government Bond ex US Index and the 21% Citigroup Broad Investment Grade Index. 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. Total returns for periods of less than one year have not been annualized. 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

Top ten fixed income holdings (unaudited)¹

As of December 31, 2010

	Percentage of net assets
US Treasury Notes, 0.500%, due 11/30/12		0.6	%
Bundesrepublik Deutschland, 3.750%, due 01/04/19		0.4
Bundesrepublik Deutschland, 6.250%, due 01/04/24		0.4
Government of France, 4.250%, due 10/25/17		0.4
Bundesrepublik Deutschland, 3.250%, due 07/04/15		0.4
Government of the Netherlands, 5.000%, due 07/15/12		0.4
Government of Spain, 5.000%, due 07/30/12		0.3
Kreditanstalt fuer Wiederaufbau, 3.875%, due 07/04/13		0.3
Buoni Poliennali Del Tesoro, 4.250%, due 08/01/13		0.3
Bundesrepublik Deutschland, 4.750%, due 07/04/34		0.3
Total		3.8	%

Industry diversification (unaudited)³

As a percentage of net assets as of December 31, 2010

Bonds
Corporate bond
Diversified financial services	0.16	%
Total corporate bond	0.16	%
US government obligations	1.82
Non-US government obligations	6.46
Total bonds	8.44	%
Investment companies
UBS Credit Bond Relationship Fund	6.08
UBS Emerging Markets Equity Relationship Fund	13.55
UBS Global (ex-U.S.) All Cap Growth Relationship Fund	10.58
UBS Global Corporate Bond Relationship Fund	6.09
UBS High Yield Relationship Fund	6.35
UBS International Equity Relationship Fund	11.00
UBS U.S. Large Cap Equity Relationship Fund	16.65
UBS U.S. Large Cap Growth Equity Relationship Fund	8.52
Total investment companies	78.82	%
Short-term investment	8.28
Total investments	95.54	%
Cash and other assets, less liabilities	4.46
Net assets	100.00	%

Country exposure, top five (unaudited)²

As of December 31, 2010

	Percentage of net assets
Germany		2.2	%
United States		1.8
United Kingdom		1.2
Italy		0.7
France		0.5
Total		6.4	%

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

²  Figures represent the direct investments of UBS Global Frontier Fund. If a breakdown of the underlying investment companies was included, the country exposure percentages would be as follows: United States 48.3%, United Kingdom 7.4%, Japan 5.5%, China 3.8%, Germany 3.1%.

³  Figures represent the industry breakdown of direct investments of UBS Global Frontier Fund. Figures would be different if a breakdown of the underlying investment companies' industry diversification was included.

53

UBS Global Frontier Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Face amount		Value
Bonds: 8.44%
Corporate bond: 0.16%
United Kingdom: 0.16%
Network Rail Infrastructure Finance PLC, 4.875%, due 03/07/12 (cost $113,778)	GBP	70,000	$	113,568
US government obligations: 1.82%
US Treasury Bonds, 3.875%, due 08/15/40	$	100,000		92,109
6.250%, due 08/15/23		70,000		87,981
6.625%, due 02/15/27		105,000		138,108
US Treasury Notes, 0.375%, due 10/31/121		105,000		104,680
0.500%, due 11/30/121		395,000		394,491
0.875%, due 01/31/121		30,000		30,168
1.250%, due 09/30/15		45,000		43,660
1.375%, due 11/30/15		95,000		92,321
2.500%, due 04/30/151		170,000		175,751
4.625%, due 07/31/12		120,000		127,884
Total US government obligations (cost $1,268,042)				1,287,153
Non-US government obligations: 6.46%
Austria: 0.31%
Republic of Austria, 4.350%, due 03/15/192	EUR	150,000		216,370
Belgium: 0.17%
Kingdom of Belgium, Series 56, 3.500%, due 03/28/15		90,000		122,277
Canada: 0.18%
Government of Canada, 4.000%, due 06/01/16	CAD	40,000		43,199
5.250%, due 06/01/12		80,000		84,597
				127,796
Denmark: 0.10%
Government of Denmark, 4.000%, due 11/15/17	DKK	370,000		72,160
Finland: 0.20%
Government of Finland, 3.875%, due 09/15/17	EUR	100,000		144,075
France: 0.48%
Government of France, 4.250%, due 10/25/17		190,000		276,545
4.750%, due 04/25/35		40,000		60,567
				337,112

	Face amount		Value
Germany: 2.22%
Bundesrepublik Deutschland, 3.250%, due 07/04/15	EUR	185,000	$	262,716
3.750%, due 01/04/17		75,000		108,465
3.750%, due 01/04/19		210,000		300,477
4.750%, due 07/04/34		140,000		223,075
5.000%, due 07/04/12		10,000		14,213
6.250%, due 01/04/24		170,000		298,925
Kreditanstalt fuer Wiederaufbau, 3.875%, due 07/04/13		160,000		227,030
4.625%, due 10/12/12		30,000		42,501
5.500%, due 06/05/14	AUD	95,000		96,038
				1,573,440
Ireland: 0.05%
Republic of Ireland, 3.900%, due 03/05/12	EUR	25,000		32,424
Italy: 0.74%
Buoni Poliennali Del Tesoro, 4.000%, due 02/01/37		185,000		202,457
4.250%, due 08/01/13		165,000		226,562
4.500%, due 08/01/18		70,000		93,906
				522,925
Mexico: 0.09%
Mexican Bonos, Series M, 8.000%, due 06/11/20	MXN	700,000		60,707
Netherlands: 0.42%
Government of the Netherlands, 4.000%, due 07/15/18	EUR	40,000		57,681
5.000%, due 07/15/12		170,000		241,748
				299,429
Spain: 0.37%
Government of Spain, 4.200%, due 01/31/37		25,000		25,666
5.000%, due 07/30/12		175,000		239,393
				265,059
Sweden: 0.06%
Government of Sweden, 6.750%, due 05/05/14	SEK	240,000		40,538
United Kingdom: 1.07%
UK Gilts, 2.000%, due 01/22/16	GBP	110,000		168,160
2.250%, due 03/07/14		130,000		206,919
3.750%, due 09/07/19		35,000		56,295
4.000%, due 03/07/22		30,000		48,087
4.250%, due 12/07/49		45,000		71,528

54

UBS Global Frontier Fund

Portfolio of investments

December 31, 2010 (unaudited)

	Face amount		Value
Bonds—(Concluded)
Non-US government obligations—(Concluded)
United Kingdom—(Concluded)
4.750%, due 12/07/38	GBP	100,000	$	170,394
5.250%, due 06/07/12		20,000		33,150
				754,533
Total non-US government obligations (cost $4,616,658)				4,568,845
Total bonds(cost $5,998,478)				5,969,566
	Shares
Investment companies: 78.82%
UBS Credit Bond Relationship Fund*3		303,412		4,299,584
UBS Emerging Markets Equity Relationship Fund*3		240,192		9,583,062
UBS Global (ex-U.S.) All Cap Growth Relationship Fund*3		518,825		7,479,118
UBS Global Corporate Bond Relationship Fund*3		396,242		4,303,430
UBS High Yield Relationship Fund*3		169,412		4,492,604

	Shares		Value
UBS International Equity Relationship Fund*3		425,216	$	7,777,584
UBS U.S. Large Cap Equity Relationship Fund*3		603,807		11,776,166
UBS U.S. Large Cap Growth Equity Relationship Fund*3		448,986		6,023,643
Total investment companies (cost $38,988,048)				55,735,191
Short-term investment: 8.28%
Investment company: 8.28%
UBS Cash Management Prime Relationship Fund3 (cost $5,855,053)		5,855,053		5,855,053
Total investments: 95.54% (cost $50,841,579)				67,559,810
Cash and other assets, less liabilities: 4.46%				3,152,160
Net assets: 100.00%			$	70,711,970

Notes to portfolio of investments

Aggregate cost for federal income tax purposes was substantially the same as for book purposes; and net unrealized appreciation consisted of:

Gross unrealized appreciation	$	16,851,747
Gross unrealized depreciation		(133,516	)
Net unrealized appreciation of investments	$	16,718,231

*  Non-income producing security.

¹  Security, or portion thereof, was on loan at December 31, 2010.

²  Security exempt from registration pursuant to Rule 144A under 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 December 31, 2010, the value of these securities amounted to $216,370 or 0.31% of net assets.

55

UBS Global Frontier Fund

Portfolio of investments

December 31, 2010 (unaudited)

³  The table below details the Fund's investments in funds advised by the same advisor as the Fund. The advisor does not earn a management fee from the affiliated UBS Relationship Funds.

Security description	Value 06/30/10		Purchases during the six months ended 12/31/10		Sales during the six months ended 12/31/10		Net realized gain during the six months ended 12/31/10		Change in net unrealized appreciation/ depreciation during the six months ended 12/31/10			Value 12/31/10		Income earned from affiliate for the six months ended 12/31/10
UBS Cash Management Prime Relationship Fund	$	625,102	$	19,978,040	$	14,748,089	$	—	$	—		$	5,855,053	$	3,813
UBS Credit Bond Relationship Fund		4,005,338		1,500,000		1,350,000		292,173		(147,927	)		4,299,584		—
UBS Emerging Markets Equity Relationship Fund		8,982,575		—		1,600,000		804,934		1,395,553			9,583,062		—
UBS Global (ex-U.S.) All Cap Growth Relationship Fund		6,080,116		600,000		1,000,000		215,271		1,583,731			7,479,118		—
UBS Global Corporate Bond Relationship Fund		7,355,743		900,000		4,300,000		372,708		(25,021	)		4,303,430		—
UBS High Yield Relationship Fund		2,560,339		1,600,000		—		—		332,265			4,492,604		—
UBS International Equity Relationship Fund		6,453,919		500,000		900,000		283,640		1,440,025			7,777,584		—
UBS U.S. Large Cap Equity Relationship Fund		11,425,002		—		2,000,000		465,440		1,885,724			11,776,166		—
UBS U.S. Large Cap Growth Equity Relationship Fund		5,368,075		—		800,000		313,583		1,141,985			6,023,643		—
	$	52,856,209	$	25,078,040	$	26,698,089	$	2,747,749	$	7,606,335		$	61,590,244	$	3,813

Currency type abbreviations:

AUD  Australian Dollar

CAD  Canadian Dollar

DKK  Danish Krone

EUR  Euro

GBP  Great Britain Pound

MXN  Mexican Peso

SEK  Swedish Krona

56

UBS Global Frontier Fund

Portfolio of investments

December 31, 2010 (unaudited)

Forward foreign currency contracts

UBS Global Frontier Fund had the following open forward foreign currency contracts as of December 31, 2010:

Counterparty	Contracts to deliver		In exchange for		Maturity date	Unrealized appreciation/ (depreciation)
JPMorgan Chase Bank	EUR	570,000	USD	752,303	03/03/11	$	(9,281	)
JPMorgan Chase Bank	GBP	285,000	USD	440,627	03/03/11		(3,524	)
JPMorgan Chase Bank	USD	724,333	AUD	760,000	03/03/11		47,325
JPMorgan Chase Bank	USD	454,550	CAD	465,000	03/03/11		12,574
JPMorgan Chase Bank	USD	639,425	CHF	640,000	03/03/11		45,492
JPMorgan Chase Bank	USD	1,934,766	EUR	1,465,000	03/03/11		22,640
JPMorgan Chase Bank	USD	3,846,344	GBP	2,455,000	03/03/11		(20,408	)
JPMorgan Chase Bank	USD	324,157	HKD	2,515,000	03/03/11		(435	)
JPMorgan Chase Bank	USD	1,135,088	KRW	1,315,000,000	03/03/11		20,140
JPMorgan Chase Bank	USD	868,627	MXN	10,950,000	03/03/11		14,290
JPMorgan Chase Bank	USD	356,623	MYR	1,128,000	03/03/11		7,828
JPMorgan Chase Bank	USD	1,129,916	PLN	3,465,000	03/03/11		36,264
JPMorgan Chase Bank	USD	2,367,569	SEK	16,680,000	03/03/11		107,514
JPMorgan Chase Bank	USD	2,128,143	SGD	2,810,000	03/03/11		61,439
JPMorgan Chase Bank	USD	1,184,254	TWD	35,800,000	03/03/11		45,233
Morgan Stanley & Co. Inc.	USD	10,815,011	JPY	904,600,000	03/03/11		333,540
Net unrealized appreciation on forward foreign currency contracts						$	720,631

Currency type abbreviations:

AUD  Australian Dollar

CAD  Canadian Dollar

CHF  Swiss Franc

EUR  Euro

GBP  Great Britain Pound

HKD  Hong Kong Dollar

JPY  Japanese Yen

KRW  Korean Won

MXN  Mexican Peso

MYR  Malaysian Ringgit

PLN  Polish Zloty

SEK  Swedish Krona

SGD  Singapore Dollar

TWD  New Taiwan Dollar

USD  United States Dollar

57

UBS Global Frontier Fund

Portfolio of investments

December 31, 2010 (unaudited)

Concluded

Futures contracts

UBS Global Frontier Fund had the following open futures contracts as of December 31, 2010:

	Expiration date	Cost/ (proceeds)			Value			Unrealized appreciation/ (depreciation)
Index futures buy contracts:
Amsterdam Exchange Index, 4 contracts (EUR)	January 2011	$	376,642		$	379,296		$	2,654
DAX Index, 9 contracts (EUR)	March 2011		2,102,758			2,082,724			(20,034	)
Dow Jones EURO STOXX 50 Index, 193 contracts (EUR)	March 2011		7,345,256			7,205,891			(139,365	)
FTSE 100 Index, 27 contracts (GBP)	March 2011		2,457,065			2,480,700			23,635
Hang Seng Stock Index, 3 contracts (HKD)	January 2011		441,865			444,241			2,376
OMX Stockholm 30 Index, 77 contracts (SEK)	January 2011		1,319,695			1,324,615			4,920
S&P 500 Index, 239 contracts (USD)	March 2011		14,674,122			14,973,350			299,228
S&P Toronto Stock Exchange 60 Index, 4 contracts (CAD)	March 2011		607,203			617,198			9,995
SPI 200 Index, 9 contracts (AUD)	March 2011		1,097,273			1,088,515			(8,758	)
TOPIX Index, 27 contracts (JPY)	March 2011		2,922,074			2,979,677			57,603
Index futures sell contracts:
FTSE/MIB Index, 5 contracts (EUR)	March 2011		(692,686	)		(674,999	)		17,687
IBEX 35 Index, 11 contracts (EUR)	January 2011		(1,450,798	)		(1,439,208	)		11,590
Net unrealized appreciation on futures contracts								$	261,531

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

USD  United States Dollar

The following is a summary of the inputs used as of December 31, 2010 in valuing the Fund's investments:

Measurements at 12/31/10
Description	Unadjusted quoted prices in active markets for identical investments (Level 1)		Other significant observable inputs (Level 2)		Unobservable inputs (Level 3)		Total
Corporate bond	$	—	$	113,568		—	$	113,568
US government obligations		—		1,287,153		—		1,287,153
Non-US government obligations		—		4,568,845		—		4,568,845
Investment companies		—		55,735,191		—		55,735,191
Short-term investment		—		5,855,053		—		5,855,053
Other financial instruments1		261,531		720,631		—		982,162
Total	$	261,531	$	68,280,441		—	$	68,541,972

¹  Other financial instruments include open futures contracts and forward foreign currency contracts.

See accompanying notes to financial statements.
58

The UBS Funds

December 31, 2010 (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, July 1, 2010 to December 31, 2010.

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 July 1, 2010 to December 31, 2010.

59

The UBS Funds

December 31, 2010 (unaudited)

		Beginning account value July 1, 2010		Ending account value December 31, 2010		Expenses paid during period* 07/01/10 – 12/31/10		Expense ratio during period
UBS Dynamic Alpha Fund
Class A	Actual	$	1,000.00	$	1,061.70	$	8.89		1.71	%
	Hypothetical (5% annual return before expenses)		1,000.00		1,016.59		8.69		1.71
Class B	Actual		1,000.00		1,059.30		12.77		2.46
	Hypothetical (5% annual return before expenses)		1,000.00		1,012.80		12.48		2.46
Class C	Actual		1,000.00		1,058.80		12.77		2.46
	Hypothetical (5% annual return before expenses)		1,000.00		1,012.80		12.48		2.46
Class Y	Actual		1,000.00		1,062.80		7.38		1.42
	Hypothetical (5% annual return before expenses)		1,000.00		1,018.05		7.22		1.42
UBS Global Allocation Fund
Class A	Actual		1,000.00		1,203.70		6.78		1.22
	Hypothetical (5% annual return before expenses)		1,000.00		1,019.06		6.21		1.22
Class B	Actual		1,000.00		1,197.50		11.63		2.10
	Hypothetical (5% annual return before expenses)		1,000.00		1,014.62		10.66		2.10
Class C	Actual		1,000.00		1,197.00		11.08		2.00
	Hypothetical (5% annual return before expenses)		1,000.00		1,015.12		10.16		2.00
Class Y	Actual		1,000.00		1,204.80		5.17		0.93
	Hypothetical (5% annual return before expenses)		1,000.00		1,020.52		4.74		0.93
UBS Global Frontier Fund
Class A	Actual		1,000.00		1,293.40		8.09		1.40
	Hypothetical (5% annual return before expenses)		1,000.00		1,018.15		7.12		1.40
Class C	Actual		1,000.00		1,289.00		12.40		2.15
	Hypothetical (5% annual return before expenses)		1,000.00		1,014.37		10.92		2.15
Class Y	Actual		1,000.00		1,294.70		6.65		1.15
	Hypothetical (5% annual return before expenses)		1,000.00		1,019.41		5.85		1.15

*  Expenses are equal to the Fund's annualized net expense ratios, multiplied by the average account value over the period, multiplied by 184 divided by 365 (to reflect the one-half year period).

60

The UBS Funds

Financial statements

Statement of assets and liabilities
December 31, 2010 (unaudited)

	UBS Dynamic Alpha Fund		UBS Global Allocation Fund		UBS Global Frontier Fund
Assets:
Investments, at cost:
Unaffiliated issuers	$	350,179,259	$	726,199,705	$	5,998,478
Affiliated issuers		126,671,893		407,232,785		44,843,101
Investments of cash collateral in affiliated issuers received from securities loaned, at cost1		2,930,382		16,533,673		—
Foreign currency, at cost		1,724,888		2,886,610		27,496
	$	481,506,422	$	1,152,852,773	$	50,869,075
Investments, at value:
Unaffiliated issuers	$	364,152,682	$	854,688,224	$	5,969,566
Affiliated issuers		149,656,625		545,360,965		61,590,244
Investments of cash collateral in affiliated issuers received from securities loaned, at value1		2,930,382		16,533,673		—
Foreign currency, at value		1,826,925		2,971,824		29,759
Cash		—		5,274		—
Receivables:
Investment securities sold		4,418,057		1,779,946		—
Interest		783,263		1,345,730		102,057
Dividends		296,682		593,299		—
Foreign tax reclaims		241,857		154,223		—
Fund shares sold		126,377		455,645		85,516
Cash collateral for futures contracts		23,808,433		18,611,063		2,471,475
Cash collateral for securities sold short		38,735,380		—		—
Cash collateral for swap agreements		16,720,000		—		—
Outstanding swap agreements, at value2		11,095,873		—		—
Unrealized appreciation on forward foreign currency contracts		7,231,455		7,922,458		754,279
Other assets		66,741		105,850		24,489
Total assets		622,090,732		1,450,528,174		71,027,385
Liabilities:
Payables:
Cash collateral from securities loaned		2,930,382		16,533,673		—
Investment securities purchased		5,589,471		2,082,205		—
Investment advisory and administration fee		374,789		997,243		46,840
Fund shares redeemed		2,540,373		4,681,846		114,292
Custody and fund accounting fees		37,338		85,173		8,556
Distribution and service fees		143,418		515,116		24,240
Trustees' fees		14,429		30,031		5,553
Dividends payable for securities sold short		41,550		—		—
Due to custodian		138,358		—		9
Variation margin		358,378		72,930		50,186
Accrued expenses		176,186		397,623		32,091
Options written, at value3		6,900,531		—		—
Securities sold short, at value4		89,933,881		—		—
Outstanding swap agreements, at value2		20,071,507		—		—
Unrealized depreciation on forward foreign currency contracts		11,158,254		1,637,098		33,648
Total liabilities		140,408,845		27,032,938		315,415
Net assets	$	481,681,887	$	1,423,495,236	$	70,711,970

¹  The market value of securities loaned by UBS Dynamic Alpha Fund, UBS Global Allocation Fund and UBS Global Frontier Fund as of December 31, 2010 was $2,831,824, $21,497,835 and $695,102, respectively.

²  Net upfront payments made by UBS Dynamic Alpha Fund were $302,179.

³  Premiums received by UBS Dynamic Alpha Fund were $3,685,987.

⁴  Proceeds from securities sold short by UBS Dynamic Alpha Fund were $65,367,865.

See accompanying notes to financial statements.
61

The UBS Funds

Financial statements

Statement of assets and liabilities (continued)
December 31, 2010 (unaudited)

	UBS Dynamic Alpha Fund			UBS Global Allocation Fund			UBS Global Frontier Fund1
Net assets consist of:
Beneficial interest	$	887,207,532		$	2,381,878,649		$	85,643,780
Distributions in excess of net investment income		(8,581,945	)		(4,956,834	)		(1,967,492	)
Accumulated net realized loss		(393,558,443	)		(1,225,542,374	)		(30,669,027	)
Net unrealized appreciation (depreciation)		(3,385,257	)		272,115,795			17,704,709
Net assets	$	481,681,887		$	1,423,495,236		$	70,711,970
Class A:
Net assets	$	295,468,248		$	838,590,045		$	54,349,142
Shares outstanding		48,082,089			84,141,644			6,867,848
Net asset value and redemption proceeds per share	$	6.15		$	9.97		$	7.91
Offering price per share (NAV per share plus maximum sales charge)2	$	6.51		$	10.55		$	8.37
Class B:
Net assets	$	4,150,910		$	11,975,988			N/A
Shares outstanding		705,510			1,196,332			N/A
Net asset value and offering price per share	$	5.88		$	10.01			N/A
Redemption proceeds per share (NAV per share less maximum contingent deferred sales charge)2	$	5.59		$	9.51			N/A
Class C:
Net assets	$	87,714,998		$	388,079,730		$	15,479,881
Shares outstanding		14,905,327			39,867,552			1,952,239
Net asset value and offering price per share	$	5.88		$	9.73		$	7.93
Redemption proceeds per share (NAV per share less maximum contingent deferred sales charge)2	$	5.82		$	9.63		$	7.85
Class Y:
Net assets	$	94,347,731		$	184,849,473		$	882,947
Shares outstanding		15,118,331			18,201,230			111,672
Net asset value per share, offering price per share, and redemption proceeds per share2	$	6.24		$	10.16		$	7.91

¹  UBS Global Frontier Fund does 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 sale 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.

62

The UBS Funds

Financial statements

Statement of operations
For the six months ended December 31, 2010 (unaudited)

	UBS Dynamic Alpha Fund			UBS Global Allocation Fund			UBS Global Frontier Fund
Investment income:
Dividends	$	2,442,960		$	6,935,245		$	—
Interest and other		3,269,460			1,427,350			70,056
Affiliated interest		34,557			43,142			3,813
Securities lending-net		27,323			80,187			156
Foreign tax withheld		(84,381	)		(107,629	)		—
Total income		5,689,919			8,378,295			74,025
Expenses:
Advisory and administration	$	2,391,352		$	5,967,120		$	354,340
Service and distribution:
Class A		404,539			1,067,809			67,012
Class B		22,216			68,688			—
Class C		489,171			1,977,646			74,852
Transfer agency and related service fees:
Class A		131,758			296,395			11,653
Class B		4,205			16,036			—
Class C		50,669			201,700			6,104
Class Y		8,267			27,445			118
Custodian and fund accounting		113,402			242,714			25,223
Federal and state registration		25,973			27,178			18,594
Professional services		60,206			59,890			37,896
Shareholder reports		27,933			59,161			5,499
Trustees		28,280			59,181			11,269
Dividend expense and security loan fees for securities sold short		930,928			—			—
Other		44,324			92,456			7,528
Total expenses		4,733,223			10,163,419			620,088
Fee waivers and/or expense reimbursements by Advisor		(56,697	)		(2,343	)		(80,046	)
Net expenses		4,676,526			10,161,076			540,042
Net investment income (loss)		1,013,393			(1,782,781	)		(466,017	)
Net realized gain (loss) on:
Investments in unaffiliated issuers		19,210,563			40,373,375			33,641
Investments in affiliated issuers		5,614,411			23,354,248			2,747,749
Futures contracts		(16,878,961	)		(5,521,058	)		3,230,353
Options written		2,011,542			—			—
Securities sold short		(4,516,614	)		—			—
Swap agreements		(2,987,109	)		—			—
Forward foreign currency contracts		(21,608,254	)		15,816,539			2,044,157
Foreign currency transactions		224,039			88,217			(19,207	)
Net realized gain (loss)		(18,930,383	)		74,111,321			8,036,693
Change in net unrealized appreciation/depreciation on:
Investments		67,260,506			183,135,713			7,754,320
Futures contracts		(4,657,273	)		2,140,920			1,805,617
Options written		(3,219,730	)		—			—
Securities sold short		(14,147,926	)		—			—
Swap agreements		4,530,024			—			—
Forward foreign currency contracts		(705,293	)		3,569,742			239,143
Translation of other assets and liabilities denominated in foreign currency		207,469			108,649			8,156
Change in net unrealized appreciation/depreciation		49,267,777			188,955,024			9,807,236
Net realized and unrealized gain		30,337,394			263,066,345			17,843,929
Net increase in net assets resulting from operations	$	31,350,787		$	261,283,564		$	17,377,912

See accompanying notes to financial statements.
63

The UBS Funds

Financial statements

Statement of changes in net assets

	UBS Dynamic Alpha Fund						UBS Global Allocation Fund
	Six months ended December 31, 2010 (unaudited)			Year ended June 30, 2010			Six months ended December 31, 2010 (unaudited)			Year ended June 30, 2010
Operations:
Net investment income (loss)	$	1,013,393		$	1,223,597		$	(1,782,781	)	$	(3,123,265	)
Net realized gain (loss)		(18,930,383	)		10,196,316			74,111,321			194,245,926
Change in net unrealized appreciation/depreciation		49,267,777			77,091,341			188,955,024			50,734,378
Net increase in net assets from operations		31,350,787			88,511,254			261,283,564			241,857,039
Dividends and distributions to shareholders by class:
Class A:
Net investment income and net foreign currency gains		(7,507,567	)		(18,036,063	)		(35,643,712	)		(64,679,381	)
Class B:
Net investment income and net foreign currency gains		(74,697	)		(256,998	)		(271,858	)		(1,173,478	)
Class C:
Net investment income and net foreign currency gains		(1,529,009	)		(5,224,436	)		(13,451,079	)		(27,111,813	)
Class Y:
Net investment income and net foreign currency gains		(2,642,703	)		(5,942,088	)		(8,188,472	)		(14,623,794	)
Decrease in net assets from dividends and distributions		(11,753,976	)		(29,459,585	)		(57,555,121	)		(107,588,466	)
Beneficial interest transactions:
Proceeds from shares sold		28,432,870			114,313,977			37,843,021			115,466,913
Shares issued on reinvestment of dividends and distributions		11,063,778			28,144,238			53,431,280			100,642,981
Cost of shares redeemed		(103,852,540	)		(289,139,327	)		(253,120,046	)		(679,409,293	)
Redemption fees		6,132			10,795			9,925			30,280
Net decrease in net assets resulting from beneficial interest transactions		(64,349,760	)		(146,670,317	)		(161,835,820	)		(463,269,119	)
Increase (decrease) in net assets		(44,752,949	)		(87,618,648	)		41,892,623			(329,000,546	)
Net assets, beginning of period		526,434,836			614,053,484			1,381,602,613			1,710,603,159
Net assets, end of period	$	481,681,887		$	526,434,836		$	1,423,495,236		$	1,381,602,613
Net assets include accumulated undistributed (distributions in excess of) net investment income	$	(8,581,945	)	$	2,158,638		$	(4,956,834	)	$	54,381,068

64

The UBS Funds

Financial statements

	UBS Global Frontier Fund
	Six months ended December 31, 2010 (unaudited)			Year ended June 30, 2010
Operations:
Net investment income (loss)	$	(466,017	)	$	(848,300	)
Net realized gain (loss)		8,036,693			10,120,585
Change in net unrealized appreciation/depreciation		9,807,236			3,573,824
Net increase in net assets from operations		17,377,912			12,846,109
Dividends and distributions to shareholders by class:
Class A:
Net investment income and net foreign currency gains		(1,678,450	)		(2,525,878	)
Class B:
Net investment income and net foreign currency gains		—			—
Class C:
Net investment income and net foreign currency gains		(361,050	)		(614,766	)
Class Y:
Net investment income and net foreign currency gains		(28,269	)		(530	)
Decrease in net assets from dividends and distributions		(2,067,769	)		(3,141,174	)
Beneficial interest transactions:
Proceeds from shares sold		5,529,015			14,056,564
Shares issued on reinvestment of dividends and distributions		1,915,760			3,011,650
Cost of shares redeemed		(14,504,491	)		(28,974,906	)
Redemption fees		5,085			6,130
Net decrease in net assets resulting from beneficial interest transactions		(7,054,631	)		(11,900,562	)
Increase (decrease) in net assets		8,255,512			(2,195,627	)
Net assets, beginning of period		62,456,458			64,652,085
Net assets, end of period	$	70,711,970		$	62,456,458
Net assets include accumulated undistributed (distributions in excess of) net investment income	$	(1,967,492	)	$	566,294

See accompanying notes to financial statements.
65

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
	Six months ended December 31, 2010			Year ended June 30,
	(unaudited)			2010			2009			2008			2007			2006
Net asset value, beginning of period	$	5.92		$	5.45		$	9.89		$	11.42		$	11.04		$	10.22
Income (loss) from investment operations:
Net investment income (loss)1		0.01			0.02			0.14			0.04			0.01			(0.09	)
Net realized and unrealized gain (loss)		0.38			0.75			(1.84	)		(0.56	)		0.37			1.01
Net increase from payment by Advisor		—			—			0.003			—			—			0.003
Total income (loss)		0.39			0.77			(1.70	)		(0.52	)		0.38			0.92
Less dividends/distributions:
From net investment income		(0.16	)		(0.30	)		—			(0.01	)		0.003			(0.10	)
From net realized gains		—			—			(2.74	)		(1.00	)		—			—
Total dividends/distributions		(0.16	)		(0.30	)		(2.74	)		(1.01	)		0.003			(0.10	)
Net asset value, end of period	$	6.15		$	5.92		$	5.45		$	9.89		$	11.42		$	11.04
Total investment return2		6.17	%		14.19	%		(14.31	)%4		(4.95	)%		3.44	%		9.02	%5
Ratios/Supplemental data:
Net assets, end of period (000's)	$	295,468		$	334,131		$	398,321		$	1,178,342		$	2,168,596		$	1,777,329
Ratios of expenses to average net assets:
Before expense reimbursement and after dividend expense and security loan fees for securities sold short		1.73	%6		1.74	%		1.54	%		1.20	%		1.17	%		1.20	%
Net of expense reimbursement and after dividend expense and security loan fees for securities sold short		1.71	%6		1.72	%		1.54	%		1.20	%		1.17	%		1.20	%
Net of expense reimbursement and before dividend expense and security loan fees for securities sold short		1.35	%6		1.35	%		1.30	%		1.20	%		1.17	%		1.20	%
Ratio of net investment income (loss) to average net assets		0.48	%6		0.31	%		1.99	%		0.35	%		0.06	%		(0.80	)%
Portfolio turnover rate		34	%		58	%		139	%		39	%		28	%		38	%
	Class B
	Six months ended December 31, 2010			Year ended June 30,
	(unaudited)			2010			2009			2008			2007			2006
Net asset value, beginning of period	$	5.65		$	5.20		$	9.68		$	11.26		$	10.98		$	10.19
Income (loss) from investment operations:
Net investment income (loss)1		(0.01	)		(0.03	)		0.08			(0.04	)		(0.09	)		(0.17	)
Net realized and unrealized gain (loss)		0.35			0.73			(1.82	)		(0.54	)		0.37			1.00
Net increase from payment by Advisor		—			—			0.003			—			—			0.003
Total income (loss)		0.34			0.70			(1.74	)		(0.58	)		0.28			0.83
Less dividends/distributions:
From net investment income		(0.11	)		(0.25	)		—			—			—			(0.04	)
From net realized gains		—			—			(2.74	)		(1.00	)		—			—
Total dividends/distributions		(0.11	)		(0.25	)		(2.74	)		(1.00	)		—			(0.04	)
Net asset value, end of period	$	5.88		$	5.65		$	5.20		$	9.68		$	11.26		$	10.98
Total investment return2		5.93	%		13.11	%		(14.98	)%4		(5.62	)%		2.64	%		8.09	%5
Ratios/Supplemental data:
Net assets, end of period (000's)	$	4,151		$	4,597		$	6,733		$	14,905		$	25,790		$	30,051
Ratios of expenses to average net assets:
Before expense reimbursement and after dividend expense and security loan fees for securities sold short		2.59	%6		2.58	%		2.39	%		1.99	%		1.95	%		1.98	%
Net of expense reimbursement/recoupment and after dividend expense and security loan fees for securities sold short		2.46	%6		2.47	%		2.36	%		1.99	%		1.95	%		1.99	%7
Net of expense reimbursement/recoupment and before dividend expense and security loan fees for securities sold short		2.10	%6		2.10	%		2.10	%		1.99	%		1.95	%		1.99	%7
Ratio of net investment income (loss) to average net assets		(0.27	)%6		(0.44	)%		1.23	%		(0.42	)%		(0.78	)%		(1.59	)%
Portfolio turnover rate		34	%		58	%		139	%		39	%		28	%		38	%

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.

66

UBS Dynamic Alpha Fund

Financial highlights

	Class C
	Six months ended December 31, 2010			Year ended June 30,
	(unaudited)			2010			2009			2008			2007			2006
Net asset value, beginning of period	$	5.65		$	5.21		$	9.68		$	11.26		$	10.97		$	10.19
Income (loss) from investment operations:
Net investment income (loss)1		(0.01	)		(0.03	)		0.08			(0.04	)		(0.08	)		(0.17	)
Net realized and unrealized gain (loss)		0.34			0.72			(1.81	)		(0.54	)		0.37			1.00
Net increase from payment by Advisor		—			—			0.003			—			—			0.003
Total income (loss)		0.33			0.69			(1.73	)		(0.58	)		0.29			0.83
Less dividends/distributions:
From net investment income		(0.10	)		(0.25	)		—			—			—			(0.05	)
From net realized gains		—			—			(2.74	)		(1.00	)		—			—
Total dividends/distributions		(0.10	)		(0.25	)		(2.74	)		(1.00	)		—			(0.05	)
Net asset value, end of period	$	5.88		$	5.65		$	5.21		$	9.68		$	11.26		$	10.97
Total investment return2		5.88	%		13.15	%		(14.98	)%4		(5.62	)%		2.64	%		8.15	%5
Ratios/Supplemental data:
Net assets, end of period (000's)	$	87,715		$	104,146		$	131,745		$	317,450		$	579,916		$	520,754
Ratios of expenses to average net assets:
Before expense reimbursement and after dividend expense and security loan fees for securities sold short		2.50	%6		2.50	%		2.32	%		1.97	%		1.93	%		1.97	%
Net of expense reimbursement and after dividend expense and security loan fees for securities sold short		2.46	%6		2.47	%		2.32	%		1.97	%		1.93	%		1.97	%
Net of expense reimbursement and before dividend expense and security loan fees for securities sold short		2.10	%6		2.10	%		2.07	%		1.97	%		1.93	%		1.97	%
Ratio of net investment income (loss) to average net assets		(0.26	)%6		(0.44	)%		1.24	%		(0.41	)%		(0.72	)%		(1.57	)%
Portfolio turnover rate		34	%		58	%		139	%		39	%		28	%		38	%
	Class Y
	Six months ended December 31, 2010			Year ended June 30,
	(unaudited)			2010			2009			2008			2007			2006
Net asset value, beginning of period	$	6.03		$	5.54		$	9.96		$	11.48		$	11.07		$	10.23
Income (loss) from investment operations:
Net investment income (loss)1		0.02			0.03			0.17			0.08			0.05			(0.06	)
Net realized and unrealized gain (loss)		0.37			0.78			(1.85	)		(0.56	)		0.36			1.02
Net increase from payment by Advisor		—			—			0.003			—			—			0.003
Total income (loss)		0.39			0.81			(1.68	)		(0.48	)		0.41			0.96
Less dividends/distributions:
From net investment income		(0.18	)		(0.32	)		—			(0.04	)		0.003			(0.12	)
From net realized gains		—			—			(2.74	)		(1.00	)		—			—
Total dividends/distributions		(0.18	)		(0.32	)		(2.74	)		(1.04	)		0.003			(0.12	)
Net asset value, end of period	$	6.24		$	6.03		$	5.54		$	9.96		$	11.48		$	11.07
Total investment return2		6.28	%		14.49	%		(13.99	)%4		(4.64	)%		3.80	%		9.28	%5
Ratios/Supplemental data:
Net assets, end of period (000's)	$	94,348		$	83,561		$	77,254		$	320,839		$	478,785		$	293,004
Ratios of expenses to average net assets:
Before expense reimbursement and after dividend expense and security loan fees for securities sold short		1.42	%6		1.42	%		1.22	%		0.91	%		0.89	%		0.92	%
Net of expense reimbursement/recoupment and after dividend expense and security loan fees for securities sold short		1.42	%6		1.42	%		1.22	%		0.91	%		0.89	%		0.92	%
Net of expense reimbursement/recoupment and before dividend expense and security loan fees for securities sold short		1.06	%6		1.04	%		1.00	%		0.91	%		0.89	%		0.92	%
Ratio of net investment income (loss) to average net assets		0.79	%6		0.56	%		2.23	%		0.69	%		0.40	%		(0.52	)%
Portfolio turnover rate		34	%		58	%		139	%		39	%		28	%		38	%

⁴  During the fiscal year ended June 30, 2009, the Fund's total investment return included a reimbursement by the Investment Advisor for amounts related to a trading error that had an impact on the total return of less than 0.005%.

⁵  During the fiscal year ended June 30, 2006, the Fund's total investment return included a reimbursement by the Investment Advisor for amounts related to a trading error that had an impact on the total return of less than 0.005%.

⁶  Annualized.

⁷  The Investment Manager recouped expenses previously reimbursed by the Investment Manager on behalf of the Fund, not to exceed the expense cap.

See accompanying notes to financial statements.
67

UBS Global Allocation Fund

Financial highlights

The table below sets forth financial data for one share of beneficial interest outstanding throughout each period presented.

	Class A
	Six months ended December 31, 2010			Year ended June 30,
	(unaudited)			2010			2009			2008			2007			2006
Net asset value, beginning of period	$	8.66		$	8.18		$	12.59		$	14.81		$	13.86		$	13.33
Income (loss) from investment operations:
Net investment income (loss)1		(0.00	)3		0.003			0.08			0.17			0.19			0.19
Net realized and unrealized gain (loss)		1.75			1.11			(3.08	)		(1.34	)		1.83			1.08
Total income (loss)		1.75			1.11			(3.00	)		(1.17	)		2.02			1.27
Less dividends/distributions:
From net investment income		(0.44	)		(0.63	)		(0.46	)		(0.23	)		(0.27	)		(0.14	)
From net realized gains		—			—			(0.95	)		(0.82	)		(0.80	)		(0.60	)
Total dividends/distributions		(0.44	)		(0.63	)		(1.41	)		(1.05	)		(1.07	)		(0.74	)
Net asset value, end of period	$	9.97		$	8.66		$	8.18		$	12.59		$	14.81		$	13.86
Total investment return2		20.37	%		13.11	%		(22.36	)%		(8.43	)%		14.93	%		9.72	%
Ratios/Supplemental data:
Net assets, end of period (000's)	$	838,590		$	814,760		$	996,059		$	2,396,937		$	3,094,036		$	2,246,289
Ratio of expenses to average net assets		1.22	%4		1.21	%		1.19	%		1.09	%		1.13	%		1.14	%
Ratio of net investment income (loss) to average net assets		(0.06	)%4		0.01	%		0.84	%		1.19	%		1.28	%		1.41	%
Portfolio turnover rate		33	%		90	%		122	%		83	%		74	%		83	%
	Class B
	Six months ended December 31, 2010			Year ended June 30,
	(unaudited)			2010			2009			2008			2007			2006
Net asset value, beginning of period	$	8.56		$	8.00		$	12.35		$	14.52		$	13.60		$	13.08
Income (loss) from investment operations:
Net investment income (loss)1		(0.04	)		(0.08	)		0.003			0.05			0.07			0.08
Net realized and unrealized gain (loss)		1.72			1.08			(3.01	)		(1.31	)		1.79			1.06
Total income (loss)		1.68			1.00			(3.01	)		(1.26	)		1.86			1.14
Less dividends/distributions:
From net investment income		(0.23	)		(0.44	)		(0.39	)		(0.09	)		(0.14	)		(0.02	)
From net realized gains		—			—			(0.95	)		(0.82	)		(0.80	)		(0.60	)
Total dividends/distributions		(0.23	)		(0.44	)		(1.34	)		(0.91	)		(0.94	)		(0.62	)
Net asset value, end of period	$	10.01		$	8.56		$	8.00		$	12.35		$	14.52		$	13.60
Total investment return2		19.75	%		12.14	%		(22.98	)%		(9.14	)%		13.96	%		8.81	%
Ratios/Supplemental data:
Net assets, end of period (000's)	$	11,976		$	15,190		$	33,685		$	90,258		$	139,061		$	161,704
Ratios of expenses to average net assets:
Before expense reimbursement		2.13	%4		2.09	%		2.02	%		1.91	%		1.93	%		1.95	%
Net of expense reimbursement		2.10	%4		2.09	%		2.02	%		1.91	%		1.93	%		1.95	%
Ratio of net investment income (loss) to average net assets		(0.93	)%4		(0.90	)%		0.01	%		0.36	%		0.48	%		0.60	%
Portfolio turnover rate		33	%		90	%		122	%		83	%		74	%		83	%

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.

68

UBS Global Allocation Fund

Financial highlights

	Class C
	Six months ended December 31, 2010			Year ended June 30,
	(unaudited)			2010			2009			2008			2007			2006
Net asset value, beginning of period	$	8.42		$	7.96		$	12.29		$	14.48		$	13.58		$	13.09
Income (loss) from investment operations:
Net investment income (loss)1		(0.04	)		(0.07	)		0.003			0.05			0.07			0.09
Net realized and unrealized gain (loss)		1.69			1.07			(2.99	)		(1.30	)		1.79			1.05
Total income (loss)		1.65			1.00			(2.99	)		(1.25	)		1.86			1.14
Less dividends/distributions:
From net investment income		(0.34	)		(0.54	)		(0.39	)		(0.12	)		(0.16	)		(0.05	)
From net realized gains		—			—			(0.95	)		(0.82	)		(0.80	)		(0.60	)
Total dividends/distributions		(0.34	)		(0.54	)		(1.34	)		(0.94	)		(0.96	)		(0.65	)
Net asset value, end of period	$	9.73		$	8.42		$	7.96		$	12.29		$	14.48		$	13.58
Total investment return2		19.70	%		12.29	%		(22.93	)%		(9.15	)%		14.02	%		8.82	%
Ratios/Supplemental data:
Net assets, end of period (000's)	$	388,080		$	381,137		$	456,577		$	985,156		$	1,274,539		$	1,044,517
Ratio of expenses to average net assets		2.00	%4		2.00	%		1.97	%		1.89	%		1.90	%		1.91	%
Ratio of net investment income (loss) to average net assets		(0.84	)%4		(0.78	)%		0.06	%		0.40	%		0.51	%		0.64	%
Portfolio turnover rate		33	%		90	%		122	%		83	%		74	%		83	%
	Class Y
	Six months ended December 31, 2010			Year ended June 30,
	(unaudited)			2010			2009			2008			2007			2006
Net asset value, beginning of period	$	8.84		$	8.34		$	12.80		$	15.04		$	14.06		$	13.51
Income (loss) from investment operations:
Net investment income (loss)1		0.01			0.03			0.10			0.21			0.23			0.23
Net realized and unrealized gain (loss)		1.78			1.14			(3.13	)		(1.37	)		1.85			1.09
Total income (loss)		1.79			1.17			(3.03	)		(1.16	)		2.08			1.32
Less dividends/distributions:
From net investment income		(0.47	)		(0.67	)		(0.48	)		(0.26	)		(0.30	)		(0.17	)
From net realized gains		—			—			(0.95	)		(0.82	)		(0.80	)		(0.60	)
Total dividends/distributions		(0.47	)		(0.67	)		(1.43	)		(1.08	)		(1.10	)		(0.77	)
Net asset value, end of period	$	10.16		$	8.84		$	8.34		$	12.80		$	15.04		$	14.06
Total investment return2		20.48	%		13.54	%		(22.12	)%		(8.20	)%		15.18	%		9.98	%
Ratios/Supplemental data:
Net assets, end of period (000's)	$	184,849		$	170,517		$	224,281		$	477,603		$	648,479		$	463,122
Ratios of expenses to average net assets:
Before expense reimbursement		0.93	%4		0.93	%		0.90	%		0.82	%		0.88	%		0.88	%
Net of expense reimbursement		0.93	%4		0.93	%		0.90	%		0.82	%		0.88	%		0.88	%
Ratio of net investment income (loss) to average net assets		0.23	%4		0.29	%		1.14	%		1.46	%		1.53	%		1.67	%
Portfolio turnover rate		33	%		90	%		122	%		83	%		74	%		83	%

³  Amount represents less than $0.005 per share.

⁴  Annualized.

See accompanying notes to financial statements.
69

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
	Six months ended December 31, 2010			Year ended June 30,						For the period ended
	(unaudited)			2010			2009			June 30, 20083
Net asset value, beginning of period	$	6.32		$	5.59		$	8.75		$	10.00
Income (loss) from investment operations:
Net investment loss1		(0.04	)		(0.07	)		(0.06	)		(0.05	)
Net realized and unrealized gain (loss)		1.88			1.12			(2.98	)		(1.10	)
Total income (loss)		1.84			1.05			(3.04	)		(1.15	)
Less dividends/distributions:
From net investment income		(0.25	)		(0.32	)		(0.12	)		(0.03	)
From net realized gains		—			—			—			(0.07	)
Total dividends/distributions		(0.25	)		(0.32	)		(0.12	)		(0.10	)
Net asset value, end of period	$	7.91		$	6.32		$	5.59		$	8.75
Total investment return2		29.34	%		18.30	%		(34.51	)%		(11.60	)%
Ratios/Supplemental data:
Net assets, end of period (000's)	$	54,349		$	48,479		$	48,395		$	79,572
Ratios of expenses to average net assets:
Before expense reimbursement		1.62	%5		1.62	%		1.66	%		1.59	%5
Net of expense reimbursement		1.40	%5		1.40	%		1.40	%		1.40	%5
Ratio of net investment loss to average net assets		(1.19	)%5		(1.01	)%		(1.01	)%		(0.52	)%5
Portfolio turnover rate		17	%		54	%		148	%		84	%

	Class Y
	Six months ended December 31, 2010			Year ended June 30,						For the period ended
	(unaudited)			2010			2009			June 30, 20083
Net asset value, beginning of period	$	6.32		$	5.60		$	8.77		$	10.00
Income (loss) from investment operations:
Net investment loss1		(0.04	)		(0.05	)		(0.04	)		(0.02	)
Net realized and unrealized gain (loss)		1.90			1.11			(2.99	)		(1.10	)
Total income (loss)		1.86			1.06			(3.03	)		(1.12	)
Less dividends/distributions:
From net investment income		(0.27	)		(0.34	)		(0.14	)		(0.04	)
From net realized gains		—			—			—			(0.07	)
Total dividends/distributions		(0.27	)		(0.34	)		(0.14	)		(0.11	)
Net asset value, end of period	$	7.91		$	6.32		$	5.60		$	8.77
Total investment return2		29.47	%		18.54	%		(34.30	)%		(11.33	)%
Ratios/Supplemental data:
Net assets, end of period (000's)	$	883		$	185		$	1,699		$	7,395
Ratios of expenses to average net assets:
Before expense reimbursement		1.37	%5		1.35	%		1.35	%		1.31	%5
Net of expense reimbursement		1.15	%5		1.15	%		1.15	%		1.15	%5
Ratio of net investment loss to average net assets		(0.93	)%5		(0.72	)%		(0.73	)%		(0.26	)%5
Portfolio turnover rate		17	%		54	%		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.

70

UBS Global Frontier Fund

Financial highlights

	Class C
	Six months ended December 31, 2010			Year ended June 30,						For the period ended
	(unaudited)			2010			2009			June 30, 20083
Net asset value, beginning of period	$	6.31		$	5.58		$	8.71		$	10.00
Income (loss) from investment operations:
Net investment loss1		(0.07	)		(0.12	)		(0.10	)		(0.12	)
Net realized and unrealized gain (loss)		1.88			1.12			(2.96	)		(1.10	)
Total income (loss)		1.81			1.00			(3.06	)		(1.22	)
Less dividends/distributions:
From net investment income		(0.19	)		(0.27	)		(0.07	)		(0.00	)4
From net realized gains		—			—			—			(0.07	)
Total dividends/distributions		(0.19	)		(0.27	)		(0.07	)		(0.07	)
Net asset value, end of period	$	7.93		$	6.31		$	5.58		$	8.71
Total investment return2		28.90	%		17.50	%		(35.03	)%		(12.22	)%
Ratios/Supplemental data:
Net assets, end of period (000's)	$	15,480		$	13,792		$	14,559		$	22,882
Ratios of expenses to average net assets:
Before expense reimbursement		2.41	%5		2.41	%		2.48	%		2.40	%5
Net of expense reimbursement		2.15	%5		2.15	%		2.15	%		2.15	%5
Ratio of net investment loss to average net assets		(1.94	)%5		(1.76	)%		(1.76	)%		(1.27	)%5
Portfolio turnover rate		17	%		54	%		148	%		84	%

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.
71

The UBS Funds

Notes to financial statements (unaudited)

1. Organization and significant accounting policies

The UBS Funds (the "Trust") is registered with the Securities and Exchange Commission ("SEC") 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 15 Funds available for investment, each having its own investment objectives and policies. The following three funds are covered in this report: UBS Dynamic Alpha Fund, UBS Global Allocation Fund, and UBS Global Frontier 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, which is classified as "non-diversified" for purposes of the 1940 Act. Each Fund currently offers Class A, Class C and Class Y shares. For each Fund except UBS Global Frontier Fund, Class B shares are offered only to existing Class B shareholders with respect to the reinvestment of dividends and distributions and exchanges of Class B shares of the Funds for Class B shares of other series of the UBS Family of Funds. "UBS Family of Funds" include other UBS Funds, PACE Select funds and other funds for which UBS Global Asset Management (US) Inc. ("UBS Global AM (US)") serves as principal underwriter. UBS Global Frontier Fund does not offer Class B shares. 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 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 Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") is the exclusive reference of authoritative US generally accepted accounting principles ("GAAP") recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the SEC under authority of federal laws are also sources of authoritative GAAP for SEC registrants. The Funds' financial statements are prepared in accordance with GAAP, which may require the use of management estimates and assumptions. 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, where available, for its portfolio securities. The Funds normally obtain market values for their securities and other instruments from independent pricing sources and broker-dealers. Independent pricing sources may use reported last sale prices, official market closing prices, 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

72

The UBS Funds

Notes to financial statements (unaudited)

broker-dealer market price quotations, if available, in determining the valuation of the portfolio securities or instruments. Securities and other instruments also may be valued based on appraisals derived from information concerning the security or instrument or similar securities or instruments received from recognized dealers in those holdings. Securities and instruments 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 on the valuation date available prior to valuation. Securities and instruments which are listed on US and foreign stock exchanges normally are valued at the market closing price, the last sale price on the day the securities are valued or, lacking any sales on such day, at the last available bid price. In cases where securities or instruments are traded on more than one exchange, the securities or instruments are valued on the exchange designated as the primary market by UBS Global Asset Management (Americas) Inc. ("UBS Global AM" or the "Advisor"), 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 not readily available from an independent pricing source for a particular security or instrument, that security or instrument is valued at fair value as determined in good faith 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. Foreign currency exchange rates are generally determined as of the close of the New York Stock Exchange ("NYSE").

Certain securities or instruments 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 net asset value. 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 or instruments, the Fund may adjust the previous closing prices to reflect what the Board believes to be the fair value of these securities or instruments as of 4:00 p.m. Eastern Time.

Certain Funds may use a systematic fair valuation model provided by an independent third party to value securities or instruments 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. The systematic fair valuation model may use calculations based on indices of domestic securities and other appropriate indicators, such as prices of relevant ADRs and futures contracts. If a security or instrument is valued at a "fair value," that value is likely to be different from the last quoted market price for the security or instrument. The use of the fair valuation model may result in securities being transferred between Level 1 and Level 2 at reporting periods.

The amortized cost method of valuation, which approximates market value, generally is used to value short-term debt instruments with 60 days or less remaining to maturity, unless the Board determines that this does not represent fair value. Investments in open-end investment companies are valued at the daily closing net asset value of the respective investment company. Pursuant to the Funds' adoption of the use of the practical expedient within ASC Topic 820, investments in non-registered investment companies are also valued at the daily net asset value. All investments quoted in foreign currencies will be valued daily in US dollars on the basis of the foreign currency exchange rates prevailing at the time such valuation is determined by the Funds' custodian.

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.

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 Statement of

73

The UBS Funds

Notes to financial statements (unaudited)

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.

GAAP requires disclosure regarding 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—Unadjusted 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.

Level 3—Unobservable inputs inclusive of the Fund's own assumptions in determining the fair value of investments.

A fair value hierarchy has been included near the end of each Fund's Portfolio of investments.

In January 2010, FASB issued Accounting Standards Update No. 2010-06 "Improving Disclosures about Fair Value Measurements" ("ASU No. 2010-06"). ASU No. 2010-06 requires reporting entities to make new disclosures about amounts and reasons for significant transfers in and out of Level 1 and Level 2 fair value measurements as well as inputs and valuation techniques used to measure fair value for both recurring and nonrecurring fair value measurements that fall in either Level 2 or Level 3, including information on purchases, sales, issuances and settlements on a gross basis in the reconciliation of activity in Level 3 fair value measurements. The new and revised disclosures have been implemented for annual and interim periods beginning after December 15, 2009 except for the disclosures surrounding purchases, sales, issuances and settlements on a gross basis in the reconciliation of Level 3 fair value measurements, which are effective for annual and interim periods beginning after December 15, 2010. Management is currently evaluating the impact the adoption of the remaining portion of ASU No. 2010-06 may have on the Funds' financial statement disclosures.

The provisions of ASC Topic 815 "Derivatives and Hedging" ("ASC Topic 815") require qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of gains and losses on derivative instruments and disclosures about credit-risk related contingent features in derivative agreements. Since investment companies value their derivatives at fair value and recognize changes in fair value through the statement of operations, they do not qualify for hedge accounting under ASC Topic 815. Accordingly, even though a fund's investments in derivatives may represent economic hedges, they are considered to be non-hedge transactions for purposes of disclosure under ASC Topic 815. ASC Topic 815 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. Details of this disclosure can be found below as well as in the Portfolio of investments. The volume of derivatives that is presented in the Portfolio of investments of each Fund is consistent with the derivative activity during the period ended December 31, 2010. The Funds may be sellers of protection through credit default swap agreements which are by nature credit-risk contingent (the terms of these agreements can be found within the Portfolio of investments, with further discussion in the Notes to financial statements); however, the Funds are not aware of any additional credit-risk contingent features on other derivative contracts held by the Funds.

74

The UBS Funds

Notes to financial statements (unaudited)

Disclosure of derivatives by underlying risk for each Fund as of and for the period ended December 31, 2010 is as follows:

Asset derivatives

	Interest rate risk		Equity risk		Credit risk		Foreign exchange risk		Total
UBS Dynamic Alpha Fund
Forward contracts1	$	—	$	—	$	—	$	7,231,455	$	7,231,455
Futures contracts2		107,546		1,552,946		—		—		1,660,492
Options purchased1		1,194,422		2,040,540		—		14,788		3,249,750
Swap agreements1		5,750,233		—		4,875,014		470,626		11,095,873
Total value	$	7,052,201	$	3,593,486	$	4,875,014	$	7,716,869	$	23,237,570

¹  Statement of assets and liabilities location: Investments in securities of unaffiliated issuers, at value, Unrealized appreciation on forward foreign currency contracts and Outstanding swap agreements, at value.

²  Includes cumulative appreciation of futures contracts as reported in the futures contracts table in the Portfolio of investments, but only the unpaid variation margin is reported within the Statement of assets and liabilities.

Liability derivatives

	Interest rate risk			Equity risk			Credit risk			Foreign exchange risk			Total
UBS Dynamic Alpha Fund
Forward contracts1	$	—		$	—		$	—		$	(11,158,254	)	$	(11,158,254	)
Futures contracts2		(404,036	)		(1,606,860	)		—			—			(2,010,896	)
Options written1		(6,594,959	)		—			(27,837	)		(277,735	)		(6,900,531	)
Swap agreements1		(8,901,109	)		—			(10,613,668	)		(556,730	)		(20,071,507	)
Total value	$	(15,900,104	)	$	(1,606,860	)	$	(10,641,505	)	$	(11,992,719	)	$	(40,141,188	)

¹  Statement of assets and liabilities location: Unrealized depreciation on forward foreign currency contracts, Outstanding swap agreements, at value and Options written, at value.

²  Includes cumulative depreciation of futures contracts as reported in the futures contracts table in the Portfolio of investments, but only the unpaid variation margin is reported within the Statement of assets and liabilities.

75

The UBS Funds

Notes to financial statements (unaudited)

Activities in derivative instruments during the period ended December 31, 2010, were as follows:

	Interest rate risk			Equity risk			Credit risk		Foreign exchange risk			Total
UBS Dynamic Alpha Fund
Net realized gain (loss)1
Forward contracts	$	—		$	—		$	—	$	(21,608,254	)	$	(21,608,254	)
Futures contracts		184,218			(17,063,179	)		—		—			(16,878,961	)
Options purchased3		(3,229,650	)		(719,445	)		—		—			(3,949,095	)
Options written		1,890,642			—			120,900		—			2,011,542
Swap agreements		(5,312,896	)		(59,458	)		2,358,951		26,294			(2,987,109	)
Total net realized gain (loss)	$	(6,467,686	)	$	(17,842,082	)	$	2,479,851	$	(21,581,960	)	$	(43,411,877	)
Net change in unrealized appreciation/depreciation2
Forward contracts	$	—		$	—		$	—	$	(705,293	)	$	(705,293	)
Futures contracts		41,201			(4,698,474	)		—		—			(4,657,273	)
Options purchased3		(1,114,252	)		1,657,146			—		(245,404	)		297,490
Options written		(3,257,763	)		—			55,576		(17,543	)		(3,219,730	)
Swap agreements		4,749,029			(1,889,451	)		1,826,600		(156,154	)		4,530,024
Total net change in unrealized appreciation/depreciation	$	418,215		$	(4,930,779	)	$	1,882,176	$	(1,124,394	)	$	(3,754,782	)

¹  Statement of operations location: Net realized gain (loss) on futures contracts, options written, swap agreements and forward foreign currency contracts.

²  Statement of operations location: Change in net unrealized appreciation/depreciation on futures contracts, options written, swap agreements and forward foreign currency contracts.

³  Realized and unrealized gain (loss) is included in net realized gain (loss) from investments and net change in unrealized appreciation/depreciation on investments.

Asset derivatives

	Interest rate risk		Equity risk		Foreign exchange risk		Total
UBS Global Allocation Fund
Forward contracts1	$	—	$	—	$	7,922,458	$	7,922,458
Futures contracts2		207,450		1,150,044		—		1,357,494
Total value	$	207,450	$	1,150,044	$	7,922,458	$	9,279,952

¹  Statement of assets and liabilities location: Unrealized appreciation on forward foreign currency contracts

²  Includes cumulative appreciation of futures contracts as reported in the futures contracts table in the Portfolio of investments, but only the unpaid variation margin is reported within the Statement of assets and liabilities.

Liability derivatives

	Interest rate risk			Equity risk			Foreign exchange risk			Total
UBS Global Allocation Fund
Forward contracts1	$	—		$	—		$	(1,637,098	)	$	(1,637,098	)
Futures contracts2		(145,337	)		(2,108,207	)		—			(2,253,544	)
Total value	$	(145,337	)	$	(2,108,207	)	$	(1,637,098	)	$	(3,890,642	)

¹  Statement of assets and liabilities location: Unrealized depreciation on forward foreign currency contracts

²  Includes cumulative depreciation of futures contracts as reported in the futures contracts table in the Portfolio of investments, but only the unpaid variation margin is reported within the Statement of assets and liabilities.

76

The UBS Funds

Notes to financial statements (unaudited)

Activities in derivative instruments during the period ended December 31, 2010, were as follows:

	Interest rate risk			Equity risk			Foreign exchange risk		Total
UBS Global Allocation Fund
Net realized gain (loss)1
Forward contracts	$	—		$	—		$	15,816,539	$	15,816,539
Futures contracts		(2,073,462	)		(3,447,596	)		—		(5,521,058	)
Total net realized gain (loss)	$	(2,073,462	)	$	(3,447,596	)	$	15,816,539	$	10,295,481
Net change in unrealized appreciation/depreciation2
Forward contracts	$	—		$	—		$	3,569,742	$	3,569,742
Futures contracts		1,558,271			582,649			—		2,140,920
Total net change in unrealized appreciation/depreciation	$	1,558,271		$	582,649		$	3,569,742	$	5,710,662

¹  Statement of operations location: Net realized gain (loss) on futures contracts and forward foreign currency contracts.

²  Statement of operations location: Change in net unrealized appreciation/depreciation on futures contracts and forward foreign currency contracts.

Asset derivatives

	Equity risk		Foreign exchange risk		Total
UBS Global Frontier Fund
Forward contracts1	$	—	$	754,279	$	754,279
Futures contracts2		429,688		—		429,688
Total value	$	429,688	$	754,279	$	1,183,967

¹  Statement of assets and liabilities location: Unrealized appreciation on forward foreign currency contracts.

²  Includes cumulative appreciation of futures contracts as reported in the futures contracts table in the Portfolio of investments, but only the unpaid variation margin is reported within the Statement of assets and liabilities.

Liability derivatives

	Equity risk			Foreign exchange risk			Total
UBS Global Frontier Fund
Forward contracts1	$	—		$	(33,648	)	$	(33,648	)
Futures contracts2		(168,157	)		—			(168,157	)
Total value	$	(168,157	)	$	(33,648	)	$	(201,805	)

¹  Statement of assets and liabilities location: Unrealized depreciation on forward foreign currency contracts.

²  Includes cumulative depreciation of futures contracts as reported in the futures contracts table in the Portfolio of investments, but only the unpaid variation margin is reported within the Statement of assets and liabilities.

77

The UBS Funds

Notes to financial statements (unaudited)

Activities in derivative instruments during the period ended December 31, 2010, were as follows:

	Interest rate risk			Equity risk		Foreign exchange risk		Total
UBS Global Frontier Fund
Net realized gain (loss)1
Forward contracts	$	—		$	—	$	2,044,157	$	2,044,157
Futures contracts		(28,101	)		3,258,454		—		3,230,353
Total net realized gain (loss)	$	(28,101	)	$	3,258,454	$	2,044,157	$	5,274,510
Net change in unrealized appreciation/depreciation2
Forward contracts	$	—		$	—	$	239,143	$	239,143
Futures contracts		27,549			1,778,068		—		1,805,617
Total net change in unrealized appreciation/depreciation	$	27,549		$	1,778,068	$	239,143	$	2,044,760

¹  Statement of operations location: Net realized gain (loss) on futures contracts and forward foreign currency contracts.

²  Statement of operations location: Change in net unrealized appreciation/depreciation on futures contracts 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 in each Fund's Notes to portfolio of investments.

C. Investment transactions, investment income and expenses: Investment transactions are recorded on the trade date. Realized gains and losses from investment and foreign exchange transactions are calculated using the identified cost method. 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.

D. Foreign currency translation: The Funds use the foreign currency exchange rates determined as of the close of regular trading on the NYSE. For purposes of calculating the US dollar equivalent value of a non US dollar denominated obligation, foreign currency amounts are translated into US dollars on the following basis: (1) market value of investment securities and other assets and liabilities—at the exchange rates prevailing at the end of each Fund's fiscal period; and (2) purchases and sales of investment securities and income and expenses—at the rates of exchange prevailing on the respective dates of such transactions.

Although the net assets and the market value of each Fund's portfolio are presented at the foreign exchange rates at the end of each Fund's fiscal period, the Funds do not generally isolate the effect of fluctuations in foreign exchange rates from the effect of the changes in market prices of securities. However, the Funds do isolate the effect of fluctuations in foreign exchange rates when determining the gain or loss upon the sale or maturity of foreign currency-denominated securities pursuant to US federal income tax regulations. Certain foreign exchange gains and losses included in realized and unrealized gains and losses are included in or are a reduction of ordinary income in accordance with US federal income tax regulations.

78

The UBS Funds

Notes to financial statements (unaudited)

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, manage currency risk or to gain exposure to a currency without purchasing securities denominated in that currency. Forward foreign currency contracts involve, to varying degrees, elements of market risk (specifically foreign currency risk).

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 utilization 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 unrealized gains or losses on foreign forward currency contracts by the Funds. Realized gains and losses include net gains and losses recognized by each Fund on contracts which have been sold or matured.

F. Futures contracts: Each Fund may purchase or sell financial futures contracts. The Funds may purchase or sell futures contracts to increase or reduce their exposure to an asset class without purchasing or selling the underlying securities, either as a hedge or to enhance income or realize gains. Using financial futures contracts involves various market risks, including interest rate 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. To the extent that market prices move in an unexpected direction, there is a risk that a Fund will not achieve the anticipated benefits of the futures contract or may realize a loss.

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.

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 the Funds' records 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, total return, and credit default swap agreements. The Funds expect to enter into these transactions to preserve a return or spread on a particular investment or to hedge a portion of the portfolio's duration, to protect

79

The UBS Funds

Notes to financial statements (unaudited)

against any increase in the price of securities a Fund anticipates purchasing at a later date, to gain exposure to certain markets in the most economical way possible or in an attempt to enhance income or gains.

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 itself 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.

Certain Funds may enter into currency swap agreements with another party in order to receive or pay amounts based on changes in currency exchange rates to protect itself from or take advantage of exchange rate fluctuations. The Fund utilizes currency swaps to earn income and enhance returns as well as to manage the risk profile of the Fund. 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 currency exchange rate(s) for a specified amount. Currency swap agreements are subject to general market risk, liquidity risk, counterparty risk, foreign exchange risk and interest rate risk.

Credit default swap agreements involve commitments to make or receive payments in the event of a default or other credit event of a referenced security. As a buyer, a Fund would make periodic payments to the counterparty, and a Fund would receive payments only upon the occurrence of a credit event. If no credit event occurs, a Fund will lose its periodic stream of payments over the term of the contract. However, if a credit event does occur, a Fund typically would receive full notional value for a reference obligation that may have little or no value. As a seller, a Fund would receive periodic payments from the counterparty, and a Fund would make payments only upon the occurrence of a credit event. If no credit event occurs, a Fund will gain the periodic stream of payments it received over the term of the contract. However, if a credit event occurs, a 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 a 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 corporate issues or sovereign issues of an emerging market 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 obligations may be delivered in lieu of the specific referenced obligation. The ability to deliver other obligations may result in delivery of a security with a value other than had been anticipated (such as a party's right to choose the deliverable obligation with the lowest value following a credit event). A Fund may use credit default swaps on corporate issues or sovereign issues of an emerging market country to provide a measure of protection against defaults of the issuers (i.e., to reduce risk where a Fund owns or has exposure to the referenced obligation) or to take an active long or short position with respect to the likelihood of a particular issuer's default.

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. Notional amounts of all credit default swap agreements outstanding as of December 31, 2010 for which a Fund is the seller of protection are disclosed under the section "Credit default swaps on corporate and sovereign issues—sell protection" in the Notes to Portfolio 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.

80

The UBS Funds

Notes to financial statements (unaudited)

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, a 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.

The use of swap agreements 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 a Fund will be less favorable than it would have been if this investment technique was never used. Swap agreements 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, a Fund would consider the creditworthiness of the counterparty to a swap agreement in evaluating potential credit risk.

A Fund accrues for interim payments on swap agreements on a daily basis, with the net amount recorded within unrealized appreciation/depreciation of swap agreements on the Statement 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 Statement 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, foreign currencies and interest rate swaps (commonly referred to as swaptions), in order to gain exposure to or protect against changes in the markets or in an attempt to enhance income or gains. 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 security 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 a 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.

In writing an option, the Fund bears the market risk of an unfavorable change in the price of the derivative instrument, security, index or currency underlying the written option. Exercise of an option written by the 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 purchase put and call options on foreign or US securities, indices, foreign currencies and interest rate swaps (commonly referred to as swaptions), as well as exchange listed call options on particular market segment indices to achieve temporary exposure to a specific security, currency, 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. The risk

81

The UBS Funds

Notes to financial statements (unaudited)

associated with purchasing put and call options is limited to the premium paid. Premiums 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 may enter into short sales whereby it sells a security it generally does 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 the Fund shorts a security while 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. The Fund will realize a gain or loss upon closing of the short sale (returning the security to the lender by way of purchase or delivery of a long position owned). The Fund is liable to the lender for any dividends payable or other corporate actions on securities while those securities are in a short position. These dividends are booked as an expense or liability of the Fund. The Fund segregates collateral consisting of cash, US government securities or other liquid assets sufficient to collateralize the market value of short positions. The Fund is charged a securities loan fee in connection with short sale transactions.

L. Dividends and distributions: It is the Funds' policy to distribute their respective net investment income and net capital gains, if any, annually. Dividends and distributions to shareholders are recorded on the ex-distribution date. The amount of dividends from net investment income and distributions from net realized capital gains and/or return of capital is determined in accordance with US federal income tax regulations, which may differ from GAAP. These "book/tax" differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature, such amounts are reclassified within the capital accounts based on their federal tax-basis treatment; temporary differences do not require reclassification.

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 the Funds invest. The ability of the issuers of debt securities held by a Fund 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 Funds participate in a brokerage commission recapture program. The 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 period ended December 31, 2010 the UBS Global Allocation Fund recorded $15,268 recaptured commissions which are reflected on the Statement of operations within the net realized gains (losses) on investment activities.

O. Redemption fees: Each class of each series of The UBS Funds will impose 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 retained by the Funds are disclosed in the Statement of changes in net assets.

82

The UBS Funds

Notes to financial statements (unaudited)

2. Investment advisory fees and other transactions with affiliates

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 $1.0 billion			$1.0 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

	$0 to $500 mm			$500 mm to $1.0 billion			$1.0 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	%

For UBS Global Allocation Fund, the Advisor has agreed to waive its fees and/or reimburse expenses (excluding expenses incurred through investment in other investment companies, interest, taxes, brokerage commissions and extraordinary expenses) to the extent necessary so that the Fund's operating expenses (excluding expenses incurred through investment in other investment companies, interest, taxes, brokerage commissions and extraordinary expenses) do not exceed the expense limit of each class of shares as indicated in the table. For UBS Dynamic Alpha Fund and UBS Global Frontier Fund, the Advisor has agreed to waive its fees and/or reimburse expenses (excluding expenses incurred through investment in other investment companies, interest, taxes, brokerage commissions, extraordinary expenses and securities loan fees and dividend expenses for securities sold short) to the extent necessary so that each Fund's operating expenses (excluding expenses incurred through investment in other investment companies, interest, taxes, brokerage commissions, extraordinary expenses and securities loan fees and dividend expenses for securities sold short) do not exceed the expense limit of each class of shares as indicated in the table. Investment advisory fees, including the dollar amount waived or reimbursed for the period ended December 31, 2010, 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	%	$	2,197,138	$	56,697
UBS Global Allocation Fund		1.35			2.10			2.10			1.10			5,425,903		2,343
UBS Global Frontier Fund		1.40			N/A1			2.15			1.15			328,395		80,046

¹  UBS Global Frontier Fund does not offer Class B shares.

83

The UBS Funds

Notes to financial statements (unaudited)

Each Fund will reimburse the Advisor for expenses it reimburses for a period of three years following such expense reimbursements, provided that the reimbursement by a Fund of the Advisor will not cause the total operating expense ratio to exceed the contractual limit as then may be in effect for the Fund. The expenses waived for the period ended December 31, 2010 are subject to repayment through June 30, 2014. At December 31, 2010, 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, 2011		Expires June 30, 2012		Expires June 30, 2013		Expires June 30, 2014
UBS Dynamic Alpha Fund—Class A	$	84,260	$	—	$	—	$	51,127	$	33,133
UBS Dynamic Alpha Fund—Class B		11,836		—		2,654		6,334		2,848
UBS Dynamic Alpha Fund—Class C		56,199		—		—		35,483		20,716
UBS Global Allocation Fund—Class B		2,343		—		—		—		2,343
UBS Global Frontier Fund—Class A		468,711		152,817		137,120		118,866		59,908
UBS Global Frontier Fund—Class C		165,041		52,934		50,614		41,974		19,519
UBS Global Frontier Fund—Class Y		20,259		12,442		5,653		1,545		619

Each Fund pays 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 period ended December 31, 2010, the Funds owed and incurred administrative fees as follows:

Fund	Adminstrative fees owed		Adminstrative fees incurred
UBS Dynamic Alpha Fund	$	31,185	$	194,214
UBS Global Allocation Fund		90,427		541,217
UBS Global Frontier Fund		4,447		25,945

The Funds may invest in certain affiliated investment companies also advised or managed by the Advisor. Investments in affiliated investment companies for the period ended December 31, 2010 have been included near the end of each Fund's Portfolio of investments.

The Funds may invest in 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 Statement of operations.

Under normal conditions, the Funds invest cash collateral from securities lending activities into an affiliated private money market fund, UBS Private Money Market Fund LLC ("Private Money Market"), which operates in compliance with most of the substantive provisions of Rule 2a-7 of the 1940 Act. 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. UBS Global AM 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 order to maintain operating expenses at a certain level. Distributions received from Private Money Market, net of fee rebates paid to borrowers, are reflected as securities lending-net in the Statement of operations.

84

The UBS Funds

Notes to financial statements (unaudited)

The following Funds have incurred brokerage commissions with UBS AG, an affiliated broker-dealer. Amounts relating to those transactions for the period ended December 31, 2010, were as follows:

Fund	UBS AG
UBS Dynamic Alpha Fund	$	14,084
UBS Global Allocation Fund		6,797

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 Frontier Fund does 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 December 31, 2010, certain Funds owed UBS Global AM (US) service and distribution fees, and for the period ended December 31, 2010, 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	$	64,148	$	58,870
UBS Dynamic Alpha Fund—Class B		3,593		3,466
UBS Dynamic Alpha Fund—Class C		75,677		6,488
UBS Global Allocation Fund—Class A		177,282		87,353
UBS Global Allocation Fund—Class B		10,221		13,698
UBS Global Allocation Fund—Class C		327,613		3,297
UBS Global Frontier Fund—Class A		11,330		17,792
UBS Global Frontier Fund—Class C		12,910		316

4. Transfer agency and related services fees

UBS Financial Services Inc. provides certain services pursuant to a delegation of authority from BNY Mellon Investment Servicing ("BNY Mellon") each Fund's transfer agent, and is compensated for these services by BNY Mellon, not the Funds.

85

The UBS Funds

Notes to financial statements (unaudited)

For the period ended December 31, 2010, UBS Financial Services Inc. received from BNY Mellon, not the Funds, total services fees as follows:

Fund	Amount paid
UBS Dynamic Alpha Fund	$	89,445
UBS Global Allocation Fund		204,127
UBS Global Frontier Fund		8,119

5. Securities lending

Each Fund may lend 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, cash equivalents or US government securities in an amount at least equal to 102% of the market value of the securities loaned with respect to domestic securities and 105% of the market value of the securities loaned with respect to foreign securities, 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, the Fund may bear the risk of delay in recovery of, or even loss of rights in, the securities loaned should the borrower fail financially. The Fund receives compensation for lending its securities from interest or dividends earned on the cash, cash equivalents or US government securities held as collateral, net of fee rebates paid to the borrower plus reasonable administrative and custody fees.

UBS Dynamic Alpha Fund, UBS Global Allocation Fund and UBS Global Frontier Fund loaned securities to certain qualified broker-dealers, with the Funds' custodian acting as the Funds' lending agent. Cash collateral received is invested in Private Money Market, which is included in the Portfolio(s) of investments. In addition, UBS Global Allocation Fund and UBS Global Frontier Fund received US Government Agency securities as collateral amounting to $5,657,643 and $709,206, respectively, which cannot be resold. The value of loaned securities and related collateral outstanding at December 31, 2010, were as follows:

Fund	Market value of securities loaned		Market value of collateral received from securities loaned		Market value of investments of cash collateral received
UBS Dynamic Alpha Fund	$	2,831,824	$	2,930,382	$	2,930,382
UBS Global Allocation Fund		21,497,835		22,191,316		16,533,673
UBS Global Frontier Fund		695,102		709,206		—

6. Purchases and sales of securities

For the period ended December 31, 2010, 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	$	193,746,713	$	295,290,998
UBS Global Allocation Fund		257,337,489		472,407,902
UBS Global Frontier Fund		7,404,793		13,158,065

86

The UBS Funds

Notes to financial statements (unaudited)

For the period ended December 31, 2010, 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	$	2,291,464	$	3,272,544
UBS Global Allocation Fund		189,246,222		212,193,357
UBS Global Frontier Fund		3,131,628		4,195,539

7. Federal income taxes

It is each Fund's policy to comply with all requirements of the Internal Revenue 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.

The tax character of distributions paid during the fiscal year ended June 30, 2010 were as follows:

	2010
Fund	Distributions paid from ordinary income
UBS Dynamic Alpha Fund	$	29,459,585
UBS Global Allocation Fund		107,588,466
UBS Global Frontier Fund		3,141,174

The tax character of distributions paid and components of accumulated earnings/(deficit) on a tax basis for the current fiscal year will be determined after the Trust's fiscal year ending June 30, 2011.

At June 30, 2010, 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, 2011		June 30, 2012		June 30, 2013		June 30, 2014		June 30, 2015		June 30, 2016		June 30, 2017		June 30, 2018
UBS Dynamic Alpha Fund		—		—		—		—		—		—	$	145,211,340	$	202,927,795
UBS Global Allocation Fund		—		—		—		—		—		—		288,404,627		862,762,158
UBS Global Frontier Fund		—		—		—		—		—		—		12,841,328		9,543,610

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, 2010, the following Funds incurred, and elected to defer, losses of the following:

Fund	Net capital losses		Net currency losses
UBS Dynamic Alpha Fund	$	4,123,842	$	3,519,823
UBS Global Allocation Fund		101,365,098		—
UBS Global Frontier Fund		7,180,823		—

87

The UBS Funds

Notes to financial statements (unaudited)

As of and during the period ended December 31, 2010, the Funds did not have any liabilities for any unrecognized tax benefits. The Funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of operations. During the period, the Funds did not incur any interest or penalties.

Each of the tax years in the four year period ended June 30, 2010, 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 request of shareholders and other temporary or emergency purposes. Interest on amounts borrowed is calculated based on the prevailing rates in effect at the time of borrowing. 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. There were no borrowings from the Committed Credit Facility during the period ended December 31, 2010.

9. Shares of beneficial interest

For the period ended December 31, 2010, 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		2,646,459		$	16,115,097			—		$	—
Shares repurchased		(12,097,112	)		(74,018,239	)		(113,332	)		(659,623	)
Shares converted from Class B to Class A		6,405			38,104			(6,716	)		(38,104	)
Dividends reinvested		1,128,687			6,941,424			12,288			72,375
Redemption fees		—			5,590			—			—
Net decrease		(8,315,561	)	$	(50,918,024	)		(107,760	)	$	(625,352	)

	Class C						Class Y
	Shares			Amount			Shares			Amount
Shares sold		134,744		$	781,731			1,873,568		$	11,497,938
Shares repurchased		(3,904,483	)		(22,721,372	)		(1,036,769	)		(6,415,202	)
Dividends reinvested		244,384			1,439,424			418,358			2,610,555
Redemption fees		—			356			—			186
Net increase (decrease)		(3,525,355	)	$	(20,499,861	)		1,255,157		$	7,693,477

88

The UBS Funds

Notes to financial statements (unaudited)

UBS Global Allocation Fund

	Class A						Class B
	Shares			Amount			Shares			Amount
Shares sold		2,858,395		$	27,442,811			6,121		$	60,474
Shares repurchased		(16,488,199	)		(159,809,483	)		(239,284	)		(2,245,044	)
Shares converted from Class B to Class A		365,917			3,500,122			(371,137	)		(3,500,122	)
Dividends reinvested		3,337,040			32,702,995			25,649			252,385
Redemption fees		—			9,046			—			—
Net decrease		(9,926,847	)	$	(96,154,509	)		(578,651	)	$	(5,432,307	)

	Class C						Class Y
	Shares			Amount			Shares			Amount
Shares sold		337,339		$	3,174,949			367,324		$	3,664,665
Shares repurchased		(7,016,504	)		(65,787,024	)		(2,268,269	)		(21,778,373	)
Dividends reinvested		1,301,168			12,452,180			803,980			8,023,720
Redemption fees		—			732			—			147
Net decrease		(5,377,997	)	$	(50,159,163	)		(1,096,965	)	$	(10,089,841	)

UBS Global Frontier Fund

	Class A						Class C						Class Y
	Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		584,196		$	4,447,643			63,693		$	491,785			79,923		$	589,587
Shares repurchased		(1,588,096	)		(11,975,570	)		(343,114	)		(2,520,128	)		(1,168	)		(8,793	)
Dividends reinvested		199,143			1,539,376			44,976			348,115			3,662			28,269
Redemption fees		—			5,061			—			24			—			—
Net increase (decrease)		(804,757	)	$	(5,983,490	)		(234,445	)	$	(1,680,204	)		82,417		$	609,063

For the year ended June 30, 2010, 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		8,327,793		$	51,653,337			1,338		$	7,948
Shares repurchased		(27,919,319	)		(169,870,197	)		(440,378	)		(2,587,427	)
Shares converted from Class B to Class A		80,825			498,728			(84,617	)		(498,728	)
Dividends reinvested		2,795,905			16,999,103			43,098			250,834
Redemption fees		—			10,795			—			—
Net decrease		(16,714,796	)	$	(100,708,234	)		(480,559	)	$	(2,827,373	)

	Class C						Class Y
	Shares			Amount			Shares			Amount
Shares sold		1,384,171		$	8,180,981			9,079,410		$	53,972,983
Shares repurchased		(9,114,936	)		(53,034,892	)		(10,125,401	)		(63,148,083	)
Dividends reinvested		852,122			4,959,348			961,905			5,934,953
Net decrease		(6,878,643	)	$	(39,894,563	)		(84,086	)	$	(3,240,147	)

89

The UBS Funds

Notes to financial statements (unaudited)

UBS Global Allocation Fund

	Class A						Class B
	Shares			Amount			Shares			Amount
Shares sold		6,352,517		$	59,062,787			10,783		$	100,247
Shares repurchased		(41,995,018	)		(391,321,186	)		(1,081,458	)		(9,800,513	)
Shares converted from Class B to Class A		1,460,114			13,447,161			(1,486,878	)		(13,447,161	)
Dividends reinvested		6,494,949			59,948,378			121,003			1,108,390
Redemption fees		—			21,796			—			—
Net decrease		(27,687,438	)	$	(258,841,064	)		(2,436,550	)	$	(22,039,037	)

	Class C						Class Y
	Shares			Amount			Shares			Amount
Shares sold		1,764,048		$	16,132,184			2,805,782		$	26,724,534
Shares repurchased		(16,688,832	)		(151,047,516	)		(11,923,497	)		(113,792,917	)
Dividends reinvested		2,798,058			25,210,500			1,529,331			14,375,713
Redemption fees		—			7,984			—			500
Net decrease		(12,126,726	)	$	(109,696,848	)		(7,588,384	)	$	(72,692,170	)

UBS Global Frontier Fund

	Class A						Class C						Class Y
	Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		1,866,397		$	12,428,452			208,061		$	1,436,877			27,487		$	191,235
Shares repurchased		(3,195,448	)		(21,825,684	)		(714,884	)		(4,951,609	)		(301,785	)		(2,197,613	)
Dividends reinvested		347,095			2,408,840			86,529			602,239			82			571
Redemption fees		—			5,142			—			988			—			—
Net decrease		(981,956	)	$	(6,983,250	)		(420,294	)	$	(2,911,505	)		(274,216	)	$	(2,005,807	)

90

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 UBS's Web site: www.ubs.com/ubsglobalam-proxy, or on the EDGAR Database on the SEC's Web site (http://www.sec.gov).

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The UBS Funds

Funds' privacy notice

This notice describes the privacy policy of the UBS Family of Funds, the PACE Funds and all closed-end funds managed by UBS Global Asset Management (collectively, the "Funds"). The Funds are committed to protecting the personal information that they collect about individuals who are prospective, current or former investors.

The Funds collect personal information in order to process requests and transactions and to provide customer service. Personal information, which is obtained from applications, may include name(s), address, social security number or tax identification number, bank account information, other Fund holdings and any affiliation the person has with UBS Financial Services Inc. or its subsidiaries ("Personal Information"). The Funds limit access to Personal Information to those individuals who need to know that information in order to process transactions and service accounts. These individuals are required to maintain and protect the confidentiality of Personal Information. The Funds maintain physical, electronic and procedural safeguards to protect Personal Information. The Funds may share Personal Information described above with their affiliates for marketing and other business purposes, such as to facilitate the servicing of accounts. The Funds may share Personal Information described above with a non-affiliated third party if the entity is under contract to perform transaction processing or to service and maintain shareholder accounts on behalf of the Funds and otherwise as permitted by law. Any such contract will include provisions designed to ensure that the third party will uphold and maintain privacy standards when handling Personal Information. The Funds may also disclose Personal Information to regulatory authorities as required by applicable law. Except as described in this privacy notice, the Funds will not use Personal Information for any other purpose unless the Funds describe how such Personal Information will be used and clients are given an opportunity to decline approval of such use of Personal Information relating to them. The Funds endeavor to keep their customer files complete and accurate. The Funds should be notified if any Personal Information needs to be corrected or updated. Please call 1-800-647 1568 with any questions or concerns regarding your Personal Information or this privacy notice.

Privacy Notice
This privacy notice is not a part of the shareholder report.

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Item 2.  Code of Ethics.

Form N-CSR disclosure requirement not applicable to this filing of a semi-annual report.

Item 3.  Audit Committee Financial Expert.

Form N-CSR disclosure requirement not applicable to this filing of a semi-annual report.

Item 4.  Principal Accountant Fees and Services.

Form N-CSR disclosure requirement not applicable to this filing of a semi-annual report.

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, 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.

(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 — Form N-CSR disclosure requirement not applicable to this filing of a semi-annual report.

(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-99.906CERT.

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:	March 11, 2011

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:	March 11, 2011

By:	/s/ Thomas Disbrow
	Thomas Disbrow
	Vice President and Treasurer
Date:	March 11, 2011