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 | |||||||
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The UBS Funds | ||||||||
(Exact name of registrant as specified in charter) | ||||||||
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One North Wacker Drive, Chicago, IL |
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60606-2807 | ||||||
(Address of principal executive offices) |
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(Zip code) | ||||||
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Tammie Lee, Esq. UBS Asset Management (Americas) Inc. 1285 Avenue of the Americas New York, NY 10019 | ||||||||
(Name and address of agent for service) | ||||||||
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Copy to: | ||||||||
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Bruce Leto, Esq. Stradley Ronon Stevens & Young, LLP 2600 One Commerce Square Philadelphia, PA 19103-7098 | ||||||||
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Registrants telephone number, including area code: |
212-713-2000 |
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Date of fiscal year end: |
June 30 |
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Date of reporting period: |
June 30, 2016 |
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Item 1. Reports to Stockholders.
UBS Funds
June 30, 2016
The UBS Funds
Annual Report
Table of contents |
|||||||
President's letter |
1 | ||||||
Market commentary |
3 | ||||||
Asset Allocation Funds |
|||||||
UBS Dynamic Alpha Fund |
5 |
||||||
UBS Global Allocation Fund |
25 | ||||||
UBS International Sustainable Equity Fund (formerly, UBS Global Sustainable Equity Fund) |
39 | ||||||
UBS U.S. Large Cap Equity Fund |
48 | ||||||
UBS U.S. Small Cap Growth Fund |
57 | ||||||
UBS Core Plus Bond Fund |
66 | ||||||
UBS Total Return Bond Fund |
85 | ||||||
UBS Municipal Bond Fund |
101 | ||||||
Explanation of expense disclosure |
111 | ||||||
Statement of assets and liabilities |
116 | ||||||
Statement of operations |
124 | ||||||
Statement of changes in net assets |
128 | ||||||
Financial highlights |
132 | ||||||
Notes to financial statements |
146 | ||||||
Report of independent registered public accounting firm |
178 | ||||||
Federal tax information |
179 |
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General information |
180 | ||||||
Board approval of investment advisory agreements |
181 | ||||||
Trustee and Officer information |
186 |
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President's letter
August 15, 2016
Dear Shareholder,
The past year has seen global markets rise and recede in waves, as changing news flow has elicited varying responses from investors. Geopolitical events have been at the forefront. The United Kingdom's decision to leave the European Union, continued weakness in China and actions by central banks all have heightened volatility. In an economic environment in which achieving even relatively low levels of growth has been dependent on the support of central banks, investor confidence has been tenuous and has changed quickly.
Amid uncertainty and volatility, some safety-seeking investors have turned to government bonds for wealth preservation and portfolio stability. The perceived attractiveness of some government bondsincluding those issued by Germany, Japan and Switzerlandhas pushed up their prices and pulled down their yields into negative territory. In fact, nearly one-third of global government bonds currently have negative yields, which we believe could lead to capital losses for investors who hold these assets to maturity.1 As such, for some investors, government bonds may not provide wealth preservation or portfolio stability, as negative yields erode wealth and record asset prices raise fears of a coming market dislocation.
On the other hand, income-seeking investors have a different set of challenges. In a climate in which traditional safety assetssuch as government bondsprovide low or negative yield, some have turned to the equity market, where dividends provide greater income, but with the risk of greater price volatility.2 The shares of companies whose products include basic necessitiessuch as utilities, telecommunications and consumer stapleshave attracted many investors. Often considered the most defensive of the defensive sectors, utilities in particular have attracted investor interest over the past 12 months. As income-focused investors have moved into utilities stocks, the MSCI USA Utilities Index (net) has gained 30.18% for the 12 months ended June 30, 2016, raising concerns that a bubble may be forming in this and other defensive sectors of the equities market.3 As the prices of shares in defensive sectors become increasingly overvalued, we believe it is worth remembering that over the long-run, valuation is the single best predictor of returns.4,5
So where is safety to be found in a world of volatile markets and geopolitical uncertainty? We continue to believe that a well-diversified portfolio is the best defense against uncertainty and the most likely strategy to help grow wealth over the long term. We believe diversification across asset classes acts as a ballast against waves of volatility. Flexibly allocating assets across a wide range of global markets and asset classes, including global and US equities, fixed income and currencies, helps provide better risk-adjusted returns across various market cycles.6 At UBS Asset Management, we provide solutions to your global investment challenges by offering a range of products and
1 Stubbs, David. "If you thought you knew what a 'safe' asset was, think again." Financial Times 27 July 2016.
2 Investors who buy a bond with negative yield and hold until maturity receive less return than they paid to purchase the debt.
3 The MSCI USA Utilities Index (net) is designed to capture the large and mid cap segments of the US equity universe. All securities in the index are classified in the Utilities sector as per the Global Industry Classification Standard (GICS). Investors should note that indices do not reflect the deduction of fees and expenses.
4 Defensive sectors consist of equities that generally provide constant dividends and stable earnings across various phases of the business cycle.
5 Overvalued shares trade at a price that is high relative to their price-to-earnings ratio, expected earnings or financial condition.
6 Diversification and asset allocation strategies do not ensure gains or guarantee against loss.
1
President's letter
solutions that help you and your financial advisor create portfolios that meet your long term goals of capital preservation, income or wealth accumulation. We embrace the responsibility of helping our clients meet their financial objectives and thank you for your continued trust in our skill and commitment to serve you.
Sincerely,
Mark E. Carver
President
The UBS Funds
Managing Director
UBS Asset Management (Americas) Inc.
The views expressed are those of UBS Asset Management (Americas) Inc. as of August 15, 2016. The views are subject to change based on market conditions; they are not intended to predict or guarantee the future performance of the markets, any individual security or market segment, or any UBS mutual fund.
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. A prospectus or summary prospectus for the 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/am-us.
2
The markets in review
Overall tepid global growth
The US economy was resilient and continued to expand during the reporting period. The US Commerce Department reported that gross domestic product ("GDP") expanded at a 2.0% seasonally adjusted annualized rate during the third quarter of 2015. Economic activity in the US then moderated, as GDP growth was a revised 0.9% during the fourth quarter of 2015 and 0.8% for the first quarter of 2016. However, the pace of growth then slightly accelerated, as the Commerce Department's initial estimate for second-quarter 2016 GDP growth was 1.2%.1
After taking its first step toward normalizing monetary policy in late 2015, the US Federal Reserve Board (the "Fed") has since been in a holding pattern. Looking back, in December 2015, the Fed raised the fed funds rates from a range of 0% to 0.25% to a range between 0.25% and 0.50%. This marked the Fed's first rate hike in almost a decade. However, the Fed remained on hold during its first four meetings in 2016. In its official statement following its June 2016 meeting, the Fed said: "The Committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run."
From a global perspective, International Monetary Fund ("IMF") forecasts paint a picture of overall modest growth, which could moderate further following the United Kingdom's vote to leave the European Union ("Brexit"). In the IMF's July 2016 World Economic Outlook Update, released after the reporting period ended, it said: "With 'Brexit' still very much unfolding, the extent of uncertainty complicates the already difficult task of macroeconomic forecasting. The baseline global growth forecast has been revised down modestly relative to the April 2016 World Economic Outlook." More specifically, the IMF estimates that 2016 growth in the eurozone will be 1.6%, slightly slower than its 1.7% expansion in 2015. Japan's economy is projected to grow a tepid 0.3% in 2016, versus 0.5% in 2015. Among emerging markets countries, the IMF believes that growth will be 4.1% in 2016, a slight improvement from 4.0% in 2015.
Global equities generate mixed results
The global equity market was highly volatile at times and produced mixed results during the reporting period. Investors in both the US and abroad were confronted with mixed economic data, questions regarding future monetary policy, fluctuating oil prices and, in June 2016, the Brexit vote. All told, the US stock market, as measured by the S&P 500 Index, gained 3.99% for the 12 months ended June 30, 2016.2 Meanwhile, international equities generated very weak results, as they were unable to overcome several bouts of investor risk aversion. International developed equities, as measured by the MSCI EAFE Index (net), fell 10.16% during the period.3 Emerging markets equities, as measured by the MSCI Emerging Markets Index (net), declined 12.05% over the same period.4
1 Based on the Commerce Department's initial estimate announced on July 29, 2016, after the reporting period had ended.
2 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.
3 The MSCI EAFE Index (net) is an index of stocks designed to measure the investment returns of developed economies outside of North America. Net total return indices reinvest dividends after the deduction of withholding taxes, using a tax rate applicable to non-resident institutional investors who do not benefit from double taxation treaties. 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.
4 The MSCI Emerging Markets Index (net) is a market-capitalization-weighted index composed of different emerging market countries in Europe, Latin America and the Pacific Basin. Net total return indices reinvest dividends after the deduction of withholding taxes, using a tax rate applicable to non-resident institutional investors who do not benefit from double taxation treaties. 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 markets in review
Overall strong period in the fixed income market
Many of the issues holding back equities triggered a number of "flights to quality" that supported global fixed income markets. The yield on the US 10-year Treasury fell from 2.35% to 1.49% during the reporting period (bond yields and prices move in the opposite direction). Demand for US Treasuries was generally strong from both domestic and international investors. In addition, at the Fed's June 2016 meeting they lowered their projections of how much they expect to raise rates in the coming years. The overall US bond market, as measured by the Barclays US Aggregate Index, gained 6.00% for the 12 months ended June 30, 2016.5 Returns of riskier fixed income securities were mixed. Despite a strong rally over the second half of the period, high yield bonds, as measured by the BofA Merrill Lynch US High Yield Cash Pay Constrained Index, gained a modest 1.73%.6 In contrast, emerging markets debt, as measured by the J.P. Morgan Emerging Markets Bond Index Global (EMBI Global),7 gained 10.32% during the reporting period.
5 The Barclays US Aggregate Index is an unmanaged broad based index designed to measure the US dollar-denominated, investment-grade, taxable bond market. The index includes bonds from the Treasury, government-related, corporate, mortgage-backed, asset-backed and commercial mortgage-backed sectors. Investors should note that indices do not reflect the deduction of fees and expenses.
6 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 capitalization weighted, so that larger bond issuers have a greater effect on the index's return. However, the representation of any single bond issuer 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.
7 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.
4
UBS Dynamic Alpha Fund
Portfolio performance (unaudited)
For the 12 months ended June 30, 2016, Class A shares of UBS Dynamic Alpha Fund (the "Fund") returned -10.48% (Class A shares returned -15.35% after the deduction of the maximum sales charge), while Class P shares returned -10.17%. For purposes of comparison, the BofA Merrill Lynch US Treasury 1-5 Year Index returned 2.43% during the same time period, the MSCI World Free Index (net) returned -2.78%, and the Citigroup One-Month US Treasury Bill Index returned 0.11%. (Class P shares have lower expenses than other share classes of the Fund. Returns for all share classes over various time periods are shown on page 7; 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 index returns do not reflect the deduction of fees and expenses.)
The Fund produced a negative absolute return during the reporting period. Performance was due to asset allocation decisions.
During the review period, we used derivatives for risk management purposes and as a tool to help enhance returns across various strategies. With respect to our active currency strategy, utilizing currency forwards had a direct positive impact on Fund performance. We used a variety of equity and fixed income options, futures and swaps to implement our market allocation strategy. Derivatives were just one tool, among others, that we used to implement our market allocation strategy. These derivatives, in aggregate, detracted from performance during the reporting period.
Portfolio performance summary1
What worked:
• Certain equity positions added value over the reporting period.
The portfolio's relative value trade of long German equities versus Swedish equities contributed to results after a sustained performance gap between the two markets narrowed.
The portfolio's relative value trade of long North Asian equities versus emerging markets contributed to performance. North Asian countries are net importers of oil and are experiencing healthier current account balances.
• Certain fixed income positions were positive for performance.
The Fund benefited from a sustained long position in Australian government bonds, which served as a source of yield pick-up within the fixed income holdings.
The Fund's long positions in Italian and Spanish government bonds added value as yields in these periphery countries declined during the reporting period.
1 For a detailed commentary on the market environment in general during the reporting period, see pages 3-4.
5
UBS Dynamic Alpha Fund
• Overall, the portfolio's active currency strategy was beneficial for results.
The Fund's long position in the euro over the Swiss franc contributed to results. The removal of the 1.20 euro/Swiss franc floor earlier in the year resulted in an immediate appreciation of the Swiss franc and the currency appearing significantly overvalued, which had negative consequences for the Swiss economy.
The Fund's trade of long Mexican peso versus the Malaysian ringgit added to performance. Chinese trading partners such as Malaysia suffered amid heightened growth concerns.
What didn't work:
• Overall, the Fund's equity positioning was negative for returns.
The portfolio's long exposure to developed ex-US equitiesparticularly the eurozone and Japandetracted from performance given concerns surrounding a global growth slowdown and economic linkages with China.
The portfolio's relative value trade of long US small cap equities versus US large cap equities detracted from performance. Third-quarter earnings were disappointing, and merger and acquisition (M&A) activity remained concentrated in the large cap space.
• Overall, the Fund's fixed income positioning slightly detracted from results.
The portfolio's long position in investment grade bonds versus global sovereigns was negative for results, as spreads widened on corporate debt during the reporting period.
The Fund's performance was negatively impacted by a short US duration position as US yields were flat to slightly down across the curve during the reporting period.
• Certain currency trades performed poorly during the reporting period.
The Fund's overweight in the Swedish krona over the euro was negative for results. The Swedish Riksbank cut rates and expanded their quantitative easing program and the euro rebounded from its lows, causing this trade to detract from results.
The Fund's trade of long New Zealand dollar versus the US dollar detracted from performance. Even though the Reserve Bank of New Zealand reduced interest rates late in the year, the market interpreted this move as hawkish given the lack of additional forward guidance around future monetary policy easing.
This letter is intended to assist shareholders in understanding how the Fund performed during the 12 months ended June 30, 2016. The views and opinions in the letter were current as of August 15, 2016. 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/am-us.
6
UBS Dynamic Alpha Fund
Average annual total returns for periods ended 06/30/16 (unaudited)
1 year |
5 years |
10 years |
|||||||||||||
Before deducting maximum sales charge |
|||||||||||||||
Class A1 |
(10.48 |
)% |
2.37 |
% |
1.14 |
% |
|||||||||
Class C2 |
(11.00 |
) |
1.65 |
0.39 |
|||||||||||
Class P3 |
(10.17 |
) |
2.64 |
1.44 |
|||||||||||
After deducting maximum sales charge |
|||||||||||||||
Class A1 |
(15.35 |
)% |
1.22 |
% |
0.57 |
% |
|||||||||
Class C2 |
(11.87 |
) |
1.65 |
0.39 |
|||||||||||
BofA Merrill Lynch US Treasury 1-5 Year Index4 |
2.43 |
% |
1.43 |
% |
3.22 |
% |
|||||||||
MSCI World Free Index (net)5 |
(2.78 |
) |
6.63 |
4.43 |
|||||||||||
Citigroup One-Month US Treasury Bill Index6 |
0.11 |
0.05 |
0.88 |
The annualized gross and net expense ratios, respectively, for each class of shares as in the October 28, 2015 prospectuses were as follows: Class A1.44% and 1.36%; Class C2.20% and 2.11%; Class P1.21% and 1.11%. 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 Asset Management (Americas) Inc. (formerly, UBS Global Asset Management (Americas) Inc.), the Fund's investment advisor ("UBS 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 dividend expense and security loan fees 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 dividend expense and security loan fees for securities sold short), through the period ending October 27, 2016, do not exceed 1.35% for Class A shares, 2.10% for Class C shares and 1.10% for Class P 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. The fee waiver/expense reimbursement agreement may be terminated by the Fund's Board of Trustees at any time and also will terminate automatically upon the expiration or termination of the Fund's advisory contract with the Advisor. Upon termination of the fee waiver/expense reimbursement agreement, however, the UBS AM (Americas)'s three year recoupment rights will survive.
1 Maximum sales charge for Class A shares is 5.5%. Class A shares bear ongoing 12b-1 service fees.
2 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 distribution and service fees.
3 Class P shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees, but Class P shares held through advisory programs may be subject to a program fee, which, if included, would have reduced performance.
4 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.
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. Net total return indices reinvest dividends after the deduction of withholding taxes, using a tax rate applicable to non-resident institutional investors who do not benefit from double taxation treaties. 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 Citigroup One-Month US Treasury Bill Index is an unmanaged index representing monthly return equivalents of yield averages of the last one month Treasury Bill issue. Investors should note that indices do not reflect the deduction of fees and expenses.
Prior to February 17, 2015, if an investor sold or exchanged shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged was deducted at the time of the transaction, except as noted otherwise in the prospectus. For sales or exchanges taking place on or after February 17, 2015 but prior to August 3, 2015, there was a reduction in the redemption holding period from 90 days to 30 days. Effective August 3, 2015, the 1.00% redemption fee imposed on sales or exchanges of any class of shares of the funds made during the holding periods specified in the prospectus was eliminated. Please refer to the prospectus for further information.
Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit www.ubs.com/us-mutualfundperformance.
7
UBS Dynamic Alpha Fund
Illustration of an assumed investment of $10,000 in Class A shares (adjusted for 5.5% maximum sales charge) and $5,000,000 in Class P shares (unaudited)
The following two graphs depict the performance of UBS Dynamic Alpha Fund Class A and Class P shares versus the BofA Merrill Lynch US Treasury 1-5 Year Index, the MSCI World Free Index (net) and the Citigroup One-Month US Treasury Bill Index over the 10 years ended June 30, 2016. The performance of Class C shares will vary based upon the different class specific expenses and sales charges. The performance provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Past performance is no guarantee of future results. Share price and returns will vary with market conditions; investors may realize a gain or loss upon redemption.
Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit www.ubs.com/us-mutualfundperformance.
8
UBS Dynamic Alpha Fund
Top ten long-term fixed income holdings
(unaudited)
As of June 30, 2016
Percentage of net assets |
|||||||
US Treasury Inflation Indexed Note (TIPS), 0.625%, due 01/15/26 |
14.2 |
% |
|||||
JPMorgan Chase & Co., 3.200%, due 01/25/23 |
0.7 |
||||||
Citigroup, Inc., 3.875%, due 10/25/23 |
0.4 |
||||||
Verizon Communications, Inc., 6.550%, due 09/15/43 |
0.3 |
||||||
Deutsche Bank AG, 2.850%, due 05/10/19 |
0.3 |
||||||
Adani Abbot Point Terminal Pty Ltd., 6.750%, due 11/01/18 |
0.3 |
||||||
Transocean, Inc., 6.500%, due 11/15/20 |
0.3 |
||||||
Goldman Sachs Group, Inc., 1.375%, due 07/26/22 |
0.3 |
||||||
Ford Motor Credit Co. LLC, 3.000%, due 06/12/17 |
0.3 |
||||||
NBCUniversal Media LLC, 4.375%, due 04/01/21 |
0.3 |
||||||
Total |
17.4 |
% |
Top five issuer breakdown by country or territory of origin (unaudited)
As of June 30, 2016
Percentage of net assets |
|||||||
United States |
33.8 |
% |
|||||
United Kingdom |
4.9 |
||||||
Netherlands |
3.3 |
||||||
Australia |
2.7 |
||||||
France |
1.6 |
||||||
Total |
46.3 |
% |
9
UBS Dynamic Alpha Fund
Industry diversification (unaudited)
As a percentage of net assets as of June 30, 2016
Bonds |
|||||||
Corporate bonds |
|||||||
Aerospace & defense |
0.06 |
% |
|||||
Air freight & logistics |
0.10 |
||||||
Airlines |
0.07 |
||||||
Automobiles |
0.07 |
||||||
Banks |
8.32 |
||||||
Beverages |
0.89 |
||||||
Biotechnology |
0.43 |
||||||
Capital markets |
1.99 |
||||||
Chemicals |
0.45 |
||||||
Communications equipment |
0.16 |
||||||
Construction & engineering |
0.53 |
||||||
Consumer finance |
0.78 |
||||||
Diversified financial services |
1.67 |
||||||
Diversified telecommunication services |
2.01 |
||||||
Electric utilities |
2.18 |
||||||
Energy equipment & services |
0.59 |
||||||
Food & staples retailing |
0.23 |
||||||
Food products |
0.49 |
||||||
Gas utilities |
0.63 |
||||||
Health care equipment & supplies |
0.33 |
||||||
Health care providers & services |
0.34 |
||||||
Hotels, restaurants & leisure |
0.17 |
||||||
Independent power and renewable electricity producers |
0.17 |
||||||
Industrial conglomerates |
0.36 |
||||||
Insurance |
4.13 |
||||||
Internet software & services |
0.09 |
||||||
IT services |
0.12 |
||||||
Life sciences tools & services |
0.08 |
||||||
Machinery |
0.21 |
||||||
Marine |
0.12 |
||||||
Media |
1.36 |
||||||
Metals & mining |
0.66 |
||||||
Multiline retail |
0.06 |
||||||
Multi-utilities |
0.49 |
||||||
Oil, gas & consumable fuels |
4.36 |
||||||
Pharmaceuticals |
1.00 |
||||||
Real estate investment trust (REIT) |
0.69 |
||||||
Real estate management & development |
0.10 |
||||||
Road & rail |
0.44 |
||||||
Software |
0.26 |
||||||
Specialty retail |
0.21 |
||||||
Technology hardware, storage & peripherals |
0.65 |
||||||
Tobacco |
0.80 |
||||||
Transportation infrastructure |
0.61 |
||||||
Water utilities |
0.34 |
||||||
Wireless telecommunication services |
0.55 |
||||||
Total corporate bonds |
40.35 |
% |
Collateralized debt obligation |
0.00 |
%1 |
|||||
Commercial mortgage-backed security |
0.08 |
||||||
Mortgage & agency debt security |
0.001 |
||||||
US government obligation |
14.16 |
||||||
Total bonds |
54.59 |
% |
|||||
Short-term investments |
34.94 |
||||||
Options purchased |
0.94 |
||||||
Investment of cash collateral from securities loaned |
0.46 |
||||||
Total investments |
90.93 |
% |
|||||
Cash and other assets, less liabilities |
9.07 |
||||||
Net assets |
100.00 |
% |
1 Amount represents less than 0.005%.
10
UBS Dynamic Alpha Fund
Portfolio of investments
June 30, 2016
Face amount |
Value |
||||||||||
Bonds: 54.59% |
|||||||||||
Corporate bonds: 40.35% |
|||||||||||
Australia: 2.71% |
|||||||||||
Adani Abbot Point Terminal Pty Ltd., 6.750%, due 11/01/181 |
AUD |
1,025,000 |
$ |
726,703 |
|||||||
APT Pipelines Ltd., 4.200%, due 03/23/252 |
$ |
310,000 |
318,110 |
||||||||
Aurizon Network Pty Ltd., 2.000%, due 09/18/241 |
EUR |
220,000 |
240,336 |
||||||||
Australia & New Zealand Banking Group Ltd., 4.500%, due 03/19/241 |
$ |
250,000 |
260,758 |
||||||||
Australia Pacific Airports Melbourne Pty Ltd., 1.750%, due 10/15/241 |
EUR |
250,000 |
297,525 |
||||||||
BHP Billiton Finance USA Ltd., 5.000%, due 09/30/43 |
$ |
130,000 |
150,367 |
||||||||
Commonwealth Bank of Australia, 1.125%, due 03/13/17 |
370,000 |
370,290 |
|||||||||
National Australia Bank Ltd., 2.000%, due 11/12/241,3 |
EUR |
250,000 |
277,990 |
||||||||
2.750%, due 03/09/17 |
$ |
400,000 |
404,656 |
||||||||
Origin Energy Finance Ltd., 2.500%, due 10/23/201 |
EUR |
425,000 |
482,239 |
||||||||
5.450%, due 10/14/211 |
$ |
235,000 |
244,906 |
||||||||
QBE Insurance Group Ltd., 2.400%, due 05/01/181 |
205,000 |
206,724 |
|||||||||
6.750%, due 12/02/441,3 |
395,000 |
422,650 |
|||||||||
Santos Finance Ltd., 8.250%, due 09/22/703 |
EUR |
205,000 |
229,865 |
||||||||
Scentre Group Trust 1, 1.500%, due 07/16/201 |
150,000 |
173,922 |
|||||||||
Scentre Group Trust 1/ Scentre Group Trust 2, 1.375%, due 03/22/231 |
300,000 |
346,538 |
|||||||||
SGSP Australia Assets Pty Ltd., 2.000%, due 06/30/221 |
225,000 |
263,908 |
|||||||||
Suncorp-Metway Ltd., 1.700%, due 03/28/171 |
$ |
275,000 |
276,015 |
||||||||
Telstra Corp. Ltd., 4.800%, due 10/12/211 |
160,000 |
182,093 |
|||||||||
Transurban Finance Co. Pty Ltd., 1.875%, due 09/16/24 |
EUR |
200,000 |
231,533 |
||||||||
Total Australia corporate bonds |
6,107,128 |
||||||||||
Belgium: 0.13% |
|||||||||||
AG Insurance SA, 3.500%, due 06/30/471,3 |
300,000 |
300,465 |
|||||||||
Bermuda: 0.15% |
|||||||||||
Bacardi Ltd., 2.750%, due 07/03/231 |
270,000 |
332,245 |
Face amount |
Value |
||||||||||
Brazil: 0.30% |
|||||||||||
Petrobras Global Finance BV, 3.250%, due 04/01/191 |
EUR |
410,000 |
$ |
423,716 |
|||||||
Vale SA, 5.625%, due 09/11/42 |
$ |
300,000 |
244,169 |
||||||||
Total Brazil corporate bonds |
667,885 |
||||||||||
Canada: 0.96% |
|||||||||||
Bank of Montreal, 6.020%, due 05/02/18 |
CAD |
215,000 |
180,512 |
||||||||
Bank of Nova Scotia, 4.100%, due 06/08/17 |
320,000 |
254,638 |
|||||||||
Bell Canada, 4.750%, due 09/29/44 |
60,000 |
50,136 |
|||||||||
Canadian Imperial Bank of Commerce, 1.350%, due 07/18/16 |
$ |
150,000 |
150,052 |
||||||||
Canadian Natural Resources Ltd., 3.900%, due 02/01/25 |
100,000 |
99,078 |
|||||||||
Nexen Energy ULC, 6.400%, due 05/15/37 |
245,000 |
307,169 |
|||||||||
Royal Bank of Canada, 2.980%, due 05/07/191 |
CAD |
220,000 |
177,657 |
||||||||
Suncor Energy, Inc., 6.500%, due 06/15/38 |
$ |
300,000 |
387,682 |
||||||||
TELUS Corp., 3.750%, due 01/17/25 |
CAD |
75,000 |
62,020 |
||||||||
Thomson Reuters Corp., 1.300%, due 02/23/17 |
$ |
200,000 |
200,034 |
||||||||
Yamana Gold, Inc., 4.950%, due 07/15/24 |
305,000 |
300,059 |
|||||||||
Total Canada corporate bonds |
2,169,037 |
||||||||||
Cayman Islands: 0.51% |
|||||||||||
Hutchison Whampoa International 09 Ltd., 7.625%, due 04/09/191 |
125,000 |
144,531 |
|||||||||
Noble Holding International Ltd., 6.950%, due 04/01/25 |
195,000 |
155,512 |
|||||||||
Principal Financial Global Funding II LLC, 4.500%, due 01/26/17 |
EUR |
300,000 |
340,689 |
||||||||
Tencent Holdings Ltd., 3.375%, due 05/02/192 |
$ |
200,000 |
206,566 |
||||||||
Thames Water Utilities Cayman Finance Ltd., 5.375%, due 07/21/253 |
GBP |
90,000 |
123,407 |
||||||||
Yorkshire Water Services Bradford Finance Ltd., 6.000%, due 04/24/253 |
130,000 |
178,566 |
|||||||||
Total Cayman Islands corporate bonds |
1,149,271 |
11
UBS Dynamic Alpha Fund
Portfolio of investments
June 30, 2016
Face amount |
Value |
||||||||||
Bonds(Continued) |
|||||||||||
Corporate bonds(Continued) |
|||||||||||
China: 0.21% |
|||||||||||
AIA Group Ltd., 1.750%, due 03/13/181 |
$ |
110,000 |
$ |
110,275 |
|||||||
1.750%, due 03/13/181 |
360,000 |
360,900 |
|||||||||
Total China corporate bonds |
471,175 |
||||||||||
Czech Republic: 0.13% |
|||||||||||
NET4GAS sro, 2.500%, due 07/28/211 |
EUR |
255,000 |
297,128 |
||||||||
Denmark: 0.19% |
|||||||||||
AP Moeller - Maersk A/S, 3.375%, due 08/28/191 |
230,000 |
279,814 |
|||||||||
DONG Energy A/S, 3.000%, due 11/06/151,3,4 |
140,000 |
152,498 |
|||||||||
Total Denmark corporate bonds |
432,312 |
||||||||||
Finland: 0.34% |
|||||||||||
Elenia Finance Oyj, 2.875%, due 12/17/201 |
230,000 |
275,651 |
|||||||||
SATO Oyj, 2.375%, due 03/24/211 |
100,000 |
114,045 |
|||||||||
Teollisuuden Voima Oyj, 2.500%, due 03/17/211 |
125,000 |
141,106 |
|||||||||
4.625%, due 02/04/191 |
195,000 |
234,829 |
|||||||||
Total Finland corporate bonds |
765,631 |
||||||||||
France: 1.61% |
|||||||||||
Arkema SA, 1.500%, due 01/20/251 |
100,000 |
115,568 |
|||||||||
AXA SA, 3.375%, due 07/06/471,3 |
250,000 |
275,230 |
|||||||||
6.667%, due 07/06/163,5 |
GBP |
225,000 |
299,532 |
||||||||
Banque Federative du Credit Mutuel SA, 3.000%, due 09/11/251 |
EUR |
100,000 |
117,161 |
||||||||
BNP Paribas SA, 2.700%, due 08/20/18 |
$ |
235,000 |
240,730 |
||||||||
2.875%, due 03/20/261,3 |
EUR |
215,000 |
244,172 |
||||||||
Credit Logement SA, 0.888%, due 09/16/161,3,5 |
150,000 |
125,226 |
|||||||||
Electricite de France SA, 4.125%, due 01/22/221,3,5 |
100,000 |
104,728 |
|||||||||
5.625%, due 01/22/242,3,5 |
$ |
180,000 |
171,450 |
||||||||
6.950%, due 01/26/392 |
95,000 |
126,847 |
|||||||||
Engie SA, 4.750%, due 07/10/211,3,5 |
EUR |
300,000 |
367,050 |
||||||||
Orange SA, 5.875%, due 02/07/221,3,5 |
GBP |
170,000 |
230,953 |
Face amount |
Value |
||||||||||
Societe Des Autoroutes Paris-Rhin-Rhone, 2.250%, due 01/16/201 |
EUR |
300,000 |
$ |
357,087 |
|||||||
Total Capital International SA, 1.550%, due 06/28/17 |
$ |
555,000 |
557,890 |
||||||||
TOTAL SA, 2.625%, due 02/26/251,3,5 |
EUR |
165,000 |
169,665 |
||||||||
Transport et Infrastructures Gaz France SA, 2.200%, due 08/05/251 |
100,000 |
120,888 |
|||||||||
Total France corporate bonds |
3,624,177 |
||||||||||
Germany: 0.70% |
|||||||||||
Allianz SE, 4.750%, due 10/24/231,3,5 |
100,000 |
118,391 |
|||||||||
alstria office REIT-AG, 2.250%, due 03/24/211 |
EUR |
500,000 |
584,809 |
||||||||
Deutsche Bank AG, 2.850%, due 05/10/19 |
$ |
745,000 |
745,721 |
||||||||
RWE AG, 2.750%, due 04/21/751,3 |
EUR |
135,000 |
127,775 |
||||||||
Total Germany corporate bonds |
1,576,696 |
||||||||||
Guernsey: 0.13% |
|||||||||||
Credit Suisse Group Guernsey I Ltd., 7.875%, due 02/24/411,3 |
$ |
285,000 |
285,356 |
||||||||
Ireland: 0.94% |
|||||||||||
Aquarius & Investments PLC for Swiss Reinsurance Co., Ltd., 6.375%, due 09/01/241,3 |
200,000 |
208,601 |
|||||||||
Cloverie PLC for Zurich Insurance Co., Ltd., 1.750%, due 09/16/241 |
EUR |
130,000 |
154,288 |
||||||||
GE Capital International Funding Co., Unlimited Co., 2.342%, due 11/15/202 |
$ |
374,000 |
386,582 |
||||||||
4.418%, due 11/15/352 |
604,000 |
677,553 |
|||||||||
Perrigo Co. PLC, 4.000%, due 11/15/23 |
200,000 |
206,141 |
|||||||||
PGH Capital Ltd., 5.750%, due 07/07/211 |
GBP |
180,000 |
250,311 |
||||||||
XL Group PLC, 4.450%, due 03/31/25 |
$ |
130,000 |
131,246 |
||||||||
4.450%, due 03/31/25 |
5,000 |
5,046 |
|||||||||
5.250%, due 12/15/43 |
100,000 |
108,169 |
|||||||||
Total Ireland corporate bonds |
2,127,937 |
||||||||||
Israel: 0.04% |
|||||||||||
Teva Pharmaceutical Finance IV BV, 3.650%, due 11/10/21 |
95,000 |
100,415 |
12
UBS Dynamic Alpha Fund
Portfolio of investments
June 30, 2016
Face amount |
Value |
||||||||||
Bonds(Continued) |
|||||||||||
Corporate bonds(Continued) |
|||||||||||
Italy: 0.64% |
|||||||||||
2i Rete Gas SpA, 1.125%, due 01/02/201 |
EUR |
100,000 |
$ |
114,213 |
|||||||
Autostrade per l'Italia SpA, 1.125%, due 11/04/211 |
110,000 |
126,883 |
|||||||||
CDP Reti SpA, 1.875%, due 05/29/221 |
155,000 |
179,004 |
|||||||||
Intesa Sanpaolo SpA, 3.875%, due 01/16/18 |
$ |
320,000 |
328,320 |
||||||||
4.375%, due 10/15/191 |
EUR |
100,000 |
123,751 |
||||||||
Snam SpA, 3.875%, due 03/19/181 |
204,000 |
241,305 |
|||||||||
UniCredit SpA, 6.375%, due 05/02/231,3 |
$ |
340,000 |
342,078 |
||||||||
Total Italy corporate bonds |
1,455,554 |
||||||||||
Japan: 0.26% |
|||||||||||
Bank of Tokyo-Mitsubishi UFJ Ltd., 2.350%, due 09/08/191 |
200,000 |
204,533 |
|||||||||
Mitsubishi UFJ Financial Group, Inc., 2.950%, due 03/01/21 |
200,000 |
207,169 |
|||||||||
Sumitomo Mitsui Financial Group, Inc., 2.934%, due 03/09/21 |
175,000 |
182,417 |
|||||||||
Total Japan corporate bonds |
594,119 |
||||||||||
Jersey, Channel Islands: 0.41% |
|||||||||||
AA Bond Co., Ltd., 4.720%, due 07/31/181 |
GBP |
175,000 |
240,689 |
||||||||
Gatwick Funding Ltd., 5.250%, due 01/23/241 |
140,000 |
223,355 |
|||||||||
Heathrow Funding Ltd., 4.600%, due 02/15/181 |
EUR |
300,000 |
356,804 |
||||||||
HSBC Bank Capital Funding Sterling 2 LP, 5.862%, due 04/07/203,5 |
GBP |
85,000 |
115,419 |
||||||||
Total Jersey, Channel Islands corporate bonds |
936,267 |
||||||||||
Luxembourg: 0.11% |
|||||||||||
Belfius Financing Co., 1.288%, due 02/09/173 |
185,000 |
245,050 |
|||||||||
Mexico: 0.17% |
|||||||||||
America Movil SAB de CV, 5.000%, due 03/30/20 |
$ |
185,000 |
204,610 |
||||||||
Series A, 5.125%, due 09/06/731,3 |
EUR |
145,000 |
168,959 |
||||||||
Total Mexico corporate bonds |
373,569 |
Face amount |
Value |
||||||||||
Netherlands: 3.27% |
|||||||||||
ABN AMRO Bank NV, 4.875%, due 01/16/191 |
GBP |
150,000 |
$ |
218,256 |
|||||||
6.250%, due 09/13/221,3 |
$ |
370,000 |
384,803 |
||||||||
Achmea BV, 2.500%, due 11/19/201 |
EUR |
380,000 |
461,403 |
||||||||
4.250%, due 02/04/251,3,5 |
205,000 |
198,885 |
|||||||||
Allianz Finance II BV, 4.375%, due 02/17/173,5 |
195,000 |
218,729 |
|||||||||
BAT International Finance PLC, 2.375%, due 01/19/231 |
250,000 |
305,826 |
|||||||||
Bharti Airtel International Netherlands BV, 4.000%, due 12/10/181 |
355,000 |
422,031 |
|||||||||
Coca-Cola HBC Finance BV, 2.375%, due 06/18/201 |
245,000 |
290,818 |
|||||||||
Cooperatieve Rabobank UA, 1.700%, due 03/19/18 |
$ |
330,000 |
332,902 |
||||||||
2.500%, due 05/26/261,3 |
EUR |
365,000 |
411,851 |
||||||||
5.500%, due 06/29/201,3,5 |
450,000 |
475,667 |
|||||||||
Deutsche Telekom International Finance BV, 6.500%, due 04/08/22 |
GBP |
84,000 |
141,256 |
||||||||
E.ON International Finance BV, 6.650%, due 04/30/382 |
$ |
65,000 |
77,658 |
||||||||
EDP Finance BV, 2.000%, due 04/22/251 |
EUR |
155,000 |
170,541 |
||||||||
Heineken NV, 2.125%, due 08/04/201 |
285,000 |
340,615 |
|||||||||
LYB International Finance BV, 5.250%, due 07/15/43 |
$ |
130,000 |
142,243 |
||||||||
Nomura Europe Finance NV, 1.500%, due 05/12/211 |
EUR |
180,000 |
204,914 |
||||||||
Redexis Gas Finance BV, 1.875%, due 04/27/271 |
310,000 |
328,118 |
|||||||||
2.750%, due 04/08/211 |
175,000 |
212,824 |
|||||||||
Ren Finance BV, 2.500%, due 02/12/251 |
180,000 |
211,002 |
|||||||||
4.750%, due 10/16/201 |
180,000 |
232,444 |
|||||||||
Shell International Finance BV, 1.250%, due 11/10/17 |
$ |
340,000 |
340,936 |
||||||||
4.375%, due 05/11/45 |
375,000 |
406,574 |
|||||||||
Siemens Financieringsmaatschappij NV, 5.125%, due 02/20/17 |
EUR |
205,000 |
235,097 |
||||||||
6.125%, due 09/14/663 |
GBP |
145,000 |
193,906 |
||||||||
Swiss Reinsurance Co. via ELM BV, 2.600%, due 09/01/251,3,5 |
EUR |
130,000 |
131,647 |
||||||||
TenneT Holding BV, 6.655%, due 06/01/173,5 |
150,000 |
174,132 |
13
UBS Dynamic Alpha Fund
Portfolio of investments
June 30, 2016
Face amount |
Value |
||||||||||
Bonds(Continued) |
|||||||||||
Corporate bonds(Continued) |
|||||||||||
Netherlands(Concluded) |
|||||||||||
Vonovia Finance BV, 4.000%, due 12/17/211,3,5 |
EUR |
100,000 |
$ |
112,362 |
|||||||
Total Netherlands corporate bonds |
7,377,440 |
||||||||||
Norway: 0.27% |
|||||||||||
DNB Bank ASA, 3.200%, due 04/03/172 |
$ |
200,000 |
203,041 |
||||||||
Statoil ASA, 3.125%, due 08/17/17 |
210,000 |
215,017 |
|||||||||
4.800%, due 11/08/43 |
160,000 |
186,603 |
|||||||||
Total Norway corporate bonds |
604,661 |
||||||||||
Portugal: 0.05% |
|||||||||||
Caixa Geral de Depositos SA, 3.750%, due 01/18/181 |
EUR |
100,000 |
117,231 |
||||||||
Singapore: 0.11% |
|||||||||||
United Overseas Bank Ltd., 3.750%, due 09/19/241,3 |
$ |
250,000 |
258,401 |
||||||||
Spain: 0.75% |
|||||||||||
Aigues de Barcelona Finance SAU, 1.944%, due 09/15/211 |
EUR |
175,000 |
197,486 |
||||||||
Canal de Isabel II Gestion SA, 1.680%, due 02/26/251 |
100,000 |
112,671 |
|||||||||
Santander Consumer Finance SA, 0.900%, due 02/18/201 |
400,000 |
443,340 |
|||||||||
Santander International Debt SAU, 1.375%, due 03/25/171 |
400,000 |
448,083 |
|||||||||
Santander Issuances SAU, 3.250%, due 04/04/261 |
100,000 |
107,390 |
|||||||||
Telefonica Emisiones SAU, 4.710%, due 01/20/201 |
300,000 |
384,002 |
|||||||||
Total Spain corporate bonds |
1,692,972 |
||||||||||
Sweden: 0.47% |
|||||||||||
Nordea Bank AB, 1.875%, due 11/10/251,3 |
140,000 |
156,578 |
|||||||||
PGE Sweden AB, 1.625%, due 06/09/191 |
100,000 |
113,059 |
|||||||||
Svenska Handelsbanken AB, 5.125%, due 03/30/202 |
$ |
175,000 |
196,031 |
||||||||
5.125%, due 03/30/201 |
115,000 |
128,820 |
|||||||||
5.250%, due 03/01/211,3,5 |
275,000 |
259,944 |
|||||||||
Swedbank Hypotek AB, 2.375%, due 04/05/171 |
200,000 |
201,924 |
|||||||||
Total Sweden corporate bonds |
1,056,356 |
Face amount |
Value |
||||||||||
Switzerland: 0.27% |
|||||||||||
Credit Suisse AG, 3.000%, due 10/29/21 |
$ |
380,000 |
$ |
389,279 |
|||||||
Demeter Investments BV for Swiss Life AG, 4.375%, due 06/16/251,3,5 |
EUR |
215,000 |
228,225 |
||||||||
Total Switzerland corporate bonds |
617,504 |
||||||||||
United Kingdom: 4.81% |
|||||||||||
Anglian Water Services Financing PLC, 4.500%, due 02/22/261 |
GBP |
100,000 |
152,090 |
||||||||
Aon PLC, 2.875%, due 05/14/26 |
EUR |
55,000 |
65,111 |
||||||||
4.750%, due 05/15/45 |
$ |
230,000 |
246,888 |
||||||||
Arqiva Financing PLC, 4.040%, due 06/30/201 |
GBP |
225,000 |
311,285 |
||||||||
4.882%, due 12/31/321 |
130,000 |
189,320 |
|||||||||
Aviva PLC, 5.125%, due 06/04/501,3 |
180,000 |
220,965 |
|||||||||
Barclays Bank PLC, 2.250%, due 05/10/171 |
$ |
200,000 |
202,034 |
||||||||
6.625%, due 03/30/221 |
EUR |
110,000 |
143,639 |
||||||||
Barclays PLC, 4.375%, due 09/11/24 |
$ |
560,000 |
541,625 |
||||||||
BP Capital Markets PLC, 1.375%, due 05/10/18 |
190,000 |
190,280 |
|||||||||
2.750%, due 05/10/23 |
100,000 |
101,047 |
|||||||||
British Telecommunications PLC, 0.625%, due 03/10/211 |
EUR |
250,000 |
278,811 |
||||||||
8.500%, due 12/07/161 |
GBP |
180,000 |
246,922 |
||||||||
BUPA Finance PLC, 3.375%, due 06/17/211 |
110,000 |
154,257 |
|||||||||
6.125%, due 09/16/203,5 |
100,000 |
138,850 |
|||||||||
Centrica PLC, 5.250%, due 04/10/751,3 |
125,000 |
156,838 |
|||||||||
Diageo Capital PLC, 3.875%, due 04/29/43 |
$ |
140,000 |
146,934 |
||||||||
EE Finance PLC, 4.375%, due 03/28/191 |
GBP |
145,000 |
208,035 |
||||||||
GlaxoSmithKline Capital PLC, 1.500%, due 05/08/17 |
$ |
260,000 |
261,319 |
||||||||
1.500%, due 05/08/17 |
10,000 |
10,051 |
|||||||||
HSBC Holdings PLC, 5.100%, due 04/05/21 |
425,000 |
468,995 |
|||||||||
Imperial Brands Finance PLC, 2.950%, due 07/21/202 |
305,000 |
314,112 |
|||||||||
9.000%, due 02/17/221 |
GBP |
75,000 |
135,109 |
||||||||
Liverpool Victoria Friendly Society Ltd., 6.500%, due 05/22/431,3 |
270,000 |
342,938 |
14
UBS Dynamic Alpha Fund
Portfolio of investments
June 30, 2016
Face amount |
Value |
||||||||||
Bonds(Continued) |
|||||||||||
Corporate bonds(Continued) |
|||||||||||
United Kingdom(Concluded) |
|||||||||||
Lloyds Bank PLC, 1.375%, due 09/08/221 |
EUR |
410,000 |
$ |
464,445 |
|||||||
11.875%, due 12/16/211,3 |
185,000 |
214,503 |
|||||||||
National Grid Electricity Transmission PLC, 4.000%, due 06/08/271 |
GBP |
130,000 |
202,430 |
||||||||
Northern Gas Networks Finance PLC, 5.875%, due 07/08/19 |
125,000 |
188,672 |
|||||||||
Prudential PLC, 1.375%, due 01/19/181 |
170,000 |
226,991 |
|||||||||
5.000%, due 07/20/551,3 |
200,000 |
240,678 |
|||||||||
Royal Bank of Scotland PLC, 6.934%, due 04/09/18 |
EUR |
290,000 |
347,574 |
||||||||
Santander UK PLC, 4.000%, due 03/13/24 |
$ |
240,000 |
257,785 |
||||||||
Scottish Widows Ltd., 5.500%, due 06/16/231 |
GBP |
200,000 |
273,742 |
||||||||
Sinopec Capital 2013 Ltd., 3.125%, due 04/24/231 |
$ |
430,000 |
428,486 |
||||||||
Sky PLC, 2.500%, due 09/15/261 |
EUR |
150,000 |
177,239 |
||||||||
Southern Gas Networks PLC, 2.500%, due 02/03/251 |
GBP |
115,000 |
156,453 |
||||||||
SSE PLC, 3.875%, due 09/10/201,3,5 |
100,000 |
126,588 |
|||||||||
Standard Chartered PLC, 4.000%, due 07/12/221,3 |
$ |
350,000 |
352,254 |
||||||||
State Grid Europe Development 2014 PLC, Series A, 1.500%, due 01/26/221 |
EUR |
125,000 |
141,146 |
||||||||
Thames Water Utilities Finance Ltd., 5.125%, due 09/28/37 |
GBP |
235,000 |
415,327 |
||||||||
Vodafone Group PLC, 1.250%, due 08/25/211 |
EUR |
210,000 |
240,045 |
||||||||
Wales & West Utilities Finance PLC, 5.125%, due 12/02/161 |
GBP |
370,000 |
500,286 |
||||||||
6.750%, due 12/17/363 |
50,000 |
73,457 |
|||||||||
Western Power Distribution West Midlands PLC, 5.750%, due 04/16/321 |
100,000 |
179,430 |
|||||||||
WPP Finance 2010, 3.750%, due 09/19/24 |
$ |
185,000 |
195,602 |
||||||||
WPP Finance 2013, 0.430%, due 03/23/181 |
EUR |
210,000 |
233,707 |
||||||||
Total United Kingdom corporate bonds |
10,864,295 |
Face amount |
Value |
||||||||||
United States: 19.60% |
|||||||||||
21st Century Fox America, Inc., 6.200%, due 12/15/34 |
$ |
335,000 |
$ |
420,244 |
|||||||
ABB Finance USA, Inc., 2.875%, due 05/08/22 |
235,000 |
244,856 |
|||||||||
AbbVie, Inc., 2.900%, due 11/06/22 |
370,000 |
377,310 |
|||||||||
4.400%, due 11/06/42 |
140,000 |
142,751 |
|||||||||
Actavis Funding SCS, 1.300%, due 06/15/17 |
95,000 |
94,839 |
|||||||||
3.450%, due 03/15/22 |
240,000 |
249,337 |
|||||||||
4.750%, due 03/15/45 |
195,000 |
204,199 |
|||||||||
Aetna, Inc., 3.500%, due 11/15/24 |
245,000 |
258,593 |
|||||||||
Albemarle Corp., 1.875%, due 12/08/211 |
EUR |
365,000 |
417,965 |
||||||||
Altria Group, Inc., 4.250%, due 08/09/42 |
$ |
530,000 |
579,064 |
||||||||
American Airlines Pass Through Trust, Series 2014-1, Class B, 4.375%, due 10/01/22 |
116,718 |
117,885 |
|||||||||
American Express Credit Corp., 1.300%, due 07/29/16 |
145,000 |
145,068 |
|||||||||
2.375%, due 05/26/20 |
105,000 |
107,439 |
|||||||||
American International Group, Inc., 3.375%, due 08/15/20 |
305,000 |
320,027 |
|||||||||
3.875%, due 01/15/35 |
115,000 |
110,170 |
|||||||||
4.500%, due 07/16/44 |
125,000 |
121,011 |
|||||||||
Amgen, Inc., 1.250%, due 02/25/22 |
EUR |
110,000 |
126,120 |
||||||||
Anadarko Petroleum Corp., 3.450%, due 07/15/24 |
$ |
125,000 |
122,234 |
||||||||
4.850%, due 03/15/21 |
100,000 |
106,072 |
|||||||||
6.375%, due 09/15/17 |
50,000 |
52,628 |
|||||||||
Apache Corp., 4.750%, due 04/15/43 |
405,000 |
416,636 |
|||||||||
Apple, Inc., 1.300%, due 02/23/18 |
130,000 |
130,883 |
|||||||||
AT&T, Inc., 3.000%, due 02/15/22 |
190,000 |
193,788 |
|||||||||
4.750%, due 05/15/46 |
270,000 |
276,735 |
|||||||||
5.000%, due 03/01/21 |
420,000 |
470,343 |
|||||||||
5.550%, due 08/15/41 |
260,000 |
291,607 |
|||||||||
Bank of America Corp., 1.375%, due 09/10/211 |
EUR |
370,000 |
426,763 |
||||||||
3.875%, due 08/01/25 |
$ |
570,000 |
606,679 |
||||||||
5.875%, due 02/07/42 |
155,000 |
195,587 |
|||||||||
Berkshire Hathaway Finance Corp., 1.300%, due 05/15/18 |
145,000 |
145,912 |
|||||||||
Berkshire Hathaway, Inc., 1.300%, due 03/15/24 |
EUR |
200,000 |
230,023 |
||||||||
3.125%, due 03/15/26 |
$ |
200,000 |
209,818 |
15
UBS Dynamic Alpha Fund
Portfolio of investments
June 30, 2016
Face amount |
Value |
||||||||||
Bonds(Continued) |
|||||||||||
Corporate bonds(Continued) |
|||||||||||
United States(Continued) |
|||||||||||
Biogen, Inc., 4.050%, due 09/15/25 |
$ |
285,000 |
$ |
306,936 |
|||||||
Branch Banking & Trust Co., 1.350%, due 10/01/17 |
265,000 |
265,677 |
|||||||||
Burlington Northern Santa Fe LLC, 3.000%, due 03/15/23 |
265,000 |
278,791 |
|||||||||
5.400%, due 06/01/41 |
155,000 |
192,181 |
|||||||||
Caterpillar, Inc., 4.750%, due 05/15/64 |
160,000 |
176,855 |
|||||||||
CF Industries, Inc., 5.150%, due 03/15/34 |
195,000 |
190,479 |
|||||||||
Charter Communications Operating LLC/Charter Communications Operating Capital, 4.464%, due 07/23/222 |
235,000 |
253,018 |
|||||||||
Chevron Corp., 2.355%, due 12/05/22 |
190,000 |
193,241 |
|||||||||
Cisco Systems, Inc., 1.400%, due 02/28/18 |
145,000 |
146,313 |
|||||||||
Citigroup, Inc., 0.379%, due 05/31/173 |
EUR |
290,000 |
321,196 |
||||||||
3.875%, due 10/25/23 |
$ |
885,000 |
949,792 |
||||||||
4.600%, due 03/09/26 |
110,000 |
116,325 |
|||||||||
Coca-Cola Co., 1.800%, due 09/01/16 |
255,000 |
255,469 |
|||||||||
1.875%, due 09/22/26 |
EUR |
105,000 |
128,126 |
||||||||
Comcast Corp., 4.750%, due 03/01/44 |
$ |
75,000 |
87,513 |
||||||||
ConocoPhillips Co., 2.200%, due 05/15/20 |
350,000 |
353,466 |
|||||||||
4.200%, due 03/15/21 |
200,000 |
216,017 |
|||||||||
CVS Health Corp., 5.125%, due 07/20/45 |
255,000 |
316,124 |
|||||||||
Daimler Finance North America LLC, 2.450%, due 05/18/202 |
150,000 |
154,370 |
|||||||||
Delta Air Lines Pass Through Trust, Series 2007-1, Class A, 6.821%, due 08/10/22 |
38,811 |
45,098 |
|||||||||
Diamond 1 Finance Corp./ Diamond 2 Finance Corp., 3.480%, due 06/01/192 |
270,000 |
276,591 |
|||||||||
4.420%, due 06/15/212 |
340,000 |
349,454 |
|||||||||
5.450%, due 06/15/232 |
360,000 |
373,293 |
|||||||||
8.350%, due 07/15/462 |
310,000 |
334,025 |
|||||||||
Duke Energy Corp., 3.050%, due 08/15/22 |
250,000 |
259,805 |
|||||||||
Enable Midstream Partners LP, 3.900%, due 05/15/24 |
150,000 |
133,755 |
Face amount |
Value |
||||||||||
Energy Transfer Partners LP, 6.050%, due 06/01/41 |
$ |
270,000 |
$ |
264,331 |
|||||||
Enterprise Products Operating LLC, 4.850%, due 03/15/44 |
180,000 |
190,185 |
|||||||||
5.200%, due 09/01/20 |
145,000 |
163,152 |
|||||||||
ERAC USA Finance LLC, 5.625%, due 03/15/422 |
145,000 |
175,913 |
|||||||||
ERP Operating LP, 3.375%, due 06/01/25 |
225,000 |
237,433 |
|||||||||
Exelon Corp., 3.400%, due 04/15/26 |
185,000 |
193,449 |
|||||||||
Express Scripts Holding Co., 2.250%, due 06/15/19 |
225,000 |
228,823 |
|||||||||
Exxon Mobil Corp., 3.567%, due 03/06/45 |
65,000 |
67,225 |
|||||||||
4.114%, due 03/01/46 |
130,000 |
146,314 |
|||||||||
FedEx Corp., 1.625%, due 01/11/27 |
EUR |
150,000 |
169,318 |
||||||||
3.250%, due 04/01/26 |
$ |
65,000 |
67,723 |
||||||||
Fifth Third Bank, 2.875%, due 10/01/21 |
345,000 |
356,387 |
|||||||||
Five Corners Funding Trust, 4.419%, due 11/15/232 |
235,000 |
253,722 |
|||||||||
Ford Motor Credit Co. LLC, 3.000%, due 06/12/17 |
680,000 |
689,670 |
|||||||||
Freeport-McMoRan, Inc., 3.550%, due 03/01/226 |
350,000 |
308,000 |
|||||||||
3.875%, due 03/15/236 |
235,000 |
205,625 |
|||||||||
General Electric Co., 1.875%, due 05/28/27 |
EUR |
120,000 |
147,266 |
||||||||
4.125%, due 10/09/42 |
$ |
140,000 |
154,098 |
||||||||
4.375%, due 09/16/20 |
117,000 |
130,320 |
|||||||||
Series A, 6.750%, due 03/15/32 |
167,000 |
234,484 |
|||||||||
General Motors Financial Co., Inc., 3.500%, due 07/10/19 |
240,000 |
248,339 |
|||||||||
Georgia Power Co., 5.400%, due 06/01/40 |
125,000 |
155,139 |
|||||||||
Gilead Sciences, Inc., 2.050%, due 04/01/19 |
150,000 |
153,613 |
|||||||||
3.650%, due 03/01/26 |
55,000 |
59,841 |
|||||||||
4.750%, due 03/01/46 |
95,000 |
107,870 |
|||||||||
4.800%, due 04/01/44 |
185,000 |
209,075 |
|||||||||
Glencore Funding LLC, 2.500%, due 01/15/192 |
60,000 |
57,675 |
|||||||||
3.125%, due 04/29/192 |
230,000 |
224,250 |
|||||||||
Goldman Sachs Group, Inc., 1.375%, due 07/26/221 |
EUR |
625,000 |
711,013 |
||||||||
2.625%, due 04/25/21 |
$ |
155,000 |
157,207 |
||||||||
5.150%, due 05/22/45 |
180,000 |
187,573 |
|||||||||
Halliburton Co., 3.800%, due 11/15/25 |
80,000 |
83,158 |
|||||||||
5.000%, due 11/15/45 |
95,000 |
103,570 |
16
UBS Dynamic Alpha Fund
Portfolio of investments
June 30, 2016
Face amount |
Value |
||||||||||
Bonds(Continued) |
|||||||||||
Corporate bonds(Continued) |
|||||||||||
United States(Continued) |
|||||||||||
Hartford Financial Services Group, Inc., 4.300%, due 04/15/43 |
$ |
155,000 |
$ |
154,930 |
|||||||
HCP, Inc., 3.875%, due 08/15/24 |
210,000 |
211,255 |
|||||||||
Illinois Tool Works, Inc., 1.250%, due 05/22/23 |
EUR |
260,000 |
300,484 |
||||||||
International Business Machines Corp., 3.375%, due 08/01/23 |
$ |
260,000 |
282,089 |
||||||||
JPMorgan Chase & Co., 3.200%, due 01/25/23 |
1,500,000 |
1,555,373 |
|||||||||
3.875%, due 09/10/24 |
125,000 |
129,329 |
|||||||||
Juniper Networks, Inc., 4.500%, due 03/15/24 |
200,000 |
211,927 |
|||||||||
Kellogg Co., 1.875%, due 11/17/16 |
180,000 |
180,707 |
|||||||||
Kinder Morgan Energy Partners LP, 5.000%, due 10/01/21 |
145,000 |
153,571 |
|||||||||
5.000%, due 03/01/43 |
305,000 |
288,949 |
|||||||||
Kinder Morgan, Inc., 5.625%, due 11/15/232 |
90,000 |
96,437 |
|||||||||
Kraft Heinz Foods Co., 4.875%, due 02/15/252 |
155,000 |
170,025 |
|||||||||
5.000%, due 06/04/42 |
220,000 |
252,759 |
|||||||||
Liberty Mutual Group, Inc., 2.750%, due 05/04/261 |
EUR |
140,000 |
158,607 |
||||||||
4.250%, due 06/15/232 |
$ |
300,000 |
318,793 |
||||||||
Lincoln National Corp., 4.200%, due 03/15/22 |
335,000 |
359,353 |
|||||||||
Lowe's Cos., Inc., 4.250%, due 09/15/44 |
215,000 |
239,355 |
|||||||||
Marathon Oil Corp., 3.850%, due 06/01/25 |
175,000 |
160,853 |
|||||||||
Marathon Petroleum Corp., 3.625%, due 09/15/24 |
250,000 |
245,608 |
|||||||||
McDonald's Corp., 1.000%, due 11/15/231 |
EUR |
200,000 |
226,343 |
||||||||
2.750%, due 12/09/20 |
$ |
145,000 |
151,395 |
||||||||
Medtronic, Inc., 3.150%, due 03/15/22 |
250,000 |
266,826 |
|||||||||
4.625%, due 03/15/45 |
85,000 |
100,023 |
|||||||||
Mellon Capital III, 6.369%, due 09/05/663 |
GBP |
350,000 |
464,773 |
||||||||
Merck & Co., Inc., 1.875%, due 10/15/26 |
EUR |
125,000 |
153,437 |
||||||||
3.700%, due 02/10/45 |
$ |
85,000 |
89,345 |
||||||||
Metropolitan Life Global Funding I, 1.250%, due 09/17/211 |
EUR |
565,000 |
648,165 |
Face amount |
Value |
||||||||||
Microsoft Corp., 3.500%, due 11/15/42 |
$ |
175,000 |
$ |
172,607 |
|||||||
Molson Coors Brewing Co., 3.000%, due 07/15/26 |
90,000 |
89,960 |
|||||||||
Mondelez International, Inc., 2.375%, due 01/26/21 |
EUR |
410,000 |
492,172 |
||||||||
Monongahela Power Co., 5.400%, due 12/15/432 |
$ |
125,000 |
156,997 |
||||||||
Monsanto Co., 4.200%, due 07/15/34 |
140,000 |
140,302 |
|||||||||
Morgan Stanley, 2.375%, due 07/23/19 |
660,000 |
670,889 |
|||||||||
2.500%, due 04/21/21 |
265,000 |
267,801 |
|||||||||
2.650%, due 01/27/20 |
350,000 |
355,800 |
|||||||||
4.350%, due 09/08/26 |
215,000 |
225,033 |
|||||||||
6.375%, due 07/24/42 |
95,000 |
128,226 |
|||||||||
NBCUniversal Media LLC, 4.375%, due 04/01/21 |
610,000 |
683,617 |
|||||||||
Occidental Petroleum Corp., 4.625%, due 06/15/45 |
95,000 |
106,013 |
|||||||||
Oncor Electric Delivery Co. LLC, 7.000%, due 05/01/32 |
96,000 |
133,682 |
|||||||||
Oracle Corp., 2.400%, due 09/15/23 |
410,000 |
411,947 |
|||||||||
Pacific Gas & Electric Co., 6.050%, due 03/01/34 |
200,000 |
266,606 |
|||||||||
PacifiCorp, 6.000%, due 01/15/39 |
245,000 |
331,405 |
|||||||||
Petroleos Mexicanos, 5.500%, due 02/24/251 |
EUR |
160,000 |
194,872 |
||||||||
Pfizer, Inc., 5.200%, due 08/12/20 |
$ |
330,000 |
378,154 |
||||||||
Philip Morris International, Inc., 4.250%, due 11/10/44 |
230,000 |
252,807 |
|||||||||
Phillips 66, 4.650%, due 11/15/34 |
115,000 |
122,654 |
|||||||||
Phillips 66 Partners LP, 4.680%, due 02/15/45 |
80,000 |
73,902 |
|||||||||
Plains All American Pipeline LP/PAA Finance Corp., 5.000%, due 02/01/216 |
65,000 |
68,605 |
|||||||||
PNC Funding Corp., 2.700%, due 09/19/16 |
195,000 |
195,449 |
|||||||||
PPL Capital Funding, Inc., 4.700%, due 06/01/43 |
135,000 |
146,705 |
|||||||||
Reynolds American, Inc., 4.450%, due 06/12/25 |
130,000 |
145,251 |
|||||||||
5.700%, due 08/15/35 |
60,000 |
73,062 |
|||||||||
SABMiller Holdings, Inc., 3.750%, due 01/15/222 |
390,000 |
418,224 |
|||||||||
Schlumberger Holdings Corp., 3.000%, due 12/21/202 |
175,000 |
182,535 |
17
UBS Dynamic Alpha Fund
Portfolio of investments
June 30, 2016
Face amount |
Value |
||||||||||
Bonds(Concluded) |
|||||||||||
Corporate bonds(Concluded) |
|||||||||||
United States(Concluded) |
|||||||||||
Sempra Energy, 6.000%, due 10/15/39 |
$ |
200,000 |
$ |
250,991 |
|||||||
Southern Co., 3.250%, due 07/01/26 |
260,000 |
270,293 |
|||||||||
4.400%, due 07/01/46 |
240,000 |
258,168 |
|||||||||
Southwestern Electric Power Co., 6.200%, due 03/15/40 |
270,000 |
336,395 |
|||||||||
SunTrust Bank, 1.350%, due 02/15/17 |
320,000 |
320,385 |
|||||||||
SunTrust Banks, Inc., 2.350%, due 11/01/18 |
280,000 |
284,771 |
|||||||||
Swiss Re Treasury US Corp., 4.250%, due 12/06/422 |
200,000 |
208,689 |
|||||||||
Target Corp., 3.625%, due 04/15/46 |
130,000 |
133,399 |
|||||||||
Teachers Insurance & Annuity Association of America, 4.900%, due 09/15/442 |
145,000 |
161,097 |
|||||||||
Thermo Fisher Scientific, Inc., 2.400%, due 02/01/19 |
180,000 |
183,130 |
|||||||||
Time Warner Cable, Inc., 4.500%, due 09/15/42 |
150,000 |
139,889 |
|||||||||
5.000%, due 02/01/20 |
525,000 |
570,691 |
|||||||||
Time Warner, Inc., 2.950%, due 07/15/26 |
110,000 |
110,889 |
|||||||||
Transocean, Inc., 6.500%, due 11/15/206 |
810,000 |
719,847 |
|||||||||
6.800%, due 03/15/38 |
150,000 |
97,875 |
|||||||||
Union Pacific Corp., 4.050%, due 11/15/45 |
105,000 |
113,798 |
|||||||||
United Technologies Corp., 1.250%, due 05/22/23 |
EUR |
110,000 |
126,516 |
||||||||
UnitedHealth Group, Inc., 2.700%, due 07/15/20 |
$ |
120,000 |
124,994 |
||||||||
US Bank NA, 1.350%, due 01/26/18 |
310,000 |
311,158 |
|||||||||
Valero Energy Corp., 6.625%, due 06/15/37 |
250,000 |
273,478 |
|||||||||
Verizon Communications, Inc., 2.625%, due 02/21/20 |
612,000 |
633,017 |
|||||||||
3.000%, due 11/01/21 |
140,000 |
146,794 |
|||||||||
4.500%, due 09/15/20 |
160,000 |
177,651 |
|||||||||
6.550%, due 09/15/43 |
570,000 |
766,557 |
|||||||||
Wachovia Corp., 5.750%, due 02/01/18 |
625,000 |
668,894 |
|||||||||
Walgreens Boots Alliance, Inc., 3.800%, due 11/18/24 |
210,000 |
222,590 |
|||||||||
Williams Partners LP, 4.300%, due 03/04/24 |
230,000 |
216,461 |
Face amount |
Value |
||||||||||
Xcel Energy, Inc., 4.800%, due 09/15/41 |
$ |
120,000 |
$ |
138,003 |
|||||||
Zimmer Biomet Holdings, Inc., 3.150%, due 04/01/22 |
185,000 |
189,678 |
|||||||||
4.450%, due 08/15/45 |
195,000 |
198,581 |
|||||||||
Total United States corporate bonds |
44,238,924 |
||||||||||
Virgin Islands, British: 0.11% |
|||||||||||
CNPC General Capital Ltd., 3.400%, due 04/16/232 |
250,000 |
255,892 |
|||||||||
Total corporate bonds (cost $92,576,560) |
91,095,093 | ||||||||||
Collateralized debt obligation: 0.00%7 |
|||||||||||
Cayman Islands: 0.00%7 |
|||||||||||
LNR CDO Ltd., Series 2006-1A, Class FFX, 7.592%, due 05/28/438 (cost $8,101,618) |
8,000,000 |
0 |
|||||||||
Commercial mortgage-backed security: 0.08% |
|||||||||||
United Kingdom: 0.08% |
|||||||||||
Tesco Property Finance 4 PLC, 5.801%, due 10/13/401 (cost $239,304) |
GBP |
138,026 |
169,722 |
||||||||
Mortgage & agency debt security: 0.00%7 |
|||||||||||
United States: 0.00%7 |
|||||||||||
Structured Adjustable Rate Mortgage Loan Trust, Series 2005-7, Class B11, 2.987%, due 04/25/353 (cost $34,348) |
$ |
280,231 |
9,310 |
||||||||
US government obligation: 14.16% |
|||||||||||
US Treasury Inflation Indexed Note (TIPS), 0.625%, due 01/15/269 (cost $31,240,064) |
30,130,000 |
31,955,205 |
|||||||||
Total bonds (cost $132,191,894) |
123,229,330 |
||||||||||
Shares |
|||||||||||
Short-term investments: 34.94% |
|||||||||||
Investment company: 11.69% |
|||||||||||
JPMorgan U.S. Government Money Market Fund, Capital Shares (cost $26,384,956) |
26,384,956 |
26,384,956 |
18
UBS Dynamic Alpha Fund
Portfolio of investments
June 30, 2016
Face amount |
Value |
||||||||||
US government obligations: 23.25% |
|||||||||||
US Treasury Bills |
|||||||||||
0.360%, due 09/15/1610 |
$ |
26,500,000 |
$ |
26,487,890 |
|||||||
0.428%, due 08/18/166,10 |
26,000,000 |
25,992,439 |
|||||||||
Total US government obligations (cost $52,465,023) |
52,480,329 |
||||||||||
Total short-term investments (cost $78,849,979) |
78,865,285 |
||||||||||
Number of contracts |
|||||||||||
Options purchased: 0.94% |
|||||||||||
Call options: 0.14% |
|||||||||||
EURO STOXX 50 Index, strike @ EUR 3,150.00, expires September 2016 |
1,018 |
215,778 |
|||||||||
iShares MSCI Emerging Markets ETF, strike @ USD 36.50, expires September 2016 |
2,020 |
90,900 |
|||||||||
306,678 |
Number of contracts |
Value |
||||||||||
Put options: 0.80% |
|||||||||||
S&P 500 Index, strike @ USD 1,800.00, expires December 2017 |
177 |
$ |
1,807,170 |
||||||||
Total options purchased (cost $3,008,892) |
2,113,848 |
||||||||||
Shares |
|||||||||||
Investment of cash collateral from securities loaned: 0.46% |
|||||||||||
JPMorgan U.S. Government Money Market Fund, Capital Shares (cost $1,048,138) |
1,048,138 |
1,048,138 |
|||||||||
Total investments: 90.93% (cost $215,098,903) |
205,256,601 |
||||||||||
Cash and other assets, less liabilities: 9.07% |
20,480,522 |
||||||||||
Net assets: 100.00% |
$ |
225,737,123 |
Notes to portfolio of investments
Aggregate cost for federal income tax purposes was $214,248,901; and net unrealized depreciation consisted of:
Gross unrealized appreciation |
$ |
2,867,302 |
|||||
Gross unrealized depreciation |
(11,859,602 |
) |
|||||
Net unrealized depreciation of investments |
$ |
(8,992,300 |
) |
For a listing of defined portfolio acronyms, counterparty abbreviations and currency abbreviations that are used throughout the Portfolio of investments as well as the tables that follow, please refer to page 110. Portfolio footnotes begin on page 23.
Forward foreign currency contracts
Counterparty |
Contracts to deliver |
In exchange for |
Maturity date |
Unrealized appreciation/ (depreciation) |
|||||||||||||||
BB |
USD |
11,007,831 |
KRW |
12,707,000,000 |
09/21/16 |
$ |
15,186 |
||||||||||||
CIBC |
GBP |
8,525,000 |
USD |
12,448,410 |
09/21/16 |
1,090,740 |
|||||||||||||
CIBC |
USD |
1,161,422 |
NZD |
1,660,000 |
09/21/16 |
19,040 |
|||||||||||||
GSI |
CHF |
855,000 |
USD |
889,345 |
09/21/16 |
9,737 |
|||||||||||||
GSI |
INR |
1,271,380,000 |
USD |
18,514,775 |
09/21/16 |
(63,387 |
) |
||||||||||||
GSI |
USD |
15,428,086 |
AUD |
21,070,000 |
09/21/16 |
240,534 |
|||||||||||||
HSBC |
HKD |
15,910,000 |
USD |
2,050,735 |
09/21/16 |
(2,013 |
) |
||||||||||||
HSBC |
USD |
4,633,492 |
MXN |
87,020,000 |
09/21/16 |
88,385 |
|||||||||||||
JPMCB |
USD |
1,386,934 |
EUR |
1,225,000 |
09/21/16 |
(23,513 |
) |
||||||||||||
JPMCB |
USD |
678,228 |
EUR |
615,000 |
09/21/16 |
6,265 |
|||||||||||||
JPMCB |
USD |
10,137,168 |
TWD |
325,100,000 |
09/21/16 |
(41,427 |
) |
19
UBS Dynamic Alpha Fund
Portfolio of investments
June 30, 2016
Forward foreign currency contracts (Concluded)
Counterparty |
Contracts to deliver |
In exchange for |
Maturity date |
Unrealized appreciation/ (depreciation) |
|||||||||||||||
MSC |
NZD |
14,995,000 |
USD |
10,380,229 |
09/21/16 |
$ |
(283,045 |
) |
|||||||||||
SSB |
AUD |
21,070,000 |
USD |
15,604,358 |
09/21/16 |
(64,262 |
) |
||||||||||||
SSB |
JPY |
191,900,000 |
USD |
1,786,216 |
09/21/16 |
(77,195 |
) |
||||||||||||
SSB |
KRW |
12,707,000,000 |
USD |
10,957,428 |
09/21/16 |
(65,590 |
) |
||||||||||||
SSB |
TWD |
325,100,000 |
USD |
10,089,067 |
09/21/16 |
(6,674 |
) |
||||||||||||
SSB |
USD |
1,207,111 |
COP |
3,635,817,000 |
09/21/16 |
16,924 |
|||||||||||||
SSB |
USD |
18,751,917 |
INR |
1,271,380,000 |
09/21/16 |
(173,755 |
) |
||||||||||||
SSB |
USD |
1,187,607 |
RUB |
79,629,038 |
09/21/16 |
31,747 |
|||||||||||||
WBC |
CAD |
18,540,000 |
USD |
14,499,055 |
09/21/16 |
146,400 |
|||||||||||||
WBC |
EUR |
38,140,000 |
USD |
43,517,282 |
09/21/16 |
1,067,578 |
|||||||||||||
Net unrealized appreciation on forward foreign currency contracts |
$ |
1,931,675 |
Futures contracts
Expiration date |
Cost/ (proceeds) |
Value |
Unrealized appreciation/ (depreciation) |
||||||||||||||||
US Treasury futures sell contracts: |
|||||||||||||||||||
US Ultra Bond, 5 contracts (USD) |
September 2016 |
$ |
(873,899 |
) |
$ |
(931,875 |
) |
$ |
(57,976 |
) |
|||||||||
2 Year US Treasury Notes, 266 contracts (USD) |
September 2016 |
(58,045,812 |
) |
(58,341,281 |
) |
(295,469 |
) |
||||||||||||
5 Year US Treasury Notes, 58 contracts (USD) |
September 2016 |
(6,957,254 |
) |
(7,085,515 |
) |
(128,261 |
) |
||||||||||||
10 Year US Treasury Notes, 517 contracts (USD) |
September 2016 |
(66,907,948 |
) |
(68,752,922 |
) |
(1,844,974 |
) |
||||||||||||
Index futures buy contracts: |
|||||||||||||||||||
EURO STOXX 50 Index, 204 contracts (EUR) |
September 2016 |
6,782,457 |
6,484,544 |
(297,913 |
) |
||||||||||||||
Hong Kong Hang Seng China Enterprise Index, 287 contracts (HKD) |
July 2016 |
15,283,812 |
16,275,613 |
991,801 |
|||||||||||||||
KOSPI 200 Index, 57 contracts (KRW) |
September 2016 |
6,065,762 |
6,081,512 |
15,750 |
|||||||||||||||
TOPIX Index, 156 contracts (JPY) |
September 2016 |
19,806,877 |
19,073,170 |
(733,707 |
) |
||||||||||||||
Index futures sell contracts: |
|||||||||||||||||||
FTSE China A50 Index, 560 contracts (USD) |
July 2016 |
(5,057,980 |
) |
(5,217,330 |
) |
(159,350 |
) |
||||||||||||
NIKKEI 225 Index, 121 contracts (JPY) |
September 2016 |
(19,098,473 |
) |
(18,504,966 |
) |
593,507 |
|||||||||||||
Interest rate futures buy contracts: |
|||||||||||||||||||
Canadian Government 10 Year Bond, 452 contracts (CAD) |
September 2016 |
50,571,272 |
51,793,088 |
1,221,816 |
|||||||||||||||
Interest rate futures sell contracts: |
|||||||||||||||||||
Euro-Bund, 89 contracts (EUR) |
September 2016 |
(16,197,172 |
) |
(16,506,067 |
) |
(308,895 |
) |
||||||||||||
Long Gilt, 6 contracts (GBP) |
September 2016 |
(992,594 |
) |
(1,026,314 |
) |
(33,720 |
) |
||||||||||||
Net unrealized depreciation on futures contracts |
$ |
(1,037,391 |
) |
Interest rate swap agreements
Counterparty |
Notional amount |
Termination date |
Payments made by the Fund11 |
Payments received by the Fund11 |
Upfront payments |
Value |
Unrealized appreciation/ (depreciation) |
||||||||||||||||||||||||
DB |
EUR |
32,600,000 |
11/01/21 |
2.698 |
% |
6 month EURIBOR |
$ |
|
$ |
(6,061,077 |
) |
$ |
(6,061,077 |
) |
|||||||||||||||||
GSI |
EUR |
31,200,000 |
06/21/21 |
6 month EURIBOR |
3.325 |
% |
|
5,993,997 |
5,993,997 |
||||||||||||||||||||||
$ |
|
$ |
(67,080 |
) |
$ |
(67,080 |
) |
20
UBS Dynamic Alpha Fund
Portfolio of investments
June 30, 2016
Credit default swaps on corporate issuesbuy protection12
Counterparty |
Referenced obligation13 |
Notional amount |
Termination date |
Payments made by the Fund11 |
Upfront payments received |
Value |
Unrealized appreciation/ (depreciation) |
||||||||||||||||||||||||
BB |
METRO AG bond, 3.375%, due 03/01/19 |
EUR |
455,000 |
06/20/20 |
1.000 |
% |
$ |
2,265 |
$ |
880 |
$ |
3,145 |
|||||||||||||||||||
CITI |
HSBC Bank PLC bond, 4.000%, due 03/20/20 |
EUR |
325,000 |
03/20/20 |
1.000 |
8,027 |
(1,531 |
) |
6,496 |
||||||||||||||||||||||
JPMCB |
Bayer AG bond, 5.625%, due 05/23/18 |
EUR |
585,000 |
03/20/18 |
1.000 |
4,646 |
(8,462 |
) |
(3,816 |
) |
|||||||||||||||||||||
JPMCB |
Pfizer, Inc. bond, 4.650%, due 03/01/18 |
USD |
1,345,000 |
06/20/20 |
1.000 |
41,856 |
(43,015 |
) |
(1,159 |
) |
|||||||||||||||||||||
$ |
56,794 |
$ |
(52,128 |
) |
$ |
4,666 |
Credit default swaps on corporate issuessell protection14
Counterparty |
Referenced obligation13 |
Notional amount |
Termination date |
Payments received by the Fund11 |
Upfront Payments (made)/ received |
Value |
Unrealized appreciation/ (depreciation) |
Credit spread15 |
|||||||||||||||||||||||||||
CITI |
Glencore International AG bond, 6.500%, due 02/27/19 |
EUR |
355,000 |
06/20/19 |
1.000 |
% |
$ |
14,753 |
$ |
(20,297 |
) |
$ |
(5,544 |
) |
2.800 |
% |
|||||||||||||||||||
CITI |
Standard Chartered Bank PLC bond, 0.000%, due 03/20/20 |
EUR |
325,000 |
03/20/20 |
1.000 |
(926 |
) |
(3,853 |
) |
(4,779 |
) |
1.300 |
|||||||||||||||||||||||
GSI |
Freeport-McMoran, Inc. bond, 3.550%, due 03/01/22 |
USD |
290,000 |
12/20/19 |
1.000 |
9,980 |
(28,227 |
) |
(18,247 |
) |
4.018 |
||||||||||||||||||||||||
JPMCB |
Lanxess AG bond, 4.125%, due 05/23/18 |
EUR |
595,000 |
06/20/19 |
1.000 |
5,701 |
12,869 |
18,570 |
0.361 |
||||||||||||||||||||||||||
JPMCB |
Teck Resources Ltd. bond, 3.150%, due 01/15/17 |
USD |
420,000 |
12/20/19 |
1.000 |
28,709 |
(58,797 |
) |
(30,088 |
) |
5.390 |
||||||||||||||||||||||||
JPMCB |
Teck Resources Ltd. bond, 3.150%, due 01/15/17 |
USD |
90,000 |
03/20/20 |
1.000 |
5,393 |
(14,469 |
) |
(9,076 |
) |
5.766 |
||||||||||||||||||||||||
$ |
63,610 |
$ |
(112,774 |
) |
$ |
(49,164 |
) |
Centrally cleared credit default swaps on credit indicesbuy protection12
Referenced index13 |
Notional amount |
Termination date |
Payments made by the Fund11 |
Value |
Unrealized appreciation |
||||||||||||||||||
iTraxx Europe Series 25 Index |
EUR |
4,070,000 |
06/20/21 |
1.000 |
% |
$ |
(43,959 |
) |
$ |
8,723 |
21
UBS Dynamic Alpha Fund
Portfolio of investments
June 30, 2016
Centrally cleared credit default swaps on credit indicessell protection14
Referenced index13 |
Notional amount |
Termination date |
Payments received by the Fund11 |
Value |
Unrealized appreciation |
Credit spread15 |
|||||||||||||||||||||
iTraxx Europe Crossover Series 25 Index |
EUR |
6,860,000 |
06/20/21 |
5.000 |
% |
$ |
436,928 |
$ |
240 |
3.708 |
% |
Written options activity for the year ended June 30, 2016 was as follows:
Number of contracts |
Premiums received |
||||||||||
Options outstanding at June 30, 2015 |
1,615 |
$ |
1,155,635 |
||||||||
Options written |
9,952 |
8,875,781 |
|||||||||
Options terminated in closing purchase transactions |
(11,567 |
) |
(10,031,416 |
) |
|||||||
Options expired prior to exercise |
|
|
|||||||||
Options outstanding at June 30, 2016 |
|
$ |
|
The following is a summary of the fair valuations according to the inputs used as of June 30, 2016 in valuing the Fund's investments:
Description |
Investments measured at fair value using the net asset value per share (or its equivalent) practical expedient at 6/30/2016a |
Unadjusted quoted prices in active markets for identical investments (Level 1) |
Other significant observable inputs (Level 2) |
Unobservable inputs (Level 3) |
Total |
||||||||||||||||||
Assets |
|||||||||||||||||||||||
Corporate bonds |
$ |
|
$ |
|
$ |
91,095,093 |
$ |
|
$ |
91,095,093 |
|||||||||||||
Collateralized debt obligation |
|
|
|
0 |
0 |
||||||||||||||||||
Commercial mortgage-backed security |
|
|
169,722 |
|
169,722 |
||||||||||||||||||
Mortgage & agency debt security |
|
|
9,310 |
|
9,310 |
||||||||||||||||||
US government obligation |
|
|
31,955,205 |
|
31,955,205 |
||||||||||||||||||
Short-term investments |
|
|
78,865,285 |
|
78,865,285 |
||||||||||||||||||
Options purchased |
|
2,113,848 |
|
|
2,113,848 |
||||||||||||||||||
Investment of cash collateral from securities loaned |
|
|
1,048,138 |
|
1,048,138 |
||||||||||||||||||
Forward foreign currency contracts |
|
|
2,732,536 |
|
2,732,536 |
||||||||||||||||||
Futures contracts |
|
1,221,816 |
1,601,058 |
|
2,822,874 |
||||||||||||||||||
Swap agreements, at value |
|
|
6,444,674 |
|
6,444,674 |
||||||||||||||||||
Total |
$ |
|
$ |
3,335,664 |
$ |
213,921,021 |
$ |
0 |
$ |
217,256,685 |
|||||||||||||
Liabilities |
|||||||||||||||||||||||
Forward foreign currency contracts |
$ |
|
$ |
|
$ |
(800,861 |
) |
$ |
|
$ |
(800,861 |
) |
|||||||||||
Futures contracts |
|
(2,669,295 |
) |
(1,190,970 |
) |
|
(3,860,265 |
) |
|||||||||||||||
Swap agreements, at value |
|
|
(6,283,687 |
) |
|
(6,283,687 |
) |
||||||||||||||||
Total |
$ |
|
$ |
(2,669,295 |
) |
$ |
(8,275,518 |
) |
$ |
|
$ |
(10,944,813 |
) |
a In accordance with Accounting Standards Update No. 2015-07, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Portfolio of investments.
22
UBS Dynamic Alpha Fund
Portfolio of investments
June 30, 2016
At June 30, 2016, $1,601,058 and $(1,190,970) of futures contracts were classified within Level 2 of the fair value hierarchy pursuant to the Fund's fair valuation procedures for foreign portfolio holdings.
Level 3 Rollforward Disclosure
Collateralized debt obligation |
|||||||
Assets |
|||||||
Beginning balance |
$ |
0 |
|||||
Purchases |
|
||||||
Issuances |
|
||||||
Sales |
|
||||||
Accrued discounts (premiums) |
(3,784 |
) |
|||||
Total realized gain (loss) |
|
||||||
Change in net unrealized appreciation (depreciation) |
3,784 |
||||||
Transfers into Level 3 |
|
||||||
Transfers out of Level 3 |
|
||||||
Ending balance |
$ |
0 |
The change in net unrealized appreciation (depreciation) relating to the Level 3 investments held at June 30, 2016 was $3,784.
Portfolio footnotes
1 Security was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At June 30, 2016, these securities amounted to $32,151,277 or 14.24% of net assets.
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 June 30, 2016, the value of these securities amounted to $7,098,950 or 3.14% of net assets.
3 Variable or floating rate securityThe interest rate shown is the current rate as of June 30, 2016 and changes periodically.
4 Security matures in 3015.
5 Perpetual investment. Date shown reflects the next call date.
6 Security, or portion thereof, was on loan at June 30, 2016.
7 Amount represents less than 0.005%.
8 Illiquid investment as of June 30, 2016.
9 Debt security whose principal and/or interest payments are adjusted for inflation, unlike debt securities that make fixed principal and interest payments. The interest rate paid by the securities is fixed, while the principal value rises or falls based on changes in an index. Thus, if inflation occurs, the principal and interest payments on the securities are adjusted accordingly to protect investors from inflationary loss. During a deflationary period, the principal and interest payments decrease, although the securities' principal amounts will not drop below their face amounts at maturity. In exchange for the inflation protection, the securities generally pay lower interest rates than typical government securities from the issuer's country. Only if inflation occurs will securities offer a higher real yield than a conventional security of the same maturity.
10 Rate shown is the discount rate at the date of purchase.
11 Payments made or received are based on the notional amount.
12 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/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/obligation.
23
UBS Dynamic Alpha Fund
Portfolio of investments
June 30, 2016
13 Payments from/to the counterparty will be received/made upon the occurrence of bankruptcy and/or restructuring event with respect to the referenced index/obligation.
14 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/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/obligation.
15 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. Credit spreads are unaudited.
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 06/30/15 |
Purchases during the year ended 06/30/16 |
Sales during the year ended 06/30/16 |
Value 06/30/16 |
Net income earned from affiliate for the year ended 06/30/16 |
||||||||||||||||||
UBS Cash Management Prime Relationship Fund |
$ |
26,421,851 |
$ |
100,490,025 |
$ |
126,911,876 |
$ |
|
$ |
8,639 |
|||||||||||||
UBS Private Money Market Fund LLCb |
1,558,438 |
19,141,662 |
20,700,100 |
|
1,278 |
||||||||||||||||||
$ |
27,980,289 |
$ |
119,631,687 |
$ |
147,611,976 |
$ |
|
$ |
9,917 |
b The Advisor earned a management fee from this affiliated fund. Please see the Notes to financial statements for further information.
See accompanying notes to financial statements.
24
UBS Global Allocation Fund
Portfolio performance (unaudited)
For the 12 months ended June 30, 2016, Class A shares of UBS Global Allocation Fund (the "Fund") returned -4.81% (Class A shares returned -10.08% after the deduction of the maximum sales charge), while Class P shares returned -4.50%. In contrast, the Fund's benchmark, the 60% MSCI All Country World Index (net)/40% Citigroup World Government Bond Index (Hedged in USD), returned 1.42% during the same time period. For comparison purposes, the MSCI All Country World Index (net) returned -3.73% and the Citigroup World Government Bond Index (Hedged in USD) returned 8.84% over the same period. (Class P shares have lower expenses than other share classes of the Fund. Returns for all share classes over various time periods are shown on page 27. 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 index returns do not reflect the deduction of fees and expenses.)
The Fund produced a negative absolute return during the reporting period and underperformed the benchmark. Negative performance was primarily due to our active market allocation strategy.
During the review period, we used derivatives for risk management purposes and as a tool to help enhance returns across various strategies. With respect to our active currency strategy, utilizing currency forwards had a direct positive impact on Fund performance. We used a variety of equity and fixed income options, futures and swaps to implement our market allocation strategy. Derivatives were just one tool, among others, that we used to implement our market allocation strategy. These derivatives, in aggregate, detracted from performance during the reporting period.
Portfolio performance summary1
What worked:
• Certain active equity positions added to performance.
The Fund's overweight to North Asian equities relative to broader emerging markets contributed to results over the reporting period. North Asian countries are net importers of oil and are experiencing healthier current account balances.
The Fund benefited from a relative value trade of long German equities versus Swedish equities, which outperformed after a sustained dislocation between the two markets.
• Certain active fixed income positions were positive for results.
The Fund's allocation to global corporate bonds added value on a relative basis.
The Fund held an overweight position in UK government bonds, which served as a source of yield pick-up within the fixed income holdings.
1 For a detailed commentary on the market environment in general during the reporting period, see pages 3-4.
25
UBS Global Allocation Fund
• Overall, the portfolio's active currency positions were additive for performance.
The Fund maintained an overweight to the Japanese yen relative to the euro and US dollar. The yen benefited during this volatile time for its perceived safe haven status.
The Fund maintained an overweight to the Mexican peso relative to the Malaysian ringgit. Chinese trading partners such as Malaysia suffered amid heightened growth concerns.
• Overall, the portfolio's bottom-up security selection was positive for results.
Positive security selection came from within US equities and emerging market equities.
What didn't work:
• Certain equity trades detracted from performance during the reporting period.
An overweight to non-US developed equitiesparticularly the eurozone and Japandetracted from performance given concerns surrounding a global growth slowdown and economic linkages with China.
The Fund's relative value trade of long Dutch versus UK equities detracted from performance.
• Certain fixed income allocations were headwinds for results.
The Fund's overall underweight to global ex-US bonds detracted from performance. In particular, the Fund's underweight to European bonds and Japanese bonds detracted from returns as global sovereign bonds benefited from heightened risk aversion and underwhelming global economic developments.
The Fund's performance was negatively impacted by a short US duration position, as US yields were flat to slightly down across the curve during the reporting period.
• Certain active currency positions were negative for results relative to the benchmark.
The biggest detractor from performance was the Fund's overweight in the Swedish krona over the euro. The Swedish Riksbank cut rates and expanded their quantitative easing program and the euro rebounded from its lows, causing this trade to detract from results.
This letter is intended to assist shareholders in understanding how the Fund performed during the 12 months ended June 30, 2016. The views and opinions in the letter were current as of August 15, 2016. 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/am-us.
26
UBS Global Allocation Fund
Average annual total returns for periods ended 06/30/16 (unaudited)
1 year |
5 years |
10 years |
|||||||||||||
Before deducting maximum sales charge |
|||||||||||||||
Class A1 |
(4.81 |
)% |
2.58 |
% |
2.66 |
% |
|||||||||
Class C2 |
(5.49 |
) |
1.77 |
1.86 |
|||||||||||
Class P3 |
(4.50 |
) |
2.88 |
2.95 |
|||||||||||
After deducting maximum sales charge |
|||||||||||||||
Class A1 |
(10.08 |
)% |
1.42 |
% |
2.08 |
% |
|||||||||
Class C2 |
(6.42 |
) |
1.77 |
1.86 |
|||||||||||
MSCI All Country World Index (net)4 |
(3.73 |
)% |
5.38 |
% |
4.26 |
% |
|||||||||
Citigroup World Government Bond Index (Hedged in USD)5 |
8.84 |
5.11 |
4.97 |
||||||||||||
60% MSCI All Country World Index (net)/40% Citigroup World Government Bond Index (Hedged in USD)6 |
1.42 |
5.54 |
4.96 |
The annualized gross and net expense ratios, respectively, for each class of shares as in the October 28, 2015 prospectuses were as follows: Class A1.39% and 1.39%; Class C2.17% and 2.17%; Class P1.11% and 1.11%. 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 Asset Management (Americas) Inc. (formerly, UBS Global Asset Management (Americas) Inc.), the Fund's investment advisor ("UBS 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 period ending October 27, 2016, do not exceed 1.35% for Class A shares, 2.10% for Class C shares and 1.10% for Class P 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. The fee waiver/expense reimbursement agreement may be terminated by the Fund's Board of Trustees at any time and also will terminate automatically upon the expiration or termination of the Fund's advisory contract with the Advisor. Upon termination of the fee waiver/expense reimbursement agreement, however, UBS AM (Americas)'s three year recoupment rights will survive.
1 Maximum sales charge for Class A shares is 5.5%. Class A shares bear ongoing 12b-1 service fees.
2 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 distribution and service fees.
3 Class P shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees, but Class P shares held through advisory programs may be subject to a program fee, which, if included, would have reduced performance.
4 The MSCI All Country World Index (net) is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets. Net total return indices reinvest dividends after the deduction of withholding taxes, using a tax rate applicable to non-resident institutional investors who do not benefit from double taxation treaties. 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.
5 The Citigroup World Government Bond Index (Hedged in USD) is an unmanaged market capitalization-weighted index designed to measure the performance of fixed-rate, local currency, investment-grade sovereign bonds with a one-year minimum maturity and is hedged back to the US dollar. Investors should note that indices do not reflect the deduction of fees and expenses.
6 The 60% MSCI All Country World Index (net)/40% Citigroup World Government Bond Index (Hedged in USD) is a unmanaged blended benchmark compiled by the Advisor. Investors should note that indices do not reflect the deduction of fees and expenses.
Prior to February 17, 2015, if an investor sold or exchanged shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged was deducted at the time of the transaction, except as noted otherwise in the prospectus. For sales or exchanges taking place on or after February 17, 2015 but prior to August 3, 2015, there was a reduction in the redemption holding period from 90 days to 30 days. Effective August 3, 2015, the 1.00% redemption fee imposed on sales or exchanges of any class of shares of the funds made during the holding periods specified in the prospectus was eliminated. Please refer to the prospectus for further information.
Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit www.ubs.com/us-mutualfundperformance.
27
UBS Global Allocation Fund
Illustration of an assumed investment of $10,000 in Class A shares (adjusted for 5.5% maximum sales charge) and $5,000,000 in Class P shares (unaudited)
The following two graphs depict the performance of UBS Global Allocation Fund Class A and Class P shares versus the MSCI All Country World Index (net), Citigroup World Government Bond Index (Hedged in USD), and the 60% MSCI All Country World Index (net)/40% Citigroup World Government Bond Index (Hedged in USD) over the 10 years ended June 30, 2016. The performance of Class C shares will vary based upon the different class specific expenses and sales charges. The performance provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Past performance is no guarantee of future results. Share price and returns will vary with market conditions; investors may realize a gain or loss upon redemption.
Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit www.ubs.com/us-mutualfundperformance.
28
UBS Global Allocation Fund
Top ten equity holdings (unaudited)1
As of June 30, 2016
Percentage of net assets |
|||||||
Facebook, Inc., Class A |
0.9 |
% |
|||||
Amazon.com, Inc. |
0.9 |
||||||
Roche Holding AG |
0.8 |
||||||
KDDI Corp. |
0.7 |
||||||
Microsoft Corp. |
0.7 |
||||||
Sony Corp. |
0.6 |
||||||
Unilever NV CVA |
0.6 |
||||||
Royal Dutch Shell PLC, Class A |
0.6 |
||||||
Alphabet, Inc., Class A |
0.6 |
||||||
AIA Group Ltd. |
0.5 |
||||||
Total |
6.9 |
% |
Top ten long-term fixed income holdings (unaudited)1
As of June 30, 2016
Percentage of net assets |
|||||||
US Treasury Notes, 0.750%, due 02/28/18 |
1.1 |
% |
|||||
US Treasury Notes, 0.500%, due 11/30/16 |
0.8 |
||||||
US Treasury Notes, 1.000%, due 09/30/16 |
0.8 |
||||||
Japan Government Twenty Year Bond, 0.400%, due 03/20/36 |
0.7 |
||||||
New Zealand Government Bond, 2.000%, due 09/20/25 |
0.6 |
||||||
Commonwealth of Australia, 4.500%, due 04/15/20 |
0.5 |
||||||
Commonwealth of Australia, 5.500%, due 04/21/23 |
0.4 |
||||||
US Treasury Notes, 2.000%, due 11/30/22 |
0.4 |
||||||
New Zealand Government Bond, 5.500%, due 04/15/23 |
0.3 |
||||||
US Treasury Inflation Indexed Bonds (TIPS), 0.750%, due 02/15/45 |
0.3 |
||||||
Total |
5.9 |
% |
Top five issuer breakdown by country or territory of origin (unaudited)2
As of June 30, 2016
Percentage of net assets |
|||||||
United States |
29.0 |
% |
|||||
Japan |
6.3 |
||||||
United Kingdom |
4.8 |
||||||
Germany |
1.9 |
||||||
Australia |
1.7 |
||||||
Total |
43.7 |
% |
1 Figures represent the direct investments of UBS Global Allocation Fund. Figures may 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: 33.7%, Japan: 6.4%, United Kingdom: 6.1%, Germany: 2.2%, and Australia: 2.3%.
29
UBS Global Allocation Fund
Industry diversification (unaudited)1
As a percentage of net assets as of June 30, 2016
Common stocks |
|||||||
Aerospace & defense |
0.87 |
% |
|||||
Airlines |
0.79 |
||||||
Auto components |
0.60 |
||||||
Automobiles |
0.93 |
||||||
Banks |
2.81 |
||||||
Beverages |
0.88 |
||||||
Biotechnology |
2.02 |
||||||
Capital markets |
0.46 |
||||||
Chemicals |
1.42 |
||||||
Communications equipment |
0.09 |
||||||
Construction materials |
0.41 |
||||||
Consumer finance |
0.33 |
||||||
Diversified financial services |
1.17 |
||||||
Diversified telecommunication services |
0.86 |
||||||
Electric utilities |
0.47 |
||||||
Electrical equipment |
0.61 |
||||||
Electronic equipment, instruments & components |
0.51 |
||||||
Energy equipment & services |
0.30 |
||||||
Food & staples retailing |
0.21 |
||||||
Food products |
0.98 |
||||||
Health care equipment & supplies |
0.67 |
||||||
Health care providers & services |
0.97 |
||||||
Hotels, restaurants & leisure |
1.23 |
||||||
Household durables |
0.60 |
||||||
Industrial conglomerates |
0.93 |
||||||
Insurance |
1.88 |
||||||
Internet & catalog retail |
1.19 |
||||||
Internet software & services |
2.05 |
||||||
IT services |
0.90 |
||||||
Life sciences tools & services |
0.22 |
||||||
Machinery |
0.90 |
||||||
Marine |
0.19 |
||||||
Media |
1.02 |
||||||
Metals & mining |
0.73 |
||||||
Multiline retail |
0.03 |
||||||
Oil, gas & consumable fuels |
2.87 |
||||||
Personal products |
0.83 |
||||||
Pharmaceuticals |
1.89 |
||||||
Professional services |
0.23 |
||||||
Real estate investment trust (REIT) |
0.96 |
||||||
Real estate management & development |
0.28 |
||||||
Road & rail |
0.52 |
||||||
Semiconductors & semiconductor equipment |
2.09 |
||||||
Software |
2.03 |
||||||
Specialty retail |
1.27 |
||||||
Technology hardware, storage & peripherals |
0.58 |
||||||
Textiles, apparel & luxury goods |
0.32 |
Tobacco |
0.87 |
% |
|||||
Trading companies & distributors |
0.36 |
||||||
Wireless telecommunication services |
1.12 |
||||||
Total common stocks |
46.45 |
% |
|||||
Bonds |
|||||||
US government obligations |
6.05 |
||||||
Non-US government obligations |
5.25 |
||||||
Total bonds |
11.30 |
% |
|||||
Investment companies |
|||||||
iShares Edge MSCI Minimum Volatility Emerging Markets ETF |
4.36 |
||||||
iShares JP Morgan USD Emerging Markets Bond ETF |
4.63 |
||||||
UBS Global Corporate Bond Relationship Fund |
10.13 |
||||||
UBS-HALO Emerging Markets Equity Relationship Fund |
6.88 |
||||||
Total investment companies |
26.00 |
% |
|||||
Short-term investment |
13.14 |
||||||
Options purchased |
0.09 |
||||||
Investment of cash collateral from securities loaned |
6.27 |
||||||
Total investments |
103.25 |
% |
|||||
Liabilities, in excess of cash and other assets |
(3.25 |
) |
|||||
Net assets |
100.00 |
% |
1 Figures represent the direct investments of UBS Global Allocation Fund. Figures may be different if a breakdown of the underlying investment companies was included.
30
UBS Global Allocation Fund
Portfolio of investments
June 30, 2016
Shares |
Value |
||||||||||
Common stocks: 46.45% |
|||||||||||
Australia: 0.42% |
|||||||||||
Westfield Corp., REIT |
208,479 |
$ |
1,674,645 |
||||||||
Austria: 0.26% |
|||||||||||
Erste Group Bank AG |
44,477 |
1,012,652 |
|||||||||
Canada: 1.48% |
|||||||||||
Canadian Pacific Railway Ltd.1 |
7,692 |
990,653 |
|||||||||
Husky Energy, Inc. |
91,371 |
1,115,307 |
|||||||||
Suncor Energy, Inc. |
65,809 |
1,825,608 |
|||||||||
Toronto-Dominion Bank |
45,800 |
1,966,782 |
|||||||||
Total Canada common stocks |
5,898,350 |
||||||||||
China: 1.15% |
|||||||||||
AIA Group Ltd. |
368,517 |
2,216,160 |
|||||||||
Jardine Matheson Holdings Ltd. |
26,600 |
1,555,135 |
|||||||||
Power Assets Holdings Ltd. |
85,000 |
781,534 |
|||||||||
Total China common stocks |
4,552,829 |
||||||||||
Denmark: 0.45% |
|||||||||||
AP Moeller - Maersk A/S, Class B |
573 |
748,427 |
|||||||||
Danske Bank A/S |
39,935 |
1,051,104 |
|||||||||
Total Denmark common stocks |
1,799,531 |
||||||||||
Finland: 0.38% |
|||||||||||
Sampo Oyj, Class A |
36,860 |
1,507,438 |
|||||||||
France: 0.90% |
|||||||||||
Danone SA |
17,477 |
1,223,086 |
|||||||||
Renault SA |
15,858 |
1,197,240 |
|||||||||
Schneider Electric SE |
20,169 |
1,176,674 |
|||||||||
Total France common stocks |
3,597,000 |
||||||||||
Germany: 1.91% |
|||||||||||
Deutsche Telekom AG |
75,240 |
1,283,013 |
|||||||||
Fresenius SE & Co. KGaA |
26,737 |
1,964,569 |
|||||||||
HeidelbergCement AG |
14,177 |
1,067,982 |
|||||||||
KION Group AG |
23,764 |
1,151,793 |
|||||||||
MTU Aero Engines AG |
5,957 |
556,550 |
|||||||||
Thyssenkrupp AG |
61,950 |
1,245,217 |
|||||||||
TUI AG |
30,204 |
343,780 |
|||||||||
Total Germany common stocks |
7,612,904 |
||||||||||
Ireland: 1.07% |
|||||||||||
ICON PLC* |
12,419 |
869,454 |
|||||||||
Perrigo Co. PLC |
3,920 |
355,426 |
|||||||||
Ryanair Holdings PLC ADR |
17,592 |
1,223,348 |
|||||||||
Shire PLC |
29,030 |
1,794,127 |
|||||||||
Total Ireland common stocks |
4,242,355 |
Shares |
Value |
||||||||||
Israel: 0.50% |
|||||||||||
Check Point Software Technologies Ltd.* |
20,700 |
$ |
1,649,376 |
||||||||
Teva Pharmaceutical Industries Ltd. ADR |
6,816 |
342,368 |
|||||||||
Total Israel common stocks |
1,991,744 |
||||||||||
Italy: 0.63% |
|||||||||||
Autogrill SpA |
98,670 |
797,714 |
|||||||||
Banca Mediolanum SpA |
129,731 |
890,414 |
|||||||||
Intesa Sanpaolo SpA |
434,223 |
827,070 |
|||||||||
Total Italy common stocks |
2,515,198 |
||||||||||
Japan: 5.56% |
|||||||||||
ABC-Mart, Inc. |
18,200 |
1,221,434 |
|||||||||
Alps Electric Co., Ltd. |
44,200 |
839,725 |
|||||||||
Hino Motors Ltd. |
96,600 |
962,132 |
|||||||||
Inpex Corp. |
110,100 |
861,048 |
|||||||||
Japan Airlines Co., Ltd. |
44,600 |
1,434,899 |
|||||||||
KDDI Corp. |
91,500 |
2,782,491 |
|||||||||
Matsui Securities Co., Ltd. |
104,900 |
867,618 |
|||||||||
Mitsui Fudosan Co., Ltd. |
48,000 |
1,101,638 |
|||||||||
Nidec Corp. |
16,500 |
1,256,030 |
|||||||||
ORIX Corp. |
120,000 |
1,552,856 |
|||||||||
Shin-Etsu Chemical Co., Ltd. |
23,600 |
1,382,689 |
|||||||||
Sony Corp. |
80,400 |
2,368,743 |
|||||||||
Sumitomo Electric Industries Ltd. |
79,600 |
1,053,541 |
|||||||||
THK Co., Ltd.1 |
31,700 |
540,308 |
|||||||||
Tokyo Electron Ltd. |
19,500 |
1,647,920 |
|||||||||
Toyota Industries Corp. |
17,100 |
679,894 |
|||||||||
Toyota Motor Corp. |
32,000 |
1,577,553 |
|||||||||
Total Japan common stocks |
22,130,519 |
||||||||||
Macao: 0.16% |
|||||||||||
Sands China Ltd. |
186,000 |
629,408 |
|||||||||
Netherlands: 1.46% |
|||||||||||
Heineken NV |
19,894 |
1,824,714 |
|||||||||
Koninklijke DSM NV |
22,802 |
1,315,457 |
|||||||||
NXP Semiconductors NV* |
5,062 |
396,557 |
|||||||||
Royal Dutch Shell PLC, Class A |
82,840 |
2,275,215 |
|||||||||
Total Netherlands common stocks |
5,811,943 |
||||||||||
Norway: 0.27% |
|||||||||||
Telenor ASA |
64,381 |
1,065,700 |
|||||||||
Singapore: 0.37% |
|||||||||||
Broadcom Ltd. |
9,540 |
1,482,516 |
31
UBS Global Allocation Fund
Portfolio of investments
June 30, 2016
Shares |
Value |
||||||||||
Common stocks(Continued) |
|||||||||||
Spain: 0.76% |
|||||||||||
Banco Bilbao Vizcaya Argentaria SA |
141,314 |
$ |
809,652 |
||||||||
Banco Santander SA |
216,603 |
840,566 |
|||||||||
Mediaset Espana Comunicacion SA |
120,572 |
1,361,091 |
|||||||||
Total Spain common stocks |
3,011,309 |
||||||||||
Switzerland: 0.90% |
|||||||||||
Actelion Ltd.* |
2,912 |
490,374 |
|||||||||
Roche Holding AG |
11,728 |
3,094,782 |
|||||||||
Total Switzerland common stocks |
3,585,156 |
||||||||||
United Kingdom: 4.82% |
|||||||||||
Aon PLC |
5,800 |
633,534 |
|||||||||
ARM Holdings PLC |
57,568 |
874,442 |
|||||||||
Ashtead Group PLC |
100,852 |
1,440,563 |
|||||||||
Associated British Foods PLC |
34,040 |
1,240,361 |
|||||||||
Atlassian Corp. PLC, Class A*1 |
14,600 |
378,140 |
|||||||||
BP PLC |
337,547 |
1,975,837 |
|||||||||
Delphi Automotive PLC |
10,669 |
667,879 |
|||||||||
HSBC Holdings PLC |
253,282 |
1,569,222 |
|||||||||
Imperial Brands PLC |
35,883 |
1,946,035 |
|||||||||
Lloyds Banking Group PLC |
1,887,902 |
1,367,390 |
|||||||||
London Stock Exchange Group PLC |
39,150 |
1,330,257 |
|||||||||
Next PLC |
1,870 |
123,562 |
|||||||||
Noble Corp. PLC |
22,300 |
183,752 |
|||||||||
Rio Tinto Ltd. |
20,298 |
702,120 |
|||||||||
Rio Tinto PLC |
30,141 |
936,377 |
|||||||||
Tesco PLC* |
117,552 |
276,082 |
|||||||||
Unilever NV CVA |
48,862 |
2,281,982 |
|||||||||
Vodafone Group PLC |
404,426 |
1,233,038 |
|||||||||
Total United Kingdom common stocks |
19,160,573 |
||||||||||
United States: 23.00% |
|||||||||||
Aflac, Inc. |
8,969 |
647,203 |
|||||||||
Allergan PLC* |
7,417 |
1,713,994 |
|||||||||
Allstate Corp. |
16,385 |
1,146,131 |
|||||||||
Alnylam Pharmaceuticals, Inc.* |
13,177 |
731,192 |
|||||||||
Alphabet, Inc., Class A* |
3,185 |
2,240,743 |
|||||||||
Alphabet, Inc., Class C* |
1,788 |
1,237,475 |
|||||||||
Amazon.com, Inc.* |
4,968 |
3,555,200 |
|||||||||
American Express Co. |
7,868 |
478,060 |
|||||||||
Apple, Inc. |
18,756 |
1,793,074 |
|||||||||
Arista Networks, Inc.*1 |
5,548 |
357,180 |
|||||||||
Atara Biotherapeutics, Inc.* |
12,402 |
279,169 |
|||||||||
Best Buy Co., Inc. |
13,934 |
426,380 |
|||||||||
Catalent, Inc.* |
15,232 |
350,184 |
|||||||||
Caterpillar, Inc. |
7,121 |
539,843 |
Shares |
Value |
||||||||||
CBS Corp. (Non-Voting), Class B |
17,690 |
$ |
963,044 |
||||||||
CDW Corp. |
9,637 |
386,251 |
|||||||||
Celgene Corp.* |
12,586 |
1,241,357 |
|||||||||
Chevron Corp. |
2,173 |
227,796 |
|||||||||
Chipotle Mexican Grill, Inc.* |
1,233 |
496,603 |
|||||||||
Cobalt International Energy, Inc.* |
80,658 |
108,082 |
|||||||||
Cognizant Technology Solutions Corp., Class A* |
16,247 |
929,978 |
|||||||||
Colfax Corp.* |
14,531 |
384,490 |
|||||||||
Cooper Cos., Inc. |
3,894 |
668,094 |
|||||||||
Cornerstone OnDemand, Inc.* |
15,623 |
594,611 |
|||||||||
Danaher Corp. |
13,035 |
1,316,535 |
|||||||||
Digital Realty Trust, Inc., REIT |
11,600 |
1,264,284 |
|||||||||
Dolby Laboratories, Inc., Class A |
8,640 |
413,424 |
|||||||||
Dow Chemical Co. |
12,282 |
610,538 |
|||||||||
Ecolab, Inc. |
9,571 |
1,135,121 |
|||||||||
Eli Lilly & Co. |
6,782 |
534,082 |
|||||||||
Emergent BioSolutions, Inc.* |
7,126 |
200,383 |
|||||||||
Envision Healthcare Holdings, Inc.* |
15,892 |
403,180 |
|||||||||
EOG Resources, Inc. |
9,073 |
756,870 |
|||||||||
Estee Lauder Cos., Inc., Class A |
11,032 |
1,004,133 |
|||||||||
Expedia, Inc. |
3,647 |
387,676 |
|||||||||
Express Scripts Holding Co.* |
9,261 |
701,984 |
|||||||||
Facebook, Inc., Class A* |
32,966 |
3,767,354 |
|||||||||
First Data Corp., Class A* |
20,042 |
221,865 |
|||||||||
General Electric Co. |
26,155 |
823,359 |
|||||||||
General Motors Co. |
33,044 |
935,145 |
|||||||||
Gilead Sciences, Inc. |
11,292 |
941,979 |
|||||||||
Gulfport Energy Corp.* |
3,931 |
122,883 |
|||||||||
Halliburton Co. |
9,833 |
445,337 |
|||||||||
HeartWare International, Inc.* |
12,518 |
722,914 |
|||||||||
Home Depot, Inc. |
15,181 |
1,938,462 |
|||||||||
Honeywell International, Inc. |
9,668 |
1,124,582 |
|||||||||
Impax Laboratories, Inc.* |
7,267 |
209,435 |
|||||||||
Instructure, Inc.*1 |
16,945 |
321,955 |
|||||||||
Intuitive Surgical, Inc.* |
758 |
501,349 |
|||||||||
Invesco Ltd. |
15,300 |
390,762 |
|||||||||
Jabil Circuit, Inc. |
21,466 |
396,477 |
|||||||||
JPMorgan Chase & Co. |
21,321 |
1,324,887 |
|||||||||
Lam Research Corp.1 |
5,616 |
472,081 |
|||||||||
Laredo Petroleum, Inc.*1 |
52,247 |
547,548 |
|||||||||
Lexicon Pharmaceuticals, Inc.*1 |
98,642 |
1,415,513 |
|||||||||
Lincoln National Corp. |
15,546 |
602,718 |
|||||||||
MacroGenics, Inc.* |
5,025 |
135,625 |
|||||||||
Mallinckrodt PLC* |
3,873 |
235,401 |
|||||||||
Marsh & McLennan Cos., Inc. |
3,367 |
230,505 |
|||||||||
Martin Marietta Materials, Inc. |
2,972 |
570,624 |
|||||||||
MasterCard, Inc., Class A |
8,446 |
743,755 |
|||||||||
Maxim Integrated Products, Inc. |
11,755 |
419,536 |
|||||||||
McDermott International, Inc.* |
113,967 |
562,997 |
|||||||||
Medicines Co.*1 |
19,844 |
667,354 |
32
UBS Global Allocation Fund
Portfolio of investments
June 30, 2016
Shares |
Value |
||||||||||
Common stocks(Concluded) |
|||||||||||
United States(Concluded) |
|||||||||||
MetLife, Inc. |
12,878 |
$ |
512,931 |
||||||||
Micron Technology, Inc.* |
70,208 |
966,062 |
|||||||||
Microsoft Corp. |
52,267 |
2,674,502 |
|||||||||
Mondelez International, Inc., Class A |
31,741 |
1,444,533 |
|||||||||
Morgan Stanley |
21,811 |
566,650 |
|||||||||
NextEra Energy, Inc. |
8,228 |
1,072,931 |
|||||||||
NIKE, Inc., Class B |
14,167 |
782,018 |
|||||||||
Norfolk Southern Corp. |
4,387 |
373,465 |
|||||||||
NVIDIA Corp. |
7,367 |
346,323 |
|||||||||
Oasis Petroleum, Inc.* |
64,678 |
604,092 |
|||||||||
ON Semiconductor Corp.* |
40,475 |
356,989 |
|||||||||
PDC Energy, Inc.* |
7,060 |
406,727 |
|||||||||
pdvWireless, Inc.*1 |
19,700 |
421,383 |
|||||||||
PepsiCo, Inc. |
15,921 |
1,686,671 |
|||||||||
Philip Morris International, Inc. |
14,828 |
1,508,304 |
|||||||||
Qorvo, Inc.* |
9,194 |
508,060 |
|||||||||
S&P Global, Inc. |
8,083 |
866,983 |
|||||||||
salesforce.com, Inc.* |
20,077 |
1,594,315 |
|||||||||
SBA Communications Corp., Class A* |
6,123 |
660,917 |
|||||||||
ServiceNow, Inc.* |
11,579 |
768,846 |
|||||||||
Sherwin-Williams Co. |
4,047 |
1,188,482 |
|||||||||
Silicon Laboratories, Inc.* |
9,238 |
450,260 |
|||||||||
Simon Property Group, Inc., REIT |
4,000 |
867,600 |
|||||||||
Skyworks Solutions, Inc. |
6,127 |
387,716 |
|||||||||
SM Energy Co. |
21,749 |
587,223 |
|||||||||
Starbucks Corp. |
23,895 |
1,364,882 |
|||||||||
Synchrony Financial* |
33,473 |
846,197 |
|||||||||
TG Therapeutics, Inc.*1 |
11,329 |
68,654 |
|||||||||
Time Warner, Inc. |
9,050 |
665,537 |
|||||||||
TJX Cos., Inc. |
18,954 |
1,463,817 |
|||||||||
T-Mobile US, Inc.* |
10,282 |
444,902 |
|||||||||
TransDigm Group, Inc.* |
3,153 |
831,415 |
|||||||||
TripAdvisor, Inc.* |
12,356 |
794,491 |
|||||||||
Under Armour, Inc., Class A*1 |
6,222 |
249,689 |
|||||||||
Under Armour, Inc., Class C* |
6,266 |
228,088 |
|||||||||
Union Pacific Corp. |
8,291 |
723,390 |
|||||||||
United Continental Holdings, Inc.* |
11,943 |
490,141 |
|||||||||
United Technologies Corp. |
9,341 |
957,919 |
|||||||||
UnitedHealth Group, Inc. |
5,520 |
779,424 |
|||||||||
US Bancorp |
10,643 |
429,232 |
|||||||||
Verisk Analytics, Inc.* |
11,340 |
919,447 |
|||||||||
Vertex Pharmaceuticals, Inc.* |
8,730 |
750,955 |
|||||||||
Visa, Inc., Class A |
22,639 |
1,679,135 |
|||||||||
VMware, Inc., Class A*1 |
17,836 |
1,020,576 |
|||||||||
Walgreens Boots Alliance, Inc. |
6,844 |
569,900 |
|||||||||
Walt Disney Co. |
10,925 |
1,068,683 |
|||||||||
Western Digital Corp. |
10,801 |
510,455 |
|||||||||
Yum! Brands, Inc. |
15,064 |
1,249,107 |
Shares |
Value |
||||||||||
Zimmer Biomet Holdings, Inc. |
6,560 |
$ |
789,693 |
||||||||
Total United States common stocks |
91,516,458 |
||||||||||
Total common stocks (cost $187,208,519) |
184,798,228 | ||||||||||
Face amount |
|||||||||||
Bonds: 11.30% |
|||||||||||
US government obligations: 6.05% |
|||||||||||
US Treasury Bonds, 2.500%, due 02/15/461 |
$ |
1,250,000 |
1,302,784 |
||||||||
2.750%, due 11/15/42 |
885,000 |
974,365 |
|||||||||
2.875%, due 05/15/43 |
565,000 |
635,757 |
|||||||||
2.875%, due 08/15/45 |
50,000 |
56,160 |
|||||||||
3.000%, due 11/15/45 |
275,000 |
316,475 |
|||||||||
8.000%, due 11/15/21 |
645,000 |
878,334 |
|||||||||
US Treasury Inflation Indexed Bonds (TIPS), 0.750%, due 02/15/452 |
1,331,000 |
1,359,160 |
|||||||||
US Treasury Inflation Indexed Notes (TIPS), 0.125%, due 01/15/232 |
700,000 |
735,276 |
|||||||||
US Treasury Notes, 0.500%, due 11/30/16 |
3,293,000 |
3,294,772 |
|||||||||
0.750%, due 02/28/18 |
4,375,000 |
4,387,302 |
|||||||||
0.875%, due 10/15/181 |
510,000 |
512,730 |
|||||||||
1.000%, due 09/30/161 |
3,289,000 |
3,294,305 |
|||||||||
1.125%, due 01/15/19 |
1,040,000 |
1,051,822 |
|||||||||
1.250%, due 03/31/21 |
1,065,000 |
1,077,605 |
|||||||||
1.375%, due 10/31/20 |
780,000 |
794,229 |
|||||||||
1.625%, due 12/31/19 |
160,000 |
164,437 |
|||||||||
1.625%, due 02/15/26 |
650,000 |
657,719 |
|||||||||
2.000%, due 11/30/221 |
1,575,000 |
1,648,705 |
|||||||||
3.125%, due 04/30/171 |
895,000 |
914,246 |
|||||||||
Total US government obligations (cost $23,470,988) |
24,056,183 |
||||||||||
Non-US government obligations: 5.25% |
|||||||||||
Australia: 1.25% |
|||||||||||
Commonwealth of Australia, 4.500%, due 04/15/203 |
AUD |
2,320,000 |
1,916,580 |
||||||||
4.500%, due 04/21/333 |
1,248,000 |
1,203,632 |
|||||||||
5.500%, due 04/21/233 |
2,000,000 |
1,841,440 |
|||||||||
4,961,652 |
|||||||||||
Austria: 0.05% |
|||||||||||
Republic of Austria, 1.200%, due 10/20/253,4 |
EUR |
87,000 |
106,940 |
||||||||
3.150%, due 06/20/443,4 |
56,000 |
99,263 |
|||||||||
206,203 |
33
UBS Global Allocation Fund
Portfolio of investments
June 30, 2016
Face amount |
Value |
||||||||||
Bonds(Concluded) |
|||||||||||
Non-US government obligations(Concluded) |
|||||||||||
Belgium: 0.08% |
|||||||||||
Kingdom of Belgium, 3.750%, due 06/22/453 |
EUR |
161,000 |
$ |
306,870 |
|||||||
Canada: 0.07% |
|||||||||||
Government of Canada, 2.250%, due 06/01/25 |
CAD |
206,000 |
177,124 |
||||||||
2.750%, due 12/01/64 |
82,000 |
85,778 |
|||||||||
262,902 |
|||||||||||
Finland: 0.02% |
|||||||||||
Republic of Finland, 0.500%, due 04/15/263,4 |
EUR |
85,000 |
97,488 |
||||||||
France: 0.27% |
|||||||||||
France Government Bond OAT, 3.250%, due 05/25/453 |
610,000 |
1,073,734 |
|||||||||
Ireland: 0.14% |
|||||||||||
Republic of Ireland, 2.000%, due 02/18/453 |
418,000 |
545,406 |
|||||||||
Italy: 0.66% |
|||||||||||
Buoni Poliennali Del Tesoro, 2.500%, due 12/01/24 |
142,000 |
175,353 |
|||||||||
2.550%, due 09/15/412,3 |
701,530 |
1,004,046 |
|||||||||
4.250%, due 02/01/193 |
720,000 |
887,016 |
|||||||||
4.750%, due 09/01/443,4 |
325,000 |
543,008 |
|||||||||
2,609,423 |
|||||||||||
Japan: 0.74% |
|||||||||||
Japan Government Twenty Year Bond, 0.400%, due 03/20/36 |
JPY |
285,000,000 |
2,939,696 |
||||||||
Netherlands: 0.06% |
|||||||||||
Kingdom of the Netherlands, 2.750%, due 01/15/473,4 |
EUR |
139,000 |
252,331 |
||||||||
New Zealand: 1.32% |
|||||||||||
New Zealand Government Bond, 2.000%, due 09/20/252,3 |
NZD |
3,187,328 |
2,452,744 |
||||||||
3.000%, due 04/15/203 |
1,600,000 |
1,181,674 |
|||||||||
4.500%, due 04/15/273 |
282,000 |
241,934 |
|||||||||
5.500%, due 04/15/233 |
1,610,000 |
1,396,961 |
|||||||||
5,273,313 |
Face amount |
Value |
||||||||||
Spain: 0.59% |
|||||||||||
Kingdom of Spain, 3.300%, due 07/30/16 |
EUR |
110,000 |
$ |
122,432 |
|||||||
3.750%, due 10/31/18 |
920,000 |
1,113,317 |
|||||||||
4.800%, due 01/31/243,4 |
780,000 |
1,117,881 |
|||||||||
2,353,630 |
|||||||||||
Total Non-US government obligations (cost $20,057,252) |
20,882,648 |
||||||||||
Total bonds (cost $43,528,240) |
44,938,831 |
||||||||||
Shares |
|||||||||||
Investment companies: 26.00% |
|||||||||||
iShares Edge MSCI Minimum Volatility Emerging Markets ETF |
336,000 |
17,334,240 |
|||||||||
iShares JP Morgan USD Emerging Markets Bond ETF1 |
160,100 |
18,435,515 |
|||||||||
UBS Global Corporate Bond Relationship Fund*5 |
2,853,369 |
40,307,836 |
|||||||||
UBS-HALO Emerging Markets Equity Relationship Fund*5 |
807,248 |
27,386,277 |
|||||||||
Total investment companies (cost $102,473,245) |
103,463,868 |
||||||||||
Short-term investment: 13.14% |
|||||||||||
Investment company: 13.14% |
|||||||||||
JPMorgan U.S. Government Money Market Fund, Capital Shares (cost $52,265,201) |
52,265,201 |
52,265,201 |
|||||||||
Number of contracts |
|||||||||||
Options purchased: 0.09% |
|||||||||||
Call options: 0.09% |
|||||||||||
EURO STOXX 50 Index, strike @ EUR 3,150.00, expires September 2016 |
891 |
188,859 |
|||||||||
iShares MSCI Emerging Markets ETF, strike @ USD 36.50, expires September 2016 |
3,542 |
159,390 |
|||||||||
Total options purchased (cost $901,580) |
348,249 |
34
UBS Global Allocation Fund
Portfolio of investments
June 30, 2016
Shares |
Value |
||||||||||
Investment of cash collateral from securities loaned: 6.27% |
|||||||||||
JPMorgan U.S. Government Money Market Fund, Capital Shares (cost $24,965,617) |
24,965,617 |
$ |
24,965,617 |
||||||||
Total investments: 103.25% (cost $411,342,402) |
410,779,994 | ||||||||||
Liabilities, in excess of cash and other assets: (3.25)% |
(12,905,902 |
) |
|||||||||
Net assets: 100.00% |
$ |
397,874,092 |
Notes to portfolio of investments
Aggregate cost for federal income tax purposes was $416,499,001; and net unrealized depreciation consisted of:
Gross unrealized appreciation |
$ |
18,643,412 |
|||||
Gross unrealized depreciation |
(24,362,419 |
) |
|||||
Net unrealized depreciation of investments |
$ |
(5,719,007 |
) |
For a listing of defined portfolio acronyms, counterparty abbreviations and currency abbreviations that are used throughout the Portfolio of investments as well as the tables that follow, please refer to page 110. Portfolio footnotes begin on page 38.
Forward foreign currency contracts
Counterparty |
Contracts to deliver |
In exchange for |
Maturity date |
Unrealized appreciation/ (depreciation) |
|||||||||||||||
GSI |
EUR |
2,240,000 |
USD |
2,554,926 |
09/20/16 |
$ |
61,911 |
||||||||||||
GSI |
RUB |
99,409,826 |
USD |
1,485,392 |
09/20/16 |
(37,265 |
) |
||||||||||||
GSI |
TWD |
274,800,000 |
USD |
8,457,987 |
09/20/16 |
(75,544 |
) |
||||||||||||
GSI |
USD |
5,325,588 |
INR |
362,140,000 |
09/20/16 |
(32,925 |
) |
||||||||||||
JPMCB |
AUD |
4,165,000 |
USD |
3,072,279 |
09/20/16 |
(25,113 |
) |
||||||||||||
JPMCB |
GBP |
1,770,000 |
USD |
2,504,382 |
09/20/16 |
146,278 |
|||||||||||||
JPMCB |
ILS |
6,120,000 |
USD |
1,585,246 |
09/20/16 |
(3,441 |
) |
||||||||||||
JPMCB |
JPY |
335,800,000 |
USD |
3,179,747 |
09/20/16 |
(80,836 |
) |
||||||||||||
JPMCB |
NOK |
10,910,000 |
USD |
1,321,372 |
09/20/16 |
17,912 |
|||||||||||||
JPMCB |
USD |
4,300,838 |
EUR |
3,900,000 |
09/20/16 |
39,679 |
|||||||||||||
JPMCB |
USD |
3,817,051 |
EUR |
3,370,000 |
09/20/16 |
(66,399 |
) |
||||||||||||
JPMCB |
USD |
3,073,257 |
HKD |
23,835,000 |
09/20/16 |
1,968 |
|||||||||||||
JPMCB |
USD |
1,109,892 |
PLN |
4,335,000 |
09/20/16 |
(13,085 |
) |
||||||||||||
JPMCB |
USD |
1,699,533 |
SGD |
2,310,000 |
09/20/16 |
13,850 |
|||||||||||||
SSB |
CHF |
13,000,000 |
USD |
13,534,716 |
09/20/16 |
161,333 |
|||||||||||||
SSB |
EUR |
8,050,000 |
USD |
9,104,381 |
09/20/16 |
145,110 |
|||||||||||||
WBC |
NZD |
29,440,000 |
USD |
20,681,276 |
09/20/16 |
(255,140 |
) |
||||||||||||
Net unrealized depreciation on forward foreign currency contracts |
$ |
(1,707 |
) |
35
UBS Global Allocation Fund
Portfolio of investments
June 30, 2016
Futures contracts
Expiration date |
Cost/ (proceeds) |
Value |
Unrealized appreciation/ (depreciation) |
||||||||||||||||
US Treasury futures buy contracts: |
|||||||||||||||||||
US Ultra Bond, 40 contracts (USD) |
September 2016 |
$ |
6,970,422 |
$ |
7,455,000 |
$ |
484,578 |
||||||||||||
10 Year US Treasury Notes, 551 contracts (USD) |
September 2016 |
71,384,124 |
73,274,391 |
1,890,267 |
|||||||||||||||
US Treasury futures sell contracts: |
|||||||||||||||||||
2 Year US Treasury Notes, 375 contracts (USD) |
September 2016 |
(81,735,180 |
) |
(82,248,047 |
) |
(512,867 |
) |
||||||||||||
5 Year US Treasury Notes, 142 contracts (USD) |
September 2016 |
(17,030,350 |
) |
(17,347,297 |
) |
(316,947 |
) |
||||||||||||
Index futures buy contracts: |
|||||||||||||||||||
EURO STOXX 50 Index, 560 contracts (EUR) |
September 2016 |
17,479,421 |
17,800,708 |
321,287 |
|||||||||||||||
Hong Kong Hang Seng China Enterprise Index, 237 contracts (HKD) |
July 2016 |
12,621,127 |
13,440,140 |
819,013 |
|||||||||||||||
TOPIX Index, 253 contracts (JPY) |
September 2016 |
32,122,691 |
30,932,769 |
(1,189,922 |
) |
||||||||||||||
Index futures sell contracts: |
|||||||||||||||||||
E-mini S&P 500 Index, 207 contracts (USD) |
September 2016 |
(21,602,572 |
) |
(21,633,570 |
) |
(30,998 |
) |
||||||||||||
FTSE 100 Index, 179 contracts (GBP) |
September 2016 |
(14,071,676 |
) |
(15,396,961 |
) |
(1,325,285 |
) |
||||||||||||
FTSE China A50 Index, 1,392 contracts (USD) |
July 2016 |
(12,572,692 |
) |
(12,968,790 |
) |
(396,098 |
) |
||||||||||||
Mini MSCI Emerging Markets Index, 581 contracts (USD) |
September 2016 |
(23,514,232 |
) |
(24,248,035 |
) |
(733,803 |
) |
||||||||||||
NIKKEI 225 Index, 227 contracts (JPY) |
September 2016 |
(35,829,366 |
) |
(34,715,927 |
) |
1,113,439 |
|||||||||||||
Interest rate futures buy contracts: |
|||||||||||||||||||
Australian Government 3 Year Bond, 193 contracts (AUD) |
September 2016 |
16,267,433 |
16,291,650 |
24,217 |
|||||||||||||||
Canadian Government 10 Year Bond, 372 contracts (CAD) |
September 2016 |
41,622,239 |
42,626,170 |
1,003,931 |
|||||||||||||||
Euro Schatz, 33 contracts (EUR) |
September 2016 |
4,095,634 |
4,104,016 |
8,382 |
|||||||||||||||
Interest rate futures sell contracts: |
|||||||||||||||||||
Euro-BTP, 132 contracts (EUR) |
September 2016 |
(20,707,875 |
) |
(20,890,511 |
) |
(182,636 |
) |
||||||||||||
Long Gilt, 161 contracts (GBP) |
September 2016 |
(26,217,743 |
) |
(27,539,422 |
) |
(1,321,679 |
) |
||||||||||||
Net unrealized depreciation on futures contracts |
$ |
(345,121 |
) |
Centrally cleared credit default swaps on credit indicessell protection6
Referenced index7 |
Notional amount |
Termination date |
Payments received by the Fund8 |
Value |
Unrealized appreciation |
Credit spread9 |
|||||||||||||||||||||
CDX.NA.HY. Series 25 Index |
USD |
21,000,000 |
12/20/20 |
5.000 |
% |
$ |
878,955 |
$ |
905,441 |
3.951 |
% |
Options written
Call options |
Expiration date |
Premiums received |
Value |
||||||||||||
EURO STOXX 50 Index, 891 contracts, strike @ EUR 3,350.00 |
September 2016 |
$ |
171,748 |
$ |
(24,720 |
) |
36
UBS Global Allocation Fund
Portfolio of investments
June 30, 2016
Written options activity for the year ended June 30, 2016 was as follows:
Number of contracts |
Premiums received |
||||||||||
Options outstanding at June 30, 2015 |
|
$ |
|
||||||||
Options written |
891 |
171,748 |
|||||||||
Options terminated in closing purchase transactions |
|
|
|||||||||
Options expired prior to exercise |
|
|
|||||||||
Options outstanding at June 30, 2016 |
891 |
$ |
171,748 |
The following is a summary of the fair valuations according to the inputs used as of June 30, 2016 in valuing the Fund's investments:
Description |
Investments measured at fair value using the net asset value per share (or its equivalent) practical expedient at 6/30/2016a |
Unadjusted quoted prices in active markets for identical investments (Level 1) |
Other significant observable inputs (Level 2) |
Unobservable inputs (Level 3) |
Total |
||||||||||||||||||
Assets |
|||||||||||||||||||||||
Common stocks |
$ |
|
$ |
105,597,158 |
$ |
79,201,070 |
$ |
|
$ |
184,798,228 |
|||||||||||||
US government obligations |
|
|
24,056,183 |
|
24,056,183 |
||||||||||||||||||
Non-US government obligations |
|
|
20,882,648 |
|
20,882,648 |
||||||||||||||||||
Investment companies |
67,694,113 |
35,769,755 |
|
|
103,463,868 |
||||||||||||||||||
Short-term investment |
|
|
52,265,201 |
|
52,265,201 |
||||||||||||||||||
Options purchased |
|
348,249 |
|
|
348,249 |
||||||||||||||||||
Investment of cash collateral from securities loaned |
|
|
24,965,617 |
|
24,965,617 |
||||||||||||||||||
Forward foreign currency contracts |
|
|
588,041 |
|
588,041 |
||||||||||||||||||
Futures contracts |
|
3,411,375 |
2,253,739 |
|
5,665,114 |
||||||||||||||||||
Swap agreements, at value |
|
|
878,955 |
|
878,955 |
||||||||||||||||||
Total |
$ |
67,694,113 |
$ |
145,126,537 |
$ |
205,091,454 |
$ |
|
$ |
417,912,104 |
|||||||||||||
Liabilities |
|||||||||||||||||||||||
Forward foreign currency contracts |
$ |
|
$ |
|
$ |
(589,748 |
) |
$ |
|
$ |
(589,748 |
) |
|||||||||||
Futures contracts |
|
(3,098,930 |
) |
(2,911,305 |
) |
|
(6,010,235 |
) |
|||||||||||||||
Options written |
|
(24,720 |
) |
|
|
(24,720 |
) |
||||||||||||||||
Total |
$ |
|
$ |
(3,123,650 |
) |
$ |
($3,501,053 |
) |
$ |
|
$ |
(6,624,703 |
) |
a In accordance with Accounting Standards Update No. 2015-07, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Portfolio of investments.
At June 30, 2016, $81,454,809 of foreign investments, including futures contracts, and $(2,911,305) of futures contracts were classified within Level 2 of the fair value hierarchy pursuant to the Fund's fair valuation procedures for foreign portfolio holdings.
37
UBS Global Allocation Fund
Portfolio of investments
June 30, 2016
Portfolio footnotes
* Non-income producing security.
1 Security, or portion thereof, was on loan at June 30, 2016.
2 Debt security whose principal and/or interest payments are adjusted for inflation, unlike debt securities that make fixed principal and interest payments. The interest rate paid by the securities is fixed, while the principal value rises or falls based on changes in an index. Thus, if inflation occurs, the principal and interest payments on the securities are adjusted accordingly to protect investors from inflationary loss. During a deflationary period, the principal and interest payments decrease, although the securities' principal amounts will not drop below their face amounts at maturity. In exchange for the inflation protection, the securities generally pay lower interest rates than typical government securities from the issuer's country. Only if inflation occurs will securities offer a higher real yield than a conventional security of the same maturity.
3 Security was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At June 30, 2016, these securities amounted to $16,268,948 or 4.09% of net assets.
4 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 June 30, 2016, the value of these securities amounted to $2,216,911 or 0.56% of net assets.
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 06/30/15 |
Purchases during the year ended 06/30/16 |
Sales during the year ended 06/30/16 |
Net realized gain during the year ended 06/30/16 |
Change in net unrealized appreciation/ (depreciation) during the year ended 06/30/16 |
Value 06/30/16 |
Net income earned from affiliate for the year ended 06/30/16 |
||||||||||||||||||||||||
UBS Cash Management Prime Relationship Fund |
$ |
92,078,493 |
$ |
100,024,288 |
$ |
192,102,781 |
$ |
|
$ |
|
$ |
|
$ |
32,095 |
|||||||||||||||||
UBS Private Money Market Fund LLCb |
23,131,258 |
384,316,423 |
407,447,681 |
|
|
|
20,934 |
||||||||||||||||||||||||
UBS-HALO Emerging Markets Equity Relationship Fundc |
30,420,559 |
|
|
|
(3,034,282 |
) |
27,386,277 |
|
|||||||||||||||||||||||
UBS Global Corporate Bond Relationship Fund |
51,629,911 |
|
14,000,000 |
937,743 |
1,740,182 |
40,307,836 |
|
||||||||||||||||||||||||
$ |
197,260,221 |
$ |
484,340,711 |
$ |
613,550,462 |
$ |
937,743 |
$ |
(1,294,100 |
) |
$ |
67,694,113 |
$ |
53,029 |
b The Advisor earned a management fee from this affiliated fund. Please see the Notes to financial statements for further information.
c Formerly known as UBS Emerging Markets Equity Relationship Fund
6 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 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 agreement less the recovery value of the underlying securities comprising the referenced index.
7 Payments to the counterparty will be made upon the occurrence of bankruptcy and/or restructuring event with respect to the referenced index.
8 Payments received are based on the notional amount.
9 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. Credit spreads are unaudited.
See accompanying notes to financial statements.
38
UBS International Sustainable Equity Fund (formerly, UBS Global Sustainable Equity Fund)
Portfolio performance (unaudited)
For the 12 months ended June 30, 2016, Class A shares of UBS International Sustainable Equity Fund (the "Fund") returned -14.07% (Class A shares returned -18.79% after the deduction of the maximum sales charge), while Class P shares returned -13.83%. The Fund's benchmark, the MSCI World Free ex USA Index (net) (the "Index"), returned -9.84%. The Fund's previous benchmark, the MSCI World Free Index (net) returned -2.78%. (Class P shares have lower expenses than other share classes in the series. Returns for all share classes over various time periods are shown on page 42; 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 index returns do not reflect the deduction of fees and expenses.)
The Fund posted a negative absolute return and underperformed its benchmark during the reporting period, primarily due to stock selection. Sector allocation was also a drag on results, albeit to a lesser extent.
Portfolio performance summary1
What worked
• Several individual stocks had a positive impact on performance.
• KDDI Corp., a Japanese telecommunications company, was the Fund's largest contributor to performance during the reporting period. (For additional details, see "Portfolio Highlights.")
• Unilever NV CVA, a British-Dutch multinational consumer goods company specializing in nutrition, hygiene and personal care products, was the next largest contributor to performance. Investor sentiment for stable, defensive companies such as Unilever helped its share price. (For additional details, see "Portfolio Highlights.")
• Carl Zeiss Meditec AG is a medical technology company offering products and solutions for the diagnosis and treatment of eye diseases, as well as systems for cataract, retinal and refractive surgery. Their systems and implants are used by hospitals and ophthalmologists in the field of ophthalmology and microsurgery. Its main products are diagnostic tools for eye diseases and ophthalmologic surgery microscopes, as well as eye lasers and intraocular lenses (IOLs) for the correction of vision defects. Better results in microsurgery and opthalmological systems earlier this year helped drive its results. Growing demand for refractive lasers in international markets and expansion of intraocular lenses for the correction of vision in the US supported better growth prospects for the company.
• Shares of Ono Pharmaceutical Co., a Japanese pharmaceutical company, rallied as Opdivo, the first approved PD-1 inhibitor, gained traction in Japan and has been licensed outside of the country. Over the fiscal year, Opdivo continued to gain breakthrough therapy status for treating various types of cancer. Ono Pharmaceutical was sold during the reporting period as a result of pricing and regulatory uncertainty in the Japanese market.
• From a sector allocation perspective, an average overweight to information technology contributed to the Fund's relative performance. An underweight to financials was also beneficial for results.
1 For a detailed commentary on the market environment in general during the reporting period, see pages 3-4.
39
UBS International Sustainable Equity Fund (formerly, UBS Global Sustainable Equity Fund)
What didn't work:
• Stock selection drove the Fund's underperformance during the reporting period.
• Next PLC, a British multinational clothing, footwear and home products retailer, was the largest detractor from the Fund's performance during the reporting period. (For additional details, see "Portfolio Highlights.")
• Intesa Sanpaolo SpA is the largest domestic bank in Italy, with a strong brand and capital position in the Italian market. The stock underperformed during the reporting period given the macroeconomic issues in Europe and specific issues related to the Italian banking system, which remains undercapitalized. As loan losses have increased, weaker Italian banks are suffering deposit outflows which created anxiety around potential contagion. Intesa Sanpaolo is experiencing capital inflows, as it is viewed as a higher quality bank (well capitalized with lower loan losses) and should emerge stronger as the Italian banking system goes through a difficult period. With the recent pullback in the stock, the company remains attractively valued for investors with a multi-year time horizon.
• Sumitomo Mitsui Financial Group, Inc. is a Japanese bank holding/financial services company. Its shares performed poorly given several macro headwinds, including weak Japanese economic growth, negative interest rates and rising costs. As a result of the weak economy, the Bank of Japan continues to keep interest rates at negative levels, which is hurting the company's profits. With the pace of rate cuts likely to subside, a renewed focus on improving capital and expense efficiency should provide support to the stock price near term.
• EasyJet is a low-cost UK-based airline carrier. Sentiment for the company weakened post-Brexit, given concerns over slower European growth, currency issues and less travel-related spending due to recent terrorist attacks. In our view, the company is well run and management will be disciplined as they reconfigure their fleet capacity plans during this difficult period. EasyJet is in the process of upgrading its fleet of aircraft to larger, more fuel efficient A320s, which has both financing and operational advantages.
• Sector allocation, overall, was negative for results during the reporting period. Underweights to consumer staples and utilities were the largest detractors from the Fund's relative performance.
Portfolio highlights
• KDDI Corp. provides a full range of telecommunication services, from fixed-line to cellular. The thesis for owning KDDI has centered on softening competition and improved operation/financial performance leading to margin recovery. Expectations have largely been met, as the competitive landscape has changed and all three Japanese telecommunication companies have turned their focus away from gaining market share to growing profits. KDDI's shares were further supported by a share buyback program that was announced in February 2016.
• Shares of consumer goods company Unilever NV CVA rallied sharply during the reporting period as it continues to execute well. In addition, Unilever benefited from strong investor demand for stable companies with attractive dividend yields, along with currency and commodity tailwinds. Investors are underestimating Unilever's potential for organic earnings growth, as 35% of revenues come from emerging markets where customers are moving up the income ladder, enabling increased frequency of Unilever products, new user acquisitions and users trading up in terms of brand. We also believe that Unilever will be able to improve its return on capital over time through capital allocation, which prioritizes segments with capacity to grow and earn returns that are higher than the company's current average.
40
UBS International Sustainable Equity Fund (formerly, UBS Global Sustainable Equity Fund)
• We sold the Fund's position in Next PLC during the reporting period. We had become concerned that a significant growth driver of company earnings in recent yearsnamely store credit saleswould continue to decline in the future due to new consumer legislation. While the company has a good franchise, the apparel marketplace in the UK is a difficult space to operate in and Brexit is going to make it even more challenging for consumer-facing businesses.
• Banco Bilbao Vizcaya Argentaria SA is a Spanish banking group that operates in Europe, Latin America, the US, China and Turkey. Its shares fell sharply given the macroeconomic and geopolitical concerns in many of the regions it operates. As a result, loan losses have risen and loan growth has weakened, as asset quality in Spain and Turkey have become an issue. We continue to maintain a modest position in the company, as we believe it is structurally well-positioned in longer term, higher growth markets with a very strong brand. The stock remains attractively valued for investors with a long time horizon and, with a modest improvement in the macroeconomic and political environment, we expect losses and profitability to improve accordingly.
This letter is intended to assist shareholders in understanding how the Fund performed during the 12 months ended June 30, 2016. The views and opinions in the letter were current as of August 15, 2016. 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/am-us.
41
UBS International Sustainable Equity Fund (formerly, UBS Global Sustainable Equity Fund)
Average annual total returns for periods ended 06/30/16 (unaudited)
1 year |
5 years |
10 years |
|||||||||||||
Before deducting maximum sales charge |
|||||||||||||||
Class A1 |
(14.07 |
)% |
1.62 |
% |
1.73 |
% |
|||||||||
Class C2 |
(14.72 |
) |
0.87 |
0.97 |
|||||||||||
Class P3 |
(13.83 |
) |
1.87 |
1.96 |
|||||||||||
After deducting maximum sales charge |
|||||||||||||||
Class A1 |
(18.79 |
)% |
0.47 |
% |
1.16 |
% |
|||||||||
Class C2 |
(15.57 |
) |
0.87 |
0.97 |
|||||||||||
MSCI World Free ex USA Index (net)4,6 |
(9.84 |
)% |
1.23 |
% |
1.63 |
% |
|||||||||
MSCI World Free Index (net)5,6 |
(2.78 |
) |
6.63 |
4.43 |
The annualized gross and net expense ratios, respectively, for each class of shares as in the October 28, 2015 prospectuses were as follows: Class A2.47% and 1.25%; Class C3.23% and 2.00%; Class P2.21% 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 Asset Management (Americas) Inc. (formerly, UBS Global Asset Management (Americas) Inc.), the Fund's investment advisor ("UBS 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 C shares and 1.00% for Class P shares. This fee waiver and expense arrangement may only be amended or terminated by shareholders.
1 Maximum sales charge for Class A shares is 5.5%. Class A shares bear ongoing 12b-1 service fees.
2 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 distribution and service fees.
3 Class P shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees, but Class P shares held through advisory programs may be subject to a program fee, which, if included, would have reduced performance.
4 The MSCI World 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. Net total return indices reinvest dividends after the deduction of withholding taxes, using a tax rate applicable to non-resident institutional investors who do not benefit from double taxation treaties. 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.
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. Net total return indices reinvest dividends after the deduction of withholding taxes, using a tax rate applicable to non-resident institutional investors who do not benefit from double taxation treaties. 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 Effective October 28, 2015, the MSCI World ex USA Index (net) replaced the MSCI World Free Index (net) as the Fund's primary benchmark index because it more closely aligns with the Fund's investment strategy.
Prior to February 17, 2015, if an investor sold or exchanged shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged was deducted at the time of the transaction, except as noted otherwise in the prospectus. For sales or exchanges taking place on or after February 17, 2015 but prior to August 3, 2015, there was a reduction in the redemption holding period from 90 days to 30 days. Effective August 3, 2015, the 1.00% redemption fee imposed on sales or exchanges of any class of shares of the funds made during the holding periods specified in the prospectus was eliminated. Please refer to the prospectus for further information.
Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit www.ubs.com/us-mutualfundperformance.
42
UBS International Sustainable Equity Fund (formerly, UBS Global Sustainable Equity Fund)
Illustration of an assumed investment of $10,000 in Class A shares (adjusted for 5.5% maximum sales charge) and $5,000,000 in Class P shares (unaudited)
The following two graphs depict the performance of UBS International Sustainable Equity Fund Class A and Class P shares versus the MSCI World Free ex USA Index (net) and MSCI World Free Index (net) over the 10 years ended June 30, 2016. The performance of Class C shares will vary based upon the different class specific expenses and sales charges. The performance provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Past performance is no guarantee of future results. Share price and returns will vary with market conditions; investors may realize a gain or loss upon redemption.
Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit www.ubs.com/us-mutualfundperformance.
43
UBS International Sustainable Equity Fund (formerly, UBS Global Sustainable Equity Fund)
Top ten equity holdings (unaudited)
As of June 30, 2016
Percentage of net assets |
|||||||
Statoil ASA |
3.6 |
% |
|||||
Zurich Insurance Group AG |
2.8 |
||||||
Mahindra & Mahindra Ltd. GDR |
2.8 |
||||||
Koninklijke DSM NV |
2.7 |
||||||
KDDI Corp. |
2.7 |
||||||
Toyota Motor Corp. |
2.6 |
||||||
Mirvac Group |
2.6 |
||||||
Weir Group PLC |
2.5 |
||||||
Santos Ltd. |
2.5 |
||||||
Unilever NV CVA |
2.3 |
||||||
Total |
27.1 |
% |
Top five issuer breakdown by country or territory of origin (unaudited)
As of June 30, 2016
Percentage of net assets |
|||||||
Japan |
18.6 |
% |
|||||
United Kingdom |
15.4 |
||||||
Germany |
8.3 |
||||||
Norway |
6.8 |
||||||
France |
5.7 |
||||||
Total |
54.8 |
% |
Industry diversification (unaudited)
As a percentage of net assets as of June 30, 2016
Common stocks |
|||||||
Airlines |
1.17 |
% |
|||||
Auto components |
0.98 |
||||||
Automobiles |
7.06 |
||||||
Banks |
9.52 |
||||||
Biotechnology |
1.85 |
||||||
Building products |
1.14 |
||||||
Chemicals |
7.13 |
||||||
Construction materials |
0.94 |
||||||
Diversified telecommunication services |
1.18 |
||||||
Electrical equipment |
1.35 |
||||||
Electronic equipment, instruments & components |
1.14 |
||||||
Food products |
1.27 |
||||||
Health care equipment & supplies |
3.43 |
||||||
Household durables |
0.93 |
||||||
Household products |
2.87 |
||||||
Insurance |
8.55 |
||||||
IT services |
1.73 |
||||||
Machinery |
5.15 |
||||||
Marine |
2.09 |
||||||
Media |
1.49 |
||||||
Metals & mining |
2.03 |
||||||
Oil, gas & consumable fuels |
6.06 |
||||||
Personal products |
3.63 |
||||||
Pharmaceuticals |
7.05 |
||||||
Professional services |
1.45 |
||||||
Real estate investment trust (REIT) |
2.63 |
||||||
Real estate management & development |
1.37 |
||||||
Semiconductors & semiconductor equipment |
4.90 |
||||||
Software |
1.66 |
||||||
Technology hardware, storage & peripherals |
2.08 |
||||||
Trading companies & distributors |
1.49 |
||||||
Wireless telecommunication services |
2.65 |
||||||
Total common stocks |
97.97 |
% |
|||||
Short-term investment |
1.95 |
||||||
Investment of cash collateral from securities loaned |
1.85 |
||||||
Total investments |
101.77 |
% |
|||||
Liabilities, in excess of cash and other assets |
(1.77 |
) |
|||||
Net assets |
100.00 |
% |
44
UBS International Sustainable Equity Fund (formerly, UBS Global Sustainable Equity Fund)
Portfolio of investments
June 30, 2016
Shares |
Value |
||||||||||
Common stocks: 97.97% |
|||||||||||
Australia: 5.09% |
|||||||||||
Mirvac Group, REIT |
412,648 |
$ |
627,574 |
||||||||
Santos Ltd. |
165,052 |
584,249 |
|||||||||
Total Australia common stocks |
1,211,823 |
||||||||||
China: 4.09% |
|||||||||||
Industrial & Commercial Bank of China Ltd., H Shares |
807,000 |
450,039 |
|||||||||
Ping An Insurance Group Co. of China Ltd., H Shares |
118,500 |
525,035 |
|||||||||
Total China common stocks |
975,074 |
||||||||||
Denmark: 3.15% |
|||||||||||
AP Moeller - Maersk A/S, Class B |
381 |
497,645 |
|||||||||
Novo Nordisk A/S, Class B |
4,705 |
253,378 |
|||||||||
Total Denmark common stocks |
751,023 |
||||||||||
France: 5.66% |
|||||||||||
AXA SA |
10,011 |
197,944 |
|||||||||
Ingenico Group SA |
2,352 |
272,608 |
|||||||||
Sanofi |
3,900 |
324,023 |
|||||||||
Schneider Electric SE |
5,502 |
320,990 |
|||||||||
Valeo SA |
5,253 |
233,202 |
|||||||||
Total France common stocks |
1,348,767 |
||||||||||
Germany: 8.33% |
|||||||||||
Bayerische Motoren Werke AG |
5,379 |
391,457 |
|||||||||
Carl Zeiss Meditec AG |
11,146 |
452,625 |
|||||||||
Infineon Technologies AG |
20,316 |
294,103 |
|||||||||
Jungheinrich AG |
4,600 |
138,453 |
|||||||||
Merck KGaA |
3,070 |
312,044 |
|||||||||
SAP SE |
5,282 |
396,705 |
|||||||||
Total Germany common stocks |
1,985,387 |
||||||||||
Hong Kong: 1.37% |
|||||||||||
Sun Hung Kai Properties Ltd. |
27,000 |
325,860 |
|||||||||
India: 5.37% |
|||||||||||
ICICI Bank Ltd. ADR |
29,100 |
208,938 |
|||||||||
Infosys Ltd. ADR |
23,100 |
412,335 |
|||||||||
Mahindra & Mahindra Ltd. GDR |
30,868 |
657,514 |
|||||||||
Total India common stocks |
1,278,787 |
||||||||||
Indonesia: 0.95% |
|||||||||||
Indocement Tunggal Prakarsa Tbk PT |
175,100 |
225,185 |
|||||||||
Ireland: 1.84% |
|||||||||||
Shire PLC |
7,113 |
439,601 |
|||||||||
Italy: 1.53% |
|||||||||||
Intesa Sanpaolo SpA |
191,764 |
365,255 |
Shares |
Value |
||||||||||
Japan: 18.60% |
|||||||||||
Astellas Pharma, Inc. |
18,300 |
$ |
286,987 |
||||||||
Canon, Inc.1 |
17,400 |
496,774 |
|||||||||
Kao Corp. |
5,300 |
308,683 |
|||||||||
KDDI Corp. |
20,800 |
632,523 |
|||||||||
Kubota Corp. |
18,300 |
247,513 |
|||||||||
Olympus Corp. |
9,800 |
365,948 |
|||||||||
Panasonic Corp. |
25,800 |
221,971 |
|||||||||
Shin-Etsu Chemical Co., Ltd. |
4,500 |
263,648 |
|||||||||
Sumitomo Mitsui Financial Group, Inc. |
15,200 |
438,901 |
|||||||||
THK Co., Ltd. |
14,500 |
247,144 |
|||||||||
Toyota Motor Corp. |
12,800 |
631,021 |
|||||||||
Unicharm Corp. |
13,000 |
292,079 |
|||||||||
Total Japan common stocks |
4,433,192 |
||||||||||
Netherlands: 5.26% |
|||||||||||
ASML Holding NV |
2,789 |
274,544 |
|||||||||
Koninklijke DSM NV |
10,968 |
632,749 |
|||||||||
NXP Semiconductors NV* |
4,410 |
345,479 |
|||||||||
Total Netherlands common stocks |
1,252,772 |
||||||||||
Norway: 6.81% |
|||||||||||
Norsk Hydro ASA |
132,270 |
484,218 |
|||||||||
Statoil ASA |
49,711 |
858,930 |
|||||||||
Telenor ASA |
16,951 |
280,590 |
|||||||||
Total Norway common stocks |
1,623,738 |
||||||||||
Spain: 3.10% |
|||||||||||
Banco Bilbao Vizcaya Argentaria SA |
66,776 |
382,590 |
|||||||||
Mediaset Espana Comunicacion SA |
31,560 |
356,269 |
|||||||||
Total Spain common stocks |
738,859 |
||||||||||
Sweden: 2.92% |
|||||||||||
Assa Abloy AB, Class B |
13,237 |
272,323 |
|||||||||
Nordea Bank AB |
49,989 |
424,089 |
|||||||||
Total Sweden common stocks |
696,412 |
||||||||||
Switzerland: 4.95% |
|||||||||||
Novartis AG |
2,520 |
207,997 |
|||||||||
Roche Holding AG |
1,123 |
296,337 |
|||||||||
Zurich Insurance Group AG* |
2,734 |
676,345 |
|||||||||
Total Switzerland common stocks |
1,180,679 |
||||||||||
Taiwan: 1.27% |
|||||||||||
Uni-President Enterprises Corp. |
153,000 |
302,182 |
|||||||||
United Kingdom: 15.35% |
|||||||||||
ARM Holdings PLC |
16,618 |
252,423 |
|||||||||
Ashtead Group PLC |
24,915 |
355,884 |
|||||||||
Aviva PLC |
49,726 |
262,120 |
|||||||||
Capita PLC |
26,737 |
344,520 |
|||||||||
Croda International PLC |
5,824 |
244,482 |
45
UBS International Sustainable Equity Fund (formerly, UBS Global Sustainable Equity Fund)
Portfolio of investments
June 30, 2016
Shares |
Value |
||||||||||
Common stocks(Concluded) |
|||||||||||
United Kingdom(Concluded) |
|||||||||||
easyJet PLC |
19,210 |
$ |
279,153 |
||||||||
Prudential PLC |
22,184 |
376,438 |
|||||||||
Reckitt Benckiser Group PLC |
3,905 |
391,561 |
|||||||||
Unilever NV CVA |
11,926 |
556,975 |
|||||||||
Weir Group PLC |
30,747 |
593,831 |
|||||||||
Total United Kingdom common stocks |
3,657,387 |
||||||||||
United States: 2.33% |
|||||||||||
LyondellBasell Industries NV, Class A |
7,463 |
555,396 |
|||||||||
Total common stocks (cost $24,927,269) |
23,347,379 |
Shares |
Value |
||||||||||
Short-term investment: 1.95% |
|||||||||||
Investment company: 1.95% |
|||||||||||
JPMorgan U.S. Government Money Market Fund, Capital Shares (cost $464,904) |
464,904 |
$ |
464,904 |
||||||||
Investment of cash collateral from securities loaned: 1.85% |
|||||||||||
JPMorgan U.S. Government Money Market Fund, Capital Shares (cost $440,742) |
440,742 |
440,742 |
|||||||||
Total investments: 101.77% (cost $25,832,915) |
24,253,025 |
||||||||||
Liabilities, in excess of cash and other assets: (1.77)% |
(420,665 |
) |
|||||||||
Net assets: 100.00% |
$ |
23,832,360 |
Notes to portfolio of investments
Aggregate cost for federal income tax purposes, was $26,085,623; and net unrealized depreciation consisted of:
Gross unrealized appreciation |
$ |
1,024,155 |
|||||
Gross unrealized depreciation |
(2,856,753 |
) |
|||||
Net unrealized depreciation of investments |
$ |
(1,832,598 |
) |
For a listing of defined portfolio acronyms, counterparty abbreviations and currency abbreviations that are used throughout the Portfolio of investments as well as the tables that follow, please refer to page 110. Portfolio footnotes begin on page 47.
The following is a summary of the fair valuations according to the inputs used as of June 30, 2016 in valuing the Fund's investments:
Description |
Investments measured at fair value using the net asset value per share (or its equivalent) practical 6/30/2016a |
Unadjusted quoted prices in active markets for expedient at (Level 1) |
Other significant identical investments (Level 2) |
Unobservable observable inputs (Level 3) |
inputs Total |
||||||||||||||||||
Assets |
|||||||||||||||||||||||
Common stocks |
$ |
|
$ |
1,522,148 |
$ |
21,825,231 |
$ |
|
$ |
23,347,379 |
|||||||||||||
Short-term investment |
|
|
464,904 |
|
464,904 |
||||||||||||||||||
Investment of cash collateral from securities loaned |
|
|
440,742 |
|
440,742 |
||||||||||||||||||
Total |
$ |
|
$ |
1,522,148 |
$ |
22,730,877 |
$ |
|
$ |
24,253,025 |
a In accordance with Accounting Standards Update No. 2015-07, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Portfolio of investments.
At June 30, 2016, $21,825,231 of foreign investments were classified within Level 2 of the fair value hierarchy pursuant to the Fund's fair valuation procedures for foreign portfolio holdings.
46
UBS International Sustainable Equity Fund (formerly, UBS Global Sustainable Equity Fund)
Portfolio of investments
June 30, 2016
Portfolio footnotes
* Non-income producing security.
1 Security, or portion thereof, was on loan at June 30, 2016.
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 06/30/15 |
Purchases during the year ended 06/30/16 |
Sales during the year ended 06/30/16 |
Value 06/30/16 |
Net income earned from affiliate for the year ended 06/30/16 |
||||||||||||||||||
UBS Cash Management Prime Relationship Fund |
$ |
608,651 |
$ |
8,378,569 |
$ |
8,987,220 |
$ |
|
$ |
165 |
|||||||||||||
UBS Private Money Market Fund LLCb |
785,656 |
12,349,761 |
13,135,417 |
|
648 |
||||||||||||||||||
$ |
1,394,307 |
$ |
20,728,330 |
$ |
22,122,637 |
$ |
|
$ |
813 |
b The Advisor earned a management fee from this affiliated fund. Please see the Notes to financial statements for further information.
See accompanying notes to financial statements.
47
UBS U.S. Large Cap Equity Fund
Portfolio performance (unaudited)
For the 12 months ended June 30, 2016, Class A shares of UBS U.S. Large Cap Equity Fund (the "Fund") returned -6.13% (Class A shares returned -11.28% after the deduction of the maximum sales charge), while Class P shares returned -5.91%. The Fund's benchmark, the Russell 1000 Index (the "Index"), returned 2.93% over the same time period. (Class P shares have lower expenses than other share classes of the Fund. Returns for all share classes over various time periods are shown on page 51; please note that the Fund's returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares, while index returns do not reflect the deduction of fees and expenses.)
The Fund underperformed the Index primarily due to stock selection.
Portfolio performance summary1
What worked:
• Digital Realty Trust made the largest positive contribution during the 12-month period. The real estate investment trust (REIT) has enjoyed improved return on invested capital and is well-placed to benefit from the growing worldwide demand for data centers. Digital Realty has aggressively strengthened its portfolio through new developments and acquisitions, particularly in the higher-margin overseas markets. In addition, the REIT should benefit from increased occupancy levels as older contracts expire and are replaced with higher-rent leases.
• Several health care stocks contributed positively to Fund performance.
Shares of Lexicon Pharmaceuticals, a biopharmaceutical company, traded higher after Lexicon inked a licensing and collaboration deal with Sanofi for its experimental drug developed for the treatment of type 1 and type 2 diabetes. This news followed Lexicon's announcement that another experimental drug met its primary endpoint in a pivotal late-stage trial as a potential treatment for cancer patients with carcinoid syndrome.
Heartware International was a top contributor during the reporting period. The company was purchased by Medtronic at a large premium to its stock price. The Heartware Ventricular Assist Device (HVAD) System offered great strategic value to a large established company in the cardiology space. We sold the stock at a large premium following the purchase offer from Medtronic.
• The Fund benefited from a slight overweight to the consumer staples sector, as well as successful stock selection within the sector.
Philip Morris posted strong returns as foreign currency exchange issues became less of a headwind and investors re-focused on the company's solid fundamentals. Philip Morris's underlying business continues to show strength, with the potential for additional upside following the launch of its new iQOS product, a smokeless cigarette that is being released in 20 global markets in 2016. (For details, see "Portfolio highlights.")
Other positive contributors in the staples sector included Mondelez International, PepsiCo and Walgreens. The Fund's position in this less-volatile sector serves as a complement to the higher-beta stocks that we hold elsewhere in the portfolio. (For details, see "Portfolio highlights.")
1 For a detailed commentary on the market environment in general during the reporting period, see pages 3-4.
48
UBS U.S. Large Cap Equity Fund
• The Fund's position in Amazon.com also made a positive contribution during the 12 months. The company continued to execute at the highest level both in retail and in the cloud. Amazon appears to be building a true barrier to entry in the retailing space. As the company gains an ever-larger share of retail spending, the ensuing network effect increases the value of Amazon's platform. We believe the company will be able to generate margins over the longer term.
What didn't work:
• As the health care sector struggled during the 12 months, our slight overweight and stock selection hindered Fund returns. The sector came under pressure from uncertainty about potential future regulation of prices, lowering the multiples for health care stocks.
Chimerix, Inc. was the largest stock detractor for the 12-month period. The development stage biotechnology company is working to advance an antiviral treatment for double-stranded DNA viruses. Its stock price plunged in the last week of December 2015 on news that a key Phase 3 trial did not meet its primary endpoint. Though our risk models had fully considered the possibility, it was a major setback for the stock. We sold out of the name.
Alnylam Pharmaceuticals detracted from relative performance as biotechnology stocks experienced an indiscriminate sell-off in the face of increasing risk aversion among investors. The company's Ribonucleic acid (RNA) interference (RNAi) technology has the potential to effectively silence disease-causing genes. While it is still in the early stages of development, there have been significant value-creating advances over the past two years. (For details, see "Portfolio highlights.")
Shares of Envision Healthcare Holdings traded lower during the reporting period. The healthcare company, which provides physician-led, outsourced medical services, executed poorly on new emergency department contracts. However, the issues appear to be contained and should be fixable over the next several quarters. In addition, we believe the stock was unfairly penalized by a broader sector-wide rotation away from companies that benefit from improving utilization.
• Certain individual stock positions made a negative contribution to Fund returns.
While Cobalt International Energy detracted during the 12 months, we believe the company is well-positioned from an asset value perspective. Investors are concerned about whether the company's sale of assets in Angola will take place. As oil prices stabilize, that sale should be de-risked. The company should be able to meet near-term capital plans even without the Angola sale.
United Continental Holdings experienced price weakness following the company's decision to deploy cash toward the purchase of additional airplanes at an attractive price. While investors were looking for a quicker return of cash to shareholders, the purchase made sound economic sense. We believe the company's and industry's focus on return on invested capital will reduce capacity problems going forward.
49
UBS U.S. Large Cap Equity Fund
Portfolio highlights
• Philip Morris is a leading player in the global cigarette and tobacco market. We believe the market underappreciates the persistence and predictability of the company's cash flows and its returns to shareholders. Philip Morris's regulatory and consumption risk is well-diversified across 180 markets around the globe. The company has proven its ability to accurately model demand for its products in spite of the complexities surrounding regulation, taxation and demographics.
• Mondelez International manufactures and markets snack food and beverages including cookies, crackers, chocolate, gum, candy, coffee, powdered beverages, and various cheese and grocery products. Cookies and chocolate are experiencing strong category growth in developing markets. We believe Mondelez is well-positioned to benefit from its geographic exposure and strong operations in the BRICS countries (Brazil, Russia, India, China and South Africa) and in next wave markets like Indonesia and the Middle East. In addition, we see potential for restructuring in the company's developed markets business, which represents an attractive opportunity to improve profit margins.
• PepsiCo is a worldwide food and beverage company with a product portfolio that includes more than 20 billion-dollar brands. Our research indicates that the market is mispricing the relative attractiveness of PepsiCo's Frito-Lay business in developed and developing countries, and we see potential for improved pricing in the carbonated soft drink category to offer further upside on the stock.
• Alnylam Pharmaceuticals is a biotechnology company developing a unique platform technology based on RNA interference (RNAi) science. We believe the value of Alnylam's platform technology will rise substantially as scientists continue to discover disease-causing genes at an increasing rate.
• The Walt Disney Company is a diversified international family entertainment and media enterprise. The company has five business segments: Media Networks, Parks & Resorts, Studio Entertainment, Consumer Products and Interactive Media. Disney has spent considerable capital on strategic acquisitions and projects. While new projects will continue, the level of spending should decline as the company shifts to harvesting returns from prior investments and returning cash to shareholders. In addition, Disney owns ESPN, the crown jewel in its content assets. According to our research, the network should weather any potential disruption to viewing patterns due to the immediacy of sports viewing. Finally, we like Disney's ability to refresh and reinvent content for new generations, a legacy dating back to the company's founding in the 1920s.
This letter is intended to assist shareholders in understanding how the Fund performed during the 12 months ended June 30, 2016. The views and opinions in the letter were current as of August 15, 2016. 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/am-us.
50
UBS U.S. Large Cap Equity Fund
Average annual total returns for periods ended 06/30/16 (unaudited)
1 year |
5 years |
10 years |
|||||||||||||
Before deducting maximum sales charge |
|||||||||||||||
Class A1 |
(6.13 |
)% |
9.97 |
% |
5.43 |
% |
|||||||||
Class C2 |
(6.82 |
) |
9.14 |
4.66 |
|||||||||||
Class P3 |
(5.91 |
) |
10.24 |
5.71 |
|||||||||||
After deducting maximum sales charge |
|||||||||||||||
Class A1 |
(11.28 |
)% |
8.73 |
% |
4.83 |
% |
|||||||||
Class C2 |
(7.75 |
) |
9.14 |
4.66 |
|||||||||||
Russell 1000 Index4 |
2.93 |
% |
11.88 |
% |
7.51 |
% |
The annualized gross and net expense ratios, respectively, for each class of shares as in the October 28, 2015 prospectuses, supplemented from time to time, were as follows: Class A1.56% and 0.95%; Class C2.31% and 1.70%; Class P1.07% 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 Asset Management (Americas) Inc. (formerly, UBS Global Asset Management (Americas) Inc.), the Fund's investment advisor ("UBS 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 period ending October 27, 2017, do not exceed 0.95% for Class A shares, 1.70% for Class C shares and 0.70% for Class P 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. The fee waiver/expense reimbursement agreement may be terminated by the Fund's Board of Trustees at any time and also will terminate automatically upon the expiration or termination of the Fund's advisory contract with the Advisor. Upon termination of the fee waiver/expense reimbursement agreement, however, the UBS AM (Americas)'s three year recoupment rights will survive.
1 Maximum sales charge for Class A shares is 5.5%. Class A shares bear ongoing 12b-1 service fees.
2 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 distribution and service fees.
3 Class P shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees, but Class P shares held through advisory programs may be subject to a program fee, which, if included, would have reduced performance.
4 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 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.
Prior to February 17, 2015, if an investor sold or exchanged shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged was deducted at the time of the transaction, except as noted otherwise in the prospectus. For sales or exchanges taking place on or after February 17, 2015 but prior to August 3, 2015, there was a reduction in the redemption holding period from 90 days to 30 days. Effective August 3, 2015, the 1.00% redemption fee imposed on sales or exchanges of any class of shares of the funds made during the holding periods specified in the prospectus was eliminated. Please refer to the prospectus for further information.
Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit www.ubs.com/us-mutualfundperformance.
51
UBS U.S. Large Cap Equity Fund
Illustration of an assumed investment of $10,000 in Class A shares (adjusted for 5.5% maximum sales charge) and $5,000,000 in Class P shares (unaudited)
The following two graphs depict the performance of UBS U.S. Large Cap Equity Fund Class A and Class P shares versus the Russell 1000 Index over the 10 years ended June 30, 2016. The performance of Class C shares will vary based upon the different class specific expenses and sales charges. The performance provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Past performance is no guarantee of future results. Share price and returns will vary with market conditions; investors may realize a gain or loss upon redemption.
Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit www.ubs.com/us-mutualfundperformance.
52
UBS U.S. Large Cap Equity Fund
Top ten equity holdings (unaudited)
As of June 30, 2016
Percentage of net assets |
|||||||
Philip Morris International, Inc. |
4.6 |
% |
|||||
PepsiCo, Inc. |
3.4 |
||||||
Mondelez International, Inc., Class A |
3.1 |
||||||
Walt Disney Co. |
2.6 |
||||||
Amazon.com, Inc. |
2.5 |
||||||
Aon PLC |
2.3 |
||||||
Union Pacific Corp. |
2.2 |
||||||
Simon Property Group, Inc. |
2.2 |
||||||
Facebook, Inc., Class A |
2.2 |
||||||
Walgreens Boots Alliance, Inc. |
2.0 |
||||||
Total |
27.1 |
% |
Industry diversification (unaudited)
As a percentage of net assets as of June 30, 2016
Common stocks |
|||||||
Aerospace & defense |
1.42 |
% |
|||||
Airlines |
1.30 |
||||||
Auto components |
1.17 |
||||||
Automobiles |
1.80 |
||||||
Banks |
4.10 |
||||||
Beverages |
3.38 |
||||||
Biotechnology |
3.44 |
||||||
Capital markets |
1.14 |
||||||
Chemicals |
1.47 |
||||||
Communications equipment |
0.62 |
||||||
Consumer finance |
1.64 |
||||||
Electronic equipment, instruments & components |
2.45 |
||||||
Energy equipment & services |
2.74 |
||||||
Food & staples retailing |
1.98 |
||||||
Food products |
3.14 |
||||||
Health care providers & services |
2.59 |
||||||
Hotels, restaurants & leisure |
1.66 |
||||||
Household durables |
1.25 |
||||||
Insurance |
6.03 |
||||||
Internet & catalog retail |
3.61 |
||||||
Internet software & services |
3.07 |
||||||
IT services |
1.96 |
||||||
Life sciences tools & services |
1.17 |
||||||
Machinery |
2.19 |
||||||
Media |
5.71 |
||||||
Oil, gas & consumable fuels |
4.93 |
||||||
Pharmaceuticals |
9.14 |
||||||
Real estate investment trust (REIT) |
3.82 |
||||||
Road & rail |
2.20 |
||||||
Semiconductors & semiconductor equipment |
8.03 |
||||||
Software |
2.77 |
||||||
Specialty retail |
1.00 |
||||||
Technology hardware, storage & peripherals |
1.35 |
||||||
Tobacco |
4.56 |
||||||
Wireless telecommunication services |
1.09 |
||||||
Total common stocks |
99.92 |
% |
|||||
Investment of cash collateral from securities loaned |
5.71 |
||||||
Total investments |
105.63 |
% |
|||||
Liabilities, in excess of cash and other assets |
(5.63 |
) |
|||||
Net assets |
100.00 |
% |
53
UBS U.S. Large Cap Equity Fund
Portfolio of investments
June 30, 2016
Shares |
Value |
||||||||||
Common stocks: 99.92% |
|||||||||||
Aerospace & defense: 1.42% |
|||||||||||
United Technologies Corp. |
3,739 |
$ |
383,434 |
||||||||
Airlines: 1.30% |
|||||||||||
United Continental Holdings, Inc.* |
8,558 |
351,220 |
|||||||||
Auto components: 1.17% |
|||||||||||
Delphi Automotive PLC |
5,040 |
315,504 |
|||||||||
Automobiles: 1.80% |
|||||||||||
General Motors Co. |
17,212 |
487,100 |
|||||||||
Banks: 4.10% |
|||||||||||
JPMorgan Chase & Co. |
8,373 |
520,298 |
|||||||||
US Bancorp |
7,068 |
285,053 |
|||||||||
Wells Fargo & Co. |
6,413 |
303,527 |
|||||||||
1,108,878 |
|||||||||||
Beverages: 3.38% |
|||||||||||
PepsiCo, Inc. |
8,622 |
913,415 |
|||||||||
Biotechnology: 3.44% |
|||||||||||
Alnylam Pharmaceuticals, Inc.* |
5,059 |
280,724 |
|||||||||
Atara Biotherapeutics, Inc.*1 |
3,925 |
88,352 |
|||||||||
Emergent BioSolutions, Inc.* |
3,745 |
105,309 |
|||||||||
Lexicon Pharmaceuticals, Inc.*1 |
29,636 |
425,277 |
|||||||||
TG Therapeutics, Inc.* |
5,005 |
30,330 |
|||||||||
929,992 |
|||||||||||
Capital markets: 1.14% |
|||||||||||
Morgan Stanley |
11,889 |
308,876 |
|||||||||
Chemicals: 1.47% |
|||||||||||
Dow Chemical Co. |
7,986 |
396,984 |
|||||||||
Communications equipment: 0.62% |
|||||||||||
Arista Networks, Inc.*1 |
2,603 |
167,581 |
|||||||||
Consumer finance: 1.64% |
|||||||||||
American Express Co. |
7,302 |
443,669 |
|||||||||
Electronic equipment, instruments & components: 2.45% |
|||||||||||
CDW Corp. |
6,282 |
251,783 |
|||||||||
Dolby Laboratories, Inc., Class A |
4,956 |
237,145 |
|||||||||
Jabil Circuit, Inc. |
9,420 |
173,987 |
|||||||||
662,915 |
|||||||||||
Energy equipment & services: 2.74% |
|||||||||||
Halliburton Co. |
7,902 |
357,881 |
|||||||||
McDermott International, Inc.* |
48,972 |
241,922 |
|||||||||
Noble Corp. PLC |
17,067 |
140,632 |
|||||||||
740,435 |
Shares |
Value |
||||||||||
Food & staples retailing: 1.98% |
|||||||||||
Walgreens Boots Alliance, Inc. |
6,438 |
$ |
536,092 |
||||||||
Food products: 3.14% |
|||||||||||
Mondelez International, Inc., Class A |
18,684 |
850,309 |
|||||||||
Health care providers & services: 2.59% |
|||||||||||
Envision Healthcare Holdings, Inc.* |
11,109 |
281,835 |
|||||||||
UnitedHealth Group, Inc. |
2,967 |
418,941 |
|||||||||
700,776 |
|||||||||||
Hotels, restaurants & leisure: 1.66% |
|||||||||||
Yum! Brands, Inc. |
5,427 |
450,007 |
|||||||||
Household durables: 1.25% |
|||||||||||
Lennar Corp., Class A |
7,361 |
339,342 |
|||||||||
Insurance: 6.03% |
|||||||||||
Aflac, Inc. |
5,710 |
412,034 |
|||||||||
Aon PLC |
5,612 |
612,999 |
|||||||||
Lincoln National Corp. |
6,647 |
257,704 |
|||||||||
MetLife, Inc. |
8,788 |
350,026 |
|||||||||
1,632,763 |
|||||||||||
Internet & catalog retail: 3.61% |
|||||||||||
Amazon.com, Inc.* |
961 |
687,711 |
|||||||||
Expedia, Inc. |
2,708 |
287,860 |
|||||||||
975,571 |
|||||||||||
Internet software & services: 3.07% |
|||||||||||
Cornerstone OnDemand, Inc.* |
6,468 |
246,172 |
|||||||||
Facebook, Inc., Class A* |
5,112 |
584,199 |
|||||||||
830,371 |
|||||||||||
IT services: 1.96% |
|||||||||||
Visa, Inc., Class A |
7,159 |
530,983 |
|||||||||
Life sciences tools & services: 1.17% |
|||||||||||
Bio-Rad Laboratories, Inc., Class A* |
2,208 |
315,788 |
|||||||||
Machinery: 2.19% |
|||||||||||
Caterpillar, Inc. |
5,774 |
437,727 |
|||||||||
Colfax Corp.* |
5,872 |
155,373 |
|||||||||
593,100 |
|||||||||||
Media: 5.71% |
|||||||||||
CBS Corp. (Non-Voting), Class B |
7,286 |
396,650 |
|||||||||
Time Warner, Inc. |
5,857 |
430,724 |
|||||||||
Walt Disney Co. |
7,328 |
716,825 |
|||||||||
1,544,199 |
54
UBS U.S. Large Cap Equity Fund
Portfolio of investments
June 30, 2016
Shares |
Value |
||||||||||
Common stocks(Concluded) |
|||||||||||
Oil, gas & consumable fuels: 4.93% |
|||||||||||
Cobalt International Energy, Inc.*1 |
42,778 |
$ |
57,323 |
||||||||
EOG Resources, Inc. |
4,959 |
413,680 |
|||||||||
Gulfport Energy Corp.* |
7,604 |
237,701 |
|||||||||
Laredo Petroleum, Inc.*1 |
19,276 |
202,012 |
|||||||||
Oasis Petroleum, Inc.* |
23,955 |
223,740 |
|||||||||
SM Energy Co.1 |
7,354 |
198,558 |
|||||||||
1,333,014 |
|||||||||||
Pharmaceuticals: 9.14% |
|||||||||||
Allergan PLC* |
2,151 |
497,075 |
|||||||||
Catalent, Inc.* |
16,597 |
381,565 |
|||||||||
Eli Lilly & Co. |
6,540 |
515,025 |
|||||||||
Impax Laboratories, Inc.* |
7,064 |
203,584 |
|||||||||
Mallinckrodt PLC* |
6,314 |
383,765 |
|||||||||
Medicines Co.*1 |
6,784 |
228,146 |
|||||||||
Teva Pharmaceutical Industries Ltd. ADR |
5,220 |
262,201 |
|||||||||
2,471,361 |
|||||||||||
Real estate investment trust (REIT): 3.82% |
|||||||||||
Digital Realty Trust, Inc. |
4,035 |
439,775 |
|||||||||
Simon Property Group, Inc. |
2,739 |
594,089 |
|||||||||
1,033,864 |
|||||||||||
Road & rail: 2.20% |
|||||||||||
Union Pacific Corp. |
6,811 |
594,260 |
|||||||||
Semiconductors & semiconductor equipment: 8.03% |
|||||||||||
Broadcom Ltd. |
2,043 |
317,482 |
|||||||||
Lam Research Corp. |
2,824 |
237,386 |
|||||||||
Maxim Integrated Products, Inc. |
6,545 |
233,591 |
|||||||||
Micron Technology, Inc.* |
32,658 |
449,374 |
|||||||||
NXP Semiconductors NV* |
2,832 |
221,859 |
Shares |
Value |
||||||||||
ON Semiconductor Corp.* |
26,116 |
$ |
230,343 |
||||||||
Qorvo, Inc.* |
4,403 |
243,310 |
|||||||||
Skyworks Solutions, Inc. |
3,797 |
240,274 |
|||||||||
2,173,619 |
|||||||||||
Software: 2.77% |
|||||||||||
Check Point Software Technologies Ltd.* |
4,637 |
369,476 |
|||||||||
VMware, Inc., Class A*1 |
6,638 |
379,826 |
|||||||||
749,302 |
|||||||||||
Specialty retail: 1.00% |
|||||||||||
Best Buy Co., Inc. |
8,828 |
270,137 |
|||||||||
Technology hardware, storage & peripherals: 1.35% |
|||||||||||
Western Digital Corp. |
7,735 |
365,556 |
|||||||||
Tobacco: 4.56% |
|||||||||||
Philip Morris International, Inc. |
12,140 |
1,234,880 |
|||||||||
Wireless telecommunication services: 1.09% |
|||||||||||
T-Mobile US, Inc.* |
6,801 |
294,279 |
|||||||||
Total common stocks (cost $26,581,108) |
27,029,576 |
||||||||||
Investment of cash collateral from securities loaned: 5.71% |
|||||||||||
JPMorgan U.S. Government Money Market Fund, Capital Shares (cost $1,545,341) |
1,545,341 |
1,545,341 |
|||||||||
Total investments: 105.63% (cost $28,126,449) |
28,574,917 |
||||||||||
Liabilities, in excess of cash and other assets: (5.63)% |
(1,523,822 |
) |
|||||||||
Net assets: 100.00% |
$ |
27,051,095 |
Notes to portfolio of investments
Aggregate cost for federal income tax purposes was $28,725,366; and net unrealized depreciation consisted of:
Gross unrealized appreciation |
$ |
2,441,129 |
|||||
Gross unrealized depreciation |
(2,591,578 |
) |
|||||
Net unrealized depreciation of investments |
$ |
(150,449 |
) |
For a listing of defined portfolio acronyms, counterparty abbreviations and currency abbreviations that are used throughout the Portfolio of investments as well as the tables that follow, please refer to page 110. Portfolio footnotes begin on page 56.
55
UBS U.S. Large Cap Equity Fund
Portfolio of investments
June 30, 2016
The following is a summary of the fair valuations according to the inputs used as of June 30, 2016 in valuing the Fund's investments:
Description |
Investments measured at fair value using the net asset value per share (or its equivalent) practical expedient at 6/30/2016a |
Unadjusted quoted prices in active markets for identical investments (Level 1) |
Other significant observable inputs (Level 2) |
Unobservable inputs (Level 3) |
Total |
||||||||||||||||||
Assets |
|||||||||||||||||||||||
Common stocks |
$ |
|
$ |
27,029,576 |
$ |
|
$ |
|
$ |
27,029,576 |
|||||||||||||
Investment of cash collateral from securities loaned |
|
|
1,545,341 |
|
1,545,341 |
||||||||||||||||||
Total |
$ |
|
$ |
27,029,576 |
$ |
1,545,341 |
$ |
|
$ |
28,574,917 |
a In accordance with Accounting Standards Update No. 2015-07, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Portfolio of investments.
At June 30, 2016, there were no transfers between Level 1 and Level 2.
Portfolio footnotes
* Non-income producing security.
1 Security, or portion thereof, was on loan at June 30, 2016.
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 06/30/15 |
Purchases during the year ended 06/30/16 |
Sales during the year ended 06/30/16 |
Value 06/30/16 |
Net income earned from affiliate for the year ended 06/30/16 |
||||||||||||||||||
UBS Cash Management Prime Relationship Fund |
$ |
533,330 |
$ |
3,713,405 |
$ |
4,246,735 |
$ |
|
$ |
144 |
|||||||||||||
UBS Private Money Market Fund LLCb |
1,240,202 |
26,544,676 |
27,784,878 |
|
2,397 |
||||||||||||||||||
$ |
1,773,532 |
$ |
30,258,081 |
$ |
32,031,613 |
$ |
|
$ |
2,541 |
b The Advisor earned a management fee from this affiliated fund. Please see the Notes to financial statements for further information.
See accompanying notes to financial statements.
56
UBS U.S. Small Cap Growth Fund
Portfolio performance (unaudited)
For the 12 months ended June 30, 2016, Class A shares of UBS U.S. Small Cap Growth Fund (the "Fund") returned -17.58% (Class A shares returned -22.10% after the deduction of the maximum sales charge), while Class P shares returned -17.39%. The Fund's benchmark, the Russell 2000 Growth Index (the "Index"), returned -10.75% over the same time period. (Class P shares have lower expenses than other share classes of the Fund. Returns for all share classes over various time periods are shown on page 60; please note that the Fund's returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares, while index returns do not reflect the deduction of fees and expenses.)
The Fund underperformed the Index primarily due to stock selection decisions.
Portfolio performance summary1
What worked:
• Stock selection within the information technology sector made a positive contribution to Fund returns during the 12 months ended June 30, 2016.
8x8, Inc. was the Fund's top performing stock during the reporting period. The company, which provides cloud-based communication services to businesses, saw its shares rise due to accelerated user growth and earnings. Investors are optimistic about 8x8's move up-market into the enterprise segment of the universal communications as a service (UCaaS) market. (For details, see "Portfolio highlights.")
Shares of Gigamon, a manufacturer of networking products and solutions, traded higher during the 12 months. Investors are increasingly confident about the strong trends within the identity and access management market. (For details, see "Portfolio highlights.")
Wix.com offers solutions that enable businesses, organizations and individuals to develop custom websites and applications. The company's shares were up after reporting first quarter results that showed improvement across subscriptions, new registered users and retention rates. (For details, see "Portfolio highlights.")
The Fund's position in InContact contributed positively to performance. The company, a provider of cloud-based customer service solutions, agreed in May 2016 to be acquired by Nice Systems for approximately $877 million.
• Energy stocks contributed to Fund returns over the 12-month period. We hold several exploration and production (E&P) companies that proved to be excellent operators in a low-oil-price environment and have benefited as oil has rebounded.
Callon Petroleum performed well after the company raised additional equity and reiterated plans to grow production 20% in 2016 while reaching cash flow neutrality in the second quarter.
Diamondback Energy, an exploration and production company focused in the Permian Basin in West Texas, saw its shares rise with support from improvements in oil prices.
1 For a detailed commentary on the market environment in general during the reporting period, see pages 3-4.
57
UBS U.S. Small Cap Growth Fund
What didn't work:
• Stock selection within the health care sector detracted from the Fund's relative returns during the 12 months.
LDR Holding Corp. is a medical device company that provides proprietary surgical technologies for the treatment of patients suffering from spine disorders. Shares fell after the company announced sales and earnings for the third quarter that disappointed investors and raised concerns that LDR's overall growth profile was slowing. We sold the stock during the reporting period.
Pacira Pharmaceuticals, a specialty pharmaceutical company focused on the development of extended release drug candidates, traded lower after monthly sales data showed slower-than-expected sales growth for Exparel, the company's post-surgical pain product.
Shares of Acadia Healthcare declined as investors worried about the coming Brexit vote, the final decision from the UK merger and acquisition commission about the company's Priory transaction, and Acadia's leveraged balance sheet. (For details, see "Portfolio highlights.")
Cepheid, a molecular diagnostics company, missed its third-quarter earnings estimate and reduced its guidance for the fourth quarter. We sold the stock after the end of the reporting period.
Endologix manufactures devices used in the treatment of abdominal aortic aneurysms. The company's shares fell after it announced plans to acquire a competitor, TriVascular Technologies, for cash and stock. Subsequently, we sold the stock prior to the end of the reporting period.
• Certain consumer discretionary and industrials stocks negatively affected Fund performance.
ClubCorp Holdings owns private golf and country clubs, as well as alumni clubs, in the US. The company's headquarters and the majority of its properties are located in Texas. The stock came under pressure due to concerns about the impact of declining oil prices on its customer base. We continue to hold the stock, and have added to the Fund's position.
Asbury Automotive, which owns a network of car dealerships, detracted from returns during the 12 months. The stock suffered from concerns that the operating environment would erode Asbury's margins, as well as fears that we are in the late stages of the automotive cycle. We sold the stock during the reporting period.
58
UBS U.S. Small Cap Growth Fund
Portfolio highlights
• 8x8 Inc. is one of the leading providers of unified communications as a service. The company's cloud-based solutions provide communications and collaboration on a unified platform that includes voice, video, contact center and desktop. 8x8's solutions allow enterprises to easily deploy and scale their communications platforms as needed without large upfront expenses.
• Gigamon provides high-density networking traffic switches that replicate, filter, stream, monitor, analyze and record information. The company's customers include enterprises, data centers and service providers worldwide. Increasing data speeds, virtualization complexity and a growing number of security breaches are increasing demand for the improved visibility that Gigamon's solutions can provide. We believe the company will see additional growth from (1) enhancing the functionality and scalability of its solutions, (2) deepening existing relationships, and (3) investing in its global distribution network.
• Wix.com is a web platform that is experiencing rapid growth from the continued move online by small and medium-sized businesses (SMBs). In today's world, web sites have become crucial for all businesses. Wix.com provides SMBs with an easy-to-use solution that incorporates not only web design but full e-commerce capabilities.
• Acadia Health Care is one of the country's leading operators of behavioral health centers. The company operates 52 facilities in 21 states, up from just six facilities when the current management team took over the company in early 2011. Pricing trends remain favorable, with increases expected across the company's payer sources. Acadia is benefitting from several demographic trends including the aging population and an increased focus on care for adolescents. Acadia's experienced management team has demonstrated an ability to grow through acquisitions, as well as by adding beds to existing facilities. We expect the company to continue to grow revenues at rates in the high single digits.
This letter is intended to assist shareholders in understanding how the Fund performed during the 12 months ended June 30, 2016. The views and opinions in the letter were current as of August 15, 2016. 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.
59
UBS U.S. Small Cap Growth Fund
Average annual total returns for periods ended 06/30/16 (unaudited)
1 year |
5 years |
10 years |
|||||||||||||
Before deducting maximum sales charge |
|||||||||||||||
Class A1 |
(17.58 |
)% |
8.57 |
% |
6.40 |
% |
|||||||||
Class C2 |
(18.18 |
) |
7.77 |
5.60 |
|||||||||||
Class P3 |
(17.39 |
) |
8.87 |
6.68 |
|||||||||||
After deducting maximum sales charge |
|||||||||||||||
Class A1 |
(22.10 |
)% |
7.35 |
% |
5.79 |
% |
|||||||||
Class C2 |
(18.92 |
) |
7.77 |
5.60 |
|||||||||||
Russell 2000 Growth Index4 |
(10.75 |
)% |
8.51 |
% |
7.14 |
% |
The annualized gross and net expense ratios, respectively, for each class of shares as in the October 28, 2015 prospectuses were as follows: Class A1.52% and 1.25%; Class C2.25% and 2.00%; Class P1.11% 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. Effective March 27, 2015, the Trust, with respect to the Fund, and UBS Asset Management (Americas) Inc. (formerly, UBS Global Asset Management (Americas) Inc.), the Fund's investment advisor ("UBS 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 dividend expense and security loan fees 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 dividend expense and security loan fees for securities sold short), through the period ending October 27, 2016, do not exceed 1.24% for Class A shares, 1.99% for Class C shares and 0.99% for Class P 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. The fee waiver/expense reimbursement agreement may be terminated by the Fund's Board of Trustees at any time and also will terminate automatically upon the expiration or termination of the Fund's advisory contract with the Advisor. Upon termination of the fee waiver/expense reimbursement agreement, however, the UBS AM (Americas)'s three year recoupment rights will survive.
1 Maximum sales charge for Class A shares is 5.5%. Class A shares bear ongoing 12b-1 service fees.
2 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 distribution and service fees.
3 Class P shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees, but Class P shares held through advisory programs may be subject to a program fee, which, if included, would have reduced performance.
4 The Russell 2000 Growth Index measures the performance of the small-cap growth segment of the US equity universe. It includes those Russell 2000 Index 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.
Prior to February 17, 2015, if an investor sold or exchanged shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged was deducted at the time of the transaction, except as noted otherwise in the prospectus. For sales or exchanges taking place on or after February 17, 2015 but prior to August 3, 2015, there was a reduction in the redemption holding period from 90 days to 30 days. Effective August 3, 2015, the 1.00% redemption fee imposed on sales or exchanges of any class of shares of the funds made during the holding periods specified in the prospectus was eliminated. Please refer to the prospectus for further information.
The Fund invests in IPOs which may have a magnified impact on performance.
Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit www.ubs.com/us-mutualfundperformance.
60
UBS U.S. Small Cap Growth Fund
Illustration of an assumed investment of $10,000 in Class A shares (adjusted for 5.5% maximum sales charge) and $5,000,000 in Class P shares (unaudited)
The following two graphs depict the performance of UBS U.S. Small Cap Growth Fund Class A and Class P versus the Russell 2000 Growth Index over the 10 years ended June 30, 2016. The performance of Class C shares will vary based upon the different class specific expenses and sales charges. The performance provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Past performance is no guarantee of future results. Share price and returns will vary with market conditions; investors may realize a gain or loss upon redemption.
Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit www.ubs.com/us-mutualfundperformance.
61
UBS U.S. Small Cap Growth Fund
Top ten equity holdings (unaudited)
As of June 30, 2016
Percentage of net assets |
|||||||
8x8, Inc. |
2.6 |
% |
|||||
Gigamon, Inc. |
2.3 |
||||||
DexCom, Inc. |
2.3 |
||||||
Proofpoint, Inc. |
2.2 |
||||||
ABIOMED, Inc. |
2.1 |
||||||
Wix.com Ltd. |
2.1 |
||||||
inContact, Inc. |
1.8 |
||||||
Integrated Device Technology, Inc. |
1.7 |
||||||
Five Below, Inc. |
1.7 |
||||||
B&G Foods, Inc. |
1.6 |
||||||
Total |
20.4 |
% |
Industry diversification (unaudited)
As a percentage of net assets as of June 30, 2016
Common stocks |
|||||||
Airlines |
1.52 |
% |
|||||
Auto components |
0.20 |
||||||
Banks |
6.17 |
||||||
Biotechnology |
6.47 |
||||||
Building products |
1.38 |
||||||
Communications equipment |
2.15 |
||||||
Construction & engineering |
1.39 |
||||||
Construction materials |
0.99 |
||||||
Diversified consumer services |
1.16 |
||||||
Diversified telecommunication services |
2.64 |
||||||
Electrical equipment |
2.68 |
||||||
Electronic equipment, instruments & components |
2.15 |
||||||
Energy equipment & services |
2.83 |
||||||
Food & staples retailing |
1.35 |
||||||
Food products |
3.89 |
||||||
Health care equipment & supplies |
6.67 |
||||||
Health care providers & services |
3.72 |
||||||
Hotels, restaurants & leisure |
3.80 |
||||||
Household durables |
1.40 |
||||||
Internet software & services |
6.93 |
||||||
Life sciences tools & services |
0.59 |
||||||
Machinery |
1.14 |
||||||
Media |
2.88 |
||||||
Multiline retail |
1.45 |
||||||
Oil, gas & consumable fuels |
2.70 |
||||||
Paper & forest products |
1.35 |
||||||
Pharmaceuticals |
2.37 |
||||||
Professional services |
2.43 |
||||||
Real estate investment trust (REIT) |
2.32 |
||||||
Road & rail |
0.58 |
||||||
Semiconductors & semiconductor equipment |
5.25 |
||||||
Software |
10.23 |
||||||
Specialty retail |
4.70 |
||||||
Thrifts & mortgage finance |
0.88 |
||||||
Total common stocks |
98.36 |
% |
|||||
Short-term investment |
2.63 |
||||||
Investment of cash collateral from securities loaned |
8.37 |
||||||
Total investments |
109.36 |
% |
|||||
Liabilities, in excess of cash and other assets |
(9.36 |
) |
|||||
Net assets |
100.00 |
% |
62
UBS U.S. Small Cap Growth Fund
Portfolio of investments
June 30, 2016
Shares |
Value |
||||||||||
Common stocks: 98.36% |
|||||||||||
Airlines: 1.52% |
|||||||||||
Spirit Airlines, Inc.* |
55,174 |
$ |
2,475,657 |
||||||||
Auto components: 0.20% |
|||||||||||
Tenneco, Inc.* |
6,860 |
319,745 |
|||||||||
Banks: 6.17% |
|||||||||||
BankUnited, Inc. |
62,276 |
1,913,119 |
|||||||||
Columbia Banking System, Inc. |
67,314 |
1,888,831 |
|||||||||
National Bank Holdings Corp., Class A |
97,473 |
1,984,550 |
|||||||||
Webster Financial Corp. |
61,080 |
2,073,666 |
|||||||||
Yadkin Financial Corp. |
87,013 |
2,183,156 |
|||||||||
10,043,322 |
|||||||||||
Biotechnology: 6.47% |
|||||||||||
Cepheid, Inc.* |
47,215 |
1,451,861 |
|||||||||
Exact Sciences Corp.*1 |
184,543 |
2,260,652 |
|||||||||
FibroGen, Inc.* |
39,247 |
644,043 |
|||||||||
Kite Pharma, Inc.*1 |
19,459 |
972,950 |
|||||||||
Ligand Pharmaceuticals, Inc.*1 |
22,438 |
2,676,180 |
|||||||||
Loxo Oncology, Inc.*1 |
36,198 |
839,070 |
|||||||||
Sage Therapeutics, Inc.* |
22,902 |
690,037 |
|||||||||
Seres Therapeutics, Inc.*1 |
24,658 |
716,315 |
|||||||||
vTv Therapeutics, Inc., Class A* |
46,553 |
270,008 |
|||||||||
10,521,116 |
|||||||||||
Building products: 1.38% |
|||||||||||
NCI Building Systems, Inc.* |
140,318 |
2,243,685 |
|||||||||
Communications equipment: 2.15% |
|||||||||||
Ciena Corp.* |
105,878 |
1,985,212 |
|||||||||
Lumentum Holdings, Inc.* |
62,168 |
1,504,466 |
|||||||||
3,489,678 |
|||||||||||
Construction & engineering: 1.39% |
|||||||||||
EMCOR Group, Inc. |
45,781 |
2,255,172 |
|||||||||
Construction materials: 0.99% |
|||||||||||
Summit Materials, Inc., Class A* |
78,775 |
1,611,737 |
|||||||||
Diversified consumer services: 1.16% |
|||||||||||
Grand Canyon Education, Inc.* |
47,210 |
1,884,623 |
|||||||||
Diversified telecommunication services: 2.64% |
|||||||||||
8x8, Inc.* |
293,849 |
4,293,134 |
|||||||||
Electrical equipment: 2.68% |
|||||||||||
EnerSys |
39,754 |
2,364,170 |
|||||||||
Generac Holdings, Inc.* |
57,234 |
2,000,901 |
|||||||||
4,365,071 |
Shares |
Value |
||||||||||
Electronic equipment, instruments & components: 2.15% |
|||||||||||
Fabrinet* |
27,600 |
$ |
1,024,512 |
||||||||
Universal Display Corp.* |
36,468 |
2,472,530 |
|||||||||
3,497,042 |
|||||||||||
Energy equipment & services: 2.83% |
|||||||||||
Patterson-UTI Energy, Inc. |
111,362 |
2,374,238 |
|||||||||
US Silica Holdings, Inc. |
64,902 |
2,237,172 |
|||||||||
4,611,410 |
|||||||||||
Food & staples retailing: 1.35% |
|||||||||||
Casey's General Stores, Inc. |
16,652 |
2,189,905 |
|||||||||
Food products: 3.89% |
|||||||||||
B&G Foods, Inc. |
55,543 |
2,677,172 |
|||||||||
Blue Buffalo Pet Products, Inc.*1 |
62,673 |
1,462,788 |
|||||||||
Dean Foods Co. |
120,945 |
2,187,895 |
|||||||||
6,327,855 |
|||||||||||
Health care equipment & supplies: 6.67% |
|||||||||||
ABIOMED, Inc.* |
31,159 |
3,405,367 |
|||||||||
DexCom, Inc.* |
46,484 |
3,687,576 |
|||||||||
K2M Group Holdings, Inc.* |
120,291 |
1,866,916 |
|||||||||
Zeltiq Aesthetics, Inc.*1 |
69,042 |
1,886,918 |
|||||||||
10,846,777 |
|||||||||||
Health care providers & services: 3.72% |
|||||||||||
Acadia Healthcare Co., Inc.* |
44,611 |
2,471,449 |
|||||||||
Amsurg Corp.* |
28,238 |
2,189,575 |
|||||||||
MEDNAX, Inc.* |
19,295 |
1,397,537 |
|||||||||
6,058,561 |
|||||||||||
Hotels, restaurants & leisure: 3.80% |
|||||||||||
Buffalo Wild Wings, Inc.* |
12,164 |
1,690,188 |
|||||||||
ClubCorp Holdings, Inc. |
108,748 |
1,413,724 |
|||||||||
Del Frisco's Restaurant Group, Inc.* |
98,939 |
1,416,807 |
|||||||||
Popeyes Louisiana Kitchen, Inc.* |
30,546 |
1,669,033 |
|||||||||
6,189,752 |
|||||||||||
Household durables: 1.40% |
|||||||||||
Universal Electronics, Inc.* |
31,416 |
2,270,748 |
|||||||||
Internet software & services: 6.93% |
|||||||||||
Apigee Corp.* |
152,026 |
1,857,758 |
|||||||||
inContact, Inc.* |
214,208 |
2,966,781 |
|||||||||
Twilio, Inc., Class A*1 |
20,000 |
730,000 |
|||||||||
WebMD Health Corp.*1 |
39,866 |
2,316,613 |
|||||||||
Wix.com Ltd.* |
112,082 |
3,401,689 |
|||||||||
11,272,841 |
63
UBS U.S. Small Cap Growth Fund
Portfolio of investments
June 30, 2016
Shares |
Value |
||||||||||
Common stocks(Concluded) |
|||||||||||
Life sciences tools & services: 0.59% |
|||||||||||
Charles River Laboratories International, Inc.* |
11,641 |
$ |
959,684 |
||||||||
Machinery: 1.14% |
|||||||||||
Woodward, Inc. |
32,232 |
1,857,852 |
|||||||||
Media: 2.88% |
|||||||||||
AMC Entertainment Holdings, Inc., Class A |
85,136 |
2,350,605 |
|||||||||
IMAX Corp.* |
79,210 |
2,335,111 |
|||||||||
4,685,716 |
|||||||||||
Multiline retail: 1.45% |
|||||||||||
Ollie's Bargain Outlet Holdings, Inc.*1 |
94,487 |
2,351,781 |
|||||||||
Oil, gas & consumable fuels: 2.70% |
|||||||||||
Callon Petroleum Co.* |
177,765 |
1,996,301 |
|||||||||
Diamondback Energy, Inc.* |
9,169 |
836,305 |
|||||||||
Matador Resources Co.* |
78,698 |
1,558,220 |
|||||||||
4,390,826 |
|||||||||||
Paper & forest products: 1.35% |
|||||||||||
Boise Cascade Co.* |
96,052 |
2,204,393 |
|||||||||
Pharmaceuticals: 2.37% |
|||||||||||
Horizon Pharma PLC* |
110,175 |
1,814,582 |
|||||||||
Intersect ENT, Inc.* |
76,237 |
985,744 |
|||||||||
Pacira Pharmaceuticals, Inc.* |
31,113 |
1,049,442 |
|||||||||
3,849,768 |
|||||||||||
Professional services: 2.43% |
|||||||||||
Kforce, Inc. |
87,290 |
1,474,328 |
|||||||||
WageWorks, Inc.* |
41,437 |
2,478,347 |
|||||||||
3,952,675 |
|||||||||||
Real estate investment trust (REIT): 2.32% |
|||||||||||
Cousins Properties, Inc. |
171,030 |
1,778,712 |
|||||||||
Sovran Self Storage, Inc. |
19,041 |
1,997,782 |
|||||||||
3,776,494 |
|||||||||||
Road & rail: 0.58% |
|||||||||||
Saia, Inc.* |
37,660 |
946,772 |
Shares |
Value |
||||||||||
Semiconductors & semiconductor equipment: 5.25% |
|||||||||||
Cavium, Inc.*1 |
41,918 |
$ |
1,618,035 |
||||||||
Integrated Device Technology, Inc.* |
135,642 |
2,730,473 |
|||||||||
MACOM Technology Solutions Holdings, Inc., H Shares*1 |
51,169 |
1,687,554 |
|||||||||
Semtech Corp.* |
104,618 |
2,496,185 |
|||||||||
8,532,247 |
|||||||||||
Software: 10.23% |
|||||||||||
Callidus Software, Inc.* |
122,732 |
2,452,185 |
|||||||||
CyberArk Software Ltd.*1 |
50,322 |
2,445,146 |
|||||||||
Gigamon, Inc.* |
102,117 |
3,818,155 |
|||||||||
Proofpoint, Inc.*1 |
57,128 |
3,604,206 |
|||||||||
Synchronoss Technologies, Inc.* |
60,716 |
1,934,412 |
|||||||||
Ultimate Software Group, Inc.* |
11,346 |
2,385,950 |
|||||||||
16,640,054 |
|||||||||||
Specialty retail: 4.70% |
|||||||||||
Burlington Stores, Inc.* |
38,205 |
2,548,656 |
|||||||||
Children's Place, Inc. |
30,113 |
2,414,460 |
|||||||||
Five Below, Inc.* |
57,947 |
2,689,320 |
|||||||||
7,652,436 |
|||||||||||
Thrifts & mortgage finance: 0.88% |
|||||||||||
Essent Group Ltd.* |
65,431 |
1,427,051 |
|||||||||
Total common stocks (cost $150,019,626) |
159,995,580 |
||||||||||
Short-term investment: 2.63% |
|||||||||||
Investment company: 2.63% |
|||||||||||
JPMorgan U.S. Government Money Market Fund, Capital Shares (cost $4,280,339) |
4,280,339 |
4,280,339 |
|||||||||
Investment of cash collateral from securities loaned: 8.37% |
|||||||||||
JPMorgan U.S. Government Money Market Fund, Capital Shares (cost $13,614,860) |
13,614,860 |
13,614,860 |
|||||||||
Total investments: 109.36% (cost $167,914,825) |
177,890,779 |
||||||||||
Liabilities, in excess of cash and other assets: (9.36)% |
(15,231,179 |
) |
|||||||||
Net assets: 100.00% |
$ |
162,659,600 |
Notes to portfolio of investments
Aggregate cost for federal income tax purposes was $169,354,600; and net unrealized appreciation consisted of:
Gross unrealized appreciation |
$ |
19,922,925 |
|||||
Gross unrealized depreciation |
(11,386,746 |
) |
|||||
Net unrealized appreciation of investments |
$ |
8,536,179 |
64
UBS U.S. Small Cap Growth Fund
Portfolio of investments
June 30, 2016
For a listing of defined portfolio acronyms, counterparty abbreviations and currency abbreviations that are used throughout the Portfolio of investments as well as the tables that follow, please refer to page 110. Portfolio footnotes begin below.
The following is a summary of the fair valuations according to the inputs used as of June 30, 2016 in valuing the Fund's investments:
Description |
Investments measured at fair value using the net asset value per share (or its equivalent) practical expedient at 6/30/2016a |
Unadjusted quoted prices in active markets for identical investments (Level 1) |
Other significant observable inputs (Level 2) |
Unobservable inputs (Level 3) |
Total |
||||||||||||||||||
Assets |
|||||||||||||||||||||||
Common stocks |
$ |
|
$ |
159,995,580 |
$ |
|
$ |
|
$ |
159,995,580 |
|||||||||||||
Short-term investment |
|
|
4,280,339 |
|
4,280,339 |
||||||||||||||||||
Investment of cash collateral from securities loaned |
|
|
13,614,860 |
|
13,614,860 |
||||||||||||||||||
Total |
$ |
|
$ |
159,995,580 |
$ |
17,895,199 |
$ |
|
$ |
177,890,779 |
a In accordance with Accounting Standards Update No. 2015-07, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Portfolio of investments.
At June 30, 2016, there were no transfers between Level 1 and Level 2.
Portfolio footnotes
* Non-income producing security.
1 Security, or portion thereof, was on loan at June 30, 2016.
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 06/30/15 |
Purchases during the year ended 06/30/16 |
Sales during the year ended 06/30/16 |
Value 06/30/16 |
Net income earned from affiliate for the year ended 06/30/16 |
||||||||||||||||||
UBS Cash Management Prime Relationship Fund |
$ |
10,433,392 |
$ |
45,877,796 |
$ |
56,311,188 |
$ |
|
$ |
2,417 |
|||||||||||||
UBS Private Money Market Fund LLCb |
17,148,414 |
217,096,221 |
234,244,635 |
|
21,588 |
||||||||||||||||||
$ |
27,581,806 |
$ |
262,974,017 |
$ |
290,555,823 |
$ |
|
$ |
24,005 |
b The Advisor earned a management fee from this affiliated fund. Please see the Notes to financial statements for further information.
See accompanying notes to financial statements.
65
UBS Core Plus Bond Fund
Portfolio performance (unaudited)
For the 12 months ended June 30, 2016, Class A shares of UBS Core Plus Bond Fund (the "Fund") returned 4.62% (Class A shares returned 0.73% after the deduction of the maximum sales charge), while Class P shares returned 4.87%. The Fund's benchmark, the Barclays US Aggregate Index (the "Index"), returned 6.00% over the same time period. (Class P shares have lower expenses than other share classes of the Fund. Returns for all share classes over various time periods are shown on page 68; please note that the Fund's returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares, while index returns do not reflect the deduction of fees and expenses.)
The Fund posted a positive return during the reporting period but underperformed the benchmark, primarily due to its corporate credit allocation and securitized positioning.
The Fund used derivatives during the reporting period. Certain interest rate derivatives were utilized to facilitate specific duration and yield curve strategies. Credit derivatives (such as credit default swaps and options on credit default swaps) were used to implement specific credit-related investment strategies as part of the Fund's sector allocation and security selection. Throughout the period, the Fund engaged in foreign exchange forwards to help implement its active currency positions. While derivatives play a role in the overall portfolio construction process, they are just one of the tools we use to manage the Fund's overall risk exposure and to implement the aforementioned strategies.
Portfolio performance summary1
What worked:
• Currency positioning was additive to performance during the reporting period. The Fund's exposure to the US dollar against a basket of developed market currencies contributed to performance. At various times during the reporting period, the Fund was long the US dollar versus short the Australian dollar and Canadian dollar, which benefited returns.
• Yield curve positioning was additive to performance. The Fund was positioned to benefit from a flattening of the yield curve during the reporting period. (When the yield curve flattens, yields on shorter maturity bonds rise more than yields on longer maturity bonds.) This played out during the period, as shorter-term yields declined less than longer-term yields given strong overseas demand for the latter.
What didn't work:
• The Fund's allocation to corporate credit detracted from performance during the reporting period. At various times during the reporting period the Fund was overweight credit as corporate spreads widened. The main detractors came from commodity-related sub-sectors.
• The Fund's securitized positioning detracted from performance. Generally, sector allocation and security selection within the agency mortgage-backed security and commercial mortgage-backed security sectors detracted from results during the reporting period.
1 For a detailed commentary on the market environment in general during the reporting period, see pages 3-4.
66
UBS Core Plus Bond Fund
This letter is intended to assist shareholders in understanding how the Fund performed during the 12 months ended June 30, 2016. The views and opinions in the letter were current as of August 15, 2016. 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.
67
UBS Core Plus Bond Fund
Average annual total returns for periods ended 06/30/16 (unaudited)
1 year |
5 years |
10 years |
|||||||||||||
Before deducting maximum sales charge |
|||||||||||||||
Class A1 |
4.62 |
% |
3.90 |
% |
3.00 |
% |
|||||||||
Class C2 |
4.10 |
3.37 |
2.48 |
||||||||||||
Class P3 |
4.87 |
4.14 |
3.25 |
||||||||||||
After deducting maximum sales charge |
|||||||||||||||
Class A1 |
0.73 |
% |
3.11 |
% |
2.60 |
% |
|||||||||
Class C2 |
3.35 |
3.37 |
2.48 |
||||||||||||
Barclays US Aggregate Index4 |
6.00 |
% |
3.76 |
% |
5.13 |
% |
The annualized gross and net expense ratios, respectively, for each class of shares as in the October 28, 2015 prospectuses were as follows: Class A1.75% and 0.66%; Class C2.38% and 1.16%; Class P1.45% 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 Asset Management (Americas) Inc. (formerly, UBS Global Asset Management (Americas) Inc.), the Fund's investment advisor ("UBS 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 period ending October 27, 2016, do not exceed 0.64% for Class A shares, 1.14% for Class C shares and 0.39% for Class P 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. The fee waiver/expense reimbursement agreement may be terminated by the Fund's Board of Trustees at any time and also will terminate automatically upon the expiration or termination of the Fund's advisory contract with the Advisor. Upon termination of the fee waiver/expense reimbursement agreement, however, the UBS AM (Americas)'s three year recoupment rights will survive.
1 Effective June 1, 2016, maximum sales charge for Class A shares changed from 4.50% to 3.75%. All "after deducting maximum sales charge" returns shown above reflect the deduction of 3.75% sales charge. Class A shares bear ongoing 12b-1 service fees.
2 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 distribution and service fees.
3 Class P shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees, but Class P shares held through advisory programs may be subject to a program fee, which, if included, would have reduced performance.
4 The Barclays US Aggregate Index is an unmanaged broad based index designed to measure the US dollar-denominated, investment-grade, taxable bond market. The index includes bonds from the Treasury, government-related, corporate, mortgage-backed, asset-backed and commercial mortgage-backed sectors. Investors should note that indices do not reflect the deduction of fees and expenses.
Prior to February 17, 2015, if an investor sold or exchanged shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged was deducted at the time of the transaction, except as noted otherwise in the prospectus. For sales or exchanges taking place on or after February 17, 2015 but prior to August 3, 2015, there was a reduction in the redemption holding period from 90 days to 30 days. Effective August 3, 2015, the 1.00% redemption fee imposed on sales or exchanges of any class of shares of the funds made during the holding periods specified in the prospectus was eliminated. Please refer to the prospectus for further information.
Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit www.ubs.com/us-mutualfundperformance.
68
UBS Core Plus Bond Fund
Illustration of an assumed investment of $10,000 in Class A shares (adjusted for 3.75% maximum sales charge) and $5,000,000 in Class P shares (unaudited)
The following two graphs depict the performance of UBS Core Plus Bond Fund Class A and Class P shares versus the Barclays US Aggregate Index over the 10 years ended June 30, 2016. The performance of Class C shares will vary based upon the different class specific expenses and sales charges. The performance provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Past performance is no guarantee of future results. Share price and returns will vary with market conditions; investors may realize a gain or loss upon redemption.
Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit www.ubs.com/us-mutualfundperformance.
69
UBS Core Plus Bond Fund
Top ten long-term fixed income holdings
(unaudited)
As of June 30, 2016
Percentage of net assets |
|||||||
Federal National Mortgage Association Pools, 4.500%, TBA |
8.2 |
% |
|||||
Federal Home Loan Mortgage Corp. Gold Pools, 3.500%, TBA |
4.6 |
||||||
Federal National Mortgage Association Pools, 3.500%, TBA |
4.3 |
||||||
Federal Home Loan Mortgage Corp. Gold Pools, 3.000%, TBA |
4.1 |
||||||
Federal National Mortgage Association Pools, 4.000%, TBA |
3.4 |
||||||
Federal National Mortgage Association Pools, 3.000%, TBA |
2.7 |
||||||
Government National Mortgage Association Pools, 3.500%, TBA |
2.7 |
||||||
Government National Mortgage Association Pools, 3.000%, TBA |
2.3 |
||||||
Federal National Mortgage Association Pools, 4.000%, TBA |
2.3 |
||||||
US Treasury Bonds, 2.500%, due 02/15/46 |
2.0 |
||||||
Total |
36.6 |
% |
70
UBS Core Plus Bond Fund
Industry diversification (unaudited)
As a percentage of net assets as of June 30, 2016
Bonds |
|||||||
Corporate bonds |
|||||||
Air freight & logistics |
0.13 |
% |
|||||
Automobiles |
0.20 |
||||||
Banks |
4.63 |
||||||
Beverages |
0.51 |
||||||
Biotechnology |
0.26 |
||||||
Building products |
0.46 |
||||||
Capital markets |
1.51 |
||||||
Chemicals |
0.35 |
||||||
Commercial services & supplies |
0.24 |
||||||
Communications equipment |
0.14 |
||||||
Consumer finance |
0.95 |
||||||
Containers & packaging |
0.08 |
||||||
Diversified financial services |
0.27 |
||||||
Diversified telecommunication services |
1.45 |
||||||
Electric utilities |
1.60 |
||||||
Electronic equipment, instruments & components |
0.22 |
||||||
Food & staples retailing |
0.30 |
||||||
Food products |
0.16 |
||||||
Health care equipment & supplies |
0.36 |
||||||
Health care providers & services |
0.15 |
||||||
Hotels, restaurants & leisure |
0.46 |
||||||
Household durables |
0.39 |
||||||
Household products |
0.09 |
||||||
Independent power and renewable electricity producers |
0.39 |
||||||
Industrial conglomerates |
0.39 |
||||||
Insurance |
0.87 |
||||||
Internet & catalog retail |
0.16 |
||||||
IT services |
0.14 |
||||||
Machinery |
0.35 |
||||||
Media |
1.56 |
||||||
Metals & mining |
0.89 |
||||||
Multiline retail |
0.14 |
||||||
Multi-utilities |
0.54 |
||||||
Oil, gas & consumable fuels |
3.80 |
Paper & forest products |
0.04 |
% |
|||||
Pharmaceuticals |
0.98 |
||||||
Real estate investment trust (REIT) |
0.57 |
||||||
Real estate management & development |
0.23 |
||||||
Road & rail |
0.66 |
||||||
Semiconductors & semiconductor equipment |
0.16 |
||||||
Software |
0.48 |
||||||
Specialty retail |
0.26 |
||||||
Technology hardware, storage & peripherals |
0.34 |
||||||
Thrifts & mortgage finance |
0.20 |
||||||
Tobacco |
0.55 |
||||||
Trading companies & distributors |
0.26 |
||||||
Wireless telecommunication services |
0.29 |
||||||
Total corporate bonds |
29.16 |
% |
|||||
Asset-backed securities |
6.88 |
||||||
Commercial mortgage-backed securities |
6.51 |
||||||
Mortgage & agency debt securities |
40.00 |
||||||
Municipal bonds |
1.38 |
||||||
US government obligations |
14.34 |
||||||
Non-US government obligations |
3.63 |
||||||
Total bonds |
101.90 |
% |
|||||
Short-term investment |
32.06 |
||||||
Options purchased |
0.17 |
||||||
Investment of cash collateral from securities loaned |
0.14 |
||||||
Total investments |
134.27 |
% |
|||||
Liabilities, in excess of cash and other assets |
(34.27 |
) |
|||||
Net assets |
100.00 |
% |
71
UBS Core Plus Bond Fund
Portfolio of investments
June 30, 2016
Face amount |
Value |
||||||||||
Bonds: 101.90% |
|||||||||||
Corporate bonds: 29.16% |
|||||||||||
Australia: 0.26% |
|||||||||||
Australia & New Zealand Banking Group Ltd., 2.700%, due 11/16/20 |
$ |
30,000 |
$ |
31,139 |
|||||||
BHP Billiton Finance USA Ltd., 3.850%, due 09/30/23 |
30,000 |
32,658 |
|||||||||
Rio Tinto Finance USA Ltd., 3.750%, due 06/15/25 |
35,000 |
36,774 |
|||||||||
Total Australia corporate bonds |
100,571 |
||||||||||
Brazil: 0.13% |
|||||||||||
Vale Overseas Ltd., 4.375%, due 01/11/221 |
55,000 |
51,035 |
|||||||||
Canada: 0.33% |
|||||||||||
NOVA Chemicals Corp., 5.250%, due 08/01/232 |
70,000 |
70,350 |
|||||||||
Petro-Canada, 6.050%, due 05/15/18 |
50,000 |
53,774 |
|||||||||
Total Canada corporate bonds |
124,124 |
||||||||||
China: 0.53% |
|||||||||||
Sinopec Group Overseas Development 2013 Ltd., 2.500%, due 10/17/182 |
200,000 |
202,221 |
|||||||||
France: 0.23% |
|||||||||||
Total Capital International SA, 3.750%, due 04/10/24 |
80,000 |
88,093 |
|||||||||
Germany: 0.53% |
|||||||||||
Unitymedia Hessen GmbH & Co. KG, 5.500%, due 01/15/232 |
200,000 |
201,000 |
|||||||||
Ireland: 0.07% |
|||||||||||
XL Group PLC, 6.375%, due 11/15/24 |
21,000 |
25,267 |
|||||||||
Israel: 0.28% |
|||||||||||
Teva Pharmaceutical Finance Co. BV, 2.400%, due 11/10/16 |
70,000 |
70,310 |
|||||||||
Teva Pharmaceutical Finance IV BV, 3.650%, due 11/10/21 |
34,000 |
35,938 |
|||||||||
Total Israel corporate bonds |
106,248 |
Face amount |
Value |
||||||||||
Luxembourg: 0.33% |
|||||||||||
ArcelorMittal, 6.500%, due 03/01/21 |
$ |
121,000 |
$ |
124,328 |
|||||||
Mexico: 0.62% |
|||||||||||
America Movil SAB de CV, 5.000%, due 03/30/20 |
100,000 |
110,600 |
|||||||||
Petroleos Mexicanos, 4.875%, due 01/24/22 |
125,000 |
127,799 |
|||||||||
Total Mexico corporate bonds |
238,399 |
||||||||||
Netherlands: 0.35% |
|||||||||||
LYB International Finance BV, 4.875%, due 03/15/44 |
60,000 |
63,483 |
|||||||||
Shell International Finance BV, 2.250%, due 11/10/20 |
40,000 |
41,059 |
|||||||||
4.000%, due 05/10/46 |
30,000 |
30,620 |
|||||||||
Total Netherlands corporate bonds |
135,162 |
||||||||||
Norway: 0.47% |
|||||||||||
Eksportfinans ASA, 5.500%, due 06/26/17 |
140,000 |
144,883 |
|||||||||
Statoil ASA, 4.800%, due 11/08/43 |
30,000 |
34,988 |
|||||||||
Total Norway corporate bonds |
179,871 |
||||||||||
Spain: 0.40% |
|||||||||||
Telefonica Emisiones SAU, 3.192%, due 04/27/18 |
150,000 |
154,017 |
|||||||||
United Kingdom: 0.70% |
|||||||||||
Aon PLC, 3.500%, due 06/14/24 |
50,000 |
51,484 |
|||||||||
BP Capital Markets PLC, 1.676%, due 05/03/19 |
30,000 |
30,241 |
|||||||||
3.062%, due 03/17/22 |
70,000 |
72,337 |
|||||||||
Lloyds Bank PLC, 6.500%, due 09/14/202 |
100,000 |
111,946 |
|||||||||
Total United Kingdom corporate bonds |
266,008 |
||||||||||
United States: 23.93% |
|||||||||||
AbbVie, Inc., 2.500%, due 05/14/20 |
70,000 |
71,657 |
|||||||||
3.200%, due 05/14/26 |
30,000 |
30,333 |
|||||||||
Actavis Funding SCS, 3.800%, due 03/15/25 |
70,000 |
72,835 |
|||||||||
ADT Corp., 3.500%, due 07/15/22 |
100,000 |
91,625 |
|||||||||
Alabama Power Co., 6.000%, due 03/01/39 |
20,000 |
26,533 |
72
UBS Core Plus Bond Fund
Portfolio of investments
June 30, 2016
Face amount |
Value |
||||||||||
Bonds(Continued) |
|||||||||||
Corporate bonds(Continued) |
|||||||||||
United States(Continued) |
|||||||||||
Ally Financial, Inc., 6.250%, due 12/01/17 |
$ |
60,000 |
$ |
62,850 |
|||||||
Altria Group, Inc., 5.375%, due 01/31/44 |
65,000 |
83,393 |
|||||||||
9.950%, due 11/10/38 |
18,000 |
32,398 |
|||||||||
Anadarko Finance Co., Series B, 7.500%, due 05/01/31 |
35,000 |
41,929 |
|||||||||
Anadarko Petroleum Corp., 4.500%, due 07/15/44 |
25,000 |
22,976 |
|||||||||
4.850%, due 03/15/21 |
60,000 |
63,643 |
|||||||||
Anheuser-Busch InBev Finance, Inc., 4.700%, due 02/01/36 |
80,000 |
90,005 |
|||||||||
4.900%, due 02/01/46 |
70,000 |
81,996 |
|||||||||
Apache Corp., 4.750%, due 04/15/43 |
40,000 |
41,149 |
|||||||||
Apple, Inc., 3.850%, due 05/04/43 |
50,000 |
50,237 |
|||||||||
AT&T, Inc., 2.800%, due 02/17/21 |
50,000 |
51,307 |
|||||||||
6.000%, due 08/15/40 |
40,000 |
46,742 |
|||||||||
AvalonBay Communities, Inc. REIT, 3.450%, due 06/01/25 |
40,000 |
41,939 |
|||||||||
Bank of America Corp., Series L, 2.650%, due 04/01/19 |
70,000 |
71,773 |
|||||||||
4.200%, due 08/26/24 |
120,000 |
124,101 |
|||||||||
6.110%, due 01/29/37 |
100,000 |
118,234 |
|||||||||
Barrick North America Finance LLC, 4.400%, due 05/30/21 |
20,000 |
21,536 |
|||||||||
BB&T Corp., 2.625%, due 06/29/20 |
120,000 |
123,969 |
|||||||||
Berkshire Hathaway Energy Co., 5.150%, due 11/15/43 |
30,000 |
36,385 |
|||||||||
Biogen, Inc., 4.050%, due 09/15/25 |
30,000 |
32,309 |
|||||||||
Boston Properties LP, REIT, 3.800%, due 02/01/24 |
110,000 |
118,135 |
|||||||||
Burlington Northern Santa Fe LLC, 5.150%, due 09/01/43 |
120,000 |
146,555 |
|||||||||
Case New Holland Industrial, Inc., 7.875%, due 12/01/17 |
85,000 |
91,375 |
|||||||||
Charter Communications Operating LLC/Charter Communications Operating Capital, 3.579%, due 07/23/202 |
80,000 |
83,643 |
Face amount |
Value |
||||||||||
Chevron Corp., 3.191%, due 06/24/23 |
$ |
60,000 |
$ |
63,755 |
|||||||
Cisco Systems, Inc., 5.900%, due 02/15/39 |
40,000 |
54,331 |
|||||||||
CIT Group, Inc., 5.500%, due 02/15/192 |
70,000 |
73,237 |
|||||||||
Citigroup, Inc., 1.750%, due 05/01/18 |
85,000 |
85,374 |
|||||||||
5.500%, due 09/13/25 |
220,000 |
246,721 |
|||||||||
CNA Financial Corp., 4.500%, due 03/01/26 |
30,000 |
31,948 |
|||||||||
Comcast Corp., 6.950%, due 08/15/37 |
40,000 |
57,566 |
|||||||||
ConocoPhillips Co., 4.200%, due 03/15/21 |
40,000 |
43,203 |
|||||||||
5.950%, due 03/15/46 |
30,000 |
37,432 |
|||||||||
Consolidated Edison Co. of New York, Inc., 5.850%, due 03/15/36 |
45,000 |
57,988 |
|||||||||
CVS Health Corp., 5.125%, due 07/20/45 |
13,000 |
16,116 |
|||||||||
Devon Energy Corp., 5.000%, due 06/15/45 |
30,000 |
28,004 |
|||||||||
Diamond 1 Finance Corp./ Diamond 2 Finance Corp., 4.420%, due 06/15/212 |
50,000 |
51,390 |
|||||||||
DISH DBS Corp., 7.875%, due 09/01/19 |
70,000 |
77,175 |
|||||||||
Dollar General Corp., 3.250%, due 04/15/23 |
50,000 |
51,916 |
|||||||||
Dominion Resources, Inc., 2.962%, due 07/01/193 |
20,000 |
20,361 |
|||||||||
DR Horton, Inc., 4.000%, due 02/15/20 |
70,000 |
72,100 |
|||||||||
DTE Electric Co., 3.700%, due 03/15/45 |
25,000 |
26,520 |
|||||||||
Duke Energy Indiana LLC, 6.350%, due 08/15/38 |
20,000 |
28,168 |
|||||||||
Duke Energy Progress LLC, 3.000%, due 09/15/21 |
160,000 |
170,803 |
|||||||||
Edison International, 2.950%, due 03/15/23 |
40,000 |
41,012 |
|||||||||
Energy Transfer Partners LP, 9.000%, due 04/15/19 |
130,000 |
145,321 |
|||||||||
Enterprise Products Operating LLC, 2.850%, due 04/15/21 |
30,000 |
30,999 |
|||||||||
ERAC USA Finance LLC, 2.800%, due 11/01/182 |
80,000 |
81,989 |
|||||||||
ERP Operating LP, 4.500%, due 06/01/45 |
15,000 |
16,807 |
|||||||||
4.750%, due 07/15/20 |
35,000 |
38,809 |
73
UBS Core Plus Bond Fund
Portfolio of investments
June 30, 2016
Face amount |
Value |
||||||||||
Bonds(Continued) |
|||||||||||
Corporate bonds(Continued) |
|||||||||||
United States(Continued) |
|||||||||||
Exelon Corp., 3.400%, due 04/15/26 |
$ |
30,000 |
$ |
31,370 |
|||||||
Exelon Generation Co. LLC, 2.950%, due 01/15/20 |
135,000 |
138,880 |
|||||||||
Exxon Mobil Corp., 4.114%, due 03/01/46 |
50,000 |
56,275 |
|||||||||
FedEx Corp., 3.875%, due 08/01/42 |
50,000 |
49,111 |
|||||||||
Flextronics International Ltd., 5.000%, due 02/15/23 |
80,000 |
83,650 |
|||||||||
Florida Power & Light Co., 5.950%, due 02/01/38 |
40,000 |
54,913 |
|||||||||
Ford Motor Co., 7.450%, due 07/16/31 |
30,000 |
40,097 |
|||||||||
Ford Motor Credit Co. LLC, 8.125%, due 01/15/20 |
125,000 |
149,096 |
|||||||||
Frontier Communications Corp., 8.500%, due 04/15/20 |
80,000 |
84,900 |
|||||||||
General Electric Co., 4.650%, due 10/17/21 |
55,000 |
62,992 |
|||||||||
Series A, 6.750%, due 03/15/32 |
60,000 |
84,245 |
|||||||||
General Motors Co., 6.600%, due 04/01/36 |
30,000 |
34,418 |
|||||||||
General Motors Financial Co., Inc., 3.100%, due 01/15/19 |
40,000 |
40,863 |
|||||||||
3.700%, due 11/24/20 |
40,000 |
41,100 |
|||||||||
Georgia-Pacific LLC, 8.000%, due 01/15/24 |
10,000 |
13,364 |
|||||||||
Gilead Sciences, Inc., 4.750%, due 03/01/46 |
60,000 |
68,128 |
|||||||||
Goldman Sachs Group, Inc., 2.875%, due 02/25/21 |
110,000 |
112,765 |
|||||||||
5.150%, due 05/22/45 |
5,000 |
5,210 |
|||||||||
5.750%, due 01/24/22 |
20,000 |
23,236 |
|||||||||
6.150%, due 04/01/18 |
100,000 |
107,795 |
|||||||||
Hartford Financial Services Group, Inc., 5.950%, due 10/15/36 |
80,000 |
98,198 |
|||||||||
Home Depot, Inc., 3.350%, due 09/15/25 |
60,000 |
65,420 |
|||||||||
Illinois Tool Works, Inc., 3.500%, due 03/01/24 |
40,000 |
43,839 |
|||||||||
Indiana Michigan Power Co., Series K, 4.550%, due 03/15/46 |
35,000 |
38,926 |
|||||||||
International Business Machines Corp., 2.250%, due 02/19/21 |
50,000 |
51,563 |
Face amount |
Value |
||||||||||
International Lease Finance Corp., 7.125%, due 09/01/182 |
$ |
90,000 |
$ |
98,815 |
|||||||
International Paper Co., 3.800%, due 01/15/261 |
30,000 |
31,499 |
|||||||||
John Deere Capital Corp., 2.450%, due 09/11/20 |
30,000 |
30,987 |
|||||||||
JPMorgan Chase & Co., 3.875%, due 09/10/24 |
170,000 |
175,888 |
|||||||||
4.625%, due 05/10/21 |
90,000 |
100,032 |
|||||||||
Kimberly-Clark Corp., 3.625%, due 08/01/20 |
30,000 |
32,852 |
|||||||||
Kinder Morgan Energy Partners LP, 5.000%, due 10/01/21 |
80,000 |
84,729 |
|||||||||
6.500%, due 09/01/39 |
45,000 |
47,088 |
|||||||||
Kraft Heinz Foods Co., 5.200%, due 07/15/452 |
50,000 |
59,248 |
|||||||||
Kroger Co., 3.850%, due 08/01/23 |
90,000 |
98,807 |
|||||||||
Lennar Corp., 4.750%, due 05/30/25 |
80,000 |
77,600 |
|||||||||
Lowe's Cos., Inc., 4.650%, due 04/15/42 |
30,000 |
34,982 |
|||||||||
Masco Corp., 3.500%, due 04/01/21 |
40,000 |
40,812 |
|||||||||
4.450%, due 04/01/25 |
40,000 |
41,404 |
|||||||||
McDonald's Corp., 2.100%, due 12/07/18 |
30,000 |
30,701 |
|||||||||
Medtronic, Inc., 4.375%, due 03/15/35 |
66,000 |
74,425 |
|||||||||
MetLife, Inc., 4.125%, due 08/13/42 |
20,000 |
19,924 |
|||||||||
Microsoft Corp., 2.375%, due 02/12/22 |
50,000 |
51,689 |
|||||||||
4.450%, due 11/03/45 |
30,000 |
33,742 |
|||||||||
Morgan Stanley, 4.350%, due 09/08/26 |
80,000 |
83,733 |
|||||||||
4.875%, due 11/01/22 |
60,000 |
65,712 |
|||||||||
Series J, 5.550%, due 07/15/204,5 |
70,000 |
69,342 |
|||||||||
5.625%, due 09/23/19 |
100,000 |
110,951 |
|||||||||
National Rural Utilities Cooperative Finance Corp., 2.300%, due 11/01/20 |
30,000 |
30,948 |
|||||||||
NBCUniversal Media LLC, 4.375%, due 04/01/21 |
30,000 |
33,620 |
|||||||||
Northern States Power Co., 3.600%, due 05/15/46 |
30,000 |
31,568 |
|||||||||
NRG Energy, Inc., 8.250%, due 09/01/20 |
10,000 |
10,300 |
|||||||||
Occidental Petroleum Corp., Series 1, 4.100%, due 02/01/21 |
30,000 |
32,842 |
74
UBS Core Plus Bond Fund
Portfolio of investments
June 30, 2016
Face amount |
Value |
||||||||||
Bonds(Continued) |
|||||||||||
Corporate bonds(Concluded) |
|||||||||||
United States(Concluded) |
|||||||||||
Oracle Corp., 2.500%, due 05/15/22 |
$ |
50,000 |
$ |
51,092 |
|||||||
5.375%, due 07/15/40 |
40,000 |
48,395 |
|||||||||
Pacific Gas & Electric Co., 2.950%, due 03/01/26 |
30,000 |
31,257 |
|||||||||
5.800%, due 03/01/37 |
25,000 |
32,638 |
|||||||||
PacifiCorp, 6.000%, due 01/15/39 |
40,000 |
54,107 |
|||||||||
PepsiCo, Inc., 4.875%, due 11/01/40 |
20,000 |
23,850 |
|||||||||
Pfizer, Inc., 7.200%, due 03/15/39 |
60,000 |
91,343 |
|||||||||
Philip Morris International, Inc., 2.900%, due 11/15/21 |
60,000 |
63,388 |
|||||||||
PNC Funding Corp., 3.300%, due 03/08/22 |
100,000 |
106,364 |
|||||||||
Principal Financial Group, Inc., 8.875%, due 05/15/19 |
90,000 |
106,796 |
|||||||||
Quicken Loans, Inc., 5.750%, due 05/01/252 |
80,000 |
77,200 |
|||||||||
QVC, Inc., 4.450%, due 02/15/25 |
60,000 |
60,361 |
|||||||||
Realogy Group LLC, 5.250%, due 12/01/212 |
85,000 |
87,019 |
|||||||||
Reynolds American, Inc., 5.700%, due 08/15/35 |
25,000 |
30,443 |
|||||||||
Seagate HDD Cayman, 5.750%, due 12/01/34 |
40,000 |
28,100 |
|||||||||
Sempra Energy, 9.800%, due 02/15/19 |
75,000 |
90,273 |
|||||||||
Sprint Capital Corp., 6.900%, due 05/01/19 |
70,000 |
66,850 |
|||||||||
Starwood Hotels & Resorts Worldwide, Inc., 4.500%, due 10/01/34 |
50,000 |
51,035 |
|||||||||
SunTrust Bank, 7.250%, due 03/15/18 |
100,000 |
108,993 |
|||||||||
SunTrust Banks, Inc., 2.900%, due 03/03/21 |
80,000 |
82,839 |
|||||||||
Synchrony Financial, 4.500%, due 07/23/25 |
40,000 |
41,477 |
|||||||||
TCI Communications, Inc., 7.875%, due 02/15/26 |
50,000 |
71,588 |
|||||||||
Texas Instruments, Inc., 1.650%, due 08/03/19 |
20,000 |
20,263 |
|||||||||
1.850%, due 05/15/22 |
40,000 |
40,064 |
|||||||||
Time Warner Entertainment Co. LP, 8.375%, due 03/15/23 |
35,000 |
45,655 |
Face amount |
Value |
||||||||||
Time Warner, Inc., 2.950%, due 07/15/26 |
$ |
30,000 |
$ |
30,242 |
|||||||
Union Pacific Corp., 4.050%, due 11/15/45 |
20,000 |
21,676 |
|||||||||
UnitedHealth Group, Inc., 4.625%, due 07/15/35 |
50,000 |
58,102 |
|||||||||
USG Corp., 5.875%, due 11/01/212 |
50,000 |
52,312 |
|||||||||
6.300%, due 11/15/16 |
40,000 |
40,812 |
|||||||||
Valero Energy Corp., 6.625%, due 06/15/37 |
50,000 |
54,696 |
|||||||||
Verizon Communications, Inc., 2.406%, due 09/14/184 |
50,000 |
51,247 |
|||||||||
4.522%, due 09/15/48 |
97,000 |
100,195 |
|||||||||
Virginia Electric & Power Co., 3.450%, due 09/01/22 |
40,000 |
43,009 |
|||||||||
Walt Disney Co., 2.150%, due 09/17/20 |
30,000 |
31,053 |
|||||||||
4.125%, due 06/01/44 |
30,000 |
34,092 |
|||||||||
Wells Fargo & Co., 5.375%, due 11/02/43 |
55,000 |
64,115 |
|||||||||
Williams Partners LP, 4.300%, due 03/04/24 |
50,000 |
47,057 |
|||||||||
Wyndham Worldwide Corp., 5.625%, due 03/01/21 |
85,000 |
94,907 |
|||||||||
Zimmer Biomet Holdings, Inc., 4.450%, due 08/15/45 |
60,000 |
61,102 |
|||||||||
Total United States corporate bonds |
9,131,208 |
||||||||||
Total corporate bonds (cost $10,730,612) |
11,127,552 |
||||||||||
Asset-backed securities: 6.88% |
|||||||||||
United States: 6.88% |
|||||||||||
AmeriCredit Automobile Receivables Trust, Series 2012-3, Class C, 2.420%, due 05/08/18 |
33,057 |
33,086 |
|||||||||
Series 2014-1, Class D, 2.540%, due 06/08/20 |
125,000 |
126,082 |
|||||||||
Series 2013-5, Class D, 2.860%, due 12/09/19 |
125,000 |
127,010 |
|||||||||
Capital Auto Receivables Asset Trust, Series 2013-3, Class A4, 1.680%, due 04/20/18 |
180,000 |
180,255 |
|||||||||
Series 2013-3, Class B, 2.320%, due 07/20/18 |
150,000 |
150,929 |
|||||||||
Series 2016-1, Class D, 4.030%, due 08/21/23 |
280,000 |
288,362 |
75
UBS Core Plus Bond Fund
Portfolio of investments
June 30, 2016
Face amount |
Value |
||||||||||
Bonds(Continued) |
|||||||||||
Asset-backed securities(Concluded) |
|||||||||||
United States(Concluded) |
|||||||||||
Drive Auto Receivables Trust, Series 2016-BA, Class A2, 1.380%, due 08/15/182 |
$ |
125,000 |
$ |
124,990 |
|||||||
Series 2016-BA, Class C, 3.190%, due 07/15/222 |
75,000 |
75,150 |
|||||||||
Series 2015-BA, Class D, 3.840%, due 07/15/212 |
200,000 |
198,479 |
|||||||||
Series 2015-CA, Class D, 4.200%, due 09/15/212 |
200,000 |
199,854 |
|||||||||
Series 2015-DA, Class D, 4.590%, due 01/17/232 |
125,000 |
125,910 |
|||||||||
Ford Credit Auto Owner Trust, Series 2014-A, Class C, 1.900%, due 09/15/19 |
175,000 |
176,142 |
|||||||||
Hyundai Auto Receivables Trust, Series 2012-B, Class C, 1.950%, due 10/15/18 |
200,000 |
200,277 |
|||||||||
Renaissance Home Equity Loan Trust, Series 2006-4, Class AF1, 5.545%, due 01/25/373 |
38,329 |
20,812 |
|||||||||
Santander Drive Auto Receivables Trust, Series 2014-2, Class D, 2.760%, due 02/18/20 |
175,000 |
177,607 |
|||||||||
Series 2012-4, Class D, 3.500%, due 06/15/18 |
226,000 |
228,175 |
|||||||||
Series 2012-2, Class D, 3.870%, due 02/15/18 |
192,528 |
193,087 |
|||||||||
Total asset-backed securities (cost $2,627,684) |
2,626,207 |
||||||||||
Commercial mortgage-backed securities: 6.51% |
|||||||||||
United States: 6.51% |
|||||||||||
Americold 2010 LLC Trust, Series 2010-ARTA, Class C, 6.811%, due 01/14/292 |
100,000 |
112,695 |
|||||||||
CDGJ Commercial Mortgage Trust, Series 2014-BXCH, Class DPA, 3.442%, due 12/15/272,4 |
100,000 |
97,564 |
|||||||||
CG-CCRE Commercial Mortgage Trust, Series 2014-FL1, Class C, 2.192%, due 06/15/312,4 |
125,000 |
123,313 |
|||||||||
Citigroup Commercial Mortgage Trust, Series 2016-P3, Class A4, 3.329%, due 04/15/49 |
150,000 |
160,156 |
Face amount |
Value |
||||||||||
Series 2015-GC33, Class AS, 4.114%, due 09/10/58 |
$ |
150,000 |
$ |
164,918 |
|||||||
Series 2015-GC29, Class C, 4.155%, due 04/10/484 |
200,000 |
197,643 |
|||||||||
Commercial Mortgage Loan Trust, Series 2015-DC1, Class C, 4.353%, due 02/10/484 |
100,000 |
97,788 |
|||||||||
Commercial Mortgage Pass Through Certificates, Series 2013-GAM, Class B, 3.531%, due 02/10/282,4 |
200,000 |
204,698 |
|||||||||
CSAIL Commercial Mortgage Trust, Series 2015-C4, Class C, 4.738%, due 11/15/484 |
150,000 |
146,452 |
|||||||||
CSMC Trust, Series 2015-DEAL, Class D, 3.542%, due 04/15/292,4 |
200,000 |
192,733 |
|||||||||
FDIC Guaranteed Notes Trust, Series 2010-C1, Class A, 2.980%, due 12/06/202 |
72,260 |
73,440 |
|||||||||
FREMF Mortgage Trust, Series 2016-K55, Class B, 4.160%, due 04/25/492,4 |
150,000 |
143,207 |
|||||||||
GAHR Commercial Mortgage Trust, Series 2015-NRF, Class CFX, 3.495%, due 12/15/342,4 |
150,000 |
151,733 |
|||||||||
GS Mortgage Securities Trust, Series 2014-GSFL, Class D, 4.342%, due 07/15/312,4 |
175,000 |
168,648 |
|||||||||
JP Morgan Chase Commercial Mortgage Securities Trust, Series 2014-CBM, Class D, 2.942%, due 10/15/292,4 |
125,000 |
121,248 |
|||||||||
Morgan Stanley Bank of America Merrill Lynch Trust, Series 2013-C10, Class C, 4.219%, due 07/15/464 |
100,000 |
103,432 |
|||||||||
Starwood Retail Property Trust, Series 2014-STAR, Class C, 2.942%, due 11/15/272,4 |
150,000 |
146,503 |
|||||||||
WFCG Commercial Mortgage Trust, Series 2015-BXRP, Class D, 3.013%, due 11/15/292,4 |
80,343 |
78,877 |
|||||||||
Total commercial mortgage-backed securities (cost $2,443,105) |
2,485,048 |
76
UBS Core Plus Bond Fund
Portfolio of investments
June 30, 2016
Face amount |
Value |
||||||||||
Bonds(Continued) |
|||||||||||
Mortgage & agency debt securities: 40.00% |
|||||||||||
United States: 40.00% |
|||||||||||
Federal Home Loan Mortgage Corp. Gold Pools, 3.000%, TBA |
$ |
1,500,000 |
$ |
1,554,649 |
|||||||
3.500 |
%, TBA |
1,675,000 |
1,765,921 |
||||||||
#A96140 4.000%, due 01/01/41 |
71,151 |
76,498 |
|||||||||
#C63008 6.000%, due 01/01/32 |
37,852 |
43,033 |
|||||||||
#G01717 6.500%, due 11/01/29 |
32,158 |
37,934 |
|||||||||
Federal National Mortgage Association Pools, 3.000%, TBA |
250,000 |
262,124 |
|||||||||
3.000 |
%, TBA |
1,000,000 |
1,037,735 |
||||||||
#AS0302 3.000%, due 08/01/43 |
21,913 |
22,787 |
|||||||||
#AU3735 3.000%, due 08/01/43, |
83,678 |
87,017 |
|||||||||
#AV1735 3.000%, due 11/01/43 |
66,554 |
69,216 |
|||||||||
3.500 |
%, TBA |
1,550,000 |
1,635,189 |
||||||||
4.000 |
%, TBA |
1,200,000 |
1,286,367 |
||||||||
4.000 |
%, TBA |
825,000 |
883,604 |
||||||||
#AH4568 4.000%, due 03/01/41 |
87,025 |
93,575 |
|||||||||
#AS5669 4.000%, due 08/01/45 |
192,538 |
210,060 |
|||||||||
4.500 |
%, TBA |
2,850,000 |
3,110,786 |
||||||||
#AE0106 4.500%, due 06/01/40 |
784 |
859 |
|||||||||
#890209 5.000%, due 05/01/40 |
114,145 |
126,938 |
|||||||||
#688066 5.500%, due 03/01/33 |
63,287 |
71,059 |
|||||||||
#688314 5.500%, due 03/01/33 |
66,839 |
76,698 |
|||||||||
#802481 5.500%, due 11/01/34 |
112,379 |
127,547 |
|||||||||
#408267 6.000%, due 03/01/28 |
11,095 |
12,895 |
|||||||||
#323715 6.000%, due 05/01/29 |
5,808 |
6,706 |
|||||||||
#676733 6.000%, due 01/01/33 |
44,536 |
51,099 |
|||||||||
#831730 6.500%, due 09/01/36 |
48,327 |
56,942 |
|||||||||
Government National Mortgage Association Pools, 3.000%, TBA |
850,000 |
888,383 |
Face amount |
Value |
||||||||||
#G2 MA3735 3.000%, due 06/20/46 |
$ |
375,000 |
$ |
392,441 |
|||||||
3.500%, TBA |
975,000 |
1,034,643 |
|||||||||
#G2 AB2784 3.500%, due 08/20/42 |
69,644 |
74,734 |
|||||||||
#G2 779425 4.000%, due 06/20/42 |
71,056 |
77,083 |
|||||||||
#G2 2687 6.000%, due 12/20/28 |
12,282 |
14,114 |
|||||||||
#G2 2794 6.000%, due 08/20/29 |
40,480 |
46,524 |
|||||||||
#G2 4245 6.000%, due 09/20/38 |
27,224 |
31,094 |
|||||||||
Total mortgage & agency debt securities (cost $15,154,774) |
15,266,254 |
||||||||||
Municipal bonds: 1.38% |
|||||||||||
Los Angeles Unified School District, 6.758%, due 07/01/34 |
70,000 |
100,898 |
|||||||||
Metropolitan Transportation Authority Revenue Bonds, Series A, Class A, 6.668%, due 11/15/39 |
30,000 |
43,227 |
|||||||||
State of California, GO Bonds, 7.300%, due 10/01/39 |
125,000 |
189,160 |
|||||||||
State of Illinois, GO Bonds, 5.877%, due 03/01/19 |
180,000 |
194,771 |
|||||||||
Total municipal bonds (cost $441,922) |
528,056 |
||||||||||
US government obligations: 14.34% |
|||||||||||
Israel Government AID Bond, 5.500%, due 09/18/33 |
125,000 |
175,812 |
|||||||||
Private Export Funding Corp., Series MM, 2.300%, due 09/15/20 |
150,000 |
154,361 |
|||||||||
Tennessee Valley Authority, 2.875%, due 09/15/24 |
70,000 |
75,985 |
|||||||||
US Treasury Bonds, 2.500%, due 02/15/461 |
720,000 |
750,403 |
|||||||||
2.500%, due 05/15/46 |
75,000 |
78,243 |
|||||||||
2.750%, due 11/15/42 |
400,000 |
440,391 |
|||||||||
2.875%, due 08/15/45 |
40,000 |
44,928 |
|||||||||
3.125%, due 08/15/44 |
475,000 |
559,498 |
|||||||||
3.750%, due 11/15/43 |
100,000 |
132,043 |
|||||||||
6.250%, due 05/15/30 |
50,000 |
78,604 |
|||||||||
US Treasury Inflation Indexed Notes (TIPS), 0.125%, due 04/15/216 |
375,000 |
387,971 |
|||||||||
0.625%, due 01/15/266 |
385,000 |
408,323 |
77
UBS Core Plus Bond Fund
Portfolio of investments
June 30, 2016
Face amount |
Value |
||||||||||
Bonds(Concluded) |
|||||||||||
US government obligations(Concluded) |
|||||||||||
US Treasury Notes, 0.875%, due 05/31/18 |
$ |
400,000 |
$ |
402,203 |
|||||||
1.000%, due 08/15/181 |
100,000 |
100,805 |
|||||||||
1.250%, due 03/31/21 |
300,000 |
303,551 |
|||||||||
1.375%, due 06/30/23 |
550,000 |
552,921 |
|||||||||
1.625%, due 05/31/23 |
50,000 |
51,139 |
|||||||||
1.625%, due 02/15/26 |
90,000 |
91,069 |
|||||||||
1.625%, due 05/15/261 |
675,000 |
683,648 |
|||||||||
Total US government obligations (cost $5,307,026) |
5,471,898 |
||||||||||
Non-US government obligations: 3.63% |
|||||||||||
Brazil: 1.09% |
|||||||||||
Banco Nacional de Desenvolvimento Economico e Social, 3.375%, due 09/26/162 |
200,000 |
198,400 |
|||||||||
Federative Republic of Brazil, 6.000%, due 04/07/26 |
200,000 |
216,800 |
|||||||||
415,200 |
|||||||||||
Chile: 0.28% |
|||||||||||
Republic of Chile, 3.250%, due 09/14/21 |
100,000 |
106,750 |
|||||||||
Colombia: 0.43% |
|||||||||||
Republic of Colombia, 8.125%, due 05/21/24 |
125,000 |
162,500 |
|||||||||
Germany: 0.13% |
|||||||||||
KFW, 3.011%, due 04/18/367 |
80,000 |
47,969 |
|||||||||
Indonesia: 0.29% |
|||||||||||
Republic of Indonesia, 5.875%, due 03/13/202 |
100,000 |
111,274 |
|||||||||
Mexico: 0.48% |
|||||||||||
United Mexican States, 4.000%, due 10/02/23 |
150,000 |
161,625 |
|||||||||
6.750%, due 09/27/34 |
15,000 |
20,160 |
|||||||||
181,785 |
|||||||||||
Panama: 0.11% |
|||||||||||
Republic of Panama, 8.875%, due 09/30/27 |
30,000 |
43,800 |
Face amount |
Value |
||||||||||
Peru: 0.47% |
|||||||||||
Peruvian Government International Bond, 4.125%, due 08/25/27 |
$ |
40,000 |
$ |
44,000 |
|||||||
7.350%, due 07/21/25 |
100,000 |
136,250 |
|||||||||
180,250 |
|||||||||||
Poland: 0.07% |
|||||||||||
Republic of Poland, 5.000%, due 03/23/22 |
25,000 |
28,125 |
|||||||||
Turkey: 0.28% |
|||||||||||
Republic of Turkey, 6.750%, due 04/03/18 |
100,000 |
107,445 |
|||||||||
Total Non-US government obligations (cost $1,348,625) |
1,385,098 |
||||||||||
Total bonds (cost $38,053,748) |
38,890,113 |
||||||||||
Shares |
|||||||||||
Short-term investment: 32.06% |
|||||||||||
Investment company: 32.06% |
|||||||||||
JPMorgan U.S. Government Money Market Fund, Capital Shares (cost $12,236,214) |
12,236,214 |
12,236,214 |
|||||||||
Number of contracts |
|||||||||||
Options purchased: 0.17% |
|||||||||||
Call options: 0.11% |
|||||||||||
3 Year Euro-Dollar Midcurve, strike@ USD 99.13, expires December 2016 |
38 |
21,137 |
|||||||||
20 Year US Treasury Bonds, strike@ USD 168.00, expires July 2016 |
4 |
19,000 |
|||||||||
40,137 |
|||||||||||
Put options: 0.03% |
|||||||||||
10 Year US Treasury Notes, strike@ USD 129.00, expires August 2016 |
11 |
1,375 |
|||||||||
20 Year US Treasury Bonds, strike@ USD 168.00, expires July 2016 |
4 |
1,625 |
78
UBS Core Plus Bond Fund
Portfolio of investments
June 30, 2016
Face amount covered by contracts |
Value |
||||||||||
Put options(Concluded) | |||||||||||
Foreign Exchange Option, Buy USD/INR, strike@ INR 67.80, expires August 2016, counterparty: MLI |
$ |
375,000 |
$ |
2,758 |
|||||||
Foreign Exchange Option, Buy USD/MXN, strike@ MXN 18.10, expires October 2016, counterparty: CITI |
370,000 |
5,778 |
|||||||||
11,536 |
|||||||||||
Notional Amount |
|||||||||||
Options purchased on credit default swaps on credit indices: 0.03%8 |
|||||||||||
Expiring 07/20/16. If exercised, the payment from the counterparty will be made upon the occurrence of a failure to pay, obligation acceleration, repudiation or restructuring of referenced obligation specified in the CDX.NA.IG Series 26 Index and the Fund receives quarterly fixed rate of 1.000% per annum. Underlying credit default swap terminating 06/20/21. European style. Counterparty: MLI |
$ |
3,750,000 |
2,607 |
Notional Amount |
Value |
||||||||||
Expiring 07/20/16. If exercised, the payment from the counterparty will be made upon the occurrence of a failure to pay, obligation acceleration, repudiation or restructuring of referenced obligation specified in the iTraxx Europe Series 25 Index and the Fund receives quarterly fixed rate of 1.000% per annum. Underlying credit default swap terminating 06/20/21. European style. Counterparty: MLI |
EUR |
3,500,000 |
$ |
9,450 |
|||||||
12,057 |
|||||||||||
Total options purchased (cost $85,567) |
63,730 |
||||||||||
Shares |
|||||||||||
Investment of cash collateral from securities loaned: 0.14% |
|||||||||||
JPMorgan U.S. Government Money Market Fund, Capital Shares (cost $53,900) |
53,900 |
53,900 |
|||||||||
Total investments: 134.27% (cost $50,429,429) |
51,243,957 |
||||||||||
Liabilities, in excess of cash and other assets: (34.27%) |
(13,079,230 |
) |
|||||||||
Net assets: 100.00% |
$ |
38,164,727 |
Notes to portfolio of investments
Aggregate cost for federal income tax purposes was $50,445,390; and net unrealized appreciation consisted of:
Gross unrealized appreciation |
$ |
951,596 |
|||||
Gross unrealized depreciation |
(153,029 |
) |
|||||
Net unrealized appreciation of investments |
$ |
798,567 |
For a listing of defined portfolio acronyms, counterparty abbreviations and currency abbreviations that are used throughout the Portfolio of investments as well as the tables that follow, please refer to page 110. Portfolio footnotes begin on page 83.
79
UBS Core Plus Bond Fund
Portfolio of investments
June 30, 2016
Forward foreign currency contracts
Counterparty |
Contracts to deliver |
In exchange for |
Maturity date |
Unrealized appreciation/ (depreciation) |
|||||||||||||||
JPMCB |
EUR |
510,000 |
USD |
575,545 |
07/20/16 |
$ |
9,264 |
||||||||||||
JPMCB |
USD |
760,761 |
NOK |
6,280,000 |
07/20/16 |
(10,363 |
) |
||||||||||||
MSC |
GBP |
260,000 |
USD |
354,002 |
07/20/16 |
7,837 |
|||||||||||||
MSC |
GBP |
280,000 |
USD |
369,963 |
07/20/16 |
(2,830 |
) |
||||||||||||
MSC |
NOK |
1,570,000 |
USD |
185,598 |
07/20/16 |
(2,002 |
) |
||||||||||||
Net unrealized appreciation on forward foreign currency contracts |
$ |
1,906 |
Futures contracts
Expiration date |
Cost/ (proceeds) |
Value |
Unrealized appreciation/ (depreciation) |
||||||||||||||||
US Treasury futures buy contracts: |
|||||||||||||||||||
US 10 Year Ultra Bond, 4 contracts (USD) |
September 2016 |
$ |
566,654 |
$ |
582,687 |
$ |
16,033 |
||||||||||||
US Ultra Bond, 1 contract (USD) |
September 2016 |
175,054 |
186,375 |
11,321 |
|||||||||||||||
2 Year US Treasury Notes, 11 contracts (USD) |
September 2016 |
2,395,690 |
2,412,609 |
16,919 |
|||||||||||||||
10 Year US Treasury Notes, 16 contracts (USD) |
September 2016 |
2,070,063 |
2,127,750 |
57,687 |
|||||||||||||||
US Treasury futures sell contracts: |
|||||||||||||||||||
US Long Bond, 2 contracts (USD) |
September 2016 |
(345,247 |
) |
(344,687 |
) |
560 |
|||||||||||||
5 Year US Treasury Notes, 24 contracts (USD) |
September 2016 |
(2,884,237 |
) |
(2,931,937 |
) |
(47,700 |
) |
||||||||||||
Interest rate futures sell contracts: |
|||||||||||||||||||
Euro-Bobl, 1 contract (EUR) |
September 2016 |
(146,789 |
) |
(148,263 |
) |
(1,474 |
) |
||||||||||||
Net unrealized appreciation on futures contracts |
$ |
53,346 |
Credit default swaps on corporate issuesbuy protection9
Counterparty |
Referenced obligation10 |
Notional amount |
Termination date |
Payments made by the Fund11 |
Upfront payments received |
Value |
Unrealized appreciation |
||||||||||||||||||||||||
GSI |
The Procter & Gamble Co., bond, 1.600%, due 11/15/18 |
USD |
180,000 |
12/20/20 |
1.000 |
% |
$ |
6,293 |
$ |
(6,236 |
) |
$ |
57 |
Credit default swaps on credit indicessell protection12
Counterparty |
Referenced index10 |
Notional amount |
Termination date |
Payments received by the Fund11 |
Upfront payments (made)/ received |
Value |
Unrealized depreciation |
Credit spread13 |
|||||||||||||||||||||||||||
MLI |
CMBX.NA.BB. Series 6 Index |
USD |
50,000 |
05/11/63 |
5.000 |
% |
$ |
(132 |
) |
$ |
(6,815 |
) |
$ |
(6,947 |
) |
6.234 |
% |
||||||||||||||||||
MLI |
CMBX.NA.BB. Series 6 Index |
USD |
200,000 |
05/11/63 |
5.000 |
(6,246 |
) |
(27,262 |
) |
(33,508 |
) |
6.234 |
|||||||||||||||||||||||
MSC |
CMBX.NA.AA. Series 9 Index |
USD |
375,000 |
09/17/58 |
1.500 |
26,998 |
(34,738 |
) |
(7,740 |
) |
2.131 |
||||||||||||||||||||||||
$ |
20,620 |
$ |
(68,815 |
) |
$ |
(48,195 |
) |
80
UBS Core Plus Bond Fund
Portfolio of investments
June 30, 2016
Total return swap agreements8
Counterparty |
Notional amount |
Termination date |
Payments made by the Fund11 |
Payments received by the Fund11 |
Upfront payments made |
Value |
Unrealized depreciation |
||||||||||||||||||||||||
MSC |
EUR |
200,000 |
12/20/16 |
3 month EURIBOR |
14 |
$ |
(46 |
) |
$ |
(37 |
) |
$ |
(83 |
) |
Centrally cleared interest rate swap agreements
Notional amount |
Termination date |
Payments made by the Fund11 |
Payments received by the Fund11 |
Value |
Unrealized depreciation |
||||||||||||||||||
CAD |
1,175,000 |
05/13/21 |
1.023 |
% |
3 month BA |
$ |
(4,914 |
) |
$ |
(2,602 |
) |
||||||||||||
USD |
1,050,000 |
11/30/22 |
1.902 |
3 month USD LIBOR |
(52,591 |
) |
(52,591 |
) |
|||||||||||||||
$ |
(57,505 |
) |
$ |
(55,193 |
) |
Options written
Expiration date |
Premiums received |
Value |
|||||||||||||
Call options |
|||||||||||||||
2 Year Euro-Dollar Midcurve, 38 contracts, strike @ USD 99.00 |
December 2016 |
$ |
10,317 |
$ |
(19,000 |
) |
|||||||||
Foreign Exchange Option, Sell USD/MXN, 370,000 contracts, strike @ MXN 19.00, counterparty: CITI |
October 2016 |
8,073 |
(7,902 |
) |
|||||||||||
Put options |
|||||||||||||||
Foreign Exchange Option, Sell USD/EUR, 750,000 contracts, strike @ EUR 0.88, counterparty: MLI |
August 2016 |
14,371 |
(5,215 |
) |
|||||||||||
Foreign Exchange Option, Sell USD/EUR, 750,000 contracts, strike @ EUR 0.87, counterparty: CITI |
September 2016 |
7,980 |
(4,514 |
) |
|||||||||||
Options written on credit default swaps on credit indices8 |
|||||||||||||||
If option exercised, the 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 26 Index and the Fund pays quarterly fixed rate of 5.000% per annum. Underlying credit default swap terminating 06/20/21. European style. Counterparty: JPMCB, Notional Amount USD 750,000 |
September 2016 |
2,925 |
(3,688 |
) |
|||||||||||
If option exercised, the 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.IG Series 26 Index and the Fund pays quarterly fixed rate of 1.000% per annum. Underlying credit default swap terminating 06/20/21. European style. Counterparty: MLI, Notional Amount USD 3,750,000 |
September 2016 |
11,625 |
(3,692 |
) |
|||||||||||
If option exercised, the 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 iTraxx Europe Crossover Series 25 Index and the Fund pays quarterly fixed rate of 5.000% per annum. Underlying credit default swap terminating 06/20/21. European style. Counterparty: MLI, Notional Amount EUR 330,000 |
September 2016 |
2,182 |
(1,977 |
) |
81
UBS Core Plus Bond Fund
Portfolio of investments
June 30, 2016
Options written (Concluded)
Expiration date |
Premiums received |
Value |
|||||||||||||
If option exercised, the 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 iTraxx Europe Series 25 Index and the Fund pays quarterly fixed rate of 1.000% per annum. Underlying credit default swap terminating 06/20/21. European style. Counterparty: MLI, Notional Amount EUR 3,500,000 |
July 2016 |
$ |
8,861 |
$ |
(1,994 |
) |
|||||||||
Total options written |
$ |
66,334 |
$ |
(47,982 |
) |
Written options activity for the year ended June 30, 2016 was as follows:
Number of contracts |
Premiums received |
||||||||||
Options outstanding at June 30, 2015 |
52 |
$ |
42,068 |
||||||||
Options written |
49 |
15,629 |
|||||||||
Options terminated in closing purchase transactions |
(37 |
) |
(26,346 |
) |
|||||||
Options expired prior to exercise |
(26 |
) |
(21,034 |
) |
|||||||
Options outstanding at June 30, 2016 |
38 |
$ |
10,317 |
Written swaptions and foreign exchange options activity for the year ended June 30, 2016 was as follows:
Swaptions & foreign exchange options outstanding at June 30, 2015 |
$ |
8,222 |
|||||
Swaptions & foreign exchange options written |
251,604 |
||||||
Swaptions & foreign exchange options terminated in closing purchase transactions |
(203,809 |
) |
|||||
Swaptions & foreign exchange options expired prior to exercise |
|
||||||
Swaptions & foreign exchange options outstanding at June 30, 2016 |
$ |
56,017 |
82
UBS Core Plus Bond Fund
Portfolio of investments
June 30, 2016
The following is a summary of the fair valuations according to the inputs used as of June 30, 2016 in valuing the Fund's investments:
Description |
Investments measured at fair value using the net asset value per share (or its equivalent) practical expedient at 6/30/2016a |
Unadjusted quoted prices in active markets for identical investments (Level 1) |
Other significant observable inputs (Level 2) |
Unobservable inputs (Level 3) |
Total |
||||||||||||||||||
Assets |
|||||||||||||||||||||||
Corporate bonds |
$ |
|
$ |
|
$ |
11,127,552 |
$ |
|
$ |
11,127,552 |
|||||||||||||
Asset-backed securities |
|
|
2,626,207 |
|
2,626,207 |
||||||||||||||||||
Commercial mortgage-backed securities |
|
|
2,485,048 |
|
2,485,048 |
||||||||||||||||||
Mortgage & agency debt securities |
|
|
15,266,254 |
|
15,266,254 |
||||||||||||||||||
Municipal bonds |
|
|
528,056 |
|
528,056 |
||||||||||||||||||
US government obligations |
|
|
5,471,898 |
|
5,471,898 |
||||||||||||||||||
Non-US government obligations |
|
|
1,385,098 |
|
1,385,098 |
||||||||||||||||||
Short-term investment |
|
|
12,236,214 |
|
12,236,214 |
||||||||||||||||||
Options purchased |
|
43,137 |
20,593 |
|
63,730 |
||||||||||||||||||
Investment of cash collateral from securities loaned |
|
|
53,900 |
|
53,900 |
||||||||||||||||||
Forward foreign currency contracts |
|
|
17,101 |
|
17,101 |
||||||||||||||||||
Futures contracts |
|
102,520 |
|
|
102,520 |
||||||||||||||||||
Total |
$ |
|
$ |
145,657 |
$ |
51,217,921 |
$ |
|
$ |
51,363,578 |
|||||||||||||
Liabilities |
|||||||||||||||||||||||
Forward foreign currency contracts |
$ |
|
$ |
|
$ |
(15,195 |
) |
$ |
|
$ |
(15,195 |
) |
|||||||||||
Futures contracts |
|
(49,174 |
) |
|
|
(49,174 |
) |
||||||||||||||||
Swap agreements, at value |
|
|
(132,593 |
) |
|
(132,593 |
) |
||||||||||||||||
Options written |
|
(19,000 |
) |
(28,982 |
) |
|
(47,982 |
) |
|||||||||||||||
Total |
$ |
|
$ |
(68,174 |
) |
$ |
(176,770 |
) |
$ |
|
$ |
(244,944 |
) |
a In accordance with Accounting Standards Update No. 2015-07, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Portfolio of investments.
At June 30, 2016, there were no transfers between Level 1 and Level 2.
Portfolio footnotes
1 Security, or portion thereof, was on loan at June 30, 2016.
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 June 30, 2016, the value of these securities amounted to $3,899,086 or 10.22% of net assets.
3 Step bondCoupon rate increases in increments to maturity. Rate disclosed is as of June 30, 2016. Maturity date disclosed is the ultimate maturity date.
4 Variable or floating rate securityThe interest rate shown is the current rate as of June 30, 2016 and changes periodically.
5 Perpetual investment. Date shown reflects the next call date.
83
UBS Core Plus Bond Fund
Portfolio of investments
June 30, 2016
6 Debt security whose principal and/or interest payments are adjusted for inflation, unlike debt securities that make fixed principal and interest payments. The interest rate paid by the securities is fixed, while the principal value rises or falls based on changes in an index. Thus, if inflation occurs, the principal and interest payments on the securities are adjusted accordingly to protect investors from inflationary loss. During a deflationary period, the principal and interest payments decrease, although the securities' principal amounts will not drop below their face amounts at maturity. In exchange for the inflation protection, the securities generally pay lower interest rates than typical government securities from the issuer's country. Only if inflation occurs will securities offer a higher real yield than a conventional security of the same maturity.
7 Rate shown is the discount rate at the date of purchase.
8 Illiquid investment as of June 30, 2016.
9 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 agreement less the recovery value of the referenced obligation.
10 Payments from/to the counterparty will be received/made upon the occurrence of bankruptcy and/or restructuring event with respect to the referenced index/obligation.
11 Payments made or received are based on the notional amount.
12 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 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 agreement less the recovery value of the underlying securities comprising the referenced index.
13 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. Credit spreads are unaudited.
14 Payment is based on the performance of the underlying Markit iBoxx EUR Liquid High Yield Index.
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 06/30/15 |
Purchases during the year ended 06/30/16 |
Sales during the year ended 06/30/16 |
Value 06/30/16 |
Net income earned from affiliate for the year ended 06/30/16 |
||||||||||||||||||
UBS Cash Management Prime Relationship Fund |
$ |
8,382,243 |
$ |
18,092,817 |
$ |
26,475,060 |
$ |
|
$ |
2,397 |
|||||||||||||
UBS Private Money Market Fund LLCb |
159,900 |
3,012,565 |
3,172,465 |
|
74 |
||||||||||||||||||
$ |
8,542,143 |
$ |
21,105,382 |
$ |
29,647,525 |
$ |
|
$ |
2,471 |
b The Advisor earned a management fee from this affiliated fund. Please see the Notes to financial statements for further information.
See accompanying notes to financial statements.
84
UBS Total Return Bond Fund
Portfolio performance
For the 12 months ending June 30, 2016, Class P shares of the UBS Total Return Bond Fund (the "Fund") returned 0.95%. For comparison purposes, the Barclays US Aggregate Index (the "Index") returned 6.00%. (Please note that the Fund's returns do not reflect the deduction of taxes that a shareholder would pay on the redemption of Fund shares, while index returns do not reflect the deduction of fees and expenses.)
Special Note
UBS Total Return Bond Fund is a newly organized open-end mutual fund. The Fund's Class P shares acquired the assets and liabilities of Fort Dearborn Income Securities, Inc., a closed-end fund (the "Predecessor Fund"), prior to the opening of business on May 23, 2016. The Predecessor Fund was also managed by the Advisor, and the day-to-day management of, and investment decisions for, the Fund and the Predecessor Fund are made by the same portfolio management team. The Funds had generally similar investment objectives and strategies. For the purpose of this report, we will comment on: (1) the performance of Fort Dearborn Income Securities, Inc. for the period July 1, 2015 through April 30, 2016, (2) the performance of Fort Dearborn Income Securities, Inc. for the month of May 2016 as it began transitioning its portfolio in anticipation of the reorganization into UBS Total Return Bond Fund and (3) key factors impacting the performance of UBS Total Return Bond Fund for the month of June 2016.
Portfolio performance summary (Predecessor Fund: July 1, 2015 through April 30, 2016)1
What worked:
• Yield curve positioning contributed to results.
• A yield curve flattening bias was beneficial as we had an overweight to the long end of the curve and an underweight to the short end of the curve.
• Credit beta hedging also contributed to performance.
• While the Fund's allocation to corporate debt generally detracted from performance, certain credit risk reducing positions mitigated the impact. During bouts of elevated risk aversion, these credit hedging strategies generated positive returns.
• Allocations to Treasury Inflation-Protected Securities ("TIPS") and selection of foreign agency securities were positive for performance.
What didn't work:
• Allocation and security selection within corporate credit were negative for results.
• The Fund's allocation to both investment grade and high yield corporate debt was negative for performance as corporate spreads widened during the period. General security selection in commodity-related issuers detracted from performance, primarily in the second half of 2015 as a result of a steep decline in the price of oil.
1 For a detailed commentary on the market environment in general during the reporting period, see pages 3-4.
85
UBS Total Return Bond Fund
• Duration positioning detracted from results.2
• Duration was tactically adjusted, but was shorter than that of the Index during the period. Duration underweight was not rewarded as rates moved lower during the period.
• The Fund's securitized exposure was a headwind for performance.
• An overweight allocation to commercial mortgage-backed securities ("CMBS") contributed to returns, but was not enough to offset weakness in security selection. Additionally, the Fund's allocation to agency mortgage-backed securities ("MBS") was negative for results.
Use of derivatives
• Interest rate swaps, futures and options were utilized to more effectively manage duration and yield curve positioning. Overall, duration management strategies detracted from results during the period.
• Credit derivatives, such as credit default swaps and options on credit default swaps, were utilized to manage exposure across different fixed income sectors. These instruments were used to help reduce risk in the portfolio, but also to add exposure to areas we found attractive, and offered an opportunity to boost net investment income. Overall, the use of these instruments was generally positive for performance during the period.
• Use of currency instruments, such as foreign exchange forward positions, was quite limited during the period given that the Predecessor Fund sought to hedge its foreign currency-denominated bond positions back to US dollars.
Portfolio summary (Predecessor Fund: May 2016)
Following shareholder approval of the proposal to reorganize the Predecessor Fund into UBS Total Return Bond Fund, the portfolio underwent several changes in May to prepare for the conversion to an open-end fund structure:
• Reduced allocation to corporate debt.
• Added to its exposure in agency MBS.
• Increased allocation to asset-backed securities ("ABS") and TIPS.
• Bolstered its overall liquidity profile by adding to existing US Treasury and cash positions in anticipation of potential outflows.
Portfolio summary (the Fund: June 2016)
For the month of June, the Fund modestly lagged the Index:
• Overall duration underweight positioning was not rewarded as government bond yields continued to decline over the month.
• Spread management moderately detracted from results, largely stemming from CMBS and agency MBS allocations.
2 Duration is a measure of a portfolio's sensitivity to interest rates, or the change in the value of a security or portfolio that will result from a 1% change in interest rates.
86
UBS Total Return Bond Fund
This letter is intended to assist shareholders in understanding how the Fund performed during the 12 months ended June 30, 2016. The views and opinions in the letter were current as of August 15, 2016. 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.
87
UBS Total Return Bond Fund
Average annual total returns for periods ended 06/30/16 (unaudited)
1 year |
5 years |
10 years |
|||||||||||||
Class P1 |
0.95 |
% |
4.75 |
% |
6.38 |
% |
|||||||||
Barclays US Aggregate Index2 |
6.00 |
% |
3.76 |
% |
5.13 |
% |
The annualized gross and net expense ratios as in the May 23, 2016 prospectuses were as follows: Class P0.81% and 0.50%. 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 Asset Management (Americas) Inc. (formerly, UBS Global Asset Management (Americas) Inc.), the Fund's investment advisor ("UBS 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 period ending October 27, 2017, do not exceed 0.50% for Class P 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. The fee waiver/expense reimbursement agreement may be terminated by the Fund's Board of Trustees at any time and also will terminate automatically upon the expiration or termination of the Fund's advisory contract with the Advisor. Upon termination of the fee waiver/expense reimbursement agreement, however, UBS AM (Americas)'s three year recoupment rights will survive.
1 Class P shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees, but Class P shares held through advisory programs may be subject to a program fee, which, if included, would have reduced performance.
2 The Barclays US Aggregate Index is an unmanaged broad based index designed to measure the US dollar-denominated, investment-grade, taxable bond market. The index includes bonds from the Treasury, government-related, corporate, mortgage-backed, asset-backed and commercial mortgage-backed sectors. Investors should note that indices do not reflect the deduction of fees and expenses.
For UBS Total Return Bond Fund, the Board of Trustees approved a temporary redemption fee of 2.00% following the reorganization of Fort Dearborn Income Securities, Inc. with the Fund. The temporary redemption fee will remain in effect for 90 days following the date of the reorganization (or until August 22, 2016).
Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit www.ubs.com/us-mutualfundperformance.
88
UBS Total Return Bond Fund
Illustration of an assumed investment of $5,000,000 in Class P shares (unaudited)
The following graph depicts the performance of UBS Total Return Bond Fund Class P shares versus the Barclays US Aggregate Index over the 10 years ended June 30, 2016. The performance provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Past performance is no guarantee of future results. Share price and returns will vary with market conditions; investors may realize a gain or loss upon redemption.
a The Fund is newly organized. The Fund's Class P shares acquired the assets and liabilities of the Fort Dearborn Income Securities, Inc., a closed-end fund (the "Predecessor Fund"), prior to the opening of business on May 23, 2016 (the "Reorganization"). The Predecessor Fund was also managed by the Advisor, and the day-to-day management of, and investment decisions for, the Fund and the Predecessor Fund are made by the same portfolio management team. The Funds have generally similar investment objectives and strategies. Therefore, the information shown above reflects the historical performance of the Predecessor Fund.
Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit www.ubs.com/us-mutualfundperformance.
89
UBS Total Return Bond Fund
Top ten long-term fixed income holdings (unaudited)
As of June 30, 2016
Percentage of net assets |
|||||||
Federal National Mortgage Association Pools, 4.500%, TBA |
8.8 |
% |
|||||
US Treasury Bonds, 3.125%, due 08/15/44 |
5.6 |
||||||
Federal Home Loan Mortgage Corp. Gold Pools, #G08702, 3.500%, due 04/01/46 |
4.2 |
||||||
US Treasury Inflation Indexed Notes (TIPS), 0.125%, due 04/15/20 |
3.6 |
||||||
Government National Mortgage Association Pools, #G2 MA3662, 3.000%, 05/20/46 |
3.2 |
||||||
Federal Home Loan Mortgage Corp. Gold Pools, #G08705, 3.000%, TBA |
3.0 |
||||||
US Treasury Notes, 0.875%, due 04/15/19 |
2.8 |
||||||
US Treasury Notes, 1.625%, due 05/15/26 |
2.6 |
||||||
US Treasury Notes, 0.875%, due 05/31/18 |
2.6 |
||||||
Government National Mortgage Association Pools, 3.000%, TBA |
2.3 |
||||||
Total |
38.7 |
% |
Industry diversification (unaudited)
As a percentage of net assets as of June 30, 2016
Bonds |
|||||||
Corporate bonds |
|||||||
Automobiles |
0.32 |
% |
|||||
Banks |
4.63 |
||||||
Beverages |
0.43 |
||||||
Biotechnology |
0.37 |
||||||
Building products |
0.42 |
||||||
Capital markets |
0.63 |
||||||
Chemicals |
0.86 |
||||||
Commercial services & supplies |
0.32 |
||||||
Communications equipment |
0.27 |
||||||
Construction materials |
0.46 |
||||||
Consumer finance |
1.57 |
||||||
Diversified financial services |
1.64 |
||||||
Diversified telecommunication services |
1.31 |
||||||
Electric utilities |
1.61 |
||||||
Food & staples retailing |
0.68 |
||||||
Hotels, restaurants & leisure |
0.66 |
||||||
Household durables |
1.17 |
||||||
Industrial conglomerates |
0.63 |
||||||
Insurance |
0.67 |
||||||
Life sciences tools & services |
0.12 |
||||||
Machinery |
0.25 |
||||||
Media |
2.07 |
||||||
Metals & mining |
0.57 |
||||||
Oil, gas & consumable fuels |
3.20 |
||||||
Paper & forest products |
0.16 |
||||||
Pharmaceuticals |
0.05 |
||||||
Real estate investment trust (REIT) |
0.34 |
||||||
Real estate management & development |
0.20 |
||||||
Semiconductors & semiconductor equipment |
0.17 |
||||||
Technology hardware, storage & peripherals |
1.02 |
||||||
Thrifts & mortgage finance |
0.50 |
||||||
Tobacco |
0.61 |
||||||
Trading companies & distributors |
0.35 |
||||||
Total corporate bonds |
28.26 |
% |
|||||
Asset-backed securities |
3.89 |
||||||
Commercial mortgage-backed securities |
6.12 |
||||||
Mortgage & agency debt securities |
35.20 |
||||||
Municipal bonds |
1.91 |
||||||
US government obligations |
22.94 |
||||||
Non-US government obligations |
2.09 |
||||||
Total bonds |
100.41 |
% |
|||||
Preferred stock |
0.08 |
||||||
Short-term investment |
14.14 |
||||||
Options purchased |
0.18 |
||||||
Total investments |
114.81 |
% |
|||||
Liabilities, in excess of cash and other assets |
(14.81 |
) |
|||||
Net assets |
100.00 |
% |
90
UBS Total Return Bond Fund
Portfolio of investments
June 30, 2016
Face amount |
Value |
||||||||||
Bonds: 100.41% |
|||||||||||
Corporate bonds: 28.26% |
|||||||||||
Brazil: 0.42% |
|||||||||||
Caixa Economica Federal, 2.375%, due 11/06/171 |
$ |
555,000 |
$ |
539,689 |
|||||||
Canada: 0.42% |
|||||||||||
Encana Corp., 6.625%, due 08/15/37 |
172,000 |
171,259 |
|||||||||
NOVA Chemicals Corp., 5.250%, due 08/01/231 |
360,000 |
361,800 |
|||||||||
Total Canada corporate bonds |
533,059 |
||||||||||
Croatia: 0.52% |
|||||||||||
Agrokor DD, 8.875%, due 02/01/201 |
630,000 |
659,925 |
|||||||||
France: 0.70% |
|||||||||||
Orange SA, 9.000%, due 03/01/31 |
575,000 |
891,053 |
|||||||||
Germany: 0.48% |
|||||||||||
Unitymedia Hessen GmbH & Co. KG, 5.500%, due 01/15/231 |
300,000 |
301,500 |
|||||||||
Unitymedia Kabel BW GmbH, 6.125%, due 01/15/251 |
300,000 |
307,470 |
|||||||||
Total Germany corporate bonds |
608,970 |
||||||||||
Ireland: 0.16% |
|||||||||||
XL Group PLC, Series E, 6.500%, due 04/15/172,3 |
290,000 |
201,550 |
|||||||||
Israel: 0.05% |
|||||||||||
Teva Pharmaceutical Finance IV BV, 3.650%, due 11/10/21 |
57,000 |
60,249 |
|||||||||
Luxembourg: 0.64% |
|||||||||||
ArcelorMittal, 6.500%, due 03/01/21 |
450,000 |
462,375 |
|||||||||
Intelsat Jackson Holdings SA, 7.500%, due 04/01/21 |
500,000 |
345,000 |
|||||||||
Total Luxembourg corporate bonds |
807,375 |
||||||||||
Malaysia: 0.34% |
|||||||||||
SSG Resources Ltd., 4.250%, due 10/04/224 |
410,000 |
431,363 |
|||||||||
Mexico: 0.54% |
|||||||||||
Cemex SAB de CV, 5.875%, due 03/25/191 |
350,000 |
358,750 |
Face amount |
Value |
||||||||||
Petroleos Mexicanos, 3.500%, due 01/30/23 |
$ |
350,000 |
$ |
328,685 |
|||||||
Total Mexico corporate bonds |
687,435 |
||||||||||
Netherlands: 0.39% |
|||||||||||
LYB International Finance BV, 4.875%, due 03/15/44 |
470,000 |
497,282 |
|||||||||
Norway: 0.41% |
|||||||||||
Eksportfinans ASA, 5.500%, due 06/26/17 |
500,000 |
517,440 |
|||||||||
Portugal: 1.13% |
|||||||||||
EDP Finance BV, 4.900%, due 10/01/191 |
1,000,000 |
1,062,180 |
|||||||||
6.000%, due 02/02/181 |
350,000 |
369,250 |
|||||||||
Total Portugal corporate bonds |
1,431,430 |
||||||||||
United Kingdom: 1.27% |
|||||||||||
Barclays Bank PLC, 6.050%, due 12/04/171 |
900,000 |
942,521 |
|||||||||
HSBC Holdings PLC, 3.400%, due 03/08/21 |
460,000 |
474,044 |
|||||||||
Lloyds Banking Group PLC, 4.582%, due 12/10/251 |
200,000 |
201,149 |
|||||||||
Total United Kingdom corporate bonds |
1,617,714 |
||||||||||
United States: 20.79% |
|||||||||||
21st Century Fox America, Inc., 7.750%, due 12/01/45 |
350,000 |
511,568 |
|||||||||
ADT Corp., 3.500%, due 07/15/22 |
440,000 |
403,150 |
|||||||||
AEP Texas Central Co., Series E, 6.650%, due 02/15/33 |
495,000 |
638,181 |
|||||||||
Alabama Power Co., 6.000%, due 03/01/39 |
175,000 |
232,161 |
|||||||||
Ally Financial, Inc., 6.250%, due 12/01/17 |
250,000 |
261,875 |
|||||||||
Altria Group, Inc., 9.950%, due 11/10/38 |
300,000 |
539,962 |
|||||||||
Anadarko Petroleum Corp., 4.500%, due 07/15/44 |
100,000 |
91,903 |
|||||||||
5.550%, due 03/15/26 |
300,000 |
331,441 |
|||||||||
Anheuser-Busch InBev Finance, Inc., 4.900%, due 02/01/46 |
470,000 |
550,543 |
|||||||||
AXA Financial, Inc., 7.000%, due 04/01/28 |
165,000 |
217,725 |
|||||||||
Bank of America Corp., 6.110%, due 01/29/37 |
475,000 |
561,612 |
91
UBS Total Return Bond Fund
Portfolio of investments
June 30, 2016
Face amount |
Value |
||||||||||
Bonds(Continued) |
|||||||||||
Corporate bonds(Continued) |
|||||||||||
United States(Continued) |
|||||||||||
CalAtlantic Group, Inc., 6.250%, due 12/15/21 |
$ |
310,000 |
$ |
329,375 |
|||||||
6.625%, due 05/01/20 |
310,000 |
340,225 |
|||||||||
Case New Holland Industrial, Inc., 7.875%, due 12/01/17 |
300,000 |
322,500 |
|||||||||
Celgene Corp., 5.000%, due 08/15/45 |
430,000 |
473,896 |
|||||||||
Cemex Finance LLC, 9.375%, due 10/12/221 |
200,000 |
220,000 |
|||||||||
CF Industries, Inc., 4.950%, due 06/01/43 |
250,000 |
230,025 |
|||||||||
Charter Communications Operating LLC/Charter Communications Operating Capital, 6.484%, due 10/23/451 |
630,000 |
752,691 |
|||||||||
CIT Group, Inc., 5.500%, due 02/15/191 |
250,000 |
261,562 |
|||||||||
Citigroup, Inc., 5.500%, due 09/13/25 |
600,000 |
672,877 |
|||||||||
Series M, 6.300%, due 05/15/242,3 |
450,000 |
447,705 |
|||||||||
ConocoPhillips Co., 4.200%, due 03/15/21 |
130,000 |
140,411 |
|||||||||
Devon Energy Corp., 5.000%, due 06/15/45 |
110,000 |
102,680 |
|||||||||
DISH DBS Corp., 7.875%, due 09/01/19 |
350,000 |
385,875 |
|||||||||
DR Horton, Inc., 4.000%, due 02/15/20 |
477,000 |
491,310 |
|||||||||
Enterprise Products Operating LLC, 2.850%, due 04/15/21 |
380,000 |
392,659 |
|||||||||
Exelon Corp., 3.400%, due 04/15/26 |
300,000 |
313,700 |
|||||||||
Ford Motor Co., 7.450%, due 07/16/31 |
300,000 |
400,975 |
|||||||||
Frontier Communications Corp., 8.500%, due 04/15/20 |
250,000 |
265,312 |
|||||||||
General Electric Co., Series D, 5.000%, due 01/21/212,3 |
749,000 |
795,812 |
|||||||||
General Motors Financial Co., Inc., 3.000%, due 09/25/17 |
500,000 |
507,250 |
|||||||||
4.750%, due 08/15/17 |
850,000 |
877,069 |
|||||||||
Georgia-Pacific LLC, 8.000%, due 01/15/24 |
150,000 |
200,463 |
Face amount |
Value |
||||||||||
Goldman Sachs Group, Inc., 5.750%, due 01/24/22 |
$ |
455,000 |
$ |
528,612 |
|||||||
6.750%, due 10/01/37 |
220,000 |
271,520 |
|||||||||
Host Hotels & Resorts LP, Series E, 4.000%, due 06/15/25 |
420,000 |
427,267 |
|||||||||
International Lease Finance Corp., 7.125%, due 09/01/181 |
400,000 |
439,176 |
|||||||||
JPMorgan Chase & Co., Series 1, 7.900%, due 04/30/182,3 |
425,000 |
433,500 |
|||||||||
Kinder Morgan Energy Partners LP, 5.800%, due 03/15/35 |
135,000 |
138,756 |
|||||||||
Kinder Morgan, Inc., 6.500%, due 09/15/20 |
300,000 |
330,657 |
|||||||||
7.250%, due 06/01/18 |
300,000 |
324,441 |
|||||||||
Kroger Co., 6.900%, due 04/15/38 |
150,000 |
208,980 |
|||||||||
Lennar Corp., 4.750%, due 05/30/25 |
330,000 |
320,100 |
|||||||||
Liberty Mutual Group, Inc., 4.250%, due 06/15/231 |
400,000 |
425,057 |
|||||||||
Life Technologies Corp., 6.000%, due 03/01/20 |
135,000 |
152,364 |
|||||||||
Masco Corp., 3.500%, due 04/01/21 |
210,000 |
214,263 |
|||||||||
MetLife, Inc., 6.400%, due 12/15/36 |
210,000 |
224,179 |
|||||||||
Motorola Solutions, Inc., 3.500%, due 03/01/23 |
350,000 |
337,927 |
|||||||||
NextEra Energy Capital Holdings, Inc., 6.650%, due 06/15/672 |
200,000 |
163,000 |
|||||||||
Occidental Petroleum Corp., 2.600%, due 04/15/22 |
380,000 |
389,432 |
|||||||||
Pacific Gas & Electric Co., 2.950%, due 03/01/26 |
350,000 |
364,670 |
|||||||||
PacifiCorp, 6.000%, due 01/15/39 |
250,000 |
338,169 |
|||||||||
Quicken Loans, Inc., 5.750%, due 05/01/251 |
660,000 |
636,900 |
|||||||||
Realogy Group LLC, 5.250%, due 12/01/211 |
250,000 |
255,938 |
|||||||||
Regency Energy Partners LP, 5.500%, due 04/15/23 |
500,000 |
504,491 |
|||||||||
Reynolds American, Inc., 7.250%, due 06/15/37 |
175,000 |
237,982 |
|||||||||
Seagate HDD Cayman, 3.750%, due 11/15/18 |
1,050,000 |
1,050,662 |
|||||||||
5.750%, due 12/01/34 |
350,000 |
245,875 |
92
UBS Total Return Bond Fund
Portfolio of investments
June 30, 2016
Face amount |
Value |
||||||||||
Bonds(Continued) |
|||||||||||
Corporate bonds(Concluded) |
|||||||||||
United States(Concluded) |
|||||||||||
Southern Copper Corp., 6.750%, due 04/16/40 |
$ |
250,000 |
$ |
257,963 |
|||||||
Sprint Capital Corp., 6.875%, due 11/15/28 |
200,000 |
157,000 |
|||||||||
Starwood Hotels & Resorts Worldwide, Inc., 3.750%, due 03/15/25 |
270,000 |
281,241 |
|||||||||
4.500%, due 10/01/34 |
180,000 |
183,727 |
|||||||||
SunTrust Bank, 7.250%, due 03/15/18 |
495,000 |
539,515 |
|||||||||
Synchrony Financial, 4.500%, due 07/23/25 |
340,000 |
352,555 |
|||||||||
Texas Instruments, Inc., 1.850%, due 05/15/22 |
220,000 |
220,353 |
|||||||||
Time Warner Cable, Inc., 7.300%, due 07/01/38 |
100,000 |
125,289 |
|||||||||
8.750%, due 02/14/19 |
210,000 |
245,198 |
|||||||||
USG Corp., 5.875%, due 11/01/211 |
310,000 |
324,338 |
|||||||||
Valero Energy Corp., 7.500%, due 04/15/32 |
265,000 |
315,613 |
|||||||||
Wells Fargo Capital X, 5.950%, due 12/15/36 |
275,000 |
290,125 |
|||||||||
Williams Partners LP, 6.300%, due 04/15/40 |
525,000 |
498,252 |
|||||||||
Wyndham Worldwide Corp., 3.900%, due 03/01/23 |
360,000 |
368,700 |
|||||||||
Total United States corporate bonds |
26,388,280 |
||||||||||
Total corporate bonds (cost $34,998,360) |
35,872,814 |
||||||||||
Asset-backed securities: 3.89% |
|||||||||||
United States: 3.89% |
|||||||||||
AmeriCredit Automobile Receivables Trust, Series 2012-3, Class C, 2.420%, due 05/08/18 |
661,140 |
661,718 |
|||||||||
Series 2014-1, Class D, 2.540%, due 06/08/20 |
920,000 |
927,965 |
|||||||||
Capital Auto Receivables Asset Trust, Series 2016-1, Class D, 4.030%, due 08/21/23 |
975,000 |
1,004,118 |
|||||||||
Drive Auto Receivables Trust, Series 2016-AA, Class B, 3.170%, due 05/15/201 |
585,000 |
594,163 |
|||||||||
Series 2015-DA, Class C, 3.380%, due 11/15/211 |
975,000 |
987,063 |
Face amount |
Value |
||||||||||
Santander Drive Auto Receivables Trust, Series 2012-4, Class D, 3.500%, due 06/15/18 |
$ |
760,000 |
$ |
767,312 |
|||||||
Total asset-backed securities (cost $4,936,285) |
4,942,339 |
||||||||||
Commercial mortgage-backed securities: 6.12% |
|||||||||||
United States: 6.12% |
|||||||||||
Americold 2010 LLC Trust, Series 2010-ARTA, Class C, 6.811%, due 01/14/291 |
695,000 |
783,230 |
|||||||||
BXHTL Mortgage Trust, Series 2015-JWRZ, Class GL2, 4.131%, due 05/15/291,2 |
500,000 |
470,260 |
|||||||||
Citigroup Commercial Mortgage Trust, Series 2015-P1, Class A5, 3.717%, due 09/15/48 |
570,000 |
626,516 |
|||||||||
Series 2015-GC29, Class C, 4.155%, due 04/10/482 |
350,000 |
345,874 |
|||||||||
Commercial Mortgage Pass Through Certificates, Series 2014-CR14, Class C, 4.604%, due 02/10/472 |
250,000 |
260,046 |
|||||||||
Commercial Mortgage Trust, Series 2015-DC1, Class A5, 3.350%, due 02/10/48 |
525,000 |
558,407 |
|||||||||
Series 2015-DC1, Class B, 4.035%, due 02/10/482 |
340,000 |
352,638 |
|||||||||
Series 2015-CR26, Class C, 4.645%, due 10/10/482 |
325,000 |
317,694 |
|||||||||
CSMC Trust, Series 2015-DEAL, Class D, 3.542%, due 04/15/291,2 |
475,000 |
457,741 |
|||||||||
FREMF Mortgage Trust, Series 2016-K55, Class B, 4.160%, due 04/25/491,2 |
525,000 |
501,226 |
|||||||||
GS Mortgage Securities Trust, Series 2014-GSFL, Class D, 4.342%, due 07/15/311,2 |
500,000 |
481,852 |
|||||||||
Series 2014-GC18, Class C, 5.112%, due 01/10/472 |
300,000 |
318,290 |
|||||||||
JP Morgan Chase Commercial Mortgage Securities Trust, Series 2015-CSMO, Class E, 4.392%, due 01/15/321,2 |
325,000 |
320,312 |
|||||||||
Morgan Stanley Bank of America Merrill Lynch Trust, Series 2015-C25, Class A5, 3.635%, due 10/15/48 |
500,000 |
545,592 |
|||||||||
Series 2014-C17, Class B, 4.464%, due 08/15/472 |
500,000 |
542,153 |
93
UBS Total Return Bond Fund
Portfolio of investments
June 30, 2016
Face amount |
Value |
||||||||||
Bonds(Continued) |
|||||||||||
Commercial mortgage-backed securities(Concluded) |
|||||||||||
United States(Concluded) |
|||||||||||
Morgan Stanley Capital I Trust, Series 2014-CPT, Class E, 3.560%, due 07/13/291,2 |
$ |
250,000 |
$ |
244,304 |
|||||||
Starwood Retail Property Trust, Series 2014-STAR, Class C, 2.942%, due 11/15/271,2 |
125,000 |
122,086 |
|||||||||
VNDO Mortgage Trust, Series 2013-PENN, Class D, 3.947%, due 12/13/291,2 |
500,000 |
513,351 |
|||||||||
Total commercial mortgage-backed securities (cost $7,674,805) |
7,761,572 |
||||||||||
Mortgage & agency debt securities: 35.20% |
|||||||||||
United States: 35.20% |
|||||||||||
Federal Home Loan Mortgage Corp. Gold Pools 3.000%, TBA |
2,350,000 |
2,435,616 |
|||||||||
#G08705 3.000%, due 05/01/46 |
3,641,542 |
3,777,897 |
|||||||||
3.500%, TBA |
2,200,000 |
2,319,419 |
|||||||||
#G08702, 3.500%, due 04/01/46 |
5,062,346 |
5,341,114 |
|||||||||
4.000%, TBA |
2,450,000 |
2,622,095 |
|||||||||
#E01127 6.500%, due 02/01/17 |
1,827 |
1,846 |
|||||||||
Federal National Mortgage Association Pools, 3.000%, TBA |
2,075,000 |
2,153,299 |
|||||||||
3.000%, TBA |
875,000 |
917,434 |
|||||||||
3.500%, TBA |
675,000 |
712,099 |
|||||||||
4.000%, TBA |
2,450,000 |
2,624,036 |
|||||||||
4.000%, TBA |
2,700,000 |
2,894,326 |
|||||||||
#AE1568 4.000%, due 09/01/40 |
251,480 |
270,460 |
|||||||||
4.500%, TBA |
10,225,000 |
11,160,627 |
|||||||||
#688066 5.500%, due 03/01/33 |
50,630 |
56,848 |
|||||||||
#793666 5.500%, due 09/01/34 |
231,590 |
262,013 |
|||||||||
#802481 5.500%, due 11/01/34 |
43,223 |
49,056 |
|||||||||
#596124 6.000%, due 11/01/28 |
54,852 |
63,487 |
|||||||||
Government National Mortgage Association Pools, 3.000%, TBA |
2,850,000 |
2,978,695 |
Face amount |
Value |
||||||||||
#G2 MA3662 3.000%, due 05/20/46 |
$ |
3,841,297 |
$ |
4,019,956 |
|||||||
#781029 6.500%, due 05/15/29 |
15,787 |
18,597 |
|||||||||
Total mortgage & agency debt securities (cost $44,503,616) |
44,678,920 |
||||||||||
Municipal bonds: 1.91% |
|||||||||||
California: 0.39% |
|||||||||||
State of California, GO Bonds, 7.300%, due 10/01/39 |
325,000 |
491,816 |
|||||||||
Illinois: 1.35% |
|||||||||||
State of Illinois, GO Bonds, 5.665%, due 03/01/18 |
710,000 |
749,362 |
|||||||||
5.877%, due 03/01/19 |
885,000 |
957,623 |
|||||||||
1,706,985 |
|||||||||||
New Jersey: 0.17% |
|||||||||||
New Jersey Turnpike Authority, Revenue Bonds, Series F, 7.414%, due 01/01/40 |
140,000 |
219,148 |
|||||||||
Total municipal bonds (cost $2,280,064) |
2,417,949 |
||||||||||
US government obligations: 22.94% |
|||||||||||
US Treasury Bonds, 2.500%, due 02/15/46 |
1,475,000 |
1,537,285 |
|||||||||
2.500%, due 05/15/46 |
275,000 |
286,892 |
|||||||||
2.875%, due 08/15/45 |
1,400,000 |
1,572,484 |
|||||||||
3.125%, due 08/15/44 |
6,025,000 |
7,096,793 |
|||||||||
US Treasury Inflation Indexed Notes (TIPS), 0.125%, due 04/15/205 |
4,360,000 |
4,557,754 |
|||||||||
0.625%, due 01/15/265 |
680,000 |
721,193 |
|||||||||
US Treasury Notes, 0.875%, due 05/31/18 |
3,300,000 |
3,318,176 |
|||||||||
0.875%, due 04/15/19 |
3,475,000 |
3,491,969 |
|||||||||
1.375%, due 06/30/23 |
2,075,000 |
2,086,022 |
|||||||||
1.625%, due 04/30/23 |
925,000 |
946,065 |
|||||||||
1.625%, due 05/31/23 |
150,000 |
153,416 |
|||||||||
1.625%, due 05/15/26 |
3,305,000 |
3,347,344 |
|||||||||
Total US government obligations (cost $28,288,211) |
29,115,393 |
||||||||||
Non-US government obligations: 2.09% |
|||||||||||
Brazil: 0.68% |
|||||||||||
Federative Republic of Brazil, 6.000%, due 04/07/26 |
800,000 |
867,200 |
94
UBS Total Return Bond Fund
Portfolio of investments
June 30, 2016
Face amount |
Value |
||||||||||
Bonds(Concluded) |
|||||||||||
Non-US government obligations(Concluded) |
|||||||||||
Chile: 0.17% |
|||||||||||
Republic of Chile, 3.250%, due 09/14/21 |
$ |
200,000 |
$ |
213,500 |
|||||||
Colombia: 0.26% |
|||||||||||
Republic of Colombia, 8.125%, due 05/21/24 |
250,000 |
325,000 |
|||||||||
Indonesia: 0.12% |
|||||||||||
Republic of Indonesia, 5.875%, due 03/13/201 |
140,000 |
155,784 |
|||||||||
Mexico: 0.39% |
|||||||||||
United Mexican States, 4.000%, due 10/02/23 |
400,000 |
431,000 |
|||||||||
6.750%, due 09/27/34 |
50,000 |
67,200 |
|||||||||
498,200 |
|||||||||||
Panama: 0.12% |
|||||||||||
Republic of Panama, 8.875%, due 09/30/27 |
100,000 |
146,000 |
|||||||||
Peru: 0.35% |
|||||||||||
Peruvian Government International Bond, 7.350%, due 07/21/25 |
325,000 |
442,812 |
|||||||||
Total Non-US government obligations (cost $2,595,426) |
2,648,496 |
||||||||||
Total bonds (cost $125,276,767) |
127,437,483 |
||||||||||
Shares |
|||||||||||
Preferred stock: 0.08% |
|||||||||||
United States: 0.08% |
|||||||||||
JPMorgan Chase & Co. 5.450%, due 03/01/183 (cost $102,000) |
4,000 |
104,520 |
|||||||||
Short-term investment: 14.14% |
|||||||||||
Investment company: 14.14% |
|||||||||||
JPMorgan U.S. Government Money Market Fund, Capital Shares (cost $17,940,956) |
17,940,956 |
17,940,956 |
Number of contracts |
Value |
||||||||||
Options purchased: 0.18% |
|||||||||||
Call options: 0.12% |
|||||||||||
3 Year Euro-Dollar Midcurve, strike @ USD 99.13, expires December 2016 |
130 |
$ |
72,313 |
||||||||
20 Year US Treasury Bonds, strike @ USD 168.00, expires July 2016 |
16 |
76,000 |
|||||||||
148,313 |
|||||||||||
Put options: 0.03% |
|||||||||||
10 Year US Treasury Notes, strike @ USD 129.00, expires August 2016 |
38 |
4,750 |
|||||||||
20 Year US Treasury Bonds, strike @ USD 168.00, expires July 2016 |
16 |
6,500 |
|||||||||
Face amount covered by contracts |
|||||||||||
Foreign Exchange Option, Buy USD/INR, strike @ INR 67.80, expires August 2016, counterparty: BOA |
$ |
1,300,000 |
9,559 |
||||||||
Foreign Exchange Option, Buy USD/MXN, strike @ MXN 18.10, expires October 2016, counterparty: BOA |
1,300,000 |
20,302 |
|||||||||
41,111 |
95
UBS Total Return Bond Fund
Portfolio of investments
June 30, 2016
Notional amount |
Value |
||||||||||
Options purchased(Concluded) |
|||||||||||
Options purchased on credit default swaps on credit indices: 0.03%6 |
|||||||||||
Expiring 07/20/16. If exercised, the payment from the counterparty will be made upon the occurrence of a failure to pay, obligation acceleration, repudiation or restructuring of referenced obligation specified in the CDX.NA.IG. Series 26 Index and the Fund receives quarterly fixed rate of 1.000% per annum. Underlying credit default swap terminating 06/20/21. European style. Counterparty: BOA |
$ |
13,000,000 |
$ |
9,037 |
Notional amount |
Value |
||||||||||
Expiring 07/20/16. If exercised, the payment from the counterparty will be made upon the occurrence of a failure to pay, obligation acceleration, repudiation or restructuring of referenced obligation specified in the iTraxx Europe Series 25 Index and the Fund receives quarterly fixed rate of 1.000% per annum. Underlying credit default swap terminating 06/20/21. European style. Counterparty: BOA |
EUR |
13,000,000 |
$ |
35,100 |
|||||||
44,137 |
|||||||||||
Total options purchased (cost $209,884) |
233,561 |
||||||||||
Total investments: 114.81% (cost $143,529,607) |
145,716,520 |
||||||||||
Liabilities, in excess of cash and other assets: (14.81%) |
(18,794,388 |
) |
|||||||||
Net assets: 100.00% |
$ |
126,922,132 |
Notes to portfolio of investments
Aggregate cost for federal income tax purposes was $143,598,843; and net unrealized appreciation consisted of:
Gross unrealized appreciation |
$ |
3,067,566 |
|||||
Gross unrealized depreciation |
(949,889 |
) |
|||||
Net unrealized appreciation of investments |
$ |
2,117,677 |
For a listing of defined portfolio acronyms, counterparty abbreviations and currency abbreviations that are used throughout the Portfolio of investments as well as the tables that follow, please refer to page 110. Portfolio footnotes begin on page 100.
Forward foreign currency contracts
Counterparty |
Contracts to deliver |
In exchange for |
Maturity date |
Unrealized appreciation/ (depreciation) |
|||||||||||||||
BB |
NOK |
5,290,000 |
USD |
625,230 |
07/20/16 |
$ |
(6,873 |
) |
|||||||||||
JPMCB |
EUR |
2,940,000 |
USD |
3,317,849 |
07/20/16 |
53,402 |
|||||||||||||
JPMCB |
USD |
2,643,283 |
NOK |
21,820,000 |
07/20/16 |
(36,007 |
) |
||||||||||||
MSC |
GBP |
865,000 |
USD |
1,177,736 |
07/20/16 |
26,074 |
|||||||||||||
MSC |
GBP |
935,000 |
USD |
1,235,411 |
07/20/16 |
(9,449 |
) |
||||||||||||
Net unrealized appreciation on forward foreign currency contracts |
$ |
27,147 |
96
UBS Total Return Bond Fund
Portfolio of investments
June 30, 2016
Futures contracts
Expiration date |
Cost/ (proceeds) |
Value |
Unrealized appreciation/ (depreciation) |
||||||||||||||||
US Treasury futures buy contracts: |
|||||||||||||||||||
10 Year US Treasury Notes, 15 contracts (USD) |
September 2016 |
$ |
1,963,850 |
$ |
1,994,765 |
$ |
30,915 |
||||||||||||
US Treasury futures sell contracts: |
|||||||||||||||||||
US 10 Year Ultra Bond, 4 contracts (USD) |
September 2016 |
(575,744 |
) |
(582,687 |
) |
(6,943 |
) |
||||||||||||
US Long Bond, 15 contracts (USD) |
September 2016 |
(2,535,760 |
) |
(2,585,157 |
) |
(49,397 |
) |
||||||||||||
5 Year US Treasury Notes, 47 contracts (USD) |
September 2016 |
(5,667,431 |
) |
(5,741,710 |
) |
(74,279 |
) |
||||||||||||
Net unrealized depreciation on futures contracts |
$ |
(99,704 |
) |
Total return swap agreements6
Counterparty |
Notional amount |
Termination date |
Payments made by the Fund7 |
Payments received by the Fund7 |
Upfront payments |
Value |
Unrealized depreciation |
||||||||||||||||||||||||
BOA |
EUR |
800,000 |
12/20/16 |
3 month EURIBOR |
8 |
$ |
|
$ |
(5,192 |
) |
$ |
(5,192 |
) |
Options written
Expiration date |
Premiums received |
Value |
|||||||||||||
Call options |
|||||||||||||||
2 Year Euro-Dollar Midcurve, 130 contracts, strike @ USD 99.00 |
December 2016 |
$ |
38,545 |
$ |
(65,000 |
) |
|||||||||
Foreign Exchange Option, Sell USD/MXN, Notional Amount USD 1,300,000, strike @ MXN 19.00, counterparty: BOA |
October 2016 |
33,656 |
(27,764 |
) |
|||||||||||
Put options |
|||||||||||||||
Foreign Exchange Option, Sell USD/EUR, Notional Amount USD 2,500,000, strike @ EUR 0.87, counterparty: CITI |
September 2016 |
26,600 |
(15,047 |
) |
|||||||||||
Options written on credit default swaps on credit indices6 |
|||||||||||||||
If option exercised, the 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 26 Index and the Fund pays quarterly fixed rate of 5.000% per annum. Underlying credit default swap terminating 06/20/21. European style. Counterparty: BOA, Notional Amount USD 2,600,000 |
September 2016 |
11,180 |
(12,784 |
) |
|||||||||||
If option exercised, the 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.IG Series 26 Index and the Fund pays quarterly fixed rate of 1.000% per annum. Underlying credit default swap terminating 06/20/21. European style. Counterparty: BOA, Notional Amount USD 13,000,000 |
September 2016 |
14,950 |
(12,799 |
) |
|||||||||||
If option exercised, the 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 iTraxx Europe Crossover Series 25 Index and the Fund pays quarterly fixed rate of 5.000% per annum. Underlying credit default swap terminating 06/20/21. European style. Counterparty: BOA, Notional Amount EUR 1,100,000 |
September 2016 |
7,275 |
(6,592 |
) |
97
UBS Total Return Bond Fund
Portfolio of investments
June 30, 2016
Options written (Concluded)
Expiration date |
Premiums received |
Value |
|||||||||||||
If option exercised, the 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 iTraxx Europe Series 25 Index and the Fund pays quarterly fixed rate of 1.000% per annum. Underlying credit default swap terminating 06/20/21. European style. Counterparty: BOA, Notional Amount EUR 13,000,000 |
July 2016 |
$ |
12,186 |
$ |
(7,405 |
) |
|||||||||
Total options written |
$ |
144,392 |
$ |
(147,391 |
) |
Written options activity for the period ended June 30, 2016 was as follows:
Number of contracts |
Premiums received |
||||||||||
Options outstanding at September 30, 2015 |
|
$ |
|
||||||||
Options written |
168 |
56,897 |
|||||||||
Options terminated in closing purchase transactions |
(38 |
) |
(18,352 |
) |
|||||||
Options expired prior to exercise |
|
|
|||||||||
Options outstanding at June 30, 2016 |
130 |
$ |
38,545 |
Written swaptions and foreign exchange options activity for the period ended June 30, 2016 was as follows:
Swaptions & foreign exchange options outstanding at September 30, 2015 |
$ |
219,998 |
|||||
Swaptions & foreign exchange options written |
748,137 |
||||||
Swaptions & foreign exchange options terminated in closing purchase transactions |
(862,288 |
) |
|||||
Swaptions & foreign exchange options expired prior to exercise |
|
||||||
Swaptions & foreign exchange options outstanding at June 30, 2016 |
$ |
105,847 |
The following is a summary of the fair valuations according to the inputs used as of June 30, 2016 in valuing the Fund's investments:
Description |
Investments measured at fair value using the net asset value per share (or its equivalent) practical 6/30/2016a |
Unadjusted quoted prices in active markets for expedient at (Level 1) |
Other significant identical investments (Level 2) |
Unobservable observable inputs (Level 3) |
inputs Total |
||||||||||||||||||
Assets |
|||||||||||||||||||||||
Corporate bonds |
$ |
|
$ |
|
$ |
35,872,814 |
$ |
|
$ |
35,872,814 |
|||||||||||||
Asset-backed securities |
|
|
4,942,339 |
|
4,942,339 |
||||||||||||||||||
Commercial mortgage-backed securities |
|
|
7,761,572 |
|
7,761,572 |
||||||||||||||||||
Mortgage & agency debt securities |
|
|
44,678,920 |
|
44,678,920 |
||||||||||||||||||
Municipal bonds |
|
|
2,417,949 |
|
2,417,949 |
||||||||||||||||||
US government obligations |
|
|
29,115,393 |
|
29,115,393 |
||||||||||||||||||
Non-US government obligations |
|
|
2,648,496 |
|
2,648,496 |
||||||||||||||||||
Preferred stock |
|
104,520 |
|
|
104,520 |
98
UBS Total Return Bond Fund
Portfolio of investments
June 30, 2016
Description |
Investments measured at fair value using the net asset value per share (or its equivalent) practical 6/30/2016a |
Unadjusted quoted prices in active markets for expedient at (Level 1) |
Other significant identical investments (Level 2) |
Unobservable observable inputs (Level 3) |
inputs Total |
||||||||||||||||||
Short-term investment |
$ |
|
$ |
|
$ |
17,940,956 |
$ |
|
$ |
17,940,956 |
|||||||||||||
Options purchased |
|
159,563 |
73,998 |
|
233,561 |
||||||||||||||||||
Forward foreign currency contracts |
|
|
79,476 |
|
79,476 |
||||||||||||||||||
Futures contracts |
|
30,915 |
|
|
30,915 |
||||||||||||||||||
Total |
$ |
|
$ |
294,998 |
$ |
145,531,913 |
$ |
|
$ |
145,826,911 |
|||||||||||||
Liabilities |
|||||||||||||||||||||||
Forward foreign currency contracts |
$ |
|
$ |
|
$ |
(52,329 |
) |
$ |
|
$ |
(52,329 |
) |
|||||||||||
Futures contracts |
|
(130,619 |
) |
|
|
(130,619 |
) |
||||||||||||||||
Swap agreements, at value |
|
|
(5,192 |
) |
|
(5,192 |
) |
||||||||||||||||
Options written |
|
(65,000 |
) |
(82,391 |
) |
|
(147,391 |
) |
|||||||||||||||
Total |
$ |
|
$ |
(195,619 |
) |
$ |
(139,912 |
) |
$ |
|
$ |
(335,531 |
) |
a In accordance with Accounting Standards Update No. 2015-07, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Portfolio of investments.
At June 30, 2016, there were no transfers between Level 1 and Level 2.
Level 3 Rollforward Disclosure
Collateralized debt obligation |
Total |
||||||||||
Assets |
|||||||||||
Beginning balance |
$ |
2,985,015 |
$ |
2,985,015 |
|||||||
Purchases |
|
|
|||||||||
Issuances |
|
|
|||||||||
Sales |
(2,889,090 |
) |
(2,889,090 |
) |
|||||||
Accrued discounts (premiums) |
|
|
|||||||||
Total realized gain (loss) |
(153,028 |
) |
(153,028 |
) |
|||||||
Change in net unrealized appreciation (depreciation) |
57,103 |
57,103 |
|||||||||
Transfers into Level 3 |
|
|
|||||||||
Transfers out of Level 3 |
|
|
|||||||||
Ending balance |
$ |
|
$ |
|
The change in net unrealized appreciation (depreciation) relating to the Level 3 investments held at June 30, 2016 was $0.
99
UBS Total Return Bond Fund
Portfolio of investments
June 30, 2016
Portfolio footnotes
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 June 30, 2016, the value of these securities amounted to $14,051,268 or 11.07% of net assets.
2 Variable or floating rate securityThe interest rate shown is the current rate as of June 30, 2016 and changes periodically.
3 Perpetual investment. Date shown reflects the next call date.
4 Security was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At June 30, 2016, the value of this security amounted to $431,363 or 0.34% of net assets.
5 Debt security whose principal and/or interest payments are adjusted for inflation, unlike debt securities that make fixed principal and interest payments. The interest rate paid by the securities is fixed, while the principal value rises or falls based on changes in an index. Thus, if inflation occurs, the principal and interest payments on the securities are adjusted accordingly to protect investors from inflationary loss. During a deflationary period, the principal and interest payments decrease, although the securities' principal amounts will not drop below their face amounts at maturity. In exchange for the inflation protection, the securities generally pay lower interest rates than typical government securities from the issuer's country. Only if inflation occurs will securities offer a higher real yield than a conventional security of the same maturity.
6 Illiquid investment as of June 30, 2016.
7 Payments made or received are based on the notional amount.
8 Payment is based on the performance of the underlying Markit iBoxx EUR Liquid High Yield Index.
The table below details the Fund's investment in a fund 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 09/30/15 |
Purchases during the period ended 06/30/16 |
Sales during the period ended 06/30/16 |
Value 06/30/16 |
Net income earned from affiliate for the period ended 06/30/16 |
||||||||||||||||||
UBS Cash Management Prime Relationship Fund |
$ |
2,324,286 |
$ |
10,025,562 |
$ |
12,349,848 |
$ |
|
$ |
383 |
See accompanying notes to financial statements.
100
UBS Municipal Bond Fund
Portfolio performance (unaudited)
For the 12 months ended June 30, 2016, Class A shares of UBS Municipal Bond Fund (the "Fund") gained 7.74% (Class A shares returned 5.30% after the deduction of the maximum sales charge), while Class P shares rose 8.01%. For comparison purposes, the Fund's benchmark, the Barclays Municipal Bond Index (the "Index"), returned 7.65%, and the Barclays Municipal Managed Money Intermediate (1-17) Index advanced 7.61% over the same time period. (Class P shares have lower expenses than other share classes of the Fund. Returns for all share classes over various time periods are shown on page 102; please note that the Fund's returns do not reflect the deduction of taxes that a shareholder could pay on Fund distributions or the redemption of Fund shares, while index returns do not reflect the deduction of fees and expenses.)
The Fund posted a positive return during the reporting period and outperformed the benchmark, primarily due to its yield curve positioning.
The Fund used US Treasury futures during the reporting period to adjust its duration positioning. Overall, the use of Treasury futures detracted from performance.
Portfolio performance summary1
What worked:
• Positioning in several parts of the municipal yield curve was additive for performance. In order of magnitude, the Fund's overweights to the 1520 year, 710 year and 35 year portions of the municipal curve were the most beneficial given their outperformance versus the Index. (The yield curve plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity dates.)
• An underweight to AAA-rated municipal bonds was beneficial as they lagged the Index.
• Security selection in the transportation and industrial development revenue/pollution control revenue sectors were additive for results.
What didn't work:
• An underweight to the long end of the municipal yield curve was detrimental to results as it outperformed the Index.
• An underweight to BBB-rated municipal securities was not rewarded as they outperformed the Index.
• An underweight to the hospital sector detracted from results as it outperformed in the Index.
This letter is intended to assist shareholders in understanding how the Fund performed during the 12 months ended June 30, 2016. The views and opinions in the letter were current as of August 15, 2016. 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/am-us.
1 For a detailed commentary on the market environment in general during the reporting period, see pages 3-4.
101
UBS Municipal Bond Fund
Average annual total returns for periods ended 06/30/16 (unaudited)
1 year |
Inception1 |
||||||||||
Before deducting maximum sales charge |
|||||||||||
Class A2 |
7.74 |
% |
4.85 |
% |
|||||||
Class C3 |
7.21 |
4.37 |
|||||||||
Class P4 |
8.01 |
5.11 |
|||||||||
After deducting maximum sales charge |
|||||||||||
Class A2 |
5.30 |
% |
3.40 |
% |
|||||||
Class C3 |
6.46 |
4.37 |
|||||||||
Barclays Municipal Bond Index5 |
7.65 |
% |
5.29 |
% |
|||||||
Barclays Municipal Managed Money Intermediate (1-17) Index6 |
7.61 |
% |
5.08 |
% |
The annualized gross and net expense ratios, respectively, for each class of shares as in the October 28, 2015 prospectuses were as follows: Class A1.46% and 0.65%; Class C1.98% and 1.15%; Class P1.23% and 0.40%. 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 Asset Management (Americas) Inc. (formerly, UBS Global Asset Management (Americas) Inc.), the Fund's investment advisor ("UBS 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 period ending October 27, 2016, do not exceed 0.65% for Class A shares, 1.15% for Class C shares and 0.40% for Class P 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. The fee waiver/expense reimbursement agreement may be terminated by the Fund's Board of Trustees at any time and also will terminate automatically upon the expiration or termination of the Fund's advisory contract with the Advisor. Upon termination of the fee waiver/expense reimbursement agreement, however, the UBS AM (Americas)'s three year recoupment rights will survive.
1 Inception date of all shares of UBS Municipal Bond Fund and the indices is November 10, 2014.
2 Maximum sales charge for Class A shares is 2.25%. 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 distribution and service fees.
4 Class P shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees, but Class P shares held through advisory programs may be subject to a program fee, which, if included, would have reduced performance.
5 The Barclays Municipal Bond Index is an unmanaged index designed to measure the total return of the US dollar denominated tax exempt bond market. Investors should note that indices do not reflect the deduction of fees and expenses.
6 The Barclays Municipal Managed Money Intermediate (1-17) Index is an unmanaged sub-index of the Barclays Municipal Managed Money Index, which is a rules-based, market-value-weighted index designed to track the performance of municipal securities issued by state and local municipalities whose interest is exempt from federal income tax and the federal alternative minimum tax. Investors should note that indices do not reflect the deduction of fees and expenses.
Prior to February 17, 2015, if an investor sold or exchanged shares less than 90 days after purchase, a redemption fee of 1.00% of the amount sold or exchanged was deducted at the time of the transaction, except as noted otherwise in the prospectus. For sales or exchanges taking place on or after February 17, 2015 but prior to August 3, 2015, there was a reduction in the redemption holding period from 90 days to 30 days. Effective August 3, 2015, the 1.00% redemption fee imposed on sales or exchanges of any class of shares of the funds made during the holding periods specified in the prospectus was eliminated. Please refer to the prospectus for further information.
Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder could pay on Fund distributions or the redemption of Fund shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit www.ubs.com/us-mutualfundperformance.
102
UBS Municipal Bond Fund
Illustration of an assumed investment of $10,000 in Class A shares (adjusted for 2.25% maximum sales charge) and $5,000,000 in Class P shares (unaudited)
The following two graphs depict the performance of UBS Municipal Bond Fund Class A and Class P shares versus the Barclays Municipal Bond Index and Barclays Municipal Managed Money Intermediate (1-17) Index from November 10, 2014, which is the inception date of the two classes, through June 30, 2016. The performance of Class C shares will vary based upon the different class specific expenses and sales charges. The performance provided does not reflect the deduction of taxes that a shareholder could pay on Fund distributions or the redemption of Fund shares. Past performance is no guarantee of future results. Share price and returns will vary with market conditions; investors may realize a gain or loss upon redemption.
Past performance does not predict future performance, and the performance information provided does not reflect the deduction of taxes that a shareholder could pay on Fund distributions or the redemption of Fund shares. The return and principal value of an investment will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance results assume reinvestment of all dividends and capital gain distributions at net asset value on the ex-dividend dates. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit www.ubs.com/us-mutualfundperformance.
103
UBS Municipal Bond Fund
Summary of municipal securities by state (unaudited)
As a percentage of net assets as of June 30, 2016
Long-term municipal bonds |
|||||||
California |
6.63 |
% |
|||||
Connecticut |
1.05 |
||||||
Florida |
9.73 |
||||||
Hawaii |
1.16 |
||||||
Illinois |
15.87 |
||||||
Indiana |
1.23 |
||||||
Kentucky |
2.57 |
||||||
Maryland |
0.91 |
||||||
Massachusetts |
7.34 |
||||||
Michigan |
3.22 |
||||||
Minnesota |
0.91 |
||||||
Mississippi |
4.39 |
||||||
Nebraska |
2.15 |
||||||
Nevada |
2.06 |
||||||
New Jersey |
7.41 |
||||||
New York |
8.72 |
||||||
Pennsylvania |
5.30 |
||||||
Rhode Island |
1.77 |
||||||
Texas |
19.67 |
||||||
Washington |
3.61 |
||||||
Wisconsin |
0.47 |
||||||
Total long-term municipal bonds |
106.17 |
% |
|||||
Short-term investment |
0.03 |
||||||
Total investments |
106.20 |
% |
|||||
Liabilities, in excess of other assets |
(6.20 |
) |
|||||
Net assets |
100.00 |
% |
104
UBS Municipal Bond Fund
Portfolio of investments
June 30, 2016
Face amount |
Value |
||||||||||
Long-term municipal bonds: 106.17% |
|||||||||||
California: 6.63% |
|||||||||||
California State Public Works Board Revenue Bonds, Series F, 5.000%, due 05/01/26 |
$ |
1,500,000 |
$ |
1,913,025 |
|||||||
Golden State Tobacco Securitization Corp., Enhanced Tobacco Settlement, Asset-Backed Revenue Bonds, Series A, 5.000%, due 06/01/32 |
1,000,000 |
1,243,020 |
|||||||||
5.000%, due 06/01/33 |
650,000 |
804,973 |
|||||||||
Irvine Unified School District, Community Facilities District No. 09-1, Series B, 0.400%, due 09/01/511 |
3,600,000 |
3,600,000 |
|||||||||
7,561,018 |
|||||||||||
Connecticut: 1.05% |
|||||||||||
Connecticut Health & Educational Facilities Authority, Fairfield University, Revenue Bonds, Series M, 5.000%, due 07/01/182 |
1,100,000 |
1,194,831 |
|||||||||
Florida: 9.73% |
|||||||||||
School Board of Volusia County, Certificates Refunding, Master Lease Program, COP, Series B, 5.000%, due 08/01/31 |
1,000,000 |
1,221,270 |
|||||||||
School District of St. Lucie County, Sales Tax Revenue Bonds, AGC, 5.000%, due 10/01/26 |
1,020,000 |
1,285,139 |
|||||||||
South Florida Water Management District, COP, Series 2015, 5.000%, due 10/01/34 |
1,000,000 |
1,245,530 |
|||||||||
The School Board of Broward County, COP, Series B, 5.000%, due 07/01/30 |
2,000,000 |
2,464,300 |
|||||||||
The School Board of Miami-Dade County, COP, Series A, 5.000%, due 05/01/31 |
1,000,000 |
1,205,870 |
|||||||||
Series D, 5.000%, due 02/01/23 |
1,000,000 |
1,208,460 |
|||||||||
5.000%, due 11/01/31 |
1,000,000 |
1,218,120 |
Face amount |
Value |
||||||||||
The School Board of Palm Beach County, COP, Series B, 5.000%, due 08/01/31 |
$ |
1,000,000 |
$ |
1,237,800 |
|||||||
11,086,489 |
|||||||||||
Hawaii: 1.16% |
|||||||||||
County Of Hawaii, GO Bonds, Series A, 5.000%, due 09/01/27 |
1,025,000 |
1,327,867 |
|||||||||
Illinois: 15.87% |
|||||||||||
Chicago Transit Authority Revenue Bonds, Series A, 5.000%, due 12/01/162 |
2,605,000 |
2,653,114 |
|||||||||
City of Chicago O'Hare International Airport, Senior Lien Revenue Bonds, Series B, 5.000%, due 01/01/30 |
1,000,000 |
1,228,240 |
|||||||||
5.000%, due 01/01/31 |
1,050,000 |
1,285,063 |
|||||||||
5.250%, due 01/01/29 |
500,000 |
605,070 |
|||||||||
County of Cook, GO Refunding Bonds, Series A, 5.000%, due 11/15/20 |
1,830,000 |
2,081,168 |
|||||||||
Illinois Finance Authority, Sherman Health Systems Revenue Bonds, Series A, 5.500%, due 08/01/172 |
1,000,000 |
1,051,440 |
|||||||||
Illinois State Toll Highway Authority Revenue Bonds, Series B, 5.000%, due 01/01/27 |
1,000,000 |
1,297,040 |
|||||||||
5.000%, due 01/01/40 |
1,000,000 |
1,217,850 |
|||||||||
State of Illinois, GO Bonds, 5.000%, due 08/01/18 |
3,450,000 |
3,687,429 |
|||||||||
State of Illinois Revenue Bonds, 5.000%, due 06/15/22 |
1,105,000 |
1,323,956 |
|||||||||
Series B, 5.250%, due 01/01/18 |
1,000,000 |
1,054,750 |
|||||||||
State of Illinois, Sales Tax Revenue Bonds, 5.750%, due 06/15/20 |
510,000 |
600,204 |
|||||||||
18,085,324 |
|||||||||||
Indiana: 1.23% |
|||||||||||
Vanderburgh County Redevelopment District Revenue Bonds, 5.250%, due 08/01/162 |
1,400,000 |
1,405,670 |
105
UBS Municipal Bond Fund
Portfolio of investments
June 30, 2016
Face amount |
Value |
||||||||||
Long-term municipal bonds(Continued) |
|||||||||||
Kentucky: 2.57% |
|||||||||||
Kentucky Property & Buildings Community Project No. 87, Revenue Bonds, 5.250%, due 02/01/192 |
$ |
2,635,000 |
$ |
2,932,465 |
|||||||
Maryland: 0.91% |
|||||||||||
State of Maryland, GO Bonds, Series B, 4.500%, due 08/01/17 |
1,000,000 |
1,042,690 |
|||||||||
Massachusetts: 7.34% |
|||||||||||
Massachusetts Water Resources Authority Revenue Bonds, Series C, 5.000%, due 08/01/35 |
1,000,000 |
1,274,870 |
|||||||||
The Commonwealth of Massachusetts, Consolidated Loan of 2002, GO Bonds, Series C, NATL-RE, 5.500%, due 11/01/17 |
1,000,000 |
1,065,890 |
|||||||||
The Commonwealth of Massachusetts, Consolidated Loan of 2016, GO Bonds, Series A, 5.000%, due 03/01/34 |
1,125,000 |
1,380,881 |
|||||||||
The Commonwealth of Massachusetts, Consolidated Loan, GO Bonds, Series A, 5.000%, due 07/01/30 |
1,500,000 |
1,940,775 |
|||||||||
The Commonwealth of Massachusetts, GO Bonds, Series B, 5.000%, due 07/01/22 |
780,000 |
953,160 |
|||||||||
5.000%, due 07/01/27 |
1,325,000 |
1,750,511 |
|||||||||
8,366,087 |
|||||||||||
Michigan: 3.22% |
|||||||||||
Michigan Finance Authority Revenue Bonds, Q-SBLF, 5.000%, due 06/01/20 |
1,150,000 |
1,189,514 |
|||||||||
Michigan Municipal Bond Authority, Clean Water Revolving Fund Revenue Bonds, 5.000%, due 10/01/17 |
1,160,000 |
1,223,974 |
Face amount |
Value |
||||||||||
State Building Authority of Michigan, Facilities Program Revenue Bonds, Series I, 5.000%, due 04/15/21 |
$ |
1,060,000 |
$ |
1,251,637 |
|||||||
3,665,125 |
|||||||||||
Minnesota: 0.91% |
|||||||||||
State of Minnesota, Trunk Highway, GO Bonds, Series B, 4.000%, due 08/01/17 |
1,000,000 |
1,037,290 |
|||||||||
Mississippi: 4.39% |
|||||||||||
Mississippi Business Finance Corp., Gulf Opportunity Zone Industrial Development, Chevron USA, Inc., Project Revenue Bonds, Series L, 0.440%, due 11/01/351 |
5,000,000 |
5,000,000 |
|||||||||
Nebraska: 2.15% |
|||||||||||
Public Power Generation Agency, Whelan Energy Center Unit-2 Revenue Bonds, Series A, 5.000%, due 01/01/24 |
2,000,000 |
2,445,720 |
|||||||||
Nevada: 2.06% |
|||||||||||
Clark County, Las Vegas-Mccarran International Airport Revenue Bonds, Series C, 5.000%, due 07/01/27 |
1,815,000 |
2,344,181 |
|||||||||
New Jersey: 7.41% |
|||||||||||
New Jersey Economic Development Authority, School Facilities Construction Revenue Bonds, Series II, 5.000%, due 03/01/22 |
750,000 |
838,927 |
|||||||||
Series XX, 5.000%, due 06/15/22 |
1,000,000 |
1,122,290 |
|||||||||
New Jersey Turnpike Authority Revenue Bonds, Series A, 5.000%, due 01/01/27 |
1,000,000 |
1,248,480 |
|||||||||
Series E, 5.000%, due 01/01/34 |
860,000 |
1,045,063 |
106
UBS Municipal Bond Fund
Portfolio of investments
June 30, 2016
Face amount |
Value |
||||||||||
Long-term municipal bonds(Continued) |
|||||||||||
New Jersey(Concluded) |
|||||||||||
State of New Jersey, GO Bonds, Series Q, 5.000%, due 08/15/19 |
$ |
1,500,000 |
$ |
1,668,915 |
|||||||
Series T, 5.000%, due 06/01/20 |
750,000 |
851,333 |
|||||||||
State of New Jersey, Various Purpose, GO Bonds, 5.000%, due 06/01/18 |
500,000 |
536,600 |
|||||||||
5.000%, due 06/01/20 |
1,000,000 |
1,135,110 |
|||||||||
8,446,718 |
|||||||||||
New York: 8.72% |
|||||||||||
City of New York, GO Bonds, Series E, 5.000%, due 08/01/26 |
1,000,000 |
1,311,990 |
|||||||||
City of New York, Tax Exempt, GO Bonds, Series I, 5.000%, due 08/01/17 |
1,040,000 |
1,089,327 |
|||||||||
New York City Municipal Water Finance Authority, Water and Sewer System Revenue Bonds, Series BB-4, 0.380%, due 06/15/501 |
400,000 |
400,000 |
|||||||||
New York City Transitional Finance Authority, Revenue Bonds, Series B-1, 5.000%, due 08/01/33 |
1,000,000 |
1,247,460 |
|||||||||
Series E-1, 5.000%, due 02/01/32 |
1,000,000 |
1,272,500 |
|||||||||
New York State Dormitory Authority, Northern Westchester Hospital Association Revenue Bonds, 0.400%, due 11/01/341 |
3,500,000 |
3,500,000 |
|||||||||
Port Authority of New York and New Jersey Revenue Bonds, Series 194, 5.000%, due 10/15/30 |
875,000 |
1,119,598 |
|||||||||
9,940,875 |
|||||||||||
Pennsylvania: 5.30% |
|||||||||||
City of Philadelphia, GO Bonds, Series A, 5.000%, due 08/01/22 |
1,000,000 |
1,191,140 |
|||||||||
Commonwealth of Pennsylvania, GO Bonds, 5.000%, due 08/15/21 |
1,700,000 |
1,998,180 |
Face amount |
Value |
||||||||||
Pennsylvania Turnpike Commission Revenue Bonds, Series A-1, 5.000%, due 12/01/24 |
$ |
1,500,000 |
$ |
1,895,700 |
|||||||
Philadelphia Municipal Authority, City Agreement Revenue Bonds, Series A, 5.000%, due 11/15/17 |
910,000 |
961,633 |
|||||||||
6,046,653 |
|||||||||||
Rhode Island: 1.77% |
|||||||||||
Tobacco Settlement Fing Corp., Asset-Backed Revenue Bonds, Series A, 4.000%, due 06/01/17 |
850,000 |
875,407 |
|||||||||
5.000%, due 06/01/21 |
1,000,000 |
1,145,340 |
|||||||||
2,020,747 |
|||||||||||
Texas: 19.67% |
|||||||||||
Allen Independent School District, GO Bonds, Series 2016, 5.000%, due 02/15/31 |
1,000,000 |
1,275,530 |
|||||||||
Austin Community College District Public Facility Corp., Round Rock Campus Revenue Bonds, 5.000%, due 08/01/24 |
1,000,000 |
1,246,530 |
|||||||||
Dallas County Community College District, GO Bonds, 5.000%, due 02/15/18 |
4,665,000 |
4,997,988 |
|||||||||
Denton Independent School District, GO Bonds, 5.000%, due 08/15/27 |
1,185,000 |
1,531,920 |
|||||||||
Harris County, Health Facilities Development Corp., Methodist Hospital System Revenue Bonds, Series A-1, |
|||||||||||
0.380%, due 12/01/411 |
900,000 |
900,000 |
|||||||||
Series A-2, 0.380%, due 12/01/411 |
500,000 |
500,000 |
|||||||||
Houston Independent School District, GO Bonds, Series A, 5.000%, due 02/15/30 |
2,000,000 |
2,561,200 |
|||||||||
North Texas Tollway Authority Revenue Bonds, Series A, 5.000%, due 01/01/25 |
1,000,000 |
1,241,070 |
|||||||||
5.000%, due 01/01/27 |
3,030,000 |
3,721,961 |
107
UBS Municipal Bond Fund
Portfolio of investments
June 30, 2016
Face amount |
Value |
||||||||||
Long-term municipal bonds(Concluded) |
|||||||||||
Texas(Concluded) |
|||||||||||
Texas Transportation Commission, GO Bonds, Series A, 5.000%, due 10/01/29 |
$ |
1,500,000 |
$ |
1,925,820 |
|||||||
Texas Transportation Commission, Highway Improvement, GO Bonds, 5.000%, due 04/01/37 |
2,000,000 |
2,519,080 |
|||||||||
22,421,099 |
|||||||||||
Washington: 3.61% |
|||||||||||
State of Washington, GO Bonds, Series 5C, 5.000%, due 07/01/29 |
1,000,000 |
1,257,530 |
|||||||||
Series 7A, 5.000%, due 08/01/27 |
1,400,000 |
1,820,042 |
|||||||||
State of Washington, Motor Vehicle Fuel Tax, GO Bonds, Series 5D, 4.000%, due 07/01/17 |
1,000,000 |
1,034,250 |
|||||||||
4,111,822 |
Face amount |
Value |
||||||||||
Wisconsin: 0.47% |
|||||||||||
Shawano School District, GO Bonds, 4.250%, due 03/01/182 |
$ |
500,000 |
$ |
530,385 |
|||||||
Total long-term municipal bonds (cost $117,524,579) |
121,013,056 |
||||||||||
Shares |
|||||||||||
Short-term investment: 0.03% |
|||||||||||
Investment company: 0.03% |
|||||||||||
JPMorgan U.S. Government Money Market Fund, Capital Shares (cost $37,563) |
37,563 |
37,563 |
|||||||||
Total investments: 106.20% (cost $117,562,142) |
121,050,619 |
||||||||||
Liabilities, in excess of cash and other assets: (6.20%) |
(7,069,271 |
) |
|||||||||
Net assets: 100.00% |
$ |
113,981,348 |
Notes to portfolio of investments
Aggregate cost for federal income tax purposes was $117,562,142; and net unrealized appreciation consisted of:
Gross unrealized appreciation |
$ |
3,556,188 |
|||||
Gross unrealized depreciation |
(67,711 |
) |
|||||
Net unrealized appreciation of investments |
$ |
3,488,477 |
For a listing of defined portfolio acronyms, counterparty abbreviations and currency abbreviations that are used throughout the Portfolio of investments as well as the tables that follow, please refer to page 110. Portfolio footnotes begin on page 109.
The following is a summary of the fair valuations according to the inputs used as of June 30, 2016 in valuing the Fund's investments:
Description |
Investments measured at fair value using the net asset value per share (or its equivalent) practical 6/30/2016a |
Unadjusted quoted prices in active markets for expedient at (Level 1) |
Other significant identical investments (Level 2) |
Unobservable observable inputs (Level 3) |
inputs Total |
||||||||||||||||||
Assets |
|||||||||||||||||||||||
Long-term municipal bonds |
$ |
|
$ |
|
$ |
121,013,056 |
$ |
|
$ |
121,013,056 |
|||||||||||||
Short-term investment |
|
|
37,563 |
|
37,563 |
||||||||||||||||||
Total |
$ |
|
$ |
|
$ |
121,050,619 |
$ |
|
$ |
121,050,619 |
a In accordance with Accounting Standards Update No. 2015-07, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Portfolio of investments.
108
UBS Municipal Bond Fund
Portfolio of investments
June 30, 2016
At June 30, 2016, there were no transfers between Level 1 and Level 2.
Portfolio footnotes
1 Variable or floating rate securityThe interest rate shown is the current rate as of June 30, 2016 and changes periodically.
2 Security is prerefunded or escrowed to maturity. The maturity date shown is the earlier of the reset date or the date of the prerefunded call.
The table below details the Fund's investment in a fund 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 06/30/15 |
Purchases during the year ended 06/30/16 |
Sales during the year ended 06/30/16 |
Value 06/30/16 |
Net income earned from affiliate for the year ended 06/30/16 |
||||||||||||||||||
UBS Cash Management Prime Relationship Fund |
$ |
399,871 |
$ |
36,892,158 |
$ |
37,292,029 |
$ |
|
$ |
773 |
See accompanying notes to financial statements.
109
The UBS Funds
June 30, 2016
Portfolio acronyms
ADR American Depositary Receipt
AGC Assured Guaranty Corp.
BA Canadian Bankers' Acceptance Rate
CDO Collateralized Debt Obligations
COP Certificate of Participation
CVA Dutch CertificationDepository Certificate
ETF Exchange Traded Fund
EURIBOR Euro Interbank Offered Rate
GDR Global Depositary Receipt
GO General Obligation
LIBOR London Interbank Offered Rate
NATL-RE Reinsured by National Public Finance Guarantee Corp.
Q-SBLF Qualified School Bond Loan Fund
REIT Real Estate Investment Trust
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.
TIPS Treasury inflation protected securities ("TIPS") are debt securities issued by the US Treasury whose principal and/or interest payments are adjusted for inflation, unlike debt securities that make fixed principal and interest payments. The interest rate paid by the TIPS is fixed, while the principal value rises or falls based on changes in a published Consumer Price Index ("CPI"). Thus, if inflation occurs, the principal and interest payments on the TIPS are adjusted accordingly to protect investors from inflationary loss. During a deflationary period, the principal and interest payments decrease, although the TIPS principal amounts will not drop below their face amounts at maturity. In exchange for the inflation protection, the TIPS generally pay lower interest rates than typical US Treasury securities. Only if inflation occurs will TIPS offer a higher real yield than a conventional Treasury security of the same maturity.
Counterparty abbreviations
BB Barclays Bank PLC
BOA Bank of America
CIBC Canadian Imperial Bank of Commerce
CITI Citibank NA
DB Deutsche Bank AG
GSI Goldman Sachs International
HSBC HSBC Bank PLC
JPMCB JPMorgan Chase Bank
MLI Merrill Lynch International
MSC Morgan Stanley & Co.
SSB State Street Bank
WBC Westpac Banking Corp.
Currency abbreviations
AUD Australian Dollar
CAD Canadian Dollar
CHF Swiss Franc
COP Colombian Peso
EUR Euro
GBP Great Britain Pound
HKD Hong Kong Dollar
ILS Israel New Shekel
INR Indian Rupee
JPY Japanese Yen
KRW Korean Won
MXN Mexican Peso
NOK Norwegian Krone
NZD New Zealand Dollar
PLN Polish Zloty
RUB Russian Ruble
SGD Singapore Dollar
TWD Taiwan Dollar
USD United States Dollar
See accompanying notes to financial statements.
110
The UBS Funds
June 30, 2016 (unaudited)
Explanation of expense disclosure
As a shareholder of the Funds, you incur two types of costs: (1) transactional costs (as applicable); including sales charges (loads); and (2) ongoing costs, including management fees; service and/or distribution (12b-1) fees (if applicable); and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in each Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The example below is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, January 1, 2016 to June 30, 2016.
Actual expenses
The first line for each class of shares in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over a period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses paid during period" to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The second line for each class of shares in the table below provides information about hypothetical account values and hypothetical expenses based on that Fund's actual expense ratios for each class of shares and an assumed rate of return of 5% per year before expenses, which is not that Fund's actual return for each class of shares. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in a Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs (as applicable), such as sales charges (loads). Therefore, the second line in the table for each class of shares is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
This projection assumes that annualized expense ratios were in effect during the period January 1, 2016 to June 30, 2016.
111
The UBS Funds
June 30, 2016 (unaudited)
Beginning account value January 1, 2016 |
Ending account value June 30, 2016 |
Expenses paid during period* 01/01/16 06/30/16 |
Expense ratio during period |
||||||||||||||||||||
UBS Dynamic Alpha Fund |
|||||||||||||||||||||||
Class A |
Actual |
$ |
1,000.00 |
$ |
962.50 |
$ |
6.59 |
1.35 |
% |
||||||||||||||
Hypothetical (5% annual return before expenses) |
1,000.00 |
1,018.15 |
6.77 |
1.35 |
|||||||||||||||||||
Class C |
Actual |
1,000.00 |
960.10 |
10.23 |
2.10 |
||||||||||||||||||
Hypothetical (5% annual return before expenses) |
1,000.00 |
1,014.42 |
10.52 |
2.10 |
|||||||||||||||||||
Class P |
Actual |
1,000.00 |
963.20 |
5.37 |
1.10 |
||||||||||||||||||
Hypothetical (5% annual return before expenses) |
1,000.00 |
1,019.39 |
5.52 |
1.10 |
|||||||||||||||||||
UBS Global Allocation Fund |
|||||||||||||||||||||||
Class A |
Actual |
1,000.00 |
981.20 |
6.70 |
1.36 |
||||||||||||||||||
Hypothetical (5% annual return before expenses) |
1,000.00 |
1,018.10 |
6.82 |
1.36 |
|||||||||||||||||||
Class C |
Actual |
1,000.00 |
976.90 |
10.32 |
2.10 |
||||||||||||||||||
Hypothetical (5% annual return before expenses) |
1,000.00 |
1,014.42 |
10.52 |
2.10 |
|||||||||||||||||||
Class P |
Actual |
1,000.00 |
982.50 |
5.52 |
1.12 |
||||||||||||||||||
Hypothetical (5% annual return before expenses) |
1,000.00 |
1,019.29 |
5.62 |
1.12 |
|||||||||||||||||||
UBS International Sustainable Equity Fund |
|||||||||||||||||||||||
Class A |
Actual |
1,000.00 |
942.60 |
6.04 |
1.25 |
||||||||||||||||||
Hypothetical (5% annual return before expenses) |
1,000.00 |
1,018.65 |
6.27 |
1.25 |
|||||||||||||||||||
Class C |
Actual |
1,000.00 |
939.00 |
9.64 |
2.00 |
||||||||||||||||||
Hypothetical (5% annual return before expenses) |
1,000.00 |
1,014.92 |
10.02 |
2.00 |
|||||||||||||||||||
Class P |
Actual |
1,000.00 |
943.90 |
4.83 |
1.00 |
||||||||||||||||||
Hypothetical (5% annual return before expenses) |
1,000.00 |
1,019.89 |
5.02 |
1.00 |
* Expenses are equal to each Fund's annualized net expense ratios, multiplied by the average account value over the period, multiplied by 182 divided by 366 (to reflect the one-half year period).
112
The UBS Funds
June 30, 2016 (unaudited)
Beginning account value January 1, 2016 |
Ending account value June 30, 2016 |
Expenses paid during period* 01/01/16 06/30/16 |
Expense ratio during period |
||||||||||||||||||||
UBS U.S. Large Cap Equity Fund |
|||||||||||||||||||||||
Class A |
Actual |
$ |
1,000.00 |
$ |
1,003.90 |
$ |
5.28 |
1.06 |
% |
||||||||||||||
Hypothetical (5% annual return before expenses) |
1,000.00 |
1,019.59 |
5.32 |
1.06 |
|||||||||||||||||||
Class C |
Actual |
1,000.00 |
1,000.40 |
9.00 |
1.81 |
||||||||||||||||||
Hypothetical (5% annual return before expenses) |
1,000.00 |
1,015.86 |
9.07 |
1.81 |
|||||||||||||||||||
Class P |
Actual |
1,000.00 |
1,005.10 |
4.14 |
0.83 |
||||||||||||||||||
Hypothetical (5% annual return before expenses) |
1,000.00 |
1,020.74 |
4.17 |
0.83 |
|||||||||||||||||||
UBS U.S. Small Cap Growth Fund |
|||||||||||||||||||||||
Class A |
Actual |
1,000.00 |
935.70 |
5.97 |
1.24 |
||||||||||||||||||
Hypothetical (5% annual return before expenses) |
1,000.00 |
1,018.70 |
6.22 |
1.24 |
|||||||||||||||||||
Class C |
Actual |
1,000.00 |
932.40 |
9.56 |
1.99 |
||||||||||||||||||
Hypothetical (5% annual return before expenses) |
1,000.00 |
1,014.97 |
9.97 |
1.99 |
|||||||||||||||||||
Class P |
Actual |
1,000.00 |
937.00 |
4.77 |
0.99 |
||||||||||||||||||
Hypothetical (5% annual return before expenses) |
1,000.00 |
1,019.94 |
4.97 |
0.99 |
|||||||||||||||||||
UBS Core Plus Bond Fund |
|||||||||||||||||||||||
Class A |
Actual |
1,000.00 |
1,045.60 |
3.26 |
0.64 |
||||||||||||||||||
Hypothetical (5% annual return before expenses) |
1,000.00 |
1,021.68 |
3.22 |
0.64 |
|||||||||||||||||||
Class C |
Actual |
1,000.00 |
1,043.20 |
5.79 |
1.14 |
||||||||||||||||||
Hypothetical (5% annual return before expenses) |
1,000.00 |
1,019.19 |
5.72 |
1.14 |
|||||||||||||||||||
Class P |
Actual |
1,000.00 |
1,047.00 |
1.98 |
0.39 |
||||||||||||||||||
Hypothetical (5% annual return before expenses) |
1,000.00 |
1,022.92 |
1.96 |
0.39 |
* Expenses are equal to each Fund's annualized net expense ratios, multiplied by the average account value over the period, multiplied by 182 divided by 366 (to reflect the one-half year period).
113
The UBS Funds
June 30, 2016 (unaudited)
Beginning account value January 1, 2016 |
Ending account value June 30, 2016 |
Expenses paid during period* 01/01/16 06/30/16 |
Expense ratio during period |
||||||||||||||||||||
UBS Total Return Bond Fund |
|||||||||||||||||||||||
Class P |
Actual |
$ |
1,000.00 |
$ |
1,042.90 |
$ |
6.96 |
1.37 |
|||||||||||||||
Hypothetical (5% annual return before expenses) |
1,000.00 |
1,018.05 |
6.87 |
1.37 |
|||||||||||||||||||
UBS Municipal Bond Fund |
|||||||||||||||||||||||
Class A |
Actual |
1,000.00 |
1,040.70 |
3.30 |
0.65 |
||||||||||||||||||
Hypothetical (5% annual return before expenses) |
1,000.00 |
1,021.63 |
3.27 |
0.65 |
|||||||||||||||||||
Class C |
Actual |
1,000.00 |
1,039.20 |
5.83 |
1.15 |
||||||||||||||||||
Hypothetical (5% annual return before expenses) |
1,000.00 |
1,019.14 |
5.77 |
1.15 |
|||||||||||||||||||
Class P |
Actual |
1,000.00 |
1,043.00 |
2.03 |
0.40 |
||||||||||||||||||
Hypothetical (5% annual return before expenses) |
1,000.00 |
1,022.87 |
2.01 |
0.40 |
* Expenses are equal to each Fund's annualized net expense ratios, multiplied by the average account value over the period, multiplied by 182 divided by 366 (to reflect the one-half year period)
114
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115
The UBS Funds
Financial statements
Statement of assets and liabilities
June 30, 2016
UBS Dynamic Alpha Fund |
UBS Global Allocation Fund |
UBS International Sustainable Equity Fund |
|||||||||||||
Assets: |
|||||||||||||||
Investments, at cost: |
|||||||||||||||
Unaffiliated issuers |
$ |
214,050,765 |
$ |
318,973,438 |
$ |
25,392,173 |
|||||||||
Affiliated issuers |
|
67,403,347 |
|
||||||||||||
Investment of cash collateral received from securities loaned1 |
1,048,138 |
24,965,617 |
440,742 |
||||||||||||
Foreign currency |
3,258,180 |
1,396,110 |
52,418 |
||||||||||||
$ |
218,357,083 |
$ |
412,738,512 |
$ |
25,885,333 |
||||||||||
Investments, at value: |
|||||||||||||||
Unaffiliated issuers |
$ |
204,208,463 |
$ |
318,120,264 |
$ |
23,812,283 |
|||||||||
Affiliated issuers |
|
67,694,113 |
|
||||||||||||
Investment of cash collateral received from securities loaned1 |
1,048,138 |
24,965,617 |
440,742 |
||||||||||||
Foreign currency |
3,223,064 |
1,394,827 |
51,986 |
||||||||||||
Cash |
|
|
|
||||||||||||
Receivables: |
|||||||||||||||
Investment securities sold |
|
2,162,726 |
|
||||||||||||
Interest |
1,121,358 |
227,364 |
142 |
||||||||||||
Fund shares sold |
8,513 |
110,191 |
2,566 |
||||||||||||
Foreign tax reclaims |
|
222,608 |
18,584 |
||||||||||||
Due from Advisor |
|
|
10,693 |
||||||||||||
Dividends |
4,310 |
143,151 |
69,339 |
||||||||||||
Variation margin on centrally cleared swap agreements |
|
1,050,958 |
|
||||||||||||
Due from broker |
8,035,868 |
|
|
||||||||||||
Cash collateral for securities lending |
|
24,375 |
|
||||||||||||
Cash collateral for futures contracts |
4,956,262 |
10,258,264 |
|
||||||||||||
Cash collateral for swap agreements |
6,649,921 |
1,219,686 |
|
||||||||||||
Outstanding swap agreements, at value2 |
6,007,746 |
|
|
||||||||||||
Unrealized appreciation on forward foreign currency contracts |
2,732,536 |
588,041 |
|
||||||||||||
Other assets |
26,656 |
29,524 |
22,371 |
||||||||||||
Total assets |
238,022,835 |
428,211,709 |
24,428,706 |
||||||||||||
Liabilities: |
|||||||||||||||
Payables: |
|||||||||||||||
Cash collateral from securities loaned |
1,048,138 |
24,989,992 |
440,742 |
||||||||||||
Investment securities purchased |
499,791 |
1,972,778 |
|
||||||||||||
Investment advisory and administration fee |
136,540 |
247,621 |
|
||||||||||||
Custody and fund accounting fees |
71,406 |
86,375 |
25,744 |
||||||||||||
Fund shares redeemed |
1,670,560 |
1,394,457 |
17,982 |
||||||||||||
Distribution and service fees |
36,492 |
135,684 |
3,050 |
||||||||||||
Trustees' fees |
16,535 |
24,108 |
6,177 |
||||||||||||
Due to custodian |
6 |
|
|
||||||||||||
Due to broker |
|
309,595 |
|
||||||||||||
Variation margin on futures contracts |
1,035,012 |
262,197 |
|
||||||||||||
Variation margin on centrally cleared swap agreements |
532,449 |
|
|
||||||||||||
Accrued expenses |
198,194 |
300,342 |
102,651 |
||||||||||||
Options written, at value3 |
|
24,720 |
|
||||||||||||
Outstanding swap agreements, at value2 |
6,239,728 |
|
|
||||||||||||
Unrealized depreciation on forward foreign currency contracts |
800,861 |
589,748 |
|
||||||||||||
Total liabilities |
12,285,712 |
30,337,617 |
596,346 |
||||||||||||
Net assets |
$ |
225,737,123 |
$ |
397,874,092 |
$ |
23,832,360 |
1 The market value of securities loaned by UBS Dynamic Alpha Fund, UBS Global Allocation Fund, UBS International Sustainable Equity Fund, UBS U.S. Large Cap Equity Fund and UBS U.S. Small Cap Growth Fund, as of June 30, 2016 was $19,735,554, $32,164,164, $419,659, $1,510,179 and $14,959,754, respectively.
2 Net upfront payments received by UBS Dynamic Alpha Fund were $120,404.
3 Premiums received by UBS Global Allocation Fund were $171,748.
116
The UBS Funds
Financial statements
UBS U.S. Large Cap Equity Fund |
UBS U.S. Small Cap Growth Fund |
||||||||||
Assets: |
|||||||||||
Investments, at cost: |
|||||||||||
Unaffiliated issuers |
$ |
26,581,108 |
$ |
154,299,965 |
|||||||
Affiliated issuers |
|
|
|||||||||
Investment of cash collateral received from securities loaned1 |
1,545,341 |
13,614,860 |
|||||||||
Foreign currency |
|
|
|||||||||
$ |
28,126,449 |
$ |
167,914,825 |
||||||||
Investments, at value: |
|||||||||||
Unaffiliated issuers |
$ |
27,029,576 |
$ |
164,275,919 |
|||||||
Affiliated issuers |
|
|
|||||||||
Investment of cash collateral received from securities loaned1 |
1,545,341 |
13,614,860 |
|||||||||
Foreign currency |
|
|
|||||||||
Cash |
|
7 |
|||||||||
Receivables: |
|||||||||||
Investment securities sold |
1,261,392 |
2,385,994 |
|||||||||
Interest |
1,076 |
6,122 |
|||||||||
Fund shares sold |
|
154,376 |
|||||||||
Foreign tax reclaims |
|
|
|||||||||
Due from Advisor |
29,124 |
|
|||||||||
Dividends |
28,852 |
44,410 |
|||||||||
Variation margin on centrally cleared swap agreements |
|
|
|||||||||
Due from broker |
|
|
|||||||||
Cash collateral for securities lending |
|
1,688,577 |
|||||||||
Cash collateral for futures contracts |
|
|
|||||||||
Cash collateral for swap agreements |
|
|
|||||||||
Outstanding swap agreements, at value2 |
|
|
|||||||||
Unrealized appreciation on forward foreign currency contracts |
|
|
|||||||||
Other assets |
16,535 |
21,280 |
|||||||||
Total assets |
29,911,896 |
182,191,545 |
|||||||||
Liabilities: |
|||||||||||
Payables: |
|||||||||||
Cash collateral from securities loaned |
1,545,341 |
15,303,437 |
|||||||||
Investment securities purchased |
546,797 |
3,601,581 |
|||||||||
Investment advisory and administration fee |
|
79,310 |
|||||||||
Custody and fund accounting fees |
20,744 |
32,643 |
|||||||||
Fund shares redeemed |
468,688 |
391,030 |
|||||||||
Distribution and service fees |
3,761 |
9,633 |
|||||||||
Trustees' fees |
6,432 |
12,285 |
|||||||||
Due to custodian |
171,206 |
|
|||||||||
Due to broker |
|
|
|||||||||
Variation margin on futures contracts |
|
|
|||||||||
Variation margin on centrally cleared swap agreements |
|
|
|||||||||
Accrued expenses |
97,832 |
102,026 |
|||||||||
Options written, at value3 |
|
|
|||||||||
Outstanding swap agreements, at value2 |
|
|
|||||||||
Unrealized depreciation on forward foreign currency contracts |
|
|
|||||||||
Total liabilities |
2,860,801 |
19,531,945 |
|||||||||
Net assets |
$ |
27,051,095 |
$ |
162,659,600 |
See accompanying notes to financial statements.
117
The UBS Funds
Financial statements
Statement of assets and liabilities (continued)
June 30, 2016
UBS Core Plus Bond Fund |
UBS Total Return Bond Fund |
||||||||||
Assets: |
|||||||||||
Investments, at cost: |
|||||||||||
Unaffiliated issuers |
$ |
50,375,529 |
$ |
143,529,607 |
|||||||
Investment of cash collateral received from securities loaned1 |
53,900 |
|
|||||||||
Foreign currency |
4,434 |
311,923 |
|||||||||
$ |
50,433,863 |
$ |
143,841,530 |
||||||||
Investments, at value: |
|||||||||||
Unaffiliated issuers |
$ |
51,190,057 |
$ |
145,716,520 |
|||||||
Investment of cash collateral received from securities loaned1 |
53,900 |
|
|||||||||
Foreign currency |
4,334 |
307,888 |
|||||||||
Receivables: |
|||||||||||
Investment securities sold |
17,367,667 |
79,353,459 |
|||||||||
Interest |
182,143 |
672,770 |
|||||||||
Fund shares sold |
102,531 |
4,420 |
|||||||||
Foreign tax reclaims |
|
793 |
|||||||||
Due from Advisor |
14,120 |
|
|||||||||
Dividends |
2,513 |
3,593 |
|||||||||
Variation margin on futures contracts |
53,354 |
|
|||||||||
Variation margin on centrally cleared swap agreements |
18,517 |
|
|||||||||
Due from broker |
|
49,466 |
|||||||||
Deferred offering cost |
|
70,998 |
|||||||||
Cash collateral for futures contracts |
41,118 |
69,314 |
|||||||||
Cash collateral for swap agreements |
41,428 |
|
|||||||||
Unrealized appreciation on forward foreign currency contracts |
17,101 |
79,476 |
|||||||||
Other assets |
20,723 |
|
|||||||||
Total assets |
69,109,506 |
226,328,697 |
|||||||||
Liabilities: |
|||||||||||
Payables: |
|||||||||||
Cash collateral from securities loaned |
53,900 |
|
|||||||||
Investment securities purchased |
30,540,492 |
98,280,613 |
|||||||||
Investment advisory and administration fee |
|
119,071 |
|||||||||
Custody and fund accounting fees |
27,356 |
17,467 |
|||||||||
Fund shares redeemed |
19,895 |
348,508 |
|||||||||
Distribution and service fees |
1,796 |
|
|||||||||
Trustees' fees |
6,747 |
10,927 |
|||||||||
Offering costs |
|
79,492 |
|||||||||
Due to broker |
79,225 |
|
|||||||||
Variation margin on futures contracts |
|
99,704 |
|||||||||
Accrued expenses |
77,103 |
245,871 |
|||||||||
Options written, at value2 |
47,982 |
147,391 |
|||||||||
Outstanding swap agreements, at value3 |
75,088 |
5,192 |
|||||||||
Unrealized depreciation on forward foreign currency contracts |
15,195 |
52,329 |
|||||||||
Total liabilities |
30,944,779 |
99,406,565 |
|||||||||
Net assets |
$ |
38,164,727 |
$ |
126,922,132 |
1 The market value of securities loaned by UBS Core Plus Bond Fund as of June 30, 2016 was $1,811,550.
2 Premiums received by UBS Core Plus Bond Fund and UBS Total Return Bond Fund were $66,334 and $144,392, respectively.
3 Net upfront payments received by UBS Core Plus Bond Fund were $26,867.
118
The UBS Funds
Financial statements
UBS Municipal Bond Fund |
|||||||
Assets: |
|||||||
Investments, at cost: |
|||||||
Unaffiliated issuers |
$ |
117,562,142 |
|||||
Investment of cash collateral received from securities loaned1 |
|
||||||
Foreign currency |
|
||||||
$ |
117,562,142 |
||||||
Investments, at value: |
|||||||
Unaffiliated issuers |
$ |
121,050,619 |
|||||
Investment of cash collateral received from securities loaned1 |
|
||||||
Foreign currency |
|
||||||
Receivables: |
|||||||
Investment securities sold |
|
||||||
Interest |
1,194,270 |
||||||
Fund shares sold |
443,099 |
||||||
Foreign tax reclaims |
|
||||||
Due from Advisor |
|
||||||
Dividends |
281 |
||||||
Variation margin on futures contracts |
|
||||||
Variation margin on centrally cleared swap agreements |
|
||||||
Due from broker |
|
||||||
Deferred offering cost |
|
||||||
Cash collateral for futures contracts |
|
||||||
Cash collateral for swap agreements |
|
||||||
Unrealized appreciation on forward foreign currency contracts |
|
||||||
Other assets |
13,919 |
||||||
Total assets |
122,702,188 |
||||||
Liabilities: |
|||||||
Payables: |
|||||||
Cash collateral from securities loaned |
|
||||||
Investment securities purchased |
8,257,531 |
||||||
Investment advisory and administration fee |
6,860 |
||||||
Custody and fund accounting fees |
25,744 |
||||||
Fund shares redeemed |
335,818 |
||||||
Distribution and service fees |
7,132 |
||||||
Trustees' fees |
8,550 |
||||||
Offering costs |
|
||||||
Due to broker |
|
||||||
Variation margin on futures contracts |
|
||||||
Accrued expenses |
79,205 |
||||||
Options written, at value2 |
|
||||||
Outstanding swap agreements, at value3 |
|
||||||
Unrealized depreciation on forward foreign currency contracts |
|
||||||
Total liabilities |
8,720,840 |
||||||
Net assets |
$ |
113,981,348 |
See accompanying notes to financial statements.
119
The UBS Funds
Financial statements
Statement of assets and liabilities (continued)
June 30, 2016
UBS Dynamic Alpha Fund |
UBS Global Allocation Fund |
UBS International Sustainable Equity Fund |
|||||||||||||
Net assets consist of: |
|||||||||||||||
Beneficial interest |
$ |
641,002,191 |
$ |
1,361,007,858 |
$ |
34,121,980 |
|||||||||
Accumulated undistributed (distributions in excess of) net investment income (loss) |
(8,555,716 |
) |
4,640,197 |
427,895 |
|||||||||||
Accumulated net realized loss |
(397,787,076 |
) |
(968,065,644 |
) |
(9,136,870 |
) |
|||||||||
Net unrealized appreciation (depreciation) |
(8,922,276 |
) |
291,681 |
(1,580,645 |
) |
||||||||||
Net assets |
$ |
225,737,123 |
$ |
397,874,092 |
$ |
23,832,360 |
|||||||||
Class A: |
|||||||||||||||
Net assets |
$ |
65,740,604 |
$ |
190,813,380 |
$ |
5,203,836 |
|||||||||
Shares outstanding |
10,663,233 |
18,241,281 |
646,334 |
||||||||||||
Net asset value and redemption proceeds per share |
$ |
6.17 |
$ |
10.46 |
$ |
8.05 |
|||||||||
Offering price per share (NAV per share plus maximum sales charge) |
$ |
6.53 |
$ |
11.07 |
$ |
8.52 |
|||||||||
Class C: |
|||||||||||||||
Net assets |
$ |
27,270,926 |
$ |
116,056,490 |
$ |
2,350,950 |
|||||||||
Shares outstanding |
4,719,683 |
11,432,288 |
299,368 |
||||||||||||
Net asset value and offering price per share |
$ |
5.78 |
$ |
10.15 |
$ |
7.85 |
|||||||||
Redemption proceeds per share (NAV per share less maximum contingent deferred sales charge) |
$ |
5.72 |
$ |
10.05 |
$ |
7.77 |
|||||||||
Class P: |
|||||||||||||||
Net assets |
$ |
132,725,593 |
$ |
91,004,222 |
$ |
16,277,574 |
|||||||||
Shares outstanding |
21,128,384 |
8,514,509 |
2,014,491 |
||||||||||||
Net asset value per share, offering price per share, and redemption proceeds per share |
$ |
6.28 |
$ |
10.69 |
$ |
8.08 |
120
The UBS Funds
Financial statements
UBS U.S. Large Cap Equity Fund |
UBS U.S. Small Cap Growth Fund |
||||||||||
Net assets consist of: |
|||||||||||
Beneficial interest |
$ |
108,387,633 |
$ |
155,381,519 |
|||||||
Accumulated undistributed (distributions in excess of) net investment income (loss) |
302,171 |
(388,273 |
) |
||||||||
Accumulated net realized loss |
(82,087,177 |
) |
(2,309,600 |
) |
|||||||
Net unrealized appreciation (depreciation) |
448,468 |
9,975,954 |
|||||||||
Net assets |
$ |
27,051,095 |
$ |
162,659,600 |
|||||||
Class A: |
|||||||||||
Net assets |
$ |
9,773,865 |
$ |
28,048,495 |
|||||||
Shares outstanding |
383,177 |
1,579,937 |
|||||||||
Net asset value and redemption proceeds per share |
$ |
25.51 |
$ |
17.75 |
|||||||
Offering price per share (NAV per share plus maximum sales charge) |
$ |
26.99 |
$ |
18.78 |
|||||||
Class C: |
|||||||||||
Net assets |
$ |
2,130,246 |
$ |
4,384,551 |
|||||||
Shares outstanding |
87,266 |
289,163 |
|||||||||
Net asset value and offering price per share |
$ |
24.41 |
$ |
15.16 |
|||||||
Redemption proceeds per share (NAV per share less maximum contingent deferred sales charge) |
$ |
24.17 |
$ |
15.01 |
|||||||
Class P: |
|||||||||||
Net assets |
$ |
15,146,984 |
$ |
130,226,554 |
|||||||
Shares outstanding |
591,415 |
6,836,864 |
|||||||||
Net asset value per share, offering price per share, and redemption proceeds per share |
$ |
25.61 |
$ |
19.05 |
See accompanying notes to financial statements.
121
The UBS Funds
Financial statements
Statement of assets and liabilities (continued)
June 30, 2016
UBS Core Plus Bond Fund |
UBS Total Return Bond Fund |
||||||||||
Net assets consist of: |
|||||||||||
Beneficial interest |
$ |
71,058,107 |
$ |
129,320,830 |
|||||||
Accumulated undistributed (distributions in excess of) net investment income |
302,082 |
75,097 |
|||||||||
Accumulated net realized gain (loss) |
(33,980,316 |
) |
(4,575,925 |
) |
|||||||
Net unrealized appreciation |
784,854 |
2,102,130 |
|||||||||
Net assets |
$ |
38,164,727 |
$ |
126,922,132 |
|||||||
Class A: |
|||||||||||
Net assets |
$ |
5,129,442 |
$ |
|
|||||||
Shares outstanding |
554,048 |
$ |
|
||||||||
Net asset value and redemption proceeds per share |
$ |
9.26 |
$ |
|
|||||||
Offering price per share (NAV per share plus maximum sales charge) |
$ |
9.62 |
$ |
|
|||||||
Class C: |
|||||||||||
Net assets |
$ |
1,239,612 |
$ |
|
|||||||
Shares outstanding |
134,352 |
$ |
|
||||||||
Net asset value and offering price per share |
$ |
9.23 |
$ |
|
|||||||
Redemption proceeds per share (NAV per share less maximum contingent deferred sales charge) |
$ |
9.16 |
$ |
|
|||||||
Class P: |
|||||||||||
Net assets |
$ |
31,795,673 |
$ |
126,922,132 |
|||||||
Shares outstanding |
3,439,276 |
8,383,487 |
|||||||||
Net asset value per share, offering price per share, and redemption proceeds per share |
$ |
9.24 |
$ |
15.14 |
122
The UBS Funds
Financial statements
UBS Municipal Bond Fund |
|||||||
Net assets consist of: |
|||||||
Beneficial interest |
$ |
110,398,964 |
|||||
Accumulated undistributed (distributions in excess of) net investment income |
(43,851 |
) |
|||||
Accumulated net realized gain (loss) |
137,758 |
||||||
Net unrealized appreciation |
3,488,477 |
||||||
Net assets |
$ |
113,981,348 |
|||||
Class A: |
|||||||
Net assets |
$ |
17,671,616 |
|||||
Shares outstanding |
1,679,275 |
||||||
Net asset value and redemption proceeds per share |
$ |
10.52 |
|||||
Offering price per share (NAV per share plus maximum sales charge) |
$ |
10.76 |
|||||
Class C: |
|||||||
Net assets |
$ |
6,163,747 |
|||||
Shares outstanding |
586,019 |
||||||
Net asset value and offering price per share |
$ |
10.52 |
|||||
Redemption proceeds per share (NAV per share less maximum contingent deferred sales charge) |
$ |
10.44 |
|||||
Class P: |
|||||||
Net assets |
$ |
90,145,985 |
|||||
Shares outstanding |
8,569,948 |
||||||
Net asset value per share, offering price per share, and redemption proceeds per share |
$ |
10.52 |
See accompanying notes to financial statements.
123
The UBS Funds
Financial statements
Statement of operations
For the year ended June 30, 2016
UBS Dynamic Alpha Fund |
UBS Global Allocation Fund |
UBS International Sustainable Equity Fund |
|||||||||||||
Investment income: |
|||||||||||||||
Dividends |
$ |
22,790 |
$ |
5,338,702 |
$ |
792,520 |
|||||||||
Interest and other |
5,851,509 |
908,864 |
|
||||||||||||
Affiliated income |
8,639 |
32,095 |
165 |
||||||||||||
Securities lending1 |
47,397 |
393,250 |
9,278 |
||||||||||||
Foreign tax withheld |
|
(252,155 |
) |
(70,508 |
) |
||||||||||
Total income |
5,930,335 |
6,420,756 |
731,455 |
||||||||||||
Expenses: |
|||||||||||||||
Advisory and administration |
2,530,753 |
3,894,088 |
220,512 |
||||||||||||
Distribution and service: |
|||||||||||||||
Class A |
188,555 |
521,651 |
14,967 |
||||||||||||
Class C |
340,822 |
1,283,487 |
25,067 |
||||||||||||
Transfer agency and related services fees: |
|||||||||||||||
Class A |
38,658 |
138,094 |
4,079 |
||||||||||||
Class C |
30,565 |
132,710 |
2,408 |
||||||||||||
Class P |
119,186 |
48,963 |
10,318 |
||||||||||||
Custodian and fund accounting |
161,727 |
184,880 |
52,703 |
||||||||||||
Federal and state registration |
62,158 |
54,730 |
40,039 |
||||||||||||
Professional services |
147,853 |
177,220 |
134,499 |
||||||||||||
Shareholder reports |
85,244 |
162,278 |
14,073 |
||||||||||||
Trustees |
67,613 |
96,956 |
24,889 |
||||||||||||
Other |
74,036 |
95,500 |
33,151 |
||||||||||||
Total expenses |
3,847,170 |
6,790,557 |
576,705 |
||||||||||||
Fee waivers and/or expense reimbursements by Advisor |
(312,860 |
) |
(86,899 |
) |
(284,271 |
) |
|||||||||
Net expenses |
3,534,310 |
6,703,658 |
292,434 |
||||||||||||
Net investment income (loss) |
2,396,025 |
(282,902 |
) |
439,021 |
|||||||||||
Net realized gain (loss) on: |
|||||||||||||||
Investments in unaffiliated issuers |
(15,129,386 |
) |
(7,966,824 |
) |
(509,400 |
) |
|||||||||
Investments in affiliated issuers |
|
937,743 |
|
||||||||||||
Distribution from affiliated issuer |
2,473 |
14,315 |
119 |
||||||||||||
Futures contracts |
(27,803,319 |
) |
(12,389,946 |
) |
|
||||||||||
Options written |
(5,692,024 |
) |
|
|
|||||||||||
Swap agreements |
(191,960 |
) |
(311,514 |
) |
|
||||||||||
Forward foreign currency contracts |
4,394,704 |
4,060,080 |
(60,864 |
) |
|||||||||||
Foreign currency transactions |
(376,574 |
) |
(162,129 |
) |
49,735 |
||||||||||
Net realized loss |
(44,796,086 |
) |
(15,818,275 |
) |
(520,410 |
) |
|||||||||
Change in net unrealized appreciation (depreciation) on: |
|||||||||||||||
Investments |
8,531,680 |
(12,870,492 |
) |
(3,715,419 |
) |
||||||||||
Futures contracts |
548,614 |
3,354,729 |
|
||||||||||||
Options written |
430,590 |
147,028 |
|
||||||||||||
Swap agreements |
(421,701 |
) |
1,235,401 |
|
|||||||||||
Forward foreign currency contracts |
880,971 |
(641,222 |
) |
|
|||||||||||
Translation of other assets and liabilities denominated in foreign currency |
38,151 |
209,639 |
2,188 |
||||||||||||
Change in net unrealized appreciation (depreciation) |
10,008,305 |
(8,564,917 |
) |
(3,713,231 |
) |
||||||||||
Net realized and unrealized loss |
(34,787,781 |
) |
(24,383,192 |
) |
(4,233,641 |
) |
|||||||||
Contributions from Advisor |
214,280 |
316,557 |
39,797 |
||||||||||||
Net decrease in net assets resulting from operations |
$ |
(32,177,476 |
) |
$ |
(24,349,537 |
) |
$ |
(3,754,823 |
) |
1 Includes affiliated income from UBS Private Money Market Fund LLC of $1,278, $20,934, $648, $2,397 and $21,588 for UBS Dynamic Alpha Fund, UBS Global Allocation Fund, UBS International Sustainable Equity Fund, UBS U.S. Large Cap Equity Fund and UBS U.S. Small Cap Growth Fund, respectively.
124
The UBS Funds
Financial statements
UBS U.S. Large Cap Equity Fund |
UBS U.S. Small Cap Growth Fund |
||||||||||
Investment income: |
|||||||||||
Dividends |
$ |
639,644 |
$ |
815,082 |
|||||||
Interest and other |
|
|
|||||||||
Affiliated income |
144 |
2,417 |
|||||||||
Securities lending1 |
23,749 |
331,564 |
|||||||||
Foreign tax withheld |
|
|
|||||||||
Total income |
663,537 |
1,149,063 |
|||||||||
Expenses: |
|||||||||||
Advisory and administration |
268,744 |
1,800,830 |
|||||||||
Distribution and service: |
|||||||||||
Class A |
23,355 |
93,250 |
|||||||||
Class C |
22,304 |
47,197 |
|||||||||
Transfer agency and related services fees: |
|||||||||||
Class A |
7,510 |
63,693 |
|||||||||
Class C |
1,963 |
7,718 |
|||||||||
Class P |
16,519 |
86,583 |
|||||||||
Custodian and fund accounting |
41,989 |
74,323 |
|||||||||
Federal and state registration |
39,397 |
42,396 |
|||||||||
Professional services |
114,094 |
119,282 |
|||||||||
Shareholder reports |
15,837 |
34,273 |
|||||||||
Trustees |
26,434 |
53,302 |
|||||||||
Other |
42,612 |
44,078 |
|||||||||
Total expenses |
620,758 |
2,466,925 |
|||||||||
Fee waivers and/or expense reimbursements by Advisor |
(264,805 |
) |
(398,148 |
) |
|||||||
Net expenses |
355,953 |
2,068,777 |
|||||||||
Net investment income (loss) |
307,584 |
(919,714 |
) |
||||||||
Net realized gain (loss) on: |
|||||||||||
Investments in unaffiliated issuers |
(473,281 |
) |
(976,963 |
) |
|||||||
Investments in affiliated issuers |
|
|
|||||||||
Distribution from affiliated issuer |
76 |
1,161 |
|||||||||
Futures contracts |
|
|
|||||||||
Options written |
|
|
|||||||||
Swap agreements |
|
|
|||||||||
Forward foreign currency contracts |
|
|
|||||||||
Foreign currency transactions |
|
|
|||||||||
Net realized loss |
(473,205 |
) |
(975,802 |
) |
|||||||
Change in net unrealized appreciation (depreciation) on: |
|||||||||||
Investments |
(3,137,879 |
) |
(41,105,966 |
) |
|||||||
Futures contracts |
|
|
|||||||||
Options written |
|
|
|||||||||
Swap agreements |
|
|
|||||||||
Forward foreign currency contracts |
|
|
|||||||||
Translation of other assets and liabilities denominated in foreign currency |
|
|
|||||||||
Change in net unrealized appreciation (depreciation) |
(3,137,879 |
) |
(41,105,966 |
) |
|||||||
Net realized and unrealized loss |
(3,611,084 |
) |
(42,081,768 |
) |
|||||||
Contributions from Advisor |
|
|
|||||||||
Net decrease in net assets resulting from operations |
$ |
(3,303,500 |
) |
$ |
(43,001,482 |
) |
See accompanying notes to financial statements.
125
The UBS Funds
Financial statements
Statement of operations (continued)
For the year ended June 30, 2016
UBS Total Return Bond Fund |
|||||||||||||||
UBS Core Plus Bond Fund |
Nine Months Ended 6/30/2016 |
Year ended September 30, 2015 |
|||||||||||||
Investment income: |
|||||||||||||||
Dividends |
$ |
12,230 |
$ |
12,568 |
$ |
7,892 |
|||||||||
Interest and other |
782,706 |
4,245,239 |
6,617,755 |
||||||||||||
Affiliated income |
2,397 |
383 |
1,275 |
||||||||||||
Securities lending1 |
3,614 |
|
|
||||||||||||
Total income |
800,947 |
4,258,190 |
6,626,922 |
||||||||||||
Expenses: |
|||||||||||||||
Advisory and administration |
199,434 |
471,338 |
653,019 |
||||||||||||
Distribution and service: |
|||||||||||||||
Class A |
10,530 |
|
|
||||||||||||
Class C |
9,073 |
|
|
||||||||||||
Transfer agency and related services fees: |
|||||||||||||||
Class A |
1,526 |
|
|
||||||||||||
Class C |
2,691 |
|
|
||||||||||||
Class P |
4,381 |
28,218 |
|
||||||||||||
Custodian and fund accounting |
54,919 |
50,508 |
62,330 |
||||||||||||
Directors' fees |
|
|
38,935 |
||||||||||||
Federal and state registration |
42,469 |
|
|
||||||||||||
Insurance expense |
|
|
12,091 |
||||||||||||
Listing fees |
|
29,735 |
23,751 |
||||||||||||
Professional services |
112,401 |
407,543 |
112,958 |
||||||||||||
Shareholder reports |
10,158 |
44,401 |
64,496 |
||||||||||||
Trustees |
26,610 |
32,525 |
|
||||||||||||
Transfer agency and related service fees |
|
|
44,726 |
||||||||||||
Franchise taxes |
|
6,923 |
3,647 |
||||||||||||
Amortization of offering costs |
|
8,494 |
|
||||||||||||
Other |
20,334 |
92,645 |
23,224 |
||||||||||||
Total expenses |
494,526 |
1,172,330 |
1,039,177 |
||||||||||||
Fee waivers and/or expense reimbursements by Advisor |
(339,144 |
) |
(42,595 |
) |
|
||||||||||
Net expenses |
155,382 |
1,129,735 |
1,039,177 |
||||||||||||
Net investment income |
645,565 |
3,128,455 |
5,587,745 |
||||||||||||
Net realized gain (loss) on: |
|||||||||||||||
Investments in unaffiliated issuers |
154,117 |
(1,633,992 |
) |
(1,072,378 |
) |
||||||||||
Investments in affiliated issuers |
|
|
|
||||||||||||
Distribution from affiliated issuer |
1,064 |
|
|
||||||||||||
Futures contracts |
83,281 |
556,754 |
(680,129 |
) |
|||||||||||
Options written |
83,151 |
331,144 |
1,077,139 |
||||||||||||
Swap agreements |
9,611 |
(3,254,618 |
) |
386,140 |
|||||||||||
Forward foreign currency contracts |
(8,961 |
) |
(41,722 |
) |
26,774 |
||||||||||
Foreign currency transactions |
29,290 |
(16,595 |
) |
(2,955 |
) |
||||||||||
Net realized gain (loss) |
351,553 |
(4,059,029 |
) |
(265,409 |
) |
||||||||||
Change in net unrealized appreciation (depreciation) on: |
|||||||||||||||
Investments |
871,399 |
4,741,927 |
(7,169,198 |
) |
|||||||||||
Futures contracts |
64,309 |
(48,385 |
) |
(385,001 |
) |
||||||||||
Options written |
2,304 |
64,035 |
(242,830 |
) |
|||||||||||
Swap agreements |
(225,988 |
) |
247,493 |
(251,141 |
) |
||||||||||
Forward foreign currency contracts |
(10,748 |
) |
27,147 |
(5,760 |
) |
||||||||||
Translation of other assets and liabilities denominated in foreign currency |
(184 |
) |
11,269 |
(15,003 |
) |
||||||||||
Change in net unrealized appreciation (depreciation) |
701,092 |
5,043,486 |
(8,068,933 |
) |
|||||||||||
Net realized and unrealized gain |
1,052,645 |
984,457 |
(8,334,342 |
) |
|||||||||||
Contributions from Advisor |
774 |
|
|
||||||||||||
Net increase in net assets resulting from operations |
$ |
1,698,984 |
$ |
4,112,912 |
$ |
(2,746,597 |
) |
1 Includes affiliated income from UBS Private Money Market Fund LLC of $74 for UBS Core Plus Bond Fund.
126
The UBS Funds
Financial statements
UBS Municipal Bond Fund |
|||||||
Investment income: |
|||||||
Dividends |
$ |
2,835 |
|||||
Interest and other |
1,666,000 |
||||||
Affiliated income |
773 |
||||||
Securities lending1 |
|
||||||
Total income |
1,669,608 |
||||||
Expenses: |
|||||||
Advisory and administration |
344,521 |
||||||
Distribution and service: |
|||||||
Class A |
32,683 |
||||||
Class C |
33,595 |
||||||
Transfer agency and related services fees: |
|||||||
Class A |
1,162 |
||||||
Class C |
1,099 |
||||||
Class P |
10,452 |
||||||
Custodian and fund accounting |
54,858 |
||||||
Directors' fees |
|
||||||
Federal and state registration |
44,829 |
||||||
Insurance expense |
|
||||||
Listing fees |
|
||||||
Professional services |
94,329 |
||||||
Shareholder reports |
29,947 |
||||||
Trustees |
32,377 |
||||||
Transfer agency and related service fees |
|
||||||
Franchise taxes |
|
||||||
Amortization of offering costs |
24,488 |
||||||
Other |
13,070 |
||||||
Total expenses |
717,410 |
||||||
Fee waivers and/or expense reimbursements by Advisor |
(359,905 |
) |
|||||
Net expenses |
357,505 |
||||||
Net investment income |
1,312,103 |
||||||
Net realized gain (loss) on: |
|||||||
Investments in unaffiliated issuers |
257,813 |
||||||
Investments in affiliated issuers |
|
||||||
Distribution from affiliated issuer |
585 |
||||||
Futures contracts |
14,846 |
||||||
Options written |
|
||||||
Swap agreements |
|
||||||
Forward foreign currency contracts |
|
||||||
Foreign currency transactions |
|
||||||
Net realized gain (loss) |
273,244 |
||||||
Change in net unrealized appreciation (depreciation) on: |
|||||||
Investments |
4,159,781 |
||||||
Futures contracts |
(93,722 |
) |
|||||
Options written |
|
||||||
Swap agreements |
|
||||||
Forward foreign currency contracts |
|
||||||
Translation of other assets and liabilities denominated in foreign currency |
|
||||||
Change in net unrealized appreciation (depreciation) |
4,066,059 |
||||||
Net realized and unrealized gain |
4,339,303 |
||||||
Contributions from Advisor |
|
||||||
Net increase in net assets resulting from operations |
$ |
5,651,406 |
See accompanying notes to financial statements.
127
The UBS Funds
Financial statements
Statement of changes in net assets
UBS Dynamic Alpha Fund |
UBS Global Allocation Fund |
||||||||||||||||||
Year ended June 30, 2016 |
Year ended June 30, 2015 |
Year ended June 30, 2016 |
Year ended June 30, 2015 |
||||||||||||||||
Operations: |
|||||||||||||||||||
Net investment income (loss) |
$ |
2,396,025 |
$ |
1,962,094 |
$ |
(282,902 |
) |
$ |
(901,964 |
) |
|||||||||
Net realized gain (loss) |
(44,796,086 |
) |
23,526,473 |
(15,818,275 |
) |
61,553,345 |
|||||||||||||
Change in net unrealized appreciation (depreciation) |
10,008,305 |
(19,331,753 |
) |
(8,564,917 |
) |
(50,112,257 |
) |
||||||||||||
Contributions from advisor |
214,280 |
2,068 |
316,557 |
|
|||||||||||||||
Net increase (decrease) in net assets from operations |
(32,177,476 |
) |
6,158,882 |
(24,349,537 |
) |
10,539,124 |
|||||||||||||
Dividends and distributions to shareholders by class: |
|||||||||||||||||||
Class A: |
|||||||||||||||||||
Net investment income |
(2,647,814 |
) |
(3,213,694 |
) |
(5,354,437 |
) |
|
||||||||||||
Return of capital |
(30,207 |
) |
|
|
|
||||||||||||||
Total Class A dividends and distributions |
(2,678,021 |
) |
(3,213,694 |
) |
(5,354,437 |
) |
|
||||||||||||
Class C: |
|||||||||||||||||||
Net investment income |
(936,550 |
) |
(1,474,152 |
) |
(2,183,113 |
) |
|
||||||||||||
Return of capital |
(10,683 |
) |
|
|
|
||||||||||||||
Total Class C dividends and distributions |
(947,233 |
) |
(1,474,152 |
) |
(2,183,113 |
) |
|
||||||||||||
Class P: |
|||||||||||||||||||
Net investment income |
(5,913,042 |
) |
(6,858,469 |
) |
(3,013,026 |
) |
|
||||||||||||
Return of capital |
(67,458 |
) |
|
|
|
||||||||||||||
Total Class P dividends and distributions |
(5,980,500 |
) |
(6,858,469 |
) |
(3,013,026 |
) |
|
||||||||||||
Decrease in net assets from dividends and distributions |
(9,605,754 |
) |
(11,546,315 |
) |
(10,550,576 |
) |
|
||||||||||||
Beneficial interest transactions: |
|||||||||||||||||||
Proceeds from shares sold |
29,677,803 |
167,409,014 |
9,553,990 |
78,469,043 |
|||||||||||||||
Shares issued on reinvestment of dividends and distributions |
9,059,509 |
10,374,472 |
9,531,202 |
|
|||||||||||||||
Cost of shares redeemed |
(99,285,584 |
) |
(170,803,372 |
) |
(90,668,225 |
) |
(197,453,045 |
) |
|||||||||||
Redemption fees |
|
3,797 |
378 |
11,272 |
|||||||||||||||
Net increase (decrease) in net assets resulting from beneficial interest transactions |
(60,548,272 |
) |
6,983,911 |
(71,582,655 |
) |
(118,972,730 |
) |
||||||||||||
Increase (decrease) in net asset |
(102,331,502 |
) |
1,596,478 |
(106,482,768 |
) |
(108,433,606 |
) |
||||||||||||
Net assets, beginning of year |
328,068,625 |
326,472,147 |
504,356,860 |
612,790,466 |
|||||||||||||||
Net assets, end of year |
$ |
225,737,123 |
$ |
328,068,625 |
$ |
397,874,092 |
$ |
504,356,860 |
|||||||||||
Accumulated undistributed (distributions in excess) net investment income (loss) |
$ |
(8,555,716 |
) |
$ |
6,638,142 |
$ |
4,640,197 |
$ |
9,822,635 |
128
The UBS Funds
Financial statements
UBS International Sustainable Equity Fund |
UBS U.S. Large Cap Equity Fund |
||||||||||||||||||
Year ended June 30, 2016 |
Year ended June 30, 2015 |
Year ended June 30, 2016 |
Year ended June 30, 2015 |
||||||||||||||||
Operations: |
|||||||||||||||||||
Net investment income (loss) |
$ |
439,021 |
$ |
285,369 |
$ |
307,584 |
$ |
657,802 |
|||||||||||
Net realized gain (loss) |
(520,410 |
) |
1,391,726 |
(473,205 |
) |
30,679,774 |
|||||||||||||
Change in net unrealized appreciation (depreciation) |
(3,713,231 |
) |
(69,149 |
) |
(3,137,879 |
) |
(22,596,836 |
) |
|||||||||||
Contributions from advisor |
39,797 |
|
|
|
|||||||||||||||
Net increase (decrease) in net assets from operations |
(3,754,823 |
) |
1,607,946 |
(3,303,500 |
) |
8,740,740 |
|||||||||||||
Dividends and distributions to shareholders by class: |
|||||||||||||||||||
Class A: |
|||||||||||||||||||
Net investment income |
(69,810 |
) |
(66,890 |
) |
(132,023 |
) |
(43,281 |
) |
|||||||||||
Return of capital |
|
|
|
|
|||||||||||||||
Total Class A dividends and distributions |
(69,810 |
) |
(66,890 |
) |
(132,023 |
) |
(43,281 |
) |
|||||||||||
Class C: |
|||||||||||||||||||
Net investment income |
(15,558 |
) |
(18,393 |
) |
(12,163 |
) |
|
||||||||||||
Return of capital |
|
|
|
|
|||||||||||||||
Total Class C dividends and distributions |
(15,558 |
) |
(18,393 |
) |
(12,163 |
) |
|
||||||||||||
Class P: |
|||||||||||||||||||
Net investment income |
(218,890 |
) |
(230,480 |
) |
(454,262 |
) |
(991,668 |
) |
|||||||||||
Return of capital |
|
|
|
|
|||||||||||||||
Total Class P dividends and distributions |
(218,890 |
) |
(230,480 |
) |
(454,262 |
) |
(991,668 |
) |
|||||||||||
Decrease in net assets from dividends and distributions |
(304,258 |
) |
(315,763 |
) |
(598,448 |
) |
(1,034,949 |
) |
|||||||||||
Beneficial interest transactions: |
|||||||||||||||||||
Proceeds from shares sold |
7,565,514 |
10,319,936 |
6,381,043 |
18,239,780 |
|||||||||||||||
Shares issued on reinvestment of dividends and distributions |
274,911 |
283,113 |
577,488 |
1,027,205 |
|||||||||||||||
Cost of shares redeemed |
(6,095,200 |
) |
(7,332,965 |
) |
(16,777,291 |
) |
(125,721,205 |
) |
|||||||||||
Redemption fees |
|
1,207 |
188 |
8,053 |
|||||||||||||||
Net increase (decrease) in net assets resulting from beneficial interest transactions |
1,745,225 |
3,271,291 |
(9,818,572 |
) |
(106,446,167 |
) |
|||||||||||||
Increase (decrease) in net asset |
(2,313,856 |
) |
4,563,474 |
(13,720,520 |
) |
(98,740,376 |
) |
||||||||||||
Net assets, beginning of year |
26,146,216 |
21,582,742 |
40,771,615 |
139,511,991 |
|||||||||||||||
Net assets, end of year |
$ |
23,832,360 |
$ |
26,146,216 |
$ |
27,051,095 |
$ |
40,771,615 |
|||||||||||
Accumulated undistributed (distributions in excess) net investment income (loss) |
$ |
427,895 |
$ |
339,021 |
$ |
302,171 |
$ |
602,844 |
See accompanying notes to financial statements.
129
The UBS Funds
Financial statements
Statement of changes in net assets (continued)
UBS U.S. Small Cap Growth Fund |
UBS Core Plus Bond Fund |
||||||||||||||||||
Year ended June 30, 2016 |
Year ended June 30, 2015 |
Year ended June 30, 2016 |
Year ended June 30, 2015 |
||||||||||||||||
Operations: |
|||||||||||||||||||
Net investment income (loss) |
$ |
(919,714 |
) |
$ |
(1,141,407 |
) |
$ |
645,565 |
$ |
561,654 |
|||||||||
Net realized gain (loss) |
(975,802 |
) |
53,723,523 |
351,553 |
648,680 |
||||||||||||||
Change in net unrealized appreciation (depreciation) |
(41,105,966 |
) |
(20,345,811 |
) |
701,092 |
(675,723 |
) |
||||||||||||
Contributions from Advisor |
|
|
774 |
|
|||||||||||||||
Net increase (decrease) in net assets from operations |
(43,001,482 |
) |
32,236,305 |
1,698,984 |
534,611 |
||||||||||||||
Dividends and distributions to shareholders by class: |
|||||||||||||||||||
Class A: |
|||||||||||||||||||
Net investment income |
|
|
(98,708 |
) |
(79,804 |
) |
|||||||||||||
Net realized gain |
(3,580,313 |
) |
(6,507,157 |
) |
|
|
|||||||||||||
Total Class A dividends and distributions |
(3,580,313 |
) |
(6,507,157 |
) |
(98,708 |
) |
(79,804 |
) |
|||||||||||
Class C: |
|||||||||||||||||||
Net investment income |
|
|
(20,888 |
) |
(36,781 |
) |
|||||||||||||
Net realized gain |
(515,022 |
) |
(756,458 |
) |
|
|
|||||||||||||
Total Class C dividends and distributions |
(515,022 |
) |
(756,458 |
) |
(20,888 |
) |
(36,781 |
) |
|||||||||||
Class P: |
|||||||||||||||||||
Net investment income |
|
|
(717,146 |
) |
(917,558 |
) |
|||||||||||||
Net realized gain |
(10,977,397 |
) |
(35,905,549 |
) |
|
|
|||||||||||||
Total Class P dividends and distributions |
(10,977,397 |
) |
(35,905,549 |
) |
(717,146 |
) |
(917,558 |
) |
|||||||||||
Decrease in net assets from dividends and distributions |
(15,072,732 |
) |
(43,169,164 |
) |
(836,742 |
) |
(1,034,143 |
) |
|||||||||||
Beneficial interest transactions: |
|||||||||||||||||||
Proceeds from shares sold |
96,909,755 |
51,855,914 |
9,843,211 |
7,314,727 |
|||||||||||||||
Shares issued on reinvestment of dividends and distributions |
13,779,443 |
41,880,585 |
773,644 |
1,008,220 |
|||||||||||||||
Cost of shares redeemed |
(120,663,054 |
) |
(124,727,853 |
) |
(5,328,485 |
) |
(5,909,702 |
) |
|||||||||||
Redemption fees |
1,617 |
15,649 |
|
8,338 |
|||||||||||||||
Net increase (decrease) in net assets resulting from beneficial interest transactions |
(9,972,239 |
) |
(30,975,705 |
) |
5,288,370 |
2,421,583 |
|||||||||||||
Increase (decrease) in net asset |
(68,046,453 |
) |
(41,908,564 |
) |
6,150,612 |
1,922,051 |
|||||||||||||
Net assets, beginning of year |
230,706,053 |
272,614,617 |
32,014,115 |
30,092,064 |
|||||||||||||||
Net assets, end of year |
$ |
162,659,600 |
$ |
230,706,053 |
$ |
38,164,727 |
$ |
32,014,115 |
|||||||||||
Accumulated undistributed (distributions in excess) net investment income (loss) |
$ |
(388,273 |
) |
$ |
(62,244 |
) |
$ |
302,082 |
$ |
392,037 |
1 For the period November 10, 2014 (commencement of operations) through June 30, 2015
130
The UBS Funds
Financial statements
UBS Total Return Bond Fund |
UBS Municipal Bond Fund |
||||||||||||||||||||||
Nine Months Ended 6/30/2016 |
Year ended September 30, 2015 |
Year ended September 30, 2014 |
Year ended June 30, 2016 |
Period ended June 30, 20151 |
|||||||||||||||||||
Operations: |
|||||||||||||||||||||||
Net investment income (loss) |
$ |
3,128,455 |
$ |
5,587,745 |
$ |
5,300,356 |
$ |
1,312,103 |
$ |
506,110 |
|||||||||||||
Net realized gain (loss) |
(4,059,029 |
) |
(265,409 |
) |
278,218 |
273,244 |
(92,930 |
) |
|||||||||||||||
Change in net unrealized appreciation (depreciation) |
5,043,486 |
(8,068,933 |
) |
3,592,334 |
4,066,059 |
(577,582 |
) |
||||||||||||||||
Contributions from Advisor |
|
|
|
|
|
||||||||||||||||||
Net increase (decrease) in net assets from operations |
4,112,912 |
(2,746,597 |
) |
9,170,908 |
5,651,406 |
(164,402 |
) |
||||||||||||||||
Dividends and distributions to shareholders by class: |
|||||||||||||||||||||||
Class A: |
|||||||||||||||||||||||
Net investment income |
|
|
|
(232,100 |
) |
(64,280 |
) |
||||||||||||||||
Net realized gain |
|
|
|
|
|
||||||||||||||||||
Total Class A dividends and distributions |
|
|
|
(232,100 |
) |
(64,280 |
) |
||||||||||||||||
Class C: |
|||||||||||||||||||||||
Net investment income |
|
|
|
(57,551 |
) |
(13,168 |
) |
||||||||||||||||
Net realized gain |
|
|
|
|
|
||||||||||||||||||
Total Class C dividends and distributions |
|
|
|
(57,551 |
) |
(13,168 |
) |
||||||||||||||||
Class P: |
|||||||||||||||||||||||
Net investment income |
(2,868,246 |
) |
(5,638,365 |
) |
(5,484,791 |
) |
(1,118,533 |
) |
(449,970 |
) |
|||||||||||||
Net realized gain |
|
(480,029 |
) |
(2,764,335 |
) |
|
|
||||||||||||||||
Total Class P dividends and distributions |
(2,868,246 |
) |
(6,118,394 |
) |
(8,249,126 |
) |
(1,118,533 |
) |
(449,970 |
) |
|||||||||||||
Decrease in net assets from dividends and distributions |
(2,868,246 |
) |
(6,118,394 |
) |
(8,249,126 |
) |
(1,408,184 |
) |
(527,418 |
) |
|||||||||||||
Beneficial interest transactions: |
|||||||||||||||||||||||
Proceeds from shares sold |
303,562 |
|
|
85,280,837 |
74,538,038 |
||||||||||||||||||
Shares issued on reinvestment of dividends and distributions |
249,928 |
|
|
1,172,802 |
240,583 |
||||||||||||||||||
Cost of shares redeemed |
(6,441,226 |
) |
|
|
(37,585,911 |
) |
(13,221,852 |
) |
|||||||||||||||
Redemption fees |
92,483 |
|
|
|
5,449 |
||||||||||||||||||
Net increase (decrease) in net assets resulting from beneficial interest transactions |
(5,795,253 |
) |
|
|
48,867,728 |
61,562,218 |
|||||||||||||||||
Increase (decrease) in net asset |
(4,550,587 |
) |
(8,864,991 |
) |
921,782 |
53,110,950 |
60,870,398 |
||||||||||||||||
Net assets, beginning of year |
131,472,719 |
140,337,710 |
139,415,928 |
60,870,398 |
|
||||||||||||||||||
Net assets, end of year |
$ |
126,922,132 |
$ |
131,472,719 |
$ |
140,337,710 |
$ |
113,981,348 |
$ |
60,870,398 |
|||||||||||||
Accumulated undistributed (distributions in excess) net investment income (loss) |
$ |
75,097 |
$ |
144,266 |
$ |
(3,488 |
) |
$ |
(43,851 |
) |
$ |
10,466 |
See accompanying notes to financial statements.
131
UBS Dynamic Alpha Fund
Financial highlights
The table below sets forth data for one share of beneficial interest outstanding throughout each year presented.
Class A |
|||||||||||||||||||||||
Year ended June 30, |
|||||||||||||||||||||||
2016 |
2015 |
2014 |
2013 |
2012 |
|||||||||||||||||||
Net asset value, beginning of year |
$ |
7.13 |
$ |
7.24 |
$ |
6.82 |
$ |
6.36 |
$ |
5.98 |
|||||||||||||
Income (loss) from investment operations: |
|||||||||||||||||||||||
Net investment income (loss)1 |
0.05 |
0.04 |
0.05 |
0.07 |
0.08 |
||||||||||||||||||
Net realized and unrealized gain (loss) |
(0.79 |
) |
0.11 |
0.38 |
0.50 |
0.30 |
|||||||||||||||||
Net increase from payment by Advisor |
0.01 |
0.003 |
|
|
|
||||||||||||||||||
Total income (loss) from investment operations |
(0.73 |
) |
0.15 |
0.43 |
0.57 |
0.38 |
|||||||||||||||||
Less dividends/distributions: |
|||||||||||||||||||||||
From net investment income |
(0.23 |
) |
(0.26 |
) |
(0.01 |
) |
(0.11 |
) |
|
||||||||||||||
Return of capital |
(0.00 |
)3 |
|
|
|
|
|||||||||||||||||
Total dividends/distributions |
(0.23 |
) |
(0.26 |
) |
(0.01 |
) |
(0.11 |
) |
|
||||||||||||||
Net asset value, end of year |
$ |
6.17 |
$ |
7.13 |
$ |
7.24 |
$ |
6.82 |
$ |
6.36 |
|||||||||||||
Total investment return2 |
(10.48 |
)%4 |
2.03 |
%5 |
6.31 |
% |
9.05 |
% |
6.18 |
% |
|||||||||||||
Ratios to average net assets: |
|||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursement and after dividend expense and security loan fees for securities sold short |
1.45 |
% |
1.43 |
% |
1.42 |
% |
1.43 |
% |
1.60 |
% |
|||||||||||||
Expenses after fee waivers and/or expense reimbursement and after dividend expense and security loan fees for securities sold short |
1.35 |
% |
1.35 |
% |
1.35 |
% |
1.35 |
% |
1.54 |
% |
|||||||||||||
Expenses after fee waivers and/or expense reimbursement and before dividend expense and security loan fees for securities sold short |
1.35 |
% |
1.35 |
% |
1.35 |
% |
1.35 |
% |
1.35 |
% |
|||||||||||||
Net investment income |
0.82 |
% |
0.58 |
% |
0.66 |
% |
0.98 |
% |
1.33 |
% |
|||||||||||||
Supplemental data: |
|||||||||||||||||||||||
Net assets, end of year (000's) |
$ |
65,741 |
$ |
89,421 |
$ |
194,185 |
$ |
208,369 |
$ |
160,773 |
|||||||||||||
Portfolio turnover rate |
50 |
% |
54 |
% |
45 |
% |
74 |
% |
164 |
% |
Class P |
|||||||||||||||||||||||
Year ended June 30, |
|||||||||||||||||||||||
2016 |
2015 |
2014 |
2013 |
2012 |
|||||||||||||||||||
Net asset value, beginning of year |
$ |
7.27 |
$ |
7.38 |
$ |
6.96 |
$ |
6.48 |
$ |
6.09 |
|||||||||||||
Income (loss) from investment operations: |
|||||||||||||||||||||||
Net investment income1 |
0.07 |
0.06 |
0.06 |
0.09 |
0.10 |
||||||||||||||||||
Net realized and unrealized gain (loss) |
(0.82 |
) |
0.12 |
0.39 |
0.52 |
0.29 |
|||||||||||||||||
Net increase from payment by Advisor |
0.01 |
0.003 |
|
|
|
||||||||||||||||||
Total income (loss) from investment operations |
(0.74 |
) |
0.18 |
0.45 |
0.61 |
0.39 |
|||||||||||||||||
Less dividends/distributions: |
|||||||||||||||||||||||
From net investment income |
(0.25 |
) |
(0.29 |
) |
(0.03 |
) |
(0.13 |
) |
|
||||||||||||||
Return of capital |
(0.00 |
)3 |
|
|
|
|
|||||||||||||||||
Total dividends/distributions |
(0.25 |
) |
(0.29 |
) |
(0.03 |
) |
(0.13 |
) |
|
||||||||||||||
Net asset value, end of year |
$ |
6.28 |
$ |
7.27 |
$ |
7.38 |
$ |
6.96 |
$ |
6.48 |
|||||||||||||
Total investment return2 |
(10.17 |
)%4 |
2.29 |
%5 |
6.45 |
% |
9.29 |
% |
6.57 |
% |
|||||||||||||
Ratios to average net assets: |
|||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursement and after dividend expense and security loan fees for securities sold short |
1.22 |
% |
1.20 |
% |
1.15 |
% |
1.12 |
% |
1.28 |
% |
|||||||||||||
Expenses after fee waivers and/or expense reimbursement and after dividend expense and security loan fees for securities sold short |
1.10 |
% |
1.10 |
% |
1.10 |
% |
1.10 |
% |
1.28 |
% |
|||||||||||||
Expenses after fee waivers and/or expense reimbursement and before dividend expense and security loan fees for securities sold short |
1.10 |
% |
1.10 |
% |
1.10 |
% |
1.10 |
% |
1.10 |
% |
|||||||||||||
Net investment income |
1.07 |
% |
0.84 |
% |
0.87 |
% |
1.25 |
% |
1.56 |
% |
|||||||||||||
Supplemental data: |
|||||||||||||||||||||||
Net assets, end of year (000's) |
$ |
132,725 |
$ |
192,777 |
$ |
81,168 |
$ |
48,113 |
$ |
51,807 |
|||||||||||||
Portfolio turnover rate |
50 |
% |
54 |
% |
45 |
% |
74 |
% |
164 |
% |
1 Calculated using the average shares method.
2 Total investment return is calculated assuming a $10,000 investment on the first day of each year reported, reinvestment of all dividends and distributions, if any, at net asset value on the ex-dividend dates, and a sale at net asset value on the last day of each year reported. The figures do not include any applicable sales charges; results would be lower if they were included. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund dividends/distributions or the redemption of Fund shares.
132
UBS Dynamic Alpha Fund
Financial highlights
Class C |
|||||||||||||||||||||||
Year ended June 30, |
|||||||||||||||||||||||
2016 |
2015 |
2014 |
2013 |
2012 |
|||||||||||||||||||
Net asset value, beginning of year |
$ |
6.68 |
$ |
6.81 |
$ |
6.46 |
$ |
6.02 |
$ |
5.71 |
|||||||||||||
Income (loss) from investment operations: |
|||||||||||||||||||||||
Net investment income (loss)1 |
0.003 |
(0.01 |
) |
(0.01 |
) |
0.02 |
0.03 |
||||||||||||||||
Net realized and unrealized gain (loss) |
(0.73 |
) |
0.09 |
0.36 |
0.48 |
0.28 |
|||||||||||||||||
Net increase from payment by Advisor |
0.003 |
0.003 |
|
|
|
||||||||||||||||||
Total income (loss) from investment operations |
(0.73 |
) |
0.08 |
0.35 |
0.50 |
0.31 |
|||||||||||||||||
Less dividends/distributions: |
|||||||||||||||||||||||
From net investment income |
(0.17 |
) |
(0.21 |
) |
|
(0.06 |
) |
|
|||||||||||||||
Return of capital |
(0.00 |
)3 |
|
|
|
|
|||||||||||||||||
Total dividends/distributions |
(0.17 |
) |
(0.21 |
) |
|
(0.06 |
) |
|
|||||||||||||||
Net asset value, end of year |
$ |
5.78 |
$ |
6.68 |
$ |
6.81 |
$ |
6.46 |
$ |
6.02 |
|||||||||||||
Total investment return2 |
(11.00 |
)%4 |
1.21 |
%5 |
5.42 |
% |
8.22 |
% |
5.60 |
% |
|||||||||||||
Ratios to average net assets: |
|||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursement and after dividend expense and security loan fees for securities sold short |
2.23 |
% |
2.19 |
% |
2.18 |
% |
2.19 |
% |
2.36 |
% |
|||||||||||||
Expenses after fee waivers and/or expense reimbursement and after dividend expense and security loan fees for securities sold short |
2.10 |
% |
2.10 |
% |
2.10 |
% |
2.10 |
% |
2.29 |
% |
|||||||||||||
Expenses after fee waivers and/or expense reimbursement and before dividend expense and security loan fees for securities sold short |
2.10 |
% |
2.10 |
% |
2.10 |
% |
2.10 |
% |
2.10 |
% |
|||||||||||||
Net investment income |
0.07 |
% |
(0.17 |
)% |
(0.09 |
)% |
0.24 |
% |
0.58 |
% |
|||||||||||||
Supplemental data: |
|||||||||||||||||||||||
Net assets, end of year (000's) |
$ |
27,271 |
$ |
45,871 |
$ |
51,119 |
$ |
53,405 |
$ |
49,155 |
|||||||||||||
Portfolio turnover rate |
50 |
% |
54 |
% |
45 |
% |
74 |
% |
164 |
% |
3 Amount represents less than $0.005 per share.
4 During the year ended June 30, 2016, the Advisor reimbursed the Fund $128,212, which was determined to be the value of the ineligible services paid for from the Fund's dealing commissions, and $86,068 for a trading error, both reimbursements had no impact on the Fund's total return.
5 During the year ended June 30, 2015 the advisor reimbursed the fund for a trading error in the amount of $2,068, which had no impact on the Fund's total return.
See accompanying notes to financial statements.
133
UBS Global Allocation Fund
Financial highlights
The table below sets forth data for one share of beneficial interest outstanding throughout each year presented.
Class A |
|||||||||||||||||||||||
Year ended June 30, |
|||||||||||||||||||||||
2016 |
2015 |
2014 |
2013 |
2012 |
|||||||||||||||||||
Net asset value, beginning of year |
$ |
11.27 |
$ |
11.04 |
$ |
9.79 |
$ |
9.12 |
$ |
10.27 |
|||||||||||||
Income (loss) from investment operations: |
|||||||||||||||||||||||
Net investment income (loss)1 |
0.01 |
(0.00 |
)3 |
0.02 |
0.01 |
(0.00 |
)3 |
||||||||||||||||
Net realized and unrealized gain (loss) |
(0.56 |
) |
0.23 |
1.36 |
0.88 |
(0.72 |
) |
||||||||||||||||
Net increase from payment by Advisor |
0.01 |
|
|
|
|
||||||||||||||||||
Total income (loss) from investment operations |
(0.54 |
) |
0.23 |
1.38 |
0.89 |
(0.72 |
) |
||||||||||||||||
Less dividends/distributions: |
|||||||||||||||||||||||
From net investment income |
(0.27 |
) |
|
(0.13 |
) |
(0.22 |
) |
(0.43 |
) |
||||||||||||||
Net asset value, end of year |
$ |
10.46 |
$ |
11.27 |
$ |
11.04 |
$ |
9.79 |
$ |
9.12 |
|||||||||||||
Total investment return2 |
(4.81 |
)%4 |
2.08 |
% |
14.20 |
% |
9.86 |
% |
(6.83 |
)% |
|||||||||||||
Ratios to average net assets: |
|||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursement |
1.36 |
% |
1.32 |
% |
1.30 |
% |
1.28 |
% |
1.25 |
% |
|||||||||||||
Expenses after fee waivers and/or expense reimbursement |
1.35 |
% |
1.32 |
% |
1.30 |
% |
1.28 |
% |
1.25 |
% |
|||||||||||||
Net investment income (loss) |
0.09 |
% |
(0.01 |
)% |
0.17 |
% |
0.12 |
% |
(0.03 |
)% |
|||||||||||||
Supplemental data: |
|||||||||||||||||||||||
Net assets, end of year (000's) |
$ |
190,813 |
$ |
234,665 |
$ |
309,296 |
$ |
377,781 |
$ |
494,604 |
|||||||||||||
Portfolio turnover rate |
60 |
% |
62 |
% |
49 |
% |
54 |
% |
93 |
% |
Class P |
|||||||||||||||||||||||
Year ended June 30, |
|||||||||||||||||||||||
2016 |
2015 |
2014 |
2013 |
2012 |
|||||||||||||||||||
Net asset value, beginning of year |
$ |
11.51 |
$ |
11.25 |
$ |
9.98 |
$ |
9.30 |
$ |
10.48 |
|||||||||||||
Income (loss) from investment operations: |
|||||||||||||||||||||||
Net investment income1 |
0.04 |
0.03 |
0.05 |
0.04 |
0.03 |
||||||||||||||||||
Net realized and unrealized gain (loss) |
(0.56 |
) |
0.23 |
1.39 |
0.90 |
(0.75 |
) |
||||||||||||||||
Net increase from payment by Advisor |
0.01 |
|
|
|
|
||||||||||||||||||
Total income (loss) from investment operations |
(0.51 |
) |
0.26 |
1.44 |
0.94 |
(0.72 |
) |
||||||||||||||||
Less dividends/distributions: |
|||||||||||||||||||||||
From net investment income |
(0.31 |
) |
|
(0.17 |
) |
(0.26 |
) |
(0.46 |
) |
||||||||||||||
Net asset value, end of year |
$ |
10.69 |
$ |
11.51 |
$ |
11.25 |
$ |
9.98 |
$ |
9.30 |
|||||||||||||
Total investment return2 |
(4.50 |
)%4 |
2.31 |
% |
14.56 |
% |
10.22 |
% |
(6.59 |
)% |
|||||||||||||
Ratios to average net assets: |
|||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursement |
1.09 |
% |
1.04 |
% |
1.00 |
% |
0.98 |
% |
0.95 |
% |
|||||||||||||
Expenses after fee waivers and/or expense reimbursement |
1.09 |
% |
1.04 |
% |
1.00 |
% |
0.98 |
% |
0.95 |
% |
|||||||||||||
Net investment income |
0.34 |
% |
0.26 |
% |
0.51 |
% |
0.44 |
% |
0.27 |
% |
|||||||||||||
Supplemental data: |
|||||||||||||||||||||||
Net assets, end of year (000's) |
$ |
91,004 |
$ |
124,415 |
$ |
129,417 |
$ |
127,751 |
$ |
132,941 |
|||||||||||||
Portfolio turnover rate |
60 |
% |
62 |
% |
49 |
% |
54 |
% |
93 |
% |
1 Calculated using the average shares method.
2 Total investment return is calculated assuming a $10,000 investment on the first day of each year reported, reinvestment of all dividends and distributions, if any, at net asset value on the ex-dividend dates, and a sale at net asset value on the last day of each year reported. The figures do not include any applicable sales charges; results would be lower if they were included. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund dividends/distributions or the redemption of Fund shares.
3 Amount represents less than $0.005 per share.
134
UBS Global Allocation Fund
Financial highlights
Class C |
|||||||||||||||||||||||
Year ended June 30, |
|||||||||||||||||||||||
2016 |
2015 |
2014 |
2013 |
2012 |
|||||||||||||||||||
Net asset value, beginning of year |
$ |
10.92 |
$ |
10.79 |
$ |
9.55 |
$ |
8.89 |
$ |
10.00 |
|||||||||||||
Income (loss) from investment operations: |
|||||||||||||||||||||||
Net investment income (loss)1 |
(0.07 |
) |
(0.09 |
) |
(0.06 |
) |
(0.06 |
) |
(0.07 |
) |
|||||||||||||
Net realized and unrealized gain (loss) |
(0.54 |
) |
0.22 |
1.34 |
0.86 |
(0.71 |
) |
||||||||||||||||
Net increase from payment by Advisor |
0.01 |
|
|
|
|
||||||||||||||||||
Total income (loss) from investment operations |
(0.60 |
) |
0.13 |
1.28 |
0.80 |
(0.78 |
) |
||||||||||||||||
Less dividends/distributions: |
|||||||||||||||||||||||
From net investment income |
(0.17 |
) |
|
(0.04 |
) |
(0.14 |
) |
(0.33 |
) |
||||||||||||||
Net asset value, end of year |
$ |
10.15 |
$ |
10.92 |
$ |
10.79 |
$ |
9.55 |
$ |
8.89 |
|||||||||||||
Total investment return2 |
(5.49 |
)%4 |
1.20 |
% |
13.31 |
% |
9.11 |
% |
(7.66 |
)% |
|||||||||||||
Ratios to average net assets: |
|||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursement |
2.15 |
% |
2.10 |
% |
2.08 |
% |
2.06 |
% |
2.02 |
% |
|||||||||||||
Expenses after fee waivers and/or expense reimbursement |
2.10 |
% |
2.10 |
% |
2.08 |
% |
2.06 |
% |
2.02 |
% |
|||||||||||||
Net investment income (loss) |
(0.66 |
)% |
(0.79 |
)% |
(0.59 |
)% |
(0.65 |
)% |
(0.80 |
)% |
|||||||||||||
Supplemental data: |
|||||||||||||||||||||||
Net assets, end of year (000's) |
$ |
116,057 |
$ |
145,277 |
$ |
174,078 |
$ |
195,427 |
$ |
238,054 |
|||||||||||||
Portfolio turnover rate |
60 |
% |
62 |
% |
49 |
% |
54 |
% |
93 |
% |
4 During the year ended June 30, 2016, the Advisor reimbursed the Fund $316,557 which was determined to be the value of the ineligible services paid for from the Fund's dealing commissions. If payment from Advisor was not made, the estimated total return would have been -4.90% for A shares, -5.59% for C shares, and -4.59% for P shares.
See accompanying notes to financial statements.
135
UBS International Sustainable Equity Fund (formerly, UBS Global Sustainable Equity Fund)
Financial highlights
The table below sets forth financial data for one share of beneficial interest outstanding throughout each year presented.
Class A |
|||||||||||||||||||||||
Year ended June 30, |
|||||||||||||||||||||||
2016 |
2015 |
2014 |
2013 |
2012 |
|||||||||||||||||||
Net asset value, beginning of year |
$ |
9.47 |
$ |
8.95 |
$ |
7.55 |
$ |
6.75 |
$ |
8.21 |
|||||||||||||
Income (loss) from investment operations: |
|||||||||||||||||||||||
Net investment income1 |
0.13 |
0.10 |
0.08 |
0.11 |
0.08 |
||||||||||||||||||
Net realized and unrealized gain (loss) |
(1.47 |
) |
0.53 |
1.51 |
0.93 |
(1.40 |
) |
||||||||||||||||
Net increase from payment by Advisor |
0.01 |
|
|
|
|
||||||||||||||||||
Total income (loss) from investment operations |
(1.33 |
) |
0.63 |
1.59 |
1.04 |
(1.32 |
) |
||||||||||||||||
Less dividends/distributions: |
|||||||||||||||||||||||
From net investment income |
(0.09 |
) |
(0.11 |
) |
(0.19 |
) |
(0.24 |
) |
(0.14 |
) |
|||||||||||||
Net asset value, end of year |
$ |
8.05 |
$ |
9.47 |
$ |
8.95 |
$ |
7.55 |
$ |
6.75 |
|||||||||||||
Total investment return2 |
(14.07 |
)%3 |
7.14 |
% |
21.32 |
% |
15.49 |
% |
(15.99 |
)% |
|||||||||||||
Ratios to average net assets: |
|||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursement |
2.37 |
% |
2.47 |
% |
2.74 |
% |
2.65 |
% |
2.28 |
% |
|||||||||||||
Expenses after fee waivers and/or expense reimbursement |
1.25 |
% |
1.25 |
% |
1.25 |
% |
1.25 |
% |
1.25 |
% |
|||||||||||||
Net investment income |
1.59 |
% |
1.09 |
% |
0.91 |
% |
1.49 |
% |
1.20 |
% |
|||||||||||||
Supplemental data: |
|||||||||||||||||||||||
Net assets, end of year (000's) |
$ |
5,204 |
$ |
6,371 |
$ |
7,541 |
$ |
5,433 |
$ |
5,576 |
|||||||||||||
Portfolio turnover rate |
114 |
% |
42 |
% |
137 |
% |
41 |
% |
49 |
% |
Class P |
|||||||||||||||||||||||
Year ended June 30, |
|||||||||||||||||||||||
2016 |
2015 |
2014 |
2013 |
2012 |
|||||||||||||||||||
Net asset value, beginning of year |
$ |
9.50 |
$ |
8.99 |
$ |
7.58 |
$ |
6.77 |
$ |
8.25 |
|||||||||||||
Income (loss) from investment operations: |
|||||||||||||||||||||||
Net investment income1 |
0.16 |
0.13 |
0.09 |
0.13 |
0.11 |
||||||||||||||||||
Net realized and unrealized gain (loss) |
(1.48 |
) |
0.51 |
1.53 |
0.94 |
(1.43 |
) |
||||||||||||||||
Net increase from payment by Advisor |
0.01 |
|
|
|
|
||||||||||||||||||
Total income (loss) from investment operations |
(1.31 |
) |
0.64 |
1.62 |
1.07 |
(1.32 |
) |
||||||||||||||||
Less dividends/distributions: |
|||||||||||||||||||||||
From net investment income |
(0.11 |
) |
(0.13 |
) |
(0.21 |
) |
(0.26 |
) |
(0.16 |
) |
|||||||||||||
Net asset value, end of year |
$ |
8.08 |
$ |
9.50 |
$ |
8.99 |
$ |
7.58 |
$ |
6.77 |
|||||||||||||
Total investment return2 |
(13.83 |
)%3 |
7.32 |
% |
21.65 |
% |
15.95 |
% |
(15.88 |
)% |
|||||||||||||
Ratios to average net assets: |
|||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursement |
2.12 |
% |
2.21 |
% |
2.45 |
% |
2.40 |
% |
2.06 |
% |
|||||||||||||
Expenses after fee waivers and/or expense reimbursement |
1.00 |
% |
1.00 |
% |
1.00 |
% |
1.00 |
% |
1.00 |
% |
|||||||||||||
Net investment income |
1.92 |
% |
1.40 |
% |
1.10 |
% |
1.69 |
% |
1.52 |
% |
|||||||||||||
Supplemental data: |
|||||||||||||||||||||||
Net assets, end of year (000's) |
$ |
16,277 |
$ |
17,103 |
$ |
12,462 |
$ |
11,740 |
$ |
12,966 |
|||||||||||||
Portfolio turnover rate |
114 |
% |
42 |
% |
137 |
% |
41 |
% |
49 |
% |
1 Calculated using the average shares method.
2 Total investment return is calculated assuming a $10,000 investment on the first day of each year reported, reinvestment of all dividends and distributions, if any, at net asset value on the ex-dividend dates, and a sale at net asset value on the last day of each year reported. The figures do not include any applicable sales charges; results would be lower if they were included. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund dividends/distributions or the redemption of Fund shares.
136
UBS International Sustainable Equity Fund (formerly, UBS Global Sustainable Equity Fund)
Financial highlights
Class C |
|||||||||||||||||||||||
Year ended June 30, |
|||||||||||||||||||||||
2016 |
2015 |
2014 |
2013 |
2012 |
|||||||||||||||||||
Net asset value, beginning of year |
$ |
9.26 |
$ |
8.80 |
$ |
7.43 |
$ |
6.63 |
$ |
8.02 |
|||||||||||||
Income (loss) from investment operations: |
|||||||||||||||||||||||
Net investment income1 |
0.07 |
0.04 |
0.03 |
0.05 |
0.03 |
||||||||||||||||||
Net realized and unrealized gain (loss) |
(1.44 |
) |
0.51 |
1.47 |
0.92 |
(1.36 |
) |
||||||||||||||||
Net increase from payment by Advisor |
0.01 |
|
|
|
|
||||||||||||||||||
Total income (loss) from investment operations |
(1.36 |
) |
0.55 |
1.50 |
0.97 |
(1.33 |
) |
||||||||||||||||
Less dividends/distributions: |
|||||||||||||||||||||||
From net investment income |
(0.05 |
) |
(0.09 |
) |
(0.13 |
) |
(0.17 |
) |
(0.06 |
) |
|||||||||||||
Net asset value, end of year |
$ |
7.85 |
$ |
9.26 |
$ |
8.80 |
$ |
7.43 |
$ |
6.63 |
|||||||||||||
Total investment return2 |
(14.72 |
)%3 |
6.36 |
% |
20.32 |
% |
14.72 |
% |
(16.59 |
)% |
|||||||||||||
Ratios to average net assets: |
|||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursement |
3.15 |
% |
3.23 |
% |
3.54 |
% |
3.40 |
% |
3.06 |
% |
|||||||||||||
Expenses after fee waivers and/or expense reimbursement |
2.00 |
% |
2.00 |
% |
2.00 |
% |
2.00 |
% |
2.00 |
% |
|||||||||||||
Net investment income |
0.86 |
% |
0.46 |
% |
0.37 |
% |
0.65 |
% |
0.45 |
% |
|||||||||||||
Supplemental data: |
|||||||||||||||||||||||
Net assets, end of year (000's) |
$ |
2,351 |
$ |
2,672 |
$ |
1,579 |
$ |
605 |
$ |
703 |
|||||||||||||
Portfolio turnover rate |
114 |
% |
42 |
% |
137 |
% |
41 |
% |
49 |
% |
3 During the year ended June 30, 2016, the Advisor reimbursed the Fund $34,326, which was determined to be the value of the ineligible services paid for from the Fund's dealing commissions, and $5,471 for a trading error. lf payment from Advisor was not made, the estimated total return would have been -14.18% for A shares, -14.83% for C shares, and -13.94% for P shares.
See accompanying notes to financial statements.
137
UBS U.S. Large Cap Equity Fund
Financial highlights
The table below sets forth financial data for one share of beneficial interest outstanding throughout each year presented.
Class A |
|||||||||||||||||||||||
Year ended June 30, |
|||||||||||||||||||||||
2016 |
2015 |
2014 |
2013 |
2012 |
|||||||||||||||||||
Net asset value, beginning of year |
$ |
27.55 |
$ |
25.03 |
$ |
19.85 |
$ |
15.96 |
$ |
16.46 |
|||||||||||||
Income (loss) from investment operations: |
|||||||||||||||||||||||
Net investment income (loss)1 |
0.21 |
0.14 |
0.11 |
0.11 |
0.10 |
||||||||||||||||||
Net realized and unrealized gain (loss) |
(1.88 |
) |
2.50 |
5.23 |
3.86 |
(0.51 |
) |
||||||||||||||||
Total income (loss) from investment operations |
(1.67 |
) |
2.64 |
5.34 |
3.97 |
(0.41 |
) |
||||||||||||||||
Less dividends/distributions: |
|||||||||||||||||||||||
From net investment income |
(0.37 |
) |
(0.12 |
) |
(0.16 |
) |
(0.08 |
) |
(0.09 |
) |
|||||||||||||
Net asset value, end of year |
$ |
25.51 |
$ |
27.55 |
$ |
25.03 |
$ |
19.85 |
$ |
15.96 |
|||||||||||||
Total investment return2 |
(6.13 |
)% |
10.61 |
% |
27.05 |
% |
24.99 |
% |
(2.47 |
)% |
|||||||||||||
Ratios to average net assets: |
|||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursement |
1.93 |
% |
1.56 |
% |
1.29 |
% |
1.28 |
% |
1.24 |
% |
|||||||||||||
Expenses after fee waivers and/or expense reimbursement |
1.13 |
% |
1.20 |
% |
1.20 |
% |
1.20 |
% |
1.20 |
% |
|||||||||||||
Net investment income (loss) |
0.81 |
% |
0.53 |
% |
0.47 |
% |
0.63 |
% |
0.64 |
% |
|||||||||||||
Supplemental data: |
|||||||||||||||||||||||
Net assets, end of year (000's) |
$ |
9,774 |
$ |
9,784 |
$ |
9,478 |
$ |
8,534 |
$ |
14,113 |
|||||||||||||
Portfolio turnover rate |
57 |
% |
59 |
% |
55 |
% |
58 |
% |
65 |
% |
Class P |
|||||||||||||||||||||||
Year ended June 30, |
|||||||||||||||||||||||
2016 |
2015 |
2014 |
2013 |
2012 |
|||||||||||||||||||
Net asset value, beginning of year |
$ |
27.67 |
$ |
25.14 |
$ |
19.94 |
$ |
16.07 |
$ |
16.60 |
|||||||||||||
Income (loss) from investment operations: |
|||||||||||||||||||||||
Net investment income1 |
0.26 |
0.20 |
0.16 |
0.15 |
0.14 |
||||||||||||||||||
Net realized and unrealized gain (loss) |
(1.89 |
) |
2.52 |
5.27 |
3.88 |
(0.52 |
) |
||||||||||||||||
Total income (loss) from investment operations |
(1.63 |
) |
2.72 |
5.43 |
4.03 |
(0.38 |
) |
||||||||||||||||
Less dividends/distributions: |
|||||||||||||||||||||||
From net investment income |
(0.43 |
) |
(0.19 |
) |
(0.23 |
) |
(0.16 |
) |
(0.15 |
) |
|||||||||||||
Net asset value, end of year |
$ |
25.61 |
$ |
27.67 |
$ |
25.14 |
$ |
19.94 |
$ |
16.07 |
|||||||||||||
Total investment return2 |
(5.91 |
)% |
10.90 |
% |
27.38 |
% |
25.28 |
% |
(2.23 |
)% |
|||||||||||||
Ratios to average net assets: |
|||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursement |
1.64 |
% |
1.07 |
% |
0.99 |
% |
0.98 |
% |
0.97 |
% |
|||||||||||||
Expenses after fee waivers and/or expense reimbursement |
0.90 |
% |
0.95 |
% |
0.95 |
% |
0.95 |
% |
0.95 |
% |
|||||||||||||
Net investment income |
1.00 |
% |
0.77 |
% |
0.71 |
% |
0.87 |
% |
0.90 |
% |
|||||||||||||
Supplemental data: |
|||||||||||||||||||||||
Net assets, end of year (000's) |
$ |
15,147 |
$ |
28,345 |
$ |
126,735 |
$ |
146,145 |
$ |
185,910 |
|||||||||||||
Portfolio turnover rate |
57 |
% |
59 |
% |
55 |
% |
58 |
% |
65 |
% |
1 Calculated using the average shares method.
2 Total investment return is calculated assuming a $10,000 investment on the first day of each year reported, reinvestment of all dividends and distributions, if any, at net asset value on the ex-dividend dates, and a sale at net asset value on the last day of each year reported. The figures do not include any applicable sales charges; results would be lower if they were included. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund dividends/distributions or the redemption of Fund shares.
138
UBS U.S. Large Cap Equity Fund
Financial highlights
Class C |
|||||||||||||||||||||||
Year ended June 30, |
|||||||||||||||||||||||
2016 |
2015 |
2014 |
2013 |
2012 |
|||||||||||||||||||
Net asset value, beginning of year |
$ |
26.34 |
$ |
23.99 |
$ |
19.06 |
$ |
15.36 |
$ |
15.88 |
|||||||||||||
Income (loss) from investment operations: |
|||||||||||||||||||||||
Net investment income (loss)1 |
0.01 |
(0.05 |
) |
(0.06 |
) |
(0.02 |
) |
(0.02 |
) |
||||||||||||||
Net realized and unrealized gain (loss) |
(1.80 |
) |
2.40 |
5.03 |
3.72 |
(0.50 |
) |
||||||||||||||||
Total income (loss) from investment operations |
(1.79 |
) |
2.35 |
4.97 |
3.70 |
(0.52 |
) |
||||||||||||||||
Less dividends/distributions: |
|||||||||||||||||||||||
From net investment income |
(0.14 |
) |
|
(0.04 |
) |
|
|
||||||||||||||||
Net asset value, end of year |
$ |
24.41 |
$ |
26.34 |
$ |
23.99 |
$ |
19.06 |
$ |
15.36 |
|||||||||||||
Total investment return2 |
(6.82 |
)% |
9.80 |
% |
26.09 |
% |
24.09 |
% |
(3.28 |
)% |
|||||||||||||
Ratios to average net assets: |
|||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursement |
2.68 |
% |
2.31 |
% |
2.08 |
% |
2.04 |
% |
2.02 |
% |
|||||||||||||
Expenses after fee waivers and/or expense reimbursement |
1.88 |
% |
1.95 |
% |
1.95 |
% |
1.95 |
% |
1.95 |
% |
|||||||||||||
Net investment income (loss) |
0.03 |
% |
(0.22 |
)% |
(0.27 |
)% |
(0.11 |
)% |
(0.11 |
)% |
|||||||||||||
Supplemental data: |
|||||||||||||||||||||||
Net assets, end of year (000's) |
$ |
2,130 |
$ |
2,643 |
$ |
3,299 |
$ |
2,617 |
$ |
2,873 |
|||||||||||||
Portfolio turnover rate |
57 |
% |
59 |
% |
55 |
% |
58 |
% |
65 |
% |
See accompanying notes to financial statements.
139
UBS U.S. Small Cap Growth Fund
Financial highlights
The table below sets forth data for one share of beneficial interest outstanding throughout each year presented.
Class A |
|||||||||||||||||||||||
Year ended June 30, |
|||||||||||||||||||||||
2016 |
2015 |
2014 |
2013 |
2012 |
|||||||||||||||||||
Net asset value, beginning of year |
$ |
23.60 |
$ |
24.76 |
$ |
20.10 |
$ |
16.19 |
$ |
16.00 |
|||||||||||||
Income (loss) from investment operations: |
|||||||||||||||||||||||
Net investment (loss)1 |
(0.13 |
) |
(0.16 |
) |
(0.21 |
) |
(0.11 |
) |
(0.14 |
) |
|||||||||||||
Net realized and unrealized gain (loss) |
(3.89 |
) |
3.38 |
5.40 |
4.02 |
0.33 |
|||||||||||||||||
Total income (loss) from investment operations |
(4.02 |
) |
3.22 |
5.19 |
3.91 |
0.19 |
|||||||||||||||||
Less dividends/distributions: |
|||||||||||||||||||||||
From net realized gains |
(1.83 |
) |
(4.38 |
) |
(0.53 |
) |
|
|
|||||||||||||||
Net asset value, end of year |
$ |
17.75 |
$ |
23.60 |
$ |
24.76 |
$ |
20.10 |
$ |
16.19 |
|||||||||||||
Total investment return2 |
(17.58 |
)% |
15.61 |
% |
26.42 |
% |
23.78 |
% |
1.19 |
% |
|||||||||||||
Ratios to average net assets: |
|||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursement |
1.53 |
% |
1.51 |
% |
1.45 |
% |
1.55 |
% |
1.57 |
% |
|||||||||||||
Expenses after fee waivers and/or expense reimbursement |
1.24 |
% |
1.35 |
% |
1.40 |
% |
1.40 |
% |
1.40 |
% |
|||||||||||||
Net investment loss |
(0.65 |
)% |
(0.69 |
)% |
(0.92 |
)% |
(0.64 |
)% |
(0.93 |
)% |
|||||||||||||
Supplemental data: |
|||||||||||||||||||||||
Net assets, end of year (000's) |
$ |
28,048 |
$ |
46,813 |
$ |
42,552 |
$ |
32,848 |
$ |
31,015 |
|||||||||||||
Portfolio turnover rate |
109 |
% |
64 |
% |
57 |
% |
42 |
% |
48 |
% |
Class P |
|||||||||||||||||||||||
Year ended June 30, |
|||||||||||||||||||||||
2016 |
2015 |
2014 |
2013 |
2012 |
|||||||||||||||||||
Net asset value, beginning of year |
$ |
25.11 |
$ |
26.00 |
$ |
21.01 |
$ |
16.88 |
$ |
16.64 |
|||||||||||||
Income (loss) from investment operations: |
|||||||||||||||||||||||
Net investment (loss)1 |
(0.08 |
) |
(0.11 |
) |
(0.15 |
) |
(0.08 |
) |
(0.11 |
) |
|||||||||||||
Net realized and unrealized gain (loss) |
(4.15 |
) |
3.60 |
5.67 |
4.21 |
0.35 |
|||||||||||||||||
Total income (loss) from investment operations |
(4.23 |
) |
3.49 |
5.52 |
4.13 |
0.24 |
|||||||||||||||||
Less dividends/distributions: |
|||||||||||||||||||||||
From net realized gains |
(1.83 |
) |
(4.38 |
) |
(0.53 |
) |
|
|
|||||||||||||||
Net asset value, end of year |
$ |
19.05 |
$ |
25.11 |
$ |
26.00 |
$ |
21.01 |
$ |
16.88 |
|||||||||||||
Total investment return2 |
(17.39 |
)% |
15.93 |
% |
26.79 |
% |
24.17 |
% |
1.44 |
% |
|||||||||||||
Ratios to average net assets: |
|||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursement/recoupment |
1.17 |
% |
1.10 |
% |
1.09 |
% |
1.13 |
% |
1.15 |
% |
|||||||||||||
Expenses after fee waivers and/or expense reimbursement/recoupment |
0.99 |
% |
1.07 |
% |
1.09 |
% |
1.15 |
%3 |
1.15 |
%3 |
|||||||||||||
Net investment loss |
(0.40 |
)% |
(0.43 |
)% |
(0.61 |
)% |
(0.41 |
)% |
(0.68 |
)% |
|||||||||||||
Supplemental data: |
|||||||||||||||||||||||
Net assets, end of year (000's) |
$ |
130,227 |
$ |
178,495 |
$ |
226,376 |
$ |
172,436 |
$ |
107,447 |
|||||||||||||
Portfolio turnover rate |
109 |
% |
64 |
% |
57 |
% |
42 |
% |
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 year reported, reinvestment of all dividends and distributions, if any, at net asset value on the ex-dividend dates, and a sale at net asset value on the last day of each year reported. The figures do not include any applicable sales charges; results would be lower if they were included. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund dividends/distributions or the redemption of Fund shares.
3 The investment manager recouped expenses previously reimbursed by the investment manager on behalf of the Fund, not to exceed the expense cap.
140
UBS U.S. Small Cap Growth Fund
Financial highlights
Class C |
|||||||||||||||||||||||
Year ended June 30, |
|||||||||||||||||||||||
2016 |
2015 |
2014 |
2013 |
2012 |
|||||||||||||||||||
Net asset value, beginning of year |
$ |
20.60 |
$ |
22.32 |
$ |
18.29 |
$ |
14.85 |
$ |
14.78 |
|||||||||||||
Income (loss) from investment operations: |
|||||||||||||||||||||||
Net investment (loss)1 |
(0.23 |
) |
(0.29 |
) |
(0.35 |
) |
(0.22 |
) |
(0.23 |
) |
|||||||||||||
Net realized and unrealized gain (loss) |
(3.38 |
) |
2.95 |
4.91 |
3.66 |
0.30 |
|||||||||||||||||
Total income (loss) from investment operations |
(3.61 |
) |
2.66 |
4.56 |
3.44 |
0.07 |
|||||||||||||||||
Less dividends/distributions: |
|||||||||||||||||||||||
From net realized gains |
(1.83 |
) |
(4.38 |
) |
(0.53 |
) |
|
|
|||||||||||||||
Net asset value, end of year |
$ |
15.16 |
$ |
20.60 |
$ |
22.32 |
$ |
18.29 |
$ |
14.85 |
|||||||||||||
Total investment return2 |
(18.18 |
)% |
14.71 |
% |
25.51 |
% |
22.83 |
% |
0.47 |
% |
|||||||||||||
Ratios to average net assets: |
|||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursement |
2.28 |
% |
2.24 |
% |
2.24 |
% |
2.32 |
% |
2.35 |
% |
|||||||||||||
Expenses after fee waivers and/or expense reimbursement |
1.99 |
% |
2.10 |
% |
2.15 |
% |
2.15 |
% |
2.15 |
% |
|||||||||||||
Net investment loss |
(1.39 |
)% |
(1.44 |
)% |
(1.67 |
)% |
(1.39 |
)% |
(1.68 |
)% |
|||||||||||||
Supplemental data: |
|||||||||||||||||||||||
Net assets, end of year (000's) |
$ |
4,385 |
$ |
5,398 |
$ |
3,687 |
$ |
2,937 |
$ |
2,442 |
|||||||||||||
Portfolio turnover rate |
109 |
% |
64 |
% |
57 |
% |
42 |
% |
48 |
% |
See accompanying notes to financial statements.
141
UBS Core Plus Bond Fund
Financial highlights
The table below sets forth financial data for one share of beneficial interest outstanding throughout each year presented.
Class A |
|||||||||||||||||||||||
Year ended June 30, |
|||||||||||||||||||||||
2016 |
2015 |
2014 |
2013 |
2012 |
|||||||||||||||||||
Net asset value, beginning of year |
$ |
9.05 |
$ |
9.18 |
$ |
8.91 |
$ |
9.13 |
$ |
8.70 |
|||||||||||||
Income (loss) from investment operations: |
|||||||||||||||||||||||
Net investment income1 |
0.15 |
0.15 |
0.17 |
0.16 |
0.20 |
||||||||||||||||||
Net realized and unrealized gain (loss) |
0.26 |
0.01 |
0.33 |
(0.15 |
) |
0.46 |
|||||||||||||||||
Net increase from payment by Advisor |
0.003 |
|
|
|
|
||||||||||||||||||
Total income (loss) from investment operations |
0.41 |
0.16 |
0.50 |
0.01 |
0.66 |
||||||||||||||||||
Less dividends/distributions: |
|||||||||||||||||||||||
From net investment income |
(0.20 |
) |
(0.29 |
) |
(0.23 |
) |
(0.23 |
) |
(0.23 |
) |
|||||||||||||
Net asset value, end of year |
$ |
9.26 |
$ |
9.05 |
$ |
9.18 |
$ |
8.91 |
$ |
9.13 |
|||||||||||||
Total investment return2 |
4.62 |
%4 |
1.69 |
% |
5.68 |
% |
0.06 |
% |
7.64 |
% |
|||||||||||||
Ratios to average net assets: |
|||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursement |
1.62 |
% |
1.73 |
% |
1.69 |
% |
1.58 |
% |
1.45 |
% |
|||||||||||||
Expenses after fee waivers and/or expense reimbursement |
0.64 |
% |
0.64 |
% |
0.64 |
% |
0.64 |
% |
0.64 |
% |
|||||||||||||
Net investment income |
1.66 |
% |
1.60 |
% |
1.89 |
% |
1.77 |
% |
2.18 |
% |
|||||||||||||
Supplemental data: |
|||||||||||||||||||||||
Net assets, end of year (000's) |
$ |
5,129 |
$ |
2,205 |
$ |
3,226 |
$ |
6,951 |
$ |
7,606 |
|||||||||||||
Portfolio turnover rate |
949 |
% |
744 |
% |
506 |
% |
374 |
% |
509 |
% |
Class P |
|||||||||||||||||||||||
Year ended June 30, |
|||||||||||||||||||||||
2016 |
2015 |
2014 |
2013 |
2012 |
|||||||||||||||||||
Net asset value, beginning of year |
$ |
9.03 |
$ |
9.17 |
$ |
8.89 |
$ |
9.11 |
$ |
8.69 |
|||||||||||||
Income (loss) from investment operations: |
|||||||||||||||||||||||
Net investment income1 |
0.17 |
0.17 |
0.19 |
0.19 |
0.22 |
||||||||||||||||||
Net realized and unrealized gain (loss) |
0.26 |
0.00 |
0.34 |
(0.16 |
) |
0.45 |
|||||||||||||||||
Net increase from payment by Advisor |
0.003 |
|
|
|
|
||||||||||||||||||
Total income from investment operations |
0.43 |
0.17 |
0.53 |
0.03 |
0.67 |
||||||||||||||||||
Less dividends/distributions: |
|||||||||||||||||||||||
From net investment income |
(0.22 |
) |
(0.31 |
) |
(0.25 |
) |
(0.25 |
) |
(0.25 |
) |
|||||||||||||
Net asset value, end of year |
$ |
9.24 |
$ |
9.03 |
$ |
9.17 |
$ |
8.89 |
$ |
9.11 |
|||||||||||||
Total investment return2 |
4.87 |
%4 |
1.84 |
% |
6.08 |
% |
0.31 |
% |
7.80 |
% |
|||||||||||||
Ratios to average net assets: |
|||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursement |
1.36 |
% |
1.43 |
% |
1.38 |
% |
1.20 |
% |
1.12 |
% |
|||||||||||||
Expenses after fee waivers and/or expense reimbursement |
0.39 |
% |
0.39 |
% |
0.39 |
% |
0.39 |
% |
0.39 |
% |
|||||||||||||
Net investment income |
1.91 |
% |
1.83 |
% |
2.13 |
% |
2.04 |
% |
2.44 |
% |
|||||||||||||
Supplemental data: |
|||||||||||||||||||||||
Net assets, end of year (000's) |
$ |
31,796 |
$ |
28,541 |
$ |
25,431 |
$ |
26,425 |
$ |
33,501 |
|||||||||||||
Portfolio turnover rate |
949 |
% |
744 |
% |
506 |
% |
374 |
% |
509 |
% |
1 Calculated using the average shares method.
2 Total investment return is calculated assuming a $10,000 investment on the first day of each year reported, reinvestment of all dividends and distributions, if any, at net asset value on the ex-dividend dates, and a sale at net asset value on the last day of each year reported. The figures do not include any applicable sales charges; results would be lower if they were included. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund dividends/distributions or the redemption of Fund shares.
3 Amount represents less than $0.005 per share.
4 During the year ended June 30, 2016, the Advisor reimbursed the Fund $774 for a trading error, which had no impact on the Fund's total return.
142
UBS Core Plus Bond Fund
Financial highlights
Class C |
|||||||||||||||||||||||
Year ended June 30, |
|||||||||||||||||||||||
2016 |
2015 |
2014 |
2013 |
2012 |
|||||||||||||||||||
Net asset value, beginning of year |
$ |
9.02 |
$ |
9.15 |
$ |
8.88 |
$ |
9.10 |
$ |
8.68 |
|||||||||||||
Income (loss) from investment operations: |
|||||||||||||||||||||||
Net investment income1 |
0.11 |
0.10 |
0.12 |
0.12 |
0.15 |
||||||||||||||||||
Net realized and unrealized gain (loss) |
0.25 |
0.01 |
0.33 |
(0.16 |
) |
0.45 |
|||||||||||||||||
Net increase from payment by Advisor |
0.003 |
|
|
|
|
||||||||||||||||||
Total income (loss) from investment operations |
0.36 |
0.11 |
0.45 |
(0.04 |
) |
0.60 |
|||||||||||||||||
Less dividends/distributions: |
|||||||||||||||||||||||
From net investment income |
(0.15 |
) |
(0.24 |
) |
(0.18 |
) |
(0.18 |
) |
(0.18 |
) |
|||||||||||||
Net asset value, end of year |
$ |
9.23 |
$ |
9.02 |
$ |
9.15 |
$ |
8.88 |
$ |
9.10 |
|||||||||||||
Total investment return2 |
4.10 |
%4 |
1.19 |
% |
5.30 |
% |
(0.55 |
)% |
7.01 |
% |
|||||||||||||
Ratios to average net assets: |
|||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursement |
2.31 |
% |
2.36 |
% |
2.28 |
% |
2.02 |
% |
1.91 |
% |
|||||||||||||
Expenses after fee waivers and/or expense reimbursement |
1.14 |
% |
1.14 |
% |
1.14 |
% |
1.14 |
% |
1.14 |
% |
|||||||||||||
Net investment income |
1.16 |
% |
1.09 |
% |
1.38 |
% |
1.29 |
% |
1.70 |
% |
|||||||||||||
Supplemental data: |
|||||||||||||||||||||||
Net assets, end of year (000's) |
$ |
1,240 |
$ |
1,268 |
$ |
1,435 |
$ |
1,724 |
$ |
2,187 |
|||||||||||||
Portfolio turnover rate |
949 |
% |
744 |
% |
506 |
% |
374 |
% |
509 |
% |
See accompanying notes to financial statements.
143
UBS Total Return Bond Fund
Financial highlights
The table below sets forth data for one share of beneficial interest outstanding throughout each period presented.
Class P |
|||||||||||||||||||||||||||
For the nine months ended |
Year ended September 30, |
||||||||||||||||||||||||||
June 30, 2016 |
2015 |
2014 |
2013 |
2012 |
2011 |
||||||||||||||||||||||
Net asset value, beginning of period |
$ |
14.98 |
$ |
15.99 |
$ |
15.89 |
$ |
17.87 |
$ |
17.29 |
$ |
17.35 |
|||||||||||||||
Income (loss) from investment operations: |
|||||||||||||||||||||||||||
Net investment income1 |
0.36 |
0.64 |
0.60 |
0.60 |
0.67 |
0.75 |
|||||||||||||||||||||
Net realized and unrealized gain (loss) |
0.13 |
(0.96 |
) |
0.44 |
(1.06 |
) |
1.34 |
0.54 |
|||||||||||||||||||
Total income (loss) from investment operations |
0.49 |
(0.32 |
) |
1.04 |
(0.46 |
) |
2.01 |
1.29 |
|||||||||||||||||||
Less dividends/distributions: |
|||||||||||||||||||||||||||
From net investment income |
(0.33 |
) |
(0.64 |
) |
(0.62 |
) |
(0.70 |
) |
(0.71 |
) |
(0.92 |
) |
|||||||||||||||
From net realized gains |
|
(0.05 |
) |
(0.32 |
) |
(0.82 |
) |
(0.72 |
) |
(0.43 |
) |
||||||||||||||||
Total dividends/distributions |
(0.33 |
) |
(0.69 |
) |
(0.94 |
) |
(1.52 |
) |
(1.43 |
) |
(1.35 |
) |
|||||||||||||||
Net asset value, end of period |
$ |
15.14 |
$ |
14.98 |
$ |
15.99 |
$ |
15.89 |
$ |
17.87 |
$ |
17.29 |
|||||||||||||||
Total investment return2 |
3.33 |
% |
(2.05 |
)% |
6.77 |
% |
(2.82 |
)% |
12.23 |
% |
8.10 |
% |
|||||||||||||||
Ratios to average net assets: |
|||||||||||||||||||||||||||
Expenses before fee waivers and/or expense reimbursement |
1.21 |
%3 |
0.75 |
% |
0.83 |
% |
0.71 |
% |
0.67 |
% |
0.70 |
% |
|||||||||||||||
Expenses after fee waivers and/or expense reimbursement |
1.16 |
%3 |
0.75 |
% |
0.83 |
% |
0.71 |
% |
0.67 |
% |
0.70 |
% |
|||||||||||||||
Net investment income |
3.22 |
%3 |
4.04 |
% |
3.76 |
% |
3.56 |
% |
3.89 |
% |
4.50 |
% |
|||||||||||||||
Supplemental data: |
|||||||||||||||||||||||||||
Net assets, end of period (000's) |
$ |
126,922 |
$ |
131,473 |
$ |
140,338 |
$ |
139,416 |
$ |
156,791 |
$ |
151,695 |
|||||||||||||||
Portfolio turnover rate |
251 |
% |
26 |
% |
44 |
% |
133 |
% |
175 |
% |
154 |
% |
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 Fund dividends/distributions or the redemption of Fund shares.
3 Annualized.
See accompanying notes to financial statements.
144
UBS Municipal Bond Fund
Financial highlights
The table below sets forth financial data for one share of beneficial interest outstanding throughout each period presented.
Class A |
Class C |
||||||||||||||||||
For the year ended June 30, 2016 |
For the period ended June 30, 20153 |
For the year ended June 30, 2016 |
For the period ended June 30, 20153 |
||||||||||||||||
Net asset value, beginning of year |
$ |
9.94 |
$ |
10.00 |
$ |
9.94 |
$ |
10.00 |
|||||||||||
Income (loss) from investment operations: |
|||||||||||||||||||
Net investment income1 |
0.17 |
0.09 |
0.12 |
0.06 |
|||||||||||||||
Net realized and unrealized gain (loss) |
0.59 |
(0.06 |
) |
0.59 |
(0.06 |
) |
|||||||||||||
Total income from investment operations |
0.76 |
0.03 |
0.71 |
0.004 |
|||||||||||||||
Less dividends/distributions: |
|||||||||||||||||||
From net investment income |
(0.18 |
) |
(0.09 |
) |
(0.13 |
) |
(0.06 |
) |
|||||||||||
Net asset value, end of year |
$ |
10.52 |
$ |
9.94 |
$ |
10.52 |
$ |
9.94 |
|||||||||||
Total investment return2 |
7.74 |
% |
0.30 |
% |
7.21 |
% |
0.03 |
% |
|||||||||||
Ratios to average net assets: |
|||||||||||||||||||
Expenses before fee waivers and/or expense reimbursement |
1.15 |
% |
1.46 |
%5 |
1.65 |
% |
1.98 |
%5 |
|||||||||||
Expenses after fee waivers and/or expense reimbursement |
0.65 |
% |
0.65 |
%5 |
1.15 |
% |
1.14 |
%5 |
|||||||||||
Net investment income |
1.66 |
% |
1.43 |
%5 |
1.15 |
% |
0.94 |
%5 |
|||||||||||
Supplemental data: |
|||||||||||||||||||
Net assets, end of year (000's) |
$ |
17,671 |
$ |
10,929 |
$ |
6,164 |
$ |
2,948 |
|||||||||||
Portfolio turnover rate |
100 |
% |
72 |
% |
100 |
% |
72 |
% |
Class P |
|||||||||||
For the year ended June 30, 2016 |
For the period ended June 30, 20153 |
||||||||||
Net asset value, beginning of year |
$ |
9.94 |
$ |
10.00 |
|||||||
Income (loss) from investment operations: |
|||||||||||
Net investment income1 |
0.19 |
0.10 |
|||||||||
Net realized and unrealized gain (loss) |
0.60 |
(0.05 |
) |
||||||||
Total income from investment operations |
0.79 |
0.05 |
|||||||||
Less dividends/distributions: |
|||||||||||
From net investment income |
(0.21 |
) |
(0.11 |
) |
|||||||
Net asset value, end of year |
$ |
10.52 |
$ |
9.94 |
|||||||
Total investment return2 |
8.01 |
% |
0.45 |
% |
|||||||
Ratios to average net assets: |
|||||||||||
Expenses before fee waivers and/or expense reimbursement |
0.89 |
% |
1.23 |
%5 |
|||||||
Expenses after fee waivers and/or expense reimbursement |
0.40 |
% |
0.40 |
%5 |
|||||||
Net investment income |
1.89 |
% |
1.63 |
%5 |
|||||||
Supplemental data: |
|||||||||||
Net assets, end of year (000's) |
$ |
90,146 |
$ |
46,993 |
|||||||
Portfolio turnover rate |
100 |
% |
72 |
% |
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 could pay on Fund distributions or the redemption of Fund shares.
3 For the period November 10, 2014 (commencement of operations) through June 30, 2015.
4 Amount represents less than $0.005 per share.
5 Annualized.
See accompanying notes to financial statements.
145
The UBS Funds
Notes to financial statements
1. Organization and significant accounting policies
The UBS Funds (the "Trust") is registered with the US 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 8 Funds available for investment, each having its own investment objectives and policies: UBS Dynamic Alpha Fund, UBS Global Allocation Fund, UBS International Sustainable Equity Fund (formerly, UBS Global Sustainable Equity Fund), UBS U.S. Large Cap Equity Fund, UBS U.S. Small Cap Growth Fund, UBS Core Plus Bond Fund, UBS Total Return Bond Fund and UBS Municipal Bond Fund, (each a "Fund", and collectively, the "Funds").
Each of the Funds is classified as a "diversified" investment company with the exception of UBS Dynamic Alpha Fund and UBS Municipal Bond Fund which are classified as "non-diversified" for purposes of the 1940 Act. The Funds currently offer Class A, Class C and Class P shares, except UBS Total Return Bond Fund, which currently only offers Class P 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 distribution and service charges and certain transfer agency and related services expenses. All classes of shares have equal voting privileges except that each class has exclusive voting rights with respect to its distribution and/or service plan, if any. Class P shares have no distribution or service plan.
The Class P shares of UBS Total Return Bond Fund acquired the assets and liabilities of Fort Dearborn Income Securities, Inc., a closed-end management investment company organized as a Illinois corporation (the "Predecessor Fund"), prior to the opening of business on May 23, 2016 (the "Reorganization"). The Fund's investment advisor, UBS Asset Management (Americas) Inc. (formerly, UBS Global Asset Management (Americas) Inc.) ("UBS AM", or the "Advisor"), was the advisor for the Predecessor Fund, and the day-to-day management of, and investment decisions for, the Fund and the Predecessor Fund are made by the same portfolio managers. The Funds have generally similar investment objectives and strategies. As such, the Predecessor Fund was designed as accounting survivor of the Reorganization. The Fund's Class P shares have adopted the historical performance of the Predecessor Fund.
In connection with the Reorganization, the fiscal year end for UBS Total Return Bond Fund has changed from September 30th to June 30th. As such, the fiscal year ended June 30, 2016 for UBS Total Return Bond Fund reflects the nine month period from October 1, 2015 through June 30, 2016.
In the normal course of business, the Funds may enter into contracts that contain a variety of representations that provide 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.
Under certain circumstances, shareholders of the Funds may receive payment for redemptions in securities rather than in cash.
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.
146
The UBS Funds
Notes to financial statements
The Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") is the exclusive reference of authoritative US generally accepted accounting principles ("US 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 US GAAP for SEC registrants. The Funds' financial statements are prepared in accordance with US GAAP, which may require the use of management estimates and assumptions. Actual results could differ from those estimates.
In August 2014, FASB issued Accounting Standard Update No. 2014-15, Presentation of Financial StatementsGoing Concern (Subtopic 205-40): "Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern" ("ASU 2014-15"). The update provides guidance about management's responsibility to evaluate whether there is substantial doubt about the entity's ability to continue as a going concern and to provide related footnote disclosure. ASU 2014-15 is effective for annual reporting periods ending after December 15, 2016, and for annual and interim periods thereafter. Management is currently evaluating the impact of the guidance on the disclosures in the financial statements.
The following is a summary of significant accounting policies:
A. Valuation of investments: Each Fund generally calculates its net asset value on days that the New York Stock Exchange ("NYSE") is open. A Fund calculates net asset value separately for each class as of the close of regular trading on the NYSE (generally, 4:00 p.m., Eastern time). The NYSE normally is not open, and the Funds do not price their shares, on most national holidays and Good Friday. To the extent that a Fund's assets are traded in other markets on days when the NYSE is not open, the value of a Fund's assets may be affected on those days. If trading on the NYSE is halted for the day before 4:00 p.m., Eastern time, a Fund's net asset value per share generally will still be calculated as of the close of regular trading on the NYSE. The time at which a Fund calculates its net asset value and until which purchase, sale or exchange orders are accepted may be changed as permitted by the SEC.
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 investments 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 "evaluation" systems that derive values based on comparable investments. An evaluation 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 investments. Investments also may be valued based on appraisals derived from information concerning the investment or similar investments received from recognized dealers in those holdings. Investments 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. Investments 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. Investments listed on foreign stock exchanges may be fair valued based on significant events that have occurred subsequent to the close of the foreign markets. In cases where investments are traded on more than one exchange, the investments are valued on the exchange designated as the primary market by UBS AM, the investment advisor of the Funds. UBS AM is an indirect asset management subsidiary of UBS Group AG. UBS Group AG is an internationally diversified organization with headquarters in Zurich, Switzerland. UBS Group AG operates in many areas of the financial services industry. If a market value is not readily available from an independent pricing source for a particular investment, that investment 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 an invest-
147
The UBS Funds
Notes to financial statements
ment'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 investment; and the evaluation of forces which influence the market in which the investment is purchased and sold. Foreign currency exchange rates are generally determined as of the close of the NYSE.
Certain investments 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 a 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 investments, the Fund may adjust the previous closing prices to reflect what is believed to be the fair value of these investments 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 investments 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 an investment is valued at "fair value," that value is likely to be different from the last quoted market price for the investment. The use of the fair valuation model may result in securities being transferred between Level 1 and Level 2 of the fair valuation hierarchy at the end of the reporting period. Transfers between Level 1 and Level 2, if any, are disclosed near the end of each Fund's Portfolio of investments.
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' use of the practical expedient within ASC Topic 820, investments in investment companies without publicly published prices are also valued at the daily net asset value. All investments quoted in foreign currencies are 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 assets and liabilities. In the event that market quotations are not readily available or deemed unreliable, the swap is valued at fair value as determined in good faith by or under the direction of the Board.
The Board has delegated to the UBS AM Global Valuation Committee ("GVC") the responsibility for making fair value determinations with respect to the Funds' portfolio holdings. The GVC is comprised of representatives of management.
The GVC provides reports to the Board at each quarterly meeting regarding any investments that have been fair valued, valued pursuant to standing instructions approved by the GVC, or where non-vendor pricing sources had been used to make fair value determinations when sufficient information exists during the prior quarter. Fair valuation determinations are subject to review at least monthly by the GVC during scheduled meetings. Pricing decisions, processes, and controls over fair value determinations are subject to internal and external reviews, including annual internal compliance reviews and periodic internal audit reviews.
148
The UBS Funds
Notes to financial statements
The types of investments for which such fair value pricing may be necessary include, but are not limited to: foreign investments under some circumstances, securities of an issuer that has entered into a restructuring; investments whose trading has been halted or suspended; fixed income securities that are in default and for which there is no current market value quotation; and investments that are restricted as to transfer or resale. The need to fair value a Fund's portfolio investments may also result from low trading volume in foreign markets or thinly traded domestic investments, and when a security that is subject to a trading limit or collar on the exchange or market on which it is primarily traded reaches the "limit up" or "limit down" price and no trading has taken place at that price. Various factors may be reviewed in order to make a good faith determination of an investment'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 investment; and the evaluation of forces which influence the market in which the investment is purchased and sold. Valuing investments at fair value involves greater reliance on judgment than valuing investments that have readily available market quotations. Fair value determinations can also involve reliance on quantitative models employed by a fair value pricing service.
US 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 1Unadjusted quoted prices in active markets for identical investments.
Level 2Other significant observable inputs, including but not limited to, quoted prices for similar investments, interest rates, prepayment speeds and credit risk.
Level 3Unobservable inputs inclusive of the Funds' own assumptions in determining the fair value of investments.
In May 2015 the FASB issued Accounting Standards Update No. 2015-07, Fair Value Measurement (Topic 820): "Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent)" ("ASU 2015-07"). The modification removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the NAV per share practical expedient. Early application is permitted and the Trust has elected to adopt ASU 2015-07 early. A separate column has been added to the fair value hierarchy table for investments for which fair value is measured using the NAV per share practical expedient; this is intended to permit reconciliation to the amounts presented in the Portfolio of investments.
A fair value hierarchy has been included near the end of each Fund's Portfolio of investments.
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. Swap agreements, forward foreign currency contracts, swaptions and options written entered into by a Fund may contain credit-risk related contingent features that could be triggered subject to certain circumstances. Such circumstances include agreed upon net asset value thresholds. If triggered, the derivative counterparty could request additional cash margin and/or terminate the derivative contract. The aggregate fair
149
The UBS Funds
Notes to financial statements
value of the derivative contracts that are in a net liability position that contain these triggers can be found in the Portfolio of investments. The aggregate fair value of assets that are already posted as collateral as of June 30, 2016 is reflected in the Statement of assets and liabilities. If the applicable credit-risk related contingent features were triggered as of June 30, 2016, the Fund would be required to post additional collateral or may be required to terminate the contracts and settle any amounts outstanding. Certain 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). The volume of derivatives as disclosed in each Fund's Portfolio of investments is representative of the volume of derivatives outstanding during the fiscal year ended June 30, 2016, except swap agreements for UBS Total Return Bond Fund for which the average volume during the period was higher than period end.
Disclosure of derivatives by underlying risk as of and for the year ended June 30, 2016 is as follows:
Asset derivatives1
Interest rate risk |
Equity risk |
Credit risk |
Foreign exchange risk |
Total |
|||||||||||||||||||
UBS Dynamic Alpha Fund |
|||||||||||||||||||||||
Forward foreign currency contracts |
$ |
|
$ |
|
$ |
|
$ |
2,732,536 |
$ |
2,732,536 |
|||||||||||||
Futures contracts |
1,221,816 |
1,601,058 |
|
|
2,822,874 |
||||||||||||||||||
Options purchased |
|
2,113,848 |
|
|
2,113,848 |
||||||||||||||||||
Swap agreements |
5,993,997 |
|
450,677 |
|
6,444,674 |
||||||||||||||||||
Total value |
$ |
7,215,813 |
$ |
3,714,906 |
$ |
450,677 |
$ |
2,732,536 |
$ |
14,113,932 |
Liability derivatives2
Interest rate risk |
Equity risk |
Credit risk |
Foreign exchange risk |
Total |
|||||||||||||||||||
UBS Dynamic Alpha Fund |
|||||||||||||||||||||||
Forward foreign currency contracts |
$ |
|
$ |
|
$ |
|
$ |
(800,861 |
) |
$ |
(800,861 |
) |
|||||||||||
Futures contracts |
(2,669,295 |
) |
(1,190,970 |
) |
|
|
(3,860,265 |
) |
|||||||||||||||
Swap agreements |
(6,061,077 |
) |
|
(222,610 |
) |
|
(6,283,687 |
) |
|||||||||||||||
Total value |
$ |
(8,730,372 |
) |
$ |
(1,190,970 |
) |
$ |
(222,610 |
) |
$ |
(800,861 |
) |
$ |
(10,944,813 |
) |
1 In the Statement of assets and liabilities, options purchased are shown within investments of unaffiliated issuers, at value, outstanding OTC swap agreements are shown within outstanding swap agreements, at value, while forward foreign currency contracts are shown within unrealized appreciation on forward foreign currency contracts. Futures contracts are reported in the table above using cumulative appreciation of futures contracts and centrally cleared swaps are reported at value, as reported in the futures contracts and centrally cleared swap tables in the Portfolio of investments, but only the unpaid variation margin is reported within the Statement of assets and liabilities within variation margin on futures contracts and variation margin on centrally cleared swap agreements.
2 In the Statement of assets and liabilities, outstanding OTC swap agreements are shown within outstanding swap agreements, at value, while forward foreign currency contracts are shown within unrealized depreciation on forward foreign currency contracts. Futures contracts are reported in the table above using cumulative depreciation of futures contracts and centrally cleared swaps are reported at value, as reported in the futures contracts and centrally cleared swap tables in the Portfolio of investments, but only the unpaid variation margin is reported within the Statement of assets and liabilities within variation margin on futures contracts and variation margin on centrally cleared swap agreements.
150
The UBS Funds
Notes to financial statements
Activities in derivative instruments during the year ended June 30, 2016, were as follows:
Interest rate risk |
Equity risk |
Credit risk |
Foreign exchange risk |
Total |
|||||||||||||||||||
UBS Dynamic Alpha Fund |
|||||||||||||||||||||||
Net realized gain (loss)1 |
|||||||||||||||||||||||
Forward foreign currency contracts |
$ |
|
$ |
|
$ |
|
$ |
4,394,704 |
$ |
4,394,704 |
|||||||||||||
Futures contracts |
(6,222,395 |
) |
(21,580,924 |
) |
|
|
(27,803,319 |
) |
|||||||||||||||
Options purchased2 |
(5,030 |
) |
(6,437,684 |
) |
|
|
(6,442,714 |
) |
|||||||||||||||
Options written |
|
(5,692,024 |
) |
|
|
(5,692,024 |
) |
||||||||||||||||
Swap agreements |
197,952 |
|
(389,912 |
) |
|
(191,960 |
) |
||||||||||||||||
Total net realized gain (loss) |
$ |
(6,029,473 |
) |
$ |
(33,710,632 |
) |
$ |
(389,912 |
) |
$ |
4,394,704 |
$ |
(35,735,313 |
) |
|||||||||
Change in net unrealized appreciation (depreciation)3 |
|||||||||||||||||||||||
Forward foreign currency contracts |
$ |
|
$ |
|
$ |
|
$ |
880,971 |
$ |
880,971 |
|||||||||||||
Futures contracts |
(1,618,349 |
) |
2,166,963 |
|
|
548,614 |
|||||||||||||||||
Options purchased2 |
|
(493,717 |
) |
|
|
(493,717 |
) |
||||||||||||||||
Options written |
|
430,590 |
|
|
430,590 |
||||||||||||||||||
Swap agreements |
(419,411 |
) |
|
(2,290 |
) |
|
(421,701 |
) |
|||||||||||||||
Total change in net unrealized appreciation (depreciation) |
$ |
(2,037,760 |
) |
$ |
2,103,836 |
$ |
(2,290 |
) |
$ |
880,971 |
$ |
944,757 |
1 Statement of operations location: Net realized gain (loss) on futures contracts, options written, swap agreements and forward foreign currency contracts, unless otherwise noted.
2 Statement of operations location: Realized and unrealized gain (loss) is included in net realized gain (loss) on investments and change in net unrealized appreciation (depreciation) on investments.
3 Statement of operations location: Change in net unrealized appreciation (depreciation) on futures contracts, options written, swap agreements and forward foreign currency contracts, unless otherwise noted.
Disclosure of derivatives by underlying risk as of and for the year ended June 30, 2016 is as follows:
Asset derivatives1
Interest rate risk |
Equity risk |
Credit risk |
Foreign exchange risk |
Total |
|||||||||||||||||||
UBS Global Allocation Fund |
|||||||||||||||||||||||
Forward foreign currency contracts |
$ |
|
$ |
|
$ |
|
$ |
588,041 |
$ |
588,041 |
|||||||||||||
Futures contracts |
3,411,375 |
2,253,739 |
|
|
5,665,114 |
||||||||||||||||||
Options purchased |
|
348,249 |
|
|
348,249 |
||||||||||||||||||
Swap agreements |
|
|
878,955 |
|
878,955 |
||||||||||||||||||
Total value |
$ |
3,411,375 |
$ |
2,601,988 |
$ |
878,955 |
$ |
588,041 |
$ |
7,480,359 |
Liability derivatives2
Interest rate risk |
Equity risk |
Foreign exchange risk |
Total |
||||||||||||||||
UBS Global Allocation Fund |
|||||||||||||||||||
Forward foreign currency contracts |
$ |
|
$ |
|
$ |
(589,748 |
) |
$ |
(589,748 |
) |
|||||||||
Futures contracts |
(2,334,129 |
) |
(3,676,106 |
) |
|
(6,010,235 |
) |
||||||||||||
Options written |
|
(24,720 |
) |
|
(24,720 |
) |
|||||||||||||
Total value |
$ |
(2,334,129 |
) |
$ |
(3,700,826 |
) |
$ |
(589,748 |
) |
$ |
(6,624,703 |
) |
1 In the Statement of assets and liabilities, options purchased are shown within investments of unaffiliated issuers, at value, outstanding OTC swap agreements are shown within outstanding swap agreements, at value, while forward foreign currency contracts are shown within
151
The UBS Funds
Notes to financial statements
unrealized appreciation on forward foreign currency contracts. Futures contracts are reported in the table above using cumulative appreciation of futures contracts and centrally cleared swaps are reported at value, as reported in the futures contracts and centrally cleared swap tables in the Portfolio of investments, but only the unpaid variation margin is reported within the Statement of assets and liabilities within variation margin on futures contracts and variation margin on centrally cleared swap agreements.
2 In the Statement of assets and liabilities, options written are shown within options written at value, while forward foreign currency contracts are shown within unrealized depreciation on forward foreign currency contracts. Futures contracts are reported in the table above using 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 within variation margin on futures contracts.
Activities in derivative instruments during the year ended June 30, 2016, were as follows:
Interest rate risk |
Equity risk |
Credit risk |
Foreign exchange risk |
Total |
|||||||||||||||||||
UBS Global Allocation Fund |
|||||||||||||||||||||||
Net realized gain (loss)1 |
|||||||||||||||||||||||
Forward foreign currency contracts |
$ |
|
$ |
|
$ |
|
$ |
4,060,080 |
$ |
4,060,080 |
|||||||||||||
Futures contracts |
2,053,074 |
(14,443,020 |
) |
|
|
(12,389,946 |
) |
||||||||||||||||
Options purchased2 |
|
(3,731,975 |
) |
|
|
(3,731,975 |
) |
||||||||||||||||
Swap agreements |
|
|
(311,514 |
) |
|
(311,514 |
) |
||||||||||||||||
Total net realized gain (loss) |
$ |
2,053,074 |
$ |
(18,174,995 |
) |
$ |
(311,514 |
) |
$ |
4,060,080 |
$ |
(12,373,355 |
) |
||||||||||
Change in net unrealized appreciation (depreciation)3 |
|||||||||||||||||||||||
Forward foreign currency contracts |
$ |
|
$ |
|
$ |
|
$ |
(641,222 |
) |
$ |
(641,222 |
) |
|||||||||||
Futures contracts |
1,555,993 |
1,798,736 |
|
|
3,354,729 |
||||||||||||||||||
Options purchased2 |
|
294,253 |
|
|
294,253 |
||||||||||||||||||
Options written |
|
147,028 |
|
|
147,028 |
||||||||||||||||||
Swap agreements |
|
|
1,235,401 |
|
1,235,401 |
||||||||||||||||||
Total change in net unrealized appreciation (depreciation) |
$ |
1,555,993 |
$ |
2,240,017 |
$ |
1,235,401 |
$ |
(641,222 |
) |
$ |
4,390,189 |
1 Statement of operations location: Net realized gain (loss) on futures contracts, swap agreements and forward foreign currency contracts, unless otherwise noted.
2 Statement of operations location: Realized and unrealized gain (loss) is included in net realized gain (loss) on investments and change in net unrealized appreciation (depreciation) on investments.
3 Statement of operations location: Change in net unrealized appreciation (depreciation) on futures contracts, options written, swap agreements and forward foreign currency contracts, unless otherwise noted.
Disclosure of derivatives by underlying risk as of and for the year ended June 30, 2016 is as follows:
Asset derivatives1
Interest rate risk |
Credit risk |
Foreign exchange risk |
Total |
||||||||||||||||
UBS Core Plus Bond Fund |
|||||||||||||||||||
Forward foreign currency contracts |
$ |
|
$ |
|
$ |
17,101 |
$ |
17,101 |
|||||||||||
Futures contracts |
102,520 |
|
|
102,520 |
|||||||||||||||
Options purchased |
43,137 |
12,057 |
8,536 |
63,730 |
|||||||||||||||
Total value |
$ |
145,657 |
$ |
12,057 |
$ |
25,637 |
$ |
183,351 |
152
The UBS Funds
Notes to financial statements
Liability derivatives2
Interest rate risk |
Credit risk |
Foreign exchange risk |
Total |
||||||||||||||||
UBS Core Plus Bond Fund |
|||||||||||||||||||
Forward foreign currency contracts |
$ |
|
$ |
|
$ |
(15,195 |
) |
$ |
(15,195 |
) |
|||||||||
Futures contracts |
(49,174 |
) |
|
|
(49,174 |
) |
|||||||||||||
Options written |
(19,000 |
) |
(11,351 |
) |
(17,631 |
) |
(47,982 |
) |
|||||||||||
Swap agreements |
(57,505 |
) |
(75,088 |
) |
|
(132,593 |
) |
||||||||||||
Total value |
$ |
(125,679 |
) |
$ |
(86,439 |
) |
$ |
(32,826 |
) |
$ |
(244,944 |
) |
1 In the Statement of assets and liabilities, options purchased are shown within investments of unaffiliated issuers, at value, while forward foreign currency contracts are shown within unrealized appreciation on forward foreign currency contracts. Futures contracts are reported in the table above using 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 within variation margin on futures contracts.
2 In the Statement of assets and liabilities, options written and outstanding OTC swap agreements are shown within options written and outstanding swap agreements, at value, while forward foreign currency contracts are shown within unrealized depreciation on forward foreign currency contracts. Futures contracts are reported in the table above using cumulative depreciation of futures contracts and centrally cleared swaps are reported at value, as reported in the futures contracts and centrally cleared swap tables in the Portfolio of investments, but only the unpaid variation margin is reported within the Statement of assets and liabilities within variation margin on futures contracts and variation margin on centrally cleared swap agreements.
Activities in derivative instruments during the year ended June 30, 2016, were as follows:
Interest rate risk |
Credit risk |
Foreign exchange risk |
Total |
||||||||||||||||
UBS Core Plus Bond Fund |
|||||||||||||||||||
Net realized gain (loss)1 |
|||||||||||||||||||
Forward foreign currency contracts |
$ |
|
$ |
|
$ |
(8,961 |
) |
$ |
(8,961 |
) |
|||||||||
Futures contracts |
83,281 |
|
|
83,281 |
|||||||||||||||
Options purchased2 |
(49,605 |
) |
(14,611 |
) |
(10,553 |
) |
(74,769 |
) |
|||||||||||
Options written |
261 |
75,933 |
6,957 |
83,151 |
|||||||||||||||
Swap agreements |
127,326 |
(117,715 |
) |
|
9,611 |
||||||||||||||
Total net realized gain (loss) |
$ |
161,263 |
$ |
(56,393 |
) |
$ |
(12,557 |
) |
$ |
92,313 |
|||||||||
Change in net unrealized appreciation (depreciation)3 |
|||||||||||||||||||
Forward foreign currency contracts |
$ |
|
$ |
|
$ |
(10,748 |
) |
$ |
(10,748 |
) |
|||||||||
Futures contracts |
64,309 |
|
|
64,309 |
|||||||||||||||
Options purchased2 |
45,237 |
(19,985 |
) |
(8,244 |
) |
17,008 |
|||||||||||||
Options written |
(23,289 |
) |
14,265 |
11,328 |
2,304 |
||||||||||||||
Swap agreements |
(195,722 |
) |
(30,266 |
) |
|
(225,988 |
) |
||||||||||||
Total change in net unrealized appreciation (depreciation) |
$ |
(109,465 |
) |
$ |
(35,986 |
) |
$ |
(7,664 |
) |
$ |
(153,115 |
) |
1 Statement of operations location: Net realized gain (loss) on futures contracts, options written, swap agreements and forward foreign currency contracts, unless otherwise noted.
2 Statement of operations location: Realized and unrealized gain (loss) is included in net realized gain (loss) on investments and change in net unrealized appreciation (depreciation) on investments.
3 Statement of operations location: Change in net unrealized appreciation (depreciation) on futures contracts, options written, swap agreements and forward foreign currency contracts, unless otherwise noted.
153
The UBS Funds
Notes to financial statements
Disclosure of derivatives by underlying risk as of and for the period ended June 30, 2016 is as follows:
Asset derivatives1
Interest rate risk |
Credit risk |
Foreign exchange risk |
Total |
||||||||||||||||
UBS Total Return Bond Fund |
|||||||||||||||||||
Forward foreign currency contracts |
$ |
|
$ |
|
$ |
79,476 |
$ |
79,476 |
|||||||||||
Futures contracts |
30,915 |
|
|
30,915 |
|||||||||||||||
Options purchased |
159,563 |
44,137 |
29,861 |
233,561 |
|||||||||||||||
Total value |
$ |
190,478 |
$ |
44,137 |
$ |
109,337 |
$ |
343,952 |
Liability derivatives2
Interest rate risk |
Credit risk |
Foreign exchange risk |
Total |
||||||||||||||||
UBS Total Return Bond Fund |
|||||||||||||||||||
Forward foreign currency contracts |
$ |
|
$ |
|
$ |
(52,329 |
) |
$ |
(52,329 |
) |
|||||||||
Futures contracts |
(130,619 |
) |
|
|
(130,619 |
) |
|||||||||||||
Options written |
(65,000 |
) |
(39,580 |
) |
(42,811 |
) |
(147,391 |
) |
|||||||||||
Swap agreements |
(5,192 |
) |
|
|
(5,192 |
) |
|||||||||||||
Total value |
$ |
(200,811 |
) |
$ |
(39,580 |
) |
$ |
(95,140 |
) |
$ |
(335,531 |
) |
1 In the Statement of assets and liabilities, options purchased are shown within investments of unaffiliated issuers, at value, while forward foreign currency contracts are shown within unrealized appreciation on forward foreign currency contracts. Futures contracts are reported in the table above using 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 within variation margin on futures contracts.
2 In the Statement of assets and liabilities, options written and outstanding OTC swap agreements are shown within options written and outstanding swap agreements, at value, while forward foreign currency contracts are shown within unrealized depreciation on forward foreign currency contracts. Futures contracts are reported in the table above using cumulative depreciation of futures contracts, as reported in the futures contracts but only the unpaid variation margin is reported within the statement of assets and liabilities within variation margin on futures contracts.
Activities in derivative instruments during the period ended June 30, 2016, were as follows:
Interest rate risk |
Credit risk |
Foreign exchange risk |
Total |
||||||||||||||||
UBS Total Return Bond Fund |
|||||||||||||||||||
Net realized gain (loss)1 |
|||||||||||||||||||
Forward foreign currency contracts |
$ |
|
$ |
|
$ |
(41,722 |
) |
$ |
(41,722 |
) |
|||||||||
Futures contracts |
556,754 |
|
|
556,754 |
|||||||||||||||
Options purchased2 |
(443,347 |
) |
(91,592 |
) |
|
(534,939 |
) |
||||||||||||
Options written |
(18,518 |
) |
349,662 |
|
331,144 |
||||||||||||||
Swap agreements |
(2,231,560 |
) |
(1,023,058 |
) |
|
(3,254,618 |
) |
||||||||||||
Total net realized gain (loss) |
$ |
(2,136,671 |
) |
$ |
(764,988 |
) |
$ |
(41,722 |
) |
$ |
(2,943,381 |
) |
|||||||
Change in net unrealized appreciation (depreciation)3 |
|||||||||||||||||||
Forward foreign currency contracts |
$ |
|
$ |
|
$ |
27,147 |
$ |
27,147 |
|||||||||||
Futures contracts |
(48,385 |
) |
|
|
(48,385 |
) |
|||||||||||||
Options purchased2 |
181,950 |
(1,227 |
) |
(5,357 |
) |
175,366 |
|||||||||||||
Options written |
(26,455 |
) |
73,045 |
17,445 |
64,035 |
||||||||||||||
Swap agreements |
121,102 |
126,391 |
|
247,493 |
|||||||||||||||
Total change in net unrealized appreciation (depreciation) |
$ |
228,212 |
$ |
198,209 |
$ |
39,235 |
$ |
465,656 |
1 Statement of operations location: Net realized gain (loss) on futures contracts, options written, swap agreements and forward foreign currency contracts, unless otherwise noted.
154
The UBS Funds
Notes to financial statements
2 Statement of operations location: Realized and unrealized gain (loss) is included in net realized gain (loss) on investments and change in unrealized appreciation (depreciation) on investments.
3 Statement of operations location: Change in net unrealized appreciation (depreciation) on futures contracts, options written, swap agreements and forward foreign currency contracts, unless otherwise noted.
UBS International Sustainable Equity Fund had net realized loss of $60,864 on forward foreign currency contracts related to foreign exchange risk.
UBS Municipal Bond Fund had net realized gain of $14,846 on futures contracts related to interest rate risk and net change in unrealized depreciation of $93,722 on futures contracts related to interest rate risk.
The Funds typically enter into International Swaps and Derivatives Association, Inc. Master Agreements ("ISDA Master Agreements") or similar master agreements (collectively, "Master Agreements") with its OTC derivative contract counterparties in order to, among other things, reduce its credit risk to counterparties. ISDA Master Agreements include provisions for general obligations, representations, collateral and events of default or termination. Under an ISDA Master Agreement, the Funds typically may offset with the counterparty certain derivative financial instrument's payables and/or receivables with collateral held and/or posted and create one single net payment (close-out netting) in the event of default or termination.
The provisions of ASC Topic 210 "Disclosures about Offsetting Assets and Liabilities" require disclosure on the off-setting of financial assets and liabilities. The offsetting disclosures are limited to derivatives, repurchase and reverse repurchase agreements, and security lending and borrowing transactions to the extent that they are (1) offset in the financial statements or (2) subject to an enforceable master netting arrangement ("MNA") or similar agreement. Tables are not presented below for any funds which only hold derivatives which are not subject to offsetting under ASC Topic 210.
UBS Dynamic Alpha Fund
Derivative financial instruments: |
Assets ($) |
Liabilities ($) |
|||||||||
Forward foreign currency contracts |
2,732,536 |
(800,861 |
) |
||||||||
Futures contracts1 |
2,822,874 |
(3,860,265 |
) |
||||||||
Options purchased |
2,113,848 |
|
|||||||||
Swap agreements1 |
6,444,674 |
(6,283,687 |
) |
||||||||
Total gross amount of derivative assets and liabilities in the Statement of assets and liabilities |
14,113,932 |
(10,944,813 |
) |
||||||||
Derivatives not subject to a master netting agreement or similar agreement ("MNA") |
(5,373,650 |
) |
3,904,224 |
||||||||
Total gross amount of assets and liabilities subject to MNA or similar agreements |
8,740,282 |
(7,040,589 |
) |
1 Includes cumulative appreciation (depreciation) of futures contracts and centrally cleared swaps, at value as reported in the futures contracts and centrally cleared swap tables in the Portfolio of investments, but only the unpaid variation margin is reported within the Statement of assets and liabilities within variation margin on futures contracts and centrally cleared swap agreements, respectively.
The following tables present the Fund's derivative assets and liabilities by counterparty net of amounts available for offset under a MNA and net of the related collateral received/pledged by the Fund as of June 30, 2016.
Counterparty |
Gross amount of assets ($) |
Financial instruments and derivatives available for offset ($) |
Collateral received ($)* |
Net amount of assets ($) |
|||||||||||||||
BB |
16,066 |
|
|
16,066 |
|||||||||||||||
CIBC |
1,109,780 |
|
|
1,109,780 |
|||||||||||||||
GSI |
6,244,268 |
(91,614 |
) |
|
6,152,654 |
||||||||||||||
HSBC |
88,385 |
(2,013 |
) |
|
86,372 |
||||||||||||||
JPMCB |
19,134 |
(19,134 |
) |
|
|
||||||||||||||
SSB |
48,671 |
(48,671 |
) |
|
|
||||||||||||||
WBC |
1,213,978 |
|
|
1,213,978 |
|||||||||||||||
Total |
8,740,282 |
(161,432 |
) |
|
8,578,850 |
155
The UBS Funds
Notes to financial statements
Counterparty |
Gross amount of liabilities ($) |
Financial instruments and derivatives available for offset ($) |
Collateral pledged ($)* |
Net amount of liabilities ($) |
|||||||||||||||
CITI |
(25,681 |
) |
|
20,000 |
(5,681 |
) |
|||||||||||||
DB |
(6,061,077 |
) |
|
5,581,000 |
(480,077 |
) |
|||||||||||||
GSI |
(91,614 |
) |
91,614 |
|
|
||||||||||||||
HSBC |
(2,013 |
) |
2,013 |
|
|
||||||||||||||
JPMCB |
(189,683 |
) |
19,134 |
170,549 |
|
||||||||||||||
MSC |
(283,045 |
) |
|
|
(283,045 |
) |
|||||||||||||
SSB |
(387,476 |
) |
48,671 |
|
(338,805 |
) |
|||||||||||||
Total |
(7,040,589 |
) |
161,432 |
5,771,549 |
(1,107,608 |
) |
* In some instances, the actual collateral received and/or pledged may be more than the amount shown and may be comprised of cash collateral, non-cash collateral or a combination of both.
UBS Global Allocation Fund
Derivative financial instruments: |
Assets ($) |
Liabilities ($) |
|||||||||
Forward foreign currency contracts |
588,041 |
(589,748 |
) |
||||||||
Futures contracts1 |
5,665,114 |
(6,010,235 |
) |
||||||||
Options purchased |
348,249 |
|
|||||||||
Options written |
|
(24,720 |
) |
||||||||
Swap agreements1 |
878,955 |
|
|||||||||
Total gross amount of derivative assets and liabilities in the Statement of assets and liabilities |
7,480,359 |
(6,624,703 |
) |
||||||||
Derivatives not subject to a master netting agreement or similar agreement ("MNA") |
(6,892,318 |
) |
6,034,955 |
||||||||
Total gross amount of assets and liabilities subject to MNA or similar agreements |
588,041 |
(589,748 |
) |
1 Includes cumulative appreciation (depreciation) of futures contracts and centrally cleared swaps, at value as reported in the futures contracts and centrally cleared swap tables in the Portfolio of investments, but only the unpaid variation margin is reported within the Statement of assets and liabilities within variation margin on futures contracts and centrally cleared swap agreements, respectively.
The following tables present the Fund's derivative assets and liabilities by counterparty net of amounts available for offset under a MNA and net of the related collateral received/pledged by the Fund as of June 30, 2016.
Counterparty |
Gross amount of assets ($) |
Financial instruments and derivatives available for offset ($) |
Collateral received ($) |
Net amount of assets ($) |
|||||||||||||||
GSI |
61,911 |
(61,911 |
) |
|
|
||||||||||||||
JPMCB |
219,687 |
(188,874 |
) |
|
30,813 |
||||||||||||||
SSB |
306,443 |
|
|
306,443 |
|||||||||||||||
Total |
588,041 |
(250,785 |
) |
|
337,256 |
||||||||||||||
Counterparty |
Gross amount of liabilities ($) |
Financial instruments and derivatives available for offset ($) |
Collateral pledged ($) |
Net amount of liabilities ($) |
|||||||||||||||
GSI |
(145,734 |
) |
61,911 |
|
(83,823 |
) |
|||||||||||||
JPMCB |
(188,874 |
) |
188,874 |
|
|
||||||||||||||
WBC |
(255,140 |
) |
|
|
(255,140 |
) |
|||||||||||||
Total |
(589,748 |
) |
250,785 |
|
(338,963 |
) |
156
The UBS Funds
Notes to financial statements
UBS Core Plus Bond Fund
Derivative financial instruments: |
Assets ($) |
Liabilities ($) |
|||||||||
Forward foreign currency contracts |
17,101 |
(15,195 |
) |
||||||||
Futures contracts1 |
102,520 |
(49,174 |
) |
||||||||
Options purchased |
63,730 |
|
|||||||||
Options written |
|
(47,982 |
) |
||||||||
Swap agreements1 |
|
(132,593 |
) |
||||||||
Total gross amount of derivative assets and liabilities in the Statement of assets and liabilities |
183,351 |
(244,944 |
) |
||||||||
Derivatives not subject to a master netting agreement or similar agreement ("MNA") |
(145,657 |
) |
125,679 |
||||||||
Total gross amount of assets and liabilities subject to MNA or similar agreements |
37,694 |
(119,265 |
) |
1 Includes cumulative appreciation (depreciation) of futures contracts and centrally cleared swaps, at value as reported in the futures contracts and centrally cleared swap tables in the Portfolio of investments, but only the unpaid variation margin is reported within the Statement of assets and liabilities within variation margin on futures contracts and centrally cleared swap agreements, respectively.
The following tables present the Fund's derivative assets and liabilities by counterparty net of amounts available for offset under a MNA and net of the related collateral received/pledged by the Fund as of June 30, 2016.
Counterparty |
Gross amount of assets ($) |
Financial instruments and derivatives available for offset ($) |
Collateral received ($) |
Net amount of assets ($) |
|||||||||||||||
CITI |
5,778 |
(5,778 |
) |
|
|
||||||||||||||
JPMCB |
9,264 |
(9,264 |
) |
|
|
||||||||||||||
MLI |
14,815 |
(14,815 |
) |
|
|
||||||||||||||
MSC |
7,837 |
(7,837 |
) |
|
|
||||||||||||||
Total |
37,694 |
(37,694 |
) |
|
|
||||||||||||||
Counterparty |
Gross amount of liabilities ($) |
Financial instruments and derivatives available for offset ($) |
Collateral pledged ($) |
Net amount of liabilities ($) |
|||||||||||||||
CITI |
(12,416 |
) |
5,778 |
|
(6,638 |
) |
|||||||||||||
GSI |
(6,236 |
) |
|
|
(6,236 |
) |
|||||||||||||
JPMCB |
(14,051 |
) |
9,264 |
|
(4,787 |
) |
|||||||||||||
MLI |
(46,955 |
) |
14,815 |
|
(32,140 |
) |
|||||||||||||
MSC |
(39,607 |
) |
7,837 |
|
(31,770 |
) |
|||||||||||||
Total |
(119,265 |
) |
37,694 |
|
(81,571 |
) |
UBS Total Return Bond Fund
Derivative financial instruments: |
Assets ($) |
Liabilities ($) |
|||||||||
Forward foreign currency contracts |
79,476 |
(52,329 |
) |
||||||||
Futures contracts1 |
30,915 |
(130,619 |
) |
||||||||
Options purchased |
233,561 |
|
|||||||||
Options written |
|
(147,391 |
) |
||||||||
Swap agreements |
|
(5,192 |
) |
||||||||
Total gross amount of derivative assets and liabilities in the Statement of assets and liabilities |
343,952 |
(335,531 |
) |
||||||||
Derivatives not subject to a master netting agreement or similar agreement ("MNA") |
(190,478 |
) |
195,619 |
||||||||
Total gross amount of assets and liabilities subject to MNA or similar agreements |
153,474 |
(139,912 |
) |
1 Includes cumulative appreciation (depreciation) of futures contracts as reported in the futures contracts table in the Portfolio of investments, but only the unpaid variation margin is reported within the Statement of assets and liabilities within variation margin on futures contracts.
157
The UBS Funds
Notes to financial statements
The following tables present the Fund's derivative assets and liabilities by counterparty net of amounts available for offset under a MNA and net of the related collateral received/pledged by the Fund as of June 30, 2016.
Counterparty |
Gross amount of assets ($) |
Financial instruments and derivatives available for offset ($) |
Collateral received ($) |
Net amount of assets ($) |
|||||||||||||||
BOA |
73,998 |
(72,536 |
) |
|
1,462 |
||||||||||||||
JPMCB |
53,402 |
(36,007 |
) |
|
17,395 |
||||||||||||||
MSC |
26,074 |
(9,449 |
) |
|
16,625 |
||||||||||||||
Total |
153,474 |
(117,992 |
) |
|
35,482 |
||||||||||||||
Counterparty |
Gross amount of liabilities ($) |
Financial instruments and derivatives available for offset ($) |
Collateral pledged ($) |
Net amount of liabilities ($) |
|||||||||||||||
BB |
(6,873 |
) |
|
|
(6,873 |
) |
|||||||||||||
BOA |
(72,536 |
) |
72,536 |
|
|
||||||||||||||
CITI |
(15,047 |
) |
|
|
(15,047 |
) |
|||||||||||||
JPMCB |
(36,007 |
) |
36,007 |
|
|
||||||||||||||
MSC |
(9,449 |
) |
9,449 |
|
|
||||||||||||||
Total |
(139,912 |
) |
117,992 |
|
(21,920 |
) |
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 expenses, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities, if any, is included in each Fund's Portfolio of investments footnotes.
C. Investment transactions, investment income and expenses: Investment transactions are recorded on the trade date. Realized gains and losses from investment transactions and foreign exchange transactions are calculated using the identified cost method. Dividend income and expense are recorded on the ex-dividend date ("ex-date") except in the case of certain dividends from foreign securities which are recorded as soon after the ex-date as the respective Fund, using reasonable diligence, becomes aware of such dividends. Interest income is recorded on an accrual basis. Discounts are accreted and premiums are amortized as adjustments to interest income and the identified cost of investments.
Income, expenses (excluding class-specific expenses) and realized/unrealized gains/losses are allocated proportionately to each class of shares based upon the relative net asset value of outstanding shares (or the value of dividend eligible shares, as appropriate) of each class at the beginning of the day after adjusting for current capital share activity of the respective classes. Class specific expenses are charged directly to the applicable class of shares.
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 liabilitiesat the exchange rates prevailing at the end of a Fund's fiscal period; and (2) purchases and sales of investment securities and income and expensesat the rates of exchange prevailing on the respective dates of such transactions.
Although the net assets and the market value of a Fund's portfolio are presented at the foreign exchange rates at the end of a Fund's fiscal period, a Fund does not generally isolate the effect of fluctuations in foreign exchange
158
The UBS Funds
Notes to financial statements
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 realized 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 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 the securities denominated in the currency being sold. Alternatively, when a Fund enters into a non-cash settled 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 equal to the contract's full notional value. However, currency contracts with respect to identical currencies may be netted against each other and, in such cases, a Fund's custodian or sub-custodian will place assets in a segregated account of the Fund, in an amount equal to the net amount owed (the unrealized loss) by the Fund. 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 a Fund's commitments with respect to such contracts.
The unrealized gain, if any, represents the credit risk to each Fund on a forward foreign currency contract. Fluctuations in the value of the open forward foreign currency contracts are recorded daily for book purposes as net unrealized gains or losses on foreign forward currency contracts by the Funds. Realized gains and losses include net gains and losses recognized by the Funds on contracts which have been sold or matured.
F. Futures contracts: The Funds may purchase or sell 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 realized 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, a 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 a Fund, 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 short sell, 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 securities. Securities purchased on a TBA basis are not settled until they are
159
The UBS Funds
Notes to financial statements
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 Fund's 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. A Fund expects 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 against any increase in the price of securities the 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 themselves from interest rate fluctuations. This type of swap is an agreement that obligates two parties to exchange a series of cash flows at specified intervals based upon or calculated by reference to a specified interest rate(s) for a specified amount. The payment flows are usually netted against each other, with the difference being paid by one party to the other. Interest rate swap agreements are subject to general market risk, liquidity risk, counterparty risk and interest rate risk.
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 themselves from or take advantage of exchange rate fluctuations. A 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.
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. Total return swap agreements are subject to general market risk, liquidity risk, counterparty risk, interest risk, credit risk and the risk that there may be unfavorable changes in the underlying investments or instruments.
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 the 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 the Fund would make payments only upon the occurrence of a credit event. If no credit event occurs, a Fund will retain 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 swap agreements 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
160
The UBS Funds
Notes to financial statements
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 swap agreements 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 the 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, which may exceed the amount of unrealized appreciation or depreciation reflected on the Statement of assets and liabilities. Notional amounts of all credit default swap agreements outstanding as of June 30, 2016 for which a Fund is the seller of protection are disclosed under the section "Credit default swaps on corporate issuessell protection" and "Credit default swaps on credit indicessell 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.
Certain clearinghouses currently offer clearing for limited types of derivatives transactions, such as interest and credit derivatives. In a cleared derivative transaction, a Fund typically enters into the transaction with a financial institution counterparty, and performance of the transaction is effectively guaranteed by a central clearinghouse, thereby reducing or eliminating the Fund's exposure to the credit risk of its original counterparty. The Fund will be required to post specified levels of margin with the clearinghouse or at the instruction of the clearinghouse; the margin required by a clearinghouse may be greater than the margin the Fund would be required to post in an uncleared transaction. Only a limited number of transactions are currently eligible for clearing. Centrally cleared swaps, if any, are reported on the Statement of assets and liabilities based on variation margin receivable or payable, if any.
The use of swap agreements involves investment techniques and risks different from those associated with ordinary portfolio security transactions. If UBS 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. 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 in the Statement of operations. Fluctuations in the value of swap agreements are recorded for financial statement purposes as unrealized appreciation or depreciation on 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 a Fund has written either expires on its
161
The UBS Funds
Notes to financial statements
stipulated expiration date or the Fund enters into a closing purchase transaction, the Fund realizes a gain (or a 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 a 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, a 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 a Fund could result in the Fund selling or buying a derivative instrument, security or currency at a price different from current market value.
In the normal course of trading activities, the Funds trade and hold certain fair valued derivative contracts that constitute guarantees. Such contracts include written put options, where a Fund would be obligated to purchase securities at specified prices (i.e. the options are exercised by the counterparties). The maximum payout for these contracts is limited to the number of put option contracts written and the related strike prices, respectively. Maximum payout amounts could be offset by the subsequent sale, if any, of assets obtained via the execution of a payout event. The maximum payout for UBS Core Plus Bond Fund and UBS Total Return Bond Fund was $1,457,400 and $2,415,120, respectively.
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.
K. Short sales: UBS Dynamic Alpha Fund and UBS U.S. Small Cap Growth Fund may each enter into short sales whereby a Fund 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 in 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 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. There were no short sale transactions for UBS Dynamic Alpha Fund and UBS U.S. Small Cap Growth Fund during the fiscal year ended June 30, 2016.
162
The UBS Funds
Notes to financial statements
L. Dividends and distributions: It is each Fund's (except UBS Core Plus Bond Fund, UBS Total Return Bond Fund and UBS Municipal Bond Fund) policy is to distribute its respective net investment income, if any, annually. It is the policy of UBS Core Plus Bond Fund, UBS Total Return Bond Fund and UBS Municipal Bond Fund to distribute its respective net investment income, if any, monthly. It is each Fund's policy to distribute net realized 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 US 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 some Funds in the Trust invest.
Small capitalization ("small cap") companies may be more vulnerable than larger capitalization ("large cap") companies to adverse business or economic developments. Small cap companies may also have limited product lines, markets or financial resources, and may be dependent on a relatively small management group. Securities of such companies may be less liquid and more volatile than securities of large cap companies or the market averages in general and therefore may involve greater risk than investing in large cap companies. In addition, small cap companies may not be well-known to the investing public, may not have institutional ownership and may have only cyclical, static or moderated growth prospects.
The ability of the issuers of debt securities held by a Fund to meet its obligations may be affected by economic and political developments particular to a specific industry, country, state or region.
Investments in bonds with ratings of BB (Standard & Poor's Ratings Group) or Ba (Moody's Investors Service, Inc.) or below (commonly referred to as "high yield" bonds), or deemed of equivalent quality, have an increased risk of defaulting or otherwise being unable to honor a financial obligation. These securities are considered to be predominately speculative with respect to an issuer's capacity to pay interest and repay principal in accordance with the terms of the obligations. Lower-quality bonds are more likely to be subject to an issuer's default or downgrade than investment grade (higher-quality) bonds.
N. Commission recapture program: Certain Funds participate in a brokerage commission recapture program. Certain Funds have established commission recapture arrangements with certain participating brokers or dealers. If a Fund's investment manager chooses to execute a transaction through a participating broker subject to best price and execution, the broker will rebate a portion of the commission back to the Fund. Any collateral benefit received through participation in the commission recapture program is directed exclusively to the Fund. For the year ended June 30, 2016, the following Funds recorded recaptured commissions which are reflected in the Statement of operations within the net realized gains (losses) on investments in unaffiliated issuers:
163
The UBS Funds
Notes to financial statements
Fund |
Amount |
||||||
UBS Global Allocation Fund |
$ |
3,863 |
|||||
UBS U.S. Large Cap Equity Fund |
2,186 |
||||||
UBS U.S. Small Cap Growth Fund |
9,431 |
O. Redemption fees: Effective August 3, 2015, the redemption fee of 1.00% imposed by each class of each series of The UBS Funds, with the exception of UBS Total Return Bond Fund, was eliminated. Prior to August 3, 2015 for purchases of shares on or after February 17, 2015, the redemption fee was calculated as a percentage of the amount redeemed within 30 days of purchase, if applicable. For UBS Total Return Bond Fund, the Board of Trustees approved a temporary redemption fee of 2.00% following the reorganization of Fort Dearborn Income Securities, Inc. with the Fund. The temporary redemption fee will remain in effect for 90 days following the date of the reorganization (or until August 22, 2016). This amount was paid to the applicable Fund. The redemption fees retained by the Funds are disclosed in the Statement of changes in net assets. For the year ended June 30, 2016, redemption fees represent less than $0.005 per share.
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:
$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% | |||||||||||||||||||||||||
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 |
% |
|||||||||||||||||
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 Sustainable Equity Fund |
0.800% | 0.750% | 0.700% | 0.675% | 0.650% | ||||||||||||||||||||||||||
UBS U.S. Large Cap 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 |
||||||||||||||||||||||||||
UBS Core Plus Bond Fund |
0.500 |
0.475 |
0.450 |
0.425 |
0.400 |
||||||||||||||||||||||||||
UBS Municipal Bond Fund |
0.400 |
0.400 |
0.400 |
0.400 |
0.400 |
Fund |
All assets |
||||||
UBS Total Return Bond Fund1 |
0.500 |
% |
1 Prior to May 23, 2016, the Predecessor Fund paid the Advisor 0.50% per annum of average weekly net assets up to $100,000,000 and 0.40% per annum of average weekly net assets in excess of $100,000,000.
For UBS Global Allocation Fund, UBS International Sustainable Equity Fund, UBS U.S. Large Cap Equity Fund, UBS Core Plus Bond Fund, UBS Total Return Bond Fund and UBS Municipal 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 Funds' operating expenses (excluding expenses incurred through investment in other investment companies, interest,
164
The UBS Funds
Notes to financial statements
taxes, brokerage commissions and extraordinary expenses) do not exceed the expense limit of each class of shares as indicated in the following table. For UBS Dynamic 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 dividend expense and security loan fees 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 dividend expense and security loan fees for securities sold short) do not exceed the expense limit of each class of shares as indicated in the following table. Investment advisory fees, including the dollar amount waived or reimbursed, for the year or period ended June 30, 2016 were as follows:
Fund |
Class A expense cap |
Class C expense cap |
Class P expense cap |
Amount due to or (due from) advisor |
Advisory fees incurred |
Fees waived/ expenses reimbursed |
Recoupments | ||||||||||||||||||||||||
UBS Dynamic Alpha Fund |
1.35 |
% |
2.10 |
% |
1.10 |
% |
$ |
122,381 |
$ |
2,326,576 |
$ |
312,860 |
$ |
|
|||||||||||||||||
UBS Global Allocation Fund |
1.35 |
2.10 |
1.10 |
222,897 |
3,560,855 |
86,899 |
|
||||||||||||||||||||||||
UBS International Sustainable Equity Fund |
1.25 |
2.00 |
1.00 |
(12,183 |
) |
201,631 |
284,271 |
|
|||||||||||||||||||||||
UBS U.S. Large Cap Equity Fund1 |
0.95 |
1.70 |
0.70 |
(30,852 |
) |
242,785 |
264,805 |
|
|||||||||||||||||||||||
UBS U.S. Small Cap Growth Fund |
1.24 |
1.99 |
0.99 |
69,187 |
1,655,037 |
398,148 |
|
||||||||||||||||||||||||
UBS Core Plus Bond Fund |
0.64 |
1.14 |
0.39 |
(16,442 |
) |
173,429 |
339,144 |
|
|||||||||||||||||||||||
UBS Total Return Bond Fund |
N/A |
N/A |
0.502 |
111,224 |
461,084 |
42,595 |
|
||||||||||||||||||||||||
UBS Municipal Bond Fund |
0.65 |
1.15 |
0.40 |
187 |
290,081 |
359,905 |
|
1 Effective on or about March 23, 2016, UBS U.S. Large Cap Equity Fund's expense caps were reduced from 1.20%, 1.95% and 0.95% for Class A, C and P, respectively.
2 For the period from May 23, 2016 through June 30, 2016.
Investment advisory fees for UBS Total Return Bond Fund for the year ended September 30, 2015 were as follows:
Fund |
Amount due to or (due from) advisor |
Advisory fees incurred |
|||||||||
UBS Total Return Bond Fund |
$ |
161,355 |
$ |
653,019 |
Each Fund, except for UBS International Sustainable Equity Fund, will reimburse the Advisor for expenses it waives or reimburses for a period of three years following such expense waivers or 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 or reimbursed for the fiscal year ended June 30, 2016 are subject to repayment through June 30, 2019.
165
The UBS Funds
Notes to financial statements
At June 30, 2016, 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, 2017 |
Expires June 30, 2018 |
Expires June 30, 2019 |
|||||||||||||||
UBS Dynamic Alpha FundClass A |
$ |
300,807 |
$ |
148,450 |
$ |
78,494 |
$ |
73,863 |
|||||||||||
UBS Dynamic Alpha FundClass C |
128,843 |
40,482 |
43,534 |
44,827 |
|||||||||||||||
UBS Dynamic Alpha FundClass P |
387,986 |
28,343 |
165,473 |
194,170 |
|||||||||||||||
UBS Global Allocation FundClass A |
26,083 |
|
|
26,083 |
|||||||||||||||
UBS Global Allocation FundClass C |
60,816 |
|
|
60,816 |
|||||||||||||||
UBS U.S. Large Cap Equity FundClass A |
116,169 |
7,993 |
33,158 |
75,018 |
|||||||||||||||
UBS U.S. Large Cap Equity FundClass C |
30,924 |
3,730 |
9,467 |
17,727 |
|||||||||||||||
UBS U.S. Large Cap Equity FundClass P |
322,425 |
55,550 |
94,815 |
172,060 |
|||||||||||||||
UBS U.S. Small Cap Growth FundClass A |
189,349 |
20,513 |
59,130 |
109,706 |
|||||||||||||||
UBS U.S. Small Cap Growth FundClass C |
22,001 |
2,856 |
5,493 |
13,652 |
|||||||||||||||
UBS U.S. Small Cap Growth FundClass P |
333,904 |
|
59,114 |
274,790 |
|||||||||||||||
UBS Core Plus Bond FundClass A |
122,379 |
52,584 |
28,417 |
41,378 |
|||||||||||||||
UBS Core Plus Bond FundClass C |
49,175 |
17,952 |
17,005 |
14,218 |
|||||||||||||||
UBS Core Plus Bond FundClass P |
818,833 |
248,075 |
287,210 |
283,548 |
|||||||||||||||
UBS Total Return Bond FundClass P1 |
42,595 |
|
|
42,595 |
|||||||||||||||
UBS Municipal Bond FundClass A |
100,650 |
|
35,220 |
65,430 |
|||||||||||||||
UBS Municipal Bond FundClass C |
32,962 |
|
10,331 |
22,631 |
|||||||||||||||
UBS Municipal Bond FundClass P |
492,198 |
|
220,354 |
271,844 |
1 For the period from May 23, 2016 through June 30, 2016.
Each Fund pays UBS AM a monthly administration fee that is accrued daily and paid monthly at an annual rate of 0.075% of the average daily net assets of such Fund. For the year ended June 30, 2016, the Funds owed and incurred administrative fees as follows:
Fund |
Administrative fees owed |
Administrative fees incurred |
|||||||||
UBS Dynamic Alpha Fund |
$ |
14,159 |
$ |
204,177 |
|||||||
UBS Global Allocation Fund |
24,724 |
333,233 |
|||||||||
UBS International Sustainable Equity Fund |
1,490 |
18,881 |
|||||||||
UBS U.S. Large Cap Equity Fund |
1,728 |
25,959 |
|||||||||
UBS U.S. Small Cap Growth Fund |
10,123 |
145,793 |
|||||||||
UBS Core Plus Bond Fund |
2,322 |
26,005 |
|||||||||
UBS Total Return Bond Fund1 |
7,847 |
10,254 |
|||||||||
UBS Municipal Bond Fund |
6,673 |
54,440 |
1 For the period from May 23, 2016 through June 30, 2016.
The Funds may invest in shares of certain affiliated investment companies also advised or managed by the Advisor. Investments in affiliated investment companies for the year ended June 30, 2016 have been included near the end of each Fund's Portfolio of investments.
During the year ended June 30, 2016, the Funds could invest in UBS Cash Management Prime Relationship Fund ("Cash Prime"). Cash Prime was offered as a cash management option only to mutual funds and certain other accounts. On November 20, 2015, the Board of Trustees approved changing the Funds' sweep option for uninvested
166
The UBS Funds
Notes to financial statements
balances from Cash Prime to JPMorgan U.S. Government Money Market Fund; the change went into effect on December 10, 2015. Distributions received from Cash Prime are reflected as affiliated income in the Statement of operations. Amounts relating to those investments for the year ended June 30, 2016 have been included near the end of each Fund's Portfolio of investments.
During the year ended June 30, 2016, the Funds could invest cash collateral from securities lending activities into an affiliated private money market fund, UBS Private Money Market Fund, LLC ("Private Money Market"), which operated in compliance with most of the substantive provisions of Rule 2a-7 of the 1940 Act. Private Money Market was managed by the Advisor and was offered only to mutual funds and certain other accounts managed by the Advisor. UBS AM acted as managing member of Private Money Market and received 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. UBS AM might have, in its sole discretion, waived all or any portion of the management fee to which it might have been entitled from time to time in order to maintain operating expenses at a certain level.
On June 2, 2016, the Board of Trustees approved changing the Funds' reinvestment option for cash collateral from securities lending activities from Private Money Market to JPMorgan U.S. Government Money Market Fund; the change went into effect on June 15, 2016. Distributions received from Private Money Market and JPMorgan U.S. Government Money Market Fund, net of fee rebates paid to borrowers, are included in securities lending income in the Statement of operations. Amounts relating to those investments in Private Money Market for the year ended June 30, 2016 have been included near the end of each Fund's Portfolio of investments.
The following Funds have incurred brokerage commissions with UBS AG, an affiliated broker-dealer. Amounts relating to those transactions for the year ended June 30, 2016, were as follows:
Fund |
UBS AG |
||||||
UBS Global Allocation Fund |
$ |
1,159 |
|||||
UBS International Sustainable Equity Fund |
2,147 |
||||||
UBS U.S. Large Cap Equity Fund |
64 |
||||||
UBS U.S. Small Cap Growth Fund |
2,313 |
3. Distribution and service plans
UBS AM (US) is the principal underwriter of each Fund's shares. The Trust has adopted distribution and/or service plans (the "Plans") pursuant to Rule 12b-1 under the 1940 Act for Class A and Class C. The Plans govern payments made for the expenses incurred in the service and/or distribution of Class A 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 C |
|||||||||
UBS Dynamic Alpha Fund |
0.25 |
% |
1.00 |
% |
|||||||
UBS Global Allocation Fund |
0.25 |
1.00 |
|||||||||
UBS International Sustainable Equity Fund |
0.25 |
1.00 |
|||||||||
UBS U.S. Large Cap Equity Fund |
0.25 |
1.00 |
|||||||||
UBS U.S. Small Cap Growth Fund |
0.25 |
1.00 |
|||||||||
UBS Core Plus Bond Fund |
0.25 |
0.75 |
|||||||||
UBS Total Return Bond Fund |
N/A |
N/A |
|||||||||
UBS Municipal Bond Fund |
0.25 |
0.75 |
167
The UBS Funds
Notes to financial statements
UBS 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 and Class C. At June 30, 2016, certain Funds owed UBS AM (US) distribution and service fees, and for the year ended June 30, 2016, certain Funds were informed by UBS AM (US) that it had earned sales charges as follows:
Fund |
Distribution and service fees owed |
Sales charges earned |
|||||||||
UBS Dynamic Alpha FundClass A |
$ |
13,619 |
$ |
9,663 |
|||||||
UBS Dynamic Alpha FundClass C |
22,873 |
1,765 |
|||||||||
UBS Global Allocation FundClass A |
39,327 |
27,056 |
|||||||||
UBS Global Allocation FundClass C |
96,357 |
673 |
|||||||||
UBS International Sustainable Equity FundClass A |
1,098 |
5,914 |
|||||||||
UBS International Sustainable Equity FundClass C |
1,952 |
266 |
|||||||||
UBS U.S. Large Cap Equity FundClass A |
2,010 |
2,305 |
|||||||||
UBS U.S. Large Cap Equity FundClass C |
1,751 |
40 |
|||||||||
UBS U.S. Small Cap Growth FundClass A |
6,022 |
5,424 |
|||||||||
UBS U.S. Small Cap Growth FundClass C |
3,611 |
175 |
|||||||||
UBS Core Plus Bond FundClass A |
1,041 |
146 |
|||||||||
UBS Core Plus Bond FundClass C |
755 |
|
|||||||||
UBS Municipal Bond FundClass A |
3,366 |
65,922 |
|||||||||
UBS Municipal Bond FundClass C |
3,766 |
1,169 |
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"), as each Fund's transfer agent, and is compensated for these services by BNY Mellon, not the Funds.
For the year ended June 30, 2016, UBS Financial Services Inc. received from BNY Mellon, not the Funds, total service fees as follows:
Fund |
Amount paid |
||||||
UBS Dynamic Alpha Fund |
65,149 |
||||||
UBS Global Allocation Fund |
128,833 |
||||||
UBS International Sustainable Equity Fund |
3,705 |
||||||
UBS U.S. Large Cap Equity Fund |
2,386 |
||||||
UBS U.S. Small Cap Growth Fund |
7,951 |
||||||
UBS Core Plus Bond Fund |
1,356 |
||||||
UBS Total Return Bond Fund |
|
||||||
UBS Municipal Bond Fund |
7,410 |
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.
168
The UBS Funds
Notes to financial statements
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. A 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.
Effective June 15, 2016, cash collateral received is invested in JPMorgan U.S. Government Money Market Fund, which is included in each Fund's Portfolio of investments. Prior to that, cash collateral received was invested in Private Money Market. At June 30, 2016, the following Funds loaned securities to certain qualified broker-dealers, with the Funds' custodian acting as the Funds' lending agent. The value of loaned securities and related collateral at June 30, 2016 was as follows:
Fund |
Market value of securities loaned |
Total market value of collateral received for securities loaned |
Market value of cash collateral received |
Market value of non-cash collateral received |
Security type held as non-cash collateral |
||||||||||||||||||
UBS Dynamic Alpha Fund |
$ |
19,735,554 |
$ |
20,132,167 |
$ |
1,048,138 |
$ |
19,084,029 |
Agency Debt Securities |
||||||||||||||
UBS Global Allocation Fund |
32,164,164 |
32,855,566 |
24,989,992 |
7,865,574 |
US Treasury and Agency Securities |
||||||||||||||||||
UBS International Sustainable Equity Fund |
419,659 |
440,742 |
440,742 |
|
|
||||||||||||||||||
UBS U.S. Large Cap Equity Fund |
1,510,179 |
1,545,341 |
1,545,341 |
|
|
||||||||||||||||||
UBS U.S. Small Cap Growth Fund |
14,959,754 |
15,303,437 |
15,303,437 |
|
|
||||||||||||||||||
UBS Core Plus Bond Fund |
1,811,550 |
1,860,710 |
53,900 |
1,806,810 |
US Treasury and Agency Securities |
Pursuant to Accounting Standards Update No. 2014-11, Transfers & Servicing (Topic 860), the table below represents the disaggregation at June 30, 2016 of the gross amount of recognized liabilities for securities lending transactions. As the securities loaned are subject to termination by the Funds or the borrower at any time, the remaining contractual maturities of the transactions presented below are considered to be overnight and continuous.
Type of securities loaned |
Total gross amount of recognized liabilities for |
||||||||||||||||||
Fund |
Equity securities |
Investment companies |
Corporate notes |
securities lending transactions |
|||||||||||||||
UBS Dynamic Alpha Fund |
$ |
|
$ |
|
$ |
1,048,138 |
$ |
1,048,138 |
|||||||||||
UBS Global Allocation Fund |
6,258,292 |
18,731,700 |
|
24,989,992 |
|||||||||||||||
UBS International Sustainable Equity Fund |
440,742 |
|
|
440,742 |
|||||||||||||||
UBS U.S. Large Cap Equity Fund |
1,545,341 |
|
|
1,545,341 |
|||||||||||||||
UBS U.S. Small Cap Growth Fund |
15,303,437 |
|
|
15,303,437 |
|||||||||||||||
UBS Core Plus Bond Fund |
|
|
53,900 |
53,900 |
169
The UBS Funds
Notes to financial statements
6. Purchases and sales of securities
For the year ended June 30, 2016, aggregate purchases and sales of portfolio securities, excluding short-term investments and US Government securities, were as follows:
Fund |
Purchases |
Sales proceeds |
|||||||||
UBS Dynamic Alpha Fund |
$ |
87,761,085 |
$ |
163,844,416 |
|||||||
UBS Global Allocation Fund |
170,197,229 |
209,496,026 |
|||||||||
UBS International Sustainable Equity Fund |
30,535,824 |
28,485,688 |
|||||||||
UBS U.S. Large Cap Equity Fund |
19,718,920 |
29,596,399 |
|||||||||
UBS U.S. Small Cap Growth Fund |
209,372,234 |
229,068,852 |
|||||||||
UBS Core Plus Bond Fund |
256,209,042 |
246,692,675 |
|||||||||
UBS Total Return Bond Fund1 |
192,378,182 |
216,697,544 |
|||||||||
UBS Municipal Bond Fund |
129,692,472 |
73,054,494 |
1 For the period from September 30, 2015 through June 30, 2016.
For the year ended June 30, 2016, aggregate purchases and sales of US Government securities, excluding short-term investments, were as follows:
Fund |
Purchases |
Sales proceeds |
|||||||||
UBS Global Allocation Fund |
$ |
41,188,014 |
$ |
46,833,292 |
|||||||
UBS Core Plus Bond Fund |
70,024,635 |
72,466,940 |
|||||||||
UBS Total Return Bond Fund1 |
112,776,315 |
88,497,715 |
1 For the period from September 30, 2015 through June 30, 2016.
For the year ended September 30, 2015, aggregate purchases and sales of portfolio securities for UBS Total Return Bond Fund, excluding short term securities and US Government securities, were $25,608,228 and $32,006,789, respectively.
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 years ended June 30, 2016 and June 30, 2015 were as follows:
2016 |
|||||||||||||||||||||||
Fund |
Distributions paid from tax-exempt income |
Distributions paid from ordinary income |
Distributions paid from net long-term gains |
Return of capital |
Total distributions paid |
||||||||||||||||||
UBS Dynamic Alpha Fund |
$ |
|
$ |
9,497,406 |
$ |
|
$ |
108,348 |
$ |
9,605,754 |
|||||||||||||
UBS Global Allocation Fund |
|
10,550,576 |
|
|
10,550,576 |
||||||||||||||||||
UBS International Sustainable Equity Fund |
|
304,258 |
|
|
304,258 |
||||||||||||||||||
UBS U.S. Large Cap Equity Fund |
|
598,448 |
|
|
598,448 |
||||||||||||||||||
UBS U.S. Small Cap Growth Fund |
|
5,972,567 |
9,100,165 |
|
15,072,732 |
||||||||||||||||||
UBS Core Plus Bond Fund |
|
836,742 |
|
|
836,742 |
||||||||||||||||||
UBS Total Return Bond Fund1 |
|
2,868,246 |
|
|
2,868,246 |
||||||||||||||||||
UBS Municipal Bond Fund |
1,363,303 |
15,711 |
29,170 |
|
1,408,184 |
1 For the period from October 1, 2015 through June 30, 2016.
170
The UBS Funds
Notes to financial statements
2015 |
|||||||||||||||||||
Fund |
Distributions paid from tax-exempt income |
Distributions paid from ordinary income |
Distributions paid from net long-term gains |
Total distributions paid |
|||||||||||||||
UBS Dynamic Alpha Fund |
$ |
|
$ |
11,546,315 |
$ |
|
$ |
11,546,315 |
|||||||||||
UBS Global Allocation Fund |
|
|
|
|
|||||||||||||||
UBS International Sustainable Equity Fund |
|
315,763 |
|
315,763 |
|||||||||||||||
UBS U.S. Large Cap Equity Fund |
|
1,034,949 |
|
1,034,949 |
|||||||||||||||
UBS U.S. Small Cap Growth Fund |
|
11,549,217 |
31,619,947 |
43,169,164 |
|||||||||||||||
UBS Core Plus Bond Fund |
|
1,034,143 |
|
1,034,143 |
|||||||||||||||
UBS Municipal Bond Fund |
525,283 |
1,343 |
792 |
527,418 |
For UBS Total Return Bond Fund, the tax character of distributions paid during the fiscal years ended September 30, 2015 and September 30, 2014 were as follows:
2015 |
|||||||||||||||
Fund |
Distributions paid from ordinary income |
Distributions paid from net long-term gains |
Total distributions paid |
||||||||||||
UBS Total Return Bond Fund |
$ |
5,638,357 |
$ |
480,037 |
$ |
6,118,394 |
|||||||||
2014 |
|||||||||||||||
Fund |
Distributions paid from ordinary income |
Distributions paid from net long-term gains |
Total distributions paid |
||||||||||||
UBS Total Return Bond Fund |
$ |
5,470,562 |
$ |
2,778,564 |
$ |
8,249,126 |
At June 30, 2016, the components of accumulated earnings (deficit) on a tax basis were as follows:
Fund |
Undistributed tax-exempt income |
Undistributed ordinary income |
Undistributed long term capital gains |
Accumulated capital and other losses |
Unrealized appreciation/ (depreciation) |
Total |
|||||||||||||||||||||
UBS Dynamic Alpha Fund |
$ |
|
$ |
|
$ |
|
$ |
(399,372,345 |
) |
$ |
(15,892,723 |
) |
$ |
(415,265,068 |
) |
||||||||||||
UBS Global Allocation Fund |
|
6,818,628 |
|
(969,159,263 |
) |
(4,255,705 |
) |
(966,596,340 |
) |
||||||||||||||||||
UBS International Sustainable Equity Fund |
|
504,455 |
|
(8,960,722 |
) |
(1,833,353 |
) |
(10,289,620 |
) |
||||||||||||||||||
UBS U.S. Large Cap Equity Fund |
|
299,495 |
|
(81,485,584 |
) |
(150,449 |
) |
(81,336,538 |
) |
||||||||||||||||||
UBS U.S. Small Cap Growth Fund |
|
|
|
(1,258,098 |
) |
8,536,179 |
7,278,081 |
||||||||||||||||||||
UBS Core Plus Bond Fund |
|
254,648 |
|
(33,919,693 |
) |
771,665 |
(32,893,380 |
) |
|||||||||||||||||||
UBS Total Return Bond Fund |
|
69,951 |
|
(4,605,702 |
) |
2,137,053 |
(2,398,698 |
) |
|||||||||||||||||||
UBS Municipal Bond Fund |
|
|
137,758 |
|
3,488,477 |
3,626,235 |
The difference between book and tax basis net unrealized appreciation/(depreciation) of investments is primarily attributable to mark to market of passive foreign investment companies, mark to market on certain derivative instruments, nontaxable special dividends, return of capital from investments in real estate investment trusts and tax deferral of losses on wash sales.
Under the Regulated Investment Company Modernization Act of 2010 (the "Act"), net capital losses recognized by the Funds after December 22, 2010, may be carried forward indefinitely, and retain their character as short-term and/or long-term losses. These carryforwards are available as a reduction, to the extent provided in regulations, of
171
The UBS Funds
Notes to financial statements
future realized capital gains. To the extent that such losses are used to offset future net realized capital gains, it is probable these gains will not be distributed. The Act requires that post-enactment net capital losses be used before pre-enactment net capital losses.
At June 30, 2016, the following Funds had post-enactment net capital losses that will be carried forward indefinitely, as follows:
Fund |
Short-term losses |
Long-term losses |
Net capital losses |
||||||||||||
UBS Dynamic Alpha Fund |
$ |
23,566,803 |
$ |
13,738,856 |
$ |
37,305,659 |
|||||||||
UBS Total Return Bond Fund |
2,514,598 |
1,911,270 |
4,425,868 |
At June 30, 2016, the following Funds had pre-enactment capital loss carryforwards for federal income tax purposes available to offset future capital gains through the indicated expiration dates:
Expiration Dates |
|||||||||||||||
Fund |
June 30, 2017 |
June 30, 2018 |
June 30, 2019 |
||||||||||||
UBS Dynamic Alpha Fund |
$ |
103,495,364 |
$ |
202,927,795 |
$ |
46,428,719 |
|||||||||
UBS Global Allocation Fund |
89,719,530 |
862,762,158 |
|
||||||||||||
UBS International Sustainable Equity Fund |
|
8,184,323 |
|
||||||||||||
UBS U.S. Large Cap Equity Fund |
|
80,804,303 |
|
||||||||||||
UBS Core Plus Bond Fund |
1,784,632 |
32,070,048 |
|
During the fiscal year ended June 30, 2016 the following Funds utilized capital loss carryforwards to offset current year capital gains:
Fund |
Amount |
||||||
UBS Global Allocation Fund |
$ |
1,725,903 |
|||||
UBS International Sustainable Equity Fund |
463,342 |
||||||
UBS U.S. Large Cap Equity Fund |
473,520 |
||||||
UBS Core Plus Bond Fund |
377,813 |
Qualified late year losses are deemed to arise on the first business day of a Fund's next taxable year. For the year ended June 30, 2016, the following Funds incurred and elected to defer qualified late year losses of the following:
Post October Capital Loss |
|||||||||||||||
Fund |
Late year ordinary loss |
Short-term losses |
Long-term losses |
||||||||||||
UBS Dynamic Alpha Fund |
$ |
9,214,809 |
$ |
|
$ |
|
|||||||||
UBS Global Allocation Fund |
|
8,567,747 |
7,232,469 |
||||||||||||
UBS International Sustainable Equity Fund |
|
431,083 |
345,316 |
||||||||||||
UBS U.S. Large Cap Equity Fund |
|
204,359 |
476,922 |
||||||||||||
UBS U.S. Small Cap Growth Fund |
367,707 |
890,391 |
|
||||||||||||
UBS Core Plus Bond Fund |
|
|
60,721 |
172
The UBS Funds
Notes to financial statements
At June 30, 2016, the effect of permanent "book/tax" reclassifications resulted in increases and decreases to components of the Funds' net assets as follows:
Fund |
Accumulated undistributed/ (distributions in excess of) net investment income |
Accumulated net realized gain/(loss) |
Beneficial interest |
||||||||||||
UBS Dynamic Alpha Fund |
$ |
(8,092,477 |
) |
$ |
8,092,477 |
$ |
|
||||||||
UBS Global Allocation Fund |
5,651,040 |
193,806 |
(5,844,846 |
) |
|||||||||||
UBS International Sustainable Equity Fund |
(45,889 |
) |
13,070 |
32,819 |
|||||||||||
UBS U.S. Large Cap Equity Fund |
(9,809 |
) |
9,809 |
|
|||||||||||
UBS U.S. Small Cap Growth Fund |
593,685 |
(41,678 |
) |
(552,007 |
) |
||||||||||
UBS Core Plus Bond Fund |
101,222 |
(101,222 |
) |
|
|||||||||||
UBS Total Return Bond Fund |
(329,378 |
) |
329,378 |
|
|||||||||||
UBS Municipal Bond Fund |
41,764 |
(41,764 |
) |
|
These differences are primarily due to the tax treatment of foreign currency transactions, paydown gains and losses, tax character of distributions, the tax treatment of certain derivatives, non-taxable special dividends, passive foreign investment company gains and losses, net operating losses and partnership adjustments.
ASC 740-10 "Income TaxesOverall" sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken. The Funds have conducted an analysis and concluded, as of June 30, 2016, that there are no significant uncertain tax positions taken or expected to be taken that would require recognition in the financial statements. It is each Fund's policy to record any significant foreign tax exposures in the financial statements. The Funds recognize interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of operations. During the fiscal year ended June 30, 2016, the Funds did not incur any interest or penalties.
Under the applicable foreign tax laws, gains on certain securities held in certain foreign countries may be subject to taxes that will be paid by the Funds.
Each of the tax years in the four year fiscal period ended June 30, 2016, or since inception in the case of UBS Municipal Bond Fund, remains subject to examination by the Internal Revenue Service and state taxing authorities.
8. Line of credit
The Trust and certain other funds managed by UBS AM have entered into an agreement with JPMorgan Chase Bank to provide a $50 million committed line of credit to the Funds and certain other funds managed by UBS AM ("Committed Credit Facility") to be utilized for temporary financing until the settlement of sales 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. Effective October 22, 2015, commitment fees have been allocated among the Funds in the Committed Credit Facility as follows: 50% of the allocation is based on the relative asset size of Funds and the other 50% of the allocation is based on utilization. Prior to October 22, 2015, the Funds paid commitment fees,
173
The UBS Funds
Notes to financial statements
which were allocated among the Funds in the Committed Credit Facility pro rata, based on the relative asset size of Funds. For the year ended June 30, 2016, the following Funds had borrowings as follows:
Fund |
Average daily borrowings |
Number of days outstanding |
Interest expense |
Weighted average annualized interest rate |
|||||||||||||||
UBS International Sustainable Equity Fund |
$ |
4,850,000 |
1 |
$ |
161 |
1.19 |
% |
||||||||||||
UBS U.S. Large Cap Equity Fund |
3,563,250 |
4 |
567 |
1.43 |
|||||||||||||||
UBS Dynamic Alpha Fund |
4,346,000 |
2 |
346 |
1.43 |
At June 30, 2016, there were no borrowings outstanding.
9. Shares of beneficial interest
For the year ended June 30, 2016, transactions in shares of beneficial interest for each of the Funds were as follows:
UBS Dynamic Alpha Fund
Class A |
Class C |
Class P |
|||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
||||||||||||||||||||||
Shares sold |
218,328 |
$ |
1,421,937 |
103,426 |
$ |
617,783 |
4,014,934 |
$ |
27,638,083 |
||||||||||||||||||
Shares repurchased |
(2,467,134 |
) |
(16,053,447 |
) |
(2,385,743 |
) |
(14,684,601 |
) |
(10,309,029 |
) |
(68,547,536 |
) |
|||||||||||||||
Dividends reinvested |
373,973 |
2,404,649 |
139,684 |
845,085 |
888,345 |
5,809,775 |
|||||||||||||||||||||
Redemption fees |
|
|
|
|
|
|
|||||||||||||||||||||
Net decrease |
(1,874,833 |
) |
$ |
(12,226,861 |
) |
(2,142,633 |
) |
$ |
(13,221,733 |
) |
(5,405,750 |
) |
$ |
(35,099,678 |
) |
UBS Global Allocation Fund
Class A |
Class C |
Class P |
|||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
||||||||||||||||||||||
Shares sold |
254,146 |
$ |
2,707,293 |
81,385 |
$ |
830,853 |
549,495 |
$ |
6,015,844 |
||||||||||||||||||
Shares repurchased |
(3,292,895 |
) |
(35,058,994 |
) |
(2,142,869 |
) |
(22,145,568 |
) |
(3,083,713 |
) |
(33,463,663 |
) |
|||||||||||||||
Dividends reinvested |
453,882 |
4,861,081 |
193,128 |
2,016,252 |
242,806 |
2,653,869 |
|||||||||||||||||||||
Redemption fees |
|
172 |
|
107 |
|
99 |
|||||||||||||||||||||
Net decrease |
(2,584,867 |
) |
$ |
(27,490,448 |
) |
(1,868,356 |
) |
$ |
(19,298,356 |
) |
(2,291,412 |
) |
$ |
(24,793,851 |
) |
UBS International Sustainable Equity Fund (formerly, Global Sustainable Equity Fund)
Class A |
Class C |
Class P |
|||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
||||||||||||||||||||||
Shares sold |
178,748 |
$ |
1,556,047 |
66,720 |
$ |
566,384 |
662,247 |
$ |
5,443,083 |
||||||||||||||||||
Shares repurchased |
(212,720 |
) |
(1,713,569 |
) |
(57,757 |
) |
(450,574 |
) |
(471,757 |
) |
(3,931,057 |
) |
|||||||||||||||
Dividends reinvested |
7,241 |
61,695 |
1,731 |
14,435 |
23,276 |
198,781 |
|||||||||||||||||||||
Redemption fees |
|
|
|
|
|
|
|||||||||||||||||||||
Net increase (decrease) |
(26,731 |
) |
$ |
(95,827 |
) |
10,694 |
$ |
130,245 |
213,766 |
$ |
1,710,807 |
174
The UBS Funds
Notes to financial statements
UBS U.S. Large Cap Equity Fund
Class A |
Class C |
Class P |
|||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
||||||||||||||||||||||
Shares sold |
73,334 |
$ |
1,777,229 |
6,633 |
$ |
162,598 |
171,857 |
$ |
4,441,216 |
||||||||||||||||||
Shares repurchased |
(49,958 |
) |
(1,264,299 |
) |
(20,150 |
) |
(497,984 |
) |
(621,766 |
) |
(15,015,008 |
) |
|||||||||||||||
Dividends reinvested |
4,705 |
122,708 |
430 |
10,793 |
16,972 |
443,987 |
|||||||||||||||||||||
Redemption fees |
|
60 |
|
14 |
|
114 |
|||||||||||||||||||||
Net increase (decrease) |
28,081 |
$ |
635,698 |
(13,087 |
) |
$ |
(324,579 |
) |
(432,937 |
) |
$ |
(10,129,691 |
) |
UBS U.S. Small Cap Growth Fund
Class A |
Class C |
Class P |
|||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
||||||||||||||||||||||
Shares sold |
722,812 |
$ |
14,513,102 |
91,782 |
$ |
1,545,730 |
3,815,467 |
$ |
80,850,923 |
||||||||||||||||||
Shares repurchased |
(1,286,169 |
) |
(24,263,478 |
) |
(89,821 |
) |
(1,435,475 |
) |
(4,588,148 |
) |
(94,964,101 |
) |
|||||||||||||||
Dividends reinvested |
159,734 |
3,063,699 |
25,184 |
414,279 |
501,288 |
10,301,465 |
|||||||||||||||||||||
Redemption fees |
|
16 |
|
1,555 |
|
46 |
|||||||||||||||||||||
Net increase (decrease) |
(403,623 |
) |
$ |
(6,686,661 |
) |
27,145 |
$ |
526,089 |
(271,393 |
) |
$ |
(3,811,667 |
) |
UBS Core Plus Bond Fund
Class A |
Class C |
Class P |
|||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
||||||||||||||||||||||
Shares sold |
348,278 |
$ |
3,168,746 |
22,861 |
$ |
206,469 |
715,107 |
$ |
6,467,996 |
||||||||||||||||||
Shares repurchased |
(42,341 |
) |
(384,583 |
) |
(31,027 |
) |
(280,500 |
) |
(514,871 |
) |
(4,663,402 |
) |
|||||||||||||||
Dividends reinvested |
4,396 |
39,692 |
1,873 |
16,849 |
79,485 |
717,103 |
|||||||||||||||||||||
Redemption fees |
|
|
|
|
|
|
|||||||||||||||||||||
Net increase (decrease) |
310,333 |
$ |
2,823,855 |
(6,293 |
) |
$ |
(57,182 |
) |
279,721 |
$ |
2,521,697 |
UBS Total Return Bond Fund
Class P |
|||||||||||||||||||||||||||
Shares |
Amount |
||||||||||||||||||||||||||
Shares sold |
19,939 |
$ |
303,562 |
||||||||||||||||||||||||
Shares repurchased |
(428,779 |
) |
(6,441,226 |
) |
|||||||||||||||||||||||
Dividends reinvested |
16,662 |
249,928 |
|||||||||||||||||||||||||
Redemption fees |
|
92,483 |
|||||||||||||||||||||||||
Net decrease |
(392,178 |
) |
$ |
(5,795,253 |
) |
UBS Municipal Bond Fund
Class A |
Class C |
Class P |
|||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
||||||||||||||||||||||
Shares sold |
1,127,581 |
$ |
11,536,432 |
362,028 |
$ |
3,709,114 |
6,811,943 |
$ |
70,035,291 |
||||||||||||||||||
Shares repurchased |
(563,957 |
) |
(5,741,505 |
) |
(77,714 |
) |
(804,441 |
) |
(3,063,665 |
) |
(31,039,965 |
) |
|||||||||||||||
Dividends reinvested |
16,474 |
168,229 |
5,066 |
51,751 |
93,107 |
952,822 |
|||||||||||||||||||||
Redemption fees |
|
|
|
|
|
|
|||||||||||||||||||||
Net increase |
580,098 |
$ |
5,963,156 |
289,380 |
$ |
2,956,424 |
3,841,385 |
$ |
39,948,148 |
175
The UBS Funds
Notes to financial statements
For the year ended June 30, 2015, transactions in shares of beneficial interest for each of the Funds were as follows:
UBS Dynamic Alpha Fund
Class A |
Class C |
Class P* |
|||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
||||||||||||||||||||||
Shares sold |
2,653,702 |
$ |
19,233,695 |
327,387 |
$ |
2,236,501 |
19,709,662 |
$ |
145,938,818 |
||||||||||||||||||
Shares repurchased |
(17,334,381 |
) |
(125,723,664 |
) |
(1,147,281 |
) |
(7,836,630 |
) |
(5,042,353 |
) |
(37,243,078 |
) |
|||||||||||||||
Dividends reinvested |
404,482 |
2,871,827 |
176,586 |
1,179,595 |
875,769 |
6,323,050 |
|||||||||||||||||||||
Redemption fees |
|
1,269 |
|
614 |
|
1,914 |
|||||||||||||||||||||
Net increase (decrease) |
(14,276,197 |
) |
$ |
(103,616,873 |
) |
(643,308 |
) |
$ |
(4,419,920 |
) |
15,543,078 |
$ |
115,020,704 |
UBS Global Allocation Fund
Class A |
Class C |
Class P* |
|||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
||||||||||||||||||||||
Shares sold |
1,219,630 |
$ |
13,777,786 |
98,989 |
$ |
1,087,450 |
5,659,081 |
$ |
63,603,807 |
||||||||||||||||||
Shares repurchased |
(8,400,345 |
) |
(93,015,757 |
) |
(2,933,162 |
) |
(31,943,506 |
) |
(6,352,786 |
) |
(72,493,782 |
) |
|||||||||||||||
Dividends reinvested |
|
|
|
|
|
|
|||||||||||||||||||||
Redemption fees |
|
5,031 |
|
3,244 |
|
2,997 |
|||||||||||||||||||||
Net decrease |
(7,180,715 |
) |
$ |
(79,232,940 |
) |
(2,834,173 |
) |
$ |
(30,852,812 |
) |
(693,705 |
) |
$ |
(8,886,978 |
) |
UBS International Sustainable Equity Fund (formerly, Global Sustainable Equity Fund)
Class A |
Class C |
Class P* |
|||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
||||||||||||||||||||||
Shares sold |
339,776 |
$ |
3,133,639 |
119,703 |
$ |
1,098,968 |
681,904 |
$ |
6,087,329 |
||||||||||||||||||
Shares repurchased |
(514,903 |
) |
(4,577,768 |
) |
(12,376 |
) |
(112,538 |
) |
(293,530 |
) |
(2,642,659 |
) |
|||||||||||||||
Dividends reinvested |
5,669 |
48,700 |
1,925 |
16,228 |
25,341 |
218,185 |
|||||||||||||||||||||
Redemption fees |
|
296 |
|
100 |
|
811 |
|||||||||||||||||||||
Net increase (decrease) |
(169,458 |
) |
$ |
(1,395,133 |
) |
109,252 |
$ |
1,002,758 |
413,715 |
$ |
3,663,666 |
UBS U.S. Large Cap Equity Fund
Class A |
Class C |
Class P* |
|||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
||||||||||||||||||||||
Shares sold |
80,813 |
$ |
2,085,076 |
16,194 |
$ |
405,505 |
611,878 |
$ |
15,749,199 |
||||||||||||||||||
Shares repurchased |
(106,054 |
) |
(2,674,089 |
) |
(53,363 |
) |
(1,287,012 |
) |
(4,667,957 |
) |
(121,760,104 |
) |
|||||||||||||||
Dividends reinvested |
1,594 |
40,255 |
|
|
38,948 |
986,950 |
|||||||||||||||||||||
Redemption fees |
|
892 |
|
238 |
|
6,923 |
|||||||||||||||||||||
Net decrease |
(23,647 |
) |
$ |
(547,866 |
) |
(37,169 |
) |
$ |
(881,269 |
) |
(4,017,131 |
) |
$ |
(105,017,032 |
) |
176
The UBS Funds
Notes to financial statements
UBS U.S. Small Cap Growth Fund
Class A |
Class C |
Class P* |
|||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
||||||||||||||||||||||
Shares sold |
596,836 |
$ |
13,461,409 |
98,405 |
$ |
2,008,231 |
1,516,069 |
$ |
36,386,274 |
||||||||||||||||||
Shares repurchased in-kind |
|
|
|
|
(3,163,806 |
) |
(71,312,188 |
) |
|||||||||||||||||||
Shares repurchased |
(599,282 |
) |
(13,845,210 |
) |
(38,574 |
) |
(776,498 |
) |
(1,583,410 |
) |
(38,793,957 |
) |
|||||||||||||||
Dividends reinvested |
267,579 |
5,506,787 |
36,995 |
667,385 |
1,632,666 |
35,706,413 |
|||||||||||||||||||||
Redemption fees |
|
2,480 |
|
247 |
|
12,922 |
|||||||||||||||||||||
Net increase (decrease) |
265,133 |
$ |
5,125,466 |
96,826 |
$ |
1,899,365 |
(1,598,481 |
) |
$ |
(38,000,536 |
) |
UBS Core Plus Bond Fund
Class A |
Class C |
Class P* |
|||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
||||||||||||||||||||||
Shares sold |
20,818 |
$ |
192,060 |
17,059 |
$ |
157,313 |
755,738 |
$ |
6,965,354 |
||||||||||||||||||
Shares repurchased |
(135,037 |
) |
(1,243,314 |
) |
(36,713 |
) |
(335,472 |
) |
(470,235 |
) |
(4,330,916 |
) |
|||||||||||||||
Dividends reinvested |
6,668 |
61,203 |
3,420 |
31,253 |
99,953 |
915,764 |
|||||||||||||||||||||
Redemption fees |
|
724 |
|
385 |
|
7,229 |
|||||||||||||||||||||
Net increase (decrease) |
(107,551 |
) |
$ |
(989,327 |
) |
(16,234 |
) |
$ |
(146,521 |
) |
385,456 |
$ |
3,557,431 |
UBS Municipal Bond Fund
Class A |
Class C |
Class P* |
|||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
||||||||||||||||||||||
Shares sold |
1,205,919 |
$ |
12,084,838 |
299,920 |
$ |
3,024,270 |
5,923,033 |
$ |
59,428,930 |
||||||||||||||||||
Shares repurchased |
(110,335 |
) |
(1,097,096 |
) |
(4,536 |
) |
(45,000 |
) |
(1,213,674 |
) |
(12,079,756 |
) |
|||||||||||||||
Dividends reinvested |
3,593 |
35,972 |
1,255 |
12,563 |
19,204 |
192,048 |
|||||||||||||||||||||
Redemption fees |
|
788 |
|
229 |
|
4,432 |
|||||||||||||||||||||
Net increase |
1,099,177 |
$ |
11,024,502 |
296,639 |
$ |
2,992,062 |
4,728,563 |
$ |
47,545,654 |
* Effective July 28, 2014, Class Y shares were renamed Class P shares.
10. Contribution from Advisor
During the fiscal year ended June 30, 2016, the Advisor reimbursed UBS Dynamic Alpha Fund, UBS International Sustainable Equity Fund and UBS Core Plus Bond for trading and operational errors in the amounts of $86,068, $5,471 and $774, respectively.
During a review, the Financial Conduct Authority, a UK regulator, and the Advisor agreed that the Advisor paid for ineligible services, namely index data and certain market data services, out of equity dealing commissions for trades effected on behalf of the UBS Dynamic Alpha Fund, UBS Global Allocation Fund and UBS International Sustainable Equity Fund in the United Kingdom. As a result, during the fiscal year ended June 30, 2016, the Advisor reimbursed the UBS Dynamic Alpha Fund, UBS Global Allocation Fund and UBS International Sustainable Equity Fund $128,212, $316,557 and $34,326, respectively, which was determined to be the value of the ineligible services paid for from the Funds' dealing commissions.
177
The UBS Funds
Report of independent registered public accounting firm
The Board of Trustees and Shareholders of The UBS Funds
We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of UBS Dynamic Alpha Fund, UBS Global Allocation Fund, UBS International Sustainable Equity Fund (formerly, UBS Global Sustainable Equity Fund), UBS U.S. Large Cap Equity Fund, UBS U.S. Small Cap Growth Fund, UBS Core Plus Bond Fund, UBS Total Return Bond Fund and UBS Municipal Bond Fund (eight of the series comprising The UBS Funds) (collectively the "Funds") as of June 30, 2016, and the related statements of operations, the statements of changes in net assets and the financial highlights for each of the periods indicated therein. These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Funds' internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds' internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of June 30, 2016, by correspondence with the custodian and others or by other appropriate auditing procedures where replies from others were not received. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of UBS Dynamic Alpha Fund, UBS Global Allocation Fund, UBS International Sustainable Equity Fund (formerly, UBS Global Sustainable Equity Fund), UBS U.S. Large Cap Equity Fund, UBS U.S. Small Cap Growth Fund, UBS Core Plus Bond Fund, UBS Total Return Bond Fund and UBS Municipal Bond Fund at June 30, 2016, the results of their operations, the changes in their net assets and the financial highlights for each of the periods indicated therein, in conformity with U.S. generally accepted accounting principles.
New York, New York
August 29, 2016
178
The UBS Funds
Federal tax information (unaudited)
We are required by Subchapter M of the Internal Revenue Code of 1986, as amended, to advise you in writing as to the federal tax status of distributions received by shareholders during the fiscal year. Accordingly, the percentage of ordinary dividends paid that qualify for the dividends received deduction for corporate shareholders and the amount of foreign tax credit to be passed through to shareholders are as follows:
Fund |
Dividends received deduction |
Foreign tax credit |
|||||||||
UBS Global Allocation Fund |
10.70 |
% |
$ |
|
|||||||
UBS International Sustainable Equity Fund |
43.66 |
46,872 |
|||||||||
UBS U.S. Large Cap Equity Fund |
100.00 |
|
Also, for the fiscal year ended June 30, 2016, the foreign source income for information reporting purposes for UBS International Sustainable Equity Fund was $680,943.
For the taxable year ended June 30, 2016, the Funds designate the amounts below as the maximum amount that may be considered qualified dividend income for individual shareholders.
Fund |
|||||||
UBS Global Allocation Fund |
$ |
5,277,854 |
|||||
UBS International Sustainable Equity Fund |
304,258 |
||||||
UBS U.S. Large Cap Equity Fund |
598,448 |
||||||
UBS U.S. Small Cap Growth Fund |
810,655 |
||||||
UBS Core Plus Bond Fund |
739 |
||||||
UBS Total Return Bond Fund1 |
6,413 |
1 For the period from October 1, 2015 through June 30, 2016.
Shareholders should not use the above information to prepare their tax returns. Since the Funds' fiscal year end is not the calendar year end, another notification will be sent with respect to calendar year 2016. Such notification, which will reflect the amount to be used by calendar year taxpayers on their federal income tax returns, will be made in conjunction with Form 1099 DIV and will be mailed in February 2017. Shareholders are advised to consult their own tax advisers with respect to the tax consequences of their investment in each of the Funds.
179
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 1-202-551 8090. Additionally, you may obtain copies of Forms N-Q from the Funds upon request by calling 1-800-647 1568.
Proxy voting policies and procedures 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, on the EDGAR Database on the SEC's Web site (http://www.sec.gov).
180
The UBS Funds
Board approval of investment advisory agreements (unaudited)
At the meeting of the Board of Trustees (the "Board") of The UBS Funds (the "Trust"), held on June 2 and 3, 2016 (the "Meeting"), the Board, including those Trustees who are not "interested persons" (as defined in the 1940 Act) of the Trust or UBS Asset Management (Americas) Inc. (the "Advisor") and its affiliates (together, the "Independent Trustees"), considered the continuation of the investment advisory agreements (the "Advisory Agreements") between the Trust and the Advisor for the UBS Dynamic Alpha Fund, UBS Global Allocation Fund, UBS International Sustainable Equity Fund, UBS U.S. Large Cap Equity Fund, UBS U.S. Small Cap Growth Fund, UBS Core Plus Bond Fund and UBS Municipal Bond Fund (each a "Fund," and together, the "Funds"). Prior to the Meeting, the Independent Trustees' counsel had sent to the Advisor a request detailing the information that the Independent Trustees wished to receive in connection with their consideration of the continuation of the Advisory Agreements. The Independent Trustees met with their independent counsel, as well as an independent consultant engaged by the Board to assist in the annual Advisory Agreement review process, on May 24, 2016, June 2, 2016 and June 3, 2016, to discuss the materials provided to them in response to the information request, including materials prepared by the Advisor, as well as reports prepared by Broadridge Financial Solutions, Inc. ("Broadridge Reports"), an independent statistical compilation company, providing comparative expense information on an actual and contractual basis and comparative performance information for the Funds. The Board also made reference to information and material that had been provided to the Independent Trustees throughout the year at quarterly Board meetings.
At the Meeting, the Board considered a number of factors in connection with its deliberations concerning the continuation of the Advisory Agreement for each Fund, including: (i) the nature, extent, and quality of the services provided by the Advisor to the Fund; (ii) the performance of the Fund and the Advisor; (iii) the Fund's expenses, costs of the services to be provided and profits to be realized by the Advisor and its affiliates from the relationship with the Fund; and (iv) whether economies of scale are realized by the Advisor with respect to the Fund, as it grows larger, and the extent to which the economies of scale are reflected in the level of the management fees charged.
Nature, Extent, and Quality of Services.
In considering the nature, extent, and quality of the services provided by the Advisor to a Fund, the Board reviewed the material presented by the Advisor describing the various services provided to each Fund. The Board noted that in addition to investment management services, the Advisor provides each Fund with operational, legal, and compliance support. The Board also considered the scope and depth of the Advisor's organization and the experience and expertise of the professionals currently providing investment management and other services to the Funds. The Board considered that the Advisor was a well-established investment management organization employing investment personnel with significant experience in the investment management industry. The Board also considered the Advisor's in-house research capabilities, as well as other research services available to it, including research services available to the Advisor as a result of securities transactions effected for the Funds and the Advisor's other investment management clients, and noted that the Advisor had extensive global research capabilities. The Board also evaluated the Advisor's portfolio management process for each Fund, including the use of risk management techniques and the proprietary technologies utilized to structure the Fund's portfolio. The Board noted that various presentations had been made by investment personnel at Board meetings throughout the year concerning the Funds' investment performance and investment strategies, including the derivative strategies utilized by certain Funds.
The Board also noted and discussed the services that the Advisor and its affiliates provide to the Funds under other agreements with the Trust, including administration services provided by the Advisor, underwriting services provided by UBS Asset Management (US) Inc. ("UBS AM (US)"), and sub-transfer agency services provided by UBS Financial Services Inc. ("UBS Financial Services"). In connection with the non-investment management services, the Board also considered the quarterly reports that the Advisor provides to the Board throughout the year pertaining to brokerage commissions, soft dollars, portfolio valuations, and Rule 12b-1 fees, among others. In addition, the Board considered the presentations provided with respect to distribution strategies for the Funds. After analyzing the services provided by the Advisor to each Fund, both quantitatively and qualitatively, including the impact of these services on investment performance, the Board concluded that the nature, extent, and quality of services pro-
181
The UBS Funds
Board approval of investment advisory agreements (unaudited)
vided to each Fund were consistent with the operational requirements of each Fund, and met the needs of the Fund's shareholders.
Performance.
In evaluating the performance of each Fund, the Board analyzed the Broadridge Reports, which compared the performance of each Fund with other funds in its respective peer universe over various time periods. The Board also reviewed the memoranda provided by the Advisor providing an analysis of the markets and the Funds' performance during the past year. In reviewing the Broadridge Reports, the Board noted that the UBS Municipal Bond Fund had appeared in the top performance quintile for the one-year performance period. At the Board's request, the Advisor further addressed the performance data for the UBS Dynamic Alpha Fund, UBS Global Allocation Fund, UBS International Sustainable Equity Fund, UBS U.S. Large Cap Equity Fund, UBS U.S. Small Cap Growth Fund and UBS Core Plus Bond Fund, each of which had appeared in one of the two lower performance quintiles for the one-year period.
In discussing the performance of the UBS Dynamic Alpha Fund for the one-year performance period, the Advisor explained that the Fund's positions in European and Japanese equities were the primary reasons for the Fund's underperformance as compared to its peer universe. The Advisor noted that a sharp decline in risk sentiment over the past year had negatively impacted the Fund's positions. The Advisor then discussed recent changes in investment leadership that should help to address the performance issues of the Fund.
In explaining the performance of the UBS Global Allocation Fund, the Advisor discussed the factors that had affected the performance of the Fund over the past year. The Advisor noted that both market allocation and security selection detracted from the Fund's performance over the past year. The Advisor explained that the Fund's equity positions had the most negative effect on the Fund's returns. The Advisor discussed recent changes in investment leadership that should help to address the performance issues of the Fund.
The Advisor then discussed the performance of the UBS International Sustainable Equity Fund. The Advisor noted that there was a transition in strategy during the past year from global sustainable equity to international sustainable equity. The Advisor explained that the Fund's overweight to cyclical sectors, which underperform during an economic downturn, negatively impacted performance. The Advisor noted that as markets and investor sentiment improved, the Fund's performance improved as well. For the three months ended May 31, 2016, the UBS International Sustainable Equity Fund outperformed its Broadridge peer group average.
The Advisor next addressed the relative underperformance of the UBS U.S. Large Cap Equity Fund with respect to the Fund's peers. The Fund's weaker relative performance as compared to its peer universe was mainly attributable to stock selection in the healthcare and information technology sectors. The Advisor noted that the Fund was negatively affected by the flight from risk and that as investor sentiment improved, the performance of the Fund's holdings rebounded. For the three months ended May 31, 2016, the UBS U.S. Large Cap Equity Fund outperformed its Broadridge peer group average. The Advisor also noted that while the Fund underperformed its peers for the one-year performance period, its longer term performance was more in-line with its peers.
In discussing the performance of the UBS U.S. Small Cap Growth Fund for the one-year performance period, the Advisor explained that the Fund's stock selection was the primary reason for the Fund's underperformance as compared to its peer universe. The Advisor noted that the positions that the Fund held in the consumer discretionary and information technology sectors were the biggest detractors from performance. The Advisor noted that similar to the other equity strategies, as investor risk appetite returned, the UBS U.S. Small Cap Growth Fund's performance improved. For the three months ended May 31, 2016, the UBS U.S. Small Cap Growth Fund outperformed its Broadridge peer group average.
182
The UBS Funds
Board approval of investment advisory agreements (unaudited)
The Advisor next addressed the relative underperformance of the UBS Core Plus Bond Fund with respect to the Fund's peers for the one-year performance period. The Advisor explained that the Fund's selection in corporate debt securities, particularly commodities related issuers, was one of the primary detractors from performance. The Advisor noted that while the UBS Core Plus Bond Fund's performance lagged its peers for the one-year performance period, the Fund had better comparative performance for the three-year and five-year performance periods, ranking in the second quintile in each period.
The Board concluded that the Advisor's explanations provided a sound basis for understanding the performance of each Fund that underperformed in comparison to its peer universe. The Board determined, after analyzing the performance data, that the performance of each Fund was acceptable as compared with relevant performance standards, given the investment strategies and risk profile of each Fund, the expectations of the shareholder base, the current market environment, and the Advisor's efforts to address the underperformance issues of each Fund, including the changes in investment leadership.
Fund Fees and Expenses.
When considering the fees and expenses borne by each Fund, and the reasonableness of the management fees paid to the Advisor in light of the services provided to each Fund, the Board compared the fees charged by the Advisor to each Fund to fees charged to the funds in its peer group for comparable services, as provided in the Broadridge Reports, on both an actual (taking into account expense limitation arrangements) and a contractual basis (assuming all funds in the peer expense group were similar in size to the respective Fund). In examining the Broadridge Reports, and in reviewing comparative costs, it was noted that the results of such expense comparisons showed that the actual management fee rate for each Fund, except the UBS Global Allocation Fund and UBS Dynamic Alpha Fund, was comparable to, or lower than, the Broadridge median in its respective Broadridge expense group. The Board also noted that UBS International Sustainable Equity Fund had a contractual fee rate lower than the Broadridge median in its Broadridge expense group, while the UBS Dynamic Alpha Fund, UBS Global Allocation Fund, UBS U.S. Large Cap Equity Fund, UBS U.S. Small Cap Growth Fund, UBS Core Plus Bond Fund and UBS Municipal Bond Fund, each had a fee rate higher than the median of its respective Broadridge expense group. In addition, the Board reviewed the actual total expenses of each Fund and noted that each Fund had total expenses that were comparable to, or lower than, the Broadridge median in its respective Broadridge expense group, except for UBS Global Allocation Fund.
The Board first discussed the management fee and expenses of the UBS Global Allocation Fund. It was noted that the contractual management fee, actual management fee and total expenses for the UBS Global Allocation Fund were each higher than the medians in its Broadridge expense group. The Advisor noted that the Board was being asked to approve a new fee waiver and expense cap arrangement for the Fund effective October 28, 2016, that provides for a higher level of fees waived and expenses reimbursed by the Advisor. The Advisor reported that under this new arrangement, the total expenses for the UBS Global Allocation Fund are expected to be comparable or lower than, the median of the Broadridge expense group.
The Board then discussed the management fee of the UBS Dynamic Alpha Fund. It was noted that both the actual and contractual management fee of UBS Dynamic Alpha Fund was higher than the medians of the Fund's Broadridge expense group. The Board noted that while the UBS Dynamic Alpha Fund's management fee was higher than the median of the Fund's Broadridge expense group, the Fund's total expenses were at the median of the Fund's Broadridge expense group, resulting in the total cost to investors being very competitive.
The Board next discussed the management fee of the UBS U.S. Small Cap Growth Fund. It was noted that the contractual management fee was higher than the median in its Broadridge expense group. The Advisor noted, however, that the actual management fee and total expenses for the Fund were each below the median of the Fund's Broadridge expense group.
183
The UBS Funds
Board approval of investment advisory agreements (unaudited)
The Board next considered that the management fee of the UBS U.S. Large Cap Equity Fund was higher than the median of its Broadridge expense group on a contractual basis, but noted that the Fund's actual management fee compared favorably with the Fund's peers placing in the first quintile of the Broadridge expense group. The Board also considered that the UBS U.S. Large Cap Equity Fund's total expenses were lower than the median of the Fund's expense group, placing in the first quintile of its expense group.
The Advisor next addressed the management fee of the UBS Core Plus Bond Fund. The Advisor noted that while the contractual management fee of the UBS Core Plus Bond Fund was higher than the median of the Fund's Broadridge expense group, the Fund compared very favorably to its Broadridge peers with respect to its actual management fee and total expenses. The UBS Core Plus Bond Fund placed in the first quintile of its Broadridge expense group for both its actual management fee and total expenses.
With respect to the fees and expenses of the UBS Municipal Bond Fund, the Advisor noted that the Fund was above the median of its Broadridge expense group with respect to contractual management fees. The Advisor, however, also noted that the Fund's actual management fee was lower than the median of its Broadridge expense group, placing in the first quintile of its expense group. The Board also considered that the UBS Municipal Bond Fund had total expenses that were in the first quintile of its Broadridge expense group.
The Board also received and considered information about the fee rates charged to other funds and accounts that are managed by the Advisor. After discussing the information about the other funds and accounts with the Advisor, the Board determined that the fees charged by the Advisor to the Funds were within a reasonable range, giving effect to differences in services performed for such other funds and accounts as compared to such fee rates. The Board, after reviewing all pertinent material, concluded that the management fee payable under each Fund's Advisory Agreement was fair and reasonable, both on an absolute basis and in comparison with the fees of other funds identified in its peer group.
Costs and Profitability.
The Board considered the costs of providing services to the Funds and the profitability of the Funds to the Advisor and its affiliates by reviewing the profitability analysis provided by the Advisor, including information about its fee revenues and expenses. The Board reviewed the profitability of each Fund to the Advisor and its affiliates, and the compensation that was received for providing services to each Fund. The profitability analysis, which provided information for the last three calendar years, included schedules relating to the revenue and expenses attributable to: (i) the investment advisory and administration services provided by the Advisor; (ii) the distribution and shareholder services provided by UBS AM (US) and UBS Financial Services; (iii) the transfer agency-related services provided by UBS Financial Services; and (iv) all services provided by the Advisor, UBS AM (US), and UBS Financial Services shown on a consolidated basis. In discussing the profitability analysis with the Board, the Advisor, as requested by the Board, provided the Board with a presentation on the methodology utilized in the profitability analysis. The Board noted that the methodology used for the profitability analysis provided to the Board for purposes of its annual review of the Advisory Agreements was reasonable. The Advisor also explained to the Board the reasons for an increase or decrease in profitability of each Fund from last calendar year to this calendar year.
The Board also considered "fallout" or ancillary benefits to the Advisor or its affiliates as the result of their relationship with the Funds; for example, the ability to attract other clients due to the Advisor's role as investment advisor to the Funds and the research services available to the Advisor through soft dollar brokerage commissions. The Independent Trustees also considered the ancillary benefits received by the Advisor's affiliates, UBS Securities LLC and UBS Group AG, in the form of commissions for executing securities transactions for the Funds. Upon closely examining the information provided concerning the Advisor's profitability, the Board concluded that the level of profits realized by the Advisor and its affiliates with respect to each Fund, if any, was reasonable in relation to the nature and quality of the services that were provided.
184
The UBS Funds
Board approval of investment advisory agreements (unaudited)
Economies of Scale.
The Board also discussed whether economies of scale are realized by the Advisor with respect to each Fund as it grows larger, and the extent to which this is reflected in the level of management fees charged. The Board noted that with respect most Funds, any actual or potential economies of scale are, or will be, shared with the Fund and its shareholders through existing management fee breakpoints so that as the Fund grows in size, its effective management fee declines. The Board noted that each Fund, except UBS Municipal Bond Fund, had a breakpoint schedule that provided for continuing breakpoints past the current asset level for the Fund. Based on each Fund's fees and expenses and the Advisor's profitability analysis, the Board concluded that any actual or potential economies of scale would be reasonably shared with a Fund and its shareholders.
After full consideration of the factors discussed above, with no single factor identified as being of paramount importance, the Board, including a majority of the Independent Trustees, with the assistance of independent counsel, concluded that the continuation of the Advisory Agreement for each Fund was in the best interests of the Fund and its shareholders.
185
The UBS Funds
Trustee and officer information (unaudited)
The Trust is a Delaware statutory trust. Under Delaware law, the Board has overall responsibility for managing the business and affairs of the Trust, including general supervision and review of its investment activities. The Trustees elect the Officers of the Trust, who are responsible for administering the day-to-day operations of the Trust and the Funds.
The table shows, for each Trustee and Officer, his or her name, address and age, the position held with the Trust, the length of time served as a Trustee or Officer of the Trust, the Trustee's or Officer's principal occupations during the last five years, the number of funds in the UBS Family of Funds overseen by the Trustee or Officer and other directorships held by such Trustee.
The Trust's Statement of Additional Information contains additional information about the Trustees and is available, without charge, upon request, by calling 1-800-647 1568.
Non-interested Trustees:
Name, address and age |
Position(s) held with Trust |
Term of office1 and length of time served |
Principal occupation(s) during past 5 years |
Number of portfolios in fund complex overseen by Trustee |
Other directorships held by Trustee |
||||||||||||||||||
Adela Cepeda; 58 A.C. Advisory, Inc. 150 North Wacker Drive Suite 2160 Chicago, IL 60606 |
Trustee |
Since 2004 |
Ms. Cepeda is founder and president of A.C. Advisory, Inc. (since 1995). |
Ms. Cepeda is a director or trustee of four investment companies (consisting of 31 portfolios) for which UBS AM serves as investment advisor or manager. |
Ms. Cepeda is a director (since 2012) of BMO Financial Corp. (U.S. holding company for BMO Harris Bank N.A.), director of the Mercer Funds (9 portfolios) (since 2005), trustee of the Morgan Stanley Smith Barney Consulting Group Capital Markets Funds (11 portfolios) (since 2008). Ms. Cepeda was a director of Amalgamated Bank of Chicago (from 2003 to 2012) and a director of the Municipal Securities Rulemaking Board (from 2010 to 2012). |
||||||||||||||||||
John J. Murphy; 72 268 Main Street P.O. Box 718 Gladstone, NJ 07934 |
Trustee |
Since 2009 |
Mr. Murphy is the president of Murphy Capital Management (investment advisor) (since 1983) |
Mr. Murphy is a director or trustee of four investment companies (consisting of 31 portfolios) for which UBS AM serves as investment advisor or manager. |
Mr. Murphy is a director (since 2007) of the Legg Mason Equity Funds (54 portfolios) and a trustee of Morgan Stanley Smith Barney Consulting Group Capital Markets Funds (11 portfolios). |
186
The UBS Funds
Trustee and officer information (unaudited)
Non-interested Trustees (continued):
Name, address and age |
Position(s) held with Trust |
Term of office1 and length of time served |
Principal occupation(s) during past 5 years |
Number of portfolios in fund complex overseen by Trustee |
Other directorships held by Trustee |
||||||||||||||||||
Abbie J. Smith; 63 University of Chicago Booth School of Business 5807 S. Woodlawn Avenue Chicago, IL 60637 |
Trustee |
Since 2009 |
Ms. Smith is the Boris and Irene Stern Distinguished Service Professor of Accounting in the University of Chicago Booth School of Business (since 1980). Formerly, Ms. Smith was a co-founding partner and Director of Research of Fundamental Investment Advisors, a hedge fund (co-founded in 2004, commenced operations in 2008) (from 2008 to 2010). |
Ms. Smith is a director or trustee of four investment companies (consisting of 31 portfolios) for which UBS AM serves as investment advisor or manager. |
Ms. Smith is a director (since 2000) of HNI Corporation (formerly known as HON Industries Inc.) (office furniture) and a director and member (since 2003) and chair (until October 2015) of the audit committee of Ryder System Inc. (transportation, logistics and supply-chain management). In addition, Ms. Smith is a trustee/director (since 2000) and a member of the audit committee of the Dimensional Funds complex (122 Portfolios). |
||||||||||||||||||
Frank K. Reilly; 80 Mendoza College of Business University of Notre Dame Notre Dame, IN 46556-5646 |
Chairman and Trustee |
Since 1992 |
Mr. Reilly is the Bernard J. Hank Professor Emeritus of Finance in the Mendoza College of Business at the University of Notre Dame (since 1982), and is a Chartered Financial Analyst (CFA). |
Mr. Reilly is a director or trustee of four investment companies (consisting of 31 portfolios) for which UBS AM serves as investment advisor or manager. |
Mr. Reilly is a director (since 1994) of Discover Bank, a subsidiary of Discover Financial Services and is Chairman of the Audit Committee for the Bank. |
187
The UBS Funds
Trustee and officer information (unaudited)
Non-interested Trustees (continued):
Name, address and age |
Position(s) held with Trust |
Term of office1 and length of time served |
Principal occupation(s) during past 5 years |
Number of portfolios in fund complex overseen by Trustee |
Other directorships held by Trustee |
||||||||||||||||||
J. Mikesell Thomas; 65 c/o UBS AM One North Wacker Drive Chicago, IL 60606 |
Trustee |
Since 2004 |
Mr. Thomas is a principal with the investment firm Castle Creek Capital (since 2008) and President and sole shareholder of Mikesell Advisory Corp. (since 2009). He is the former President and CEO of Federal Home Loan Bank of Chicago (from 2004 to 2008) and of First Chicago Bancorp (from 2008 to 2011). |
Mr. Thomas is a director or trustee of four investment companies (consisting of 31 portfolios) for which UBS AM serves as investment advisor or manager. |
Mr. Thomas is a director (since 1992) and chairman of the Audit Committee for NorthShore University HealthSystem, a not-for-profit healthcare organization, and a director and member, (since January 2016) of the Audit Committee of four indirect subsidiaries of Tokio Marine Holdings, Inc., a publicly traded insurance company headquartered in Tokyo, Japan: HCC Life Insurance Co., U.S. Specialty Insurance Co., Houston Casualty Co., and Producers Agriculture Insurance Co. Mr. Thomas was previously a director (2012October 2015), a member of the Audit Committee (2012October 2015) and Chairman of the Investment and Finance Committees (2014October 2015) of HCC Insurance Holdings Inc.; and a director of First Chicago Bancorp (from 2008 to 2010) and First Chicago Bank & Trust (from 2008 to 2010). |
188
The UBS Funds
Trustee and officer information (unaudited)
Interested Trustee:
Name, address and age |
Position(s) held with Trust |
Term of office1 and length of time served |
Principal occupation(s) during past 5 years |
Number of portfolios in fund complex overseen by Trustee |
Other directorships held by Trustee |
||||||||||||||||||
E. Blake Moore, Jr.; 582* |
Interested Trustee |
Since June 2015 |
Mr. Moore is a Managing Director and head of Americas at UBS Asset Management (Americas) Inc. (since March 2015). Mr. Moore is a member of the UBS Asset Management Executive Committee and UBS Americas Executive Committee. Prior to joining UBS Asset Management, Mr. Moore was Executive Vice President, head of distribution at Mackenzie Investments in Canada for over three years. Before this, Mr. Moore spent over six years at Allianz Global Investors in New York where he held a number of senior management roles. Most recently, he was Chief Executive Officer, Allianz Global Investors Fund Management. Prior to Allianz, Mr. Moore served as a member of the Executive Committee and Partner at Nicholas-Applegate Capital Management. |
Mr. Moore is a trustee of three investment companies (consisting of 30 portfolios) for which UBS AM serves as investment advisor or manager. |
None |
189
The UBS Funds
Trustee and officer information (unaudited)
Officers:
Name, address and age |
Position(s) held with Trust |
Term of office1 and length of time served |
Principal occupation(s) during past 5 years; number of portfolios in fund complex for which person serves as officer |
||||||||||||
Joseph J. Allessie*; 50 |
Chief Compliance Officer |
Since July 2014 |
Mr. Allessie is a managing director (since 2015) (prior to which he was an executive director) at UBS AM and UBS Asset Management (US) Inc. (collectively, "UBS AMAmericas region"). Mr. Allessie is head of compliance and operational risk control for the UBS Asset Management Division in the Americas with oversight for traditional and alternative investment businesses in Canada, the US and Cayman Islands. Prior to that he served as deputy general counsel of UBS AMAmericas region (from 2005 to 2014). Mr. Allessie is the chief compliance officer (prior to which he was interim chief compliance officer (from January to July 2014)) and had served as a vice president and assistant secretary (from 2005 to 2016) of 14 investment companies (consisting of 82 portfolios) for which UBS AM serves as investment advisor or manager. |
||||||||||||
Rose Ann Bubloski*; 48 |
Vice President and Assistant Treasurer |
Since 2011 |
Ms. Bubloski is a director (since 2012) (prior to which she was an associate director (from 2008 to 2012)) and senior manager of registered fund product control of UBS AMAmericas region. She is vice president and assistant treasurer of 14 investment companies (consisting of 82 portfolios) for which UBS AM serves as investment advisor or manager. |
||||||||||||
Mark E. Carver*; 52 |
President |
Since 2010 |
Mr. Carver is a managing director and head of product development and management for UBS AMAmericas region (since 2008). In this role, he oversees product development and management for both wholesale and institutional businesses. He is a member of the Americas Management Committee (since 2008) and the Regional Operating Committee (since 2008). Prior to 2008, Mr. Carver held a number of product-related or sales responsibilities with respect to funds, advisory programs and separately managed accounts. Mr. Carver is president of 14 investment companies (consisting of 82 portfolios) for which UBS AM serves as investment advisor or manager. |
||||||||||||
Thomas Disbrow*; 50 |
Vice President, Treasurer and Principal Accounting Officer |
Since 2004 and 2006, respectively |
Mr. Disbrow is a managing director (since 2011), (prior to which he was an executive director (from 2007 to 2011)) and is global head of registered fund product control (since January 2016) (prior to which he was head of the North American fund treasury administration department of UBS AMAmericas region (from 20112015)). Mr. Disbrow is a vice president and treasurer and/or principal accounting officer of 14 investment companies (consisting of 82 portfolios) for which UBS AM serves as investment advisor or manager. |
190
The UBS Funds
Trustee and officer information (unaudited)
Officers (continued):
Name, address and age |
Position(s) held with Trust |
Term of office1 and length of time served |
Principal occupation(s) during past 5 years; number of portfolios in fund complex for which person serves as officer |
||||||||||||
Mark F. Kemper**; 58 |
Vice President and Secretary |
Since 1999 |
Mr. Kemper is a managing director (since 2006) and head of the legal department of UBS AMAmericas region (since 2004). He has been secretary of UBS AMAmericas region (since 2004) and assistant secretary of UBS Asset Management Trust Company (since 1993). Mr. Kemper is vice president and secretary of 14 investment companies (consisting of 82 portfolios) for which UBS AM serves as investment advisor or manager. |
||||||||||||
Joanne M. Kilkeary*; 48 |
Vice President and Assistant Treasurer |
Since 2006 |
Ms. Kilkeary is an executive director (since 2013) (prior to which she was a director (since 2008)) and a senior manager (since 2004) of registered fund product control of UBS AMAmericas region. Ms. Kilkeary is a vice president and assistant treasurer of 14 investment companies (consisting of 82 portfolios) for which UBS AM serves as investment advisor or manager. |
||||||||||||
Cindy W. Lee*, 40 |
Vice President and Assistant Treasurer |
Since 2014 |
Ms. Lee is a director (since March 2016) (prior to which she was an associate director (from 20092016)) of registered fund product control of UBS AMAmericas region. Ms. Lee is a vice president and assistant treasurer of 14 investment companies (consisting of 82 portfolios) for which UBS AM serves as investment advisor or manager. |
||||||||||||
Tammie Lee*; 45 |
Vice President and Assistant Secretary |
Since 2005 |
Ms. Lee is an executive director (since 2010) (prior to which she was a director (from 2005 to 2010)) and associate general counsel of UBS AMAmericas region (since 2005). Ms. Lee is a vice president and assistant secretary of 14 investment companies (consisting of 82 portfolios) for which UBS AM serves as investment advisor or manager. |
||||||||||||
William T. MacGregor*; 40 |
Vice President and Assistant Secretary |
Since September 2015 |
Mr. MacGregor is an executive director and deputy general counsel at UBS AMAmericas region. From June 2012 through July 2015, Mr. MacGregor was Senior Vice President, Secretary and Associate General Counsel of AXA Equitable Funds Management Group, LLC and from May 2008 through July 2015, Mr. MacGregor was Lead Director and Associate General Counsel of AXA Equitable Life Insurance Company. Mr. MacGregor is a vice president and assistant secretary of 14 investment companies (consisting of 82 portfolios) for which UBS AM serves as investment advisor or manager. |
||||||||||||
Nancy D. Osborn*; 50 |
Vice President and Assistant Treasurer |
Since 2007 |
Mrs. Osborn is a director (since 2010) (prior to which she was an associate director) and a senior manager of registered fund product control department of UBS AMAmericas region (since 2006). Mrs. Osborn is a vice president and assistant treasurer of 14 investment companies (consisting of 82 portfolios) for which UBS AM serves as investment advisor or manager. |
||||||||||||
Eric Sanders*; 50 |
Vice President and Assistant Secretary |
Since 2005 |
Mr. Sanders is a director and associate general counsel of UBS AMAmericas region (since 2005). Mr. Sanders is a vice president and assistant secretary of 14 investment companies (consisting of 82 portfolios) for which UBS AM serves as investment advisor or manager. |
191
The UBS Funds
Trustee and officer information (unaudited)
Officers (continued):
Name, address and age |
Position(s) held with Trust |
Term of office1 and length of time served |
Principal occupation(s) during past 5 years; number of portfolios in fund complex for which person serves as officer |
||||||||||||
Keith A. Weller*; 54 |
Vice President and Assistant Secretary |
Since 2004 |
Mr. Weller is an executive director and senior associate general counsel of UBS AMAmericas region (since 2005) and has been an attorney with affiliated entities since 1995. Mr. Weller is a vice president and assistant secretary of 14 investment companies (consisting of 82 portfolios) for which UBS AM serves as investment advisor or manager. |
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Mandy Yu*; 32 |
Vice President |
Since March 2013 |
Ms. Yu is an associate director (since 2015) (prior to which she was an authorized officer (from 2012 to 2015)) and tax compliance manager (since 2013) of registered fund product control of UBS AMAmericas region. She was a fund treasury manager (from 2012 to 2013) and a mutual fund administrator (from 2007 to 2012) for UBS AMAmericas region. Ms. Yu is a vice president of 14 investment companies (consisting of 82 portfolios) for which UBS AM serves as investment advisor or manager. |
1 Each Trustee holds office for an indefinite term. Officers of the Trust are appointed by the Trustees and serve at the pleasure of the Board.
2 Mr. Moore is considered to be an interested person of the Trust under the federal securities laws due to his position as an officer of UBS AM.
* This person's business address is 1285 Avenue of the Americas, New York, NY 10019-6028
** This person's business address is One North Wacker Drive, Chicago, IL 60606.
192
The UBS Funds
Fund's 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 AM (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 and other forms or correspondence submitted to the Funds, may include name(s), address, e-mail address, telephone number, date of birth, social security number or other tax identification number, bank account information, information about your transactions and experiences with the Funds, and any affiliation a client has with UBS Financial Services Inc. or its affiliates ("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 and to follow established procedures. The Funds maintain physical, electronic and procedural safeguards to protect Personal Information and to comply with applicable laws and regulations. The Funds may share Personal Information with their affiliates to facilitate the servicing of accounts and for other business purposes, or as otherwise required or permitted by applicable law. The Funds may also share Personal Information with non-affiliated third parties that perform services for the Funds, such as vendors that provide data or transaction processing, computer software maintenance and development, and other administrative services. When the Funds share Personal Information with a non-affiliated third party, they will do so pursuant to a contract that includes provisions designed to ensure that the third party will uphold and maintain privacy standards when handling Personal Information. In addition to sharing information with non-affiliated third parties to facilitate the servicing of accounts and for other business purposes, the Funds may disclose Personal Information to non-affiliated third parties as otherwise required or permitted by applicable law. For example, the Funds may disclose Personal Information to credit bureaus or regulatory authorities to facilitate or comply with investigations; to protect against or prevent actual or potential fraud, unauthorized transactions, claims or other liabilities; or to respond to judicial or legal process, such as subpoena requests.
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 (or affirmatively approve the use of Personal Information, if required by applicable law). 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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PRESORTED
STANDARD
U.S. POSTAGE
PAID
COMPUTERSHARE
UBS Asset Management (Americas) Inc.
1285 Avenue of the Americas
New York, NY 10019
S1650
Item 2. Code of Ethics.
The registrant has adopted a code of ethics that applies to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions pursuant to Section 406 of the Sarbanes-Oxley Act of 2002. (The registrant has designated the code of ethics adopted pursuant to Sarbanes-Oxley as a Code of Conduct to lessen the risk of confusion with its separate code of ethics adopted pursuant to Rule 17j-1 under the Investment Company Act of 1940, as amended.)
Item 3. Audit Committee Financial Expert.
The registrants Board has determined that the following person serving on the registrants Audit Committee is an audit committee financial expert as defined in item 3 of Form N-CSR: J. Mikesell Thomas. Mr. Thomas is independent as defined in item 3 of Form N-CSR.
Item 4. Principal Accountant Fees and Services.
(a) Audit Fees:
For the fiscal years ended June 30, 2016 and June 30, 2015, the aggregate Ernst & Young LLP (E&Y) audit fees for professional services rendered to the registrant were approximately $451,884 and $678,053, respectively.
Fees included in the audit fees category are those associated with the annual audits of financial statements and services that are normally provided in connection with statutory and regulatory filings.
(b) Audit-Related Fees:
In each of the fiscal years ended June 30, 2016 and June 30, 2015, the aggregate audit-related fees billed by E&Y for services rendered to the registrant that are reasonably related to the performance of the audits of the financial statements, but not reported as audit fees, were approximately $54,750 and $69,250, respectively.
Fees included in the audit-related category are those associated with (1) the reading and providing of comments on the 2015 and 2014 semiannual financial statements and (2) agreed upon procedures performed in connection with the review of Form N-1A.
There were no audit-related fees required to be approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X during the fiscal years indicated above.
(c) Tax Fees:
In each of the fiscal years ended June 30, 2016 and June 30, 2015, the aggregate tax fees billed by E&Y for professional services rendered to the registrant were approximately $79,415 and $92,624, respectively.
Fees included in the tax fees category comprise all services performed by professional staff in the independent accountants tax division except those services related to the audits. This category comprises fees for review of tax returns.
There were no tax fees required to be approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X during the fiscal years indicated above.
(d) All Other Fees:
In each of the fiscal years ended June 30, 2016 and June 30, 2015, there were no fees billed by E&Y for products and services, other than the services reported in Item 4(a)-(c) above, rendered to the registrant.
Fees included in the all other fees category would consist of services related to internal control reviews, strategy and other consulting, financial information systems design and implementation, consulting on other information systems, and other tax services unrelated to the registrant.
There were no all other fees required to be approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X during the fiscal years indicated above.
(e) (1) Audit Committee Pre-Approval Policies and Procedures:
The Audit Committee Charter contains the Audit Committees pre-approval policies and procedures. Reproduced below is an excerpt from the Audit Committee Charter regarding pre-approval policies and procedures:
To carry out its purposes, the Audit Committee shall have the following duties and powers:
(a) To pre-approve the engagement of, and to recommend to the Board the engagement, retention or termination of, the independent auditors to provide audit, review or attest services to the UBS Funds, and, in connection therewith, to review and evaluate the capabilities and independence of the auditors, and receive the auditors specific representations as to their independence. In evaluating the auditors qualifications performance and independence, the Committee must, among other things, obtain and review a report by the auditors, at least annually, describing the following items: (i) all relationships between the, independent auditors and the UBS Funds, as well as with the UBS Funds, investment advisor or any control affiliate of the investment advisor that provides ongoing services to the UBS Funds; (ii) any material issues raised by the most recent internal quality control review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, with respect to one or more independent audits carried out by the firm, and any steps taken to deal with any such issues; and (iii) the audit firms internal quality control procedures.
(b) To pre-approve all non-audit services to be provided to the UBS Funds by the independent auditors when, without such pre-approval, the auditors would not be independent of the UBS Funds under applicable federal securities laws, rules or auditing standards.
(c) To pre-approve all non-audit services to be provided by the UBS Funds independent auditors to the UBS Funds investment advisor or to any entity, that controls, is controlled by or is under common control with the UBS Funds investment advisor (advisor affiliate) and that provides ongoing services to the UBS Funds when, without such pre-approval by the Committee, the auditors would not be independent of the UBS Funds under applicable federal securities laws, rules or auditing standards.
(d) To establish, if deemed necessary or appropriate as an alternative to Committee pre-approval of services to be provided by the independent auditors as required by paragraphs (b)
and (c) above, policies and procedures to permit such services to be pre-approved by other means, such as by action of a designated member or members of the Committee, subject to subsequent Committee review or oversight.
(e) To consider whether the non-audit services provided by the UBS Funds independent auditor to the UBS Funds investment advisor or any advisor affiliate that provides on-going services to the UBS Funds, which services were not pre-approved by the Committee, are compatible with maintaining the auditors independence.
(e) (2) Services approved pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X:
Audit-Related Fees:
There were no amounts that were approved by the audit committee pursuant to the de minimis exception for the fiscal years ended June 30, 2016 and June 30, 2015 on behalf of the registrant.
There were no amounts that were required to be approved by the audit committee pursuant to the de minimis exception for the fiscal years ended June 30, 2016 and June 30, 2015 on behalf of the registrants service providers that relate directly to the operations and financial reporting of the registrant.
Tax Fees:
There were no amounts that were approved by the audit committee pursuant to the de minimis exception for the fiscal years ended June 30, 2016 and June 30, 2015 on behalf of the registrant.
There were no amounts that were required to be approved by the audit committee pursuant to the de minimis exception for the fiscal years ended June 30, 2016 and June 30, 2015 on behalf of the registrants service providers that relate directly to the operations and financial reporting of the registrant.
All Other Fees:
There were no amounts that were approved by the audit committee pursuant to the de minimis exception for the fiscal years ended June 30, 2016 and June 30, 2015 on behalf of the registrant.
There were no amounts that were required to be approved by the audit committee pursuant to the de minimis exception for the fiscal years ended June 30, 2016 and June 30, 2015 on behalf of the registrants service providers that relate directly to the operations and financial reporting of the registrant.
(f) For the fiscal year ended June 30, 2016, if greater than 50%, specify the percentage of hours spent on the audit of the registrants financial statements for the most recent fiscal year that were attributed to work performed by persons who are not full-time, permanent employees of E&Y. According to E&Y, such amount was below 50%; therefore disclosure item not applicable to this filing.
(g) For the fiscal years ended June 30, 2016 and June 30, 2015, the aggregate fees billed by E&Y of $501,212 and $381,101, respectively, for non-audit services rendered on behalf of the
registrant (covered), its investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and any entity controlling, controlled by, or under common control with the adviser (non-covered) that provides ongoing services to the registrant for each of the last two fiscal years of the registrant is shown in the table below:
|
|
2016 |
|
2015 |
| ||
Covered Services |
|
$ |
134,165 |
|
$ |
161,874 |
|
Non-Covered Services |
|
$ |
367,047 |
|
$ |
219,227 |
|
(h) The registrants audit committee has considered whether the provision of non-audit services that were rendered to the registrants investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountants independence.
Item 5. Audit Committee of Listed Registrants.
Not applicable to the registrant.
Item 6. Schedule of Investments.
(a) Included as part of the report to shareholders filed under Item 1 of this form.
(b) Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable to the registrant.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable to the registrant.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable to the registrant.
Item 10. Submission of Matters to a Vote of Security Holders.
The Nominating Committee will consider nominees recommended by Qualifying Fund Shareholders if an Independent Trustee vacancy on the Board occurs. A Qualifying Fund Shareholder is a shareholder that:
(i) owns of record, or beneficially through a financial intermediary, 1/2 of 1% or more of the Trusts outstanding shares and (ii) has been a shareholder of at least 1/2 of 1% of the Trusts 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, Ms. Adela Cepeda, care of Mark Kemper, the Secretary of the UBS Funds at UBS Asset Management, One North Wacker Drive, Chicago, Illinois 60606, and indicate on the envelope Nominating Committee. The Qualifying Fund Shareholders 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 nominees resume or curriculum vitae. The Qualifying Fund Shareholders 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 registrants principal executive officer and principal financial officer have concluded that the registrants 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 registrants principal executive officer and principal financial officer are aware of no changes in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal half-year that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting.
Item 12. Exhibits.
(a) (1) Code of Ethics as required pursuant to Section 406 of the Sarbanes-Oxley Act of 2002 (and designated by registrant as a Code of Conduct) is filed herewith.
(a) (2) Certifications of principal executive officer and principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 is attached hereto as Exhibit EX-99.CERT.
(a) (3) Written solicitation to purchase securities under Rule 23c-1 under the Investment Company Act of 1940 sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons not applicable to the registrant.
(b) Certifications of principal executive officer and principal financial officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 is attached hereto as Exhibit EX-99.906.CERT.
(c) Iran related activities disclosure pursuant to Section 13(r) of the Securities Exchange Act of 1934 is filed herewith.
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 |
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By: |
/s/ Mark E. Carver |
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Mark E. Carver |
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President |
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Date: |
September 8, 2016 |
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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 |
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Mark E. Carver |
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President |
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|
Date: |
September 8, 2016 |
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|
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By: |
/s/ Thomas Disbrow |
|
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Thomas Disbrow |
|
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Vice President, Treasurer and Principal Accounting Officer | |
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Date: |
September 8, 2016 |
|
Exhibit 99.CODEETH
UBS ASSET MANAGEMENT FUNDS
Code of Conduct
Introduction
This Code of Conduct (Code) applies to U.S. registered investment companies (Funds) for which UBS Asset Management (UBS AM) acts as advisor, sub-advisor and/or manager where UBS AM employees serve as officers of the Funds. This Code shall serve as the code of ethics required by Section 406 of the Sabanes-Oxley Act.
This Code applies to a Funds principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party.
Compliance with Laws, Rules and Regulations
Each person to whom this Code applies (a Covered Person) must respect, and comply with, the laws, rules and regulations applicable to a Fund.
It is the personal responsibility of each Covered Person to adhere to the standards and restrictions imposed by those laws, rules and regulations.
Integrity and Conflicts of Interest
Each Covered Person must act ethically, with honesty and integrity, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships. A conflict of interest exists when a persons private interest interferes, or appears to interfere, in any way with the interests of a Fund.
Any Covered Person who becomes aware of a conflict of interest or potential conflict of interest not addressed by existing policies or procedures (e.g., Rule 17e-1 Procedures) must promptly consult the Compliance Procedure described in this Code.
Fair Dealing
A Covered Person must not take unfair advantage of a Fund through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other unfair practice.
A Covered Person must respect and promote compliance with applicable insider trading laws, rules and regulations as well as with the internal directives and policies of UBS AM concerning illegal or unethical trading while in possession of material non-public information.
Fund Opportunities
A Covered Person must abstain from taking for himself or herself personally, or directing to third parties, opportunities that are discovered through the use of Fund property, information or position, or otherwise competing with the interests of a Fund, unless a Fund has already been offered the opportunity and turned it down or such actions are otherwise consistent with the policies and practices disclosed in the Funds disclosure documents or approved by the Funds board or otherwise permissible under securities laws and regulations (e.g., soft dollars, trade allocation policies).
Protection and Proper Use of Fund Assets
A Covered Person must endeavor to protect a Funds assets.
Fund property should not be used for personal use.
Disclosure in Reports and Documents
A Covered Person must see that a Fund discloses information fully, fairly, accurately, timely and understandably in reports and documents that a Fund files with, or submits to, the SEC and in other public communications made by a Fund.
Reporting Any Violations of the Code
A Covered Person must promptly consult the Compliance Procedure described in this Code about any observed violations of this Code, including any violations of laws, rules, regulations or other legal requirements or when in doubt about the best course of action in a particular situation.
It is the policy of UBS AM not to allow retaliation for reports of misconduct by others made in good faith.
Reports may be made anonymously if the situation requires that identity be kept secret. UBS AM has established an ethics hotline that permits the anonymous reporting of ethical violations.
Waivers of this Code
Any waiver of this Code may be made only by the Board of the relevant Fund or the General Counsel or a Deputy General Counsel of UBS AM and will be disclosed as required by applicable law or regulations. Any waiver by the General Counsel or a Deputy General Counsel of UBS AM must be reported to the Board of the relevant Fund no later than their next regularly scheduled meeting.
For purposes of this provision, the term waiver means the approval of a material departure from a provision in this Code. It also includes an implicit waiver, which means the failure to take action within a reasonable period of time regarding a material departure from a provision of the Code that has been made known to an executive officer of a fund or the General Counsel or a Deputy General Counsel of UBS AM.
Any person granting a waiver is responsible for promptly alerting the persons responsible for preparing SEC filings so that required disclosure regarding a waiver may be timely included in filings (e.g., Form N-CSR filings).
Compliance Procedure
If you are unsure about how to handle a situation with regard to this Code or are aware of any violations or apparent violations of this Code promptly contact the General Counsel or a Deputy General Counsel of UBS AM.
A Funds Board, the General Counsel or a Deputy General Counsel of UBS AM has the authority to interpret this Code in any particular situation.
Accountability for Adherence to this Code
Those who violate the standards in this Code will be subject to disciplinary proceedings or dismissal by UBS AM.
A copy of this Code shall be provided to each Covered Person.
Note Regarding Interplay with Other Requirements
This Code deals with the required standards of fairness, honesty and integrity in a universal and general manner. UBS AM and its affiliates have issued, and will issue from time to time, more
specific directives, policies, principals and procedures to implement such values while reflecting the specific requirements of a business group, business area or a particular jurisdiction. If there is any inconsistency between the requirements of this Code or any other applicable policy, the higher standard shall apply.
This Code is supplemental to, and does not replace, any other code applicable to Covered Persons, such as a code of ethics regarding personal investing or restrictions on the receipt of gifts from third-party vendors or service contractors.
[7/16 Version]
Exhibit EX-99.CERT
Certifications
I, Mark E. Carver, President of The UBS Funds, certify that:
1. I have reviewed this report on Form N-CSR of The UBS Funds;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
4. The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements, for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
(d) Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
5. The registrants other certifying officer(s) and I have disclosed to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize, and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.
By: |
/s/ Mark E. Carver |
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Mark E. Carver |
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President |
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|
|
Date: |
September 8, 2016 |
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I, Thomas Disbrow, Vice President, Treasurer and Principal Accounting Officer of The UBS Funds, certify that:
1. I have reviewed this report on Form N-CSR of The UBS Funds;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
4. The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements, for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
(d) Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
5. The registrants other certifying officer(s) and I have disclosed to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize, and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.
By: |
/s/ Thomas Disbrow |
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Thomas Disbrow |
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Vice President, Treasurer and Principal Accounting Officer | |
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Date: |
September 8, 2016 |
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Exhibit EX-99.906CERT
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)
In connection with the attached report of The UBS Funds (the Registrant) on Form N-CSR (the Report), each of the undersigned officers of the Registrant does hereby certify that, to the best of such officers knowledge:
1) the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended;
2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant as of, and for, the periods presented in the Report.
Dated: |
September 8, 2016 |
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By: |
/s/ Mark E. Carver |
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Mark E. Carver |
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President |
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Dated: |
September 8, 2016 |
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By: |
/s/ Thomas Disbrow |
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Thomas Disbrow |
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Vice President, Treasurer and Principal Accounting Officer |
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This certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document.
Exhibit 99.IRANNOTICE
Disclosure pursuant to Section 13(r) of the Securities Exchange Act of 1934
The disclosure below does not relate to any activities conducted by the registrant and does not involve the registrant or the registrants management. The disclosure relates solely to activities conducted by UBS Group AG.
Section 219 of the U.S. Iran Threat Reduction and Syria Human Rights Act of 2012 (ITRA) added new Section 13(r) to the U.S. Securities Exchange Act of 1934, as amended (the Exchange Act) requiring each SEC reporting issuer to disclose in its annual and, if applicable, quarterly reports whether it or any of its affiliates have knowingly engaged in certain activities, transactions or dealings relating to Iran or with the Government of Iran or certain designated natural persons or entities involved in terrorism or the proliferation of weapons of mass destruction during the period covered by the report. The required disclosure includes disclosure of activities not prohibited by U.S. or other law even if conducted outside the U.S. by non-U.S. affiliates in compliance with local law. The registrants investment adviser UBS Asset Management (Americas) Inc. is an indirect subsidiary of UBS Group AG. As a result, it appears that registrant is required to provide the disclosures set forth below pursuant to Section 219 of ITRA and Section 13(r) of the Exchange Act. It should therefore be noted that the Annual Report on Form 20-F for the year ended December 31, 2015 filed by UBS Group AG with the Securities and Exchange Commission on March 18, 2016 contained the disclosure set forth below (with all references contained therein to UBS being references to UBS Group AG and its consolidated subsidiaries). By providing this disclosure, the registrant does not admit that it is an affiliate of UBS Group AG or UBS Asset Management (Americas) Inc.
The disclosure relates solely to activities conducted by UBS Group AG and its consolidated subsidiaries.
Disclosure Pursuant To Section 219 of the Iran Threat Reduction and Syrian Human Rights Act
Section 219 of the U.S. Iran Threat Reduction and Syria Human Rights Act of 2012 (ITRA) added Section 13(r) to the U.S. Securities Exchange Act of 1934, as amended (the Exchange Act) requiring each SEC reporting issuer to disclose in its annual and, if applicable, quarterly reports whether it or any of its affiliates have knowingly engaged in certain activities, transactions or dealings relating to Iran or with the Government of Iran or certain designated natural persons or entities involved in terrorism or the proliferation of weapons of mass destruction during the period covered by the report. The required disclosure may include reporting of activities not prohibited by U.S. or other law, even if conducted outside the U.S. by non-U.S. affiliates in compliance with local law. Pursuant to Section 13(r) of the Exchange Act, we note the following for the period covered by the annual report.
UBS has a Group Sanctions Policy that prohibits transactions involving sanctioned countries, including Iran, and sanctioned individuals and entities. However, UBS maintains one account involving the Iranian government under the auspices of the United Nations in Geneva after agreeing with the Swiss government that it would do so only under certain conditions. These
conditions include that payments involving the account must: (1) be made within Switzerland; (2) be consistent with paying rent, salaries, telephone and other expenses necessary for its operations in Geneva; and (3) not involve any Specially Designated Nationals (SDN) blocked or otherwise restricted under U.S. or Swiss law. In 2015, the gross revenues for this UN-related account were approximately USD 9,639 which were generated by fees charged to the account; the net profit was approximately USD 6,664 after deductions were taken for UBS internal costs for maintaining the account. UBS AG intends to continue maintaining this account pursuant to the conditions it has established with the Swiss Government and consistent with its Group Sanctions Policy.
As previously reported, UBS had certain outstanding legacy trade finance arrangements issued on behalf of Swiss client exporters in favor of their Iranian counterparties. At the time these trade finance arrangements were initiated in or about 2000, none of the Iran banks involved were WMD-designated. In February 2012 UBS ceased accepting payments on these outstanding export trade finance arrangements and worked with the Swiss government who insured these contracts (Swiss Export Risk Insurance SERV). On December 21, 2012, UBS and the SERV entered into certain Transfer and Assignment Agreements under which SERV purchased all of UBSs remaining receivables under or in connection with Iran-related export finance transactions. Hence, the SERV is the sole beneficiary of said receivables. There was no financial activity involving Iran in connection with these trade finance arrangements in 2015, and no gross revenue or net profit.
In connection with these trade finance arrangements, UBS has maintained one existing account relationship with an Iranian bank. This account was established prior to the U.S. designation of this bank and maintained due to the existing trade finance arrangements. In 2007, following the designation of the bank pursuant to sanctions issued by the US, UN and Switzerland, the account was blocked under Swiss law and remained subject to blocking requirements until January 2016. Client assets as of December 2015 were USD 3,174. As there have been no transactions involving this account in 2015 other than general account fees, there are no gross revenues or net profits to report for 2015.
Pursuant to the Joint Plan of Action (JPOA) and the Joint Comprehensive Plan of Action (JCPOA), the parties to these Plans, including the US, agreed to facilitate certain payments regarding funds of the Central Bank of Iran (CBI). The Swiss State Secretariat for Economic Affairs (SECO) was contacted in this regard by the US Office of Foreign Assets Control (OFAC), and SECO then approached UBS to request assistance in several such transfers of oil revenues for humanitarian purposes. On the basis of this request and specific written approval and guidance from OFAC regarding the transactions, UBS processed several transfers from the Bank of Japan to certain special purpose accounts at a third party bank in Switzerland. Following Implementation Day, the CBI was removed from the SDN list. These transactions yielded negligible gross revenues and no net profits.
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