0001104659-22-032494.txt : 20220310 0001104659-22-032494.hdr.sgml : 20220310 20220310170918 ACCESSION NUMBER: 0001104659-22-032494 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20211231 FILED AS OF DATE: 20220310 DATE AS OF CHANGE: 20220310 EFFECTIVENESS DATE: 20220310 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UBS FUNDS CENTRAL INDEX KEY: 0000886244 IRS NUMBER: 367056204 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-06637 FILM NUMBER: 22730025 BUSINESS ADDRESS: STREET 1: C/O UBS ASSET MANAGEMENT (AMERICAS) INC STREET 2: ONE NORTH WACKER DR. CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 312-525-7100 MAIL ADDRESS: STREET 1: C/O UBS ASSET MANAGEMENT (AMERICAS) INC STREET 2: ONE NORTH WACKER DR. CITY: CHICAGO STATE: IL ZIP: 60606 FORMER COMPANY: FORMER CONFORMED NAME: BRINSON FUNDS INC DATE OF NAME CHANGE: 19920929 0000886244 S000002979 UBS GLOBAL ALLOCATION FUND C000008182 CLASS A BNGLX C000008185 CLASS P BPGLX 0000886244 S000002980 UBS International Sustainable Equity Fund C000008186 CLASS A BNIEX C000008189 CLASS P BNUEX C000222877 Class P2 0000886244 S000002985 UBS U.S. SMALL CAP GROWTH FUND C000008206 CLASS A BNSCX C000008209 CLASS P BISCX 0000886244 S000003134 UBS Emerging Markets Equity Opportunity Fund C000008502 CLASS P UEMPX C000200986 CLASS P2 EMPTX 0000886244 S000003135 UBS DYNAMIC ALPHA FUND C000008503 CLASS A BNAAX C000008506 CLASS P BNAYX 0000886244 S000047156 UBS Municipal Bond Fund C000147812 Class A UMBAX C000147814 Class P UMBPX 0000886244 S000053041 UBS Total Return Bond Fund C000166868 Class A UTBAX C000166870 Class P UTBPX 0000886244 S000063381 UBS Engage For Impact Fund C000205441 Class P UEIPX C000225935 Class P2 0000886244 S000063382 UBS Sustainable Development Bank Bond Fund C000205443 Class P2 C000205444 Class P UDBPX 0000886244 S000065858 UBS All China Equity Fund C000212772 Class P 0000886244 S000068969 UBS US Dividend Ruler Fund C000220414 Class P 0000886244 S000068970 UBS US Quality Growth At Reasonable Price Fund C000220415 Class P N-CSRS 1 tm221465d1_ncsrs.htm N-CSRS

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM N-CSR

 

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

 

Investment Company Act file number: 811-06637

 

 

 

The UBS Funds 

 

 (Exact name of registrant as specified in charter)

 

One North Wacker Drive, Chicago, IL 60606-2807

 

(Address of principal executive offices) (Zip code)

 

Keith A. Weller, Esq.

UBS Asset Management

One North Wacker Drive

Chicago, IL 60606
(Name and address of agent for service)
 
Copy to:

Bruce Leto, Esq.

Stradley Ronon Stevens & Young, LLP

2600 One Commerce Square

Philadelphia, PA 19103-7098

 

Registrant’s telephone number, including area code: 312-525 7100

 

Date of fiscal year end: June 30

 

Date of reporting period: December 31, 2021

 

 

 

 

Item 1. Reports to Stockholders.

 

 

 

The UBS Funds

Semiannual Report | December 31, 2021

Table of contents

  

Page

  

President's letter

    

1

    

Market commentary

    

3

    

UBS All China Equity Fund

    

5

    

UBS Dynamic Alpha Fund

    

12

    

UBS Global Allocation Fund

    

24

    

UBS Emerging Markets Equity Opportunity Fund

    

37

    

UBS Engage For Impact Fund

    

42

    

UBS International Sustainable Equity Fund

    

49

    

UBS US Dividend Ruler Fund

    

57

    

UBS US Quality Growth at Reasonable Price Fund

    

63

    

UBS U.S. Small Cap Growth Fund

    

69

    

UBS Municipal Bond Fund

    

77

    

UBS Sustainable Development Bank Bond Fund

    

84

    

UBS Total Return Bond Fund

    

90

    

Glossary of terms used in the Portfolio of investments

    

104

    

Explanation of expense disclosure

    

105

    

Statement of assets and liabilities

    

108

    

Statement of operations

    

116

    

Statement of changes in net assets

    

120

    

Financial highlights

    

125

    

Notes to financial statements

    

138

    

General information

    

168

    

This page intentionally left blank.

President's letter

February 10, 2022

Dear Shareholder,

When I last wrote you after the first half of 2021, the world was experiencing continued economic recovery, reopening around the world and optimism in the markets. The second half of 2021 was more characterized by volatility and uncertainty due to new COVID-19 variants, inflation expectations and other world events.

US President Joe Biden and Congress passed a $1.2 trillion dollar infrastructure bill which promises to pump additional fiscal stimulus, supporting investors' economic outlook and markets. Vaccines continued to facilitate a sustainable recovery, with roughly 60% of the world's population having received at least one dose by the end of the year. But while growth exceeded expectations so did inflation, and while many stock markets continued to move higher so did bond yields.

Ongoing fallout from the COVID-19 Delta variant and the emergence of the fast-spreading Omicron variant also temporarily drove markets lower as pandemic-related outbreaks in critical links of global supply chains resulted in longer-than-expected supply disruptions, further feeding inflation and stymying growth in many countries.

And geopolitical events, such as the tense US—China relationship and the Russian aggression against Ukraine continued to provide headline risk that injected volatility into markets. Meanwhile, the global rates backdrop that had been supporting the economic recovery since the onset of the COVID-19 pandemic shifted.

In the second half, after a string of US CPI (consumer price index) readings that were the highest since the '80s, the Fed turned markedly more hawkish on inflation and began tapering its quantitative easing (QE) bond purchases and telegraphed ending the program and raising rates in 2022. As the Fed's stance evolved over time, it both roiled markets while calming many investors concerned about continued economic expansion over the longer term. The Bank of England raised rates in December for the first time since the pandemic began.

On the China growth and policy front, Beijing announced a slew of market-supportive, pro-growth policies in December 2021 to counter some of the economic pain from restructuring policies it implemented earlier in the year, which many had feared would derail China growth and help to slow the global economic expansion. And, the Peoples Bank of China turned policy 180°, abandoning its tightening cycle, aimed in part at curbing bubbly credit and housing markets, and lowered its key policy rates for the first time since April 2020.

Despite continued headwinds from COVID-19 and its variants, rising inflation, higher interest rates and supply chain challenges, the global economic recovery continued but momentum weakened.

Equity returns for the past six months were mixed globally with the US posting solid gains, international developed equities less so and emerging markets falling in the second half of 2021. Fixed Income market returns globally were generally weak, with a few bright spots, notably, US high yield, where investors sought out the additional spread, and China government bonds which saw a flight to quality, as other credits sectors came under duress. And strong demand, low inventories and supply challenges were a 'trifecta' pushing commodity markets higher in the second half of 2021.

So it appears volatility is likely back with us for the longer-term as markets and investors continue to digest potential threats to growth, rising inflation and interest rates against a backdrop of uncertainty around geopolitics and developments in the ongoing recovery from the COVID-19 pandemic, which has turned from a sprint into a marathon.


1

President's letter

Building a genuinely diversified portfolio capable of delivering growth amid uncertainty and volatility is as challenging as ever. That said, we believe that there are many unique and compelling opportunities across global asset classes and that the right strategies in the hands of skilled investment professionals have the potential to deliver better investment outcomes for our clients.

As always, we thank you for being a part of the UBS family of funds.

Sincerely,

Igor Lasun
President
The UBS Funds
Managing Director
UBS Asset Management (Americas) Inc.


2

The markets in review

The economic expansion continues

Despite continued headwinds from COVID-19 and its variants, rising inflation, higher interest rates, and supply chain challenges, the US economy continued to expand at a healthy pace overall. A number of factors supported the economy, including continued fiscal spending, monetary policy accommodation by the US Federal Reserve Board (the "Fed") and robust job growth. Looking back, first quarter 2021 US annualized gross domestic product ("GDP") rose by 6.3%. GDP then grew 6.7% and 2.3% over the second and third quarters of the year, respectively. Finally, the Commerce Department's initial estimate for fourth quarter annualized GDP growth—released after the reporting period ended—was 6.9%.

While the Fed maintained the federal funds rate in a record-low range between 0.00% and 0.25% in 2021, toward the end of the year it signaled a shift in its monetary policy. With inflation remaining elevated and no longer viewed as being "transitory," in November the Fed announced that it would start tapering its monthly purchase of Treasury and agency mortgage-backed securities. At its next meeting in December, the central bank further reduced its bond purchases, which are currently set to end in March 2022. The Fed may then start raising rates, and it anticipates three rate hikes in 2022. Overseas, the Bank of England raised rates for the first time since the pandemic began in December. However, both the European Central Bank and Bank of Japan have hinted that they may not raise rates in 2022.

From a global perspective, in its October 2021 World Economic Outlook, the International Monetary Fund ("IMF") said, "The global recovery continues but the momentum has weakened, hobbled by the pandemic. Fueled by the highly transmissible Delta variant, the recorded global COVID-19 death toll has risen close to 5 million and health risks abound, holding back a full return to normalcy. Pandemic outbreaks in critical links of global supply chains have resulted in longer-than-expected supply disruptions, further feeding inflation in many countries." Overall, risks to economic prospects have increased, and policy trade-offs have become more complex. The IMF expects 2021 GDP growth in the Eurozone, UK and Japan will be 5.0%, 6.8% and 2.4%, respectively. For comparison purposes, the GDP of these economies declined -6.3%, -9.8% and -4.6%, respectively, in 2020.

Developed country equities move higher

Equities in developed countries generated positive returns during the six-months ended December 31, 2021. Supporting the market were the ongoing COVID-19 vaccine rollout, monetary and fiscal policy initiatives and corporate profits that often exceeded expectations. While there were some setbacks, they proved to be temporary and investor demand for equities was solid. For the six-months ended December 31, 2021, the S&P 500 Index1 gained 11.67% and ended the year near an all-time high. Outside the US, international developed equities, as measured by the MSCI EAFE Index (net),2 returned 2.24%. However, emerging markets equities, as measured by the MSCI Emerging Markets Index (net),3 fell 9.30%.

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

2  The MSCI EAFE Index (net) is an index of stocks 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.

3  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

The overall fixed income market was weak

The overall global fixed income market generated weak results over the reporting period. As mentioned, with inflation moving higher the Fed and Bank of England, along with a number of emerging market central banks, started removing monetary policy accommodation. In the US, both short- and long-term Treasury yields moved higher (bond yields and prices move in the opposite direction). For the year as a whole, the yield on the US 10-year Treasury rose from 1.45% to 1.52%. 10-year government bond yields outside the US generally moved higher as well. The overall US bond market, as measured by the Bloomberg US Aggregate Index,4 returned 0.06% during the six-months ended December 31, 2021. Returns of riskier fixed income securities were mixed. High yield bonds, as measured by the ICE BofAML US High Yield Cash Pay Constrained Index,5 gained 1.63%. Elsewhere, emerging markets debt, as measured by the J.P. Morgan Emerging Markets Bond Index Global (EMBI Global),6 returned -0.52%.

4  The Bloomberg 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.

5  The ICE BofAML 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.

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


4

UBS All China Equity Fund

Portfolio performance

For the six months ended December 31, 2021, the UBS All China Equity Fund (the "Fund") returned -18.86%. The Fund's benchmark, the MSCI China All Shares Index (net) (the "Index"), returned -15.53% over the same time period. (Please note that the Fund's returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares, while the Index returns do not reflect the deduction of fees and expenses.)

The Fund's performance was driven primarily by stock selection decisions.

Portfolio performance summary1

What worked:

•  Within stock selection, Kweichow Moutai was the top contributor to Fund performance for the six-month period.

  – Moutai's share price rose after the company raised the prices of some of its products. This increased investor anticipation that the core product line would see price hikes, as well. (For details, see "Portfolio highlights.")

•  Several other stock selection decisions benefited performance during the reporting period.

  – NetEase, a gaming company, outperformed after the company's third quarter results showed that its top line and deferred revenue growth, a good indication of fourth quarter revenue, outperformed market expectations. We expect NetEase to have a strong product cycle next year, including the release of its Naraka Bladepoint and Harry Potter games. These new games should help with the company's expansion beyond Japan, its current key overseas market, to Europe and the US. (For details, see "Portfolio highlights.")

  – Shandong Pharmaceutical Glass, Shandong Pharmaceutical rose as a vaccine beneficiary amid concerns over the new COVID-19 variant, Omicron. Price increases were implemented in November to mitigate the rising cost of raw materials.

  – Hong Kong Exchanges & Clearing outperformed on the back of expectations for a stronger pipeline of initial public offerings (IPOs). The company also benefited from being viewed as relatively more immune to local policy changes.

  – The decision not to hold Pinduoduo contributed to relative performance during the reporting period. The stock underperformed as competition among e-commerce platforms has intensified. Further, a rise in US bond yields triggered risk aversion among investors, which hurt stocks with high valuations. In addition, Pinduoduo was negatively impacted by concerns over ADR de-listing risks related to the Holding Foreign Companies Accountable Act (HFCAA). We believe it is not yet clear whether Pinduoduo would be able to sustain its growth without user discounts.

What didn't work:

•  Certain stock selection decisions made a negative contribution to Fund returns during the reporting period.

  – Shares of Chinasoft International outperformed earlier, but pulled back after reporting weaker-than-expected 2021 earnings due to short-term margin pressures. Increasing labor input costs, higher research & development (R&D) expenses, and the resurgence of Covid-19 cases in China all caused delays in projects. We continue to hold this stock.

1  For a detailed commentary on the market environment in general during the reporting period, see page 3.


5

UBS All China Equity Fund

  – We added to the Fund's position in Ping An Insurance after the stock price fell to attractive levels based on weaker sentiment and concerns that Evergrande's missed interest payments may negatively impact Ping An Insurance. However, the company publicly disclosed that it does not have any direct exposure to Evergrande, and we believe the company's real estate exposure is manageable. We also added to Ping An Insurance as we believe it offers the best exposure to structural growth in China's life insurance and long-term financial planning markets. We continue to hold this stock. (For details, see "Portfolio highlights.")

  – Jinke Smart Services fell along with negative sentiment regarding the Chinese property sector. The market has concerns about whether the property management business will continue to receive new projects from its related developers. Jinke has historically relied more on third-party development instead, and has improved its independence by introducing Boyu Capital as a strategic investor to the company. We continue to hold this stock.

  – Shares of Alibaba Group fell on concerns of weaker-than-expected growth in core commerce in China, partly due to macroeconomic weakness and increased competition. Alibaba also lowered its earnings guidance for fiscal year 2022. The stock is trading at attractive valuations, and the company is investing in growing its e-commerce business such as Taobao Deals. We believe Alibaba's investment in other businesses such as cloud and logistics may contribute more over time. We continue to hold this stock. (For details, see "Portfolio highlights.")

  – Ping An Healthcare fell on weak market sentiment about internet healthcare in China lacking a positive catalyst. The market is waiting for the final version of detailed regulations on internet healthcare. The company guided earnings expectations lower in October. We continue to hold this stock.

•  The Fund did not invest in derivatives during the reporting period.

Portfolio highlights

•  Tencent is the leading company in China's PC/mobile internet market, and provides services such as instant messaging, online gaming, social community, news and online music. Tencent has established several powerful online service platforms and accumulated a huge number of loyal customers. With its current strong position, we expect the company to ride on the mature business models and consistently grow its business going forward. Fast-growing online games—along with newly emerging mobile games, which is one of the largest revenue-generating segments—will likely contribute most to the company going forward.

•  Alibaba is a large e-commerce company. We believe that e-commerce penetration will continue to grow in China, even in the midst of a retail slowdown. Thus, we consider it a more defensive part of retail sales, and in our view Alibaba has the strongest position in China's e-commerce space.

•  Kweichow Moutai engages in the manufacture and distribution of Moutai liquor series products. Moutai is a Chinese premium liquor brand with strong pricing power and growth visibility. The share price is attractively valued, and the company offers the potential to benefit from state-owned enterprise (SOE) reform.

•  Netease is a leading online game company in China. It has a good track record for delivering blockbuster games, and has posted healthy growth for more than 10 years. We believe that Netease continues to have a strong game pipeline and will be able to deliver new revenue streams. The company is well-positioned as a leading player in China's online entertainment sectors, particularly online games and music.


6

UBS All China Equity Fund

•  We believe Ping An Insurance is well-placed to benefit from the structural growth in the investment and retirement needs of the aging Chinese population. Premium penetration remains low compared to more developed Asian economies. The company's valuation looks attractive at current levels.

This letter is intended to assist shareholders in understanding how the Fund performed during the six months ended December 31, 2021. The views and opinions in the letter were current as of February 10, 2022. 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 website at www.ubs.com/am-us.


7

UBS All China Equity Fund

Average annual total returns for periods ended 12/31/21 (unaudited)

  

6 months

  

1 year

  

Inception1

  

Class P2

    

(18.86

)%

    

N/A

      

(32.29

)%

  

MSCI China All Shares Index (net)3

    

(15.53

)

    

(12.91

)%

    

(25.15

)

  

The annualized gross and net expense ratios, respectively, for each class of shares as in the October 28, 2021 prospectuses were as follows: Class P—17.70% and 1.13%. 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., the Fund's investment advisor and administrator ("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, such as proxy-related 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 28, 2022, do not exceed 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 to the extent such reimbursement can be made during the three fiscal years following the date on which such fee waivers and expense reimbursements were made, provided that the reimbursement of the Advisor by the Fund will not cause the Fund to exceed the lesser of any applicable expense limit that is in place for the Fund (i) at the time of the waiver or reimbursement or (ii) at the time of the recoupment. 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  Inception date of Class P of UBS All China Equity Fund is February 23, 2021.

2  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

3  The MSCI China All Shares 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.

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


8

UBS All China Equity Fund

Portfolio statistics and industry diversification—(unaudited)1

As a percentage of net assets as of December 31, 2021

Top ten holdings

Kweichow Moutai Co. Ltd., Class A

    

13.6

%

  

Tencent Holdings Ltd.

    

9.5

    

NetEase, Inc.

    

7.0

    

Alibaba Group Holding Ltd.

    

6.5

    

Ping An Insurance Group Co. of China Ltd., Class H

    

5.1

    

Hong Kong Exchanges & Clearing Ltd.

    

4.9

    

Jiangsu Hengrui Medicine Co. Ltd., Class A

    

4.9

    

China Merchants Bank Co. Ltd., Class H

    

4.4

    

Wuliangye Yibin Co. Ltd., Class A

    

2.9

    

Ping An Bank Co. Ltd., Class A

    

2.7

    

Total

    

61.5

%

  

Top issuer breakdown by country or territory of origin

China

    

90.7

%

  

Hong Kong

    

6.6

    

United States

    

3.6

    

Total

    

100.9

%

  

 

Common stocks

      

Banks

    

7.1

%

  

Beverages

    

18.0

    

Capital markets

    

4.9

    

Chemicals

    

1.6

    

Construction materials

    

1.8

    

Diversified consumer services

    

0.1

    

Diversified financial services

    

2.3

    

Entertainment

    

9.6

    

Food products

    

1.3

    

Gas utilities

    

0.6

    

Health care equipment & supplies

    

1.6

    

Health care providers & services

    

0.3

    

Health care technology

    

0.4

    

Household durables

    

1.7

    

Insurance

    

6.8

    

Interactive media & services

    

9.5

    

Internet & direct marketing retail

    

8.4

    

IT services

    

1.8

    

Life sciences tools & services

    

1.2

    

Pharmaceuticals

    

9.2

    

Real estate management & development

    

6.0

    

Software

    

0.2

    

Textiles, apparel & luxury goods

    

2.3

    

Transportation infrastructure

    

0.6

    

Total common stocks

    

97.3

    

Short-term investments

    

3.6

    

Investment of cash collateral from securities loaned

    

0.3

    

Total investments

    

101.2

    

Liabilities in excess of other assets

    

(1.2

)

  

Net assets

    

100.0

%

  

1  The portfolio is actively managed and its composition will vary over time.


9

UBS All China Equity Fund

Portfolio of investments

December 31, 2021 (unaudited)

    Number of
shares		  

Value

  

Common stocks: 97.3%

 

China: 90.7%

  

Alibaba Group Holding Ltd.*

    

6,100

    

$

93,015

    

Alibaba Health Information Technology Ltd.*,1

    

6,000

      

5,071

    

Anhui Conch Cement Co. Ltd., Class H

    

5,000

      

24,976

    

Anhui Gujing Distillery Co. Ltd., Class B

    

1,500

      

21,353

    

China Gas Holdings Ltd.

    

4,200

      

8,726

    

China Jinmao Holdings Group Ltd.

    

46,000

      

14,217

    

China Merchants Bank Co. Ltd., Class H

    

8,000

      

62,122

    

China Resources Land Ltd.

    

6,000

      

25,239

    

Chinasoft International Ltd.*

    

20,000

      

26,059

    

Country Garden Services Holdings Co. Ltd.

    

2,000

      

11,978

    

CSPC Pharmaceutical Group Ltd.

    

34,000

      

36,932

    

Far East Horizon Ltd.1

    

37,000

      

32,836

    

Hainan Meilan International Airport Co. Ltd., Class H*

    

3,000

      

9,253

    

Jiangsu Hengrui Medicine Co. Ltd., Class A

    

8,700

      

69,222

    

Jinke Smart Services Group Co. Ltd., Class H1

    

2,500

      

10,885

    

Kingsoft Corp. Ltd.

    

5,000

      

21,962

    

Kweichow Moutai Co. Ltd., Class A

    

600

      

192,991

    

Li Ning Co. Ltd.

    

3,000

      

32,837

    

Longfor Group Holdings Ltd.2

    

5,000

      

23,533

    

Meituan, Class B*,2

    

900

      

26,016

    

Midea Group Co. Ltd., Class A

    

2,100

      

24,320

    

NetEase, Inc.

    

4,900

      

98,973

    

NetEase, Inc., ADR

    

160

      

16,285

    

Ping An Bank Co. Ltd., Class A

    

15,000

      

38,787

    

Ping An Healthcare and Technology Co. Ltd.*,1,2

    

1,200

      

4,363

    

Ping An Insurance Group Co. of China Ltd., Class H

    

10,000

      

72,010

    

Shandong Pharmaceutical Glass Co. Ltd., Class A

    

3,400

      

23,419

    

TAL Education Group, ADR*

    

468

      

1,839

    

Tencent Holdings Ltd.

    

2,300

      

134,740

    

Tuya, Inc., ADR*

    

400

      

2,500

    

Wanhua Chemical Group Co. Ltd., Class A

    

1,400

      

22,186

    
    Number of
shares		  

Value

  

Common stocks—(concluded)

  

China—(concluded)

  

Wuliangye Yibin Co. Ltd., Class A

    

1,200

    

$

41,923

    

Wuxi Biologics Cayman, Inc.*,2

    

1,500

      

17,804

    

Yihai International Holding Ltd.*,1

    

4,000

      

18,493

    

Yunnan Baiyao Group Co. Ltd., Class A

    

1,500

      

24,630

    
         

1,291,495

    

Hong Kong: 6.6%

  

AIA Group Ltd.

    

2,400

      

24,192

    

Hong Kong Exchanges & Clearing Ltd.

    

1,200

      

70,084

    
         

94,276

    
Total common stocks
(cost $1,857,247)		        

1,385,771

    

Short-term investments: 3.6%

 

Investment companies: 3.6%

  
State Street Institutional U.S. Government
Money Market Fund, 0.030%3
(cost $50,472)		    

50,472

      

50,472

    

Investment of cash collateral from securities loaned: 0.3%

 

Money market funds: 0.3%

  
State Street Navigator Securities Lending
Government Money Market Portfolio, 0.030%3
(cost $4,332)		    

4,389

      

4,332

    
Total investments: 101.2%
(cost $1,912,051)		        

1,440,575

    

Liabilities in excess of other assets: (1.2%)

        

(16,890

)

  

Net assets: 100.0%

      

$

1,423,685

    

For a listing of defined portfolio acronyms that are used throughout the Portfolio of investments as well as the tables that follow, please refer to the Glossary of terms used in the Portfolio of investments.


10

UBS All China Equity Fund

Portfolio of investments

December 31, 2021 (unaudited)

Fair valuation summary

The following is a summary of the fair valuations according to the inputs used as of December 31, 2021 in valuing the Fund's investments. In the event a Fund holds investments for which fair value is measured using the NAV per share practical expedient (or its equivalent), a separate column will be added to the fair value hierarchy table; this is intended to permit reconciliation to the amounts presented in the Portfolio of investments:

Description

   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

  

$

1,385,771

    

$

—

    

$

—

    

$

1,385,771

    

Short-term investments

    

—

      

50,472

      

—

      

50,472

    

Investment of cash collateral from securities loaned

    

—

      

4,332

      

—

      

4,332

    

Total

  

$

1,385,771

    

$

54,804

    

$

—

    

$

1,440,575

    

At December 31, 2021, there were no transfers in or out of Level 3.

Portfolio footnotes

*  Non-income producing security.

1  Security, or portion thereof, was on loan at the period end.

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. Securities exempt from registration pursuant to Rule 144A, in the amount of $71,716, represented 5.0% of the Fund's net assets at period end.

3  Rates shown reflect yield at December 31, 2021.

See accompanying notes to financial statements.
11

UBS Dynamic Alpha Fund

Portfolio performance

For the six months ended December 31, 2021, Class A shares of UBS Dynamic Alpha Fund (the "Fund") returned 0.12% (Class A shares returned -5.42% after the deduction of the maximum sales charge), while Class P shares returned 0.26%. For purposes of comparison, the ICE BofA Merrill Lynch US Treasury 1-5 Year Index retuned -0.69% during the same time period, the MSCI World Index (net) returned 7.76%, and the FTSE One-Month US Treasury Bill Index returned 0.03%. (Class P shares have lower expenses than the other share class of the Fund.)

Returns for all share classes over various time periods are shown on page 14; please note that these returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares, while the Index returns do not reflect the deduction of fees and expenses.

Overall, the Fund delivered strong risk-adjusted and absolute returns over the reporting period and comfortably outperformed its benchmark and return objective. 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 performance. Derivatives were just one tool, among others, that we used to implement our market allocation strategy.

The Fund generated strong performance over the first half of the period, with most of our trades and directional exposures contributing to results. It was a period of reflation, reopening and optimism. Global growth accelerated, yield curves steepened early in the period, and inflation expectations rose. Against this backdrop, equites meaningfully outperformed bonds and our cyclicals value trades added value. Finally, attractively valued emerging market currencies benefited from a weaker US dollar and gradually improving global financial conditions. The Fund was exposed to all those factors.

The following two months were less constructive and represented more of a mixed bag for the Fund on an absolute basis. While our equity exposure continued to perform well overall, we observed a countertrend, with a move back to pandemic winners and away from reflation exposures. This was driven by investors becoming more cautious due to a peak in global growth momentum. In addition, investor sentiment was impacted by the new Omicron variant which was several times more contagious than previous variants. In turn, investors turned more cautious, bond yields began to decline, and the US dollar strengthened in anticipation of weaker near-term global growth. December, however, was again an exceptionally good month for the Fund, significantly outperforming other unconstrained strategies (e.g., as measured by the HFRX Global Hedge Fund Index), closing out the year on strong footing.

We remain positioned for a strong growth environment given financial and monetary conditions remain accommodative, vaccines continue to work and protect against severe disease and should allow for a gradual ongoing reopening of additional parts of the global economy.

Portfolio performance summary1

What worked:

•  The portfolio's strategic allocation to equities and credit contributed to performance.

  – Our strategic allocation to global equities delivered strong positive returns over the reporting period as the global economy continued to recover.

  – Fixed income was a slight detractor overall as yields rose by almost 80 basis points (i.e., 0.80%) over the reporting period. An exception was high-yield corporate bonds, which were additive for returns due to narrowing credit spreads.

1  For a detailed commentary on the market environment in general during the reporting period, see page 3.


12

UBS Dynamic Alpha Fund

•  Overall, market allocation decisions were additive for results.

  – We maintained an equity overweight for most of the reporting period, but decided to assume a more neutral stance (at least from a risk [beta] point of view), as we transitioned into second quarter of 2021 (prior to the beginning of the reporting period), as several of our key risk indicators turned more negative. First, economic momentum was peaking and markets historically struggle during such an adjustment period. Second, our behavioral sentiment indicators were softening, as the media increasingly focused on the aforementioned peak in global growth. Lastly, we were concerned that a quick rise in yields could pressure lofty equity valuations.

  – Within equities, we maintained a pro-cyclical value positioning for most of the reporting period, with the rational of further earnings upside from a reopening of the global economy. Most of the trades within this category contributed to performance, such as long Stoxx600 Banks versus Eurostoxx50, long FTSE MIB Italy versus Stoxx50 and long emerging versus developed market equities.

•  Overall, active currency positions contributed to results.

  – The largest contributor to performance was a short US dollar Norwegian krone trade. This was beneficial given hawkish rhetoric from the Norges Bank and a procyclical growth improvement which similarly helped long emerging market positions, such as the Brazilian real and Mexican peso against the US dollar, which were additive to performance.

What didn't work:

•  Certain market allocation decisions detracted from results.

  – Within equities, the trades that detracted were generally more defensively minded, such as a long UK versus EuroStoxx50 position and a long Topix versus MSCI World trade. Both underperformed slightly more than we anticipated, driven by some idiosyncratic developments in their respective markets. For example, flows and sentiment remained weak for the Topix, largely due to slow progress on vaccine distribution and approval which delayed the reopening and increased the vulnerability to COVID-19 variants. However, we anticipated Japanese equities to underperform less given their fundamental strength, cheapness and the ongoing Bank of Japan buying during stress periods. UK equities also underperformed for several reasons, but probably the most important were: 1) the pound's strength relative to other major trading currencies, 2) increasing instead of falling risk premium on UK stocks following the "skinny" Brexit deal and 3) the strength of broader eurozone equities during the first half of 2021. However, we retained both trades as they continued to improve the risk-adjusted return of the overall portfolio given our other positions.

  – There were no meaningful detractors on the relative value fixed income side, as our yield curve steepener position and our short US duration stance thereafter added to overall performance.

•  Certain active currency positions detracted from performance.

  – The Fund's short positions in developed commodity currencies, such as the Canadian dollar and New Zealand dollar against the US dollar, were the largest detractors over the period amidst the improved global growth outlook and a rebound in commodity prices.

This letter is intended to assist shareholders in understanding how the Fund performed during the six months ended December 31, 2021. The views and opinions in the letter were current as of February 10, 2022. 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 website at www.ubs.com/am-us.


13

UBS Dynamic Alpha Fund

Average annual total returns for periods ended 12/31/21 (unaudited)

  

6 months

  

1 year

  

5 years

  

10 years

  

Before deducting maximum sales charge

  

Class A1

    

0.12

%

    

4.08

%

    

2.87

%

    

2.73

%

  

Class P2

    

0.26

      

4.42

      

3.12

      

2.99

    

After deducting maximum sales charge

  

Class A1

    

(5.42

)%

    

(1.61

)%

    

1.69

%

    

2.15

%

  

ICE BofAML US Treasury 1-5 Year Index3

    

(0.69

)

    

(1.10

)

    

1.88

      

1.34

    

MSCI World Index (net)4

    

7.76

      

21.82

      

15.03

      

12.70

    

FTSE One-Month US Treasury Bill Index5

    

0.03

      

0.04

      

1.06

      

0.56

    

The annualized gross and net expense ratios, respectively, for each class of shares as in the October 28, 2021 prospectuses were as follows: Class A—2.32% and 1.38%; Class P—2.09% and 1.13%. 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., the Fund's investment advisor and administrator ("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, dividend expense and security loan fees for securities sold short, and extraordinary expenses, such as proxy-related expenses), through the period ending October 28, 2022, do not exceed 1.35% for Class A 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 to the extent such reimbursement can be made during the three fiscal years following the date on which such fee waivers and expense reimbursements were made, provided that the reimbursement of the Advisor by the Fund will not cause the Fund to exceed the lesser of any applicable expense limit that is in place for the Fund (i) at the time of the waiver or reimbursement or (ii) at the time of the recoupment. 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  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.

3  The ICE BofA 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.

4  The MSCI World 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.

5  The FTSE 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.

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


14

UBS Dynamic Alpha Fund

Portfolio statistics and industry diversification—(unaudited)1,2

As a percentage of net assets as of December 31, 2021

Top ten holdings

U.S. Treasury Bills,
0.450% due 03/10/22		    

13.9

%

  
U.S. Treasury Bills,
0.114% due 06/02/22		    

11.2

    

iShares MSCI International Value Factor ETF

    

4.6

    
U.S. Treasury Notes,
2.000% due 02/15/22		    

3.5

    
Bundesobligation,
0.000% due 04/11/25		    

3.4

    

iShares MSCI USA Value Factor ETF

    

3.2

    
U.S. Treasury Notes,
0.250% due 05/31/25		    

3.2

    
New Zealand Government Inflation Linked Bond,
3.000% due 09/20/30		    

2.3

    
Ireland Government Bond,
1.000% due 05/15/26		    

1.9

    
Japan Government Ten Year Bond,
0.400% due 03/20/25		    

1.8

    

Total

    

49.0

%

  

Top five issuer breakdown by country or territory of origin

United States

    

52.9

%

  

Japan

    

5.7

    

Germany

    

4.8

    

United Kingdom

    

4.4

    

France

    

3.9

    

Total

    

71.7

%

  

Corporate bonds

  

Advertising

    

0.1

%

  

Aerospace & defense

    

0.2

    

Agriculture

    

0.6

    

Airlines

    

0.2

    

Apparel

    

0.0

†

  

Auto manufacturers

    

1.4

    

Banks

    

7.4

    

Chemicals

    

0.8

    

Commercial services

    

0.3

    

Computers

    

0.2

    

Diversified financial services

    

1.1

    

Electric

    

2.4

    

Engineering & construction

    

0.6

    

Gas

    

0.8

    

Healthcare-products

    

0.1

    

Insurance

    

2.7

    

Media

    

0.6

    

Mining

    

0.1

    

Miscellaneous manufacturers

    

0.2

    

Oil & gas

    

0.8

    

Pharmaceuticals

    

0.4

    

Pipelines

    

0.5

    

Real estate

    

0.3

    

Real estate investment trusts

    

0.8

    

Retail

    

0.0

†

  

Semiconductors

    

0.2

    

Software

    

0.1

    

Sovereign

    

0.4

    

Supranationals

    

0.1

    

Telecommunications

    

0.3

    

Transportation

    

0.3

    

Water

    

1.3

    

Total corporate bonds

    

25.3

    

Mortgage-backed securities

    

0.0

†

  

Non-U.S. government agency obligations

    

22.9

    

U.S. Treasury obligations

    

35.5

    

Exchange traded funds

    

7.8

    

Investment of cash collateral from securities loaned

    

4.1

    

Total investments

    

95.6

    

Other assets in excess of liabilities

    

4.4

    

Net assets

    

100.0

%

  

†  Amount represents less than 0.05% or (0.05%).

1  The portfolio is actively managed and its composition will vary over time.

2  Figures represent the breakdown of direct investments of UBS Dynamic Alpha Fund. Figures would be different if a breakdown of the underlying investment companies and exchange traded funds was included.


15

UBS Dynamic Alpha Fund

Portfolio of investments

December 31, 2021 (unaudited)

    Face
amount1		  

Value

  

Corporate bonds: 25.3%

 

Australia: 0.9%

  
APT Pipelines Ltd.
4.200%, due 03/23/252		    

15,000

    

$

16,042

    
Aurizon Network Pty Ltd.
4.000%, due 06/21/242		  

AUD

30,000

      

23,555

    
Ausgrid Finance Pty Ltd.
3.750%, due 10/30/242		  

AUD

30,000

      

22,990

    
Commonwealth Bank of Australia
(fixed, converts to FRN on 10/03/24),
1.936%, due 10/03/292		  

EUR

100,000

      

118,162

    
Westpac Banking Corp.
2.000%, due 01/13/23		    

30,000

      

30,449

    
(fixed, converts to FRN on 09/21/27),
5.000%, due 09/21/273		    

80,000

      

83,286

    
         

294,484

    

Belgium: 0.4%

  
RESA SA
1.000%, due 07/22/262		  

EUR

100,000

      

117,260

    

Bermuda: 0.1%

  
XLIT Ltd.
5.250%, due 12/15/43		    

20,000

      

27,500

    

Canada: 0.2%

  
Canadian Pacific Railway Co.
1.350%, due 12/02/244		    

60,000

      

60,072

    
TELUS Corp.
3.750%, due 01/17/25		  

CAD

15,000

      

12,453

    
         

72,525

    

China: 0.1%

  
NXP BV/NXP Funding LLC/NXP USA, Inc.
2.700%, due 05/01/255		    

5,000

      

5,162

    

3.150%, due 05/01/275

    

15,000

      

15,768

    
         

20,930

    

France: 2.5%

  
AXA SA
(fixed, converts to FRN on 05/28/29),
3.250%, due 05/28/492		  

EUR

100,000

      

127,546

    
Credit Agricole SA
1.375%, due 03/13/252		  

EUR

100,000

      

118,330

    
Electricite de France SA
5.625%, due 01/22/24		    

100,000

      

105,471

    
SCOR SE
(fixed, converts to FRN on 03/13/29),
5.250%, due 03/13/292,3		    

200,000

      

208,160

    
Terega SA
2.200%, due 08/05/252		  

EUR

100,000

      

121,332

    
Unibail-Rodamco-Westfield SE
(fixed, converts to FRN on 04/25/26),
2.875%, due 01/25/262,3		  

EUR

100,000

      

114,071

    
         

794,910

    
    Face
amount1		  

Value

  

Corporate bonds—(continued)

  

Germany: 1.4%

  
ADLER Group SA
1.500%, due 07/26/242,6		  

EUR

100,000

    

$

99,334

    
Kreditanstalt fuer Wiederaufbau
2.625%, due 01/25/22		    

110,000

      

110,144

    
Volkswagen International Finance N.V.
1.125%, due 10/02/232		  

EUR

100,000

      

116,130

    
Series NC6,
(fixed, converts to FRN on 06/27/24),
3.375%, due 06/27/24 2,3		  

EUR

100,000

      

119,892

    
         

445,500

    

Guernsey: 0.4%

  
Globalworth Real Estate Investments Ltd.
3.000%, due 03/29/252		  

EUR

100,000

      

119,599

    

Ireland: 1.0%

  
AerCap Ireland Capital DAC / AerCap
Global Aviation Trust
1.650%, due 10/29/24		    

300,000

      

299,456

    

Japan: 0.1%

  
Mitsubishi UFJ Financial Group, Inc.
2.665%, due 07/25/22		    

25,000

      

25,293

    

Mexico: 1.0%

  
Mexico City Airport Trust
5.500%, due 07/31/472		    

200,000

      

199,663

    
Petroleos Mexicanos
3.750%, due 02/21/242		  

EUR

100,000

      

116,878

    
         

316,541

    

Poland: 0.4%

  
Tauron Polska Energia SA
2.375%, due 07/05/272		  

EUR

100,000

      

116,753

    

Spain: 2.0%

  
Banco Santander SA
3.250%, due 04/04/262		  

EUR

100,000

      

125,410

    

4.000%, due 01/19/232

  

AUD

200,000

      

149,997

    
Canal de Isabel II Gestion SA
1.680%, due 02/26/252		  

EUR

100,000

      

118,495

    
Iberdrola International BV
(fixed, converts to FRN on 03/26/24),
2.625%, due 03/26/242,3		  

EUR

100,000

      

119,307

    
Redexis Gas Finance BV
1.875%, due 04/27/272		  

EUR

100,000

      

120,056

    
         

633,265

    

Supranationals: 0.5%

  
Corp Andina de Fomento
4.500%, due 06/05/252		  

AUD

35,000

      

27,071

    
European Financial Stability Facility
0.500%, due 07/11/252		  

EUR

100,000

      

117,139

    
         

144,210

    


16

UBS Dynamic Alpha Fund

Portfolio of investments

December 31, 2021 (unaudited)

    Face
amount1		  

Value

  

Corporate bonds—(continued)

  

Switzerland: 0.4%

  
Argentum Netherlands BV for Swiss Life AG
(fixed, converts to FRN on 06/16/25),
4.375%, due 06/16/252,3		  

EUR

100,000

    

$

126,231

    

United Kingdom: 4.3%

  
Anglian Water Services Financing PLC
4.500%, due 02/22/262		  

GBP

100,000

      

151,474

    
AstraZeneca PLC
3.500%, due 08/17/23		    

30,000

      

31,307

    
Barclays PLC
(fixed, converts to FRN on 10/06/22),
2.375%, due 10/06/232		  

GBP

100,000

      

136,694

    
BAT Capital Corp.
3.557%, due 08/15/27		    

35,000

      

36,708

    
BAT International Finance PLC
0.875%, due 10/13/232		  

EUR

100,000

      

115,249

    
Lloyds Banking Group PLC
2.250%, due 10/16/242		  

GBP

100,000

      

137,865

    
Natwest Group PLC
(fixed, converts to FRN on 06/25/23),
4.519%, due 06/25/24		    

200,000

      

209,225

    
Phoenix Group Holdings PLC
4.125%, due 07/20/222		  

GBP

150,000

      

206,245

    
Reynolds American, Inc.
4.450%, due 06/12/25		    

25,000

      

27,000

    
Virgin Money UK PLC
(fixed, converts to FRN on 04/24/25),
3.375%, due 04/24/262		  

GBP

100,000

      

139,713

    
WPP Finance 2010
3.750%, due 09/19/24		    

25,000

      

26,428

    
Yorkshire Water Finance PLC
(fixed, converts to FRN on 03/22/23),
3.750%, due 03/22/462		  

GBP

100,000

      

137,963

    
         

1,355,871

    

United States: 9.6%

  
3M Co.
2.650%, due 04/15/25		    

20,000

      

20,875

    
AbbVie, Inc.
3.450%, due 03/15/22		    

25,000

      

25,023

    
Air Products and Chemicals, Inc.
2.050%, due 05/15/30		    

20,000

      

20,117

    
Albemarle Corp.
5.450%, due 12/01/44		    

50,000

      

65,044

    
Altria Group, Inc.
4.400%, due 02/14/26		    

13,000

      

14,320

    
American Airlines Pass-Through Trust,
Series 2014-1, Class B,
4.375%, due 10/01/22		    

34,859

      

34,747

    
Apache Corp.
4.250%, due 01/15/44		    

60,000

      

60,750

    
AT&T, Inc.
4.350%, due 03/01/29		    

60,000

      

67,397

    
    Face
amount1		  

Value

  

Corporate bonds—(continued)

  

United States—(continued)

  
Bank of America Corp.
(fixed, converts to FRN on 12/20/22),
3.004%, due 12/20/23		    

90,000

    

$

91,860

    

3.875%, due 08/01/25

    

80,000

      

86,713

    
Boeing Co.
2.196%, due 02/04/26		    

20,000

      

19,995

    
Bristol-Myers Squibb Co.
3.875%, due 08/15/25		    

24,000

      

25,972

    
Broadcom, Inc.
3.150%, due 11/15/25		    

35,000

      

36,643

    
Charter Communications Operating LLC/Charter
Communications Operating Capital
4.500%, due 02/01/24		    

50,000

      

53,174

    
Chevron Phillips Chemical Co. LLC/Chevron
Phillips Chemical Co. LP
3.300%, due 05/01/235		    

120,000

      

123,574

    

5.125%, due 04/01/255

    

25,000

      

27,758

    
Chevron USA, Inc.
3.850%, due 01/15/28		    

20,000

      

22,143

    
Citigroup, Inc.
3.875%, due 10/25/23		    

130,000

      

137,011

    

4.600%, due 03/09/26

    

20,000

      

22,057

    
Comcast Corp.
3.950%, due 10/15/25		    

35,000

      

38,211

    
Costco Wholesale Corp.
1.600%, due 04/20/30		    

10,000

      

9,688

    
CVS Health Corp.
2.625%, due 08/15/24		    

35,000

      

36,239

    
Dell International LLC/EMC Corp.
5.300%, due 10/01/29		    

60,000

      

70,332

    
Diamondback Energy, Inc.
3.250%, due 12/01/26		    

50,000

      

52,731

    
Enable Midstream Partners LP
3.900%, due 05/15/247		    

25,000

      

26,104

    
Energy Transfer LP
4.500%, due 04/15/24		    

5,000

      

5,299

    
EnLink Midstream Partners LP
4.400%, due 04/01/24		    

10,000

      

10,450

    
ERAC USA Finance LLC
5.625%, due 03/15/425		    

35,000

      

47,404

    
Exelon Corp.
3.400%, due 04/15/26		    

15,000

      

15,978

    
Ford Motor Credit Co. LLC
3.021%, due 03/06/24		  

EUR

100,000

      

118,709

    
General Electric Co.,
Series A,
6.750%, due 03/15/32		    

6,000

      

8,182

    
General Motors Financial Co., Inc.
4.350%, due 04/09/25		    

90,000

      

96,829

    
Georgia Power Co.,
Series A,
2.100%, due 07/30/23		    

25,000

      

25,440

    
Glencore Funding LLC
4.875%, due 03/12/295		    

40,000

      

45,234

    


17

UBS Dynamic Alpha Fund

Portfolio of investments

December 31, 2021 (unaudited)

    Face
amount1		  

Value

  

Corporate bonds—(continued)

  

United States—(continued)

  
Goldman Sachs Group, Inc.
1.625%, due 07/27/262		  

EUR

40,000

    

$

48,056

    

3.375%, due 03/27/252

  

EUR

35,000

      

43,898

    

3.500%, due 04/01/25

    

90,000

      

95,169

    
Illinois Tool Works, Inc.
2.650%, due 11/15/26		    

45,000

      

47,190

    
JPMorgan Chase & Co.
3.200%, due 01/25/23		    

220,000

      

225,966

    

3.625%, due 12/01/27

    

60,000

      

64,651

    
Kinder Morgan, Inc.
5.625%, due 11/15/235		    

35,000

      

37,398

    
Liberty Mutual Group, Inc.
4.569%, due 02/01/295		    

25,000

      

28,728

    
Lincoln National Corp.
3.800%, due 03/01/28		    

70,000

      

76,797

    
Mastercard, Inc.
2.000%, due 03/03/25		    

20,000

      

20,505

    
Morgan Stanley
4.000%, due 07/23/25		    

85,000

      

92,118

    

4.350%, due 09/08/26

    

20,000

      

22,107

    
MPLX LP
4.250%, due 12/01/27		    

30,000

      

33,228

    
National Rural Utilities Cooperative
Finance Corp.
3.700%, due 03/15/29		    

15,000

      

16,505

    
NIKE, Inc.
2.400%, due 03/27/25		    

10,000

      

10,353

    
Oncor Electric Delivery Co. LLC
3.700%, due 11/15/28		    

25,000

      

27,514

    
Oracle Corp.
2.500%, due 04/01/25		    

20,000

      

20,469

    
PacifiCorp.
2.700%, due 09/15/30		    

5,000

      

5,147

    
Quanta Services, Inc.
0.950%, due 10/01/24		    

50,000

      

49,457

    
Raytheon Technologies Corp.
3.950%, due 08/16/25		    

25,000

      

27,108

    
Southern California Edison Co.,
Series E,
3.700%, due 08/01/25		    

20,000

      

21,354

    
Southern Co.
3.250%, due 07/01/26		    

35,000

      

37,026

    
Swiss Re Treasury U.S. Corp.
4.250%, due 12/06/425		    

30,000

      

36,754

    
Thermo Fisher Scientific, Inc.
1.215%, due 10/18/24		    

20,000

      

19,978

    
TWDC Enterprises 18 Corp.
1.850%, due 07/30/26		    

10,000

      

10,084

    
United Airlines Pass-Through Trust,
Series 2016-1, Class B,
3.650%, due 01/07/26		    

35,012

      

34,622

    
Verizon Communications, Inc.
3.376%, due 02/15/256		    

25,000

      

26,608

    
    Face
amount1		  

Value

  

Corporate bonds—(concluded)

  

United States—(concluded)

  
ViacomCBS, Inc.
4.750%, due 05/15/25		    

75,000

    

$

82,251

    
Virginia Electric and Power Co.,
Series A,
3.800%, due 04/01/28		    

20,000

      

21,889

    
Visa, Inc.
1.900%, due 04/15/27		    

25,000

      

25,358

    
Williams Cos., Inc.
4.300%, due 03/04/24		    

35,000

      

36,933

    
Xcel Energy, Inc.
4.800%, due 09/15/41		    

80,000

      

97,055

    
         

3,004,279

    
Total corporate bonds
(cost $7,585,075)		        

7,914,607

    

Mortgage-backed securities: 0.0%†

 

Cayman Islands: 0.0%†

  
LNR CDO IV Ltd.,
Series 2006-1A, Class FFX,
7.592%, due 05/28/435,8,9		    

8,000,000

      

0

    

United States: 0.0%†

  
Structured Adjustable Rate Mortgage
Loan Trust,
Series 2005-7, Class B11,
2.668%, due 04/25/3510		    

46,431

      

0

    
Total mortgage-backed securities
(cost $8,096,407)		        

0

    

Non-U.S. government agency obligations: 22.9%

 

Australia: 1.5%

  
Australia Government Bond
2.250%, due 05/21/282		  

AUD

420,000

      

319,948

    

2.750%, due 11/21/272

  

AUD

200,000

      

156,415

    
         

476,363

    

Canada: 3.4%

  
Canada Housing Trust No. 1
2.350%, due 09/15/235		  

CAD

120,000

      

96,927

    
Canadian Government Bond
1.500%, due 02/01/22		  

CAD

520,000

      

411,508

    

1.500%, due 09/01/24

  

CAD

690,000

      

551,682

    
         

1,060,117

    

China: 0.4%

  
China Development Bank
1.250%, due 01/21/232		  

GBP

100,000

      

135,306

    

Colombia: 0.1%

  
Colombia Government International Bond
8.125%, due 05/21/24		    

30,000

      

33,943

    


18

UBS Dynamic Alpha Fund

Portfolio of investments

December 31, 2021 (unaudited)

    Face
amount1		  

Value

  

Non-U.S. government agency obligations—(continued)

  

France: 1.4%

  
Caisse d'Amortissement de la Dette Sociale
1.375%, due 11/25/242		  

EUR

100,000

    

$

119,414

    
French Republic Government Bond OAT
0.000%, due 03/25/252		  

EUR

260,000

      

300,534

    
         

419,948

    

Germany: 3.4%

  
Bundesobligation
0.000%, due 04/11/252		  

EUR

910,000

      

1,056,157

    

Ireland: 1.9%

  
Ireland Government Bond
1.000%, due 05/15/262		  

EUR

490,000

      

590,656

    

Japan: 5.6%

  
Japan Bank for International Cooperation
0.625%, due 05/22/23		    

200,000

      

199,552

    
Japan Government Ten Year Bond
0.400%, due 03/20/25		  

JPY

63,000,000

      

556,348

    
Japan Government Two Year Bond
0.100%, due 05/01/22		  

JPY

42,000,000

      

365,359

    
Japanese Government CPI Linked Bond
0.100%, due 03/10/26		  

JPY

47,932,480

      

428,363

    

0.100%, due 03/10/29

  

JPY

23,153,410

      

209,031

    
         

1,758,653

    

New Zealand: 2.9%

  
New Zealand Government Bond
0.500%, due 05/15/26		  

NZD

300,000

      

190,906

    
New Zealand Government Inflation
Linked Bond
3.000%, due 09/20/302		  

NZD

755,634

      

724,294

    
         

915,200

    

Poland: 0.3%

  
Republic of Poland Government
International Bond
0.000%, due 02/10/252		  

EUR

90,000

      

102,321

    

Romania: 0.4%

  
Romanian Government International Bond
2.750%, due 02/26/262		  

EUR

100,000

      

122,320

    

Spain: 0.7%

  
Spain Government Bond
1.600%, due 04/30/252,5		  

EUR

180,000

      

218,272

    

Supranationals: 0.1%

  
European Union
3.000%, due 09/04/262		  

EUR

30,000

      

39,377

    
    Face
amount1		  

Value

  

Non-U.S. government agency obligations—(concluded)

  

Sweden: 0.7%

  
Kommuninvest I Sverige AB
0.500%, due 02/02/222		    

200,000

    

$

200,052

    

United Kingdom: 0.1%

  
Bank of England Euro Note
0.500%, due 04/28/232		    

40,000

      

39,962

    
Total non-U.S. government agency obligations
(cost $7,192,891)		        

7,168,647

    

U.S. Treasury obligations: 35.5%

 

United States: 35.5%

  
U.S. Treasury Bills
0.114%, due 06/02/2211		    

3,500,000

      

3,498,451

    

0.450%, due 03/10/2211

    

4,350,000

      

4,349,661

    
U.S. Treasury Notes
0.250%, due 05/31/25		    

1,030,000

      

1,001,916

    

0.375%, due 04/30/25

    

560,000

      

547,575

    

1.375%, due 09/30/23

    

320,000

      

323,875

    

1.500%, due 02/28/23

    

210,000

      

212,486

    

2.000%, due 02/15/22

    

1,090,000

      

1,092,470

    

2.750%, due 11/15/23

    

100,000

      

103,777

    
Total U.S. Treasury obligations
(cost $11,170,955)		        

11,130,211

    
    Number of
shares		      

Exchange traded funds: 7.8%

 

United States: 7.8%

  

iShares MSCI USA Value Factor ETF

    

9,270

      

1,014,787

    

iShares MSCI International Value Factor ETF6

    

56,055

      

1,426,039

    
Total exchange traded funds
(cost $1,841,092)		        

2,440,826

    

Investment of cash collateral from securities loaned: 4.1%

 

Money market funds: 4.1%

  
State Street Navigator Securities
Lending Government Money
Market Portfolio, 0.030%12
(cost $1,289,086)		    

1,289,086

      

1,289,086

    
Total investments: 95.6%
(cost $37,175,506)		        

29,943,377

    

Other assets in excess of liabilities: 4.4%

        

1,387,117

    

Net assets: 100.0%

      

$

31,330,494

    


19

UBS Dynamic Alpha Fund

Portfolio of investments

December 31, 2021 (unaudited)

For a listing of defined portfolio acronyms that are used throughout the Portfolio of investments as well as the tables that follow, please refer to the Glossary of terms used in the Portfolio of investments.

Futures contracts

Number of
contracts		  

Currency

       Expiration
date		   Current
notional
amount		  

Value

   Unrealized
appreciation
(depreciation)		  

Index futures buy contracts:

      
 

1

    

AUD

      

ASX SPI 200 Index Futures

  

March 2022

  

$

131,941

    

$

133,632

    

$

1,691

    
 

1

    

CAD

      

S&P/TSX 60 Index Futures

  

March 2022

    

199,062

      

202,522

      

3,460

    
 

134

    

EUR

      

STOXX 600 Banks Index Futures

  

March 2022

    

1,046,699

      

1,102,238

      

55,539

    
 

13

    

EUR

      

EURO STOXX 600 Index Futures

  

March 2022

    

348,493

      

360,022

      

11,529

    
 

5

    

EUR

      

FTSE MIB Index Futures

  

March 2022

    

752,136

      

775,546

      

23,410

    
 

15

    

GBP

      

FTSE 100 Index Futures

  

March 2022

    

1,458,605

      

1,487,010

      

28,405

    
 

8

    

JPY

      

TOPIX Index Futures

  

March 2022

    

1,347,153

      

1,385,378

      

38,225

    
 

17

    

USD

      

Mini MSCI Emerging Markets (EM) Index Futures

  

March 2022

    

1,031,847

      

1,042,355

      

10,508

    
 

5

    

USD

      

S&P 500 E-Mini Index Futures

  

March 2022

    

1,164,736

      

1,189,625

      

24,889

    

Interest rate futures buy contracts:

      
 

2

    

CAD

      

Canada Government Bond 10 Year Futures

   March 2022    

219,743

   

225,495

   

5,752

    

U.S. Treasury futures buy contracts:

      
 

13

    

USD

      

U.S. Treasury Note 5 Year Futures

   March 2022    

1,566,214

   

1,572,695

   

6,481

    
 

Total

                        

$

9,266,629

    

$

9,476,518

    

$

209,889

    

Index futures sell contracts:

      
 

27

    

EUR

      

EURO STOXX 50 Index Futures

  

March 2022

  

$

(1,280,571

)

  

$

(1,317,956

)

  

$

(37,385

)

  

Interest rate futures sell contracts:

      
 

2

    

EUR

      

German Euro BOBL Futures

  

March 2022

    

(305,844

)

    

(303,387

)

    

2,457

    
 

6

    

EUR

      

German Euro Bund Futures

  

March 2022

    

(1,191,524

)

    

(1,170,628

)

    

20,896

    
 

5

    

GBP

      

United Kingdom Long Gilt Bond Futures

  

March 2022

    

(847,656

)

    

(845,292

)

    

2,364

    

U.S. Treasury futures sell contracts:

      
 

13

    

USD

      

U.S. Treasury Note 10 Year Futures

  

March 2022

    

(1,675,966

)

    

(1,696,094

)

    

(20,128

)

  
 

1

    

USD

      

U.S. Ultra Bond Futures

  

March 2022

    

(192,741

)

    

(197,125

)

    

(4,384

)

  
 

4

    

USD

      

U.S. Ultra Treasury Note 10 Year Futures

  

March 2022

    

(575,900

)

    

(585,750

)

    

(9,850

)

  
 

Total

                        

$

(6,070,202

)

  

$

(6,116,232

)

  

$

(46,030

)

  
 

Net unrealized appreciation (depreciation)

                        

$

163,859

    

Centrally cleared credit default swap agreements on corporate issues—sell protection13

Referenced
obligations		   Notional
amount
(000)		   Maturity
date		   Payment
frequency		   Payments
received
by the
Portfolio14		   Upfront
payments
received
(made)		  

Value

   Unrealized
appreciation
(depreciation)		  

iTraxx Europe Crossover Series 36 Index

  

EUR

400

    

12/20/26

  

Quarterly

    

5.000

%

  

$

(55,294

)

  

$

54,839

    

$

(455

)

  


20

UBS Dynamic Alpha Fund

Portfolio of investments

December 31, 2021 (unaudited)

Centrally cleared credit default swap agreements on credit indices—sell protection13

Referenced
obligations		   Notional
amount
(000)		   Maturity
date		   Payment
frequency		   Payments
received
by the
Portfolio14		   Upfront
payments
received
(made)		  

Value

   Unrealized
appreciation
(depreciation)		  

CDX North America High Yield Series 37 Index

  

USD

1,160

    

12/20/26

  

Quarterly

    

5.000

%

  

$

(98,597

)

  

$

103,190

    

$

4,593

    

Forward foreign currency contracts

Counterparty

  

Sell

  

Purchase

   Settlement
date		   Unrealized
appreciation
(depreciation)		  

BB

  

COP

3,927,540,646

    

USD

975,000

    

01/12/22

  

$

9,920

    

BB

  

GBP

366,071

    

EUR

430,000

    

01/12/22

    

(5,857

)

  

BB

  

USD

997,235

    

CLP

829,132,550

    

01/12/22

    

(24,979

)

  

BB

  

USD

1,960,452

    

COP

7,712,419,000

    

01/12/22

    

(65,348

)

  

BB

  

USD

1,908,613

    

PLN

7,975,000

    

01/12/22

    

69,822

    

BOA

  

AUD

3,555,000

    

USD

2,566,182

    

01/12/22

    

(20,308

)

  

BOA

  

CHF

1,945,000

    

USD

2,082,148

    

01/12/22

    

(52,833

)

  

CIBC

  

HKD

365,000

    

USD

46,813

    

01/12/22

    

3

    

CIBC

  

USD

1,465,032

    

JPY

168,400,000

    

01/12/22

    

(997

)

  

CITI

  

KRW

1,203,000,000

    

USD

1,012,814

    

01/12/22

    

1,020

    

CITI

  

USD

2,546,174

    

BRL

14,420,000

    

01/12/22

    

38,436

    

GS

  

CAD

4,925,000

    

USD

3,882,748

    

01/12/22

    

(10,666

)

  

GS

  

MXN

10,445,296

    

USD

490,000

    

01/12/22

    

(19,477

)

  

GS

  

USD

2,863,841

    

NOK

25,560,000

    

01/12/22

    

38,099

    

HSBC

  

EUR

6,860,000

    

USD

7,710,908

    

01/12/22

    

(100,421

)

  

JPMCB

  

TWD

14,700,000

    

USD

530,207

    

01/12/22

    

(1,102

)

  

MSCI

  

GBP

1,310,000

    

USD

1,751,679

    

01/12/22

    

(21,445

)

  

MSCI

  

NZD

5,640,000

    

USD

3,892,531

    

01/12/22

    

29,936

    

MSCI

  

PHP

76,350,000

    

USD

1,502,982

    

01/12/22

    

6,144

    

MSCI

  

USD

975,000

    

MXN

21,418,979

    

01/12/22

    

69,726

    

MSCI

  

USD

611,058

    

MYR

2,564,000

    

01/12/22

    

4,174

    

SSC

  

USD

186,655

    

EUR

165,000

    

01/12/22

    

1,227

    

Net unrealized appreciation (depreciation)

  

$

(54,926

)

  


21

UBS Dynamic Alpha Fund

Portfolio of investments

December 31, 2021 (unaudited)

Fair valuation summary

The following is a summary of the fair valuations according to the inputs used as of December 31, 2021 in valuing the Fund's investments. In the event a Fund holds investments for which fair value is measured using the NAV per share practical expedient (or its equivalent), a separate column will be added to the fair value hierarchy table; this is intended to permit reconciliation to the amounts presented in the Portfolio of investments:

Description

   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

  

$

—

    

$

7,914,607

    

$

—

    

$

7,914,607

    

Mortgage-backed securities

    

—

      

0

      

0

      

0

    

Non-U.S. government agency obligations

    

—

      

7,168,647

      

—

      

7,168,647

    

U.S. Treasury obligations

    

—

      

11,130,211

      

—

      

11,130,211

    

Exchange traded funds

    

2,440,826

      

—

      

—

      

2,440,826

    

Investment of cash collateral from securities loaned

    

—

      

1,289,086

      

—

      

1,289,086

    

Futures contracts

    

235,606

      

—

      

—

      

235,606

    

Swap agreements

    

—

      

158,029

      

—

      

158,029

    

Forward foreign currency contracts

    

—

      

268,507

      

—

      

268,507

    

Total

  

$

2,676,432

    

$

27,929,087

    

$

0

    

$

30,605,519

    

Liabilities

  

Futures contracts

  

$

(71,747

)

  

$

—

    

$

—

    

$

(71,747

)

  

Forward foreign currency contracts

    

—

      

(323,433

)

    

—

      

(323,433

)

  

Total

  

$

(71,747

)

  

$

(323,433

)

  

$

—

    

$

(395,180

)

  

At December 31, 2021, there were no transfers in or out of Level 3.

Securities valued using unobservable inputs, i.e. Level 3, were not considered significant to the Fund.

Portfolio footnotes

†  Amount represents less than 0.05% or (0.05)%.

1  In U.S. dollars unless otherwise indicated.

2  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.

3  Perpetual investment. Date shown reflects the next call date.

4  Security purchased on a when-issued basis. When-issued refers to a transaction made conditionally because a security, although authorized, has not yet been issued.

5  Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities are considered liquid, unless noted otherwise, and may be resold in transactions exempt from registration, normally to qualified institutional buyers. Securities exempt from registration pursuant to Rule 144A, in the amount of $682,979, represented 2.1% of the Fund's net assets at period end.

6  Security, or portion thereof, was on loan at the period end.

7  Step bond—coupon rate increases in increments to maturity. The rate disclosed is the rate at the period end; the maturity date disclosed is the ultimate maturity date.

8  Significant unobservable inputs were used in the valuation of this security; i.e. Level 3.

9  Security fair valued by the Valuation Committee under the direction of the Board of Trustees.


22

UBS Dynamic Alpha Fund

Portfolio of investments

December 31, 2021 (unaudited)

10  Variable or floating rate security for which the interest rate adjusts periodically based on changes in current interest rates and prepayments on the underlying pool of assets. Rate shown is the rate in effect as of period end.

11  Rate shown is the discount rate at the date of purchase unless otherwise noted.

12  Rates shown reflect yield at December 31, 2021.

13  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 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 obligation.

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

See accompanying notes to financial statements.
23

UBS Global Allocation Fund

Portfolio performance

For the six months ended December 31, 2021, Class A shares of UBS Global Allocation Fund (the "Fund") returned 2.84% (Class A shares returned -2.81% after the deduction of the maximum sales charge), while Class P shares returned 2.96%. In contrast, the Fund's primary benchmark, the MSCI All Country World Index (net) returned 5.55%. For comparison purposes, the Fund's secondary benchmarks, the 60% MSCI All Country World Index (net)/40% FTSE World Government Bond Index (Hedged in USD), returned 3.93% and the FTSE World Government Bond Index (Hedged in USD) returned 0.07% during the same time period. (Class P shares have lower expenses than the other share class of the Fund. Returns for all share classes over various time periods are shown on page 25; please note that these returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares, while the Index returns do not reflect the deduction of fees and expenses.)

The Fund produced a positive total return during the reporting period. Security selection and tactical asset allocation contributed to performance. Within tactical asset allocation, equity positioning contributed to results. Whereas currency allocation detracted from performance.

During the review period, we used derivatives for risk management purposes and as a tool to help enhance returns in the portfolio. With respect to our active currency strategy, utilizing currency forwards had a positive impact on performance. We used a variety of equity and fixed income options, futures and swaps to implement our tactical asset allocation strategy.

Portfolio performance summary

•  Bottom-up security selection contributed to performance.

  – All strategies, except for the Emerging Markets Equity Opportunity strategy, contributed to performance. More specifically, performance in the US Large Cap Value and US Large Cap Growth strategies were areas of strong security selection that were beneficial for performance.

•  Active asset allocation decisions were additive to returns.

  – An overweight to equities relative to fixed income contributed to performance.

  – Within equities, overweights to Brazil, Mexico, India and South Africa relative to broader emerging markets boosted returns. Exposure to European banks also added to performance. In contrast, overweights to Japanese stocks and small-cap stocks weighed on returns.

  – Within fixed income, the various credit tilts in the portfolio across high yield, investment grade and emerging market debt modestly contributed to performance. This was a positive environment for credit given the supportive backdrop of accommodative policy, robust fundamentals and improving global growth.

•  Active currency positions detracted from performance.

  – Long positions in the Brazilian real and European currencies detracted from performance. Short positioning in the Australian and New Zealand dollars offset some of this weakness. In general, the US dollar strengthened over this period as a result of US economic outperformance and rising interest rates.

This letter is intended to assist shareholders in understanding how the Fund performed during the six months ended December 31, 2021. The views and opinions in the letter were current as of February 10, 2022. 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 website at www.ubs.com/am-us.


24

UBS Global Allocation Fund

Average annual total returns for periods ended 12/31/21 (unaudited)

  

6 months

  

1 year

  

5 years

  

10 years

  

Before deducting maximum sales charge

  

Class A1

    

2.84

%

    

7.94

%

    

9.40

%

    

7.44

%

  

Class P2

    

2.96

      

8.23

      

9.68

      

7.72

    

After deducting maximum sales charge

  

Class A1

    

(2.81

)%

    

2.00

%

    

8.16

%

    

6.84

%

  

MSCI All Country World Index (net)3

    

5.55

      

18.54

      

14.40

      

11.85

    

FTSE World Government Bond Index (Hedged in USD)4

    

0.07

      

(2.29

)

    

3.17

      

3.38

    
60% MSCI All Country World Index (net)/40% FTSE World
Government Bond Index (Hedged in USD)5		    

3.93

      

10.43

      

10.22

      

8.70

    

The annualized gross and net expense ratios, respectively, for each class of shares as in the October 28, 2021 prospectuses were as follows: Class A—1.51% and 1.30%; Class P—1.24% and 1.05%. 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., the Fund's investment advisor and administrator ("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, such as proxy-related expenses), through the period ending October 28, 2022, do not exceed 1.20% for Class A shares and 0.95% 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 to the extent such reimbursement can be made during the three fiscal years following the date on which such fee waivers and expense reimbursements were made, provided that the reimbursement of the Advisor by the Fund will not cause the Fund to exceed the lesser of any applicable expense limit that is in place for the Fund (i) at the time of the waiver or reimbursement or (ii) at the time of the recoupment. 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  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.

3  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.

4  The FTSE 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.

5  The 60% MSCI All Country World Index (net)/40% FTSE 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 August 3, 2015, a 1% redemption fee was imposed on sales or exchanges of any class of shares of the Fund made during the specified holding period.

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


25

UBS Global Allocation Fund

Portfolio statistics and industry diversification—(unaudited)1

As a percentage of net assets as of December 31, 2021

Top ten fixed income holdings

Republic of South Africa Government Bond,
8.000% due 01/31/30		    

2.7

%

  

UMBS TBA, 2.000%

    

1.8

    

UMBS TBA, 2.500%

    

1.3

    
New Zealand Government Inflation Linked Bond,
2.000% due 09/20/25		    

1.3

    

U.S. Treasury Notes, 0.625% due 08/15/30

    

0.5

    

U.S. Treasury Notes, 1.375% due 09/30/23

    

0.4

    

GNMA II TBA, 2.500%

    

0.4

    

U.S. Treasury Bonds, 2.875% due 05/15/43

    

0.3

    

Canadian Government Bond, 1.500% due 09/01/24

    

0.3

    

U.S. Treasury Notes, 1.625% due 11/30/26

    

0.3

    

Total

    

9.3

%

  

Top ten equity holdings

iShares JPMorgan USD Emerging Markets Bond ETF

    

6.1

%

  

Invesco S&P 500 Equal Weight ETF

    

4.2

    

iShares Broad USD High Yield Corporate Bond ETF

    

4.0

    

JPMorgan BetaBuilders MSCI US REIT ETF

    

1.7

    

Apple, Inc.

    

1.4

    

Microsoft Corp.

    

1.3

    

Alphabet, Inc., Class A

    

1.2

    

AbbVie, Inc.

    

1.1

    

Energy Select Sector SPDR Fund

    

1.0

    

Amazon.com, Inc.

    

0.8

    

Total

    

22.8

%

  

Top five issuer breakdown by country or territory of origin2

United States

    

79.1

%

  

Japan

    

4.4

    

South Africa

    

3.0

    

United Kingdom

    

2.7

    

Canada

    

1.4

    

Total

    

90.6

%

  

1  The portfolio is actively managed and its composition will vary over time.

2  Figures represent the direct investments of UBS Global Allocation Fund. If a breakdown of the underlying investment companies and exchange traded funds was included, the country or territory of origin breakdown would be as follows: United States: 94.5%, Japan: 4.4%, South Africa 3.1%, United Kingdom: 3.2% and Canada 1.7%.


26

UBS Global Allocation Fund

Portfolio statistics and industry diversification—(unaudited)1

As a percentage of net assets as of December 31, 2021

Common stocks

  

 

Aerospace & defense

    

0.6

%

  

Auto components

    

0.8

    

Automobiles

    

0.7

    

Banks

    

2.6

    

Beverages

    

0.6

    

Biotechnology

    

1.8

    

Capital markets

    

1.0

    

Chemicals

    

1.3

    

Commercial services & supplies

    

0.2

    

Communications equipment

    

0.3

    

Construction & engineering

    

0.6

    

Consumer finance

    

0.2

    

Diversified financial services

    

0.8

    

Diversified telecommunication services

    

0.5

    

Electric utilities

    

0.5

    

Electrical equipment

    

0.8

    

Electronic equipment, instruments & components

    

0.6

    

Entertainment

    

1.2

    

Equity real estate investment trusts

    

0.5

    

Food products

    

1.0

    

Health care equipment & supplies

    

1.7

    

Health care providers & services

    

0.6

    

Hotels, restaurants & leisure

    

0.8

    

Household durables

    

0.7

    

Insurance

    

0.9

    

Interactive media & services

    

1.6

    

Internet & direct marketing retail

    

1.1

    

IT services

    

1.3

    

Life sciences tools & services

    

0.9

    

Machinery

    

1.1

    

Media

    

0.4

    

Metals & mining

    

0.3

    

Multiline retail

    

1.0

    

Oil, gas & consumable fuels

    

1.6

    

Personal products

    

0.4

    

Pharmaceuticals

    

0.7

    

Professional services

    

0.6

    

Road & rail

    

0.7

    

Semiconductors & semiconductor equipment

    

2.2

    

Software

    

4.1

    

Technology hardware, storage & peripherals

    

1.6

    

Textiles, apparel & luxury goods

    

0.5

    

Tobacco

    

0.3

    

Trading companies & distributors

    

0.9

    

Wireless telecommunication services

    

0.2

    

Total common stocks

    

42.8

    

Exchange traded funds

    

17.9

%

  

Investment companies

    

13.9

    

Asset-backed securities

    

2.4

    

Mortgage-backed securities

    

4.1

    

Non-U.S. government agency obligations

    

6.6

    

U.S. government agency obligations

    

4.4

    

U.S. Treasury obligations

    

3.3

    

Short-term investments

    

6.7

    

Investment of cash collateral from securities loaned

    

3.2

    

Total investments

    

105.3

    

Liabilities in excess of other assets

    

(5.3

)

  

Net assets

    

100.0

%

  


27

UBS Global Allocation Fund

Portfolio of investments

December 31, 2021 (unaudited)

    Number of
shares		  

Value

  

Common stocks: 42.8%

 

Austria: 0.6%

  

Erste Group Bank AG

    

29,052

    

$

1,367,680

    

Belgium: 0.1%

  

Galapagos N.V.*

    

1,461

      

81,870

    

Galapagos N.V.*,1

    

1,099

      

61,585

    
         

143,455

    

Canada: 0.9%

  

Canadian Pacific Railway Ltd.1

    

11,672

      

839,494

    

Royal Bank of Canada

    

11,827

      

1,255,208

    
         

2,094,702

    

China: 0.7%

  

Hangzhou Tigermed Consulting Co. Ltd., Class A

    

17,387

      

348,648

    

NXP Semiconductors N.V.

    

3,862

      

879,686

    

Prosus N.V.*,1

    

5,122

      

428,783

    
         

1,657,117

    

Denmark: 0.4%

  

Genmab A/S*

    

2,142

      

862,434

    

France: 1.1%

  

Cie Generale des Etablissements Michelin SCA

    

3,740

      

613,789

    

Pernod Ricard SA

    

3,624

      

872,633

    

Ubisoft Entertainment SA*

    

6,897

      

338,196

    

Vinci SA

    

7,011

      

741,609

    
         

2,566,227

    

Germany: 1.2%

  

BioNTech SE, ADR*

    

600

      

154,680

    

CTS Eventim AG & Co. KGaA*

    

10,746

      

787,401

    

Knorr-Bremse AG

    

5,441

      

538,309

    

LANXESS AG

    

10,607

      

658,145

    

SAP SE

    

6,197

      

881,205

    
         

3,019,740

    

Hong Kong: 0.5%

  

AIA Group Ltd.

    

110,717

      

1,116,037

    

India: 0.3%

  

HDFC Bank Ltd., ADR

    

12,718

      

827,560

    

Ireland: 0.3%

  

AIB Group PLC*

    

342,650

      

834,829

    

Italy: 0.7%

  

PRADA SpA

    

127,100

      

813,369

    

Prysmian SpA

    

20,771

      

782,978

    
         

1,596,347

    

Japan: 3.8%

  

ITOCHU Corp.

    

30,600

      

935,850

    

JTOWER, Inc.*

    

9,500

      

796,966

    

Keyence Corp.

    

1,000

      

628,358

    

Nippon Telegraph & Telephone Corp.

    

41,100

      

1,125,489

    

ORIX Corp.

    

58,700

      

1,197,933

    
    Number of
shares		  

Value

  

Common stocks—(continued)

  

Japan—(concluded)

  

Shin-Etsu Chemical Co. Ltd.

    

4,800

    

$

831,227

    

SoftBank Group Corp.

    

12,300

      

581,050

    

Sony Group Corp.

    

13,700

      

1,723,963

    

Takeda Pharmaceutical Co. Ltd.

    

22,000

      

599,965

    

TechnoPro Holdings, Inc.

    

23,700

      

719,056

    
         

9,139,857

    

Netherlands: 1.0%

  

OCI N.V.*,1

    

24,905

      

652,717

    

Royal Dutch Shell PLC, A Shares

    

78,510

      

1,723,441

    
         

2,376,158

    

South Africa: 0.3%

  

Anglo American PLC

    

19,480

      

795,233

    

South Korea: 0.2%

  

SK Hynix, Inc.*

    

5,181

      

570,945

    

Switzerland: 1.0%

  

Alcon, Inc.

    

16,958

      

1,502,622

    

Novartis AG

    

11,200

      

986,760

    
         

2,489,382

    

United Kingdom: 2.5%

  

Ashtead Group PLC

    

11,470

      

922,508

    

British American Tobacco PLC

    

21,867

      

809,063

    

Farfetch Ltd., Class A*

    

6,228

      

208,202

    

London Stock Exchange Group PLC

    

10,278

      

964,087

    

RELX PLC

    

21,167

      

688,187

    

Sage Group PLC

    

61,400

      

708,579

    

Spectris PLC

    

15,556

      

770,222

    

Unilever PLC

    

19,875

      

1,064,746

    
         

6,135,594

    

United States: 27.2%

  

10X Genomics, Inc., Class A*

    

1,055

      

157,153

    

AbbVie, Inc.

    

18,985

      

2,570,569

    

Advanced Micro Devices, Inc.*

    

5,677

      

816,920

    

AGCO Corp.

    

6,962

      

807,731

    

Airbnb, Inc., Class A*

    

120

      

19,979

    

Akamai Technologies, Inc.*

    

10,474

      

1,225,877

    

Allstate Corp.

    

4,370

      

514,130

    

Alphabet, Inc., Class A*

    

986

      

2,856,481

    

Amazon.com, Inc.*

    

579

      

1,930,583

    

Ameriprise Financial, Inc.

    

3,642

      

1,098,646

    

APA Corp.

    

25,969

      

698,306

    

Apple, Inc.

    

18,487

      

3,282,737

    

Applied Materials, Inc.

    

5,482

      

862,648

    

Aptiv PLC*

    

7,830

      

1,291,558

    

Bank OZK

    

13,942

      

648,721

    

Bio-Rad Laboratories, Inc., Class A*

    

1,444

      

1,091,043

    

Booking Holdings, Inc.*

    

218

      

523,032

    

Bunge Ltd.

    

13,750

      

1,283,700

    

CF Industries Holdings, Inc.

    

13,583

      

961,405

    

Charles Schwab Corp.

    

4,970

      

417,977

    


28

UBS Global Allocation Fund

Portfolio of investments

December 31, 2021 (unaudited)

    Number of
shares		  

Value

  

Common stocks—(continued)

  

United States—(continued)

  

Ciena Corp.*

    

9,679

    

$

744,993

    

Comcast Corp., Class A

    

18,196

      

915,805

    

ConocoPhillips

    

2,382

      

171,933

    

Constellation Brands, Inc., Class A

    

2,799

      

702,465

    

Cooper Cos., Inc.

    

735

      

307,921

    

DexCom, Inc.*

    

885

      

475,201

    

Dollar General Corp.

    

2,615

      

616,695

    

Dollar Tree, Inc.*

    

9,487

      

1,333,113

    

Edwards Lifesciences Corp.*

    

6,480

      

839,484

    

Fidelity National Information Services, Inc.

    

3,170

      

346,006

    

Ford Motor Co.

    

46,158

      

958,702

    

HubSpot, Inc.*

    

922

      

607,736

    

Ingersoll Rand, Inc.

    

22,345

      

1,382,485

    

IQVIA Holdings, Inc.*

    

1,910

      

538,887

    

Laboratory Corp. of America Holdings*

    

3,094

      

972,166

    

Las Vegas Sands Corp.*

    

18,251

      

686,968

    

LivaNova PLC*

    

10,100

      

883,043

    

Marqeta, Inc., Class A*

    

11,692

      

200,752

    

Marsh & McLennan Cos., Inc.

    

3,704

      

643,829

    

Marvell Technology, Inc.

    

5,990

      

524,065

    

Match Group, Inc.*

    

3,478

      

459,965

    

McDonald's Corp.

    

2,836

      

760,247

    

Meta Platforms, Inc., Class A*

    

1,746

      

587,267

    

Micron Technology, Inc.

    

9,660

      

899,829

    

Microsoft Corp.

    

9,568

      

3,217,910

    

Mondelez International, Inc., Class A

    

16,672

      

1,105,520

    

Netflix, Inc.*

    

762

      

459,059

    

NextEra Energy, Inc.

    

12,370

      

1,154,863

    

Nike, Inc., Class B

    

2,561

      

426,842

    

NVIDIA Corp.

    

1,891

      

556,162

    

Pioneer Natural Resources Co.

    

926

      

168,421

    

Prologis, Inc.

    

6,900

      

1,161,684

    

Regal Rexnord Corp.

    

6,292

      

1,070,773

    

salesforce.com, Inc.*

    

6,627

      

1,684,120

    

ServiceNow, Inc.*

    

1,300

      

843,843

    

Spirit AeroSystems Holdings, Inc., Class A

    

16,724

      

720,637

    

Stericycle, Inc.*

    

8,736

      

521,015

    

Synchrony Financial

    

12,846

      

595,926

    

Take-Two Interactive Software, Inc.*

    

7,288

      

1,295,223

    

Target Corp.

    

1,662

      

384,653

    

Tesla, Inc.*

    

706

      

746,087

    

Trade Desk, Inc., Class A*

    

4,864

      

445,737

    

TransDigm Group, Inc.*

    

1,087

      

691,636

    

Union Pacific Corp.

    

3,270

      

823,811

    

United Rentals, Inc.*

    

713

      

236,923

    

UnitedHealth Group, Inc.

    

1,059

      

531,766

    

Universal Display Corp.

    

1,412

      

233,022

    

Vertex Pharmaceuticals, Inc.*

    

2,443

      

536,483

    

Visa, Inc., A Shares

    

5,770

      

1,250,417

    

VMware, Inc., Class A

    

5,751

      

666,426

    

Voya Financial, Inc.

    

9,874

      

654,745

    

Wells Fargo & Co.

    

25,592

      

1,227,904

    

Western Digital Corp.*

    

8,891

      

579,782

    
    Number of
shares		  

Value

  

Common stocks—(concluded)

  

United States—(concluded)

  

Williams Cos., Inc.

    

43,689

    

$

1,137,662

    

Zscaler, Inc.*

    

2,263

      

727,170

    
         

65,474,975

    
Total common stocks
(cost $74,942,764)		        

103,068,272

    

Exchange traded funds: 17.9%

 

Energy Select Sector SPDR Fund

    

43,098

      

2,391,939

    

Invesco S&P 500 Equal Weight ETF1

    

62,627

      

10,192,544

    
iShares Broad USD High Yield Corporate
Bond ETF1		    

230,358

      

9,488,446

    
iShares JPMorgan USD Emerging Markets
Bond ETF		    

134,829

      

14,704,451

    

iShares MSCI China ETF1

    

36,676

      

2,302,153

    

JPMorgan BetaBuilders MSCI US REIT ETF

    

36,451

      

4,048,248

    
Total exchange traded funds
(cost $42,423,503)		        

43,127,781

    

Investment companies: 13.9%

 

PACE High Yield Investments2

    

1,493,867

      

14,460,636

    

UBS Emerging Markets Equity Opportunity Fund2

    

1,912,700

      

18,973,979

    
Total investment companies
(cost $34,079,383)		        

33,434,615

    
    Face
amount		      

Asset-backed securities: 2.4%

 

Canada: 0.1%

  
Golden Credit Card Trust,
Series 2021-1A, Class C,
1.740%, due 08/15/283		  

$

100,000

      

98,385

    

Cayman Islands: 0.7%

  
Ares XLI Clo Ltd.,
Series 2016-41A, Class CR,
3 mo. USD LIBOR + 1.800%,
1.924%, due 04/15/343,4		    

250,000

      

245,125

    
CIFC Funding Ltd.,
Series 2017-5A, Class B,
3 mo. USD LIBOR + 1.850%,
1.972%, due 11/16/303,4		    

300,000

      

300,020

    
Dryden 60 CLO Ltd.,
Series 2018-60A, Class C,
3 mo. USD LIBOR + 2.050%,
2.174%, due 07/15/313,4		    

250,000

      

250,015

    
Highbridge Loan Management Ltd.,
Series 12A-18, Class B,
3 mo. USD LIBOR + 1.850%,
1.972%, due 07/18/313,4		    

250,000

      

248,465

    
Palmer Square Loan Funding Ltd.,
Series 2021-1A, Class B,
3 mo. USD LIBOR + 1.800%,
1.932%, due 04/20/293,4		    

250,000

      

250,006

    


29

UBS Global Allocation Fund

Portfolio of investments

December 31, 2021 (unaudited)

    Face
amount		  

Value

  

Asset-backed securities—(continued)

  

Cayman Islands—(concluded)

  
Venture XXX CLO Ltd.,
Series 2017-30A, Class C,
3 mo. USD LIBOR + 1.950%,
2.074%, due 01/15/313,4		  

$

200,000

    

$

198,483

    
Voya CLO Ltd.,
Series 2018-2A, Class C1,
3 mo. USD LIBOR + 1.850%,
1.974%, due 07/15/313,4		    

250,000

      

248,150

    
         

1,740,264

    

United States: 1.6%

  
ACC Trust,
Series 2021-1, Class A,
0.740%, due 11/20/233		    

76,216

      

76,172

    
American Credit Acceptance Receivables Trust,
Series 2021-2, Class D,
1.340%, due 07/13/273		    

275,000

      

271,814

    
CPS Auto Receivables Trust,
Series 2021-A, Class C,
0.830%, due 09/15/263		    

150,000

      

148,933

    
Series 2021-A, Class D,
1.160%, due 12/15/263		    

100,000

      

98,911

    
Dell Equipment Finance Trust,
Series 2021-2, Class D,
1.210%, due 06/22/273		    

100,000

      

98,810

    
DT Auto Owner Trust,
Series 2018-1A, Class D,
3.810%, due 12/15/233		    

737

      

737

    
Series 2019-3A, Class C,
2.740%, due 04/15/253		    

149,106

      

150,171

    
Series 2021-1A, Class D,
1.160%, due 11/16/263		    

100,000

      

98,548

    
Exeter Automobile Receivables Trust,
Series 2019-2A, Class C,
3.300%, due 03/15/243		    

134,175

      

134,708

    
Series 2021-1A, Class B,
0.500%, due 02/18/25		    

120,000

      

119,856

    
Series 2021-1A, Class D,
1.080%, due 11/16/26		    

125,000

      

123,444

    
Series 2021-2A, Class D,
1.400%, due 04/15/27		    

300,000

      

296,734

    
Ford Credit Auto Owner Trust,
Series 2021-REV2, Class D,
2.600%, due 05/15/343		    

150,000

      

149,104

    
HPEFS Equipment Trust,
Series 2019-1A, Class B,
2.320%, due 09/20/293		    

49,279

      

49,357

    
Series 2021-2A, Class D,
1.290%, due 03/20/293		    

100,000

      

98,494

    
New Economy Assets Phase 1 Sponsor LLC,
Series 2021-1, Class A1,
1.910%, due 10/20/613		    

150,000

      

147,077

    
    Face
amount		  

Value

  

Asset-backed securities—(concluded)

  

United States—(concluded)

  
Ocwen Master Advance Receivables Trust,
Series 2020-T1, Class AT1,
1.278%, due 08/15/523		  

$

100,000

    

$

99,982

    
OneMain Direct Auto Receivables Trust,
Series 2018-1A, Class A,
3.430%, due 12/16/243		    

5,182

      

5,184

    
Series 2018-1A, Class C,
3.850%, due 10/14/253		    

216,000

      

216,465

    
Series 2018-1A, Class D,
4.400%, due 01/14/283		    

216,000

      

216,460

    
OneMain Financial Issuance Trust,
Series 2020-2A, Class B,
2.210%, due 09/14/353		    

100,000

      

100,252

    
Santander Drive Auto Receivables Trust,
Series 2021-3, Class D,
1.330%, due 09/15/27		    

350,000

      

345,409

    
Santander Retail Auto Lease Trust,
Series 2021-B, Class C,
1.100%, due 06/20/253		    

300,000

      

296,238

    
Tesla Auto Lease Trust,
Series 2021-A, Class D,
1.340%, due 03/20/253		    

425,000

      

422,100

    
World Omni Select Auto Trust,
Series 2021-A, Class D,
1.440%, due 11/15/27		    

100,000

      

98,296

    
         

3,863,256

    
Total asset-backed securities
(cost $5,690,028)		        

5,701,905

    

Mortgage-backed securities: 4.1%

  

United States: 4.1%

  
Angel Oak Mortgage Trust,
Series 2020-4, Class A1,
1.469%, due 06/25/653,5		    

60,912

      

60,806

    
Series 2020-5, Class A1,
1.373%, due 05/25/653,5		    

77,487

      

77,381

    
Series 2020-6, Class A1,
1.261%, due 05/25/653,5		    

44,127

      

44,032

    
Series 2020-R1, Class A1,
0.990%, due 04/25/533,5		    

70,266

      

70,072

    
Series 2021-2, Class A1,
0.985%, due 04/25/663,5		    

66,716

      

65,940

    
Series 2021-4, Class A1,
1.035%, due 01/20/653,5,10		    

125,925

      

124,261

    
Series 2021-5, Class A1,
0.951%, due 07/25/663,5		    

128,790

      

126,974

    
Series 2021-8, Class A1,
1.820%, due 11/25/663,5		    

125,000

      

124,999

    
Arbor Multifamily Mortgage Securities Trust,
Series 2020-MF1, Class B,
3.599%, due 05/15/533,5		    

500,000

      

537,182

    
Series 2021-MF3, Class B,
2.511%, due 10/15/543		    

100,000

      

98,830

    


30

UBS Global Allocation Fund

Portfolio of investments

December 31, 2021 (unaudited)

    Face
amount		  

Value

  

Mortgage-backed securities—(continued)

  

United States—(continued)

  
BANK,
Series 2018-BN14, Class A4,
4.231%, due 09/15/605		  

$

275,000

    

$

310,366

    
Series 2021-BN32, Class C,
3.372%, due 04/15/54		    

150,000

      

152,030

    
Series 2021-BN38, Class C,
3.217%, due 12/15/645		    

150,000

      

152,415

    
BX Commercial Mortgage Trust,
Series 2018-BIOA, Class A,
1 mo. USD LIBOR + 0.671%,
0.781%, due 03/15/373,4		    

454,911

      

454,630

    
Series 2020-VKNG, Class C,
1 mo. USD LIBOR + 1.400%,
1.510%, due 10/15/373,4		    

82,243

      

82,141

    
Series 2021-VINO, Class A,
1 mo. USD LIBOR + 0.652%,
0.762%, due 05/15/383,4		    

300,000

      

298,691

    
BX Mortgage Trust,
Series 2021-PAC, Class D,
1 mo. USD LIBOR + 1.298%,
1.408%, due 10/15/363,4		    

100,000

      

99,534

    
BX Trust,
Series 2021-LGCY, Class D,
1 mo. USD LIBOR + 1.302%,
1.412%, due 10/15/233,4		    

250,000

      

247,171

    
Series 2021-RISE, Class D,
1 mo. USD LIBOR + 1.750%,
1.850%, due 11/15/363,4		    

200,000

      

199,539

    
Citigroup Commercial Mortgage Trust,
Series 2019-GC43, Class A4,
3.038%, due 11/10/52		    

200,000

      

211,931

    
Series 2019-SMRT, Class C,
4.682%, due 01/10/363		    

345,000

      

360,509

    
COLT Funding LLC,
Series 2021-3R, Class A1,
1.051%, due 12/25/643,5		    

103,720

      

103,133

    
Series 2021-6, Class A1,
1.907%, due 12/25/663,5,10		    

200,000

      

199,999

    
COLT Mortgage Loan Trust,
Series 2020-1R, Class A1,
1.255%, due 09/25/653,5		    

35,571

      

35,297

    
Series 2020-2, Class A1,
1.853%, due 03/25/653,5		    

67,985

      

68,083

    
Series 2021-1, Class A1,
0.910%, due 06/25/663,5		    

85,763

      

84,746

    
Series 2021-2, Class A1,
0.924%, due 08/25/663,5		    

93,295

      

91,974

    
Series 2021-3, Class A1,
0.956%, due 09/27/663,5		    

96,282

      

94,754

    
Series 2021-HX1, Class A1,
1.110%, due 10/25/663,5		    

191,377

      

188,762

    
    Face
amount		  

Value

  

Mortgage-backed securities—(continued)

  

United States—(continued)

  
COMM Mortgage Trust,
Series 2021-LBA, Class C,
1 mo. USD LIBOR + 1.200%,
1.310%, due 03/15/383,4		  

$

250,000

    

$

246,386

    
CSMC Trust,
Series 2020-NQM1, Class A1,
1.208%, due 05/25/653,6		    

139,918

      

139,534

    
DBGS Mortgage Trust,
Series 2018-BIOD, Class A,
1 mo. USD LIBOR + 0.803%,
0.905%, due 05/15/353,4		    

92,814

      

92,784

    
Deephaven Residential Mortgage Trust,
Series 2020-1, Class A1,
2.339%, due 01/25/603,5		    

62,397

      

62,402

    
Series 2020-2, Class A1,
1.692%, due 05/25/653		    

20,021

      

20,009

    
Series 2021-2, Class A1,
0.899%, due 04/25/663,5		    

125,561

      

123,449

    
GCAT Trust,
Series 2021-NQM4, Class A1,
1.093%, due 08/25/663,5		    

138,513

      

136,629

    
GS Mortgage Securities Corp. II,
Series 2018-GS10, Class C,
4.409%, due 07/10/515		    

200,000

      

217,221

    
GS Mortgage Securities Trust,
Series 2017-FARM, Class A,
3.541%, due 01/10/433,5		    

100,000

      

107,594

    
Series 2017-GS5, Class B,
4.047%, due 03/10/505		    

100,000

      

106,527

    
GS Mortgage-Backed Securities Corp. Trust,
Series 2021-NQM1, Class A1,
1.017%, due 07/25/613,5		    

102,585

      

101,666

    
GS Mortgage-Backed Securities Trust,
Series 2020-NQM1, Class A1,
1.382%, due 09/27/603,5		    

39,602

      

39,344

    
J.P. Morgan Chase Commercial Mortgage
Securities Trust,
Series 2021-2NU, Class D,
2.077%, due 01/05/403,5		    

125,000

      

117,178

    
JPMDB Commercial Mortgage Securities Trust,
Series 2017-C7, Class B,
3.985%, due 10/15/50		    

175,000

      

187,179

    
MAD Mortgage Trust,
Series 2017-330M, Class B,
3.366%, due 08/15/343,5		    

125,000

      

126,300

    
Series 2017-330M, Class C,
3.484%, due 08/15/343,5		    

150,000

      

151,591

    
Med Trust,
Series 2021-MDLN, Class D,
1 mo. USD LIBOR + 2.000%,
2.110%, due 11/15/383,4		    

200,000

      

199,498

    
MFA Trust,
Series 2020-NQM3, Class A1,
1.014%, due 01/26/653,5		    

47,230

      

46,978

    


31

UBS Global Allocation Fund

Portfolio of investments

December 31, 2021 (unaudited)

    Face
amount		  

Value

  

Mortgage-backed securities—(continued)

  

United States—(continued)

  
Series 2021-NQM1, Class A1,
1.153%, due 04/25/653,5		  

$

59,613

    

$

59,268

    
Series 2021-NQM2, Class A1,
1.029%, due 11/25/643,5		    

82,117

      

81,340

    
MHC Commercial Mortgage Trust,
Series 2021-MHC, Class D,
1 mo. USD LIBOR + 1.601%,
1.711%, due 04/15/383,4		    

350,000

      

349,343

    
MHC Trust,
Series 2021-MHC2, Class D,
1 mo. USD LIBOR + 1.500%,
1.610%, due 05/15/233,4		    

150,000

      

147,606

    
MHP,
Series 2021-STOR, Class D,
1 mo. USD LIBOR + 1.350%,
1.460%, due 07/15/383,4		    

150,000

      

149,342

    
Morgan Stanley Capital I, Inc.,
Series 2021-ILP, Class C,
1 mo. USD LIBOR + 1.377%,
1.487%, due 11/15/233,4		    

299,011

      

297,579

    
New Residential Mortgage Loan Trust,
Series 2019-NQM4, Class A1,
2.492%, due 09/25/593,5		    

41,296

      

41,424

    
Series 2020-NQM2, Class A1,
1.650%, due 05/24/603,5		    

39,843

      

39,840

    
Series 2021-NQ2R, Class A1,
0.941%, due 10/25/583,5		    

106,483

      

105,912

    
Series 2021-NQM3, Class A1,
1.156%, due 11/27/563,5		    

175,396

      

174,283

    
ONE Mortgage Trust,
Series 2021-PARK, Class C,
1 mo. USD LIBOR + 1.100%,
1.210%, due 03/15/363,4		    

200,000

      

197,992

    
Residential Mortgage Loan Trust,
Series 2020-2, Class A1,
1.654%, due 05/25/603,5		    

143,237

      

143,578

    
RLGH Trust,
Series 2021-TROT, Class C,
1 mo. USD LIBOR + 1.314%,
1.424%, due 04/15/363,4		    

190,000

      

189,537

    
TTAN,
Series 2021-MHC, Class D,
1 mo. USD LIBOR + 1.750%,
1.860%, due 03/15/383,4		    

99,954

      

99,577

    
Verus Securitization Trust,
Series 2019-4, Class A1,
2.642%, due 11/25/593,6		    

25,634

      

25,881

    
Series 2020-4, Class A1,
1.502%, due 05/25/653,6		    

49,973

      

49,846

    
Series 2020-5, Class A1,
1.218%, due 05/25/653,6		    

53,850

      

53,616

    
Series 2021-3, Class A1,
1.046%, due 06/25/663,5		    

163,188

      

161,297

    
    Face
amount		  

Value

  

Mortgage-backed securities—(concluded)

  

United States—(concluded)

  
Series 2021-5, Class A1,
1.013%, due 09/25/663,5		  

$

143,169

    

$

140,578

    
Series 2021-R2, Class A1,
0.918%, due 02/25/643,5		    

70,760

      

70,547

    
Series 2021-R3, Class A1,
1.020%, due 04/25/643,5		    

114,704

      

114,320

    
Vista Point Securitization Trust,
Series 2020-1, Class A1,
1.763%, due 03/25/653,5		    

22,162

      

22,224

    
Series 2020-2, Class A1,
1.475%, due 04/25/653,5		    

49,028

      

48,874

    
Wells Fargo Commercial Mortgage Trust,
Series 2018-C45, Class AS,
4.405%, due 06/15/515		    

130,000

      

145,829

    
Total mortgage-backed securities
(cost $9,933,898)		        

9,898,084

    

Non-U.S. government agency obligations: 6.6%

  

Australia: 0.1%

  
Australia Government Bond,
Series 138,
3.250%, due 04/21/297		  

AUD

310,000

      

252,156

    

Austria: 0.0%†

  
Republic of Austria Government Bond
3.150%, due 06/20/443,7		  

EUR

55,000

      

98,791

    

Belgium: 0.1%

  
Kingdom of Belgium Government Bond,
Series 71,
3.750%, due 06/22/457		  

EUR

83,000

      

154,856

    

Canada: 0.4%

  
Canadian Government Bond
1.500%, due 09/01/24		  

CAD

1,040,000

      

831,521

    

2.250%, due 06/01/25

  

CAD

221,000

      

181,219

    
         

1,012,740

    

Finland: 0.0%†

  
Finland Government Bond,
Series 30Y,
1.375%, due 04/15/473,7		  

EUR

20,000

      

28,185

    

France: 0.1%

  
French Republic Government Bond OAT
0.500%, due 05/25/403,7		  

EUR

100,000

      

111,220

    

3.250%, due 05/25/457

  

EUR

93,000

      

163,421

    
         

274,641

    

Ireland: 0.2%

  
Ireland Government Bond
1.500%, due 05/15/507		  

EUR

240,000

      

314,363

    

2.000%, due 02/18/457

  

EUR

48,000

      

69,701

    
         

384,064

    


32

UBS Global Allocation Fund

Portfolio of investments

December 31, 2021 (unaudited)

    Face
amount		  

Value

  

Non-U.S. government agency obligations—(concluded)

  

Italy: 0.4%

  
Italy Buoni Poliennali Del Tesoro
1.650%, due 03/01/323,7		  

EUR

60,000

    

$

71,582

    

3.000%, due 08/01/297

  

EUR

240,000

      

317,168

    

3.250%, due 09/01/463,7

  

EUR

210,000

      

302,961

    

4.000%, due 02/01/373,7

  

EUR

129,000

      

195,620

    
         

887,331

    

Japan: 0.6%

  
Japan Government Forty Year Bond,
Series 12,
0.500%, due 03/20/59		  

JPY

20,000,000

      

161,556

    
Japan Government Thirty Year Bond,
Series 51,
0.300%, due 06/20/46		  

JPY

11,100,000

      

90,459

    
Japan Government Twenty Year Bond,
Series 156,
0.400%, due 03/20/36		  

JPY

83,550,000

      

738,956

    
Japanese Government CPI Linked Bond,
Series 26,
0.005%, due 03/10/31		  

JPY

50,483,000

      

455,764

    
         

1,446,735

    

New Zealand: 1.3%

  
New Zealand Government
Inflation Linked Bond,
Series 0925,
2.000%, due 09/20/257,8		  

NZD

3,634,470

      

3,097,024

    

South Africa: 2.7%

  
Republic of South Africa
Government Bond,
Series 2030,
8.000%, due 01/31/30		  

ZAR

113,500,000

      

6,582,235

    

Spain: 0.5%

  
Spain Government Bond
1.450%, due 10/31/273,7		  

EUR

165,000

      

203,210

    

1.500%, due 04/30/273,7

  

EUR

325,000

      

400,799

    

3.450%, due 07/30/663,7

  

EUR

10,000

      

17,135

    

4.200%, due 01/31/373,7

  

EUR

44,000

      

73,618

    

4.800%, due 01/31/243,7

  

EUR

296,000

      

374,591

    

5.150%, due 10/31/443,7

  

EUR

69,000

      

141,421

    
         

1,210,774

    

United Kingdom: 0.2%

  
United Kingdom Gilt
1.000%, due 04/22/247		  

GBP

90,000

      

122,850

    

1.625%, due 10/22/287

  

GBP

144,000

      

205,717

    

3.500%, due 01/22/457

  

GBP

60,000

      

118,983

    
         

447,550

    
Total non-U.S. government agency obligations
(cost $16,019,264)		        

15,877,082

    
    Face
amount		  

Value

  

U.S. government agency obligations: 4.4%

      

United States: 4.4%

      
FNMA
2.500%, due 08/01/51		  

$

270,143

    

$

276,368

    
GNMA II
3.000%, due 10/20/45		    

98,408

      

103,232

    
3.000%, due 12/20/45    

111,035

      

116,478

    
GNMA II TBA
2.000% 		   

625,000

      

629,531

    
2.500%    

900,000

      

922,248

    
3.000%    

250,000

      

258,277

    
UMBS TBA
1.500% 		   

725,000

      

700,932

    
2.000%    

4,400,000

      

4,394,651

    
2.500%    

3,125,000

      

3,190,219

    
Total U.S. government agency obligations
(cost $10,585,658)		        

10,591,936

    

U.S. Treasury obligations: 3.3%

     

United States: 3.3%

      
U.S. Treasury Bonds
2.500%, due 02/15/46		    

302,000

      

333,604

    

2.750%, due 11/15/42

    

201,000

      

229,077

    

2.750%, due 08/15/47

    

168,000

      

195,497

    

2.875%, due 05/15/43

    

717,000

      

833,176

    

3.000%, due 11/15/45

    

47,000

      

56,462

    
U.S. Treasury Notes
0.625%, due 08/15/30		    

1,270,000

      

1,184,374

    

1.250%, due 08/15/31

    

200,000

      

195,531

    

1.375%, due 09/30/23

    

971,000

      

982,758

    

1.500%, due 02/28/23

    

226,000

      

228,675

    

1.625%, due 08/15/22

    

116,000

      

116,992

    

1.625%, due 11/30/26

    

760,000

      

772,944

    

1.625%, due 08/15/29

    

196,000

      

198,841

    

1.625%, due 05/15/31

    

350,000

      

354,430

    

1.750%, due 05/15/23

    

345,000

      

350,687

    

1.875%, due 10/31/22

    

680,000

      

688,473

    

2.000%, due 11/30/22

    

528,000

      

535,652

    

2.500%, due 05/15/24

    

321,000

      

333,464

    

2.750%, due 07/31/23

    

459,000

      

474,402

    
Total U.S. Treasury obligations
(cost $7,884,820)		        

8,065,039

    
    Number of
shares		      

Short-term investments: 6.7%

     

Investment companies: 6.7%

      
State Street Institutional U.S. Government
Money Market Fund, 0.030%9
(cost $16,222,496)		    

16,222,496

      

16,222,496

    


33

UBS Global Allocation Fund

Portfolio of investments

December 31, 2021 (unaudited)

    Number of
shares		  

Value

  

Investment of cash collateral from securities loaned: 3.2%

  

Money market funds: 3.2%

  
State Street Navigator Securities
Lending Government Money
Market Portfolio, 0.030%9
(cost $7,592,367)		    

7,592,367

    

$

7,592,367

    
Total investments: 105.3%
(cost $225,374,181)		        

253,579,577

    

Liabilities in excess of other assets: (5.3%)

        

(12,841,423

)

  

Net assets: 100.0%

      

$

240,738,154

    

For a listing of defined portfolio acronyms that are used throughout the Portfolio of investments as well as the tables that follow, please refer to the Glossary of terms used in the Portfolio of investments.

Futures contracts

Number of
contracts		  

Currency

       Expiration
date		   Current
notional
amount		  

Value

   Unrealized
appreciation
(depreciation)		  

Index futures buy contracts:

      
 

112

    

EUR

      

EURO STOXX 50 Index Futures

  

March 2022

  

$

5,314,214

    

$

5,467,075

    

$

152,861

    
 

452

    

EUR

      

EURO STOXX 600 Index Futures

  

March 2022

    

3,530,786

      

3,717,998

      

187,212

    
 

15

    

GBP

      

FTSE 100 Index Futures

  

March 2022

    

1,458,605

      

1,487,010

      

28,405

    
 

49

    

JPY

      

TOPIX Index Futures

  

March 2022

    

8,251,367

      

8,485,439

      

234,072

    
 

24

    

USD

      

Russell 1000 Value E-Mini Index Futures

  

March 2022

    

1,926,097

      

1,980,480

      

54,383

    
 

93

    

USD

      

Russell 2000 Mini Index Futures

  

March 2022

    

10,118,860

      

10,429,020

      

310,160

    
 

3

    

USD

      

S&P 500 E-Mini Index Futures

  

March 2022

    

698,841

      

713,775

      

14,934

    

Interest rate futures buy contracts:

      
 

48

    

AUD

      

Australian Bond 10 Year Futures

   March 2022    

4,870,243

   

4,860,057

   

(10,186

)

  
 

18

    

EUR

      

German Euro Bund Futures

  

March 2022

    

3,577,071

      

3,511,884

      

(65,187

)

  
 

122

    

EUR

      

German Euro Schatz Futures

  

March 2022

    

15,585,068

      

15,560,626

      

(24,442

)

  
 

26

    

JPY

      

JGB MINI 10 Year Futures

  

March 2022

    

3,441,653

      

3,426,810

      

(14,843

)

  

U.S. Treasury futures buy contracts:

      
 

121

    

USD

      

U.S. Treasury Note 10 Year Futures

   March 2022    

15,602,515

   

15,786,719

   

184,204

    
 

21

    

USD

      

U.S. Ultra Treasury Note 10 Year Futures

  

March 2022

    

3,022,538

      

3,075,187

      

52,649

    
 

Total

                

$

77,397,858

    

$

78,502,080

    

$

1,104,222

    

Index futures sell contracts:

      
 

13

    

AUD

      

ASX SPI 200 Index Futures

  

March 2022

  

$

(1,714,986

)

  

$

(1,737,226

)

  

$

(22,240

)

  
 

28

    

CAD

      

S&P TSX 60 Index Futures

  

March 2022

    

(5,573,597

)

    

(5,670,611

)

    

(97,014

)

  
 

115

    

USD

      

MSCI Emerging Markets (EM) Index Futures

  

March 2022

    

(6,979,016

)

    

(7,051,225

)

    

(72,209

)

  

Interest rate futures sell contracts:

      
 

49

    

GBP

      

United Kingdom Long Gilt Bond Futures

   March 2022    

(8,281,164

 )    

(8,283,861

 )    

(2,697

)

  

U.S. Treasury futures sell contracts:

      
 

69

    

USD

      

U.S. Treasury Note 5 Year Futures

   March 2022    

(8,302,009

 )    

(8,347,383

 )    

(45,374

)

  
 

Total

                

$

(30,850,772

)

  

$

(31,090,306

)

  

$

(239,534

)

  
 

Net unrealized appreciation (depreciation)

                        

$

864,688

    


34

UBS Global Allocation Fund

Portfolio of investments

December 31, 2021 (unaudited)

Forward foreign currency contracts

Counterparty

  

Sell

  

Purchase

   Settlement
date		   Unrealized
appreciation
(depreciation)		  

BOA

  

NZD

17,695,000

    

USD

12,400,106

    

02/18/22

  

$

287,847

    

BOA

  

USD

7,465,120

    

NOK

65,190,000

    

02/18/22

    

(68,739

)

  

CIBC

  

CHF

6,030,000

    

USD

6,496,641

    

02/18/22

    

(128,629

)

  

GS

  

USD

4,257,463

    

BRL

23,660,000

    

02/18/22

    

(55,014

)

  

GS

  

USD

2,472,441

    

MYR

10,362,000

    

02/18/22

    

9,906

    

GS

  

USD

4,494,276

    

PLN

18,565,000

    

02/18/22

    

98,634

    

JPMCB

  

TWD

283,300,000

    

USD

10,268,213

    

02/18/22

    

28,866

    

JPMCB

  

USD

1,318,976

    

INR

100,440,000

    

02/18/22

    

25,703

    

MSCI

  

INR

177,470,000

    

USD

2,356,558

    

02/18/22

    

(19,390

)

  

MSCI

  

KRW

8,436,000,000

    

USD

7,150,546

    

02/18/22

    

61,024

    

MSCI

  

PHP

242,850,000

    

USD

4,849,241

    

02/18/22

    

96,167

    

MSCI

  

USD

4,904,381

    

RUB

355,425,400

    

02/18/22

    

(211,253

)

  

MSCI

  

USD

1,537,518

    

SEK

13,630,000

    

02/18/22

    

(28,612

)

  

SSC

  

GBP

4,020,000

    

USD

5,408,295

    

02/18/22

    

(32,186

)

  

SSC

  

JPY

260,100,000

    

USD

2,267,854

    

02/18/22

    

5,969

    

SSC

  

USD

4,088,231

    

AUD

5,605,000

    

02/18/22

    

(9,851

)

  

SSC

  

USD

1,259,741

    

CAD

1,580,000

    

02/18/22

    

(10,758

)

  

SSC

  

USD

771,388

    

EUR

680,000

    

02/18/22

    

3,491

    

SSC

  

USD

478,681

    

SGD

650,000

    

02/18/22

    

3,525

    

SSC

  

ZAR

116,950,000

    

USD

7,467,448

    

02/18/22

    

174,751

    

Net unrealized appreciation (depreciation)

  

$

231,451

    

Fair valuation summary

The following is a summary of the fair valuations according to the inputs used as of December 31, 2021 in valuing the Fund's investments. In the event a Fund holds investments for which fair value is measured using the NAV per share practical expedient (or its equivalent), a separate column will be added to the fair value hierarchy table; this is intended to permit reconciliation to the amounts presented in the Portfolio of investments:

Description

   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

  

$

102,986,402

    

$

81,870

    

$

—

    

$

103,068,272

    

Exchange traded funds

    

43,127,781

      

—

      

—

      

43,127,781

    

Investment companies

    

33,434,615

      

—

      

—

      

33,434,615

    

Asset-backed securities

    

—

      

5,701,905

      

—

      

5,701,905

    

Mortgage-backed securities

    

—

      

9,898,084

      

—

      

9,898,084

    

Non-U.S. government agency obligations

    

—

      

15,877,082

      

—

      

15,877,082

    

U.S. government agency obligations

    

—

      

10,591,936

      

—

      

10,591,936

    

U.S. Treasury obligations

    

—

      

8,065,039

      

—

      

8,065,039

    

Short-term investments

    

—

      

16,222,496

      

—

      

16,222,496

    

Investment of cash collateral from securities loaned

    

—

      

7,592,367

      

—

      

7,592,367

    

Futures contracts

    

1,218,880

      

—

      

—

      

1,218,880

    


35

UBS Global Allocation Fund

Portfolio of investments

December 31, 2021 (unaudited)

Fair valuation summary—(concluded)

Description

   Unadjusted
quoted prices in
active markets for
identical investments
(Level 1)		   Other significant
observable inputs
(Level 2)		   Unobservable
inputs
(Level 3)		  

Total

  

Forward foreign currency contracts

  

$

—

    

$

795,883

    

$

—

    

$

795,883

    

Total

  

$

180,767,678

    

$

74,826,662

    

$

—

    

$

255,594,340

    

Liabilities

  

Futures contracts

  

$

(354,192

)

  

$

—

    

$

—

    

$

(354,192

)

  

Forward foreign currency contracts

    

—

      

(564,432

)

    

—

      

(564,432

)

  

Total

  

$

(354,192

)

  

$

(564,432

)

  

$

—

    

$

(918,624

)

  

At December 31, 2021, there were $161,297 transferred out of Level 3. The transfers from Level 3 to Level 2 occurred because there was observable market data that became available as of December 31, 2021.

Portfolio footnotes

*  Non-income producing security.

†  Amount represents less than 0.05% or (0.05)%.

1  Security, or portion thereof, was on loan at the period end.

2  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 Funds.

Security description

   Value
06/30/21		   Purchases
during the
year
ended
12/31/21		   Sales
during the
year
ended
12/31/21		   Net
realized
gain (loss)
during the
year
ended
12/31/21		   Change in
net unrealized
appreciation
(depreciation)
during the
year
ended
12/31/21		   Value
12/31/21		   Net income
earned from
affiliate for the
year
ended
12/31/21		   Shares
12/31/21		  

PACE High Yield Investments

  

$

—

    

$

14,548,879

    

$

—

    

$

—

    

$

(88,243

)

  

$

14,460,636

    

$

148,879

      

1,493,867

    
UBS Emerging Markets Equity
Opportunity Fund		    

20,253,259

      

3,015,239

      

—

      

—

      

(4,294,519

)

    

18,973,979

      

408,326

      

1,912,700

    
   

$

20,253,259

    

$

17,564,118

    

$

—

    

$

—

    

$

(4,382,762

)

  

$

33,434,615

    

$

557,205

            

3  Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities are considered liquid, unless noted otherwise, and may be resold in transactions exempt from registration, normally to qualified institutional buyers. Securities exempt from registration pursuant to Rule 144A, in the amount of $15,151,885, represented 6.3% of the Fund's net assets at period end.

4  Variable or floating rate security. The interest rate shown is the current rate as of December 31, 2021 and changes periodically.

5  Variable or floating rate security for which the interest rate adjusts periodically based on changes in current interest rates and prepayments on the underlying pool of assets. Rate shown is the rate in effect as of period end.

6  Step bond—coupon rate increases in increments to maturity. The rate disclosed is the rate at the period end; the maturity date disclosed is the ultimate maturity date.

7  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.

8  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.

9  Rates shown reflect yield at December 31, 2021.

10  Security fair valued by a Valuation Committee under the direction of the Board of Trustees.

See accompanying notes to financial statements.
36

UBS Emerging Markets Equity Opportunity Fund

Portfolio performance

For the six months ended December 31, 2021, Class P2 shares of UBS Emerging Markets Equity Opportunity Fund (the "Fund") returned -11.00%, while Class P shares returned -11.43%. The Fund's benchmark, the MSCI Emerging Markets Index (net) (the "Index"), returned -9.30%. Please note that these returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares, while the Index returns do not reflect the deduction of fees and expenses.

The Fund posted a negative return and underperformed its benchmark during the reporting period.

Portfolio performance summary1

What worked:

•  On a sector level, stock selection in consumer discretionary and information technology (IT) were key contributors.

•  On a stock level, our overweight in MediaTek (Taiwan, IT) and our underweight in Alibaba (China, consumer discretionary) were among the top contributors to performance over the reporting period. Shares of MediaTek rebounded with investor interest returning to tech stocks in Taiwan. In addition, the launch of its high-end chipset that would target the flagship models of its handset customers in 2022 is keenly awaited. Our underweight position in Alibaba also contributed to returns. Shares of Alibaba fell alongside the China internet companies on heightened regulatory concerns, weaker consumption, tougher competition in the ecommerce space, as well as its lowered fiscal year 2022 guidance. We believe Alibaba will ride through this market softness. The stock is trading at attractive valuations and the company is investing in growing its e-commerce business such as Taobao Deals. Furthermore its investment in other businesses such as cloud and logistics may contribute more over time.

What didn't work:

•  On a sector level, stock selection within communication services and materials detracted from performance.

•  On a stock level, our overweights in Bilibili and Vale were among the main headwinds for results over the reporting period.

•  Shares of Bilibili underperformed on concerns of further regulations impacting online games' content. The company gave a conservative guidance on the back of a pause in gaming license approvals and concerns over the macro-outlook, as well as challenges with monetization of its gaming business. However, the underlying operating matrix including user growth, time spent, video views and user interaction remain solid. Vale's underperformance was related to the steep correction in iron ore prices in the period, coming from above $200/ton to below $100/ton. Prices were negatively impacted by large scale steel production controls in China, increased risks surrounding the Chinese property sector (including the potential debt default by Evergrande), and a general slowdown of economic growth in the region. We continue to hold Bilibili while we have sold out of Vale during the reporting period.

•  The Fund did not invest in derivatives during the reporting period.

This letter is intended to assist shareholders in understanding how the Fund performed during the period from the six months ended December 31, 2021. The views and opinions in the letter were current as of February 10, 2022. 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 website at www.ubs.com/am-us.

1  For a detailed commentary on the market environment in general during the reporting period, see page 3.


37

UBS Emerging Markets Equity Opportunity Fund

Average annual total returns for periods ended 12/31/21 (unaudited)

  

6 months

  

1 year

  

Inception1

  

Class P22

    

(11.00

)%

    

(9.18

)%

    

4.48

%

  

Class P4

    

(11.43

)

    

(9.98

)

    

8.59

    

MSCI Emerging Markets Index (net)3

    

(9.30

)

    

(2.54

)

    

4.50

    

The annualized gross and net expense ratios, respectively, for each class of shares as in the October 28, 2021 prospectuses were as follows: Class P—1.08% and 1.00%; Class P2—1.06% and 0.12%. 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., the Fund's investment advisor and administrator ("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, such as proxy-related expenses), through the period ending October 28, 2022, do not exceed 1.00% for Class P shares and 0.40% for Class P2 shares. Pursuant to the written agreement, the Advisor is entitled to be reimbursed for any fees it waives and expenses it reimburses to the extent such reimbursement can be made during the three fiscal years following the date on which such fee waivers and expense reimbursements were made, provided that the reimbursement of the Advisor by the Fund will not cause the Fund to exceed the lesser of any applicable expense limit that is in place for the Fund (i) at the time of the waiver or reimbursement or (ii) at the time of the recoupment. 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  Inception date of Class P2 of UBS Emerging Markets Equity Opportunity Fund is June 4, 2018. Benchmark's inception return is based on Class P2 inception date.

2  Class P2 shares do not bear initial or contingent deferred sales charges or ongoing 12b-1 service and distribution fees, but Class P2 shares held through advisory programs may be subject to a program fee, which, if included, would have reduced performance.

3  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 nonresident 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  Inception date of Class P of UBS Emerging Markets Equity Opportunity Fund is January 31, 2019.

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


38

UBS Emerging Markets Equity Opportunity Fund

Portfolio statistics and industry diversification—(unaudited)1

As a percentage of net assets as of December 31, 2021

Top ten holdings

Taiwan Semiconductor Manufacturing Co. Ltd.

    

10.2

%

  

Samsung Electronics Co. Ltd.

    

5.9

    

Tencent Holdings Ltd.

    

5.5

    

MediaTek, Inc.

    

4.3

    

China Merchants Bank Co. Ltd., Class H

    

3.7

    

Meituan, Class B

    

3.7

    

Bank Mandiri Persero Tbk. PT

    

3.6

    

MercadoLibre, Inc.

    

3.4

    

SK Hynix, Inc.

    

3.4

    

Reliance Industries Ltd.

    

3.2

    

Total

    

46.9

%

  

Top five issuer breakdown by country or territory of origin

China

    

31.2

%

  

Taiwan

    

18.0

    

India

    

11.9

    

South Korea

    

11.3

    

Indonesia

    

6.4

    

Total

    

78.8

%

  

 

Common stocks

      

Automobiles

    

2.5

%

  

Banks

    

22.8

    

Beverages

    

2.7

    

Chemicals

    

2.0

    

Entertainment

    

2.5

    

Food products

    

2.8

    

Household durables

    

1.8

    

Insurance

    

2.5

    

Interactive media & services

    

7.9

    

Internet & direct marketing retail

    

10.0

    

Metals & mining

    

2.5

    

Oil, gas & consumable fuels

    

4.7

    

Personal products

    

2.0

    

Pharmaceuticals

    

2.3

    

Real estate management & development

    

1.7

    

Semiconductors & semiconductor equipment

    

21.9

    

Technology hardware, storage & peripherals

    

5.9

    

Total common stocks

    

98.5

    

Short-term investments

    

0.8

    

Total investments

    

99.3

    

Other assets in excess of liabilities

    

0.7

    

Net assets

    

100.0

%

  

1  The portfolio is actively managed and its composition will vary over time.


39

UBS Emerging Markets Equity Opportunity Fund

Portfolio of investments

December 31, 2021 (unaudited)

    Number of
shares		  

Value

  

Common stocks: 98.5%

  

Argentina: 3.4%

  

MercadoLibre, Inc.*

    

17,902

    

$

24,139,057

    

Brazil: 1.5%

  

Petroleo Brasileiro SA, ADR

    

932,438

      

10,238,169

    

China: 31.2%

  

Alibaba Group Holding Ltd.*

    

724,444

      

11,046,597

    

Bilibili, Inc., Class Z*

    

142,220

      

6,540,528

    

China Mengniu Dairy Co. Ltd.*

    

3,469,000

      

19,663,843

    

China Merchants Bank Co. Ltd., Class H

    

3,364,000

      

26,122,333

    

Country Garden Services Holdings Co. Ltd.

    

2,013,000

      

12,055,979

    

Jiangsu Hengrui Medicine Co. Ltd., Class A

    

2,027,666

      

16,133,265

    

Kweichow Moutai Co. Ltd., Class A

    

59,967

      

19,288,498

    
LONGi Green Energy Technology Co. Ltd.,
Class A*		    

1,076,200

      

14,555,679

    

Meituan, Class B*,1

    

898,800

      

25,981,176

    

Midea Group Co. Ltd., Class A

    

1,070,846

      

12,401,507

    
Ping An Insurance Group Co. of China Ltd.,
Class H		    

2,397,500

      

17,264,349

    

Tencent Holdings Ltd.

    

656,600

      

38,465,272

    
         

219,519,026

    

Hungary: 2.6%

  

OTP Bank Nyrt*

    

355,358

      

18,180,687

    

India: 11.9%

  

Axis Bank Ltd.*

    

1,327,830

      

12,120,686

    

Eicher Motors Ltd.

    

503,152

      

17,543,664

    

HDFC Bank Ltd.

    

874,888

      

17,411,690

    

Hindustan Unilever Ltd.

    

431,789

      

13,709,261

    

Reliance Industries Ltd.

    

707,685

      

22,545,094

    
         

83,330,395

    

Indonesia: 6.4%

  

Bank Central Asia Tbk. PT

    

39,027,700

      

19,989,631

    

Bank Mandiri Persero Tbk. PT

    

51,223,400

      

25,247,808

    
         

45,237,439

    

Mexico: 2.7%

  

Grupo Financiero Banorte SAB de CV, Class O

    

2,902,200

      

18,854,272

    
    Number of
shares		  

Value

  

Common stocks—(concluded)

  

Russia: 5.7%

  

Sberbank of Russia PJSC

    

5,731,097

    

$

22,410,343

    

Yandex N.V., Class A*

    

287,100

      

17,369,550

    
         

39,779,893

    

South Africa: 3.8%

  

Anglo American PLC

    

422,749

      

17,257,910

    

Naspers Ltd., N Shares

    

60,905

      

9,448,206

    
         

26,706,116

    

South Korea: 11.3%

  

LG Chem Ltd.*

    

27,544

      

14,249,893

    

Samsung Electronics Co. Ltd.

    

630,958

      

41,559,631

    

SK Hynix, Inc.

    

214,933

      

23,685,571

    
         

79,495,095

    

Taiwan: 18.0%

  

MediaTek, Inc.

    

709,000

      

30,495,175

    

Nanya Technology Corp.

    

4,926,000

      

13,905,396

    

Sea Ltd., ADR*

    

47,900

      

10,715,709

    

Taiwan Semiconductor Manufacturing Co. Ltd.

    

3,212,000

      

71,398,417

    
         

126,514,697

    
Total common stocks
(cost $719,799,715)		        

691,994,846

    

Short-term investments: 0.8%

 

Investment companies: 0.8%

  
State Street Institutional U.S. Government
Money Market Fund, 0.030%2
(cost $5,508,414)		    

5,508,414

      

5,508,414

    
Total investments: 99.3%
(cost $725,308,129)		        

697,503,260

    

Other assets in excess of liabilities: 0.7%

        

5,260,081

    

Net assets: 100.0%

      

$

702,763,341

    

For a listing of defined portfolio acronyms that are used throughout the Portfolio of investments as well as the tables that follow, please refer to the Glossary of terms used in the Portfolio of investments.


40

UBS Emerging Markets Equity Opportunity Fund

Portfolio of investments

December 31, 2021 (unaudited)

Fair valuation summary

The following is a summary of the fair valuations according to the inputs used as of December 31, 2021 in valuing the Fund's investments. In the event a Fund holds investments for which fair value is measured using the NAV per share practical expedient (or its equivalent), a separate column will be added to the fair value hierarchy table; this is intended to permit reconciliation to the amounts presented in the Portfolio of investments:

Description

   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

  

$

669,584,503

    

$

22,410,343

    

$

—

    

$

691,994,846

    

Short-term investments

    

—

      

5,508,414

      

—

      

5,508,414

    

Total

  

$

669,584,503

    

$

27,918,757

    

$

—

    

$

697,503,260

    

At December 31, 2021, there were no transfers in or out of Level 3.

Portfolio footnotes

*  Non-income producing security.

1  Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities are considered liquid, unless noted otherwise, and may be resold in transactions exempt from registration, normally to qualified institutional buyers. Securities exempt from registration pursuant to Rule 144A, in the amount of $25,981,176, represented 3.7% of the Fund's net assets at period end.

2  Rates shown reflect yield at December 31, 2021.

See accompanying notes to financial statements.
41

UBS Engage For Impact Fund

Portfolio performance

For the six months ended December 31, 2021, Class P shares of UBS Engage For Impact Fund (the "Fund") returned 6.04%, while the Class P2 shares returned 6.43%. The Fund's benchmark, the MSCI All Country World Index (net) (the "Index"), returned 5.55% over the same time period. (Please note that the Fund's returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares, while the Index returns do not reflect the deduction of fees and expenses.)

The Fund's outperformance relative to the benchmark was driven primarily by positive stock selection.

Portfolio performance summary1

What worked:

•  Stock selection within the industrials and materials sectors was the largest positive contributor to Fund performance during the reporting period.

•  Several individual stock positions were positive for relative performance during the six-month period. The largest contributors were:

  – JTOWER, a developer of telecommunications infrastructure in both Japan and overseas, performed well following the release of third quarter results that showed a pickup in commercial and micro lending activity. Overall, we believe the telecom tower sharing business has good growth prospects in Japan and abroad.

  – Erste Group Bank's share price performed well following the release of its last quarter-end results that were ahead of market expectations. The company's positive 2021 guidance update included: mid-single-digit loan growth, high single-digit fee growth, and return to double-digit return on tangible equity. As Central and Eastern Europe (CEE) economies are recovering quickly, interest rate hikes are expected sooner, as well.

  – Evoqua Water Tech traded higher based on expectations that the company will benefit from the new infrastructure bill in the US. The announced acquisition of two subsidiaries of STERIS completes its water solutions for healthcare application, and was well received by the market.

  – Regal Rexnord's share price was boosted after the company achieved its "300 in 3" plan—aimed at expanding margins by 300 basis points (bps) over the next three years—ahead of schedule, with organic sales growth year over year approaching 40%. The predecessor company—Regal Beloit—also successfully completed its merger with Rexnord's Process & Motion Control (PMC) business to form Regal Rexnord.

  – Montrose Environmental Group announced strong earnings and raised its fiscal year 2021 earnings before interest, taxes, depreciation and amortization (EBITDA) guidance during the fourth quarter of 2021. The company continued to benefit from increasing demand for environmental services and evolving environmental regulatory initiatives.

What didn't work:

• Stock selection in the health care and consumer discretionary sectors detracted from relative performance during the six-month period. The largest individual detractors were:

  – Coursera detracted after its latest results showed a deceleration in revenue growth quarter over quarter, particularly in the company's Degrees segment, that declined sequentially for the second quarter in a row. Coursera attributed this to lengthy lead times and seasonality. With 5.5 million new registered learners, we continue to

1  For a detailed commentary on the market environment in general during the reporting period, see page 3.


42

UBS Engage For Impact Fund

think Coursera remains a beneficiary of the drive for workers to enhance their skills over the longer term. We continue to hold this stock.

  – A lack of exposure to Apple, the largest stock in the benchmark, detracted from relative performance as the stock continued to outperform. Because the technology giant does not derive revenues from impactful products and services, we do not hold Apple in the Fund.

  – Shoals Technology Group detracted in the second half of 2021 as, like other clean-tech growth names, it was affected by the change in market leadership to more economically sensitive names. We continue to hold this stock.

  – The surge in the Delta and subsequent Omicron variants led American Well's management to adjust their revenue guidance for the second half of the year, with social distancing and mask wearing suspected to affect flu season-related demand. The company upgraded its EBITDA guidance slightly and continues to expand its healthcare platform. We continue to hold this stock.

  – Takeda Pharmaceutical's shares sold off as investors appeared unenthused by its earnings guidance for next year and potentially scared off by the company's projected research and development (R&D) investment. We sold out of this stock during the reporting period.

•  As of December 31, 2021, the Fund did not have any exposure to derivatives.

Portfolio highlights

The Fund is a high conviction, impactful portfolio invested in companies that we believe have an important role to play in achieving the United Nations Sustainable Development Goals (SDGs)—not just through the products and services they sell but also through improvements in their operations and supply chains. The portfolio invests across five impact themes, which are climate, health, food, water and empowerment.

As of December 31, 2021, the portfolio's largest exposure was to the climate theme (49.5%), followed by health (16.8%) and food (15.8%), which translated in exposures to SDG 2 (Zero Hunger, 15.8%), 3 (Good Health and Well-Being, 16.8%), SDG 7 (Affordable and Clean Energy, 14.5%), and SDG 12 (Responsible Consumption & Production, 21.0%), among others.

The Fund's three largest overweights as of December 31, 2021 included:

Erste Group Bank

Impact Theme: Empowerment

Product Impact: SDG 1 (Zero Poverty)

Erste puts social banking at the core of its strategy and is a key actor in Central and Eastern Europe, where over 20% of the population is at risk of poverty or social exclusion. The bank operates in several segments including retail, small and medium enterprise (SME), and commercial real estate, in Austria and Central and Eastern Europe (CEE) via an extensive network of branches and digital channels. Erste positions itself as a bank "taking care of persons that do not or no longer have access to traditional banking services and offers them first, or in some case second, opportunity to bank." Founded by a Catholic priest, the bank was a foundation before becoming a commercial entity, and has social banking principles at its core. The foundation, which owns 11% of the outstanding shares, aims not to redistribute dividends to charitable causes, but instead to empower communities with local projects, including access to finance, social inclusion and financial literacy programs. These actions are coordinated


43

UBS Engage For Impact Fund

with the bank, with initiatives such as the "Step-by-step banking programme," a platform in CEE for social banking and microcredits. Over 15 million people (23% of the CEE population) are at risk of poverty; therefore, Erste's social banking activities are crucial. In 2020, the bank estimates that its social banking activities supported 10,308 of these at-risk clients, with 1,404 clients financed (EUR 53 million disbursed loans) and 4,676 receiving financial literacy education. Since the launch of a formal social banking plan, Erste supported 36,000 clients, granted EUR 380 million in loans and provided educational support for 26,000 clients.

Bank Mandiri

Impact Theme: Empowerment

Product Impact: SDG 1 (Zero Poverty)

Bank Mandiri has exposure to social banking, with Indonesia banking penetration rate still quite low at approximately one-third of the population, with an estimate of more than 40% of loans being borrowed among family and friends rather than through financial institutions. Bank Mandiri is 60% owned by the government of Indonesia, and aligns its sustainable finance objectives with the Indonesian government's climate pledge and the Finance Authority's (OJK) directives. The bank raised its first green bond ($300 million and eight times oversubscribed) in 2021. We engaged with the bank in 2021 to assess the depth of its environmental and social risk monitoring capabilities in financing activities. Our engagement going forward will focus on supporting the company to adopt best-in-class procedures to assess human rights abuses risk in financing, in support of SDG 8 as well as SDG 10.

Ingersoll Rand

Impact Theme: Health

Product Impact: SDG 3 (Good Health and Well-Being)

Following the merger with Denver and disposal of various assets, we believe the company has a clear health impact profile, and management intends to grow exposure to the environmental and health end-markets over time. Ingersoll Rand (IR) is a diversified industrial machinery company involved in two core businesses: (1) industrial technologies & services (including mission-critical flow creation, such as compression, blowers, vacuums, pumps, and more) and (2) precision & science tech (medical applications). The company eliminated its exposure to the upstream oil and gas industry and to specialty vehicle technology over the course of 2021. An important growth driver for IR is the push into medical end markets, where the company manufactures a broad range of specialized gas, liquid and precision syringe pumps and compressors that are specified by medical and lab equipment suppliers and integrated into their equipment for final use (such as oxygen therapy, blood dialysis, patient monitoring, lab sterilization and wound treatment). These products are mission-critical in healthcare applications and represented approximately 18% of revenues in the second quarter of 2021, versus 10% in fiscal year 2020. In addition, management indicated a clear intention to focus its investments and mergers and acquisitions (M&A) in sustainable end-markets, such as agritech, animal health, water, environmental and hydrogen, which should broaden the company's impact profile over time to include environmental impact benefits.

This letter is intended to assist shareholders in understanding how the Fund performed during the six months ended December 31, 2021. The views and opinions in the letter were current as of February 10, 2022. 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 website at www.ubs.com/am-us.


44

UBS Engage For Impact Fund

Average annual total returns for periods ended 12/31/21 (unaudited)

  

6 months

  

1 year

  

Inception1

  

Class P2

    

6.04

%

    

16.23

%

    

15.11

%

  

Class P24

    

6.43

      

N/A

      

13.63

    

MSCI All Country World Index (net)3

    

5.55

      

18.54

      

17.48

    

The annualized gross and net expense ratios, respectively, for each class of shares as in the October 28, 2021 prospectuses were as follows: Class P—1.69% and 0.85%; Class P2—2.24% and 0.25%. 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., the Fund's investment advisor and administrator ("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, such as proxy-related expenses), through the period ending October 28, 2022, do not exceed 0.85% for Class P shares and 0.25% for Class P2 shares. Pursuant to the written agreement, the Advisor is entitled to be reimbursed for any fees it waives and expenses it reimburses to the extent such reimbursement can be made during the three fiscal years following the date on which such fee waivers and expense reimbursements were made, provided that the reimbursement of the Advisor by the Fund will not cause the Fund to exceed the lesser of any applicable expense limit that is in place for the Fund (i) at the time of the waiver or reimbursement or (ii) at the time of the recoupment. 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  Inception date of Class P of UBS Engage For Impact Fund is October 24, 2018. Benchmark's inception return is based on Class P inception date.

2  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.

3  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.

4  Inception date of Class P2 of UBS Engage For Impact Fund is February 23, 2021.

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


45

UBS Engage For Impact Fund

Portfolio statistics and industry diversification—(unaudited)1

As a percentage of net assets as of December 31, 2021

Top ten holdings

Erste Group Bank AG

    

4.2

%

  

Bank Mandiri Persero Tbk. PT

    

3.9

    

Ingersoll Rand, Inc.

    

3.9

    

Alcon, Inc.

    

3.7

    

Regal Rexnord Corp.

    

3.6

    

Micron Technology, Inc.

    

3.5

    

Spectris PLC

    

3.4

    

Roper Technologies, Inc.

    

3.3

    

Linde PLC

    

3.2

    

Ecolab, Inc.

    

3.1

    

Total

    

35.8

%

  

Top five issuer breakdown by country or territory of origin

United States

    

53.8

%

  

United Kingdom

    

6.6

    

Germany

    

5.3

    

France

    

4.2

    

Austria

    

4.1

    

Total

    

74.0

%

  

 

Common stocks

      

Auto components

    

3.1

%

  

Banks

    

8.1

    

Beverages

    

2.5

    

Biotechnology

    

4.0

    

Building products

    

2.9

    

Chemicals

    

8.4

    

Commercial services & supplies

    

1.1

    

Construction & engineering

    

2.4

    

Distributors

    

1.0

    

Diversified consumer services

    

1.3

    

Electric utilities

    

1.7

    

Electrical equipment

    

5.1

    

Electronic equipment, instruments & components

    

3.4

    

Equity real estate investment trusts

    

1.9

    

Food & staples retailing

    

1.5

    

Food products

    

9.4

    

Health care equipment & supplies

    

6.9

    

Health care providers & services

    

1.5

    

Health care technology

    

0.6

    

Hotels, restaurants & leisure

    

1.1

    

Industrial conglomerates

    

3.3

    

IT services

    

2.8

    

Life sciences tools & services

    

0.9

    

Machinery

    

10.2

    

Oil, gas & consumable fuels

    

1.3

    

Paper & forest products

    

2.6

    

Semiconductors & semiconductor equipment

    

6.3

    

Software

    

4.1

    

Total common stocks

    

99.4

    

Short-term investments

    

0.5

    

Total investments

    

99.9

    

Other assets in excess of liabilities

    

0.1

    

Net assets

    

100.0

%

  

1  The portfolio is actively managed and its composition will vary over time.


46

UBS Engage For Impact Fund

Portfolio of investments

December 31, 2021 (unaudited)

    Number of
shares		  

Value

  

Common stocks: 99.4%

 

Austria: 4.2%

  

Erste Group Bank AG

    

52,871

    

$

2,489,006

    

Brazil: 2.6%

  

Suzano SA, ADR*,1

    

141,900

      

1,532,520

    

China: 2.8%

  

China Mengniu Dairy Co. Ltd.

    

296,000

      

1,677,860

    

Denmark: 2.0%

  

Genmab A/S*

    

2,970

      

1,195,811

    

France: 4.2%

  

Danone SA

    

26,504

      

1,647,242

    

Orpea SA

    

8,811

      

883,759

    
         

2,531,001

    

Germany: 5.3%

  

Infineon Technologies AG

    

36,826

      

1,708,919

    

Knorr-Bremse AG

    

14,914

      

1,475,526

    
         

3,184,445

    

Indonesia: 3.9%

  

Bank Mandiri Persero Tbk. PT

    

4,751,000

      

2,341,749

    

Ireland: 2.9%

  

Kingspan Group PLC

    

14,327

      

1,712,685

    

Japan: 2.4%

  

JTOWER, Inc.*

    

17,000

      

1,426,150

    

New Zealand: 1.2%

  

Fisher & Paykel Healthcare Corp. Ltd.

    

32,405

      

727,082

    

Norway: 1.4%

  

Mowi ASA

    

35,059

      

830,838

    

Portugal: 1.3%

  

Galp Energia SGPS SA

    

78,803

      

764,390

    

Spain: 1.7%

  

Iberdrola SA

    

87,182

      

1,033,262

    

Switzerland: 3.7%

  

Alcon, Inc.

    

25,000

      

2,215,211

    

United Kingdom: 6.6%

  

Linde PLC

    

5,444

      

1,885,965

    

Spectris PLC

    

41,333

      

2,046,515

    
         

3,932,480

    
    Number of
shares		  

Value

  

Common stocks—(concluded)

  

United States: 53.2%

  

AGCO Corp.

    

7,164

    

$

831,167

    

American Well Corp., Class A*,1

    

57,819

      

349,227

    

Aptiv PLC*

    

11,175

      

1,843,316

    

Bunge Ltd.

    

15,616

      

1,457,910

    

CF Industries Holdings, Inc.

    

18,052

      

1,277,721

    

Citrix Systems, Inc.

    

10,531

      

996,127

    

Coursera, Inc.*

    

32,166

      

786,137

    

Digital Realty Trust, Inc.

    

6,519

      

1,153,016

    

Ecolab, Inc.

    

7,951

      

1,865,225

    

Evoqua Water Technologies Co.*

    

32,522

      

1,520,404

    

Ingersoll Rand, Inc.

    

37,177

      

2,300,141

    

LivaNova PLC*

    

13,935

      

1,218,337

    

LKQ Corp.

    

10,245

      

615,007

    

Maravai LifeSciences Holdings, Inc., Class A*

    

12,824

      

537,326

    

Micron Technology, Inc.

    

22,206

      

2,068,489

    

Montrose Environmental Group, Inc.*

    

9,528

      

671,819

    

Primo Water Corp.

    

84,600

      

1,491,498

    

Regal Rexnord Corp.

    

12,679

      

2,157,712

    

Roper Technologies, Inc.

    

4,012

      

1,973,342

    

Seagen, Inc.*

    

7,665

      

1,185,009

    

Shoals Technologies Group, Inc., Class A*

    

37,968

      

922,622

    

Snowflake, Inc., Class A*

    

4,871

      

1,650,051

    

Sprouts Farmers Market, Inc.*

    

31,019

      

920,644

    

Sweetgreen, Inc., Class A*

    

20,000

      

640,000

    

VMware, Inc., Class A

    

12,536

      

1,452,672

    
         

31,884,919

    
Total common stocks
(cost $50,618,433)		        

59,479,409

    

Short-term investments: 0.5%

 

Investment companies: 0.5%

  
State Street Institutional U.S. Government
Money Market Fund, 0.030%2
(cost $313,893)		    

313,893

      

313,893

    
Total investments: 99.9%
(cost $50,932,326)		        

59,793,302

    

Other assets in excess of liabilities: 0.1%

        

86,782

    

Net assets: 100.0%

      

$

59,880,084

    

For a listing of defined portfolio acronyms that are used throughout the Portfolio of investments as well as the tables that follow, please refer to the Glossary of terms used in the Portfolio of investments.


47

UBS Engage For Impact Fund

Portfolio of investments

December 31, 2021 (unaudited)

Fair valuation summary

The following is a summary of the fair valuations according to the inputs used as of December 31, 2021 in valuing the Fund's investments. In the event a Fund holds investments for which fair value is measured using the NAV per share practical expedient (or its equivalent), a separate column will be added to the fair value hierarchy table; this is intended to permit reconciliation to the amounts presented in the Portfolio of investments:

Description

   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

  

$

59,479,409

    

$

—

    

$

—

    

$

59,479,409

    

Short-term investments

    

—

      

313,893

      

—

      

313,893

    

Total

  

$

59,479,409

    

$

313,893

    

$

—

    

$

59,793,302

    

At December 31, 2021, there were no transfers in or out of Level 3.

Portfolio footnotes

*  Non-income producing security.

1  Security, or portion thereof, was on loan at the period end.

2  Rates shown reflect yield at December 31, 2021.

See accompanying notes to financial statements.
48

UBS International Sustainable Equity Fund

Portfolio performance

For the six months ended December 31, 2021, Class A shares of UBS International Sustainable Equity Fund (the "Fund") returned -2.59% (Class A shares returned -7.98% after the deduction of the maximum sales charge), while Class P shares returned -2.52% and Class P2 returned -2.15%. The Fund's benchmark, MSCI All Country World Index ex-US Index (the "Index"), returned -1.22%. (Class P2 shares have lower expenses than the other share classes in the Fund. Returns for all share classes over various time periods are shown on page 52; please note that these returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares, while the Index returns do not reflect the deduction of fees and expenses.)

The Fund underperformed its benchmark during the reporting period.

Portfolio performance summary1

What worked:

•  Stock selection in the financials and consumer discretionary sectors added the most value relative to the benchmark.

•  Sony Group was the Fund's top contributor over the second half of 2021 as the company's shares performed well due to strong earnings, notably in the music and electronic products & solutions segments. Additionally, an indication of further profit growth in the medium term for Sony's entertainment content business lifted shares. Overall, the company has continued to perform well, boosted by growth in demand for consumer electronic products and digital content during the pandemic.

•  Erste Group Bank's shares traded strongly owing to a few key trends which boosted earnings, including strong retail loan growth on the year (and acceleration in the second quarter), triggered by demand for housing loans, as well as fees and commissions trending higher. Additionally, investors were keen on the appointment of new management board members, a move which demonstrated the bank's renewed focus on profitability.

•  Aon's shares were boosted as insurance broking firms benefitted from strong revenue growth and surging margins this year. Aon has performed well, owing to strong bottom-line improvement where it has executed on its commitment to strategic cost-cutting, mostly by means of divesting non-core operations and reinvesting the proceeds in the most profitable parts of the business. As such, Aon has steadily sold off parts of its retirement and investment businesses in order to expand on strengths such as its health and benefits business, flood insurance solutions, and risk and insurance solutions operations.

What didn't work:

•  Stock selection in the consumer staples and materials sectors detracted the most relative to the benchmark.

•  Alibaba was the main detractor over the period, as the company's shares sold off amid China's persistent regulatory crackdowns, including enforcing anti-monopoly measures. We continue to hold this stock.

•  LG Chem detracted amid volatility in preparation for the initial public offering (IPO) of its LG Energy Solutions subsidiary. We continue to hold this stock.

•  SoftBank Group's shares continued to decline in the second half of 2021 as its Vision Fund continued to underperform. Portfolio companies held in the fund such as Alibaba and Didi declined during the period, having been negatively impacted by the heightened regulatory regime in China. We continue to hold this stock.

1  For a detailed commentary on the market environment in general during the reporting period, see page 3.


49

UBS International Sustainable Equity Fund

Portfolio highlights

Our investment philosophy combines our bottom-up fundamental research with rigorous sustainability analysis. We look for companies that we believe are attractively valued and integrate sustainability factors into their business models to build a competitive advantage.

The investment process for the UBS International Sustainable Equity Fund's strategy is driven by a combination of fundamental, ESG (Environmental, Social and Governance) and thematic factors. Through this process, we aim to identify our best investment ideas across sectors and geographies from a stock-specific standpoint.

Please see below for summaries on the top three largest overweights in the portfolio, as of December 31, 2021:

Barry Callebaut

Barry Callebaut is the world's leading manufacturer of high-quality chocolate and cocoa products, and has been dedicated to this business for more than 150 years. The company operates in more than 40 countries, runs about 60 production facilities, employs a global workforce of more than 12,000 people, and generates annual sales of about $7.1 billion. We see long-term structural growth coming from outsourcing and volume growth, complemented by margin growth through leverage. Barry Callebaut is globally diversified, which gives it a competitive edge over smaller local players and allows for more capacity in innovation. We believe the company has a strong management team that is focused on long-term margin expansion and top line growth, with sustainability embedded in the DNA of the corporate culture. While the shutdown of restaurants and hotels has created short term headwinds for its Gourmet segment, we believe that post-crisis, there will be an opportunity to gain market share with a solid pipeline in food manufacturing. Overall, we view Barry Callebaut as being a recovery winner post-lockdown. In 2016, the company launched Forever Chocolate, with a plan to make sustainable chocolate the norm by 2025 and drive a sustainable cocoa and chocolate supply chain. It aims to have more than 500,000 cocoa farmers lifted out of poverty and have 100% sustainable ingredients in all the company's products. In its fourth annual progress report, Barry Callebaut reported that 143,233 cocoa farmers in its supply chain have moved out of poverty, and also reported an 8.1% reduction in its carbon footprint.

Bank Central Asia

PT Bank Central Asia Tbk (BCA) is an Indonesia-based financial institution. BCA offers individual and business products and services. BCA's individual products and services consist of savings accounts, electronic banking, credit cards, consumer credit products, bancassurance, investment products, remittance collection and safe deposit facilities. BCA's business products and services consist of savings accounts, BCA trade working capital loans, investment loans, and bank guarantees for small and medium-sized enterprises, as well as for corporate customers. BCA continues to generate one of the highest returns in the Indonesian and regional banking sectors, driven by positive domestic structural macro momentum and better leverage of its depositor franchise. Valuations of 3.9x price to book and 23x price to earnings (estimated for 2022) remain at a premium to the rest of sector, but in our view, are supported by leading balance sheet and management quality.

Sony Group

Sony is a conglomerate engaged in the production of various kinds of electronic equipment, production and licensing of music and films. Sony has transformed its business portfolio significantly over several years. We believe Sony will be able to grow its earnings in a sustainable way at least for the next three to five years. Keys to achieving this are its game and network services segment and the successful launch of the PS5 gaming console. The restructuring of its Mobile Communication and Pictures divisions is also important. There is clearly a positive sign in Pictures, as it has had higher hit rates in the last couple of years—although the film industry is currently in standstill with the closure of cinemas. On the other hand, Sony's video game segment is benefiting from the lockdown. Sony receives a very high ESG score, lifted by its environmental efficiency.

As of December 31, 2021, the Fund did not have any exposure to derivatives.


50

UBS International Sustainable Equity Fund

This letter is intended to assist shareholders in understanding how the Fund performed during the six months ended December 31, 2021. The views and opinions in the letter were current as of February 10, 2022. 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 website at www.ubs.com/am-us.


51

UBS International Sustainable Equity Fund

Average annual total returns for periods ended 12/31/21 (unaudited)

  

6 months

  

1 year

  

5 years

   10 years or
Inception1		  

Before deducting maximum sales charge

  

Class A1

    

(2.59

)%

    

3.11

%

    

9.09

%

    

8.07

%

  

Class P2

    

(2.52

)

    

3.34

      

9.36

      

8.33

    

Class P24

    

(2.15

)

    

4.14

      

N/A

      

20.34

    

After deducting maximum sales charge

  

Class A1

    

(7.98

)%

    

(2.59

)%

    

7.87

%

    

7.45

%

  

MSCI ACWI ex-US Index3

    

(1.22

)

    

7.82

      

9.61

      

7.28

    

The annualized gross and net expense ratios, respectively, for each class of shares as in the October 28, 2021 prospectuses were as follows: Class A—1.33% and 1.25%; Class P—1.05% and 1.00%; Class P2—1.08% and 0.22%. 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., the Fund's investment advisor and administrator ("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, such as proxy-related 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, such as proxy-related expenses) do not exceed 1.25% for Class A shares, 1.00% for Class P shares. This fee waiver and expense arrangement may only be amended or terminated by shareholders. The Advisor has also 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, such as proxy-related 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, such as proxy-related expenses), through the period ending October 28, 2022, does not exceed 0.25% for Class P2 shares. Pursuant to the written agreement, the Advisor is entitled to be reimbursed for any fees it waives and expenses it reimburses to the extent such reimbursement can be made during the three fiscal years following the date on which such fee waivers and expense reimbursements were made, provided that the reimbursement of the Advisor by the Fund will not cause the Fund to exceed the lesser of any applicable expense limit that is in place for the Fund (i) at the time of the waiver or reimbursement or (ii) at the time of the recoupment. 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  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.

3  The MSCI ACWI ex USA Index captures large and mid cap representation across 22 of 23 Developed Markets (DM) countries (excluding the US) and 25 Emerging Markets (EM) countries*. With 2,336 constituents, the index covers approximately 85% of the global equity opportunity set outside the US.

4  Inception date of Class P2 of UBS International Sustainable Equity Fund is October 30, 2020.

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


52

UBS International Sustainable Equity Fund

Portfolio statistics and industry diversification—(unaudited)1

As a percentage of net assets as of December 31, 2021

Top ten holdings

Sony Group Corp.

    

2.7

%

  

Barry Callebaut AG

    

2.3

    

Bank Central Asia Tbk. PT

    

2.2

    

Royal Bank of Canada

    

2.1

    

Ashtead Group PLC

    

2.1

    

Infineon Technologies AG

    

2.1

    

AstraZeneca PLC

    

2.1

    

ASML Holding N.V.

    

2.0

    

Metso Outotec Oyj

    

2.0

    

Novartis AG

    

2.0

    

Total

    

21.6

%

  

Top five issuer breakdown by country or territory of origin

United Kingdom

    

15.2

%

  

Japan

    

13.8

    

China

    

8.9

    

France

    

8.1

    

Germany

    

6.4

    

Total

    

52.4

%

  

 

Common stocks

      

Auto components

    

3.2

%

  

Automobiles

    

3.8

    

Banks

    

12.1

    

Biotechnology

    

2.0

    

Capital markets

    

1.5

    

Chemicals

    

3.4

    

Commercial services & supplies

    

1.1

    

Construction & engineering

    

1.7

    

Diversified financial services

    

1.2

    

Diversified telecommunication services

    

2.8

    

Electrical equipment

    

1.0

    

Electronic equipment, instruments & components

    

1.7

    

Energy equipment & services

    

1.2

    

Entertainment

    

2.6

    

Food products

    

6.1

    

Health care equipment & supplies

    

4.0

    

Household durables

    

2.7

    

Industrial conglomerates

    

1.3

    

Insurance

    

6.6

    

Interactive media & services

    

1.1

    

Internet & direct marketing retail

    

3.1

    

IT services

    

2.3

    

Machinery

    

3.1

    

Oil, gas & consumable fuels

    

2.6

    

Paper & forest products

    

1.1

    

Personal products

    

2.0

    

Pharmaceuticals

    

4.1

    

Professional services

    

1.5

    

Semiconductors & semiconductor equipment

    

6.7

    

Software

    

5.2

    

Specialty retail

    

2.4

    

Trading companies & distributors

    

3.3

    

Wireless telecommunication services

    

1.3

    

Total common stocks

    

99.8

    

Investment of cash collateral from securities loaned

    

0.6

    

Total investments

    

100.4

    

Liabilities in excess of other assets

    

(0.4

)

  

Net assets

    

100.0

%

  

1  The portfolio is actively managed and its composition will vary over time.


53

UBS International Sustainable Equity Fund

Portfolio of investments

December 31, 2021 (unaudited)

    Number of
shares		  

Value

  

Common stocks: 99.8%

 

Argentina: 0.9%

  

MercadoLibre, Inc.*

    

2,345

    

$

3,161,998

    

Australia: 1.1%

  

Brambles Ltd.

    

510,676

      

3,949,495

    

Austria: 1.3%

  

Erste Group Bank AG

    

99,951

      

4,705,389

    

Belgium: 2.5%

  

Galapagos N.V.*

    

31,911

      

1,788,195

    

Galapagos N.V.*,1

    

11,805

      

661,517

    

KBC Group N.V.

    

73,203

      

6,288,956

    
         

8,738,668

    

Brazil: 1.1%

  

Suzano SA*

    

367,400

      

3,968,319

    

Canada: 2.1%

  

Royal Bank of Canada

    

71,227

      

7,559,370

    

China: 8.9%

  

Alibaba Group Holding Ltd., ADR*

    

41,885

      

4,975,519

    

China Mengniu Dairy Co. Ltd.*

    

642,000

      

3,639,143

    

Li Auto, Inc., ADR*

    

102,100

      

3,277,410

    

Meituan, Class B*,2

    

99,000

      

2,861,745

    

NXP Semiconductors N.V.

    

20,346

      

4,634,412

    

Ping An Insurance Group Co. of China Ltd., Class H

    

786,500

      

5,663,570

    

Tencent Holdings Ltd.

    

63,000

      

3,690,698

    

Zhongsheng Group Holdings Ltd.

    

333,000

      

2,596,508

    
         

31,339,005

    

Denmark: 1.3%

  

Genmab A/S*

    

11,345

      

4,567,839

    

Finland: 2.0%

  

Metso Outotec Oyj

    

665,236

      

7,079,903

    

France: 8.1%

  

AXA SA

    

226,139

      

6,741,568

    

Cie Generale des Etablissements Michelin SCA

    

42,312

      

6,944,022

    

Danone SA

    

101,304

      

6,296,114

    

Societe Generale SA

    

131,663

      

4,527,677

    

Ubisoft Entertainment SA*

    

83,542

      

4,096,497

    
         

28,605,878

    

Germany: 6.4%

  

CTS Eventim AG & Co. KGaA*

    

70,310

      

5,151,883

    

Infineon Technologies AG

    

160,455

      

7,445,954

    

Knorr-Bremse AG

    

37,608

      

3,720,771

    

SAP SE

    

43,086

      

6,126,769

    
         

22,445,377

    

India: 3.6%

  

Axis Bank Ltd., GDR*

    

88,604

      

4,093,505

    

Infosys Ltd., ADR

    

191,799

      

4,854,433

    

Mahindra & Mahindra Ltd., GDR

    

340,980

      

3,870,123

    
         

12,818,061

    
    Number of
shares		  

Value

  

Common stocks—(continued)

  

Indonesia: 3.5%

  

Bank Central Asia Tbk. PT

    

15,195,900

    

$

7,783,201

    

Bank Mandiri Persero Tbk. PT

    

9,549,500

      

4,706,910

    
         

12,490,111

    

Ireland: 0.9%

  

AIB Group PLC*

    

1,269,719

      

3,093,530

    

Italy: 2.3%

  

Infrastrutture Wireless Italiane SpA1,2

    

371,142

      

4,512,781

    

Prysmian SpA

    

94,974

      

3,580,113

    
         

8,092,894

    

Japan: 13.8%

  

ITOCHU Corp.

    

139,800

      

4,275,549

    

NEC Corp.

    

68,300

      

3,152,856

    

Nippon Telegraph & Telephone Corp.

    

191,500

      

5,244,067

    

OBIC Business Consultants Co. Ltd.

    

130,100

      

5,485,395

    

ORIX Corp.

    

201,500

      

4,112,155

    

Shin-Etsu Chemical Co. Ltd.

    

35,300

      

6,112,979

    

SoftBank Group Corp.

    

96,400

      

4,553,922

    

Sony Group Corp.

    

75,100

      

9,450,339

    

Toyota Motor Corp.

    

336,000

      

6,150,117

    
         

48,537,379

    

Netherlands: 3.1%

  

ASML Holding N.V.

    

8,877

      

7,142,236

    

Koninklijke Philips N.V.

    

98,157

      

3,661,545

    
         

10,803,781

    

New Zealand: 0.8%

  

Fisher & Paykel Healthcare Corp. Ltd.

    

118,247

      

2,653,147

    

Norway: 1.9%

  

Equinor ASA

    

123,731

      

3,314,368

    

Mowi ASA

    

147,254

      

3,489,665

    
         

6,804,033

    

Portugal: 1.6%

  

Galp Energia SGPS SA

    

599,552

      

5,815,664

    

South Korea: 5.2%

  

LG Chem Ltd.*

    

11,593

      

5,997,641

    

LG Household & Health Care Ltd.*

    

1,967

      

1,815,183

    

Samsung Engineering Co. Ltd.*

    

308,186

      

5,936,874

    

SK Hynix, Inc.

    

40,683

      

4,483,258

    
         

18,232,956

    

Spain: 1.7%

  

Industria de Diseno Textil SA

    

184,508

      

5,993,077

    

Switzerland: 5.9%

  

Alcon, Inc.

    

63,676

      

5,642,230

    

Barry Callebaut AG

    

3,296

      

8,015,733

    

Novartis AG

    

80,057

      

7,053,310

    
         

20,711,273

    


54

UBS International Sustainable Equity Fund

Portfolio of investments

December 31, 2021 (unaudited)

    Number of
shares		  

Value

  

Common stocks—(concluded)

  

United Kingdom: 15.2%

  

Ashtead Group PLC

    

92,664

    

$

7,452,774

    

AstraZeneca PLC

    

62,478

      

7,338,732

    

DCC PLC

    

56,865

      

4,656,662

    

London Stock Exchange Group PLC

    

57,629

      

5,405,659

    

Prudential PLC

    

319,384

      

5,509,692

    

RELX PLC

    

166,232

      

5,404,580

    

Sage Group PLC

    

572,730

      

6,609,514

    

Spectris PLC

    

117,643

      

5,824,841

    

Unilever PLC

    

96,980

      

5,195,422

    
         

53,397,876

    

United States: 4.6%

  

Aon PLC, Class A

    

17,813

      

5,353,875

    

Aptiv PLC*

    

27,128

      

4,474,764

    

LivaNova PLC*

    

25,399

      

2,220,635

    

Schlumberger N.V.

    

137,129

      

4,107,013

    
         

16,156,287

    
Total common stocks
(cost $335,663,441)		        

351,721,310

    
    Number of
shares		  

Value

  

Investment of cash collateral from securities loaned: 0.6%

 

Money market funds: 0.6%

  
State Street Navigator Securities Lending
Government Money Market
Portfolio, 0.030%3
(cost $1,980,392)		    

1,980,392

    

$

1,980,392

    
Total investments: 100.4%
(cost $337,643,833)		        

353,701,702

    

 

Liabilities in excess of other assets: (0.4%)

    

(1,379,800

)

  

Net assets: 100.0%

  

$

352,321,902

    

For a listing of defined portfolio acronyms that are used throughout the Portfolio of investments as well as the tables that follow, please refer to the Glossary of terms used in the Portfolio of investments.

Fair valuation summary

The following is a summary of the fair valuations according to the inputs used as of December 31, 2021 in valuing the Fund's investments. In the event a Fund holds investments for which fair value is measured using the NAV per share practical expedient (or its equivalent), a separate column will be added to the fair value hierarchy table; this is intended to permit reconciliation to the amounts presented in the Portfolio of investments:

Description

   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

  

$

349,933,115

    

$

1,788,195

    

$

—

    

$

351,721,310

    

Investment of cash collateral from securities loaned

    

—

      

1,980,392

      

—

      

1,980,392

    

Total

  

$

349,933,115

    

$

3,768,587

    

$

—

    

$

353,701,702

    

At December 31, 2021, there were no transfers in or out of Level 3.


55

UBS International Sustainable Equity Fund

Portfolio of investments

December 31, 2021 (unaudited)

Portfolio footnotes

*  Non-income producing security.

1  Security, or portion thereof, was on loan at the period end.

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. Securities exempt from registration pursuant to Rule 144A, in the amount of $7,374,526, represented 2.1% of the Fund's net assets at period end.

3  Rates shown reflect yield at December 31, 2021.

See accompanying notes to financial statements.
56

UBS US Dividend Ruler Fund

Portfolio performance

For the six months ended December 31, 2021 (the "reporting period"), Class P shares of UBS US Dividend Ruler Fund (the "Fund") returned 9.93%. For comparison purposes, the S&P 500 Index (the "Index") returned 11.67%. 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.

Portfolio performance summary1

What worked

•  In terms of stock selection, holdings in the industrial, financial, consumer staples, and materials sectors were most additive to relative performance.

•  In terms of sector allocation, the portfolio's underweight to communication services was the largest contributor to relative performance.

•  A number of individual holdings were beneficial for performance, including:

  – Microsoft's shares outperformed, benefiting from a strong IT investment cycle with healthy PC sales and continued very high levels of growth in its Azure cloud platform.

  – Despite difficult year-over-year comparisons, Home Depot continued to deliver strong sales and home improvement fundamentals continued to be supported by low interest rates, limited new housing supply, healthy consumer balance sheets, home price appreciation, and hybrid working arrangements

  – Broadcom's stock outperformed. Demand for the company's semiconductor chips remained strong, supported by growth in cloud computing and 5G infrastructure.

What didn't work

•  Stock selection in the health care and communication services sectors were the largest detractors from performance.

•  In terms of sector allocation, our overweights to industrials and financials, along with an underweight to information technology, detracted from relative returns.

•  A number of individual holdings weighed on performance, including:

  – COVID surges and hospital staffing shortages reduced elective procedure volumes and weighed on Medtronic's shares. The company also experienced near-term and likely temporary setbacks for two key pipeline assets. In our view, with its shares trading at their lowest relative valuation compared to the S&P 500 in history, a fair amount of pessimism appears priced in. A recovery in hospital procedure volumes and continued share gains in newly launched innovative products should support a rebound in the stock. We continue to hold the stock.

  – Comcast's shares lagged given lowered expectations for near-term broadband subscriber growth and increasing competition from telecom providers. While near-term broadband growth may slow following elevated pandemic-driven demand, we feel Comcast still stands to benefit from further penetration of its broadband business over time (current footprint is approximately 50% penetrated in the US). Strong free cash flow generation supports the company's ability to boost its share buyback program. We continue to hold the stock.

1  For a detailed commentary on the market environment in general during the reporting period, see page 3.


57

UBS US Dividend Ruler Fund

  – Intel's shares lagged following its third quarter earnings results. Intel detailed expectations for significantly lower profit margins for the coming years as its increases investment spending to build out its foundry business. We removed Intel from the Fund in October 2021.

•  The Fund did not invest in derivatives during the reporting period.

This letter is intended to assist shareholders in understanding how the Fund performed during the six months ended December 31, 2021. The views and opinions in the letter were current as of February 10, 2022. 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 website at www.ubs.com/am-us.


58

UBS US Dividend Ruler Fund

Average annual total returns for periods ended 12/31/21 (unaudited)

  

6 months

  

1 Year

  

Inception1

  

Class P2

    

9.93

%

    

23.30

%

    

26.87

%

  

S&P 500 Index3

    

11.67

      

28.71

      

32.24

    

The annualized gross and net expense ratios, respectively, for each class of shares as in the October 28, 2021 prospectuses were as follows: Class P—1.57% 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., the Fund's investment advisor and administrator ("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, such as proxy-related 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, such as proxy-related expenses), through the period ending October 28, 2022, 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 to the extent such reimbursement can be made during the three fiscal years following the date on which such fee waivers and expense reimbursements were made, provided that the reimbursement of the Advisor by the Fund will not cause the Fund to exceed the lesser of any applicable expense limit that is in place for the Fund (i) at the time of the waiver or reimbursement or (ii) at the time of the recoupment. 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  Inception date of Class P of UBS Dividend Ruler Price Fund is July 09, 2020.

2  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

3  The S&P 500 Index is an unmanaged, weighted index comprising 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.

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


59

UBS US Dividend Ruler Fund

Portfolio statistics and industry diversification—(unaudited)1

As a percentage of net assets as of December 31, 2021

Top ten holdings

Microsoft Corp.

    

7.9

%

  

Johnson & Johnson

    

4.1

    

JPMorgan Chase & Co.

    

3.5

    

Cisco Systems, Inc.

    

3.4

    

Coca-Cola Co.

    

3.3

    

Linde PLC

    

3.3

    

McDonald's Corp.

    

3.2

    

Raytheon Technologies Corp.

    

3.2

    

Comcast Corp., Class A

    

3.1

    

Broadcom, Inc.

    

3.1

    

Total

    

38.1

%

  

Issuer breakdown by country or territory of origin

United States

    

92.5

%

  

United Kingdom

    

6.0

    

Switzerland

    

1.5

    

Total

    

100.0

%

  

 

Common stocks

      

Aerospace & defense

    

5.1

%

  

Air freight & logistics

    

2.8

    

Banks

    

6.3

    

Beverages

    

6.0

    

Biotechnology

    

2.3

    

Capital markets

    

4.1

    

Chemicals

    

3.3

    

Commercial services & supplies

    

1.9

    

Communications equipment

    

3.4

    

Consumer finance

    

1.7

    

Electric utilities

    

2.2

    

Electrical equipment

    

1.7

    

Health care equipment & supplies

    

2.8

    

Health care providers & services

    

2.2

    

Hotels, restaurants & leisure

    

5.2

    

Household products

    

2.8

    

Insurance

    

4.9

    

IT services

    

4.1

    

Media

    

3.1

    

Oil, gas & consumable fuels

    

4.0

    

Pharmaceuticals

    

5.5

    

Road & rail

    

2.2

    

Semiconductors & semiconductor equipment

    

8.6

    

Software

    

7.9

    

Specialty retail

    

2.0

    

Textiles, apparel & luxury goods

    

2.0

    

Total common stocks

    

98.1

    

Short-term investments

    

1.9

    

Total investments

    

100.0

    

Other assets in excess of liabilities

    

0.0

†

  

Net assets

    

100.0

%

  

†  Amount represents less than 0.05% or (0.05%).

1  The portfolio is actively managed and its composition will vary over time.


60

UBS US Dividend Ruler Fund

Portfolio of investments

December 31, 2021 (unaudited)

    Number of
shares		  

Value

  

Common stocks: 98.1%

  

Aerospace & defense: 5.1%

  

Lockheed Martin Corp.

    

6,616

    

$

2,351,393

    

Raytheon Technologies Corp.

    

45,092

      

3,880,617

    
         

6,232,010

    

Air freight & logistics: 2.8%

  

United Parcel Service, Inc., Class B

    

15,645

      

3,353,349

    

Banks: 6.3%

  

JPMorgan Chase & Co.

    

26,472

      

4,191,841

    

Truist Financial Corp.

    

59,054

      

3,457,612

    
         

7,649,453

    

Beverages: 6.0%

  

Coca-Cola Co.

    

67,232

      

3,980,807

    

Diageo PLC, ADR

    

14,928

      

3,286,250

    
         

7,267,057

    

Biotechnology: 2.3%

  

Amgen, Inc.

    

12,604

      

2,835,522

    

Capital markets: 4.1%

  

BlackRock, Inc.

    

3,352

      

3,068,957

    

Morgan Stanley

    

19,944

      

1,957,703

    
         

5,026,660

    

Chemicals: 3.3%

  

Linde PLC

    

11,454

      

3,968,009

    

Commercial services & supplies: 1.9%

  

Republic Services, Inc.

    

16,500

      

2,300,925

    

Communications equipment: 3.4%

  

Cisco Systems, Inc.

    

64,792

      

4,105,869

    

Consumer finance: 1.7%

  

Discover Financial Services

    

18,199

      

2,103,076

    

Electric utilities: 2.2%

  

American Electric Power Co., Inc.

    

13,558

      

1,206,255

    

NextEra Energy, Inc.

    

16,131

      

1,505,990

    
         

2,712,245

    

Electrical equipment: 1.7%

  

Rockwell Automation, Inc.

    

5,978

      

2,085,425

    

Health care equipment & supplies: 2.8%

  

Medtronic PLC

    

32,670

      

3,379,712

    

Health care providers & services: 2.2%

  

UnitedHealth Group, Inc.

    

5,239

      

2,630,712

    

Hotels, restaurants & leisure: 5.2%

  

McDonald's Corp.

    

14,569

      

3,905,512

    

Starbucks Corp.

    

20,155

      

2,357,530

    
         

6,263,042

    

Household products: 2.8%

  

Procter & Gamble Co.

    

20,757

      

3,395,430

    
    Number of
shares		  

Value

  

Common stocks—(concluded)

  

Insurance: 4.9%

  

Chubb Ltd.

    

16,938

    

$

3,274,285

    

Marsh & McLennan Cos., Inc.

    

15,252

      

2,651,102

    
         

5,925,387

    

IT services: 4.1%

  

Accenture PLC, Class A

    

5,951

      

2,466,987

    

Automatic Data Processing, Inc.

    

10,450

      

2,576,761

    
         

5,043,748

    

Media: 3.1%

  

Comcast Corp., Class A

    

75,228

      

3,786,225

    

Oil, gas & consumable fuels: 4.0%

  

EOG Resources, Inc.

    

35,033

      

3,111,981

    

Phillips 66

    

24,502

      

1,775,415

    
         

4,887,396

    

Pharmaceuticals: 5.5%

  

Johnson & Johnson

    

28,960

      

4,954,187

    

Novartis AG, ADR

    

20,307

      

1,776,254

    
         

6,730,441

    

Road & rail: 2.2%

  

Union Pacific Corp.

    

10,478

      

2,639,723

    

Semiconductors & semiconductor equipment: 8.6%

  

Analog Devices, Inc.

    

19,716

      

3,465,481

    

Broadcom, Inc.

    

5,649

      

3,758,901

    

Texas Instruments, Inc.

    

16,874

      

3,180,243

    
         

10,404,625

    

Software: 7.9%

  

Microsoft Corp.

    

28,597

      

9,617,743

    

Specialty retail: 2.0%

  

Home Depot, Inc.

    

5,809

      

2,410,793

    

Textiles, apparel & luxury goods: 2.0%

  

VF Corp.

    

33,175

      

2,429,074

    
Total common stocks
(cost $104,654,238)		        

119,183,651

    

Short-term investments: 1.9%

 

Investment companies: 1.9%

  
State Street Institutional U.S. Government
Money Market Fund, 0.030%1
(cost $2,272,815)		    

2,272,815

      

2,272,815

    
Total investments: 100.0%
(cost $106,927,053)		        

121,456,466

    

Other assets in excess of liabilities: 0.00%†

        

36,755

    

Net assets: 100.0%

      

$

121,493,221

    


61

UBS US Dividend Ruler Fund

Portfolio of investments

December 31, 2021 (unaudited)

For a listing of defined portfolio acronyms that are used throughout the Portfolio of investments as well as the tables that follow, please refer to the Glossary of terms used in the Portfolio of investments.

Fair valuation summary

The following is a summary of the fair valuations according to the inputs used as of December 31, 2021 in valuing the Fund's investments. In the event a Fund holds investments for which fair value is measured using the NAV per share practical expedient (or its equivalent), a separate column will be added to the fair value hierarchy table; this is intended to permit reconciliation to the amounts presented in the Portfolio of investments:

Description

   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

  

$

119,183,651

    

$

—

    

$

—

    

$

119,183,651

    

Short-term investments

    

—

      

2,272,815

      

—

      

2,272,815

    

Total

  

$

119,183,651

    

$

2,272,815

    

$

—

    

$

121,456,466

    

At December 31, 2021, there were no transfers in or out of Level 3.

Portfolio footnotes

†  Amount represents less than 0.05% or (0.05)%.

1  Rates shown reflect yield at December 31, 2021.

See accompanying notes to financial statements.
62

UBS US Quality Growth at Reasonable Price Fund

Portfolio performance

For the six months ended December 31, 2021 (the "reporting period"), Class P shares of UBS US Quality Growth at Reasonable Price Fund (the "Fund") returned 12.63%. For comparison purposes, the Russell 1000 Growth Index (the "Index") returned 12.93%. 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.

Portfolio performance summary1

What worked

•  Stock selection in the health care, communication services, and industrial sectors were meaningful contributors to returns.

•  Looking at sector allocation, an overweight to consumer discretionary was the largest contributor to performance.

•  A number of individual holdings were beneficial for performance, including:

  – Microsoft's shares outperformed, benefiting from a strong IT investment cycle, with healthy PC sales and continued very high levels of growth in its Azure cloud platform.

  – Despite supply constraints, demand for Apple products remained strong. Shares of the company rallied given speculation of product launches in fast-growing areas including augmented and virtual reality and electric vehicles.

  – Alphabet's shares rallied. Following a sharp deceleration in advertising in 2020, search revenues strongly rebounded. The company continued to execute well across its other key platforms, showing improved monetization in mobile and YouTube, and share gains in cloud computing.

What didn't work

•  Stock selection in the information technology sector was a detractor from performance.

•  In terms of sector allocation, our underweight in information technology was the largest negative for relative returns.

•  A number of individual holdings were less additive to performance, including:

– Fidelity National Information Services stock lagged due to pandemic-related headwinds weighing on their merchant volumes, as well as fears of share loss to fintech competitors. While the path to reopening has faced a series of challenges, we continue to expect the company will benefit from the eventual recovery in global travel. Moreover, payment volume growth for the company's merchant segment has generally mirrored the overall payments industry which, in our view, should dampen concerns of market share losses. We continue to hold the stock.

– Ongoing COVID surges and hospital staffing shortages continued to weigh on surgical procedure volumes for Medtronic. Setbacks in two key pipeline assets also weighed on the stock. We removed Medtronic from the Fund in December 2021.

1  For a detailed commentary on the market environment in general during the reporting period, see page 3.


63

UBS US Quality Growth at Reasonable Price Fund

– Similar to Fidelity National Information Services, Visa's shares lagged given the impact of COVID surges and lockdowns weighing on higher-margin cross border volumes. We expect an eventual economic normalization will help support Visa's stock. Fears of disintermediation from new payment structures such as Buy Now, Pay Later (BNPL) also weighed on investor sentiment for Visa. We view new payment structures as potentially complimentary to Visa's business and still expect a long-term growth runway for Visa with increasingly more transactions moving from cash to card over time. We continue to hold the stock.

•  The Fund did not invest in derivatives during the reporting period.

This letter is intended to assist shareholders in understanding how the Fund performed during the six months ended December 31, 2021. The views and opinions in the letter were current as of February 10, 2022. 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 website at www.ubs.com/am-us.


64

UBS US Quality Growth at Reasonable Price Fund

Average annual total returns for periods ended 12/31/21 (unaudited)

  

6 months

  

1 Year

  

Inception1

  

Class P2

    

12.63

%

    

29.19

%

    

30.40

%

  

Russell 1000 Growth3

    

12.93

      

27.60

      

32.43

    

The annualized gross and net expense ratios, respectively, for each class of shares as in the October 28, 2021 prospectuses were as follows: Class P—1.23% 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., the Fund's investment advisor and administrator ("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, such as proxy-related expenses), through the period ending October 28, 2022, 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 to the extent such reimbursement can be made during the three fiscal years following the date on which such fee waivers and expense reimbursements were made, provided that the reimbursement of the Advisor by the Fund will not cause the Fund to exceed the lesser of any applicable expense limit that is in place for the Fund (i) at the time of the waiver or reimbursement or (ii) at the time of the recoupment. 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  Inception date of Class P of UBS US Quality Growth at Reasonable Price Fund is July 09, 2020.

2  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.

3  Russell 1000 Growth Index measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values. The index was developed with a base value of 200 as of August 31, 1992.

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


65

UBS US Quality Growth at Reasonable Price Fund

Portfolio statistics and industry diversification—(unaudited)1

As a percentage of net assets as of December 31, 2021

Top ten holdings

Microsoft Corp.

    

13.0

%

  

Amazon.com, Inc.

    

8.6

    

Alphabet, Inc., Class A

    

8.3

    

Apple, Inc.

    

6.6

    

Meta Platforms, Inc. Class A

    

5.2

    

Visa, Inc., A Shares

    

3.8

    

TJX Cos., Inc.

    

3.1

    

Lowe's Cos., Inc.

    

2.7

    

Home Depot, Inc.

    

2.7

    

salesforce.com, Inc.

    

2.5

    

Total

    

56.5

%

  

Issuer breakdown by country or territory of origin

United States

    

100.4

%

  

 

Common stocks

      

Capital markets

    

4.9

%

  

Chemicals

    

2.0

    

Electrical equipment

    

1.1

    

Equity real estate investment trusts

    

1.5

    

Food & staples retailing

    

2.0

    

Health care equipment & supplies

    

4.3

    

Health care providers & services

    

2.1

    

Hotels, restaurants & leisure

    

1.3

    

Industrial conglomerates

    

1.2

    

Interactive media & services

    

13.5

    

Internet & direct marketing retail

    

8.6

    

IT services

    

5.6

    

Life sciences tools & services

    

2.6

    

Machinery

    

2.2

    

Multiline retail

    

1.5

    

Personal products

    

1.1

    

Road & rail

    

2.5

    

Semiconductors & semiconductor equipment

    

4.1

    

Software

    

17.7

    

Specialty retail

    

10.8

    

Technology hardware, storage & peripherals

    

6.6

    

Textiles, apparel & luxury goods

    

1.3

    

Total common stocks

    

98.5

    

Short-term investments

    

1.9

    

Total investments

    

100.4

    

Liabilities in excess of other assets

    

(0.4

)

  

Net assets

    

100.0

%

  

1  The portfolio is actively managed and its composition will vary over time.


66

UBS US Quality Growth at Reasonable Price Fund

Portfolio of investments

December 31, 2021 (unaudited)

    Number of
shares		  

Value

  

Common stocks: 98.5%

  

Capital markets: 4.9%

  

Ameriprise Financial, Inc.

    

13,632

    

$

4,112,229

    

Intercontinental Exchange, Inc.

    

19,928

      

2,725,553

    

S&P Global, Inc.

    

4,045

      

1,908,957

    
         

8,746,739

    

Chemicals: 2.0%

  

Sherwin-Williams Co.

    

10,078

      

3,549,068

    

Electrical equipment: 1.1%

  

Rockwell Automation, Inc.

    

5,478

      

1,911,000

    

Equity real estate investment trusts: 1.5%

  

American Tower Corp.

    

9,376

      

2,742,480

    

Food & staples retailing: 2.0%

  

Costco Wholesale Corp.

    

6,224

      

3,533,365

    

Health care equipment & supplies: 4.3%

  

Abbott Laboratories

    

31,476

      

4,429,932

    

Boston Scientific Corp.*

    

75,317

      

3,199,466

    
         

7,629,398

    

Health care providers & services: 2.1%

  

UnitedHealth Group, Inc.

    

7,452

      

3,741,947

    

Hotels, restaurants & leisure: 1.3%

  

Booking Holdings, Inc.*

    

1,002

      

2,404,028

    

Industrial conglomerates: 1.2%

  

Honeywell International, Inc.

    

10,413

      

2,171,215

    

Interactive media & services: 13.5%

  

Alphabet, Inc., Class A*

    

5,134

      

14,873,403

    

Meta Platforms, Inc., Class A*

    

27,728

      

9,326,313

    
         

24,199,716

    

Internet & direct marketing retail: 8.6%

  

Amazon.com, Inc.*

    

4,653

      

15,514,684

    

IT services: 5.6%

  

Fidelity National Information Services, Inc.

    

30,169

      

3,292,946

    

Visa, Inc., A Shares

    

31,556

      

6,838,501

    
         

10,131,447

    

Life sciences tools & services: 2.6%

  

Danaher Corp.

    

7,383

      

2,429,081

    

Thermo Fisher Scientific, Inc.

    

3,341

      

2,229,249

    
         

4,658,330

    
    Number of
shares		  

Value

  

Common stocks—(concluded)

  

Machinery: 2.2%

  

Parker-Hannifin Corp.

    

12,549

    

$

3,992,088

    

Multiline retail: 1.5%

  

Dollar General Corp.

    

11,683

      

2,755,202

    

Personal products: 1.1%

  

Estee Lauder Cos., Inc., Class A

    

5,511

      

2,040,172

    

Road & rail: 2.5%

  

Union Pacific Corp.

    

17,634

      

4,442,534

    

Semiconductors & semiconductor equipment: 4.1%

  

Applied Materials, Inc.

    

24,206

      

3,809,056

    

Texas Instruments, Inc.

    

18,762

      

3,536,074

    
         

7,345,130

    

Software: 17.7%

  

Adobe, Inc.*

    

6,903

      

3,914,415

    

Microsoft Corp.

    

69,496

      

23,372,895

    

salesforce.com, Inc.*

    

17,631

      

4,480,566

    
         

31,767,876

    

Specialty retail: 10.8%

  

Home Depot, Inc.

    

11,549

      

4,792,951

    

Lowe's Cos., Inc.

    

18,550

      

4,794,804

    

O'Reilly Automotive, Inc.*

    

6,121

      

4,322,834

    

TJX Cos., Inc.

    

73,070

      

5,547,474

    
         

19,458,063

    

Technology hardware, storage & peripherals: 6.6%

  

Apple, Inc.

    

66,652

      

11,835,396

    

Textiles, apparel & luxury goods: 1.3%

  

Nike, Inc., Class B

    

14,071

      

2,345,214

    
Total common stocks
(cost $147,240,777)		        

176,915,092

    

Short-term investments: 1.9%

 

Investment companies: 1.9%

  
State Street Institutional U.S. Government
Money Market Fund, 0.030%1
(cost $3,348,535)		    

3,348,535

      

3,348,535

    
Total investments: 100.4%
(cost $150,589,312) 		       

180,263,627

    

Liabilities in excess of other assets: (0.4%)

        

(653,552

)

  

Net assets: 100.0%

      

$

179,610,075

    

For a listing of defined portfolio acronyms that are used throughout the Portfolio of investments as well as the tables that follow, please refer to the Glossary of terms used in the Portfolio of investments.


67

UBS US Quality Growth at Reasonable Price Fund

Portfolio of investments

December 31, 2021 (unaudited)

Fair valuation summary

The following is a summary of the fair valuations according to the inputs used as of December 31, 2021 in valuing the Fund's investments. In the event a Fund holds investments for which fair value is measured using the NAV per share practical expedient (or its equivalent), a separate column will be added to the fair value hierarchy table; this is intended to permit reconciliation to the amounts presented in the Portfolio of investments.

Description

   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

  

$

176,915,092

    

$

—

    

$

—

    

$

176,915,092

    

Short-term investments

    

—

      

3,348,535

      

—

      

3,348,535

    

Total

  

$

176,915,092

    

$

3,348,535

    

$

—

    

$

180,263,627

    

At December 31, 2021, there were no transfers in or out of Level 3.

Portfolio footnotes

*  Non-income producing security.

1  Rates shown reflect yield at December 31, 2021.

See accompanying notes to financial statements.
68

UBS U.S. Small Cap Growth Fund

Portfolio performance

For the six months ended December 31, 2021, Class A shares of UBS U.S. Small Cap Growth Fund (the "Fund") returned -2.80% (Class A shares returned -8.14% after the deduction of the maximum sales charge), while Class P shares returned -2.68%. The Fund's benchmark, the Russell 2000 Growth Index (the "Index"), returned -5.64% over the same time period. (Class P shares have lower expenses than the other share class of the Fund. Returns for all share classes over various time periods are shown on page 72; please note that the Fund's returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares, while the Index returns do not reflect the deduction of fees and expenses.)

The Fund's performance was driven primarily by stock selection decisions.

Portfolio performance summary1

What worked:

•  Within stock selection, MaxLinear was the top contributor to Fund performance for the six months ended December 31, 2021.

– MaxLinear is a fabless provider of mixed-signal solutions for broadband communications and the wired/wireless infrastructure markets. The company outperformed after reporting third quarter results and providing fourth quarter guidance that was ahead of consensus expectations. (For details, see "Portfolio highlights.")

•  Several other stock selection decisions benefited performance during the six-month period.

– Herc, a heavy equipment rental services company for a wide array of industries, outperformed after the company revealed a three-year growth plan that included sales, earnings and net capital expenditure estimates that were above consensus expectations. (For details, see "Portfolio highlights.")

– DigitalOcean is a provider of on-demand infrastructure and platform tools to build, deploy and scale software applications. The company outperformed after reporting better-than-expected quarterly revenue and raising its annual guidance above expectations. DigitalOcean's second quarter results demonstrated acceleration across key metrics including annual recurring revenue, customer count and net retention rate, all of which supports the durability of the company's growth profile.

– TopBuild is an insulation installer and distributor. The company outperformed during the six-month period as investors grew more confident about its ability to deliver significant synergies from its most recent acquisition. (For details, see "Portfolio highlights.")

– Regal Rexnord manufactures electric motors, drives, mechanical motion control products, and alternators for electric generators. The company outperformed after reporting second quarter earnings that beat consensus expectations. In addition, the company pulled forward the expected closing date of its acquisition of the Process & Motion Control business of Rexnord Corporation, and increased its 2022 expectations for the growth of proforma earnings and earnings before interest, taxes, depreciation and amortization (EBITDA).

•  Within sector allocation, the Fund's overweight position in industrials, as well as its underweight in health care, contributed the most to relative returns over the six months. In contrast underweight positions in real estate and consumer staples detracted modestly.

1  For a detailed commentary on the market environment in general during the reporting period, see page 3.


69

UBS U.S. Small Cap Growth Fund

What didn't work:

•  Certain stock selection decisions made a negative contribution to Fund returns during the reporting period.

– Chegg operates an online education platform. The company underperformed after providing fourth quarter guidance that was materially lower than consensus expectations. Management attributed the cut in guidance to lower enrollment at community colleges, as students chose work over school because they are finding higher wages in the job market. We sold out of this stock after the reporting period.

– STAAR Surgical is a developer and manufacturer of implantable collamer lenses for vision correction. The stock experienced weakness following a delay in FDA approval and launch of the company's EVO Visian lens in the US. We continue to hold this stock.

– Shift4 Payments provides payment processing solutions, including software for transactions and money transfer activities. The stock underperformed after announcing that October 2021 payment volumes were up 80% versus the same period a year ago, which trailed consensus expectations. We continue to hold this stock.

– Magnite is a provider of a technology solution to automate the purchase and sale of digital advertising inventory for buyers and sellers. The company's stock price declined after management commented that macroeconomic-related headwinds emerged in some client segments late in the third quarter. We continue to hold this stock.

– CareDx, a developer and marketer of diagnostics surveillance solutions for transplant recipients, underperformed due to investor concerns about the lack of recent updates from the company, as well as competitive pressures in the markets where it operates. We sold the stock during the reporting period.

Portfolio highlights

MaxLinear is a leading provider of radio frequency, mixed-signal and analog integrated circuits for the connected home, wired and wireless infrastructure, and industrial & multi-market applications. We believe the company's infrastructure business should benefit from continued 5G and 400G PAM4 deployments. MaxLinear's connected home business was boosted by the 2020 acquisition of Intel's Home Gateway Platform Division, which gives the company greater scale in the home gateway Wi-Fi market.

Herc is one of the leading North American equipment rental companies. The company operates in a highly fragmented market, which is seeing a secular growth tailwind of customers renting rather than owning equipment. Renting is beneficial because it frees up capital, provides flexibility, and outsources repair and maintenance of the fleet. We expect the company's growth to come from expanding and diversifying revenues, improving operating efficiencies and enhancing the customer experience, along with disciplined capital management.

TopBuild is a leading installer and distributor of insulation and building material products to the North American construction industry. We believe the company will continue to benefit from strong new construction trends within the housing market. Further, TopBuild has a robust mergers & acquisitions strategy to consolidate other insulation players, in addition to expanding its commercial and adjacent product offerings.

Regal Rexnord manufactures electric motors, drives, mechanical motion control products, and alternators for electric generators. Regal Rexnord was formed through the combination of Regal Beloit and Rexnord's Process & Motion Control business through a tax-free spin in a Reverse Morris Trust (RMT) transaction that closed in the fourth quarter of 2021. Regal has a strong market position in high efficiency HVAC motors used in North American residential and light commercial HVAC installations. The company also has exposure to e-commerce through its motion control systems and water initiatives through its support of variable speed motors for pool pumps. The company has been delivering improving profit margins despite the impact from the pandemic and supply chain inflation.

•  The Fund did not invest in derivatives during the reporting period.


70

UBS U.S. Small Cap Growth Fund

This letter is intended to assist shareholders in understanding how the Fund performed during the six months ended December 31, 2021. The views and opinions in the letter were current as of February 10, 2022. 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 website at www.ubs.com/am-us.


71

UBS U.S. Small Cap Growth Fund

Average annual total returns for periods ended 12/31/21 (unaudited)

  

6 months

  

1 year

  

5 years

  

10 years

  

Before deducting maximum sales charge

  

Class A1

    

(2.80

)%

    

4.95

%

    

19.86

%

    

16.72

%

  

Class P2

    

(2.68

)

    

5.22

      

20.16

      

17.03

    

After deducting maximum sales charge

  

Class A1

    

(8.14

)%

    

(0.82

)%

    

18.50

%

    

16.07

%

  

Russell 2000 Growth Index3

    

(5.64

)

    

2.83

      

14.53

      

14.14

    

The annualized gross and net expense ratios, respectively, for each class of shares as in the October 28, 2021 prospectuses were as follows: Class A—1.44% and 1.25%; Class P—1.17% 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. The Trust, with respect to the Fund, and UBS Asset Management (Americas) Inc. the Fund's investment advisor and administrator ("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, dividend expense and security loan fees for securities sold short and extraordinary expenses, such as proxy-related expenses), through the period ending October 28, 2022, do not exceed 1.24% for Class A 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 to the extent such reimbursement can be made during the three fiscal years following the date on which such fee waivers and expense reimbursements were made, provided that the reimbursement of the Advisor by the Fund will not cause the Fund to exceed the lesser of any applicable expense limit that is in place for the Fund (i) at the time of the waiver or reimbursement or (ii) at the time of the recoupment. 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  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.

3  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.

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

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


72

UBS U.S. Small Cap Growth Fund

Portfolio statistics and industry diversification—(unaudited)1

As a percentage of net assets as of December 31, 2021

Top ten holdings

MaxLinear, Inc.

    

2.7

%

  

Herc Holdings, Inc.

    

2.6

    

Chart Industries, Inc.

    

2.1

    

Ryman Hospitality Properties, Inc.

    

2.1

    

TopBuild Corp.

    

2.1

    

Regal Rexnord Corp.

    

2.0

    

Medpace Holdings, Inc.

    

1.9

    

Ameresco, Inc., Class A

    

1.9

    

Pure Storage, Inc., Class A

    

1.9

    

Azenta, Inc.

    

1.9

    

Total

    

21.2

%

  

Top five issuer breakdown by country or territory of origin

United States

    

101.1

%

  

Netherlands

    

0.6

    

Israel

    

0.5

    

Switzerland

    

0.3

    

Canada

    

0.3

    

Total

    

102.8

%

  

 

Common stocks

      

Air freight & logistics

    

1.5

%

  

Auto components

    

1.3

    

Banks

    

4.6

    

Beverages

    

0.4

    

Biotechnology

    

7.8

    

Building products

    

2.5

    

Commercial services & supplies

    

1.0

    

Construction & engineering

    

3.7

    

Diversified consumer services

    

0.6

    

Diversified telecommunication services

    

0.5

    

Electrical equipment

    

2.9

    

Energy equipment & services

    

1.4

    

Equity real estate investment trusts

    

2.1

    

Food & staples retailing

    

1.9

    

Health care equipment & supplies

    

3.2

    

Health care providers & services

    

4.4

    

Health care technology

    

1.3

    

Hotels, restaurants & leisure

    

7.5

    

Household durables

    

2.1

    

IT services

    

4.6

    

Life sciences tools & services

    

6.8

    

Machinery

    

7.0

    

Media

    

0.8

    

Oil, gas & consumable fuels

    

1.5

    

Professional services

    

0.5

    

Semiconductors & semiconductor equipment

    

8.1

    

Software

    

8.4

    

Specialty retail

    

2.3

    

Technology hardware, storage & peripherals

    

1.9

    

Textiles, apparel & luxury goods

    

2.0

    

Thrifts & mortgage finance

    

0.6

    

Trading companies & distributors

    

4.3

    

Total common stocks

    

99.5

    

Short-term investments

    

2.2

    

Investment of cash collateral from securities loaned

    

1.1

    

Total investments

    

102.8

    

Liabilities in excess of other assets

    

(2.8

)

  

Net assets

    

100.0

%

  

1  The portfolio is actively managed and its composition will vary over time.


73

UBS U.S. Small Cap Growth Fund

Portfolio of investments

December 31, 2021 (unaudited)

    Number of
shares		  

Value

  

Common stocks: 99.5%

  

Air freight & logistics: 1.5%

  

Forward Air Corp.

    

23,260

    

$

2,816,553

    

Auto components: 1.3%

  

Visteon Corp.*

    

22,578

      

2,509,319

    

Banks: 4.6%

  

First Bancorp/Southern Pines NC

    

61,886

      

2,829,428

    

Veritex Holdings, Inc.

    

69,572

      

2,767,574

    

Webster Financial Corp.

    

53,420

      

2,982,973

    
         

8,579,975

    

Beverages: 0.4%

  

Zevia PBC, Class A*,1

    

97,859

      

689,906

    

Biotechnology: 7.8%

  

Allogene Therapeutics, Inc.*

    

43,964

      

655,943

    

ALX Oncology Holdings, Inc.*

    

20,226

      

434,657

    

Arena Pharmaceuticals, Inc.*

    

12,038

      

1,118,812

    

Argenx SE, ADR*

    

3,201

      

1,120,958

    

CRISPR Therapeutics AG*,1

    

6,965

      

527,808

    

Fate Therapeutics, Inc.*

    

14,494

      

848,044

    

IGM Biosciences, Inc.*

    

19,865

      

582,640

    

Instil Bio, Inc.*,1

    

33,995

      

581,654

    

Intellia Therapeutics, Inc.*

    

8,277

      

978,672

    

Kura Oncology, Inc.*

    

48,868

      

684,152

    

Magenta Therapeutics, Inc.*

    

75,005

      

332,272

    

MeiraGTx Holdings PLC*

    

45,049

      

1,069,463

    

Nurix Therapeutics, Inc.*

    

39,246

      

1,136,172

    

PMV Pharmaceuticals, Inc.*

    

26,116

      

603,280

    

Relay Therapeutics, Inc.*

    

24,027

      

737,869

    

Repare Therapeutics, Inc.*

    

23,451

      

494,582

    

Xencor, Inc.*

    

30,858

      

1,238,023

    

Zentalis Pharmaceuticals, Inc.*

    

17,537

      

1,474,160

    
         

14,619,161

    

Building products: 2.5%

  

AZEK Co., Inc.*

    

38,880

      

1,797,811

    

Simpson Manufacturing Co., Inc.

    

20,752

      

2,885,981

    
         

4,683,792

    

Commercial services & supplies: 1.0%

  

IAA, Inc.*

    

38,858

      

1,966,992

    

Construction & engineering: 3.7%

  

Ameresco, Inc., Class A*

    

44,400

      

3,615,936

    

MasTec, Inc.*

    

36,588

      

3,376,341

    
         

6,992,277

    

Diversified consumer services: 0.6%

  

Chegg, Inc.*

    

36,340

      

1,115,638

    

Diversified telecommunication services: 0.5%

  

Bandwidth, Inc., Class A*

    

13,089

      

939,267

    

Electrical equipment: 2.9%

  

Generac Holdings, Inc.*

    

2,185

      

768,945

    
    Number of
shares		  

Value

  

Common stocks—(continued)

  

Electrical equipment—(concluded)

  

Regal Rexnord Corp.

    

22,146

    

$

3,768,807

    

Shoals Technologies Group, Inc., Class A*

    

37,064

      

900,655

    
         

5,438,407

    

Energy equipment & services: 1.4%

  

Aspen Aerogels, Inc.*

    

53,334

      

2,655,500

    

Equity real estate investment trusts: 2.1%

  

Ryman Hospitality Properties, Inc.*

    

42,669

      

3,923,841

    

Food & staples retailing: 1.9%

  

Performance Food Group Co.*

    

76,873

      

3,527,702

    

Health care equipment & supplies: 3.2%

  

AtriCure, Inc.*

    

34,172

      

2,375,979

    

Silk Road Medical, Inc.*

    

36,388

      

1,550,493

    

STAAR Surgical Co.*

    

22,307

      

2,036,629

    
         

5,963,101

    

Health care providers & services: 4.4%

  

Castle Biosciences, Inc.*

    

23,966

      

1,027,422

    

LHC Group, Inc.*

    

11,315

      

1,552,758

    

R1 RCM, Inc.*

    

108,080

      

2,754,959

    

Surgery Partners, Inc.*

    

54,283

      

2,899,255

    
         

8,234,394

    

Health care technology: 1.3%

  

Inspire Medical Systems, Inc.*

    

10,715

      

2,465,093

    

Hotels, restaurants & leisure: 7.5%

  

Bloomin' Brands, Inc.*

    

114,279

      

2,397,574

    

Churchill Downs, Inc.

    

12,309

      

2,965,238

    

Dave & Buster's Entertainment, Inc.*

    

71,823

      

2,758,003

    

Planet Fitness, Inc., Class A*

    

31,825

      

2,882,709

    

Six Flags Entertainment Corp.*

    

68,154

      

2,901,997

    

Sweetgreen, Inc., Class A*

    

5,800

      

185,600

    
         

14,091,121

    

Household durables: 2.1%

  

TopBuild Corp.*

    

14,021

      

3,868,534

    

IT services: 4.6%

  

DigitalOcean Holdings, Inc.*

    

28,396

      

2,281,051

    

Jack Henry & Associates, Inc.

    

15,472

      

2,583,669

    

Remitly Global, Inc.*

    

29,200

      

602,104

    

Shift4 Payments, Inc., Class A*

    

36,729

      

2,127,711

    

Wix.com Ltd.*

    

6,112

      

964,412

    
         

8,558,947

    

Life sciences tools & services: 6.8%

  

Maravai LifeSciences Holdings, Inc., Class A*

    

75,987

      

3,183,855

    

Medpace Holdings, Inc.*

    

16,799

      

3,656,134

    

NanoString Technologies, Inc.*

    

29,731

      

1,255,540

    

NeoGenomics, Inc.*

    

44,338

      

1,512,813

    

Repligen Corp.*

    

12,308

      

3,259,651

    
         

12,867,993

    


74

UBS U.S. Small Cap Growth Fund

Portfolio of investments

December 31, 2021 (unaudited)

    Number of
shares		  

Value

  

Common stocks—(continued)

  

Machinery: 7.0%

  

Astec Industries, Inc.

    

33,733

    

$

2,336,685

    

Chart Industries, Inc.*

    

25,167

      

4,013,885

    

Evoqua Water Technologies Corp.*

    

69,090

      

3,229,957

    

Terex Corp.

    

79,695

      

3,502,595

    
         

13,083,122

    

Media: 0.8%

  

Magnite, Inc.*,1

    

88,866

      

1,555,155

    

Oil, gas & consumable fuels: 1.5%

  

Chesapeake Energy Corp.

    

43,369

      

2,798,168

    

Professional services: 0.5%

  

Sterling Check Corp.*

    

50,100

      

1,027,551

    

Semiconductors & semiconductor equipment: 8.1%

  

Azenta, Inc.

    

34,648

      

3,572,555

    

Lattice Semiconductor Corp.*

    

44,472

      

3,427,012

    

MaxLinear, Inc.*

    

68,188

      

5,140,694

    

Universal Display Corp.

    

19,067

      

3,146,627

    
         

15,286,888

    

Software: 8.4%

  

Alteryx, Inc., Class A*

    

18,053

      

1,092,206

    

Clearwater Analytics Holdings, Inc., Class A*

    

43,700

      

1,004,226

    

Everbridge, Inc.*

    

12,797

      

861,622

    

ForgeRock, Inc., Class A*

    

32,900

      

878,101

    

HashiCorp, Inc., Class A*,1

    

11,100

      

1,010,544

    

Jamf Holding Corp.*,1

    

76,052

      

2,890,737

    

LivePerson, Inc.*

    

29,749

      

1,062,634

    

Rapid7, Inc.*

    

30,003

      

3,531,053

    

Sumo Logic, Inc.*

    

46,560

      

631,354

    

Tenable Holdings, Inc.*

    

51,546

      

2,838,638

    
         

15,801,115

    

Specialty retail: 2.3%

  

Children's Place, Inc.*

    

22,062

      

1,749,296

    

National Vision Holdings, Inc.*

    

54,068

      

2,594,723

    
         

4,344,019

    
    Number of
shares		  

Value

  

Common stocks—(concluded)

  

Technology hardware, storage & peripherals: 1.9%

  

Pure Storage, Inc., Class A*

    

109,765

    

$

3,572,851

    

Textiles, apparel & luxury goods: 2.0%

  

PVH Corp.

    

18,339

      

1,955,854

    

Tapestry, Inc.

    

46,814

      

1,900,649

    
         

3,856,503

    

Thrifts & mortgage finance: 0.6%

  

Essent Group Ltd.

    

25,062

      

1,141,073

    

Trading companies & distributors: 4.3%

  

Boise Cascade Co.

    

43,656

      

3,108,307

    

Herc Holdings, Inc.

    

31,460

      

4,925,063

    
         

8,033,370

    
Total common stocks
(cost $143,856,945)		        

187,007,328

    

Short-term investments: 2.2%

 

Investment companies: 2.2%

  
State Street Institutional U.S. Government
Money Market Fund, 0.030%2
(cost $4,040,662)		    

4,040,662

      

4,040,662

    

Investment of cash collateral from securities loaned: 1.1%

  

Money market funds: 1.1%

  
State Street Navigator Securities Lending
Government Money Market
Portfolio, 0.030%2
(cost $2,111,754)		    

2,111,754

      

2,111,754

    
Total investments: 102.8%
(cost $150,009,361) 		       

193,159,744

    

Liabilities in excess of other assets: (2.8%)

        

(5,224,878

)

  

Net assets: 100.0%

      

$

187,934,866

    

For a listing of defined portfolio acronyms that are used throughout the Portfolio of investments as well as the tables that follow, please refer to the Glossary of terms used in the Portfolio of investments.


75

UBS U.S. Small Cap Growth Fund

Portfolio of investments

December 31, 2021 (unaudited)

Fair valuation summary

The following is a summary of the fair valuations according to the inputs used as of December 31, 2021 in valuing the Fund's investments. In the event a Fund holds investments for which fair value is measured using the NAV per share practical expedient (or its equivalent), a separate column will be added to the fair value hierarchy table; this is intended to permit reconciliation to the amounts presented in the Portfolio of investments:

Description

   Unadjusted
quoted prices in
active markets for
identical investments
(Level 1)		   Other significant
observable inputs
(Level 2)		   Unobservable
inputs
(Level 3)		  

Total

  

Common stocks

  

$

187,007,328

    

$

—

    

$

—

    

$

187,007,328

    

Short-term investments

    

—

      

4,040,662

      

—

      

4,040,662

    

Investment of cash collateral from securities loaned

    

—

      

2,111,754

      

—

      

2,111,754

    

Total

  

$

187,007,328

    

$

6,152,416

    

$

—

    

$

193,159,744

    

At December 31, 2021, there were no transfers in or out of Level 3.

Portfolio footnotes

*  Non-income producing security.

1  Security, or portion thereof, was on loan at the period end.

2  Rates shown reflect yield at December 31, 2021.

See accompanying notes to financial statements.
76

UBS Municipal Bond Fund

Portfolio performance

For the six months ended December 31, 2021, Class A shares of UBS Municipal Bond Fund (the "Fund") returned -0.02% (Class A shares returned -2.26% after the deduction of the maximum sales charge), while Class P shares returned 0.10.%. For comparison purposes, the Fund's benchmark, the Bloomberg Municipal Bond Index (the "Index"), returned 0.45%, and the Bloomberg Municipal Managed Money Intermediate (1-17) Index returned 0.34% over the same time period. (Class P shares have lower expenses than the other share class of the Fund. Returns for all share classes over various time periods are shown on page 78; 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 the Index returns do not reflect the deduction of fees and expenses.)

The Fund modestly underperformed its benchmark. This was partially due to the Fund's quality biases and yield curve positioning.

Portfolio performance summary1

What worked

•  From a yield curve positioning perspective, an overweight to the 20 year portion of the curve and an underweight to the 1-3 year portion of the curve contributed to relative performance. (The yield curve plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity dates.)

•  An overweight to the transportation sector positively impacted relative performance.

What didn't work

•  Yield curve positioning, overall, detracted from performance. Having an underweight allocation to the 22+ year portion of the municipal yield curve detracted from relative results as it lagged the benchmark.

•  The Fund's quality biases were negative for returns. In particular, an underweight to lower quality BBB-rated and A-rated securities detracted from relative results.

•  An underweight in the hospital sector was a headwind for relative performance.

•  The Fund did not invest in derivatives during the reporting period.

This letter is intended to assist shareholders in understanding how the Fund performed during the six months ended December 31, 2021. The views and opinions in the letter were current as of February 10, 2022. 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 website at www.ubs.com/am-us.

1  For a detailed commentary on the market environment in general during the reporting period, see page 3.


77

UBS Municipal Bond Fund

Average annual total returns for periods ended 12/31/21 (unaudited)

  

6 months

  

1 year

  

5 years

  

Inception1

  

Before deducting maximum sales charge

  

Class A2

    

(0.02

)%

    

0.16

%

    

3.37

%

    

2.88

%

  

Class P3

    

0.10

      

0.42

      

3.61

      

3.12

    

After deducting maximum sales charge

  

Class A2

    

(2.26

)%

    

(2.07

)%

    

2.90

%

    

2.55

%

  

Bloomberg Municipal Bond Index4

    

0.45

      

1.52

      

4.17

      

3.54

    
Bloomberg Municipal Managed Money
Intermediate (1-17) Index5		    

0.34

      

0.38

      

3.82

      

3.22

    

The annualized gross and net expense ratios, respectively, for each class of shares as in the October 28, 2021 prospectuses were as follows: Class A—0.99% and 0.65%; Class P—0.74% 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., 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, such as proxy-related expenses), through the period ending October 28, 2022, do not exceed 0.65% for Class A 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 to the extent such reimbursement can be made during the three fiscal years following the date on which such fee waivers and expense reimbursements were made, provided that the reimbursement of the Advisor by the Fund will not cause the Fund to exceed the lesser of any applicable expense limit that is in place for the Fund (i) at the time of the waiver or reimbursement, or (ii) at the time of the recoupment. 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  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  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 Bloomberg 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.

5  The Bloomberg 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.

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. Total returns for periods of less than one year have not been annualized. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit www.ubs.com/us-mutualfundperformance.


78

UBS Municipal Bond Fund

Portfolio statistics and industry diversification—(unaudited)1

Summary of municipal securities by state
As a percentage of net assets as of December 31, 2021

Municipal bonds

      

Arizona

    

1.8

%

  

Connecticut

    

5.6

    

District of Columbia

    

1.8

    

Florida

    

8.7

    

Georgia

    

4.0

    

Illinois

    

8.8

    

Maryland

    

3.6

    

Massachusetts

    

6.5

    

Michigan

    

2.0

    

Missouri

    

0.8

    

Nevada

    

2.1

    

New Jersey

    

4.3

    

New York

    

16.8

    

Ohio

    

2.5

    

Oregon

    

1.7

    

Pennsylvania

    

7.2

    

South Carolina

    

1.1

    

Texas

    

12.2

    

Virginia

    

1.1

    

Washington

    

3.3

    

Wisconsin

    

1.4

    

Total municipal bonds

    

97.3

    

Short-term investments

    

0.8

    

Total Investments

    

98.1

    

Other assets in excess of liabilities

    

1.9

    

Net assets

    

100.0

%

  

1  The portfolio is actively managed and its composition will vary over time.


79

UBS Municipal Bond Fund

Portfolio of investments

December 31, 2021 (unaudited)

    Face
amount		  

Value

  

Municipal bonds: 97.3%

 

Arizona: 1.8%

  
Arizona Health Facilities Authority,
Banner Health Obligated Group,
Revenue Bonds,
Series C,1
0.080%, due 01/01/46		  

$

600,000

    

$

600,000

    
Salt River Project Agricultural
Improvement & Power District,
Arizona Electric System, Refunding,
Revenue Bonds,
Series A,
5.000%, due 01/01/45		    

1,000,000

      

1,297,023

    
         

1,897,023

    

Connecticut: 5.6%

  
State of Connecticut Special Tax Revenue,
Transportation Infrastructure,
Revenue Bonds
5.000%, due 01/01/30		    

1,665,000

      

2,055,922

    
State of Connecticut, GO Bonds,
Series A,
5.000%, due 04/15/25		    

1,250,000

      

1,432,785

    
State of Connecticut, Refunding,
GO Bonds,
Series F,
5.000%, due 09/15/25		    

2,140,000

      

2,488,496

    
         

5,977,203

    

District of Columbia: 1.8%

  
District of Columbia,
Revenue Bonds,
Series A,
5.000%, due 03/01/31		    

1,465,000

      

1,891,351

    

Florida: 8.7%

  
Miami-Dade County Transit System,
Revenue Bonds,
Series A,
5.000%, due 07/01/43		    

1,000,000

      

1,274,153

    
Miami-Dade County, Refunding,
Revenue Bonds
5.000%, due 10/01/26		    

1,000,000

      

1,198,725

    
Palm Beach County School District,
Refunding, COP,
Series B,
5.000%, due 08/01/31		    

1,000,000

      

1,147,676

    
School Board of Miami-Dade County,
Refunding, COP,
Series A,
5.000%, due 05/01/31		    

1,000,000

      

1,136,658

    
School District of Broward County,
Refunding, COP,
Series B,
5.000%, due 07/01/30		    

2,000,000

      

2,290,728

    
    Face
amount		  

Value

  

Municipal bonds—(continued)

  

Florida—(concluded)

  
St. Lucie County School Board,
Refunding, Revenue Bonds, AGM
5.000%, due 10/01/26		  

$

1,020,000

    

$

1,187,485

    
State of Florida, Department Transportation,
Refunding, GO Bonds
5.000%, due 07/01/24		    

935,000

      

1,042,604

    
         

9,278,029

    

Georgia: 4.0%

  
Brookhaven Development Authority,
Children's Healthcare of Atlanta,
Revenue Bonds
5.000%, due 07/01/29		    

1,500,000

      

1,935,411

    
Catoosa County School District, GO Bonds
5.000%, due 08/01/26		    

2,000,000

      

2,391,530

    
         

4,326,941

    

Illinois: 8.8%

  
Chicago O'Hare International Airport,
Refunding, Revenue Bonds
5.000%, due 01/01/30		    

1,000,000

      

1,127,435

    

5.000%, due 01/01/31

    

1,050,000

      

1,183,474

    
Illinois Finance Authority, Clean Water
Initiative Revolving Fund, Revenue Bonds
5.000%, due 07/01/37		    

1,000,000

      

1,271,861

    
Illinois Finance Authority,
OSF Healthcare System,
Revenue Bonds,
Series A,
5.000%, due 05/15/23		    

1,405,000

      

1,429,857

    
Illinois State Toll Highway Authority,
Revenue Bonds,
Series B,
5.000%, due 01/01/27		    

1,000,000

      

1,189,769

    
Railsplitter Tobacco Settlement Authority,
Revenue Bonds
5.000%, due 06/01/25		    

1,235,000

      

1,412,935

    
State of Illinois, Refunding, GO Bonds,
Series C,
4.000%, due 03/01/31		    

1,500,000

      

1,803,080

    
         

9,418,411

    

Maryland: 3.6%

  
County of Anne Arundel MD, Consolidated
Water and Sewer, GO Bonds
5.000%, due 10/01/38		    

1,000,000

      

1,285,329

    
State of Maryland, GO Bonds,
Series A,
5.000%, due 08/01/30		    

1,000,000

      

1,292,781

    
Washington Suburban Sanitary Commission,
Consolidated Public Improvement,
Revenue Bonds
5.000%, due 06/01/29		    

1,000,000

      

1,256,604

    
         

3,834,714

    


80

UBS Municipal Bond Fund

Portfolio of investments

December 31, 2021 (unaudited)

    Face
amount		  

Value

  

Municipal bonds—(continued)

  

Massachusetts: 6.5%

  
Commonwealth of Massachusetts,
Consolidated Loan, GO Bonds
5.000%, due 07/01/45		  

$

4,000,000

    

$

5,089,427

    
Commonwealth of Massachusetts,
GO Bonds,
Series A,
5.000%, due 01/01/40		    

1,500,000

      

1,836,672

    
         

6,926,099

    

Michigan: 2.0%

  
Michigan State Building Authority,
Refunding, Revenue Bonds,
Series I,
5.000%, due 10/15/29		    

1,800,000

      

2,147,079

    

Missouri: 0.8%

  
Health & Educational Facilities
Authority of the State of Missouri,
St. Louis University, Revenue Bonds,
Series B-1,1
0.100%, due 10/01/35		    

800,000

      

800,000

    

Nevada: 2.1%

  
County of Clark NV Passenger Facility
Charge Revenue, Las Vegas-McCarran
International Airport, Refunding,
Revenue Bonds
5.000%, due 07/01/27		    

1,815,000

      

2,222,621

    

New Jersey: 4.3%

  
Industrial Pollution Control Financing
Authority of Union County, Exxon Project,
Refunding, Revenue Bonds1
0.050%, due 10/01/24		    

600,000

      

600,000

    
New Jersey Transportation Trust Fund Authority,
Refunding, Revenue Bonds,
Series A,
5.000%, due 06/15/30		    

1,000,000

      

1,282,258

    
New Jersey Transportation Trust Fund Authority,
Revenue Bonds,
Series AA,
5.000%, due 06/15/27		    

1,500,000

      

1,598,182

    
New Jersey Turnpike Authority,
Revenue Bonds,
Series A,
5.000%, due 01/01/27		    

1,000,000

      

1,111,646

    
         

4,592,086

    

New York: 16.8%

  
City of New York, GO Bonds,
Series B-1,
5.000%, due 10/01/42		    

1,200,000

      

1,499,018

    
Subseries F-1,
5.000%, due 04/01/40		    

1,000,000

      

1,225,360

    
    Face
amount		  

Value

  

Municipal bonds—(continued)

  

New York—(concluded)

  
New York City Transitional Finance Authority
Future Tax Secured Revenue, Refunding,
Revenue Bonds,
Series A-1,
5.000%, due 11/01/25		  

$

1,500,000

    

$

1,752,419

    
New York City Water & Sewer System,
Second General Resolution, Refunding,
Revenue Bonds
5.000%, due 06/15/40		    

1,200,000

      

1,512,543

    
Series EE,
5.000%, due 06/15/40		    

1,000,000

      

1,226,533

    
Series FF,
5.000%, due 06/15/39		    

2,000,000

      

2,472,262

    
New York State Dormitory Authority,
Refunding, Revenue Bonds,
Series A,
5.000%, due 03/15/44		    

1,000,000

      

1,289,647

    
New York State Dormitory Authority,
Revenue Bonds,
Series A,
5.000%, due 03/15/43		    

1,500,000

      

1,839,123

    
New York State Urban Development Corp.,
Refunding, Revenue Bonds,
Series A,
5.000%, due 03/15/41		    

4,060,000

      

5,137,641

    
         

17,954,546

    

Ohio: 2.5%

  
Middletown City School District/OH,
School IMPT, GO Bonds
5.250%, due 12/01/32		    

1,135,000

      

1,187,515

    
State of Ohio, GO Bonds,
Series A,
5.000%, due 06/15/30		    

1,110,000

      

1,465,505

    
         

2,653,020

    

Oregon: 1.7%

  
Tri-County Metropolitan Transportation
District of Oregon, Revenue Bonds,
Series A,
5.000%, due 09/01/43		    

1,500,000

      

1,857,014

    

Pennsylvania: 7.2%

  
Commonwealth Financing Authority,
Tobacco Master Settlement Payment,
Revenue Bonds
5.000%, due 06/01/24		    

1,625,000

      

1,799,023

    
Pennsylvania Turnpike Commission,
Refunding, Revenue Bonds,
2nd Series,
5.000%, due 12/01/30		    

1,750,000

      

2,144,545

    
Series 2017-3,
5.000%, due 12/01/28		    

1,000,000

      

1,232,869

    


81

UBS Municipal Bond Fund

Portfolio of investments

December 31, 2021 (unaudited)

    Face
amount		  

Value

  

Municipal bonds—(continued)

  

Pennsylvania—(concluded)

  
Series A-2,
5.000%, due 12/01/28		  

$

1,000,000

    

$

1,236,109

    
Subseries B,
5.000%, due 12/01/46		    

1,000,000

      

1,279,913

    
         

7,692,459

    

South Carolina: 1.1%

  
South Carolina Public Service Authority,
Refunding, Revenue Bonds,
Series A,
5.000%, due 12/01/26		    

1,010,000

      

1,157,611

    

Texas: 12.2%

  
County of Williamson TX, GO Bonds
5.000%, due 02/15/29		    

1,000,000

      

1,276,231

    
Dallas and Fort Worth International Airport,
Refunding, Revenue Bonds,
Series A,
5.000%, due 11/01/29		    

1,100,000

      

1,414,128

    
Harris County Cultural Education Facilities
Finance Corp. Baylor College of Medicine,
Refunding, Revenue Bonds
5.000%, due 11/15/37		    

1,510,000

      

1,572,270

    
Lower Colorado River Authority,
LCRA Transmission Services,
Refunding, Revenue Bonds
5.000%, due 05/15/31		    

1,000,000

      

1,265,755

    
North Texas Municipal Water District Water
System Revenue, Refunding, Revenue Bonds,
Series A,
5.000%, due 09/01/28		    

2,185,000

      

2,755,703

    
North Texas Tollway Authority,
Refunding, Revenue Bonds,
Series A,
5.000%, due 01/01/27		    

3,030,000

      

3,298,980

    
North Texas Tollway Authority,
Second Tier, Refunding, Revenue Bonds,
Series B,
5.000%, due 01/01/29		    

1,140,000

      

1,445,649

    
         

13,028,716

    
    Face
amount		  

Value

  

Municipal bonds—(concluded)

  

Virginia: 1.1%

  
County of Fairfax VA, GO Bonds,
Series A,
5.000%, due 10/01/29		  

$

1,000,000

    

$

1,219,718

    

Washington: 3.3%

  
State of Washington, GO Bonds,
Series B,
5.000%, due 06/01/27		    

2,905,000

      

3,563,387

    

Wisconsin: 1.4%

  
Public Finance Authority Voyager
FNDTN INC Projects, Revenue Bonds,
Series A,
6.000%, due 10/01/32		    

1,475,000

      

1,538,179

    
Total municipal bonds
(cost $99,629,552)		        

103,976,207

    
    Number of
shares		      

Short-term investments: 0.8%

 

Investment companies: 0.8%

  
State Street Institutional U.S. Government
Money Market Fund, 0.030%2
(cost $879,832)		    

879,832

      

879,832

    
Total investments: 98.1%
(cost $100,509,384)		        

104,856,039

    

 

Other assets in excess of liabilities: 1.9%

    

2,055,713

    

Net assets: 100.0%

  

$

106,911,752

    

For a listing of defined portfolio acronyms that are used throughout the Portfolio of investments as well as the tables that follow, please refer to the Glossary of terms used in the Portfolio of investments.


82

UBS Municipal Bond Fund

Portfolio of investments

December 31, 2021 (unaudited)

Fair valuation summary

The following is a summary of the fair valuations according to the inputs used as of December 31, 2021 in valuing the Fund's investments. In the event a Fund holds investments for which fair value is measured using the NAV per share practical expedient (or its equivalent), a separate column will be added to the fair value hierarchy table; this is intended to permit reconciliation to the amounts presented in the Portfolio of investments:

Description

   Unadjusted
quoted prices in
active markets for
identical investments
(Level 1)		   Other significant
observable inputs
(Level 2)		   Unobservable
inputs
(Level 3)		  

Total

  

Assets

  

Municipal bonds

  

$

—

    

$

103,976,207

    

$

—

    

$

103,976,207

    

Short-term investments

    

—

      

879,832

      

—

      

879,832

    

Total

  

$

—

    

$

104,856,039

    

$

—

    

$

104,856,039

    

At December 31, 2021, there were no transfers in or out of Level 3.

Portfolio footnotes

1  Variable or floating rate security. The interest rate shown is the rate in effect as of period end and changes periodically.

2  Rates shown reflect yield at December 31, 2021.

See accompanying notes to financial statements.
83

UBS Sustainable Development Bank Bond Fund

Portfolio performance

For the six months ended December 31, 2021 (the "reporting period"), Class P shares of UBS Sustainable Development Bank Bond Fund (the "Fund") returned -0.66%, while Class P2 shares returned -0.68%. For comparison purposes, the Bloomberg U.S. Treasury Index (the "Index") returned -0.26%. The Fund's secondary benchmark, the Solactive UBS Global Multilateral Development Bank Bond USD 40% 1-5 Year 60% 5-10 Year Total Return Index, retuned -0.58% during the reporting period. 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.

Fund overview

The Fund seeks current income. Under normal circumstances, the Fund invests at least 80% of its net assets in bonds and/or instruments that provide exposure to bonds issued by development banks. Development banks are financial organizations formed by government entities to promote economic and social development.

The development bank bond market typically follows high-quality US government bonds. As each of the global Multilateral Development Banks ("MDB") are supranational entities backed by multiple member governments, MDBs historically have a similar credit profile to major sovereign issuers, such as the US government. Consequently, MDB bonds have generally delivered comparable returns to US Treasurys, although this is not guaranteed to always be the case.

Market review

In the second half of 2021, three main themes dominated the financial press headlines. First, similar to the end of 2020, new variants of COVID-19 were spreading widely. However, the impact of the successive waves on financial markets diminished and no lasting performance effects resulted. The second and much more impactful theme for financial markets was inflation. The US Consumer Price Index (CPI) surged through 2021 and reached levels not seen in the last 40 years towards year end. This led to the third theme, which was the reaction of global central banks and especially the Fed to this surge in inflation. At levels at around 7% (US CPI your-over-year), inflation sits well above their desired level. Those extreme levels were deemed transitory at first. However, the surge in inflation has proven to be broader and longer lasting. As such, the narrative changed and the Fed communicated its willingness to normalize their very accommodative monetary policy.

The hawkish shift of the Fed and other major central banks led to some volatility in financial markets. US Treasury yields started to rise to reflect the normalization path and risk assets showed a mixed picture. While US equity markets were able to rise, credit spreads of US investment-grade corporate bonds started to rise.

In this environment, US Treasurys outperformed riskier parts of the US fixed income markets. Ten-year US Treasury yields rose from 1.45% at the start of the reporting period to 1.52%. Sustainable development banks (SDB) showed some resiliency to rising credit spreads and performed in-line with US Treasurys.


84

UBS Sustainable Development Bank Bond Fund

Portfolio performance summary

The Fund is passively managed and seeks to minimize tracking error relative to its secondary benchmark (before fees and expenses), which is constructed from a blend of two market indexes designed to measure the performance of the US dollar-denominated multilateral development bank bond market. During the reporting period, the Fund modestly underperformed relative to its secondary benchmark. Transaction costs associated with the management of the Fund's portfolio, as well as fees and expenses, were only partially covered by the slight outperformance of some out-of-benchmark holdings. Additionally, the performance deviation between the Fund and the primary index is explained by the longer duration of the Index, as well as a slightly higher credit-quality.

•  The Fund did not invest in derivatives during the reporting period.

This letter is intended to assist shareholders in understanding how the Fund performed during the six months ended December 31, 2021. The views and opinions in the letter were current as of February 10, 2022. 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 website at www.ubs.com/am-us.


85

UBS Sustainable Development Bank Bond Fund

Average annual total returns for periods ended 12/31/21 (unaudited)

  

6 months

  

1 year

  

Inception1

  

Class P2

    

(0.66

)%

    

(2.46

)%

    

4.09

%

  

Class P25

    

(0.68

)

    

(2.37

)

    

(1.73

)

  

Bloomberg U.S. Treasury Index3

    

0.26

      

(2.32

)

    

4.76

    
Solactive UBS Global Multilateral Development Bank Bond
USD 40% 1-5 Year 60% 5-10 Year Total Return Index.4		    

(0.58

)

    

(2.12

)

    

4.38

    

The annualized gross and net expense ratios, respectively, for each class of shares as in the October 28, 2021 prospectuses were as follows: Class P—0.80% and 0.25%; Class P2—0.68% and 0.15%. Net expenses reflect fee waivers and/or expense reimbursements, if any, pursuant to an agreement that is in effect to cap the expenses. The Trust, with respect to the Fund, and UBS Asset Management (Americas) Inc., the Fund's investment advisor and administrator ("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, such as proxy-related 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 28, 2022, do not exceed 0.25% for Class P shares and 0.15% for Class P2 shares. Pursuant to the written agreement, the Advisor is entitled to be reimbursed for any fees it waives and expenses it reimburses to the extent such reimbursement can be made during the three fiscal years following the date on which such fee waivers and expense reimbursements were made, provided that the reimbursement of the Advisor by the Fund will not cause the Fund to exceed the lesser of any applicable expense limit that is in place for the Fund (i) at the time of the waiver or reimbursement or (ii) at the time of the recoupment. 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  Inception date of Class P of UBS Sustainable Development Bank Bond Fund is October 24, 2018. Benchmark's inception return is based on Class P inception date.

2  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.

3  The Bloomberg US Treasury Index measures US dollar-denominated, fixed-rate, nominal debt issued by the US Treasury. Investors should note that indices do not reflect the deduction of fees and expenses.

4  The Solactive UBS Global Multilateral Development Bank Bond USD 40% 1-5 Year 60% 5-10 Year Total Return Index is a composite index, constructed from a blend of two market indexes designed to measure the performance of the US dollar denominated multilateral development bank bond market. Investors should note that indices do not reflect the deduction of fees and expenses.

5  Inception date of Class P2 of UBS Sustainable Development Bank Bond Fund is October 30, 2020.

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


86

UBS Sustainable Development Bank Bond Fund

Portfolio statistics and industry diversification—(unaudited)1

As a percentage of net assets as of December 31, 2021

Top ten holdings

Inter-American Development Bank,
1.125% due 01/13/31		    

5.4

%

  
Inter-American Development Bank,
2.250% due 06/18/29		    

4.2

    
International Bank for Reconstruction & Development,
1.250% due 02/10/31		    

4.0

    
Inter-American Development Bank,
3.125% due 09/18/28		    

3.6

    
Agence Francaise de Developpement,
0.625% due 01/22/26		    

3.4

    
International Bank for Reconstruction & Development,
0.750% due 08/26/30		    

3.4

    
International Bank for Reconstruction & Development,
0.750% due 11/24/27		    

3.2

    
Inter-American Development Bank,
2.000% due 06/02/26		    

3.1

    
Inter-American Investment Corp.,
1.750% due 10/02/24		    

2.8

    
International Bank for Reconstruction & Development,
1.625% due 11/03/31		    

2.8

    

Total

    

35.9

%

  

Sector allocation

  

Non-U.S. government agency obligations

    

97.1

%

  

Short-term investments

    

2.4

    

Total investments

    

99.5

    

Other assets in excess of liabilities

    

0.5

    

Net assets

    

100.0

%

  

1  The portfolio is actively managed and its composition will vary over time.


87

UBS Sustainable Development Bank Bond Fund

Portfolio of investments

December 31, 2021 (unaudited)

    Face
amount		  

Value

  

Non-U.S. government agency obligations: 97.1%

 

Supranationals: 97.1%

  
African Development Bank
0.750%, due 04/03/23		  

$

450,000

    

$

450,827

    

0.875%, due 03/23/26

    

500,000

      

491,789

    

0.875%, due 07/22/26

    

2,000,000

      

1,962,728

    

1.625%, due 09/16/22

    

220,000

      

221,869

    

3.000%, due 09/20/23

    

200,000

      

207,689

    

7.375%, due 04/06/23

    

300,000

      

324,409

    
Series GDIF,
0.500%, due 04/22/22		    

100,000

      

100,063

    
Series GDIF,
2.125%, due 11/16/22		    

300,000

      

304,371

    
Agence Francaise de Developpement
0.625%, due 01/22/261		    

3,200,000

      

3,122,080

    

2.750%, due 01/22/221

    

200,000

      

200,250

    
Asian Development Bank
0.750%, due 10/08/30		    

800,000

      

747,676

    

1.500%, due 03/04/31

    

1,000,000

      

994,926

    

1.750%, due 09/19/29

    

800,000

      

811,434

    

1.875%, due 01/24/30

    

700,000

      

717,328

    

2.500%, due 11/02/27

    

100,000

      

105,977

    

2.750%, due 01/19/28

    

240,000

      

257,975

    

3.125%, due 09/26/28

    

500,000

      

558,897

    
Asian Infrastructure Investment Bank
0.500%, due 05/28/25		    

1,200,000

      

1,174,352

    

0.500%, due 01/27/26

    

1,550,000

      

1,504,179

    

2.250%, due 05/16/24

    

1,000,000

      

1,031,446

    
Corp. Andina de Fomento
4.375%, due 06/15/22		    

300,000

      

304,983

    
Council Of Europe Development Bank
0.875%, due 09/22/26		    

800,000

      

783,083

    
Council of Europe Development Bank
1.375%, due 02/27/25		    

2,000,000

      

2,016,626

    

2.500%, due 02/27/24

    

650,000

      

672,535

    
European Bank for Reconstruction & Development
0.500%, due 05/19/25		    

400,000

      

391,173

    

0.500%, due 11/25/25

    

500,000

      

485,744

    

0.500%, due 01/28/26

    

450,000

      

436,530

    

1.500%, due 02/13/25

    

1,450,000

      

1,468,135

    

1.875%, due 02/23/22

    

100,000

      

100,238

    

2.750%, due 03/07/23

    

300,000

      

307,593

    
European Investment Bank
0.375%, due 03/26/26		    

100,000

      

96,489

    

0.625%, due 07/25/25

    

250,000

      

245,238

    

0.625%, due 10/21/27

    

1,400,000

      

1,331,948

    

1.250%, due 02/14/31

    

700,000

      

681,067

    

1.875%, due 02/10/25

    

700,000

      

718,078

    

2.625%, due 03/15/24

    

225,000

      

233,840

    
IDB Trust Services Ltd.
0.908%, due 06/25/251		    

400,000

      

391,592

    

2.393%, due 04/12/221

    

200,000

      

200,725

    

2.843%, due 04/25/241

    

1,000,000

      

1,038,750

    

3.389%, due 09/26/231

    

800,000

      

834,976

    
    Face
amount		  

Value

  

Non-U.S. government agency obligations—(continued)

  

Supranationals—(continued)

  
Inter-American Development Bank
0.625%, due 07/15/25		  

$

850,000

    

$

833,924

    

0.625%, due 09/16/27

    

1,400,000

      

1,334,567

    

0.875%, due 04/03/25

    

550,000

      

545,881

    

0.875%, due 04/20/26

    

200,000

      

196,817

    

1.125%, due 07/20/28

    

1,100,000

      

1,075,060

    

1.125%, due 01/13/31

    

5,100,000

      

4,899,139

    

1.750%, due 03/14/25

    

850,000

      

867,183

    

2.000%, due 06/02/26

    

2,750,000

      

2,835,313

    

2.000%, due 07/23/26

    

630,000

      

649,615

    

2.125%, due 01/15/25

    

200,000

      

206,496

    

2.250%, due 06/18/29

    

3,600,000

      

3,782,855

    

2.375%, due 07/07/27

    

1,285,000

      

1,348,340

    

3.000%, due 10/04/23

    

300,000

      

311,934

    

3.125%, due 09/18/28

    

2,950,000

      

3,257,290

    
Inter-American Investment Corp.
0.625%, due 02/10/261		    

100,000

      

97,200

    

1.750%, due 10/02/241

    

2,500,000

      

2,548,964

    
International Bank for Reconstruction &
Development
0.625%, due 04/22/25		    

300,000

      

294,973

    

0.750%, due 11/24/27

    

3,000,000

      

2,877,412

    

0.750%, due 08/26/30

    

3,300,000

      

3,082,245

    

0.875%, due 05/14/30

    

2,550,000

      

2,414,993

    

1.125%, due 09/13/28

    

400,000

      

390,344

    

1.250%, due 02/10/31

    

3,750,000

      

3,644,090

    

1.625%, due 11/03/31

    

2,500,000

      

2,500,307

    
Series GDIF,
1.375%, due 04/20/28		    

800,000

      

797,705

    
Series GDIF,
1.750%, due 10/23/29		    

2,060,000

      

2,089,402

    
Series GDIF,
1.875%, due 10/27/26		    

1,750,000

      

1,793,587

    
Series GDIF,
2.500%, due 11/22/27		    

2,110,000

      

2,228,769

    
International Development Association
0.875%, due 04/28/261		    

700,000

      

687,915

    

1.000%, due 12/03/301

    

1,850,000

      

1,758,706

    

2.750%, due 04/24/231

    

250,000

      

256,841

    
Series GDIF,
0.750%, due 06/10/271		    

1,500,000

      

1,445,364

    
International Finance Corp.
0.375%, due 07/16/25		    

1,000,000

      

973,000

    

0.750%, due 10/08/26

    

700,000

      

681,510

    

0.750%, due 08/27/30

    

1,250,000

      

1,170,500

    

1.375%, due 10/16/24

    

400,000

      

403,971

    

2.125%, due 04/07/26

    

875,000

      

907,034

    
Kreditanstalt fuer Wiederaufbau
0.625%, due 01/22/26		    

1,000,000

      

975,628

    

2.000%, due 05/02/25

    

600,000

      

616,970

    

2.875%, due 04/03/28

    

1,500,000

      

1,625,992

    


88

UBS Sustainable Development Bank Bond Fund

Portfolio of investments

December 31, 2021 (unaudited)

    Face
amount		  

Value

  

Non-U.S. government agency obligations—(concluded)

  

Supranationals—(concluded)

  
Nordic Investment Bank
2.250%, due 05/21/24		  

$

1,200,000

    

$

1,239,276

    

2.875%, due 07/19/23

    

600,000

      

619,923

    
Total non-U.S. government agency obligations
(cost $88,845,815)		        

88,296,643

    
    Number of
shares		      

Short-term investments: 2.4%

 

Investment companies: 2.4%

  
State Street Institutional U.S. Government
Money Market Fund, 0.030%2
(cost $2,136,479)		    

2,136,479

      

2,136,479

    
Total investments: 99.5%
(cost $90,982,294)		        

90,433,122

    

Other assets in excess of liabilities: 0.5%

        

466,405

    

Net assets: 100.0%

      

$

90,899,527

    

For a listing of defined portfolio acronyms that are used throughout the Portfolio of investments as well as the tables that follow, please refer to the Glossary of terms used in the Portfolio of investments.

Fair valuation summary

The following is a summary of the fair valuations according to the inputs used as of December 31, 2021 in valuing the Fund's investments. In the event a Fund holds investments for which fair value is measured using the NAV per share practical expedient (or its equivalent), a separate column will be added to the fair value hierarchy table; this is intended to permit reconciliation to the amounts presented in the Portfolio of investments:

Description

   Unadjusted
quoted prices in
active markets for
identical investments
(Level 1)		   Other significant
observable inputs
(Level 2)		   Unobservable
inputs
(Level 3)		  

Total

  

Assets

  

Non-U.S. government agency obligations

  

$

—

    

$

88,296,643

    

$

—

    

$

88,296,643

    

Short-term investments

    

—

      

2,136,479

      

—

      

2,136,479

    

Total

  

$

—

    

$

90,433,122

    

$

—

    

$

90,433,122

    

At December 31, 2021, there were no transfers in or out of Level 3.

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.

2  Rates shown reflect yield at December 31, 2021.

See accompanying notes to financial statements.
89

UBS Total Return Bond Fund

Portfolio performance:

For the six months ended December 31, 2021, Class A shares of UBS Total Return Bond Fund (the "Fund") returned -0.53% (Class A shares returned -4.26% after the deduction of the maximum sales charge), while Class P shares returned -0.41%. For comparison purposes, the Bloomberg U.S. Aggregate Index (the "Index") returned 0.06%. (Class P shares have lower expenses than the other share class of the Fund. Returns for all share classes over various time periods are shown on page 92; 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.)

During the reporting period, we used derivatives for risk management purposes and as a tool to help enhance returns across various strategies. A number of credit derivatives, including index (CDX) options, were used to manage the Fund's credit exposure. For active currency management, we utilized foreign exchange (FX) forwards. For managing interest rate exposure, we utilized interest rate futures during the reporting period. Derivatives were just one tool, among others, that we used to implement our overall strategy. Looking at the impact of derivatives in isolation is not very meaningful and could potentially be misleading, as often times they are used as a complement or risk mitigant to other existing positions in the portfolio.

Portfolio performance summary:

What Worked:

Active Duration: A bias for having a shorter duration relative to the index contributed to performance as rates generally trended higher over the period.

Yield Curve Positioning: Positioning along the curve for a flattening of the US Treasury yield curve was additive for relative results.

US TIPS: An allocation to US Treasury Inflation-Protected Securities (TIPS) contributed to performance as inflation expectations rose, which supported the TIPS market.

Securitized Exposure: An overweight to asset-backed securities (ABS) and security selection within the ABS market was additive. An underweight to the mortgage-backed security (MBS) market was also additive for relative returns.

What Didn't Work:

Security Selection: Security selection within the emerging market debt allocation, particularly to an issuer in China, was a detractor.

Duration—New Zealand: A long exposure to New Zealand interest rates was a headwind for returns during the period.

Duration Positioning in Germany: A short position to German bunds detracted from performance.


90

UBS Total Return Bond Fund

Market outlook:

In the US, ongoing high inflation, a buoyant household sector and tighter labor markets have forced the Federal Reserve (Fed) into a more hawkish posture sooner than anticipated. We now expect the Fed asset purchase taper to be complete by the end of March 2022 and the policy rate to be between 0.75% and 1% by the end of the year. GDP growth will likely be lower than 2021, but still higher than the pre-COVID trend. This should help support corporate earnings, but against a backdrop of tighter monetary policy when a lot of good news is already priced in. The Omicron variant is still a threat to the outlook, and COVID restrictions will cause disruption to global (and local) supply chains well into 2022.

It remains to be seen exactly how risk markets cope with real policy tightening, although the Fed has trailed an accelerated taper and the market has priced in at least two rate hikes for 2022. The emergence of the Omicron variant adds a lot of uncertainty to the 2022 outlook. A combination of tighter policy and a faltering recovery would be extremely damaging for risk assets. The credit impulse in China is negative and the property sector still faces some serious challenges with major debt restructuring looming for several issuers. Despite a better outlook for the broader economy the impact of credit losses in real-estate and the ongoing regulatory clampdown could still destabilize global markets.

With respect to our forward-looking views, risk assets are generally well supported, though rich in some cases, by the near-term economic outlook and the demand from the investment community, institutional and retail investors alike. We expect increased issuance in most sectors and eventual taper to put pressure on the Treasury and MBS markets. The supply/demand dynamics continue to look favorable for the US credit markets despite less attractive valuations. We remain defensive in the MBS sector.

This letter is intended to assist shareholders in understanding how the Fund performed during the six months ended December 31, 2021. The views and opinions in the letter were current as of February 10, 2022. 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 website at www.ubs.com/am-us.


91

UBS Total Return Bond Fund

Average annual total returns for periods ended 12/31/21 (unaudited)

  

6 months

  

1 year

  

5 years

   10 years or
Inception1		  

Before deducting maximum sales charge

  

Class A1

    

(0.53

)%

    

(1.73

)%

    

3.31

%

    

2.53

%

  

Class P3

    

(0.41

)

    

(1.49

)

    

3.56

      

3.09

    

After deducting maximum sales charge

  

Class A2

    

(4.26

)%

    

(5.40

)%

    

2.52

%

    

1.80

%

  

Bloomberg US Aggregate Index4

    

0.06

      

(1.54

)

    

3.57

      

2.75

    

The annualized gross and net expense ratios as in the October 28, 2021 prospectuses were as follows: Class A—1.74% and 0.76%; Class P—1.53% and 0.51%. 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., the Fund's investment advisor and administrator ("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, such as proxy-related expenses), through the period ending October 28, 2022, do not exceed 0.75% for Class A shares and 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 to the extent such reimbursement can be made during the three fiscal years following the date on which such fee waivers and expense reimbursements were made, provided that the reimbursement of the Advisor by the Fund will not cause the Fund to exceed the lesser of any applicable expense limit that is in place for the Fund (i) at the time of the waiver or reimbursement or (ii) at the time of the recoupment. 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  Inception date of A shares of UBS Total Return Bond Fund and the index is September 29, 2016. 10 years fund performance is shown for Class P Shares, and the 10 years index performance of the Bloomberg US Aggregate Index is 2.90%. 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 "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 for periods prior to the Reorganization. The performance information shown for periods prior to the Reorganization is for the Predecessor Fund and may not be representative of performance of the Fund.

2  Maximum sales charge for Class A shares is 3.75%. Class A shares bear ongoing 12b-1 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 Bloomberg US Aggregate Bond 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, assetbacked and commercial mortgage-backed sectors. Investors should note that indices do not reflect the deduction of fees and expenses.

A temporary redemption fee of 2% was imposed on sales of Class P shares of the Fund between May 23, and 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. Total returns for periods of less than one year have not been annualized. Current performance may be higher or lower than the performance data quoted. For month-end performance figures, please visit www.ubs.com/us-mutualfundperformance.


92

UBS Total Return Bond Fund

Portfolio statistics and industry diversification—(unaudited)1

As a percentage of net assets as of December 31, 2021

Top ten holdings

UMBS TBA,
2.000%		    

3.3

%

  
UMBS TBA,
3.000%		    

2.4

    
UMBS TBA,
2.500%		    

2.1

    
FNMA,
2.500% due 08/01/51		    

1.5

    
Santander Retail Auto Lease Trust,
1.100% due 06/20/25		    

1.5

    
COMM Mortgage Trust,
1.310% due 03/15/38		    

1.3

    
BX Trust,
1.412% due 10/15/23		    

1.2

    
State of California, GO Bonds,
7.300% due 10/01/39		    

1.2

    
JPMorgan Chase & Co.,
3.875% due 09/10/24		    

1.1

    
ONE Mortgage Trust,
1.210% due 03/15/36		    

1.1

    

Total

    

16.7

%

  

Top five issuer breakdown by country or territory of origin

United States

    

100.3

%

  

United Kingdom

    

2.6

    

New Zealand

    

1.0

    

Canada

    

0.8

    

Colombia

    

0.7

    

Total

    

105.4

%

  

Corporate bonds

      

Agriculture

    

0.1

%

  

Airlines

    

0.3

    

Auto manufacturers

    

1.7

    

Banks

    

8.6

    

Beverages

    

0.6

    

Biotechnology

    

1.1

    

Chemicals

    

0.5

    

Commercial services

    

0.3

    

Computers

    

0.7

    

Diversified financial services

    

1.9

    

Electric

    

2.2

    

Food

    

0.1

    

Healthcare-products

    

0.1

    

Housewares

    

0.7

    

Insurance

    

1.9

    

Media

    

1.2

    

Mining

    

0.2

    

Miscellaneous manufacturers

    

2.4

    

Oil & gas

    

1.9

    

Packaging & containers

    

0.6

    

Pharmaceuticals

    

1.1

    

Pipelines

    

1.7

    

Real estate

    

0.4

    

Real estate investment trust

    

0.7

    

Retail

    

0.6

    

Semiconductors

    

0.5

    

Software

    

1.9

    

Telecommunications

    

2.5

    

Transportation

    

0.5

    

Total corporate bonds

    

37.0

%

  

Asset-backed securities

    

15.0

%

  

Mortgage-backed securities

    

22.7

    

Municipal bonds

    

1.9

    

Non-U.S. government agency obligations

    

3.2

    

U.S. government agency obligations

    

19.5

    

U.S. Treasury obligations

    

1.1

    

Short-term investments

    

8.3

    

Investment of cash collateral from securities loaned

    

0.4

    

Option purchased

    

0.1

    

Swaptions purchased

    

0.0

†

  

Total investments

    

109.2

    

Liabilities in excess of other assets

    

(9.2

)

  

Net assets

    

100.0

%

  

1  The portfolio is actively managed and its composition will vary over time.

†  Amount represents less than 0.05% or (0.05)%.


93

UBS Total Return Bond Fund

Portfolio of investments

December 31, 2021 (unaudited)

    Face
amount1		  

Value

  

Asset-backed securities: 15.0%

 

Canada: 0.6%

  
Golden Credit Card Trust,
Series 2021-1A, Class C,
1.740%, due 08/15/282		    

200,000

    

$

196,769

    

United States: 14.4%

  
CCG Receivables Trust,
Series 2020-1, Class C,
1.840%, due 12/14/272		    

150,000

      

151,198

    
CPS Auto Trust,
Series 2018-C, Class D,
4.400%, due 06/17/242		    

113,209

      

114,629

    
Dell Equipment Finance Trust,
Series 2021-2, Class D,
1.210%, due 06/22/272		    

125,000

      

123,513

    
Drive Auto Receivables Trust,
Series 2018-1, Class D,
3.810%, due 05/15/24		    

56,453

      

56,691

    
Series 2018-2, Class D,
4.140%, due 08/15/24		    

69,718

      

70,592

    
Series 2018-3, Class D,
4.300%, due 09/16/24		    

138,855

      

140,603

    
Series 2018-4, Class D,
4.090%, due 01/15/26		    

102,251

      

103,894

    
DT Auto Owner Trust,
Series 2018-1A, Class D,
3.810%, due 12/15/232		    

295

      

295

    
Series 2021-1A, Class C,
0.840%, due 10/15/262		    

150,000

      

148,742

    
Series 2021-1A, Class D,
1.160%, due 11/16/262		    

150,000

      

147,823

    
Exeter Automobile Receivables Trust,
Series 2019-2A, Class C,
3.300%, due 03/15/242		    

31,570

      

31,696

    
Ford Credit Auto Owner Trust,
Series 2021-REV2, Class D,
2.600%, due 05/15/342		    

200,000

      

198,805

    
HPEFS Equipment Trust,
Series 2021-1A, Class D,
1.030%, due 03/20/312		    

300,000

      

295,975

    
Series 2021-2A, Class D,
1.290%, due 03/20/292		    

150,000

      

147,741

    
Invitation Homes Trust,
Series 2018-SFR1, Class C,
1 mo. USD LIBOR + 1.250%,
1.359%, due 03/17/372,3		    

99,986

      

99,838

    
OneMain Direct Auto Receivables Trust,
Series 2018-1A, Class C,
3.850%, due 10/14/252		    

300,000

      

300,646

    
OneMain Financial Issuance Trust,
Series 2019-1A, Class A,
3.480%, due 02/14/312		    

47,089

      

47,108

    
Series 2020-2A, Class A,
1.750%, due 09/14/352		    

100,000

      

99,346

    
    Face
amount1		  

Value

  

Asset-backed securities—(concluded)

  

United States—(concluded)

  
Series 2020-2A, Class B,
2.210%, due 09/14/352		    

150,000

    

$

150,379

    
Series 2021-1A, Class A1,
1.550%, due 06/16/362		    

250,000

      

246,378

    
PSNH Funding LLC 3,
Series 2018-1, Class A3,
3.814%, due 02/01/35		    

175,000

      

197,725

    
Santander Consumer Auto Receivables Trust,
Series 2020-BA, Class B,
0.770%, due 12/15/252		    

275,000

      

274,066

    
Santander Drive Auto Receivables Trust,
Series 2017-3, Class D,
3.200%, due 11/15/23		    

58,520

      

58,578

    
Series 2018-4, Class D,
3.980%, due 12/15/25		    

202,639

      

206,127

    
Santander Retail Auto Lease Trust,
Series 2021-B, Class C,
1.100%, due 06/20/252		    

500,000

      

493,729

    
Series 2021-C, Class C,
1.110%, due 03/20/262		    

125,000

      

123,351

    
Sofi Consumer Loan Program LLC,
Series 2017-6, Class B,
3.520%, due 11/25/262		    

47,698

      

47,792

    
Sofi Consumer Loan Program Trust,
Series 2018-1, Class B,
3.650%, due 02/25/272		    

24,243

      

24,385

    
Series 2018-2, Class B,
3.790%, due 04/26/272		    

5,355

      

5,366

    
Series 2018-3, Class B,
4.020%, due 08/25/272		    

24,520

      

24,629

    
Tesla Auto Lease Trust,
Series 2020-A, Class B,
1.180%, due 01/22/242		    

100,000

      

100,225

    
Series 2020-A, Class D,
2.330%, due 02/20/242		    

100,000

      

101,282

    
Series 2021-A, Class D,
1.340%, due 03/20/252		    

250,000

      

248,294

    
Series 2021-B, Class D,
1.320%, due 09/22/252		    

125,000

      

122,905

    
World Omni Select Auto Trust,
Series 2021-A, Class D,
1.440%, due 11/15/27		    

125,000

      

122,869

    
         

4,827,215

    
Total asset-backed securities
(cost $5,022,709)		        

5,023,984

    

Corporate bonds: 37.0%

  

Belgium: 0.6%

  
Anheuser-Busch Cos. LLC/Anheuser-Busch
InBev Worldwide, Inc.
4.900%, due 02/01/46		    

165,000

      

208,549

    


94

UBS Total Return Bond Fund

Portfolio of investments

December 31, 2021 (unaudited)

    Face
amount1		  

Value

  

Corporate bonds—(continued)

  

Canada: 0.2%

  
Rogers Communications, Inc.
5.000%, due 03/15/44		    

60,000

    

$

74,025

    

China: 0.6%

  
Agile Group Holdings Ltd.
5.750%, due 01/02/254		    

200,000

      

128,720

    
NXP BV/NXP Funding LLC/NXP USA, Inc.
3.875%, due 06/18/262		    

65,000

      

70,050

    
         

198,770

    

Colombia: 0.2%

  
Ecopetrol SA
5.375%, due 06/26/26		    

70,000

      

73,666

    

Ireland: 0.2%

  
Avolon Holdings Funding Ltd.
2.875%, due 02/15/252		    

50,000

      

51,075

    

Peru: 0.2%

  
Southern Copper Corp.
6.750%, due 04/16/40		    

40,000

      

56,045

    

United Kingdom: 2.6%

  
Barclays PLC
4.836%, due 05/09/28		    

200,000

      

220,315

    
HSBC Holdings PLC
6.500%, due 09/15/37		    

100,000

      

138,355

    
Lloyds Banking Group PLC
4.582%, due 12/10/25		    

200,000

      

218,167

    
Natwest Group PLC
3.875%, due 09/12/23		    

250,000

      

260,687

    
Reynolds American, Inc.
7.250%, due 06/15/37		    

35,000

      

46,576

    
         

884,100

    

United States: 32.4%

  
Abbott Laboratories
3.750%, due 11/30/26		    

45,000

      

49,726

    
AbbVie, Inc.
4.500%, due 05/14/35		    

100,000

      

119,622

    
AEP Texas, Inc.,
Series E,
6.650%, due 02/15/33		    

50,000

      

66,541

    
Series G,
4.150%, due 05/01/49		    

50,000

      

56,838

    
Air Lease Corp.
2.875%, due 01/15/26		    

50,000

      

51,572

    
Alabama Power Co.
6.000%, due 03/01/39		    

100,000

      

138,851

    
Allstate Corp.,
Series B,
(fixed, converts to FRN on 08/15/23),
5.750%, due 08/15/53		    

25,000

      

26,000

    
Ally Financial, Inc.
4.625%, due 05/19/22		    

100,000

      

101,480

    
    Face
amount1		  

Value

  

Corporate bonds—(continued)

  

United States—(continued)

  
American International Group, Inc.
2.500%, due 06/30/25		    

50,000

    

$

51,555

    
Amgen, Inc.
4.663%, due 06/15/51		    

50,000

      

63,962

    
Aon PLC
4.750%, due 05/15/45		    

50,000

      

62,212

    
Apple, Inc.
4.650%, due 02/23/46		    

100,000

      

131,169

    
Ardagh Packaging Finance PLC/Ardagh
Holdings USA, Inc.
5.250%, due 04/30/252		    

200,000

      

206,500

    
AT&T, Inc.
3.800%, due 12/01/57		    

58,000

      

60,382

    

4.300%, due 02/15/30

    

316,000

      

355,655

    
Bank of America Corp.
4.200%, due 08/26/24		    

150,000

      

160,779

    

6.110%, due 01/29/37

    

125,000

      

168,147

    
Bank of New York Mellon Corp.
1.600%, due 04/24/25		    

100,000

      

100,918

    
Berkshire Hathaway Energy Co.
4.450%, due 01/15/49		    

50,000

      

61,754

    
Biogen, Inc.
3.250%, due 02/15/512		    

56,000

      

54,950

    

4.050%, due 09/15/25

    

100,000

      

108,612

    
Boston Properties LP
2.750%, due 10/01/26		    

210,000

      

218,513

    
BP Capital Markets America, Inc.
3.017%, due 01/16/27		    

50,000

      

52,779

    
Bristol-Myers Squibb Co.
3.200%, due 06/15/26		    

150,000

      

161,300

    

4.125%, due 06/15/39

    

50,000

      

59,143

    
Broadcom, Inc.
3.137%, due 11/15/352		    

30,000

      

30,179

    
Burlington Northern Santa Fe LLC
5.150%, due 09/01/43		    

50,000

      

66,962

    
Burlington Resources LLC
7.200%, due 08/15/31		    

100,000

      

140,311

    
CCO Holdings LLC/CCO Holdings Capital Corp.
5.500%, due 05/01/262		    

75,000

      

77,266

    
Citigroup, Inc.
5.500%, due 09/13/25		    

300,000

      

339,277

    

6.675%, due 09/13/43

    

25,000

      

37,587

    
Comcast Corp.
2.887%, due 11/01/512		    

64,000

      

61,951

    

2.937%, due 11/01/562

    

67,000

      

63,820

    

3.969%, due 11/01/47

    

38,000

      

43,751

    
CVS Health Corp.
4.300%, due 03/25/28		    

27,000

      

30,299

    
Delta Air Lines, Inc.
7.000%, due 05/01/252		    

100,000

      

114,341

    
Duke Energy Ohio, Inc.
4.300%, due 02/01/49		    

50,000

      

59,998

    
DuPont de Nemours, Inc.
4.725%, due 11/15/28		    

100,000

      

115,824

    


95

UBS Total Return Bond Fund

Portfolio of investments

December 31, 2021 (unaudited)

    Face
amount1		  

Value

  

Corporate bonds—(continued)

  

United States—(continued)

  
Eaton Corp.
2.750%, due 11/02/22		    

190,000

    

$

193,543

    
Energy Transfer LP
5.400%, due 10/01/47		    

50,000

      

58,673

    

5.500%, due 06/01/27

    

50,000

      

57,032

    
EOG Resources, Inc.
3.900%, due 04/01/35		    

50,000

      

56,675

    
EQT Corp.
3.900%, due 10/01/27		    

220,000

      

235,954

    
Exelon Corp.
3.400%, due 04/15/26		    

150,000

      

159,784

    

4.450%, due 04/15/46

    

50,000

      

59,722

    
FedEx Corp.
4.550%, due 04/01/46		    

50,000

      

59,917

    
Fiserv, Inc.
3.200%, due 07/01/26		    

60,000

      

63,439

    

4.400%, due 07/01/49

    

50,000

      

59,567

    
Ford Motor Credit Co. LLC
4.542%, due 08/01/26		    

300,000

      

325,875

    
Fox Corp.
3.050%, due 04/07/255		    

25,000

      

26,242

    

5.576%, due 01/25/49

    

50,000

      

68,245

    
GE Capital International Funding Co.
Unlimited Co.
3.373%, due 11/15/25		    

200,000

      

212,626

    
General Electric Co.,
Series D,
3 mo. USD LIBOR + 3.330%,
3.533%, due 03/15/223,6		    

99,000

      

98,010

    
General Motors Co.
6.600%, due 04/01/36		    

170,000

      

229,933

    
Gilead Sciences, Inc.
3.650%, due 03/01/26		    

75,000

      

80,802

    

4.750%, due 03/01/46

    

50,000

      

63,356

    
Goldman Sachs Group, Inc.
3.750%, due 02/25/26		    

200,000

      

215,382

    

5.150%, due 05/22/45

    

80,000

      

104,037

    
Hillenbrand, Inc.
5.750%, due 06/15/25		    

200,000

      

209,000

    
Home Depot, Inc.
2.125%, due 09/15/26		    

100,000

      

103,135

    
Illinois Tool Works, Inc.
2.650%, due 11/15/26		    

80,000

      

83,893

    
International Lease Finance Corp.
5.875%, due 08/15/22		    

120,000

      

123,703

    
JPMorgan Chase & Co.
(fixed, converts to FRN on 01/23/28),
3.509%, due 01/23/29		    

150,000

      

160,686

    

3.875%, due 09/10/24

    

350,000

      

371,235

    
Series I,
3 mo. USD LIBOR + 3.470%,
3.599%, due 04/30/223,6		    

97,000

      

97,485

    
    Face
amount1		  

Value

  

Corporate bonds—(continued)

  

United States—(continued)

  
Kinder Morgan, Inc.
4.300%, due 03/01/28		    

100,000

    

$

111,120

    

5.550%, due 06/01/45

    

40,000

      

50,573

    
Kroger Co.
6.900%, due 04/15/38		    

25,000

      

36,449

    
Liberty Mutual Group, Inc.
4.250%, due 06/15/232		    

45,000

      

47,001

    

4.569%, due 02/01/292

    

155,000

      

178,111

    
Lumen Technologies, Inc.
5.625%, due 04/01/25		    

200,000

      

211,544

    
LYB International Finance BV
4.875%, due 03/15/44		    

50,000

      

61,760

    
Marathon Petroleum Corp.
4.750%, due 09/15/44		    

70,000

      

82,377

    
McDonald's Corp.
4.875%, due 12/09/45		    

75,000

      

96,357

    
MetLife, Inc.
6.400%, due 12/15/36		    

110,000

      

135,324

    
Microsoft Corp.
2.375%, due 02/12/22		    

250,000

      

250,103

    

2.525%, due 06/01/50

    

100,000

      

97,519

    
Morgan Stanley
4.300%, due 01/27/45		    

50,000

      

61,481

    

4.350%, due 09/08/26

    

140,000

      

154,747

    
MPLX LP
4.875%, due 06/01/25		    

70,000

      

76,598

    
Newell Brands, Inc.
4.875%, due 06/01/25		    

200,000

      

218,000

    
Oncor Electric Delivery Co. LLC
3.750%, due 04/01/45		    

50,000

      

56,876

    
OneMain Finance Corp.
6.875%, due 03/15/25		    

200,000

      

222,500

    
Oracle Corp.
2.800%, due 04/01/27		    

100,000

      

103,099

    

4.000%, due 11/15/47

    

50,000

      

51,912

    
Prudential Financial, Inc.
6.625%, due 06/21/40		    

50,000

      

74,722

    
QUALCOMM, Inc.
3.250%, due 05/20/27		    

60,000

      

64,742

    
Sabine Pass Liquefaction LLC
5.000%, due 03/15/27		    

200,000

      

224,635

    
Seagate HDD Cayman
5.750%, due 12/01/345		    

80,000

      

92,200

    
Synchrony Financial
4.500%, due 07/23/25		    

90,000

      

97,241

    
Teachers Insurance & Annuity
Association of America
4.270%, due 05/15/472		    

60,000

      

72,470

    
Union Pacific Corp.
4.050%, due 11/15/45		    

40,000

      

47,106

    
Verizon Communications, Inc.
2.987%, due 10/30/56		    

126,000

      

119,271

    
Virginia Electric and Power Co.
4.600%, due 12/01/48		    

50,000

      

63,785

    


96

UBS Total Return Bond Fund

Portfolio of investments

December 31, 2021 (unaudited)

    Face
amount1		  

Value

  

Corporate bonds—(concluded)

  

United States—(concluded)

  
Walt Disney Co.
4.950%, due 10/15/45		    

50,000

    

$

65,812

    
Wells Fargo & Co.
(fixed, converts to FRN on 06/17/26),
3.196%, due 06/17/27		    

70,000

      

73,795

    
Yale University,
Series 2020,
1.482%, due 04/15/30		    

100,000

      

97,597

    
         

10,845,304

    
Total corporate bonds
(cost $11,845,758)		        

12,391,534

    

Mortgage-backed securities: 22.7%

  

United States: 22.7%

  
Angel Oak Mortgage Trust,
Series 2019-5, Class A1,
2.593%, due 10/25/492,7		    

54,667

      

54,529

    
Series 2020-4, Class A1,
1.469%, due 06/25/652,7		    

81,215

      

81,075

    
Series 2020-5, Class A1,
1.373%, due 05/25/652,7		    

52,074

      

52,003

    
Series 2020-R1, Class A1,
0.990%, due 04/25/532,7		    

93,687

      

93,429

    
Series 2021-4, Class A1,
1.035%, due 01/20/652,7		    

83,950

      

82,840

    
Series 2021-5, Class A1,
0.951%, due 07/25/662,7		    

128,790

      

126,974

    
Angel Oak Mortgage Trust I LLC,
Series 2018-3, Class A1,
3.649%, due 09/25/482,7		    

17,592

      

17,604

    
Series 2019-4, Class A1,
2.993%, due 07/26/492,7		    

43,452

      

43,621

    
Arbor Multifamily Mortgage Securities Trust,
Series 2021-MF3, Class B,
2.511%, due 10/15/542		    

150,000

      

148,245

    
BAMLL Commercial Mortgage Securities Trust,
Series 2015-200P, Class D,
3.596%, due 04/14/332,7		    

100,000

      

101,244

    
BANK,
Series 2018-BN15, Class A4,
4.407%, due 11/15/617		    

150,000

      

171,124

    
BBCMS Trust,
Series 2015-SRCH, Class B,
4.498%, due 08/10/352		    

135,000

      

148,467

    
Benchmark Mortgage Trust,
Series 2018-B5, Class A3,
3.944%, due 07/15/51		    

100,000

      

109,949

    
BX Commercial Mortgage Trust,
Series 2021-SOAR, Class D,
1 mo. USD LIBOR + 1.400%,
1.510%, due 06/15/382,3		    

150,000

      

149,158

    
    Face
amount1		  

Value

  

Mortgage-backed securities—(continued)

  

United States—(continued)

  
BX Mortgage Trust,
Series 2021-PAC, Class D,
1 mo. USD LIBOR + 1.298%,
1.408%, due 10/15/362,3		    

175,000

    

$

174,185

    
BX Trust,
Series 2021-LGCY, Class D,
1 mo. USD LIBOR + 1.302%,
1.412%, due 10/15/232,3		    

400,000

      

395,474

    
COLT Funding LLC,
Series 2021-6, Class A1,
1.907%, due 12/25/662,7,8		    

100,000

      

99,999

    
COLT Mortgage Loan Trust,
Series 2020-2, Class A1,
1.853%, due 03/25/652,7		    

22,737

      

22,770

    
Series 2020-3, Class A1,
1.506%, due 04/27/652,7		    

27,858

      

27,855

    
Series 2021-3, Class A1,
0.956%, due 09/27/662,7		    

96,282

      

94,754

    
Series 2021-HX1, Class A1,
1.110%, due 10/25/662,7		    

263,143

      

259,548

    
COLT Mortgage Pass-Through Certificates,
Series 2021-1R, Class A1,
0.857%, due 05/25/652,7		    

42,824

      

42,715

    
COMM Mortgage Trust,
Series 2021-LBA, Class C,
1 mo. USD LIBOR + 1.200%,
1.310%, due 03/15/382,3		    

425,000

      

418,856

    
CSMC Trust,
Series 2020-NQM1, Class A1,
1.208%, due 05/25/652,9		    

89,947

      

89,701

    
Deephaven Residential Mortgage Trust,
Series 2021-1, Class A1,
0.715%, due 05/25/652,7		    

75,387

      

74,775

    
Extended Stay America Trust,
Series 2021-ESH, Class D,
1 mo. USD LIBOR + 2.250%,
2.360%, due 07/15/382,3		    

124,353

      

124,353

    
FREMF Mortgage Trust,
Series 2017-K64, Class B,
3.993%, due 05/25/502,7		    

50,000

      

54,081

    
GCAT Trust,
Series 2021-NQM4, Class A1,
1.093%, due 08/25/662,7		    

115,428

      

113,857

    
GS Mortgage Securities Corp. II,
Series 2018-GS10, Class C,
4.409%, due 07/10/517		    

100,000

      

108,610

    
GS Mortgage Securities Trust,
Series 2017-GS5, Class B,
4.047%, due 03/10/507		    

200,000

      

213,054

    
GS Mortgage-Backed Securities Trust,
Series 2020-NQM1, Class A1,
1.382%, due 09/27/602,7		    

49,502

      

49,180

    


97

UBS Total Return Bond Fund

Portfolio of investments

December 31, 2021 (unaudited)

    Face
amount1		  

Value

  

Mortgage-backed securities—(continued)

  

United States—(continued)

  
JPMBB Commercial Mortgage Securities Trust,
Series 2014-C26, Class AS,
3.800%, due 01/15/48		    

200,000

    

$

209,721

    
Series 2015-C30, Class A5,
3.822%, due 07/15/48		    

170,000

      

182,123

    
Med Trust,
Series 2021-MDLN, Class D,
1 mo. USD LIBOR + 2.000%,
2.110%, due 11/15/382,3		    

300,000

      

299,247

    
MFA Trust,
Series 2021-NQM2, Class A1,
1.029%, due 11/25/642,7		    

82,117

      

81,340

    
MHC Commercial Mortgage Trust,
Series 2021-MHC, Class D,
1 mo. USD LIBOR + 1.601%,
1.711%, due 04/15/382,3		    

300,000

      

299,437

    
Morgan Stanley Bank of America
Merrill Lynch Trust,
Series 2015-C24, Class A4,
3.732%, due 05/15/48		    

100,000

      

106,632

    
Series 2015-C24, Class AS,
4.036%, due 05/15/487		    

75,000

      

79,402

    
Series 2016-C32, Class AS,
3.994%, due 12/15/497		    

273,000

      

293,794

    
Series 2017-C34, Class C,
4.179%, due 11/15/527		    

100,000

      

106,053

    
New Residential Mortgage Loan Trust,
Series 2020-NQM2, Class A1,
1.650%, due 05/24/602,7		    

39,843

      

39,840

    
Series 2021-NQM3, Class A1,
1.156%, due 11/27/562,7		    

241,170

      

239,640

    
ONE Mortgage Trust,
Series 2021-PARK, Class C,
1 mo. USD LIBOR + 1.100%,
1.210%, due 03/15/362,3		    

375,000

      

371,235

    
Residential Mortgage Loan Trust,
Series 2019-3, Class A1,
2.633%, due 09/25/592,7		    

49,695

      

49,698

    
Series 2020-2, Class A1,
1.654%, due 05/25/602,7		    

80,571

      

80,762

    
SLG Office Trust,
Series 2021-OVA, Class C,
2.851%, due 07/15/412		    

100,000

      

100,841

    
Starwood Retail Property Trust,
Series 2014-STAR, Class C,
1 mo. USD LIBOR + 2.750%,
2.860%, due 11/15/272,3		    

125,000

      

1,501

    
Verus Securitization Trust,
Series 2019-3, Class A1,
2.784%, due 07/25/592,9		    

28,350

      

28,446

    
Series 2019-4, Class A1,
2.642%, due 11/25/592,9		    

29,578

      

29,863

    
    Face
amount1		  

Value

  

Mortgage-backed securities—(concluded)

  

United States—(concluded)

  
Series 2020-4, Class A1,
1.502%, due 05/25/652,9		    

49,973

    

$

49,846

    
Series 2020-5, Class A1,
1.218%, due 05/25/652,9		    

53,850

      

53,616

    
Series 2021-1, Class A1,
0.815%, due 01/25/662,7		    

63,655

      

63,023

    
Series 2021-3, Class A1,
1.046%, due 06/25/662,7		    

326,377

      

322,594

    
Series 2021-5, Class A1,
1.013%, due 09/25/662,7		    

238,616

      

234,297

    
Series 2021-R1, Class A1,
0.820%, due 10/25/632,7		    

101,416

      

100,913

    
Series 2021-R3, Class A1,
1.020%, due 04/25/642,7		    

196,635

      

195,977

    
Vista Point Securitization Trust,
Series 2020-1, Class A1,
1.763%, due 03/25/652,7		    

22,162

      

22,224

    
Series 2020-2, Class A1,
1.475%, due 04/25/652,7		    

49,028

      

48,874

    
Wells Fargo Commercial Mortgage Trust,
Series 2018-C44, Class C,
4.833%, due 05/15/517		    

150,000

      

163,363

    
Total mortgage-backed securities
(cost $7,717,518)		        

7,598,331

    

Municipal bonds: 1.9%

  

California: 1.2%

  
State of California, GO Bonds
7.300%, due 10/01/39		    

250,000

      

392,204

    

Hawaii: 0.2%

  
State of Hawaii, GO Bonds,
Series FZ,
2.245%, due 08/01/38		    

75,000

      

72,344

    

Illinois: 0.2%

  
State of Illinois, GO Bonds
6.630%, due 02/01/35		    

50,000

      

61,088

    

Texas: 0.3%

  
Texas Transportation Commission,
Taxable Refunding, GO Bonds
2.472%, due 10/01/44		    

100,000

      

97,769

    
Total municipal bonds
(cost $591,580)		        

623,405

    

Non-U.S. government agency obligations: 3.2%

 

Colombia: 0.5%

  
Colombia Government International Bond
8.125%, due 05/21/24		    

155,000

      

175,373

    

Indonesia: 0.4%

  
Indonesia Government International Bond
6.625%, due 02/17/372		    

100,000

      

139,394

    


98

UBS Total Return Bond Fund

Portfolio of investments

December 31, 2021 (unaudited)

    Face
amount1		  

Value

  

Non-U.S. government agency obligations—(concluded)

  

Mexico: 0.5%

  
Mexico Government International Bond
4.750%, due 03/08/44		    

150,000

    

$

163,247

    

New Zealand: 1.0%

  
New Zealand Government Bond,
Series 0531,
1.500%, due 05/15/31		  

NZD

500,000

      

319,167

    

Panama: 0.1%

  
Panama Government International Bond
3.870%, due 07/23/60		    

50,000

      

49,884

    

Turkey: 0.3%

  
Turkey Government International Bond
6.875%, due 03/17/36		    

100,000

      

93,750

    

Uruguay: 0.4%

  
Uruguay Government International Bond
7.625%, due 03/21/36		    

100,000

      

150,800

    
Total non-U.S. government agency obligations
(cost $1,101,150)		        

1,091,615

    

U.S. government agency obligations: 19.5%

  

United States: 19.5%

  
FHLMC
2.500%, due 10/01/50		    

84,285

      

86,797

    

3.000%, due 09/01/43

    

74,511

      

79,090

    

3.500%, due 08/01/47

    

100,360

      

106,362

    

3.500%, due 11/01/47

    

110,488

      

117,096

    

4.000%, due 01/01/46

    

50,866

      

55,341

    

4.000%, due 05/01/47

    

35,795

      

38,333

    

4.000%, due 10/01/47

    

24,906

      

26,672

    
FNMA
1.500%, due 03/01/51		    

47,055

      

45,526

    

2.000%, due 09/01/50

    

119,607

      

119,521

    

2.000%, due 01/01/51

    

223,424

      

223,262

    

2.000%, due 03/01/51

    

322,190

      

321,464

    

2.500%, due 11/01/50

    

84,442

      

86,438

    

2.500%, due 08/01/51

    

491,169

      

502,488

    

3.000%, due 02/01/33

    

88,802

      

93,104

    

3.000%, due 09/01/42

    

63,730

      

67,142

    

3.000%, due 07/01/43

    

49,669

      

52,293

    

3.000%, due 05/01/46

    

51,484

      

53,901

    

3.000%, due 08/01/50

    

71,685

      

74,803

    

3.500%, due 04/01/32

    

52,858

      

56,320

    

3.500%, due 06/01/45

    

58,517

      

63,144

    

3.500%, due 06/01/46

    

103,495

      

112,039

    

4.000%, due 09/01/40

    

48,091

      

52,408

    

4.000%, due 03/01/41

    

15,751

      

17,167

    

4.000%, due 12/01/43

    

97,310

      

107,061

    

4.000%, due 02/01/45

    

61,884

      

67,760

    

4.500%, due 02/01/44

    

13,378

      

14,883

    

4.500%, due 12/01/44

    

10,859

      

11,946

    

4.500%, due 02/01/45

    

17,645

      

19,411

    
    Face
amount1		  

Value

  

U.S. government agency obligations—(concluded)

      

United States—(concluded)

      
4.500%, due 08/01/46    

11,000

    

$

12,125

    

4.500%, due 05/01/47

    

29,670

      

32,619

    

5.500%, due 03/01/33

    

20,530

      

23,191

    

5.500%, due 09/01/34

    

54,272

      

60,256

    

5.500%, due 11/01/34

    

20,582

      

23,404

    

6.000%, due 11/01/28

    

20,906

      

23,150

    
GNMA
6.500%, due 05/15/29		    

5,268

      

5,840

    
GNMA II
2.500%, due 03/20/51		    

44,042

      

45,173

    

2.500%, due 08/20/51

    

146,971

      

150,744

    

2.500%, due 12/20/51

    

50,000

      

51,283

    

3.000%, due 09/20/44

    

31,643

      

33,265

    

3.500%, due 02/20/43

    

8,976

      

9,631

    

4.000%, due 06/20/44

    

5,820

      

6,302

    

4.000%, due 09/20/44

    

22,907

      

24,801

    

4.000%, due 05/20/45

    

5,690

      

6,138

    

5.000%, due 08/20/48

    

7,416

      

7,907

    
GNMA II TBA
2.000%		    

175,000

      

176,269

    
3.000%    

175,000

      

180,794

    
UMBS TBA
1.500%		    

150,000

      

145,020

    
2.000%    

1,100,000

      

1,096,779

    
2.500%    

700,000

      

714,609

    
3.000%    

775,000

      

801,815

    
3.500%    

225,000

      

236,948

    
Total U.S. government agency obligations
(cost $6,528,202)		        

6,539,835

    

U.S. Treasury obligations: 1.1%

      

United States: 1.1%

      
U.S. Treasury Inflation Index Notes (TIPS)
0.125%, due 07/15/30		    

145,596

      

162,885

    
U.S. Treasury Notes
0.625%, due 08/15/30		    

50,000

      

46,629

    

1.625%, due 05/15/31

    

150,000

      

151,898

    
Total U.S. Treasury obligations
(cost $367,155)		        

361,412

    
    Number of
shares		      

Short-term investments: 8.3%

      

Investment companies: 8.3%

      
State Street Institutional U.S. Government
Money Market Fund, 0.030%10
(cost $2,789,787)		    

2,789,733

      

2,789,787

    


99

UBS Total Return Bond Fund

Portfolio of investments

December 31, 2021 (unaudited)

        Number of
shares		  

Value

  

Investment of cash collateral from securities loaned: 0.4%

 

Money market funds: 0.4%

  
State Street Navigator Securities Lending
Government Money Market
Portfolio, 0.030%10
(cost $121,600)		        

121,600

    

$

121,600

    
    Number of
contracts		   Notional
amount		      

Option purchased: 0.1%

 

Put options: 0.1%

  
U.S. Treasury Note 10 Year
Futures, strike @ USD 129.5,
expires 01/21/22
(cost $29,554)		    

90

    

USD

11,655,000

      

23,906

    

Swaptions purchased: 0.0%†

  

Put swaptions: 0.0%†

  
CDX North American
High Yield Series 37
Index, strike @ 108.000%,
expires 02/16/22
(Counterparty UBS AG);
underlying swap terminates		    

1,000,000

    

USD

1,000,000

      

6,161

    
    Number of
contracts		   Notional
amount		  

Value

  

Swaptions purchased—(concluded)

  

Put swaptions—(concluded)

  
CDX North American
Investment Grade Series 37
Index, strike @ 55.000%,
expires 01/19/22
(Counterparty BOA);
underlying swap terminates		    

3,500,000

    

USD

3,500,000

    

$

1,044

    
Total swaptions purchased
(cost $18,950)		            

7,205

    
Total investments: 109.2%
(cost $36,133,963)		            

36,572,614

    

Liabilities in excess of other assets: (9.2%)

            

(3,067,246

)

  

Net assets: 100.0%

          

$

33,505,368

    

For a listing of defined portfolio acronyms that are used throughout the Portfolio of investments as well as the tables that follow, please refer to the Glossary of terms used in the Portfolio of investments.

Options written

Notional
amount		   Number of
contracts		   Put
options		   Expiration
date		   Premiums
received		   Current
value		   Unrealized
appreciation
(depreciation)		  

USD

11,520,000

      

90

     U.S. Treasury Note
10 Year Futures,
strike @ 128.00		  

02/18/22

  

$

23,907

    

$

(21,094

)

  

$

2,813

    


100

UBS Total Return Bond Fund

Portfolio of investments

December 31, 2021 (unaudited)

Swaptions written

Notional
amount
(000)		   Number of
contracts		   Put
swaptions		  

Counterparty

   Pay/
receive
floating
rate		   Expiration
date		   Premiums
received		   Current
value		   Unrealized
appreciation
(depreciation)		  

USD

1,000

      

1,000,000

     CDX North American High Yield
Series 37 Index, strike @
103.000%, terminating		  

GS

  

Receive

  

02/16/22

  

$

3,700

    

$

(1,368

)

  

$

2,332

    

USD

1,000

      

1,000,000

     CDX North American High Yield
37 Series Index, strike @
106.000%, terminating		  

GS

  

Receive

   02/16/22    

7,000

   

(3,341

 )    

3,659

    

USD

3,500

      

3,500,000

     CDX North American Investment
Grade Series 37 Index, strike @
75.000%, terminating		  

BOA

  

Receive

   01/19/22    

2,100

   

(93

 )    

2,007

    
 

Total swaptions written

                        

$

12,800

    

$

(4,802

)

  

$

7,998

    

Futures contracts

Number of
contracts		  

Currency

       Expiration
date		   Current
notional
amount		  

Value

   Unrealized
appreciation
(depreciation)		  

U.S. Treasury futures buy contracts:

      
 

3

    

USD

      

U.S. Long Bond Futures

  

March 2022

  

$

475,332

    

$

481,313

    

$

5,981

    
 

3

    

USD

      

U.S. Treasury Note 10 Year Futures

  

March 2022

    

393,379

      

391,406

      

(1,973

)

  
 

3

    

USD

      

U.S. Treasury Note 5 Year Futures

  

March 2022

    

362,985

      

362,930

      

(55

)

  
 

12

    

USD

      

U.S. Ultra Bond Futures

  

March 2022

    

2,321,455

      

2,365,500

      

44,045

    
 

6

    

USD

      

U.S. Ultra Treasury Note 10 Year Futures

  

March 2022

    

878,517

      

878,625

      

108

    
 

Total

                

$

4,431,668

    

$

4,479,774

    

$

48,106

    

Interest rate futures sell contracts:

      
  4    

GBP

      

United Kingdom Long Gilt Bond Futures

  

March 2022

  

$

(675,635

)

  

$

(676,234

)

  

$

(599

)

  

U.S. Treasury futures sell contracts:

      
  6    

USD

      

U.S. Treasury Note 2 Year Futures

  

March 2022

    

(1,310,335

)

    

(1,309,031

)

    

1,304

    
 

Total

                

$

(1,985,970

)

  

$

(1,985,265

)

  

$

705

    
 

Net unrealized appreciation (depreciation)

                        

$

48,811

    

Centrally cleared interest rate swap agreements

Notional
amount
(000)		   Maturity
date		   Payment
frequency		   Payments
made by
the Portfolio11		   Payments
received by
the Portfolio11 		 

Value

   Unrealized
appreciation
(depreciation)		  

NZD

300

    

08/20/31

  

Semi-Annual

  

New Zealand Bank Bills 3 Months

    

1.928

%

  

$

(11,243

)

  

$

(11,243

)

  

USD

200

    

08/20/31

  

Quarterly

    

1.309

     3 Month USD LIBOR    

3,682

      

3,682

    

NZD

530

    

08/11/31

  

Semi-Annual

  

New Zealand Bank Bills 3 Months

    

1.910

      

(20,247

)

    

(20,247

)

  

USD

390

    

08/11/31

  

Quarterly

    

1.323

     3 Month USD LIBOR    

6,506

      

6,506

    
 

Total

                   

$

(21,302

)

  

$

(21,302

)

  


101

UBS Total Return Bond Fund

Portfolio of investments

December 31, 2021 (unaudited)

Forward foreign currency contracts

Counterparty

  

Sell

  

Purchase

   Settlement
date		   Unrealized
appreciation
(depreciation)		  

JPMCB

  

NZD

485,000

    

USD

325,509

    

01/25/22

  

$

(6,593

)

  

Fair valuation summary

The following is a summary of the fair valuations according to the inputs used as of December 31, 2021 in valuing the Fund's investments. In the event a Fund holds investments for which fair value is measured using the NAV per share practical expedient (or its equivalent), a separate column will be added to the fair value hierarchy table; this is intended to permit reconciliation to the amounts presented in the Portfolio of investments:

Description

   Unadjusted
quoted prices in
active markets for
identical investments
(Level 1)		   Other significant
observable inputs
(Level 2)		   Unobservable
inputs
(Level 3)		  

Total

  

Assets

  

Asset-backed securities

  

$

—

    

$

5,023,984

    

$

—

    

$

5,023,984

    

Corporate bonds

    

—

      

12,391,534

      

—

      

12,391,534

    

Mortgage-backed securities

    

—

      

7,598,331

      

—

      

7,598,331

    

Municipal bonds

    

—

      

623,405

      

—

      

623,405

    

Non-U.S. government agency obligations

    

—

      

1,091,615

      

—

      

1,091,615

    

U.S. government agency obligations

    

—

      

6,539,835

      

—

      

6,539,835

    

U.S. Treasury obligations

    

—

      

361,412

      

—

      

361,412

    

Short-term investments

    

—

      

2,789,787

      

—

      

2,789,787

    

Investment of cash collateral from securities loaned

    

—

      

121,600

      

—

      

121,600

    

Option purchased

    

23,906

      

—

      

—

      

23,906

    

Swaptions purchased

    

—

      

7,205

      

—

      

7,205

    

Futures contracts

    

51,438

      

—

      

—

      

51,438

    

Swap agreements

    

—

      

10,188

      

—

      

10,188

    

Total

  

$

75,344

    

$

36,558,896

    

$

—

    

$

36,634,240

    

Liabilities

  

Options written

  

$

(21,094

)

  

$

—

    

$

—

    

$

(21,094

)

  

Swaptions written

    

—

      

(4,802

)

    

—

      

(4,802

)

  

Futures contracts

    

(2,627

)

    

—

      

—

      

(2,627

)

  

Swap agreements

    

—

      

(31,490

)

    

—

      

(31,490

)

  

Forward foreign currency contracts

    

—

      

(6,593

)

    

—

      

(6,593

)

  

Total

  

$

(23,721

)

  

$

(42,885

)

  

$

—

    

$

(66,606

)

  

At December 31, 2021, there were $322,594 transferred out of Level 3. The transfers from Level 3 to Level 2 occurred because there was observable market data that became available as of December 31, 2021.

Portfolio footnotes

†  Amount represents less than 0.05% or (0.05)%.

1  In U.S. dollars unless otherwise indicated.


102

UBS Total Return Bond Fund

Portfolio of investments

December 31, 2021 (unaudited)

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. Securities exempt from registration pursuant to Rule 144A, in the amount of $11,088,519, represented 33.1% of the Fund's net assets at period end.

3  Variable or floating rate security. The interest rate shown is the rate in effect as of period end and changes periodically.

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.

5  Security, or portion thereof, was on loan at the period end.

6  Perpetual investment. Date shown reflects the next call date.

7  Variable or floating rate security for which the interest rate adjusts periodically based on changes in current interest rates and prepayments on the underlying pool of assets. Rate shown is the rate in effect as of period end.

8  Security fair valued by the Valuation Committee under the direction of the Board of Trustees.

9  Step bond—coupon rate increases in increments to maturity. The rate disclosed is the rate at the period end; the maturity date disclosed is the ultimate maturity date.

10  Rates shown reflect yield at December 31, 2021.

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

See accompanying notes to financial statements.
103

The UBS Funds
Glossary of terms used in the Portfolio of investments

December 31, 2021

Portfolio acronyms

ADR  American Depositary Receipt

AGM  Assured Guaranty Municipal Corporation

CDO  Collateralized Debt Obligation

COP  Certificate of Participation

ETF  Exchange Traded Fund

FHLMC  Federal Home Loan Mortgage Corporation

FNMA  Federal National Mortgage Association

FRN  Floating Rate Note

GDR  Global Depositary Receipt

GNMA  Government National Mortgage Association

GO  General Obligation

LIBOR  London Interbank Offered Rate

OAT  Obligation Assimilables du Trésor (French
  Government Bonds)

OTC  Over The Counter

PJSC  Private Joint Stock Company

REIT  Real Estate Investment Trust

TBA  To-Be-Announced Security

TIPS  Treasury inflation protected securities

UMBS  Uniform Mortgage-Backed Securities

Counterparty abbreviations

BB  Barclays Bank PLC

BOA  Bank of America NA

CIBC  Canadian Imperial Bank of Commerce

CITI  Citibank NA

GS  Goldman Sachs International

HSBC  HSBC Bank PLC

JPMCB  JPMorgan Chase Bank

MSCI  Morgan Stanley & Co. International PLC

SSC  State Street Bank and Trust Co.

Currency abbreviations

AUD  Australian Dollar

BRL  Brazilian Real

CAD  Canadian Dollar

CHF  Swiss Franc

CNY  Chinese Yuan

COP  Colombian Peso

EUR  Euro

GBP  Great Britain Pound

HKD  Hong Kong Dollar

INR  Indian Rupee

JPY  Japanese Yen

KRW  South Korean Won

MXN  Mexican Peso

MYR  Malaysian Ringgit

NOK  Norwegian Krone

NZD  New Zealand Dollar

PHP  Philippine Peso

PLN  Polish Zloty

RUB  Russian Ruble

SEK  Swedish Krona

SGD  Singapore Dollar

THB  Thailand Baht

TWD  Taiwan Dollar

USD  United States Dollar

See accompanying notes to financial statements.
104

The UBS Funds

December 31, 2021 (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, July 1, 2021 to December 31, 2021 (unless otherwise noted).

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 hypo- thetical 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.


105

The UBS Funds

December 31, 2021 (unaudited)

        Beginning
account value
July 1, 2021		   Ending
account value
December 31, 2021		   Expenses paid
during period
07/01/21 to 12/31/211		   Expense
ratio during
the period		  

UBS All China Equity Fund

  

Class P

  

Actual

  

$

1,000.00

    

$

811.40

    

$

5.02

      

1.10

%

  
   

Hypothetical (5% annual return before expenses)

    

1,000.00

      

1,019.66

      

5.60

      

1.10

    

UBS Dynamic Alpha Fund

  

Class A

  

Actual

    

1,000.00

      

1,001.20

      

6.81

      

1.35

    
   

Hypothetical (5% annual return before expenses)

    

1,000.00

      

1,018.40

      

6.87

      

1.35

    

Class P

  

Actual

    

1,000.00

      

1,002.60

      

5.55

      

1.10

    
   

Hypothetical (5% annual return before expenses)

    

1,000.00

      

1,019.66

      

5.60

      

1.10

    

UBS Global Allocation Fund

  

Class A

  

Actual

    

1,000.00

      

1,028.40

      

6.14

      

1.20

    
   

Hypothetical (5% annual return before expenses)

    

1,000.00

      

1,019.16

      

6.11

      

1.20

    

Class P

  

Actual

    

1,000.00

      

1,029.60

      

4.86

      

0.95

    
   

Hypothetical (5% annual return before expenses)

    

1,000.00

      

1,020.42

      

4.84

      

0.95

    

UBS Emerging Markets Equity Opportunity Fund

  

Class P

  

Actual

    

1,000.00

      

885.70

      

4.75

      

1.00

    
   

Hypothetical (5% annual return before expenses)

    

1,000.00

      

1,020.16

      

5.09

      

1.00

    

Class P2

  

Actual

    

1,000.00

      

890.00

      

0.67

      

0.14

    
   

Hypothetical (5% annual return before expenses)

    

1,000.00

      

1,024.50

      

0.71

      

0.14

    

UBS Engage for Impact Fund

  

Class P

  

Actual

    

1,000.00

      

1,060.40

      

4.41

      

0.85

    
   

Hypothetical (5% annual return before expenses)

    

1,000.00

      

1,020.92

      

4.33

      

0.85

    

Class P2

  

Actual

    

1,000.00

      

1,064.30

      

1.30

      

0.25

    
   

Hypothetical (5% annual return before expenses)

    

1,000.00

      

1,023.94

      

1.28

      

0.25

    

UBS International Sustainable Equity Fund

  

Class A

  

Actual

    

1,000.00

      

974.10

      

6.22

      

1.25

    
   

Hypothetical (5% annual return before expenses)

    

1,000.00

      

1,018.90

      

6.36

      

1.25

    

Class P

  

Actual

    

1,000.00

      

974.80

      

4.98

      

1.00

    
   

Hypothetical (5% annual return before expenses)

    

1,000.00

      

1,020.16

      

5.09

      

1.00

    

Class P2

  

Actual

    

1,000.00

      

978.50

      

1.05

      

0.21

    
   

Hypothetical (5% annual return before expenses)

    

1,000.00

      

1,024.15

      

1.07

      

0.21

    

UBS US Dividend Ruler Fund

  

Class P

  

Actual

    

1,000.00

      

1,099.30

      

2.65

      

0.50

    
   

Hypothetical (5% annual return before expenses)

    

1,000.00

      

1,022.68

      

2.55

      

0.50

    

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


106

The UBS Funds

December 31, 2021 (unaudited)

        Beginning
account value
July 1, 2021		   Ending
account value
December 31, 2021		   Expenses paid
during period
07/01/21 to 12/31/211		   Expense
ratio during
the period		  

UBS US Quality Growth At Reasonable Price Fund

  

Class P

  

Actual

  

$

1,000.00

    

$

1,126.30

    

$

2.68

      

0.50

%

  
   

Hypothetical (5% annual return before expenses)

    

1,000.00

      

1,022.68

      

2.55

      

0.50

    

UBS U.S. Small Cap Growth Fund

  

Class A

  

Actual

    

1,000.00

      

972.00

      

6.16

      

1.24

    
   

Hypothetical (5% annual return before expenses)

    

1,000.00

      

1,018.95

      

6.31

      

1.24

    

Class P

  

Actual

    

1,000.00

      

973.20

      

4.92

      

0.99

    
   

Hypothetical (5% annual return before expenses)

    

1,000.00

      

1,020.21

      

5.04

      

0.99

    

UBS Municipal Bond Fund

  

Class A

  

Actual

    

1,000.00

      

999.80

      

3.28

      

0.65

    
   

Hypothetical (5% annual return before expenses)

    

1,000.00

      

1,021.93

      

3.31

      

0.65

    

Class P

  

Actual

    

1,000.00

      

1,001.00

      

2.02

      

0.40

    
   

Hypothetical (5% annual return before expenses)

    

1,000.00

      

1,023.19

      

2.04

      

0.40

    

UBS Sustainable Development Bank Bond Fund

  

Class P

  

Actual

    

1,000.00

      

993.40

      

1.26

      

0.25

    
   

Hypothetical (5% annual return before expenses)

    

1,000.00

      

1,023.95

      

1.28

      

0.25

    

Class P2

  

Actual

    

1,000.00

      

993.20

      

0.75

      

0.15

    
   

Hypothetical (5% annual return before expenses)

    

1,000.00

      

1,024.45

      

0.77

      

0.15

    

UBS Total Return Bond Fund

  

Class A

  

Actual

    

1,000.00

      

994.70

      

3.77

      

0.75

    
   

Hypothetical (5% annual return before expenses)

    

1,000.00

      

1,021.42

      

3.82

      

0.75

    

Class P

  

Actual

    

1,000.00

      

995.90

      

2.52

      

0.50

    
   

Hypothetical (5% annual return before expenses)

    

1,000.00

      

1,022.68

      

2.55

      

0.50

    

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


107

The UBS Funds

Financial statements
Statement of assets and liabilities—December 31, 2021 (unaudited)

   UBS
All China
Equity Fund		   UBS
Dynamic
Alpha Fund		   UBS
Global
Allocation Fund		  

Assets:

  

Investments, at cost

  

Unaffiliated issuers

  

$

1,912,051

    

$

37,175,506

    

$

191,294,798

    

Affiliated issuers

    

—

      

—

      

34,079,383

    

Foreign currency

    

3,053

      

1,157,194

      

1,461,667

    

Investments, at value

  

Unaffiliated issuers1

  

$

1,440,575

    

$

29,943,377

    

$

220,144,962

    

Affiliated issuers

    

—

      

—

      

33,434,615

    

Foreign currency

    

3,046

      

1,172,434

      

1,460,905

    

Cash collateral on futures

    

—

      

534,615

      

3,373,585

    

Cash collateral on swap agreements

    

—

      

122,405

      

—

    

Due from broker

    

—

      

907,674

      

—

    

Receivable for investments sold

    

—

      

26,616

      

—

    

Receivable for fund shares sold

    

—

      

1,460

      

61,557

    

Receivable for interest and dividends

    

399

      

129,726

      

390,551

    

Receivable for foreign tax reclaims

    

—

      

—

      

132,194

    

Receivable from affiliate

    

22,193

      

—

      

—

    

Receivable for variation margin on futures contracts

    

—

      

163,539

      

865,963

    

Receivable for variation margin on centrally cleared swap agreements

    

—

      

71,177

      

9

    

Unrealized appreciation on forward foreign currency contracts

    

—

      

268,507

      

795,883

    

Deferred offering cost

    

9,705

      

—

      

—

    

Other assets

    

15,107

      

24,232

      

17,867

    

Total assets

    

1,491,025

      

33,365,762

      

260,678,091

    

Liabilities:

  

Due to broker

    

—

      

—

      

832,738

    

Payable for bank loan

    

—

      

—

      

—

    

Payable for cash collateral from securities loaned

    

4,332

      

1,289,086

      

7,592,367

    

Payable for investments purchased

    

—

      

—

      

10,303,906

    

Payable for fund shares redeemed

    

—

      

222,304

      

231,729

    

Payable to affiliate

    

—

      

9,197

      

152,621

    

Payable to Trustees

    

3,989

      

7,905

      

16,330

    

Payable to custodian

    

7,789

      

64,551

      

31,305

    

Payable for foreign withholding taxes and foreign capital gains taxes

    

—

      

—

      

998

    

Unrealized depreciation on forward foreign currency contracts

    

—

      

323,433

      

564,432

    

Accrued expenses and other liabilities

    

51,230

      

118,792

      

213,511

    

Total liabilities

    

67,340

      

2,035,268

      

19,939,937

    

Net assets

  

$

1,423,685

    

$

31,330,494

    

$

240,738,154

    

1  Includes $68,065; $1,552,056; $14,516,138; $0; $756,473 and $2,034,458, respectively of investments in securities on loan, at value, plus accrued interest and dividends, if any.


108

The UBS Funds

   UBS
Emerging
Markets Equity
Opportunity Fund		   UBS
Engage for
Impact Fund		   UBS
International
Sustainable
Equity Fund		  

Assets:

  

Investments, at cost

  

Unaffiliated issuers

  

$

725,308,129

    

$

50,932,326

    

$

337,643,833

    

Affiliated issuers

    

—

      

—

      

—

    

Foreign currency

    

1,846,502

      

48,831

      

29,891

    

Investments, at value

  

Unaffiliated issuers1

  

$

697,503,260

    

$

59,793,302

    

$

353,701,702

    

Affiliated issuers

    

—

      

—

      

—

    

Foreign currency

    

1,849,102

      

48,410

      

30,095

    

Cash collateral on futures

    

—

      

—

      

—

    

Cash collateral on swap agreements

    

—

      

—

      

—

    

Due from broker

    

—

      

—

      

—

    

Receivable for investments sold

    

3,905,086

      

115,907

      

—

    

Receivable for fund shares sold

    

2,240,418

      

567,746

      

2,155,985

    

Receivable for interest and dividends

    

346,658

      

22,130

      

42,859

    

Receivable for foreign tax reclaims

    

45,572

      

26,436

      

543,686

    

Receivable from affiliate

    

—

      

16,542

      

—

    

Receivable for variation margin on futures contracts

    

—

      

—

      

—

    

Receivable for variation margin on centrally cleared swap agreements

    

—

      

—

      

—

    

Unrealized appreciation on forward foreign currency contracts

    

—

      

—

      

—

    

Deferred offering cost

    

—

      

—

      

—

    

Other assets

    

34,656

      

28,843

      

34,609

    

Total assets

    

705,924,752

      

60,619,316

      

356,508,936

    

Liabilities:

  

Due to broker

    

—

      

—

      

—

    

Payable for bank loan

    

—

      

—

      

1,351,726

    

Payable for cash collateral from securities loaned

    

—

      

—

      

1,980,392

    

Payable for investments purchased

    

—

      

619,603

      

—

    

Payable for fund shares redeemed

    

2,668,648

      

12,059

      

512,675

    

Payable to affiliate

    

150,946

      

—

      

210,838

    

Payable to Trustees

    

33,007

      

8,007

      

17,126

    

Payable to custodian

    

41,212

      

16,258

      

23,680

    

Payable for foreign withholding taxes and foreign capital gains taxes

    

166,606

      

231

      

4,712

    

Unrealized depreciation on forward foreign currency contracts

    

—

      

—

      

—

    

Accrued expenses and other liabilities

    

100,992

      

83,074

      

85,885

    

Total liabilities

    

3,161,411

      

739,232

      

4,187,034

    

Net assets

  

$

702,763,341

    

$

59,880,084

    

$

352,321,902

    

See accompanying notes to financial statements.
109

The UBS Funds

Financial statements
Statement of assets and liabilities—December 31, 2021 (unaudited) (continued)

    UBS
All China
Equity Fund		   UBS
Dynamic
Alpha Fund		   UBS
Global
Allocation Fund		  

Net assets consist of:

  

Beneficial interest

  

$

2,000,000

    

$

74,793,661

    

$

209,661,364

    

Distributable earnings (accumulated losses)

    

(576,315

)

    

(43,463,167

)

    

31,076,790

    

Net assets

  

$

1,423,685

    

$

31,330,494

    

$

240,738,154

    

Class A

  

Net assets

  

$

—

    

$

18,954,872

    

$

186,245,213

    

Shares outstanding

    

—

      

3,089,839

      

14,850,046

    

Net asset value and redemption proceeds per share

  

$

—

    

$

6.13

    

$

12.54

    

Maximum offering price per share (NAV per share plus maximum sales charge)

  

$

—

    

$

6.49

    

$

13.27

    

Class P

  

Net assets

  

$

1,423,685

    

$

12,375,622

    

$

54,492,941

    

Shares outstanding

    

200,000

      

1,960,908

      

4,217,351

    

Net asset value, offering price and redemption value per share

  

$

7.12

    

$

6.31

    

$

12.92

    

Class P2

  

Net assets

  

$

—

    

$

—

    

$

—

    

Shares outstanding

    

—

      

—

      

—

    

Net asset value and offering price per share2

  

$

—

    

$

—

    

$

—

    

2  Assumes shares were held a sufficient period or are otherwise not subject to a redemption fee.


110

The UBS Funds

    UBS
Emerging
Markets Equity
Opportunity Fund		   UBS
Engage for
Impact Fund		   UBS
International
Sustainable
Equity Fund		  

Net assets consist of:

  

Beneficial interest

  

$

702,139,748

    

$

50,533,304

    

$

327,974,524

    

Distributable earnings (accumulated losses)

    

623,593

      

9,346,780

      

24,347,378

    

Net assets

  

$

702,763,341

    

$

59,880,084

    

$

352,321,902

    

Class A

  

Net assets

  

$

—

    

$

—

    

$

8,267,882

    

Shares outstanding

    

—

      

—

      

747,669

    

Net asset value and redemption proceeds per share

  

$

—

    

$

—

    

$

11.06

    

Maximum offering price per share (NAV per share plus maximum sales charge)

  

$

—

    

$

—

    

$

11.70

    

Class P

  

Net assets

  

$

205,419,681

    

$

8,588,006

    

$

296,275,742

    

Shares outstanding

    

20,813,114

      

639,388

      

26,740,812

    

Net asset value, offering price and redemption value per share

  

$

9.87

    

$

13.43

    

$

11.08

    

Class P2

  

Net assets

  

$

497,343,660

    

$

51,292,078

    

$

47,778,278

    

Shares outstanding

    

50,126,798

      

3,823,104

      

4,310,720

    

Net asset value and offering price per share2

  

$

9.92

    

$

13.42

    

$

11.08

    

See accompanying notes to financial statements.
111

The UBS Funds

Financial statements
Statement of assets and liabilities—December 31, 2021 (unaudited) (continued)

    UBS
US Dividend
Ruler Fund		   UBS
US Quality
Growth At
Reasonable
Price Fund		   UBS
U.S. Small Cap
Growth Fund		  

Assets:

  

Investments, at cost

  

Unaffiliated issuers

  

$

106,927,053

    

$

150,589,312

    

$

150,009,361

    

Foreign currency

    

—

      

—

      

—

    

Investments, at value

  

Unaffiliated issuers1

  

$

121,456,466

    

$

180,263,627

    

$

193,159,744

    

Foreign currency

    

—

      

—

      

—

    

Cash

    

—

      

—

      

—

    

Cash collateral on futures

    

—

      

—

      

—

    

Cash collateral on swap agreements

    

—

      

—

      

—

    

Due from broker

    

—

      

—

      

—

    

Receivable for investments sold

    

—

      

—

      

151,188

    

Receivable for fund shares sold

    

1,060,957

      

1,846,219

      

86,784

    

Receivable for interest and dividends

    

51,677

      

15,188

      

31,376

    

Receivable from affiliate

    

—

      

—

      

—

    

Receivable for variation margin on futures contracts

    

—

      

—

      

—

    

Receivable for variation margin on centrally cleared swap agreements

    

—

      

—

      

—

    

Other assets

    

15,850

      

17,905

      

21,692

    

Total assets

    

122,584,950

      

182,142,939

      

193,450,784

    

Liabilities:

  

Options and swaptions written, at value (premiums received $0; $0; $0; $0; $0 and $36,707, respectively)

    

—

      

—

      

—

    

Payable for cash collateral from securities loaned

    

—

      

—

      

2,111,754

    

Payable for investments purchased

    

870,315

      

2,317,268

      

—

    

Payable for fund shares redeemed

    

89,727

      

67,774

      

3,163,824

    

Payable to affiliate

    

26,967

      

45,851

      

125,301

    

Payable to Trustees

    

7,687

      

6,654

      

13,861

    

Payable to custodian

    

13,841

      

16,538

      

11,920

    

Unrealized depreciation on forward foreign currency contracts

    

—

      

—

      

—

    

Accrued expenses and other liabilities

    

83,192

      

78,779

      

89,258

    

Total liabilities

    

1,091,729

      

2,532,864

      

5,515,918

    

Net assets

  

$

121,493,221

    

$

179,610,075

    

$

187,934,866

    

1  Includes $0; $0; $5,894,611; $0; $0 and $118,999, respectively of investments in securities on loan, at value, plus accrued interest and dividends, if any.


112

The UBS Funds

    UBS
Municipal
Bond Fund		   UBS
Sustainable
Development Bank
Bond Fund		   UBS
Total Return
Bond Fund		  

Assets:

  

Investments, at cost

  

Unaffiliated issuers

  

$

100,509,384

    

$

90,982,294

    

$

36,133,963

    

Foreign currency

    

—

      

—

      

21,525

    

Investments, at value

  

Unaffiliated issuers1

  

$

104,856,039

    

$

90,433,122

    

$

36,572,614

    

Foreign currency

    

—

      

—

      

21,209

    

Cash

    

600,023

      

—

      

—

    

Cash collateral on futures

    

—

      

—

      

115,006

    

Cash collateral on swap agreements

    

—

      

—

      

50,188

    

Due from broker

    

—

      

—

      

110,229

    

Receivable for investments sold

    

900,040

      

—

      

—

    

Receivable for fund shares sold

    

1,001,982

      

1,197,211

      

—

    

Receivable for interest and dividends

    

1,191,093

      

355,436

      

170,067

    

Receivable from affiliate

    

—

      

8,709

      

9,739

    

Receivable for variation margin on futures contracts

    

—

      

—

      

48,865

    

Receivable for variation margin on centrally cleared swap agreements

    

—

      

—

      

16,972

    

Other assets

    

22,392

      

23,776

      

15,734

    

Total assets

    

108,571,569

      

92,018,254

      

37,130,623

    

Liabilities:

  

Options and swaptions written, at value (premiums received $0; $0; $0; $0; $0 and $36,707, respectively)

    

—

      

—

      

25,896

    

Payable for cash collateral from securities loaned

    

—

      

—

      

121,600

    

Payable for investments purchased

    

1,500,063

      

290,551

      

3,349,367

    

Payable for fund shares redeemed

    

57,971

      

770,280

      

24,221

    

Payable to affiliate

    

14,655

      

—

      

—

    

Payable to Trustees

    

11,510

      

7,547

      

9,497

    

Payable to custodian

    

4,419

      

3,491

      

8,945

    

Unrealized depreciation on forward foreign currency contracts

    

—

      

—

      

6,593

    

Accrued expenses and other liabilities

    

71,199

      

46,858

      

79,136

    

Total liabilities

    

1,659,817

      

1,118,727

      

3,625,255

    

Net assets

  

$

106,911,752

    

$

90,899,527

    

$

33,505,368

    

See accompanying notes to financial statements.
113

The UBS Funds

Financial statements
Statement of assets and liabilities—December 31, 2021 (unaudited) (concluded)

    UBS
US Dividend
Ruler Fund		   UBS
US Quality
Growth At
Reasonable
Price Fund		   UBS
U.S. Small Cap
Growth Fund		  

Net assets consist of:

  

Beneficial interest

  

$

105,549,486

    

$

149,758,799

    

$

140,991,791

    

Distributable earnings (accumulated losses)

    

15,943,735

      

29,851,276

      

46,943,075

    

Net assets

  

$

121,493,221

    

$

179,610,075

    

$

187,934,866

    

Class A

  

Net assets

  

$

—

    

$

—

    

$

28,628,055

    

Shares outstanding

    

—

      

—

      

1,343,100

    

Net asset value and redemption proceeds per share

  

$

—

    

$

—

    

$

21.31

    

Maximum offering price per share (NAV per share plus maximum sales charge)

  

$

—

    

$

—

    

$

22.55

    

Class P

  

Net assets

  

$

121,493,221

    

$

179,610,075

    

$

159,306,811

    

Shares outstanding

    

8,877,535

      

12,533,800

      

6,261,027

    

Net asset value, offering price and redemption value per share

  

$

13.69

    

$

14.33

    

$

25.44

    

Class P2

  

Net assets

  

$

—

    

$

—

    

$

—

    

Shares outstanding

    

—

      

—

      

—

    

Net asset value and offering price per share2

  

$

—

    

$

—

    

$

—

    

2  Assumes shares were held a sufficient period or are otherwise not subject to a redemption fee.


114

The UBS Funds

    UBS
Municipal
Bond Fund		   UBS
Sustainable
Development Bank
Bond Fund		   UBS
Total Return
Bond Fund		  

Net assets consist of:

  

Beneficial interest

  

$

102,605,644

    

$

91,553,422

    

$

35,189,698

    

Distributable earnings (accumulated losses)

    

4,306,108

      

(653,895

)

    

(1,684,330

)

  

Net assets

  

$

106,911,752

    

$

90,899,527

    

$

33,505,368

    

Class A

  

Net assets

  

$

8,860,344

    

$

—

    

$

749,199

    

Shares outstanding

    

825,286

      

—

      

48,448

    

Net asset value and redemption proceeds per share

  

$

10.74

    

$

—

    

$

15.46

    

Maximum offering price per share (NAV per share plus maximum sales charge)

  

$

10.99

    

$

—

    

$

16.06

    

Class P

  

Net assets

  

$

98,051,408

    

$

18,859,486

    

$

32,756,169

    

Shares outstanding

    

9,141,006

      

1,803,318

      

2,117,057

    

Net asset value, offering price and redemption value per share

  

$

10.73

    

$

10.46

    

$

15.47

    

Class P2

  

Net assets

  

$

—

    

$

72,040,041

    

$

—

    

Shares outstanding

    

—

      

6,891,555

      

—

    

Net asset value and offering price per share2

  

$

—

    

$

10.45

    

$

—

    

See accompanying notes to financial statements.
115

The UBS Funds

Statement of operations
For the six months ended December 31, 2021 (unaudited)

    UBS
All China
Equity Fund		   UBS
Dynamic
Alpha Fund		   UBS
Global
Allocation Fund		  

Investment income:

  

Unaffiliated dividends

  

$

6,485

    

$

43,159

    

$

1,340,907

    

Non-cash dividends from unaffiliated securities

    

—

      

—

      

—

    

Affiliated dividends

    

—

      

—

      

557,205

    

Interest

    

15

      

172,408

      

675,535

    

Securities lending

    

72

      

3,918

      

43,071

    

Foreign tax withheld

    

(347

)

    

(28

)

    

(25,978

)

  

Total income

    

6,225

      

219,457

      

2,590,740

    

Expenses:

  

Investment management and administration fees

    

7,103

      

154,890

      

1,086,793

    

Service and distribution fees—Class A

    

—

      

25,182

      

239,737

    

Transfer agency and related services fees—Class A

    

—

      

9,840

      

55,298

    

Transfer agency and related services fees—Class P

    

4,537

      

7,864

      

11,443

    

Transfer agency and related services fees—Class P2

    

—

      

—

      

—

    

Custody and fund accounting fees

    

6,166

      

21,069

      

35,244

    

Trustees fees

    

11,215

      

14,206

      

27,517

    

Professional services fees

    

67,140

      

85,388

      

96,771

    

Printing and shareholder report fees

    

11,496

      

10,726

      

34,837

    

Federal and state registration fees

    

2,682

      

18,114

      

16,701

    

Interest expense

    

—

      

—

      

—

    

Amortization of offering costs

    

33,069

      

—

      

—

    

Other expenses

    

15,291

      

24,765

      

49,156

    

Total expenses

    

158,699

      

372,044

      

1,653,497

    

Fee waivers and/or expense reimbursements by Advisor

    

(150,252

)

    

(162,670

)

    

(233,813

)

  

Net expenses

    

8,447

      

209,374

      

1,419,684

    

Net investment income (loss)

    

(2,222

)

    

10,083

      

1,171,056

    

Net realized gain (loss) on:

  

Investments in unaffiliated issuers (including foreign capital gain tax expense of $0; $0; $0; $0; $0 and $0, respectively)

    

7,052

      

45,972

      

8,135,181

    

Realized gain received as distribution from affiliated issuers

    

—

      

—

      

1,606,912

    

Futures contracts

    

—

      

39,268

      

(679,645

)

  

Swap agreements

    

—

      

48,803

      

(101,881

)

  

Forward foreign currency contracts

    

—

      

560,814

      

(164,345

)

  

Foreign currency transactions

    

(126

)

    

(117,643

)

    

(317,806

)

  

Net realized gain (loss)

    

6,926

      

577,214

      

8,478,416

    

Change in net unrealized appreciation (depreciation) on:

  

Investments in unaffiliated issuers (net of change in deferred foreign capital gain taxes of $0; $0; $180,406; $0 and $0, respectively)

    

(337,685

)

    

(550,436

)

    

(448,773

)

  

Investments in affiliated issuers

    

—

      

—

      

(4,382,762

)

  

Futures contracts

    

—

      

260,862

      

1,710,235

    

Swap agreements

    

—

      

(31,812

)

    

40,110

    

Forward foreign currency contracts

    

—

      

(224,245

)

    

318,737

    

Translation of other assets and liabilities denominated in foreign currency

    

2

      

20,097

      

11,930

    

Net change in unrealized appreciation (depreciation)

    

(337,683

)

    

(525,534

)

    

(2,750,523

)

  

Net realized and unrealized gain (loss)

    

(330,757

)

    

51,680

      

5,727,893

    

Net increase (decrease) in net assets resulting from operations

  

$

(332,979

)

  

$

61,763

    

$

6,898,949

    


116

The UBS Funds

    UBS
Emerging
Markets Equity
Opportunity Fund		   UBS
Engage for
Impact Fund		   UBS
International
Sustainable
Equity Fund		  

Investment income:

  

Unaffiliated dividends

  

$

12,623,030

    

$

459,692

    

$

2,326,574

    

Non-cash dividends from unaffiliated securities

    

—

      

—

      

206,000

    

Affiliated dividends

    

—

      

—

      

—

    

Interest

    

2,275

      

194

      

939

    

Securities lending

    

21,804

      

17,135

      

11,491

    

Foreign tax withheld

    

(1,169,072

)

    

(20,996

)

    

(256,989

)

  

Total income

    

11,478,037

      

456,025

      

2,288,015

    

Expenses:

  

Investment management and administration fees

    

4,405,704

      

227,986

      

1,721,513

    

Service and distribution fees—Class A

    

—

      

—

      

11,057

    

Transfer agency and related services fees—Class A

    

—

      

—

      

2,274

    

Transfer agency and related services fees—Class P

    

11,015

      

971

      

38,424

    

Transfer agency and related services fees—Class P2

    

13,230

      

6,212

      

7,634

    

Custody and fund accounting fees

    

356,602

      

15,627

      

91,840

    

Trustees fees

    

69,985

      

14,921

      

35,622

    

Professional services fees

    

77,382

      

104,818

      

92,716

    

Printing and shareholder report fees

    

22,116

      

15,291

      

19,806

    

Federal and state registration fees

    

25,176

      

23,530

      

36,817

    

Interest expense

    

2,031

      

—

      

2,783

    

Amortization of offering costs

    

—

      

—

      

—

    

Other expenses

    

66,167

      

18,102

      

38,850

    

Total expenses

    

5,049,408

      

427,458

      

2,099,336

    

Fee waivers and/or expense reimbursements by Advisor

    

(3,339,542

)

    

(332,901

)

    

(271,765

)

  

Net expenses

    

1,709,866

      

94,557

      

1,827,571

    

Net investment income (loss)

    

9,768,171

      

361,468

      

460,444

    

Net realized gain (loss) on:

  

Investments in unaffiliated issuers (including foreign capital gain tax expense of $0; $0; $0; $0; $0 and $0, respectively)

    

54,444,603

      

1,664,493

      

28,543,988

    

Realized gain received as distribution from affiliated issuers

    

—

      

—

      

—

    

Futures contracts

    

—

      

—

      

—

    

Swap agreements

    

—

      

—

      

—

    

Forward foreign currency contracts

    

—

      

—

      

—

    

Foreign currency transactions

    

(136,594

)

    

(3,728

)

    

90,212

    

Net realized gain (loss)

    

54,308,009

      

1,660,765

      

28,634,200

    

Change in net unrealized appreciation (depreciation) on:

  

Investments in unaffiliated issuers (net of change in deferred foreign capital gain taxes of $0; $0; $180,406; $0 and $0, respectively)

    

(181,934,816

)

    

1,324,459

      

(40,211,402

)

  

Investments in affiliated issuers

    

—

      

—

      

—

    

Futures contracts

    

—

      

—

      

—

    

Swap agreements

    

—

      

—

      

—

    

Forward foreign currency contracts

    

—

      

—

      

—

    

Translation of other assets and liabilities denominated in foreign currency

    

24,403

      

(676

)

    

1,969

    

Net change in unrealized appreciation (depreciation)

    

(181,910,413

)

    

1,323,783

      

(40,209,433

)

  

Net realized and unrealized gain (loss)

    

(127,602,404

)

    

2,984,548

      

(11,575,233

)

  

Net increase (decrease) in net assets resulting from operations

  

$

(117,834,233

)

  

$

3,346,016

    

$

(11,114,789

)

  

See accompanying notes to financial statements.
117

The UBS Funds

Statement of operations
For the six months ended December 31, 2021 (unaudited) (concluded)

    UBS
US Dividend
Ruler Fund		   UBS
US Quality
Growth At
Reasonable
Price Fund		   UBS
U.S. Small
Cap Growth Fund		  

Investment income:

  

Unaffiliated dividends

  

$

1,106,353

    

$

522,992

    

$

647,318

    

Interest

    

285

      

387

      

665

    

Securities lending

    

—

      

—

      

5,567

    

Total income

    

1,106,638

      

523,379

      

653,550

    

Expenses:

  

Investment management and administration fees

    

289,784

      

420,696

      

944,749

    

Service and distribution fees—Class A

    

—

      

—

      

40,884

    

Transfer agency and related services fees—Class A

    

—

      

—

      

12,688

    

Transfer agency and related services fees—Class P

    

20,496

      

29,208

      

60,688

    

Transfer agency and related services fees—Class P2

    

—

      

—

      

—

    

Custody and fund accounting fees

    

14,386

      

16,490

      

9,984

    

Trustees fees

    

16,316

      

16,485

      

24,034

    

Professional services fees

    

73,878

      

74,002

      

65,482

    

Printing and shareholder report fees

    

2,486

      

5,193

      

14,555

    

Federal and state registration fees

    

17,138

      

18,713

      

16,620

    

Interest expense

    

—

      

—

      

—

    

Amortization of offering costs

    

7,427

      

7,111

      

—

    

Other expenses

    

15,182

      

16,278

      

24,077

    

Total expenses

    

457,093

      

604,176

      

1,213,761

    

Fee waivers and/or expense reimbursements by Advisor

    

(205,107

)

    

(238,354

)

    

(161,741

)

  

Net expenses

    

251,986

      

365,822

      

1,052,020

    

Net investment income (loss)

    

854,652

      

157,557

      

(398,470

)

  

Net realized gain (loss) on:

  

Investments in unaffiliated issuers

    

2,241,355

      

2,241,295

      

19,488,710

    

Options and swaptions written

    

—

      

—

      

—

    

Futures contracts

    

—

      

—

      

—

    

Swap agreements

    

—

      

—

      

—

    

Forward foreign currency contracts

    

—

      

—

      

—

    

Foreign currency transactions

    

—

      

—

      

—

    

Net realized gain (loss)

    

2,241,355

      

2,241,295

      

19,488,710

    

Change in net unrealized appreciation (depreciation) on:

  

Investments in unaffiliated

    

6,550,552

      

14,746,576

      

(25,376,626

)

  

Options and swaptions written

    

—

      

—

      

—

    

Futures contracts

    

—

      

—

      

—

    

Swap agreements

    

—

      

—

      

—

    

Forward foreign currency contracts

    

—

      

—

      

—

    

Translation of other assets and liabilities denominated in foreign currency

    

—

      

—

      

—

    

Net change in unrealized appreciation (depreciation)

    

6,550,552

      

14,746,576

      

(25,376,626

)

  

Net realized and unrealized gain (loss)

    

8,791,907

      

16,987,871

      

(5,887,916

)

  

Net increase (decrease) in net assets resulting from operations

  

$

9,646,559

    

$

17,145,428

    

$

(6,286,386

)

  


118

The UBS Funds

    UBS
Municipal
Bond Fund		   UBS
Sustainable
Development Bank
Bond Fund		   UBS
Total Return
Bond Fund		  

Investment income:

  

Unaffiliated dividends

  

$

—

    

$

—

    

$

—

    

Interest

    

969,785

      

518,973

      

418,116

    

Securities lending

    

—

      

438

      

113

    

Total income

    

969,785

      

519,411

      

418,229

    

Expenses:

  

Investment management and administration fees

    

266,134

      

100,163

      

100,775

    

Service and distribution fees—Class A

    

11,903

      

—

      

958

    

Transfer agency and related services fees—Class A

    

1,113

      

—

      

140

    

Transfer agency and related services fees—Class P

    

9,900

      

3,410

      

13,138

    

Transfer agency and related services fees—Class P2

    

—

      

7,979

      

—

    

Custody and fund accounting fees

    

5,388

      

7,458

      

13,141

    

Trustees fees

    

19,365

      

16,922

      

13,469

    

Professional services fees

    

64,375

      

67,195

      

66,445

    

Printing and shareholder report fees

    

6,990

      

3,017

      

7,571

    

Federal and state registration fees

    

15,718

      

21,067

      

15,195

    

Interest expense

    

188

      

—

      

—

    

Amortization of offering costs

    

—

      

—

      

—

    

Other expenses

    

33,355

      

22,710

      

21,889

    

Total expenses

    

434,429

      

249,921

      

252,721

    

Fee waivers and/or expense reimbursements by Advisor

    

(198,225

)

    

(173,670

)

    

(164,132

)

  

Net expenses

    

236,204

      

76,251

      

88,589

    

Net investment income (loss)

    

733,581

      

443,160

      

329,640

    

Net realized gain (loss) on:

  

Investments in unaffiliated issuers

    

384,378

      

(53,486

)

    

97,459

    

Options and swaptions written

    

—

      

—

      

21,020

    

Futures contracts

    

—

      

—

      

119,485

    

Swap agreements

    

—

      

—

      

1,137

    

Forward foreign currency contracts

    

—

      

—

      

18,779

    

Foreign currency transactions

    

—

      

—

      

(296

)

  

Net realized gain (loss)

    

384,378

      

(53,486

)

    

257,584

    

Change in net unrealized appreciation (depreciation) on:

  

Investments in unaffiliated

    

(1,016,697

)

    

(1,052,486

)

    

(647,359

)

  

Options and swaptions written

    

—

      

—

      

10,811

    

Futures contracts

    

—

      

—

      

(26,994

)

  

Swap agreements

    

—

      

—

      

(23,920

)

  

Forward foreign currency contracts

    

—

      

—

      

(18,954

)

  

Translation of other assets and liabilities denominated in foreign currency

    

—

      

—

      

(2,105

)

  

Net change in unrealized appreciation (depreciation)

    

(1,016,697

)

    

(1,052,486

)

    

(708,521

)

  

Net realized and unrealized gain (loss)

    

(632,319

)

    

(1,105,972

)

    

(450,937

)

  

Net increase (decrease) in net assets resulting from operations

  

$

101,262

    

$

(662,812

)

  

$

(121,297

)

  

See accompanying notes to financial statements.
119

The UBS Funds

Statement of changes in net assets

   

UBS All China Equity Fund

  

UBS Dynamic Alpha Fund

  
UBS Global Allocation Fund		  
    For the
six months
ended
December 31,
2021
(unaudited)		   For the
period
ended
June 30,
2021*		   For the
six months
ended
December 31,
2021
(unaudited)		   For the
year
ended
June 30,
2021		   For the
six months
ended
December 31,
2021
(unaudited)		   For the
year
ended
June 30,
2021		  

From operations:

  

Net investment income (loss)

  

$

(2,222

)

  

$

6,783

    

$

10,083

    

$

(90,797

)

  

$

1,171,056

    

$

2,206,910

    

Net realized gain (loss)

    

6,926

      

(105,979

)

    

577,214

      

3,618,601

      

8,478,416

      

29,913,845

    

Net change in unrealized appreciation (depreciation)

    

(337,683

)

    

(133,800

)

    

(525,534

)

    

1,175,817

      

(2,750,523

)

    

22,845,567

    

Net increase (decrease) in net assets resulting from operations

    

(332,979

)

    

(232,996

)

    

61,763

      

4,703,621

      

6,898,949

      

54,966,322

    

Total distributions—Class A

    

—

      

—

      

(1,987,394

)

    

—

      

(30,550,894

)

    

(3,057,684

)

  

Total distributions—Class P

    

(10,340

)

    

—

      

(1,304,338

)

    

—

      

(8,853,140

)

    

(1,019,866

)

  

Total distributions—Class P2

    

—

      

—

      

—

      

—

      

—

      

—

    

Total distributions

    

(10,340

)

    

—

      

(3,291,732

)

    

—

      

(39,404,034

)

    

(4,077,550

)

  

From beneficial interest transactions:

  

Proceeds from shares sold

    

—

      

2,000,000

      

801,950

      

1,460,148

      

1,195,622

      

3,575,085

    

Cost of shares redeemed

    

—

      

—

      

(3,260,710

)

    

(7,646,862

)

    

(13,195,387

)

    

(34,517,066

)

  

Shares issued on reinvestment of dividends and distributions

    

—

      

—

      

2,946,277

      

—

      

36,087,640

      

3,739,203

    

Net increase (decrease) in net assets from beneficial interest transactions

    

—

      

2,000,000

      

487,517

      

(6,186,714

)

    

24,087,875

      

(27,202,778

)

  

Net increase (decrease) in net assets

    

(343,319

)

    

1,767,004

      

(2,742,452

)

    

(1,483,093

)

    

(8,417,210

)

    

23,685,994

    

Net assets:

  

Beginning of period

    

1,767,004

      

—

      

34,072,946

      

35,556,039

      

249,155,364

      

225,469,370

    

End of period

  

$

1,423,685

    

$

1,767,004

    

$

31,330,494

    

$

34,072,946

    

$

240,738,154

    

$

249,155,364

    

1  For the period from February 23, 2021 (commencement of operations) through June 30, 2021


120

The UBS Funds

    UBS Emerging Markets Equity
Opportunity Fund		  
UBS Engage for Impact Fund		  
    For the
six months
ended
December 31,
2021
(unaudited)		   For the
year
ended
June 30,
2021		   For the
six months
ended
December 31,
2021
(unaudited)		   For the
year
ended
June 30,
2021		  

From operations:

  

Net investment income (loss)

  

$

9,768,171

    

$

10,804,930

    

$

361,468

    

$

255,555

    

Net realized gain (loss)

    

54,308,009

      

57,445,652

      

1,660,765

      

4,971,813

    

Net change in unrealized appreciation (depreciation)

    

(181,910,413

)

    

122,770,023

      

1,323,783

      

7,328,710

    

Net increase (decrease) in net assets resulting from operations

    

(117,834,233

)

    

191,020,605

      

3,346,016

      

12,556,078

    

Total distributions—Class A

    

—

      

—

      

—

      

—

    

Total distributions—Class P

    

(21,255,044

)

    

(1,771,622

)

    

(942,905

)

    

(300,924

)

  

Total distributions—Class P2

    

(57,717,700

)

    

(9,016,015

)

    

(5,632,935

)

    

—

    

Total distributions

    

(78,972,744

)

    

(10,787,637

)

    

(6,575,840

)

    

(300,924

)

  

From beneficial interest transactions:

  

Proceeds from shares sold

    

119,578,030

      

488,581,499

      

10,218,301

      

60,440,196

    

Cost of shares redeemed

    

(322,004,540

)

    

(117,310,941

)

    

(3,622,120

)

    

(48,693,360

)

  

Shares issued on reinvestment of dividends and distributions

    

65,976,763

      

8,182,239

      

6,005,611

      

265,026

    

Net increase (decrease) in net assets from beneficial interest transactions

    

(136,449,747

)

    

379,452,797

      

12,601,792

      

12,011,862

    

Net increase (decrease) in net assets

    

(333,256,724

)

    

559,685,765

      

9,371,968

      

24,267,016

    

Net assets:

  

Beginning of period

    

1,036,020,065

      

476,334,300

      

50,508,116

      

26,241,100

    

End of period

  

$

702,763,341

    

$

1,036,020,065

    

$

59,880,084

    

$

50,508,116

    

See accompanying notes to financial statements.
121

The UBS Funds

Statement of changes in net assets (continued)

    UBS International Sustainable
Equity Fund		  

UBS US Dividend Ruler Fund

   UBS US Quality Growth At
Reasonable Price Fund		  
    For the
six months
ended
December 31,
2021
(unaudited)		   For the
year
ended
June 30,
2021		   For the
six months
ended
December 31,
2021
(unaudited)		   For the
period
ended
June 30,
2021*		   For the
six months
ended
December 31,
2021
(unaudited)		   For the
year
ended
June 30,
2021		  

From operations:

  

Net investment income (loss)

  

$

460,444

    

$

2,697,378

    

$

854,652

    

$

675,132

    

$

157,557

    

$

196,830

    

Net realized gain (loss)

    

28,634,200

      

23,151,011

      

2,241,355

      

1,273,902

      

2,241,295

      

2,667,603

    

Net change in unrealized appreciation (depreciation)

    

(40,209,433

)

    

51,616,793

      

6,550,552

      

7,978,861

      

14,746,576

      

14,927,739

    

Net increase (decrease) in net assets resulting from operations

    

(11,114,789

)

    

77,465,182

      

9,646,559

      

9,927,895

      

17,145,428

      

17,792,172

    

Total distributions—Class A

    

(730,948

)

    

(93,754

)

    

—

      

—

      

—

      

—

    

Total distributions—Class P

    

(30,035,006

)

    

(3,529,498

)

    

(3,293,706

)

    

(337,013

)

    

(4,820,745

)

    

(250,762

)

  

Total distributions—Class P2

    

(4,530,274

)

    

(397,737

)

    

—

      

—

      

—

      

—

    

Total distributions

    

(35,296,228

)

    

(4,020,989

)

    

(3,293,706

)

    

(337,013

)

    

(4,820,745

)

    

(250,762

)

  

From beneficial interest transactions:

  

Proceeds from shares sold

    

95,280,796

      

225,093,386

      

38,794,325

      

84,691,033

      

58,800,672

      

123,322,191

    

Cost of shares redeemed

    

(160,851,260

)

    

(81,050,264

)

    

(8,518,029

)

    

(12,605,771

)

    

(12,422,746

)

    

(24,559,546

)

  

Shares issued on reinvestment of dividends and distributions

    

32,668,089

      

3,628,047

      

2,883,002

      

304,926

      

4,369,581

      

233,830

    

Net increase (decrease) in net assets from beneficial interest transactions

    

(32,902,375

)

    

147,671,169

      

33,159,298

      

72,390,188

      

50,747,507

      

98,996,475

    

Net increase (decrease) in net assets

    

(79,313,392

)

    

221,115,362

      

39,512,151

      

81,981,070

      

63,072,190

      

116,537,885

    

Net assets:

  

Beginning of period

    

431,635,294

      

210,519,932

      

81,981,070

      

—

      

116,537,885

      

—

    

End of period

  

$

352,321,902

    

$

431,635,294

    

$

121,493,221

    

$

81,981,070

    

$

179,610,075

    

$

116,537,885

    

1  For the period from July 9, 2020 (commencement of operations) through June 30, 2021.


122

The UBS Funds

    UBS U.S. Small Cap
Growth Fund		  
UBS Municipal Bond 		 
    For the
six months
ended
December 31,
2021
(unaudited)		   For the
year
ended
June 30,
2021		   For the
six months
ended
December 31,
2021
(unaudited)		   For the
year
ended
June 30,
2021		  

From operations:

  

Net investment income (loss)

  

$

(398,470

)

  

$

(1,385,314

)

  

$

733,581

    

$

1,704,405

    

Net realized gain (loss)

    

19,488,710

      

31,012,552

      

384,378

      

1,757,715

    

Net change in unrealized appreciation (depreciation)

    

(25,376,626

)

    

45,051,897

      

(1,016,697

)

    

7,467

    

Net increase (decrease) in net assets resulting from operations

    

(6,286,386

)

    

74,679,135

      

101,262

      

3,469,587

    

Total distributions—Class A

    

(6,291,832

)

    

(3,778,671

)

    

(147,775

)

    

(236,182

)

  

Total distributions—Class P

    

(29,326,530

)

    

(15,336,070

)

    

(1,747,374

)

    

(2,476,911

)

  

Total distributions—Class P2

    

—

      

—

      

—

      

—

    

Total distributions

    

(35,618,362

)

    

(19,114,741

)

    

(1,895,149

)

    

(2,713,093

)

  

From beneficial interest transactions:

  

Proceeds from shares sold

    

8,968,783

      

63,802,582

      

7,728,319

      

35,344,732

    

Cost of shares redeemed

    

(27,658,850

)

    

(39,173,242

)

    

(13,840,561

)

    

(44,075,100

)

  

Shares issued on reinvestment of dividends and distributions

    

34,291,276

      

18,382,290

      

1,559,839

      

2,202,817

    

Net increase (decrease) in net assets from beneficial interest transactions

    

15,601,209

      

43,011,630

      

(4,552,403

)

    

(6,527,551

)

  

Net increase (decrease) in net assets

    

(26,303,539

)

    

98,576,024

      

(6,346,290

)

    

(5,771,057

)

  

Net assets:

  

Beginning of period

    

214,238,405

      

115,662,381

      

113,258,042

      

119,029,099

    

End of period

  

$

187,934,866

    

$

214,238,405

    

$

106,911,752

    

$

113,258,042

    

See accompanying notes to financial statements.
123

The UBS Funds

Statement of changes in net assets (concluded)

    UBS Sustainable Development
Bank Bond Fund		  

UBS Total Return Bond Fund

  
    For the
six months
ended
December 31,
2021
(unaudited)		   For the
year
ended
June 30,
2021		   For the
six months
ended
December 31,
2021
(unaudited)		   For the
year
ended
June 30,
2021		  

From operations:

  

Net investment income (loss)

  

$

443,160

    

$

647,062

    

$

329,640

    

$

791,481

    

Net realized gain (loss)

    

(53,486

)

    

224,614

      

257,584

      

(547,424

)

  

Net change in unrealized appreciation (depreciation)

    

(1,052,486

)

    

(1,610,586

)

    

(708,521

)

    

514,088

    

Net increase (decrease) in net assets resulting from operations

    

(662,812

)

    

(738,910

)

    

(121,297

)

    

758,145

    

Total distributions — Class A

    

—

      

—

      

(5,660

)

    

(11,047

)

  

Total distributions — Class P

    

(108,881

)

    

(741,550

)

    

(297,471

)

    

(695,034

)

  

Total distributions — Class P2

    

(452,126

)

    

(1,108,472

)

    

—

      

—

    

Total distributions

    

(561,007

)

    

(1,850,022

)

    

(303,131

)

    

(706,081

)

  

From beneficial interest transactions:

  

Proceeds from shares sold

    

16,448,465

      

88,763,287

      

172,525

      

333,021

    

Cost of shares redeemed

    

(7,962,776

)

    

(41,736,626

)

    

(1,781,931

)

    

(3,311,690

)

  
Shares issued on reinvestment of dividends and
distributions		    

468,915

      

1,317,020

      

229,614

      

539,109

    
Net increase (decrease) in net assets from beneficial
interest transactions		    

8,954,604

      

48,343,681

      

(1,379,792

)

    

(2,439,560

)

  

Net increase (decrease) in net assets

    

7,730,785

      

45,754,749

      

(1,804,220

)

    

(2,387,496

)

  

Net assets:

  

Beginning of period

    

83,168,742

      

37,413,993

      

35,309,588

      

37,697,084

    

End of period

  

$

90,899,527

    

$

83,168,742

    

$

33,505,368

    

$

35,309,588

    

See accompanying notes to financial statements.
124

UBS All China Equity Fund

Financial highlights

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

Class P

    Six months ended
December 31, 2021
(unaudited)		   Period ended
June 30, 20211		  

Net asset value, beginning of period

  

$

8.84

    

$

10.00

    

Net investment income (loss)2

    

(0.01

)

    

0.03

    

Net realized and unrealized gain (loss)

    

(1.66

)

    

(1.19

)

  

Net increase (decrease) from operations

    

(1.67

)

    

(1.16

)

  

Dividends from net investment income

    

(0.05

)

    

—

    

Net asset value, end of period

  

$

7.12

    

$

8.84

    

Total investment return3

    

(18.86

)%

    

(11.60

)%

  

Ratios to average net assets:

  

Expenses before fee waivers and/or expense reimbursements

    

20.67

%4

    

20.92

%4

  

Expenses after fee waivers and/or expense reimbursements

    

1.10

%4

    

1.10

%4

  

Net investment income (loss)

    

(0.29

)%4

    

1.06

%4

  

Supplemental data:

  

Net assets, end of period (000's)

  

$

1,424

    

$

1,767

    

Portfolio turnover

    

1

%

    

6

%

  

1  For the period from February 23, 2021 (commencement of operations) through June 30, 2021.

2  Calculated using the average share method.

3  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 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.

4  Annualized.

See accompanying notes to financial statements.


125

UBS Dynamic Alpha Fund

Financial highlights

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

Class A

    Six months ended
December 31, 2021 		 

Years ended June 30,

  
   

(unaudited)

  

2021

  

2020

  

2019

  

2018

  

2017

  

Net asset value, beginning of period

  

$

6.83

    

$

5.98

    

$

6.36

    

$

6.38

    

$

6.52

    

$

6.17

    

Net investment income (loss)1

    

(0.00

)2

    

(0.02

)

    

0.07

      

0.08

      

0.04

      

0.03

    

Net realized and unrealized gain (loss)

    

(0.00

)2

    

0.87

      

(0.15

)

    

(0.04

)

    

(0.18

)

    

0.32

    

Net increase (decrease) from operations

    

(0.00

)2

    

0.85

      

(0.08

)

    

0.04

      

(0.14

)

    

0.35

    

Dividends from net investment income

    

(0.70

)

    

—

      

(0.30

)

    

(0.06

)

    

—

      

—

    

Net asset value, end of period

  

$

6.13

    

$

6.83

    

$

5.98

    

$

6.36

    

$

6.38

    

$

6.52

    

Total investment return3

    

0.12

%

    

14.21

%

    

(1.45

)%

    

0.60

%

    

(2.15

)%

    

5.84

%

  

Ratios to average net assets:

  

Expenses before fee waivers and/or expense reimbursements

    

2.31

%4

    

2.29

%5

    

2.00

%5

    

2.02

%5

    

1.69

%

    

1.49

%

  

Expenses after fee waivers and/or expense reimbursements

    

1.35

%4

    

1.35

%5

    

1.35

%5

    

1.35

%5

    

1.35

%

    

1.35

%

  

Net investment income (loss)

    

(0.04

)%4

    

(0.36

)%

    

1.06

%

    

1.29

%

    

0.57

%

    

0.42

%

  

Supplemental data:

  

Net assets, end of period (000's)

  

$

18,955

    

$

20,671

    

$

21,273

    

$

30,025

    

$

31,066

    

$

43,930

    

Portfolio turnover

    

5

%

    

27

%

    

62

%

    

32

%

    

31

%

    

48

%

  

Class P

    Six months ended
December 31, 2021 		 

Years ended June 30,

  
   

(unaudited)

  

2021

  

2020

  

2019

  

2018

  

2017

  

Net asset value, beginning of period

  

$

7.02

    

$

6.13

    

$

6.52

    

$

6.53

    

$

6.66

    

$

6.28

    

Net investment income (loss)1

    

0.01

      

(0.01

)

    

0.08

      

0.10

      

0.06

      

0.04

    

Net realized and unrealized gain (loss)

    

0.002

      

0.90

      

(0.15

)

    

(0.04

)

    

(0.19

)

    

0.34

    

Net increase (decrease) from operations

    

0.01

      

0.89

      

(0.07

)

    

0.06

      

(0.13

)

    

0.38

    

Dividends from net investment income

    

(0.72

)

    

—

      

(0.32

)

    

(0.07

)

    

—

      

—

    

Net asset value, end of period

  

$

6.31

    

$

7.02

    

$

6.13

    

$

6.52

    

$

6.53

    

$

6.66

    

Total investment return3

    

0.26

%

    

14.52

%

    

(1.28

)%

    

0.83

%

    

(1.80

)%

    

6.05

%

  

Ratios to average net assets:

  

Expenses before fee waivers and/or expense reimbursements

    

2.08

%4

    

2.06

%5

    

1.75

%5

    

1.70

%5

    

1.43

%

    

1.27

%

  

Expenses after fee waivers and/or expense reimbursements

    

1.10

%4

    

1.10

%5

    

1.10

%5

    

1.10

%5

    

1.10

%

    

1.10

%

  

Net investment income (loss)

    

0.21

%4

    

(0.11

)%

    

1.31

%

    

1.52

%

    

0.94

%

    

0.68

%

  

Supplemental data:

  

Net assets, end of period (000's)

  

$

12,376

    

$

13,402

    

$

14,283

    

$

19,357

    

$

30,647

    

$

98,018

    

Portfolio turnover

    

5

%

    

27

%

    

62

%

    

32

%

    

31

%

    

48

%

  

1  Calculated using the average share method.

2  Amount represents less than $0.005 per share.

3  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 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.

4  Annualized.

5  Includes interest expense representing less than 0.005%.

See accompanying notes to financial statements.


126

UBS Global Allocation Fund

Financial highlights

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

Class A

    Six months ended
December 31, 2021 		 

Years ended June 30,

  
   

(unaudited)

  

2021

  

2020

  

2019

  

2018

  

2017

  

Net asset value, beginning of period

  

$

14.61

    

$

11.82

    

$

12.56

    

$

12.08

    

$

11.52

    

$

10.46

    

Net investment income (loss)1

    

0.07

      

0.12

      

0.12

      

0.12

      

0.05

      

0.02

    

Net realized and unrealized gain (loss)

    

0.27

      

2.89

      

0.02

      

0.36

      

0.68

      

1.27

    

Net increase (decrease) from operations

    

0.34

      

3.01

      

0.14

      

0.48

      

0.73

      

1.29

    

Dividends from net investment income

    

(0.16

)

    

(0.07

)

    

(0.35

)

    

—

      

(0.17

)

    

(0.23

)

  

Distributions from net realized gains

    

(2.25

)

    

(0.15

)

    

(0.53

)

    

—

      

—

      

—

    

Total dividends and distributions

    

(2.41

)

    

(0.22

)

    

(0.88

)

    

—

      

(0.17

)

    

(0.23

)

  

Net asset value, end of period

  

$

12.54

    

$

14.61

    

$

11.82

    

$

12.56

    

$

12.08

    

$

11.52

    

Total investment return2

    

2.84

%

    

25.58

%

    

0.79

%

    

3.97

%3

    

6.34

%

    

12.51

%

  

Ratios to average net assets:

  

Expenses before fee waivers and/or expense reimbursements

    

1.39

%4

    

1.41

%

    

1.42

%5

    

1.40

%5

    

1.40

%

    

1.39

%

  

Expenses after fee waivers and/or expense reimbursements

    

1.20

%4

    

1.20

%

    

1.20

%5

    

1.20

%5

    

1.20

%

    

1.25

%

  

Net investment income (loss)

    

0.89

%4

    

0.85

%

    

1.01

%

    

1.04

%

    

0.39

%

    

0.16

%

  

Supplemental data:

  

Net assets, end of period (000's)

  

$

186,245

    

$

192,772

    

$

174,159

    

$

209,407

    

$

159,678

    

$

174,148

    

Portfolio turnover

    

61

%

    

128

%

    

120

%

    

35

%

    

54

%

    

56

%

  

Class P

    Six months ended
December 31, 2021 		 

Years ended June 30,

  
   

(unaudited)

  

2021

  

2020

  

2019

  

2018

  

2017

  

Net asset value, beginning of period

  

$

15.00

    

$

12.13

    

$

12.87

    

$

12.34

    

$

11.78

    

$

10.69

    

Net investment income (loss)1

    

0.09

      

0.15

      

0.16

      

0.16

      

0.08

      

0.05

    

Net realized and unrealized gain (loss)

    

0.28

      

2.97

      

0.02

      

0.37

      

0.68

      

1.30

    

Net increase (decrease) from operations

    

0.37

      

3.12

      

0.18

      

0.53

      

0.76

      

1.35

    

Dividends from net investment income

    

(0.20

)

    

(0.10

)

    

(0.39

)

    

—

      

(0.20

)

    

(0.26

)

  

Distributions from net realized gains

    

(2.25

)

    

(0.15

)

    

(0.53

)

    

—

      

—

      

—

    

Total dividends and distributions

    

(2.45

)

    

(0.25

)

    

(0.92

)

    

—

      

(0.20

)

    

(0.26

)

  

Net asset value, end of period

  

$

12.92

    

$

15.00

    

$

12.13

    

$

12.87

    

$

12.34

    

$

11.78

    

Total investment return2

    

2.96

%

    

25.88

%

    

1.02

%

    

4.21

%3

    

6.56

%

    

12.85

%

  

Ratios to average net assets:

  

Expenses before fee waivers and/or expense reimbursements

    

1.13

%4

    

1.14

%

    

1.14

%5

    

1.13

%5

    

1.14

%

    

1.12

%

  

Expenses after fee waivers and/or expense reimbursements

    

0.95

%4

    

0.95

%

    

0.95

%5

    

0.95

%5

    

0.95

%

    

1.00

%

  

Net investment income (loss)

    

1.13

%4

    

1.10

%

    

1.27

%

    

1.27

%

    

0.64

%

    

0.41

%

  

Supplemental data:

  

Net assets, end of period (000's)

  

$

54,493

    

$

56,383

    

$

51,311

    

$

57,803

    

$

64,009

    

$

67,156

    

Portfolio turnover

    

61

%

    

128

%

    

120

%

    

35

%

    

54

%

    

56

%

  

1  Calculated using the average share 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 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  During the year, the Fund recorded a gain of $263,116 from affiliated funds that were previously liquidated. If this gain had been excluded, the total return of Class A and Class P would have been 3.89% and 4.13%, respectively.

4  Annualized.

5  Includes interest expense representing less than 0.005%.

See accompanying notes to financial statements.


127

UBS Emerging Markets Equity Opportunity Fund

Financial highlights

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

Class P

    Six months ended
December 31, 2021		  

Years ended June 30,

  

Period ended

  
   

(unaudited)

  

2021

  

2020

  

June 30, 20191

  

Net asset value, beginning of period

  

$

12.39

    

$

9.23

    

$

9.28

    

$

8.92

    

Net investment income (loss)3

    

0.08

      

0.09

      

0.19

      

0.21

    

Net realized and unrealized gain (loss)

    

(1.54

)

    

3.18

      

0.004

      

0.15

    

Net increase (decrease) from operations

    

(1.46

)

    

3.27

      

0.19

      

0.36

    

Dividends from net investment income

    

(0.12

)

    

(0.11

)

    

(0.24

)

    

—

    

Distributions from net realized gains

    

(0.94

)

    

—

      

—

      

—

    

Total dividends and distributions

    

(1.06

)

    

(0.11

)

    

(0.24

)

    

—

    

Net asset value, end of period

  

$

9.87

    

$

12.39

    

$

9.23

    

$

9.28

    

Total investment return6

    

(11.43

)%

    

35.51

%

    

1.84

%

    

4.04

%

  

Ratios to average net assets:

  

Expenses before fee waivers and/or expense reimbursements

    

1.08

%7,8

    

1.08

%

    

1.19

%

    

1.22

%7

  

Expenses after fee waivers and/or expense reimbursements

    

1.00

%7,8

    

1.00

%

    

1.04

%

    

1.15

%7

  

Net investment income (loss)

    

1.45

%7

    

0.73

%

    

2.14

%

    

5.73

%7

  

Supplemental data:

  

Net assets, end of period (000's)

  

$

205,420

    

$

274,359

    

$

100,543

    

$

38,465

    

Portfolio turnover

    

24

%

    

41

%

    

50

%

    

52

%

  

Class P2

    Six months ended
December 31, 2021 		 

Years ended June 30,

  

Period ended

  
   

(unaudited)

  

2021

  

2020

  

2019

  

June 30, 20182

  

Net asset value, beginning of period

  

$

12.52

    

$

9.30

    

$

9.31

    

$

9.40

    

$

10.00

    

Net investment income (loss)3

    

0.13

      

0.18

      

0.26

      

0.19

      

0.03

    

Net realized and unrealized gains (losses)

    

(1.55

)

    

3.22

      

0.004

      

(0.23

)5

    

(0.63

)

  

Net increase (decrease) from operations

    

(1.42

)

    

3.40

      

0.26

      

(0.04

)

    

(0.60

)

  

Dividends from net investment income

    

(0.24

)

    

(0.18

)

    

(0.27

)

    

(0.05

)

    

—

    

Distributions from net realized gains

    

(0.94

)

    

—

      

—

      

—

      

—

    

Total dividends and distributions

    

(1.18

)

    

(0.18

)

    

(0.27

)

    

(0.05

)

    

—

    

Net asset value, end of period

  

$

9.92

    

$

12.52

    

$

9.30

    

$

9.31

    

$

9.40

    

Total investment return6

    

(11.00

)%

    

36.66

%

    

2.66

%

    

(0.46

)%

    

(5.90

)%

  

Ratios to average net assets:

  

Expenses before fee waivers and/or expense reimbursements

    

1.08

%7,8

    

1.06

%

    

1.17

%

    

1.42

%

    

4.39

%7

  

Expenses after fee waivers and/or expense reimbursements

    

0.14

%7,8

    

0.12

%

    

0.22

%

    

0.40

%

    

0.44

%7

  

Net investment income (loss)

    

2.31

%7

    

1.56

%

    

2.88

%

    

2.16

%

    

4.05

%7

  

Supplemental data:

  

Net assets, end of period (000's)

  

$

497,344

    

$

761,661

    

$

375,791

    

$

186,941

    

$

94,349

    

Portfolio turnover

    

24

%

    

41

%

    

50

%

    

52

%

    

0

%

  

1  For the period February 1, 2019 (commencement of operations) through June 30, 2019.

2  For the period June 4, 2018 (commencement of operations) through June 30, 2018.

3  Calculated using the average share method.

4  Amount represents less than $0.005 per share.

5  The amount of net realized and unrealized gain per share does not correspond with the net realized and unrealized gain reported within the Statement of Changes due to the timing of purchases and redemptions of Fund shares and fluctuating market values.

6  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 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.

7  Annualized.

8  Includes interest expense representing less than 0.005%.

See accompanying notes to financial statements.


128

UBS Engage For Impact Fund

Financial highlights

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

Class P

    Six months ended
December 31, 2021		  

Years ended June 30,

  

Period ended

  
   

(unaudited)

  

2021

  

2020

  

June 30, 20191

  

Net asset value, beginning of period

  

$

14.26

    

$

10.14

    

$

10.81

    

$

10.00

    

Net investment income (loss)3

    

0.06

      

0.03

      

0.08

      

0.15

    

Net realized and unrealized gain (loss)

    

0.72

      

4.19

      

(0.45

)

    

0.67

    

Net increase (decrease) from operations

    

0.78

      

4.22

      

(0.37

)

    

0.82

    

Dividends from net investment income

    

(0.08

)

    

(0.02

)

    

(0.11

)

    

(0.01

)

  

Distributions from net realized gains

    

(1.53

)

    

(0.08

)

    

(0.19

)

    

—

    

Total dividends and distributions

    

(1.61

)

    

(0.10

)

    

(0.30

)

    

(0.01

)

  

Net asset value, end of period

  

$

13.43

    

$

14.26

    

$

10.14

    

$

10.81

    

Total investment return4

    

6.04

%

    

41.70

%

    

(3.77

)%

    

8.27

%

  

Ratios to average net assets:

  

Expenses before fee waivers and/or expense reimbursements

    

1.54

%5

    

1.69

%

    

2.27

%

    

3.87

%5

  

Expenses after fee waivers and/or expense reimbursements

    

0.85

%5

    

0.85

%

    

0.85

%

    

0.85

%5

  

Net investment income (loss)

    

0.81

%5

    

0.27

%

    

0.75

%

    

2.13

%5

  

Supplemental data:

  

Net assets, end of period (000's)

  

$

8,588

    

$

7,816

    

$

26,241

    

$

15,918

    

Portfolio turnover

    

17

%

    

78

%

    

43

%

    

67

%

  

Class P2

    Six months ended
December 31, 2021
(unaudited)		   Period ended
June 30, 20212		  

Net asset value, beginning of period

  

$

14.29

    

$

13.64

    

Net investment income (loss)3

    

0.10

      

0.09

    

Net realized and unrealized gains

    

0.73

      

0.56

    

Net increase from operations

    

0.83

      

0.65

    

Dividends from net investment income

    

(0.17

)

    

—

    

Distributions from net realized gains

    

(1.53

)

    

—

    

Total dividends and distributions

    

(1.70

)

    

—

    

Net asset value, end of period

  

$

13.42

    

$

14.29

    

Total investment return4

    

6.43

%

    

4.77

%

  

Expenses before fee waivers and/or expense reimbursements

    

1.55

%5

    

2.24

%5

  

Expenses after fee waivers and/or expense reimbursements

    

0.25

%5

    

0.25

%5

  

Net investment income (loss)

    

1.40

%5

    

1.80

%5

  

Net assets, end of period (000's)

  

$

51,292

    

$

42,692

    

Portfolio turnover

    

17

%

    

78

%

  

1  For the period October 24, 2018 (commencement of operations) through June 30, 2019

2  For the period February 24, 2021 (commencement of operations) through June 30, 2021.

3  Calculated using the average share method.

4  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 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.

5  Annualized.

See accompanying notes to financial statements


129

UBS International Sustainable Equity Fund

Financial highlights

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

Class A

    Six months ended
December 31, 2021		  

Years ended June 30,

  
   

(unaudited)

  

2021

  

2020

  

2019

  

2018

  

2017

  

Net asset value, beginning of period

  

$

12.48

    

$

9.62

    

$

10.01

    

$

10.20

    

$

9.58

    

$

8.05

    

Net investment income (loss)2

    

(0.00

)3

    

0.05

      

0.16

      

0.13

      

0.08

      

0.19

    

Net realized and unrealized gain (loss)

    

(0.36

)

    

2.93

      

(0.42

)

    

(0.16

)4

    

0.66

      

1.51

    

Net increase (decrease) from operations

    

(0.36

)

    

2.98

      

(0.26

)

    

(0.03

)

    

0.74

      

1.70

    

Dividends from net investment income

    

(0.12

)

    

(0.12

)

    

(0.13

)

    

(0.06

)

    

(0.12

)

    

(0.17

)

  

Distributions from net realized gains

    

(0.94

)

    

—

      

—

      

(0.10

)

    

—

      

—

    

Total dividends and distributions

    

(1.06

)

    

(0.12

)

    

(0.13

)

    

(0.16

)

    

(0.12

)

    

(0.17

)

  

Net asset value, end of period

  

$

11.06

    

$

12.48

    

$

9.62

    

$

10.01

    

$

10.20

    

$

9.58

    

Total investment return5

    

(2.59

)%

    

31.09

%

    

(2.73

)%

    

(0.14

)%

    

7.67

%

    

21.43

%

  

Ratios to average net assets:

  

Expenses before fee waivers and/or expense reimbursements

    

1.33

%6,7

    

1.33

%

    

1.41

%6

    

1.53

%

    

2.02

%

    

2.25

%

  

Expenses after fee waivers and/or expense reimbursements

    

1.25

%6,7

    

1.25

%

    

1.25

%6

    

1.25

%

    

1.25

%

    

1.25

%

  

Net investment income (loss)

    

(0.07

)%7

    

0.45

%

    

1.60

%

    

1.38

%

    

0.79

%

    

2.16

%

  

Supplemental data:

  

Net assets, end of period (000's)

  

$

8,268

    

$

9,081

    

$

7,442

    

$

9,769

    

$

8,049

    

$

15,811

    

Portfolio turnover

    

33

%

    

52

%

    

41

%

    

57

%

    

43

%

    

33

%

  

Class P

    Six months ended
December 31,2021		  

Years ended June 30,

  
   

(unaudited)

  

2021

  

2020

  

2019

  

2018

  

2017

  

Net asset value, beginning of period

  

$

12.53

    

$

9.66

    

$

10.04

    

$

10.23

    

$

9.61

    

$

8.08

    

Net investment income (loss)2

    

0.01

      

0.09

      

0.18

      

0.17

      

0.14

      

0.14

    

Net realized and unrealized gain (loss)

    

(0.36

)

    

2.93

      

(0.41

)

    

(0.18

)4

    

0.63

      

1.58

    

Net increase (decrease) from operations

    

(0.35

)

    

3.02

      

(0.23

)

    

(0.01

)

    

0.77

      

1.72

    

Dividends from net investment income

    

(0.16

)

    

(0.15

)

    

(0.15

)

    

(0.08

)

    

(0.15

)

    

(0.19

)

  

Distributions from net realized gains

    

(0.94

)

    

—

      

—

      

(0.10

)

    

—

      

—

    

Total dividends and distributions

    

(1.10

)

    

(0.15

)

    

(0.15

)

    

(0.18

)

    

(0.15

)

    

(0.19

)

  

Net asset value, end of period

  

$

11.08

    

$

12.53

    

$

9.66

    

$

10.04

    

$

10.23

    

$

9.61

    

Total investment return5

    

(2.52

)%

    

31.40

%

    

(2.40

)%

    

0.10

%

    

7.94

%

    

21.68

%

  

Ratios to average net assets:

  

Expenses before fee waivers and/or expense reimbursements

    

1.05

%6,7

    

1.05

%

    

1.12

%6

    

1.26

%

    

1.70

%

    

2.06

%

  

Expenses after fee waivers and/or expense reimbursements

    

1.00

%6,7

    

0.99

%

    

1.00

%6

    

1.00

%

    

1.00

%

    

1.00

%

  

Net investment income (loss)

    

0.14

%7

    

0.79

%

    

1.82

%

    

1.80

%

    

1.37

%

    

1.65

%

  

Supplemental data:

  

Net assets, end of period (000's)

  

$

296,276

    

$

380,983

    

$

203,078

    

$

146,616

    

$

65,750

    

$

19,952

    

Portfolio turnover

    

33

%

    

52

%

    

41

%

    

57

%

    

43

%

    

33

%

  

1  For the period October 30, 2020 (commencement of operations) through June 20, 2021.

2  Calculated using the average share method.

3  Amount represents less than $0.005 per share.

4  The amount of net realized and unrealized gain per share does not correspond with the net realized and unrealized gain reported within the Statement of Changes due to the timing of purchases and redemptions of Fund shares and fluctuating market values.


130

UBS International Sustainable Equity Fund

Financial highlights

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

Class P2

    Six months ended
December 31, 2021
(unaudited)		   Period ended
June 30, 20211		  

Net asset value, beginning of period

  

$

12.59

    

$

10.05

    

Net investment income (loss)2

    

0.06

      

0.14

    

Net realized and unrealized gains (losses)

    

(0.37

)

    

2.55

    

Net increase (decrease) from operations

    

(0.31

)

    

2.69

    

Dividends from net investment income

    

(0.26

)

    

(0.15

)

  

Distributions from net realized gains

    

(0.94

)

    

—

    

Total dividends and distributions

    

(1.20

)

    

(0.15

)

  

Net asset value, end of period

  

$

11.08

    

$

12.59

    

Total investment return5

    

(2.15

)%

    

26.90

%

  

Ratios to average net assets:

  

Expenses before fee waivers and/or expense reimbursements

    

1.06

%6,7

    

1.08

%7

  

Expenses after fee waivers and/or expense reimbursements

    

0.21

%6,7

    

0.22

%7

  

Net investment income (loss)

    

0.97

%7

    

1.78

%7

  

Supplemental data:

  

Net assets, end of period (000's)

  

$

47,778

    

$

41,571

    

Portfolio turnover

    

33

%

    

52

%

  

5  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 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.

6  Includes interest expense representing less than 0.005%.

7  Annualized.

See accompanying notes to financial statements


131

UBS US Dividend Ruler Fund

Financial highlights

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

Class P

    Six months ended
December 31, 2021
(unaudited)		   Period ended
June 30, 20211		  

Net asset value, beginning of period

  

$

12.82

    

$

10.00

    

Net investment income (loss)2

    

0.11

      

0.20

    

Net realized and unrealized gain (loss)

    

1.14

      

2.72

    

Net increase (decrease) from operations

    

1.25

      

2.92

    

Dividends from net investment income

    

(0.16

)

    

(0.05

)

  

Distributions from net realized gains

    

(0.22

)

    

(0.05

)

  

Total dividends and distributions

    

(0.38

)

    

(0.10

)

  

Net asset value, end of period

  

$

13.69

    

$

12.82

    

Total investment return3

    

9.93

%

    

29.37

%

  

Expenses before fee waivers and/or expense reimbursements

    

0.91

%4

    

1.57

%4

  

Expenses after fee waivers and/or expense reimbursements

    

0.50

%4

    

0.50

%4

  

Net investment income (loss)

    

1.70

%4

    

1.72

%4

  

Net assets, end of period (000's)

  

$

121,493

    

$

81,981

    

Portfolio turnover

    

13

%

    

24

%

  

1  For the period from July 9, 2020 (commencement of operations) through June 30, 2021.

2  Calculated using the average share method.

3  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 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.

4  Annualized.

See accompanying notes to financial statements


132

UBS US Quality Growth At Reasonable Price Fund

Financial highlights

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

Class P

    Six months ended
December 31, 2021
(unaudited)		   Period ended
June 30, 20211		  

Net asset value, beginning of period

  

$

13.10

    

$

10.00

    

Net investment income (loss)2

    

0.02

      

0.04

    

Net realized and unrealized gain (loss)

    

1.62

      

3.10

    

Net increase (decrease) from operations

    

1.64

      

3.14

    

Dividends from net investment income

    

(0.03

)

    

(0.01

)

  

Distributions from net realized gains

    

(0.38

)

    

(0.03

)

  

Total dividends and distributions

    

(0.41

)

    

(0.04

)

  

Net asset value, end of period

  

$

14.33

    

$

13.10

    

Total investment return3

    

12.63

%

    

31.49

%

  

Ratios to average net assets:

  

Expenses before fee waivers and/or expense reimbursements

    

0.83

%4

    

1.23

%4

  

Expenses after fee waivers and/or expense reimbursements

    

0.50

%4

    

0.50

%4

  

Net investment income (loss)

    

0.22

%4

    

0.32

%4

  

Supplemental data:

  

Net assets, end of period (000's)

  

$

179,610

    

$

116,538

    

Portfolio turnover

    

9

%

    

29

%

  

1  For the period from July 9, 2020 (commencement of operations) through June 30, 2021.

2  Calculated using the average share method.

3  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 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.

4  Annualized.

See accompanying notes to financial statements


133

UBS U.S. Small Cap Growth Fund

Financial highlights

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

Class A

    Six months ended
December 31, 2021		  

Years ended June 30,

  
   

(unaudited)

  

2021

  

2020

  

2019

  

2018

  

2017

  

Net asset value, beginning of period

  

$

28.15

    

$

19.74

    

$

19.49

    

$

20.74

    

$

21.26

    

$

17.75

    

Net investment income (loss)1

    

(0.08

)

    

(0.25

)

    

(0.11

)

    

(0.10

)

    

(0.17

)

    

(0.15

)

  

Net realized and unrealized gain (loss)

    

(1.14

)

    

11.88

      

1.79

      

0.80

      

4.92

      

4.34

    

Net increase (decrease) from operations

    

(1.22

)

    

11.63

      

1.68

      

0.70

      

4.75

      

4.19

    

Distributions from net realized gains

    

(5.62

)

    

(3.22

)

    

(1.43

)

    

(1.95

)

    

(5.27

)

    

(0.68

)

  

Net asset value, end of period

  

$

21.31

    

$

28.15

    

$

19.74

    

$

19.49

    

$

20.74

    

$

21.26

    

Total investment return2

    

(2.80

)%

    

59.94

%

    

9.33

%

    

5.95

%

    

26.17

%

    

23.75

%

  

Ratios to average net assets:

  

Expenses before fee waivers and/or expense reimbursements

    

1.40

%3

    

1.43

%

    

1.60

%4

    

1.57

%

    

1.66

%

    

1.56

%

  

Expenses after fee waivers and/or expense reimbursements

    

1.24

%3

    

1.24

%

    

1.24

%4

    

1.24

%

    

1.24

%

    

1.24

%

  

Net investment income (loss)

    

(0.60

)%3

    

(0.98

)%

    

(0.63

)%

    

(0.53

)%

    

(0.83

)%

    

(0.77

)%

  

Supplemental data:

  

Net assets, end of period (000's)

  

$

28,628

    

$

35,268

    

$

22,909

    

$

26,114

    

$

26,498

    

$

27,464

    

Portfolio turnover

    

18

%

    

63

%

    

79

%

    

54

%

    

67

%

    

50

%

  

Class P

    Six months ended
December 31, 2021		  

Years ended June 30,

  
   

(unaudited)

  

2021

  

2020

  

2019

  

2018

  

2017

  

Net asset value, beginning of period

  

$

32.44

    

$

22.37

    

$

21.84

    

$

22.89

    

$

22.92

    

$

19.05

    

Net investment income (loss)1

    

(0.06

)

    

(0.22

)

    

(0.08

)

    

(0.06

)

    

(0.13

)

    

(0.11

)

  

Net realized and unrealized gain (loss)

    

(1.26

)

    

13.51

      

2.04

      

0.96

      

5.37

      

4.66

    

Net increase (decrease) from operations

    

(1.32

)

    

13.29

      

1.96

      

0.90

      

5.24

      

4.55

    

Dividends from net investment income

    

(0.06

)

    

—

      

—

      

—

      

—

      

—

    

Distributions from net realized gains

    

(5.62

)

    

(3.22

)

    

(1.43

)

    

(1.95

)

    

(5.27

)

    

(0.68

)

  

Total dividends and distributions

    

(5.68

)

    

(3.22

)

    

(1.43

)

    

(1.95

)

    

(5.27

)

    

(0.68

)

  

Net asset value, end of period

  

$

25.44

    

$

32.44

    

$

22.37

    

$

21.84

    

$

22.89

    

$

22.92

    

Total investment return2

    

(2.68

)%

    

60.29

%

    

9.62

%

    

6.24

%

    

26.50

%

    

24.09

%

  

Ratios to average net assets:

  

Expenses before fee waivers and/or expense reimbursements

    

1.15

%3

    

1.16

%

    

1.29

%4

    

1.30

%

    

1.34

%

    

1.22

%

  

Expenses after fee waivers and/or expense reimbursements

    

0.99

%3

    

0.99

%

    

0.99

%4

    

0.99

%

    

0.99

%

    

0.99

%

  

Net investment income (loss)

    

(0.35

)%3

    

(0.74

)%

    

(0.37

)%

    

(0.27

)%

    

(0.58

)%

    

(0.50

)%

  

Supplemental data:

  

Net assets, end of period (000's)

  

$

159,307

    

$

178,971

    

$

92,754

    

$

96,485

    

$

88,845

    

$

75,770

    

Portfolio turnover

    

18

%

    

63

%

    

79

%

    

54

%

    

67

%

    

50

%

  

1  Calculated using the average share 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 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.

4  Includes interest expense representing less than 0.005%.

See accompanying notes to financial statements


134

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

    Six months ended
December 31, 2021		  

Years ended June 30,

  
   

(unaudited)

  

2021

  

2020

  

2019

  

2018

  

2017

  

Net asset value, beginning of period

  

$

10.92

    

$

10.84

    

$

10.60

    

$

10.07

    

$

10.23

    

$

10.52

    

Net investment income (loss)1

    

0.06

      

0.13

      

0.18

      

0.18

      

0.16

      

0.15

    

Net realized and unrealized gain (loss)

    

(0.06

)

    

0.17

      

0.24

      

0.53

      

(0.16

)

    

(0.27

)

  

Net increase (decrease) from operations

    

—

      

0.30

      

0.42

      

0.71

      

—

      

(0.12

)

  

Dividends from net investment income

    

(0.06

)

    

(0.13

)

    

(0.18

)

    

(0.18

)

    

(0.16

)

    

(0.15

)

  

Distributions from net realized gains

    

(0.12

)

    

(0.09

)

    

—

      

—

      

—

      

(0.02

)

  

Total dividends and distributions

    

(0.18

)

    

(0.22

)

    

(0.18

)

    

(0.18

)

    

(0.16

)

    

(0.17

)

  

Net asset value, end of period

  

$

10.74

    

$

10.92

    

$

10.84

    

$

10.60

    

$

10.07

    

$

10.23

    

Total investment return2

    

(0.02

)%

    

2.82

%

    

3.98

%

    

7.17

%

    

0.04

%

    

(1.11

)%

  

Ratios to average net assets:

  

Expenses before fee waivers and/or expense reimbursements

    

1.01

%3,4

    

0.99

%4

    

1.00

%4

    

1.07

%4

    

1.03

%

    

1.00

%

  

Expenses after fee waivers and/or expense reimbursements

    

0.65

%3,4

    

0.65

%4

    

0.65

%4

    

0.65

%4

    

0.65

%

    

0.65

%

  

Net investment income (loss)

    

1.08

%3

    

1.21

%

    

1.66

%

    

1.80

%

    

1.61

%

    

1.42

%

  

Supplemental data:

  

Net assets, end of period (000's)

  

$

8,860

    

$

9,858

    

$

12,496

    

$

12,796

    

$

9,378

    

$

21,007

    

Portfolio turnover5

    

8

%

    

35

%

    

23

%

    

31

%

    

39

%

    

60

%

  

Class P

    Six months ended
December 31, 2021		  

Years ended June 30,

  
   

(unaudited)

  

2021

  

2020

  

2019

  

2018

  

2017

  

Net asset value, beginning of period

  

$

10.91

    

$

10.84

    

$

10.60

    

$

10.06

    

$

10.22

    

$

10.52

    

Net investment income (loss)1

    

0.07

      

0.16

      

0.20

      

0.21

      

0.19

      

0.17

    

Net realized and unrealized gain (loss)

    

(0.06

)

    

0.16

      

0.24

      

0.54

      

(0.16

)

    

(0.28

)

  

Net increase (decrease) from operations

    

0.01

      

0.32

      

0.44

      

0.75

      

0.03

      

(0.11

)

  

Dividends from net investment income

    

(0.07

)

    

(0.16

)

    

(0.20

)

    

(0.21

)

    

(0.19

)

    

(0.17

)

  

Distributions from net realized gains

    

(0.12

)

    

(0.09

)

    

—

      

—

      

—

      

(0.02

)

  

Total dividends and distributions

    

(0.19

)

    

(0.25

)

    

(0.20

)

    

(0.21

)

    

(0.19

)

    

(0.19

)

  

Net asset value, end of period

  

$

10.73

    

$

10.91

    

$

10.84

    

$

10.60

    

$

10.06

    

$

10.22

    

Total investment return2

    

0.10

%

    

2.99

%

    

4.24

%

    

7.55

%

    

0.30

%

    

(0.97

)%

  

Ratios to average net assets:

  

Expenses before fee waivers and/or expense reimbursements

    

0.75

%3,4

    

0.74

%4

    

0.74

%4

    

0.82

%4

    

0.79

%

    

0.77

%

  

Expenses after fee waivers and/or expense reimbursements

    

0.40

%3,4

    

0.40

%4

    

0.40

%4

    

0.40

%4

    

0.40

%

    

0.40

%

  

Net investment income (loss)

    

1.33

%3

    

1.45

%

    

1.91

%

    

2.03

%

    

1.88

%

    

1.68

%

  

Supplemental data:

  

Net assets, end of period (000's)

  

$

98,051

    

$

103,400

    

$

106,533

    

$

89,222

    

$

107,153

    

$

101,601

    

Portfolio turnover5

    

8

%

    

35

%

    

23

%

    

31

%

    

39

%

    

60

%

  

1  Calculated using the average share 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 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.

4  Includes interest expense representing less than 0.005%.

5  Effective with the fiscal year ended June 30, 2017, calculation of the portfolio turnover rate excludes transactions involving variable-rate demand notes,which are considered short-term instruments due to the ability to demand immediate repayment.

See accompanying notes to financial statements


135

UBS Sustainable Development Bank Bond Fund

Financial highlights

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

Class P

    Six months ended
December 31, 2021		  

Years ended June 30,

  

Period ended

  
   

(unaudited)

  

2021

  

2020

  

June 30, 20191

  

Net asset value, beginning of period

  

$

10.60

    

$

11.17

    

$

10.58

    

$

10.00

    

Net investment income (loss)3

    

0.05

      

0.13

      

0.21

      

0.19

    

Net realized and unrealized gain (loss)

    

(0.13

)

    

(0.31

)

    

0.63

      

0.58

    

Net increase (decrease) from operations

    

(0.08

)

    

(0.18

)

    

0.84

      

0.77

    

Dividends from net investment income

    

(0.05

)

    

(0.12

)

    

(0.21

)

    

(0.19

)

  

Distributions from net realized gains

    

(0.01

)

    

(0.27

)

    

(0.04

)

    

—

    

Total dividends and distributions

    

(0.06

)

    

(0.39

)

    

(0.25

)

    

(0.19

)

  

Net asset value, end of period

  

$

10.46

    

$

10.60

    

$

11.17

    

$

10.58

    

Total investment return4

    

(0.66

)%

    

(1.70

)%

    

8.03

%

    

7.75

%

  

Ratios to average net assets:

  

Expenses before fee waivers and/or expense reimbursements

    

0.57

%6

    

0.80

%

    

1.07

%5

    

2.19

%6

  

Expenses after fee waivers and/or expense reimbursements

    

0.25

%6

    

0.25

%

    

0.25

%5

    

0.25

%6

  

Net investment income (loss)

    

0.92

%6

    

1.18

%

    

1.94

%

    

2.67

%6

  

Supplemental data:

  

Net assets, end of period (000's)

  

$

18,859

    

$

17,510

    

$

37,414

    

$

25,235

    

Portfolio turnover

    

11

%

    

16

%

    

80

%

    

20

%

  

Class P2

    Six months ended
December 31, 2021
(unaudited)		   Period ended
June 30, 20212		  

Net asset value, beginning of period

  

$

10.59

    

$

11.09

    

Net investment income (loss)3

    

0.05

      

0.08

    

Net realized and unrealized gains (losses)

    

(0.13

)

    

(0.23

)

  

Net increase (decrease) from operations

    

(0.08

)

    

(0.15

)

  

Dividends from net investment income

    

(0.05

)

    

(0.08

)

  

Distributions from net realized gains

    

(0.01

)

    

(0.27

)

  

Total dividends and distributions

    

(0.06

)

    

(0.35

)

  

Net asset value, end of period

  

$

10.45

    

$

10.59

    

Total investment return4

    

(0.68

)%

    

(1.34

)%

  

Ratios to average net assets:

  

Expenses before fee waivers and/or expense reimbursements

    

0.56

%6

    

0.68

%6

  

Expenses after fee waivers and/or expense reimbursements

    

0.15

%6

    

0.15

%6

  

Net investment income (loss)

    

1.02

%6

    

1.09

%6

  

Supplemental data:

  

Net assets, end of period (000's)

  

$

72,040

    

$

65,659

    

Portfolio turnover

    

11

%

    

16

%

  

1  For the period October 24, 2018 (commencement of operations) through June 30, 2019

2  For the period October 30, 2020 (commencement of operations) through June 30, 2021.

3  Calculated using the average share method.

4  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 period reported. The figures do not include any applicable sales charges; results would be lower if they were included. Total investment return for periods 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.

5  Includes interest expense representing less than 0.005%.

6  Annualized.

See accompanying notes to financial statements


136

UBS Total Return Bond Fund

Financial highlights

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

Class A

    Six months ended
December 31, 2021		   Years ended June 30,  

Period ended

  
   

(unaudited)

  

2021

  

2020

  

2019

  

2018

  

June 30, 20171

  

Net asset value, beginning of period

  

$

15.66

    

$

15.64

    

$

15.09

    

$

14.40

    

$

14.94

    

$

15.24

    

Net investment income (loss)2

    

0.13

      

0.30

      

0.41

      

0.45

      

0.47

      

0.25

    

Net realized and unrealized gain (loss)

    

(0.21

)

    

(0.02

)

    

0.50

      

0.65

      

(0.65

)

    

(0.30

)

  

Net increase (decrease) from operations

    

(0.08

)

    

0.28

      

0.91

      

1.10

      

(0.18

)

    

(0.05

)

  

Dividends from net investment income

    

(0.12

)

    

(0.26

)

    

(0.36

)

    

(0.41

)

    

(0.36

)

    

(0.25

)

  

Return of capital

    

—

      

—

      

—

      

—

      

—

      

(0.00

)3

  

Total dividends and distributions

    

(0.12

)

    

(0.26

)

    

(0.36

)

    

(0.41

)

    

(0.36

)

    

(0.25

)

  

Net asset value, end of period

  

$

15.46

    

$

15.66

    

$

15.64

    

$

15.09

    

$

14.40

    

$

14.94

    

Total investment return4

    

(0.53

)%

    

1.83

%

    

6.14

%

    

7.63

%

    

(1.12

)%

    

(0.31

)%

  

Ratios to average net assets:

  

Expenses before fee waivers and/or expense reimbursements

    

1.64

%5

    

1.73

%

    

1.59

%6

    

1.68

%6

    

1.45

%

    

1.74

%5

  

Expenses after fee waivers and/or expense reimbursements

    

0.75

%5

    

0.75

%

    

0.75

%6

    

0.75

%6

    

0.75

%

    

0.75

%5

  

Net investment income (loss)

    

1.64

%5

    

1.90

%

    

2.66

%

    

3.10

%

    

3.22

%

    

2.28

%5

  

Supplemental data:

  

Net assets, end of period (000's)

  

$

749

    

$

681

    

$

650

    

$

488

    

$

108

    

$

44

    

Portfolio turnover

    

92

%

    

169

%

    

209

%

    

234

%

    

236

%

    

700

%

  

Class P

    Six months ended
December 31,2021		  

Years ended June 30,

  
   

(unaudited)

  

2021

  

2020

  

2019

  

2018

  

2017

  

Net asset value, beginning of period

  

$

15.67

    

$

15.65

    

$

15.10

    

$

14.41

    

$

14.94

    

$

15.14

    

Net investment income (loss)2

    

0.15

      

0.34

      

0.45

      

0.49

      

0.49

      

0.37

    

Net realized and unrealized gain (loss)

    

(0.21

)

    

(0.02

)

    

0.50

      

0.64

      

(0.63

)

    

(0.18

)

  

Net increase (decrease) from operations

    

(0.06

)

    

0.32

      

0.95

      

1.13

      

(0.14

)

    

0.19

    

Dividends from net investment income

    

(0.14

)

    

(0.30

)

    

(0.40

)

    

(0.44

)

    

(0.39

)

    

(0.39

)

  

Return of capital

    

—

      

—

      

—

      

—

      

—

      

(0.00

)3

  

Total dividends and distributions

    

(0.14

)

    

(0.30

)

    

(0.40

)

    

(0.44

)

    

(0.39

)

    

(0.39

)

  

Net asset value, end of period

  

$

15.47

    

$

15.67

    

$

15.65

    

$

15.10

    

$

14.41

    

$

14.94

    

Total investment return4

    

(0.41

)%

    

2.07

%

    

6.40

%

    

7.95

%

    

(0.88

)%

    

1.32

%

  

Ratios to average net assets:

  

Expenses before fee waivers and/or expense reimbursements

    

1.44

%5

    

1.52

%

    

1.38

%6

    

1.45

%6

    

1.30

%

    

1.29

%

  

Expenses after fee waivers and/or expense reimbursements

    

0.50

%5

    

0.50

%

    

0.50

%6

    

0.50

%6

    

0.50

%

    

0.50

%

  

Net investment income (loss)

    

1.89

%5

    

2.15

%

    

2.92

%

    

3.35

%

    

3.29

%

    

2.45

%

  

Supplemental data:

  

Net assets, end of period (000's)

  

$

32,756

    

$

34,629

    

$

37,048

    

$

38,949

    

$

41,245

    

$

49,919

    

Portfolio turnover

    

92

%

    

169

%

    

209

%

    

234

%

    

236

%

    

700

%

  

1  For the period September 29, 2016 (commencement of operations) through June 30, 2017.

2  Calculated using the average share method.

3  Amount represents less than $0.005 per share.

4  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 period reported. The figures do not include any applicable sales charges; results would be lower if they were included. Total investment return for period 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.

5  Annualized.

6  Includes interest expense representing less than 0.005%.

See accompanying notes to financial statements


137

The UBS Funds

Notes to financial statements (unaudited)

Organization and significant accounting policies

The UBS Funds (the "Trust") is an open-end management investment company registered with the US Securities and Exchange Commission ("SEC") under the Investment Company Act of 1940 (the "1940 Act"), as amended, 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 authority to issue an unlimited number of shares of beneficial interest at par value of $0.001 per share.

The Trust has twelve Funds available for investment, each having its own investment objectives and policies: UBS All China Equity Fund, UBS Dynamic Alpha Fund, UBS Global Allocation Fund, UBS Emerging Markets Equity Opportunity Fund, UBS Engage For Impact Fund, UBS International Sustainable Equity Fund, UBS US Dividend Ruler Fund, UBS US Quality Growth at Reasonable Price Fund, UBS U.S. Small Cap Growth Fund, UBS Municipal Bond Fund, UBS Sustainable Development Bank Bond Fund, and UBS Total Return Bond Fund, (each a "Fund", and collectively, the "Funds"). Each of the Funds is classified as a diversified investment company with the exception of UBS Dynamic Alpha Fund, UBS Municipal Bond Fund, and the UBS Sustainable Development Bank Bond Fund which are classified as non-diversified for purposes of the 1940 Act.

UBS Asset Management (Americas) Inc. ("UBS AM" or the "Advisor") serves as the investment advisor and administrator for the Funds. UBS Asset Management (US) Inc. ("UBS AM (US)") serves as principal underwriter for the Funds. UBS AM and UBS AM (US) are indirect wholly owned subsidiaries 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.

The Funds currently offer Class A and Class P shares, with the exception of UBS Emerging Markets Equity Opportunity Fund, UBS Engage For Impact Fund, UBS International Sustainable Equity Fund and UBS Sustainable Development Bank Bond Fund, which currently offers Class P2 shares. Each class represents interests in the same assets of the applicable Fund and the classes are identical except for differences in their sales charge structures, ongoing service and distribution charges and certain transfer agency and related services expenses. All classes of shares have equal voting privileges except that each class has exclusive voting rights with respect to its service and/or distribution plan, if any. Class P and Class P2 shares have no service or distribution plan.

The Trust accounts separately for the assets, liabilities and operations of each Fund. Expenses directly attributable to each Fund are charged to that Fund's operations; expenses which are applicable to all Funds are allocated among them on a pro rata basis.

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 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.


138

The UBS Funds

Notes to financial statements (unaudited)

In January 2021, the FASB issued Accounting Standards ("FASB") Update No. 2021-01 ("ASU 2021-01"), "Reference Rate Reform (Topic 848)". ASU 2021-01 is an update of ASU 2020-04, which is in response to concerns about structural risks of interbank offered rates, and particularly the risk of cessation of LIBOR, regulators have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or transaction based and less susceptible to manipulation. ASU 2020-04 provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. ASU 2020-04 is elective and applies to all entities, subject to meeting certain criteria, that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The ASU 2021-01 update clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. The amendments in this update become effective no later than December 31, 2022, for all entities. Management is currently evaluating the implications, if any, of the additional requirements and its impact on the Funds' financial statements.

The following is a summary of significant accounting policies:

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 net of withholding taxes 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.

Offering costs

Offering costs are accounted for as deferred costs until operations begin and are then amortized to expense over twelve months on a straight-line basis.

Dividends and distributions: Dividends and distributions to shareholders are recorded on the ex-dividend date. The amount of dividends from net investment income and distributions from net realized capital gains and/or return of capital are 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.

Foreign currency translation: The books and records of the Funds are maintained in US dollars. Foreign currency amounts are translated into US dollars as follows: (1) the foreign currency market value of investment securities and other assets and liabilities stated in foreign currencies are translated into US dollars based on the current exchange rates each business day; and (2) purchases and sales of investment securities and income and expenses are translated at the rate of exchange prevailing on the respective dates of such transactions. The resulting exchange gains and losses are included in the Statement of operations.

The Funds do not generally isolate the effect of fluctuations in foreign exchange rates from the effect of the changes in the market prices of securities. However, the Funds do isolate the effect of fluctuations in foreign


139

The UBS Funds

Notes to financial statements (unaudited)

exchange rates when determining the realized gain or loss upon the sale or maturity of foreign currencydenominated securities pursuant to US federal income tax regulations. Net realized foreign currency transaction gain (loss) is treated as ordinary income (loss) for income tax reporting purposes.

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 moderate growth prospects.

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

Investments in bonds with ratings of BB (Standard & Poor's Financial Services LLC or Fitch Ratings, Inc.) 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 predominantly 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.

Many financial instruments, financings or other transactions to which a Fund may be a party use or may use a floating rate based on the London Interbank Offered Rate ("LIBOR"). LIBOR is widely used in financial markets. In July 2017, the United Kingdom's financial regulatory body announced that after 2021 it will cease its active encouragement of banks to provide the quotations needed to sustain LIBOR. That announcement suggests that LIBOR may cease to be published or utilized after that time. Various financial industry groups have begun planning for that transition, but the effect of the transition process and its ultimate success cannot yet be determined. The transition process may lead to increased volatility and illiquidity in markets for instruments the terms of which are based on LIBOR. It could also lead to a reduction in the value of some LIBOR-based investments and reduce the effectiveness of new hedges placed against existing LIBOR-based investments. Since the usefulness of LIBOR as a benchmark could deteriorate during the transition period, these effects could occur prior to the end of 2021. The willingness and ability of issuers to include enhanced provisions in new and existing contracts or instruments also remains uncertain. Any of these factors may adversely affect the Fund's performance or NAV. On November 30, 2020, the administrator of LIBOR announced a delay in the phase out of a majority of the U.S. dollar LIBOR publications until June 30 , 2023, with the remainder of LIBOR publications to still end at the end of 2021.

Certain impacts to public health conditions particular to the coronavirus (COVID-19) outbreak that occurred may have a significant negative impact on the operations and profitability of the issuers of the Funds' investments. The extent of the impact to the financial performance of the Funds will depend on future developments, including (i) the duration and spread of the outbreak, (ii) the restrictions and advisories, (iii) the effects on the financial markets, and (iv) the effects on the economy overall, all of which are highly uncertain and cannot be predicted.


140

The UBS Funds

Notes to financial statements (unaudited)

Valuation of investments

Each Fund generally calculates its net asset value on days that the New York Stock Exchange ("NYSE") is open. The Fund calculates net asset value 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 Fund does not price its shares, on most national holidays and Good Friday. To the extent that the Fund's assets are traded in other markets on days when the NYSE is not open, the value of the 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, the 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 the 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 investments. The Fund normally obtains market values for its 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 U.S. 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. 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"). Foreign currency exchange rates are generally determined as of the close of the NYSE.

Certain investments in which the Fund invests are traded in markets that close before 4:00 p.m., Eastern time. Normally, developments that occur between the close of the foreign markets and 4:00 p.m., Eastern time, will not be reflected in the Fund's net asset value. However, if the Fund determines 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 a "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.

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.


141

The UBS Funds

Notes to financial statements (unaudited)

Investments in open-end investment companies are valued at the daily closing net asset value of the respective investment company. Pursuant to the Fund's use of the practical expedient within ASC Topic 820, Fair Value Measurement, 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 U.S. dollars on the basis of the foreign currency exchange rates prevailing at the time such valuation is determined by the Fund's 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. 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 Equities, Fixed Income and Multi-Asset Valuation Committee ("VC") the responsibility for making fair value determinations with respect to the Fund's portfolio holdings. The VC is comprised of representatives of management. The VC 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 VC, or where non-vendor pricing sources had been used to make fair value determinations when sufficient information exists during the prior quarter. Fair value determinations are subject to review at least monthly by the VC 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.

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 each Fund's investments. These inputs are summarized into the three broad levels listed below:

Level 1—Unadjusted quoted prices in active markets for identical investments.

Level 2—Other significant observable inputs, including but not limited to, quoted prices for similar investments, interest rates, prepayment speeds and credit risks.

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


142

The UBS Funds

Notes to financial statements (unaudited)

In accordance with the requirements of US GAAP, a fair value hierarchy has been included near the end of each Fund's Portfolio of investments.

Investments

Asset-backed securities: Certain Funds may invest in asset-backed securities ("ABS"), representing interests in pools of certain types of underlying installment loans, home equity loans, leases of various types of real and personal property and receivables from revolving lines of credit (credit cards). Such assets are securitized through the use of trusts or special purpose corporations. The yield characteristics of ABS differ from those of traditional debt securities. One such major difference is that principal may be prepaid at any time because the underlying obligations generally may be prepaid at any time. ABS may decrease in value as a result of increases in interest rates and may benefit less than other fixed-income securities from declining interest rates because of the risk of prepayment.

Mortgage-backed securities: Certain Funds may invest in mortgage-backed securities ("MBS"), representing direct or indirect interests in pools of underlying mortgage loans that are secured by real property. These securities provide investors with payments consisting of both principal and interest as the mortgages in the underlying mortgage pools are paid.

The timely payment of principal and interest (but not the market value) on MBS issued or guaranteed by Ginnie Mae (formally known as the Government National Mortgage Association or GNMA) is backed by Ginnie Mae and the full faith and credit of the US government. Obligations issued by Fannie Mae (formally known as the Federal National Mortgage Association or FNMA) and Freddie Mac (formally known as the Federal Home Loan Mortgage Company or FHLMC) are historically supported only by the credit of the issuer, but currently are guaranteed by the US government in connection with such agencies being placed temporarily into conservatorship by the US government.

Some MBS are sponsored or issued by private entities. Payments of principal and interest (but not the market value) of such private MBS may be supported by pools of mortgage loans or other MBS that are guaranteed, directly or indirectly, by the US government or one of its agencies or instrumentalities, or they may be issued without any government guarantee of the underlying mortgage assets but with some form of non-government credit enhancement.

Collateralized mortgage obligations ("CMO") are a type of MBS. A CMO is a debt security that may be collateralized by whole mortgage loans or mortgage pass-through securities. The mortgage loans or mortgage pass-through securities are divided into classes or tranches with each class having its own characteristics. Investors typically receive payments out of the interest and principal on the underlying mortgages. The portions of these payments that investors receive, as well as the priority of their rights to receive payments, are determined by the specific terms of the CMO class.

The yield characteristics of MBS differ from those of traditional debt securities. Among the major differences are that interest and principal payments are made more frequently, usually monthly, and that principal may be prepaid at any time because the underlying mortgage loans or other obligations generally may be prepaid at any time. Prepayments on a pool of mortgage loans are influenced by a variety of economic, geographic, social and other factors. Generally, prepayments on fixed-rate mortgage loans will increase during a period of falling interest rates and decrease during a period of rising interest rates. Certain classes of CMOs and other MBS are structured in a manner that makes them extremely sensitive to changes in prepayment rates. Such classes include interest-only ("IO") and principal-only ("PO") classes. IOs are entitled to receive all or a portion of the interest, but none (or only a nominal amount) of the principal payments, from the underlying mortgage assets. If the mortgage assets underlying an IO experience greater than anticipated principal prepayments, then the total amount of interest payments allocable to the IO class, and therefore the yield to investors, generally will be reduced. Conversely, PO classes are entitled to receive all or a portion of the principal payments, but none of the interest, from the underlying mortgage assets. PO


143

The UBS Funds

Notes to financial statements (unaudited)

classes are purchased at substantial discounts from par, and the yield to investors will be reduced if principal payments are slower than expected.

Real estate investment trusts: Certain Funds may invest in real estate investment trusts ("REITs"). Distributions from a REIT are initially recorded as dividend income and may subsequently be recharacterized by the REIT at the end of its tax year as a return of capital and/or capital gains. The Fund estimates the character of dividends received from REITs for financial reporting purposes based on the distribution history of each REIT. Once actual distribution characterizations are made available by the REITs, typically after calendar year end, the Fund updates its accounting and/or tax books and records.

Restricted securities: The Funds may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities, if any, is included in each Fund's portfolio footnotes.

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 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 delivered to the Fund , normally 15 to 45 days later. Beginning on the date the Fund enters into a TBA transaction, cash, U.S. government securities or other liquid securities are segregated in an amount equal in value to the purchase price of the TBA security. These transactions are subject to market fluctuations and their current value is determined in the same manner as for other securities.

Short sales: UBS Dynamic Alpha Fund, UBS U.S. Small Cap Growth Fund and UBS Total Return Bond Fund may engage in short sale transactions in which the Fund sells a security it does not own (or does not have the right to acquire at no added cost), in anticipation of a decline in the security's price.

The Fund must borrow the security to make delivery to the buyer. 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 appreciation or depreciation on the Statement of operations. The Fund will realize a loss as a result of the short sale if the price of the security increases between the date of the short sale and the date on which the Fund replaces the borrowed security, and the Fund will realize a gain if the security declines in price between those same dates. The Fund segregates collateral, consisting of cash or liquid assets, sufficient to collateralize the market value of the investments sold short. The Fund incurs transaction costs, including dividend expense, borrowing costs and interest expenses in connection with opening, maintaining and closing short sales. These dividends and interest are booked as an expense or liability to the Fund.

Because a Fund's loss on a short sale arises from increases in the value of the investment sold short, such loss, like the potential increase in price of the security sold short, is theoretically unlimited. The Fund's investments held long could also decline in value at the same time the value of the investment sold short increases, thereby increasing the Fund's potential for loss. There is also the risk that the counterparty to a short sale transaction may fail to honor its contract terms, causing a loss to the Fund.

For the period ended December 31, 2021, UBS Dynamic Alpha Fund, UBS U.S. Small Cap Growth Fund and UBS Total Return Bond Fund did not engage in short sale transactions.

Treasury inflation protected securities: The Funds may purchase Treasury inflation protected securities ("TIPS") which are debt securities issued by the US Treasury. TIPS adjust for inflation based on changes in the published


144

The UBS Funds

Notes to financial statements (unaudited)

Consumer Price Index ("CPI"). During periods of inflation when the CPI index increases, the principal amount of the debt to which the rate of interest is applied increases, which in turn increases the yield. During periods of deflation when the CPI index decreases, the principal amount of the debt to which the rate of interest is applied decreases, which in turn lowers the yield. At maturity, TIPS return the higher of the principal amount at maturity or the initial face amount of the debt.

Derivative instruments

Purchased options: Certain Funds may purchase put and call options, including, but not limited to, options on foreign or US securities, indices, foreign currencies, options on futures contracts and options on swap agreements (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. Purchasing call options tends to increase exposure to the underlying instrument. Purchasing put options tends to decrease exposure to the underlying instrument.

The Funds pay a premium which is included on the Statement of assets and liabilities as an investment and subsequently marked to market to reflect the current value of the option. Premiums paid for purchasing options which expire are treated as realized losses. Purchased options are shown as portfolio holdings within the Fund of investments and are included in the Statement of assets and liabilities in investments, at value. At December 31, 2021, the Funds did not hold any purchased options.

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 future, security or currency transaction to determine the realized gain or loss.

Option writing: Certain Funds may write (sell) put and call options, including, but not limited to, options on foreign or US securities, indices, foreign currencies, options on futures contracts and options on swap agreements (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 on the Fund's Statement of assets and liabilities as a liability. The amount of the liability is subsequently marked-to-market to reflect the current market value of the option written. If an option which the Fund has written either expires on its stipulated expiration date or the Fund enters into a closing purchase transaction, the Fund realizes a gain (or loss if the cost of a closing purchase transaction exceeds the premium received when the option was written) without regard to any unrealized gain or loss on the underlying security or derivative instrument, and the liability related to such option is extinguished. If a call option, which 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, 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 Fund trades and holds certain fair valued derivative contracts that constitute guarantees. Such contracts include written put options, where the Fund will be obligated to purchase securities at specified prices (i.e. the options are exercised by the counterparties). It also includes written swaptions, where the Fund will be obligated to enter into a swap agreement. 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.


145

The UBS Funds

Notes to financial statements (unaudited)

Written options, if any, are shown as portfolio holdings within the Portfolio of investments and are included in the Statement of assets and liabilities in options and swaptions written, at value. At December 31, 2021, the Funds did not hold any written options.

Futures contracts: Certain 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. Generally, a futures contract is a standard binding agreement to buy or sell a specified quantity of an underlying reference asset, such as a specific security or currency, at a specified price at a specified later date.

Upon entering into a futures contract, a Fund is required to deliver to a broker an amount of cash and/or US government securities equal to a certain percentage of the contract amount. This amount is known as the "initial margin". Subsequent payments, known as "variation margin", generally are made or received by a Fund , depending on the daily fluctuations in the value of the underlying futures contracts, except that in the case of certain futures contracts that are held through swap contracts. Such variation margin is recorded for financial statement purposes on a daily basis as an unrealized appreciation or depreciation 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.

Using futures contracts involves various risks, including market, interest rate and equity risks. 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.

Futures contracts, if any, are shown as fund holdings within the Portfolio of investments. Variation margin, if applicable, is shown in Variation margin receivable or payable on futures contracts within the Statement of Assets and Liabilities.

Swap agreements: Certain Funds may engage in swap agreements, including, but not limited to, interest rate, credit default and total return swap agreements. A Fund expects to enter into these transactions to preserve a return or spread on a particular investment or 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.

The Funds accrue for interim payments on swap agreements on a daily basis, with the net amount recorded within unrealized appreciation or depreciation of swap agreements. Once interim payments are settled in cash, the net amount is recorded as realized gain or loss on swap agreements, in addition to realized gain or loss recorded upon the termination of swap agreements on the Statement of operations. Fluctuations in the value of swap agreements are recorded for financial statement purposes as unrealized appreciation or depreciation on swap agreements.

Certain Funds may enter into interest rate swap agreements with another party to receive or pay interest (e.g., an exchange of fixed rate payments for floating rate payments) to protect themselves from interest rate fluctuations. This type of swap is an agreement that obligates two parties to exchange a series of cash flows at specified intervals based upon or calculated by reference to a specified interest rate(s) for a specified amount. The payment flows are usually netted against each other, with the difference being paid by one party to the other. Interest rate swap agreements are subject to general market risk, liquidity risk, counterparty risk and interest rate risk.

Credit default swap agreements involve commitments to make or receive payments in the event of a default of a security or other credit event of the referenced obligation. As a buyer, the Fund would make periodic payments to the counterparty, and the Fund would receive payments only upon the occurrence of a default or credit event. If no default or credit event occurs, the Fund will lose its periodic stream of payments over the term of the contract.


146

The UBS Funds

Notes to financial statements (unaudited)

However, if a default or a credit event does occur, the Fund typically would receive full notional value for the referenced obligation that may have little or no value. As a seller, the Fund would receive periodic payments from the counterparty, and the Fund would make payments only upon the occurrence of a default or a credit event. If no default or credit event occurs, the Fund will gain the periodic stream of payments it received over the term of the contract and the counterparty will lose its periodic stream of payments over the term of the contract. However, if a default or credit event occurs, the Fund typically would pay full notional value for the referenced obligation that may have little or no value. Credit default swap agreements may involve greater risks than if the Fund had invested in the referenced obligation directly and are subject to general market risk, liquidity risk and credit risk.

Credit default swap agreements on credit indices involve one party making a stream of payments to another party in exchange for the right to receive a specified return in the event of a write-down, principal shortfall, interest shortfall or default of all or part of the referenced entities comprising the credit index. A credit index is a list of a basket of credit instruments or exposures designed to be representative of some part of the credit market as a whole. These indices are made up of referenced credits that are judged by a poll of dealers to be the most liquid entities in the credit default swap market based on the sector of the index. Components of the indices may include, but are not limited to, investment grade securities, high yield securities, asset backed securities, emerging markets, and/or various credit ratings within each sector. Credit indices are traded using credit default swaps with standardized terms including a fixed spread and standard maturity dates. An index credit default swap references all the names in the index, and if there is a default, the credit event is settled based on that name's weight in the index. The composition of the indices changes periodically, usually every six months, and for most indices, each name has an equal weight in the index. A Fund may use credit default swap agreements on credit indices to hedge a portfolio of credit default swaps or bonds with a credit default swap on indices which is less expensive than it would be to buy many credit default swaps to achieve a similar effect. Credit default swap agreements on credit indices are benchmarks for protecting investors owning bonds against default, and traders use them to speculate on changes in credit quality.

Credit default swap agreements on corporate issues or sovereign issues of an emerging market country involve one party making a stream of payments to another party in exchange for the right to receive a specified return in the event of a default or other credit event. If a credit event occurs and cash settlement is not elected, a variety of other obligations may be delivered in lieu of the specific referenced obligation. The ability to deliver other obligations may result in a cheapest-to-deliver option (the buyer of protection'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 the value reflected on the Statement of assets and liabilities. Notional amounts of all credit default swap agreements outstanding as of the period end for which a Fund is the seller of protection are disclosed under the section "Credit default swap agreements on credit indices—sell protection" in the 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..

Total return swap agreements involve commitments to pay or receive interest in exchange for a market-linked return based on a notional amount. To the extent the total return of the security or index underlying the transaction exceeds or falls short of the offsetting interest rate obligation, the Fund will receive a payment from or make a payment to the counterparty, respectively. Total return swap agreements are marked-to-market daily, and the change, if


147

The UBS Funds

Notes to financial statements (unaudited)

any, is recorded as unrealized appreciation or depreciation. Total return swap agreements are subject to general market risk, liquidity risk, counterparty risk, interest rate risk, credit risk and the risk that there may be unfavorable changes in the underlying investments or instruments.

The use of swap agreements involves investment techniques, risks, and transaction costs different from those associated with ordinary portfolio security transactions, including assumptions about market conditions, interest rates, and other applicable factors. As a result, the performance of the Fund will be different than if it had used ordinary portfolio security transactions. OTC 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, the Fund's risk of loss will consist of the net amount of interest or other payments that the Fund is contractually entitled to receive. Therefore, the Fund would consider the creditworthiness of the counterparty to a swap agreement in evaluating potential credit risk.

Certain clearinghouses offer clearing for limited types of derivatives transactions, such as interest rate and credit default swap agreements. Centrally cleared swap agreements must be transacted through a futures commission merchant ("FCM") and cleared through a clearinghouse that serves as a central counterparty. The performance of a centrally cleared swap transaction is effectively guaranteed by a central clearinghouse, thereby reducing 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. Centrally cleared swap agreements, if any, are reported on the Statement of assets and liabilities based on variation margin receivable or payable, if any.

Swap agreements, if any, are shown as portfolio holdings within the Portfolio of investments.

Forward foreign currency contracts: Certain Funds may enter into forward foreign currency contracts as part of their investment objective, for purposes of risk management or to hedge the US dollar value of portfolio securities denominated in a particular currency. Generally, a forward foreign currency contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated forward rate. Non-deliverable forward foreign currency contracts are settled with the counterparty in US dollars, or another fully convertible currency, without the physical delivery of foreign currency.

Fluctuations in the value of open forward foreign currency contracts are recorded daily for book purposes as unrealized appreciation or depreciation on forward foreign currency contracts by the Funds. Realized gains and losses on forward foreign currency contracts include net gains or losses recognized by the Funds on contracts which have been sold or matured.

Risks may arise upon entering into forward foreign currency contracts from the potential inability of counterparties to meet the terms of their contracts and from unanticipated movements in the value of foreign currencies relative to the US dollar or each other.

Derivatives by underlying risk: Investment companies value their derivatives at fair value and recognize changes in fair value through the Statement of operations. Under US GAAP, investment companies do not qualify for hedge accounting. Accordingly, even though Fund's investments in derivatives may represent economic hedges, they are considered to be non-hedge transactions for purposes of disclosure under US GAAP.

The volume of derivatives as disclosed in each Fund's portfolio of investments is representative of the volume of derivatives outstanding during the period ended December 31, 2021.


148

The UBS Funds

Notes to financial statements (unaudited)

Swap agreements, forward foreign currency contracts, swaptions and options written entered into by the Funds 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 value of the derivative contracts that are in a net liability position that contain these triggers can be found in the Fund's Portfolio of investments. The aggregate fair value of assets that are already posted as collateral as of December 31, 2021 is reflected in the Statement of assets and liabilities.

At December 31, 2021, the Fund had the following derivatives categorized by underlying risk:

Asset derivatives1

    Interest
rate risk		   Foreign
exchange
risk		  

Credit risk

  

Equity risk

  

Total value

  

UBS Dynamic Alpha Fund

  

Futures contracts

  

$

37,950

    

$

—

    

$

—

    

$

197,656

    

$

235,606

    

Swap agreements

    

103,190

      

—

      

—

      

54,839

      

158,029

    

Forward foreign currency contracts

    

—

      

268,507

      

—

      

—

      

268,507

    

Total value

  

$

141,140

    

$

268,507

    

$

—

    

$

252,495

    

$

662,142

    

UBS Global Allocation Fund

  

Futures contracts

  

$

236,853

    

$

—

    

$

—

    

$

982,027

    

$

1,218,880

    

Forward foreign currency contracts

    

—

      

795,883

      

—

      

—

      

795,883

    

Total value

  

$

236,853

    

$

795,883

    

$

—

    

$

982,027

    

$

2,014,763

    

UBS Total Return Bond Fund

  

Options and swaptions purchased

  

$

31,111

    

$

—

    

$

—

    

$

—

    

$

31,111

    

Futures contracts

    

51,438

      

—

      

—

      

—

      

51,438

    

Swap agreements

    

10,188

      

—

      

—

      

—

      

10,188

    

Total value

  

$

92,737

    

$

—

    

$

—

    

$

—

    

$

92,737

    

1  In the Statement of assets and liabilities, options and swaptions purchased are shown within investments, at value, swap agreements (except centrally cleared swap agreements) are shown within swap agreements, at value, while forward foreign currency contracts are shown using unrealized appreciation on forward foreign currency contracts. Futures contracts are reported in the table above using cumulative appreciation of futures contracts and centrally cleared swap agreements are reported at value, as reported in the futures contracts and centrally cleared swap agreements tables at the end of the Portfolio of investments, respectively, but only the variation margin to be received, if any, is reported within the Statement of assets and liabilities.

Liability derivatives1

    Interest
rate risk		   Foreign
exchange
risk		  

Credit risk

  

Equity risk

  

Total value

  

UBS Dynamic Alpha Fund

  

Futures contracts

  

$

(34,362

)

  

$

—

    

$

—

    

$

(37,385

)

  

$

(71,747

)

  

Forward foreign currency contracts

    

—

      

(323,433

)

    

—

      

—

      

(323,433

)

  

Total

  

$

(34,362

)

  

$

(323,433

)

  

$

—

    

$

(37,385

)

  

$

(395,180

)

  

UBS Global Allocation Fund

  

Futures contracts

  

$

(162,729

)

  

$

—

    

$

—

    

$

(191,463

)

  

$

(354,192

)

  

Forward foreign currency contracts

    

—

      

(564,432

)

    

—

      

—

      

(564,432

)

  

Total

  

$

(162,729

)

  

$

(564,432

)

  

$

—

    

$

(191,463

)

  

$

(918,624

)

  


149

The UBS Funds

Notes to financial statements (unaudited)

    Interest
rate risk		   Foreign
exchange
risk		  

Credit risk

  

Equity risk

  

Total value

  

UBS Total Return Bond Fund

  

Options and swaptions written

  

$

(25,896

)

  

$

—

    

$

—

    

$

—

    

$

(25,896

)

  

Futures contracts

    

(2,627

)

    

—

      

—

      

—

      

(2,627

)

  

Swap agreements

    

(31,490

)

    

—

      

—

      

—

      

(31,490

)

  

Forward foreign currency contracts

    

—

      

(6,593

)

    

—

      

—

      

(6,593

)

  

Total

  

$

(60,013

)

  

$

(6,593

)

  

$

—

    

$

—

    

$

(66,606

)

  

1  In the Statement of assets and liabilities, options and swaptions written are shown within options and swaptions written, at value, swap agreements (except centrally cleared swap agreements) are shown within 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 swap agreements are reported at value, as reported in the futures contracts and centrally cleared swap agreements are reported at value, as reported in the futures contracts and centrally cleared swap agreements tables at the end of the Portfolio of investments, respectively, but only the variation margin to be paid, if any, is reported within the Statement of assets and liabilities.

During the period ended December 31, 2021, net realized gain (loss) from derivatives were as follows:

Realized gain (loss)1

    Interest
rate risk		   Foreign
exchange
risk		  

Credit risk

  

Equity risk

  

Total value

  

UBS Dynamic Alpha Fund

  

Futures contracts

  

$

(64,476

)

  

$

—

    

$

—

    

$

103,744

    

$

39,268

    

Swap agreements

    

—

      

—

      

48,803

      

—

      

48,803

    

Forward foreign currency contracts

    

—

      

560,814

      

—

      

—

      

560,814

    

Total net realized gains (loss)

  

$

(64,476

)

  

$

560,814

    

$

48,803

    

$

103,744

    

$

648,885

    

UBS Global Allocation Fund

  

Futures contracts

  

$

(214,285

)

  

$

—

    

$

—

    

$

(465,360

)

  

$

(679,645

)

  

Swap agreements

    

—

      

—

      

(101,881

)

    

—

      

(101,881

)

  

Forward foreign currency contracts

    

—

      

(164,345

)

    

—

      

—

      

(164,345

)

  

Total net realized gains (loss)

  

$

(214,285

)

  

$

(164,345

)

  

$

(101,881

)

  

$

(465,360

)

  

$

(945,871

)

  

UBS Total Return Bond Fund

  

Options and swaptions Purchased

  

$

(26,525

)

  

$

—

    

$

—

    

$

—

    

$

(26,525

)

  

Options and swaptions written

    

21,020

      

—

      

—

      

—

      

21,020

    

Futures contracts

    

119,485

      

—

      

—

      

—

      

119,485

    

Swap agreements

    

173

      

—

      

—

      

964

      

1,137

    

Forward foreign currency contracts

    

—

      

18,779

      

—

      

—

      

18,779

    

Total net realized gains (loss)

  

$

114,153

    

$

18,779

    

$

—

    

$

964

    

$

133,896

    

1  The net realized gain (loss) is shown in the Statement of operations in net realized gain (loss) on futures contracts, options and swaptions written, swap agreements and forward foreign currency contracts, unless otherwise noted. The net realized gain (loss) on options and swaptions purchased is shown in the Statement of operations in net realized gain (loss) on investments.


150

The UBS Funds

Notes to financial statements (unaudited)

During the period ended December 31, 2021, net unrealized appreciation (depreciation) from derivatives were as follows:

Net change in unrealized appreciation (depreciation)1

    Interest
rate risk		   Foreign
exchange
risk		  

Credit risk

  

Equity risk

  

Total value

  

UBS Dynamic Alpha Fund

  

Futures contracts

  

$

56,353

    

$

—

    

$

—

    

$

204,509

    

$

260,862

    

Swap agreements

    

—

      

—

      

(31,812

)

    

—

      

(31,812

)

  

Foreign forward currency contracts

    

—

      

(224,245

)

    

—

      

—

      

(224,245

)

  

Net change in appreciation (depreciation)

  

$

56,353

    

$

(224,245

)

  

$

(31,812

)

  

$

204,509

    

$

4,805

    

UBS Global Allocation Fund

  

Futures contracts

  

$

132,636

    

$

—

    

$

—

    

$

1,577,599

    

$

1,710,235

    

Swap agreements

    

—

      

—

      

40,110

      

—

      

40,110

    

Foreign forward currency contracts

    

—

      

318,737

      

—

      

—

      

318,737

    

Net change in appreciation (depreciation)

  

$

132,636

    

$

318,737

    

$

40,110

    

$

1,577,599

    

$

2,069,082

    

UBS Total Return Bond Fund

  

Options and swaptions purchased

  

$

(17,393

)

  

$

—

    

$

—

    

$

—

    

$

(17,393

)

  

Options and swaptions written

    

10,811

      

—

      

—

      

—

      

10,811

    

Futures contracts

    

(26,994

)

    

—

      

—

      

—

      

(26,994

)

  

Swap agreements

    

(21,302

)

    

—

      

—

      

(2,618

)

    

(23,920

)

  

Foreign forward currency contracts

    

—

      

(18,954

)

    

—

      

—

      

(18,954

)

  

Net change in appreciation (depreciation)

  

$

(54,878

)

  

$

(18,954

)

  

$

—

    

$

(2,618

)

  

$

(76,450

)

  

1  The change in net unrealized appreciation (depreciation) is shown in the Statement of operations in change in net unrealized appreciation (depreciation) on futures contracts, options and swaptions written, swap agreements and forward foreign currency contracts, unless otherwise noted. The change in net unrealized appreciation (depreciation) of options and swaptions purchased is shown in the Statement of operations in change in net unrealized appreciation (depreciation) on investments.

Offsetting of certain derivatives: The Funds typically enter into International Swaps and Derivatives Association, Inc. Master Agreements ("ISDA Master Agreements") or similar 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 Statement of assets and liabilities is presented gross of any netting.

At December 31, 2021, derivative assets and liabilities (by type) on a gross basis and derivatives subject to an enforceable master netting arrangement ("MNA") or similar were as follows:

UBS Dynamic Alpha Fund

Derivative Financial Instruments:

 

Assets

  

Liabilities

  

Total gross amount of derivative assets and liabilities in the Statement of assets and liabilities1

  

$

662,142

    

$

(395,180

)

  

Derivatives not subject to a MNA or similar agreements

    

(393,635

)

    

71,747

    

Total gross amount of assets and liabilities subject to MNA or similar agreements

  

$

268,507

    

$

(323,433

)

  


151

The UBS Funds

Notes to financial statements (unaudited)

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 Portfolio as of the period end.

Counterparty

  Gross amount
of assets		   Financial
instruments
and derivatives
available for
offset		   Collateral
received2		   Net amount
of assets		  

BB

  

$

79,742

    

$

(79,742

)

  

$

—

    

$

—

    

CIBC

    

3

      

(3

)

    

—

      

—

    

CITI

    

39,456

      

—

      

—

      

39,456

    

GS

    

38,099

      

(30,143

)

    

—

      

7,956

    

MSCI

    

109,980

      

(21,445

)

    

—

      

88,535

    

SSC

    

1,227

      

—

      

—

      

1,227

    

Total

  

$

268,507

    

$

(131,333

)

  

$

—

    

$

137,174

    

Counterparty

   Gross amount
of liabilities		   Financial
instruments
and derivatives
available for
offset		   Collateral
pledged2		   Net amount
of liabilities		  

BB

  

$

(96,184

)

  

$

79,742

    

$

—

    

$

(16,442

)

  

BOA

    

(73,141

)

    

—

      

—

      

(73,141

)

  

CIBC

    

(997

)

    

3

      

—

      

(994

)

  

GS

    

(30,143

)

    

30,143

      

—

      

—

    

HSBC

    

(100,421

)

    

—

      

—

      

(100,421

)

  

JPMCB

    

(1,102

)

    

—

      

—

      

(1,102

)

  

MSCI

    

(21,445

)

    

21,445

      

—

      

—

    

Total

  

$

(323,433

)

  

$

131,333

    

$

—

    

$

(192,100

)

  

1  In the Statement of assets and liabilities, options purchased are shown within investments of unaffiliated issuers, as value, swap agreements (except centrally cleared swap agreements) are shown within outstanding swap agreements, at value, while forward foreign currency contracts are shown within unrealized appreciation of forward foreign currency contracts. Futures contracts are reported in the table above using cumulative appreciation on futures contracts and centrally cleared swap agreements, if any, are reported at value, as reported in the futures contracts and centrally cleared swap agreements tables at the end of the Portfolio of investments, respectively, but only the variation margin to be received, if any, is reported within the Statement of assets and liabilities.

2  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 combination of both.

UBS Global Allocation Fund

Derivative Financial Instruments:

 

Assets

  

Liabilities

  

Total gross amount of derivative assets and liabilities in the Statement of assets and liabilities1

  

$

2,014,763

    

$

(918,624

)

  

Derivatives not subject to a MNA or similar agreements1

    

(1,218,880

)

    

354,192

    

Total gross amount of assets and liabilities subject to MNA or similar agreements

  

$

795,883

    

$

(564,432

)

  


152

The UBS Funds

Notes to financial statements (unaudited)

The following tables present the Portfolio's derivative liabilities by counterparty net of amounts available for offset under a MNA and net of the related collateral received/pledged by the Portfolio as of the period end.

Counterparty

  Gross amount
of assets		   Financial
instruments
and derivatives
available for
offset		   Collateral
received2		   Net amount
of assets		  

BOA

  

$

287,847

    

$

(68,739

)

  

$

—

    

$

219,108

    

GS

    

108,540

      

(55,014

)

    

—

      

53,526

    

JPMCB

    

54,569

      

—

      

—

      

54,569

    

MSCI

    

157,191

      

(157,191

)

    

—

      

—

    

SSC

    

187,736

      

(52,795

)

    

—

      

134,941

    

Total

  

$

795,883

    

$

(333,739

)

  

$

—

    

$

462,144

    

Counterparty

   Gross amount
of liabilities		   Financial
instruments
and derivatives
available for
offset		   Collateral
pledged2		   Net amount
of liabilities		  

BOA

  

$

(68,739

)

  

$

68,739

    

$

—

    

$

—

    

CIBC

    

(128,629

)

    

—

      

—

      

(128,629

)

  

GS

    

(55,014

)

    

55,014

      

—

      

—

    

MSCI

    

(259,255

)

    

157,191

      

—

      

(102,064

)

  

SSC

    

(52,795

)

    

52,795

      

—

      

—

    

Total

  

$

(564,432

)

  

$

333,739

    

$

—

    

$

(230,693

)

  

1  In the Statement of assets and liabilities, options purchased are shown within investments of unaffiliated issuers, as value, swap agreements (except centrally cleared swap agreements) are shown within outstanding swap agreements, at value, while forward foreign currency contracts are shown within unrealized appreciation of forward foreign currency contracts. Futures contracts are reported in the table above using cumulative appreciation on futures contracts and centrally cleared swap agreements, if any, are reported at value, as reported in the futures contracts and centrally cleared swap agreements tables at the end of the Portfolio of investments, respectively, but only the variation margin to be received, if any, is reported within the Statement of assets and liabilities.

2  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 combination of both.

At December 31, 2021, derivative assets and liabilities (by type) on a gross basis and derivatives subject to an enforceable master netting arrangement ("MNA") or similar were as follows:

UBS Total Return Bond Fund

Derivative Financial Instruments:

  

Assets

  

Liabilities

  

Total gross amount of derivative assets and liabilities in the Statement of assets and liabilities1

  

$

92,737

    

$

(66,606

)

  

Derivatives not subject to a MNA or similar agreements1

    

(85,532

)

    

55,211

    

Total gross amount of assets and liabilities subject to MNA or similar agreements

  

$

7,205

    

$

(11,395

)

  


153

The UBS Funds

Notes to financial statements (unaudited)

The following tables present the Portfolio'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 Portfolio as of the period end.

Counterparty

  Gross amount
of assets		   Financial
instruments
and derivatives
available for
offset		   Collateral
received2		   Net amount
of assets		  

AG

  

$

6,161

    

$

—

    

$

—

    

$

6,161

    

BOA

    

1,044

      

(93

)

    

—

      

951

    

Total

  

$

7,205

    

$

(93

)

  

$

—

    

$

7,112

    

Counterparty

   Gross amount
of liabilities		   Financial
instruments
and derivatives
available for
offset		   Collateral
pledged2		   Net amount
of liabilities		  

BOA

  

$

(93

)

  

$

93

    

$

—

    

$

—

    
GS    

(4,709

 )    

—

   

—

   

(4,709

)

  

JPMCB

    

(6,593

)

    

—

      

—

      

(6,593

)

  

Total

  

$

(11,395

)

  

$

93

    

$

—

    

$

(11,302

)

  

1  In the Statement of assets and liabilities, options purchased are shown within investments of unaffiliated issuers, as value, swap agreements (except centrally cleared swap agreements) are shown within outstanding swap agreements, at value, while forward foreign currency contracts are shown within unrealized appreciation of forward foreign currency contracts. Futures contracts are reported in the table above using cumulative appreciation on futures contracts and centrally cleared swap agreements, if any, are reported at value, as reported in the futures contracts and centrally cleared swap agreements tables at the end of the Portfolio of investments, respectively, but only the variation margin to be received, if any, is reported within the Statement of assets and liabilities.

2  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 combination of both.

Investment advisory fees and other transactions with affiliates

The Advisor, a registered investment advisor, provides the Funds with investment management services. As compensation for these services, each Fund pays the Advisor a monthly fee, accrued daily and paid monthly, based on each Fund's respective average daily net assets in accordance with the following per annum schedule:

Fund

   $0
to
$500 mm		   $500 mm
to
$1.0 billion		   $1.0 billion
to
$1.5 billion		   $1.5 billion
to
$2.0 billion		   $2.0 billion
to
$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
$250 mm		   $250 mm
to
$500 mm		   $500 mm
to
$750 mm		   $750 mm
to
$1.0 billion		   $1.0 billion
and
over		  

UBS All China Equity Fund

    

0.850

%

    

0.825

%

    

0.800

%

    

0.775

%

    

0.750

%

  

UBS Emerging Markets Equity Opportunity Fund

    

0.900

      

0.875

      

0.850

      

0.825

      

0.750

    

UBS Sustainable Development Bank Bond Fund

    

0.150

      

0.145

      

0.140

      

0.135

      

0.130

    


154

The UBS Funds

Notes to financial statements (unaudited)

Fund

   $0
to
$250 mm		   $250 mm
to
$500 mm billion		   $500 mm
to
$750 mm billion		   $750 mm
to
$1.0 billion		   $1.0 billion
to
$1.5 billion		   $2.0 billion
and
over		  

UBS International Sustainable Equity Fund

    

0.800

%

    

0.775

%

    

0.750

%

    

0.725

%

    

0.675

%

    

0.650

%

  

 

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 U.S. Small Cap Growth Fund

    

0.850

%

    

0.850

%

    

0.825

%

    

0.825

%

    

0.825

%

  

 

Fund

  

All assets

  

UBS Engage For Impact Fund

    

0.750

%

  

UBS Municipal Bond Fund

    

0.400

    

UBS US Dividend Ruler Fund

    

0.500

    

UBS US Quality Growth at Reasonable Price Fund

    

0.500

    

UBS Total Return Bond Fund

    

0.500

    

For UBS All China Equity Fund, UBS Global Allocation Fund, UBS Emerging Markets Equity Opportunity Fund, UBS Engage For Impact Fund, UBS International Sustainable Equity Fund, UBS US Dividend Ruler Fund, UBS US Quality Growth at Reasonable Price Fund, UBS Municipal Bond Fund, UBS Sustainable Development Bank Bond Fund, and UBS Total Return 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, 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. The contractual fee waiver and/or expense reimbursement agreement for each Fund, except UBS International Sustainable Equity Fund, will remain in place through the period ending October 28, 2022. The fee waiver and/or expense reimbursement for UBS International Sustainable Equity Fund is irrevocable. Investment advisory fees, including the dollar amount waived or reimbursed, for the period ended December 31, 2021 were as follows:

Fund

   Class A
expense cap		   Class P
expense cap		   Class P2
expense cap		   Amount
due to
(due from)
Advisor		   Advisory
fees
incurred		   Fees waived/
expenses
reimbursed		  

Recoupments

  

UBS All China Equity Fund

    

—

      

1.10

%

    

—

    

$

(22,285

)

  

$

6,527

    

$

(150,252

)

  

$

—

    

UBS Dynamic Alpha Fund

    

1.35

%

    

1.10

      

—

      

3,132

      

142,331

      

(162,670

)

    

—

    

UBS Global Allocation Fund

    

1.20

      

0.95

      

—

      

98,186

      

993,640

      

(233,813

)

    

—

    

UBS Emerging Markets Equity Opportunity Fund

    

—

      

1.00

      

0.40

%

    

133,641

      

4,054,230

      

(3,098,057

)

    

—

    

UBS Engage For Impact Fund

    

—

      

0.85

      

0.25

      

(20,196

)

    

207,260

      

(332,901

)

    

—

    

UBS International Sustainable Equity Fund

    

1.25

      

1.00

      

0.25

      

189,506

      

1,572,394

      

(258,156

)

    

—

    

UBS US Dividend Ruler Fund

    

—

      

0.50

      

—

      

19,528

      

251,986

      

(205,107

)

    

—

    

UBS US Quality Growth at Reasonable Price Fund

    

—

      

0.50

      

—

      

34,932

      

365,823

      

(238,354

)

    

—

    

UBS U.S. Small Cap Growth Fund

    

1.24

      

0.99

      

—

      

107,159

      

868,148

      

(161,741

)

    

—

    

UBS Municipal Bond Fund

    

0.65

      

0.40

      

—

      

5,918

      

224,113

      

(198,225

)

    

—

    

UBS Sustainable Development Bank Bond Fund

    

—

      

0.25

      

0.15

      

(13,895

)

    

66,775

      

(170,364

)

    

—

    

UBS Total Return Bond Fund

    

0.75

      

0.50

      

—

      

(12,056

)

    

87,630

      

(164,132

)

    

—

    


155

The UBS Funds

Notes to financial statements (unaudited)

For UBS Emerging Markets Opportunity Fund Class P2, UBS Engage For Impact Fund Class P2, UBS International Sustainable Equity Fund Class P2, and UBS Sustainable Development Bank Bond Fund Class P2 the Advisor has entered into a written agreement pursuant to which the Advisor has agreed to waive its all or portion of management fees. For the period ended December 31, 2021, the advisory fees waived were $2,997,046, $175,421, $175,672 and $52,560, respectively and such amounts are not subject to future recoupment. In addition these waivers are included within the fees waived/expenses reimbursed amount disclosed in the table above.

Each Fund, except for UBS International Sustainable Equity Fund and UBS Emerging Markets Equity Opportunity Fund Class P2, 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 period ended December 31, 2021 are subject to repayment through June 30, 2025.

UBS Emerging Markets Equity Opportunity Fund Class P2 will reimburse the Advisor for expenses it reimburses for a period of three years following such expense reimbursements, provided that the reimbursement by the Fund of the Advisor will not cause the total expense ratio to exceed the contractual limit as then may be in effect for the class. The expenses reimbursed for the period ended December 31, 2021 are subject to repayment through June 30, 2025.

At December 31, 2021, 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,
2022		   Expires
June 30,
2023		   Expires
June 30,
2024		   Expires
June 30,
2025		  

UBS All China Equity Fund—Class P

  

$

277,044

    

$

—

    

$

—

    

$

126,7921

    

$

150,252

    

UBS Dynamic Alpha Fund—Class A

    

677,556

      

216,606

      

163,867

      

200,016

      

97,067

    

UBS Dynamic Alpha Fund—Class P

    

466,157

      

159,704

      

109,524

      

131,326

      

65,603

    

UBS Global Allocation Fund—Class A

    

1,389,020

      

397,509

      

409,362

      

397,866

      

184,283

    

UBS Global Allocation Fund—Class P

    

365,988

      

109,737

      

103,031

      

103,690

      

49,530

    

UBS Emerging Markets Equity Opportunity Fund—Class P

    

385,333

      

2,946

      

129,108

      

152,268

      

101,011

    

UBS Emerging Markets Equity Opportunity Fund—Class P2

    

109,650

      

109,650

      

—

      

—

      

—

    

UBS Engage For Impact Fund—Class P

    

689,876

      

237,224

      

295,800

      

127,379

      

29,473

    

UBS Engage For Impact Fund—Class P2

    

249,252

      

—

      

—

      

121,244

      

128,008

    

UBS US Dividend Ruler Fund—Class P

    

625,350

      

—

      

—

      

420,243

      

205,107

    

UBS US Quality Growth at Reasonable Price Fund—Class P

    

695,989

      

—

      

—

      

457,635

      

238,354

    

UBS U.S. Small Cap Growth Fund—Class A

    

250,588

      

83,376

      

80,713

      

59,658

      

26,841

    

UBS U.S. Small Cap Growth Fund—Class P

    

941,398

      

287,096

      

268,927

      

250,475

      

134,900

    

UBS Municipal Bond Fund—Class A

    

151,606

      

50,814

      

44,702

      

39,054

      

17,036

    

UBS Municipal Bond Fund—Class P

    

1,263,258

      

394,044

      

321,177

      

366,848

      

181,189

    

UBS Sustainable Development Bank Bond Fund—Class P

    

715,961

      

241,710

      

296,902

      

146,863

      

30,486

    

UBS Sustainable Development Bank Bond Fund—Class P2

    

199,159

      

—

      

—

      

111,841

      

87,318

    

UBS Total Return Bond Fund—Class A

    

18,216

      

3,032

      

5,271

      

6,484

      

3,429

    

UBS Total Return Bond Fund—Class P

    

1,233,720

      

370,965

      

333,503

      

368,549

      

160,703

    

For UBS Emerging Markets Equity Opportunity Fund Class P2, UBS International Sustainable Equity Fund P2 and UBS Sustainable Development Bank Bond Fund Class P2, the Advisor has entered into a written agreement pursuant to which the Advisor has agreed to waive its retained administration fees. For the period ended December 31, 2021,


156

The UBS Funds

Notes to financial statements (unaudited)

the administration fees waived were $241,485, $13,609 and $3,306,respectively and such amounts are not subject to future recoupment.

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 period ended December 31, 2021, the Funds owed and incurred administrative fees as follows:

Fund

   Administrative
fees owed		   Administrative
fees incurred		  

UBS All China Equity Fund

  

$

92

    

$

576

    

UBS Dynamic Alpha Fund

    

2,025

      

12,559

    

UBS Global Allocation Fund

    

15,329

      

93,153

    

UBS Emerging Markets Equity Opportunity Fund

    

17,305

      

351,474

    

UBS Engage For Impact Fund

    

3,654

      

20,726

    

UBS International Sustainable Equity Fund

    

21,332

      

149,119

    

UBS US Dividend Ruler Fund

    

7,439

      

37,798

    

UBS US Quality Growth at Reasonable Price Fund

    

10,919

      

54,873

    

UBS U.S. Small Cap Growth Fund

    

11,965

      

76,601

    

UBS Municipal Bond Fund

    

6,916

      

42,021

    

UBS Sustainable Development Bank Bond Fund

    

5,186

      

33,388

    

UBS Total Return Bond Fund

    

2,161

      

13,145

    

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 period ended December 31, 2021 have been included near the end of each Fund's Portfolio of investments.

During the period ended December 31, 2021, the Funds listed below paid broker commissions to affiliates of the investment advisor as detailed in the below table. These broker commissions are reflected in the Statement of assets and liabilities within investments at cost of unaffiliated issuers, and the Statement of operations within net realized gain (loss) on, and/or change in net unrealized appreciation (depreciation) on investments and/or futures contracts.

Fund

  

UBS Group AG

  

UBS Emerging Markets Equity Opportunity Fund

  

$

9,020

    

UBS Engage For Impact Fund

    

141

    

UBS International Sustainable Equity Fund

    

1,563

    

During the period ended, December 31, 2021, some of the Funds engaged in purchase and sale transactions where an affiliate was underwriter. In such cases, the affiliate underwriter was not compensated and each trade was approved by the Board.

Service and distribution 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 shares. The Plans govern payments


157

The UBS Funds

Notes to financial statements (unaudited)

made for the expenses incurred in the service and/or distribution of Class A shares. 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

  

UBS Dynamic Alpha Fund

    

0.25

%

  

UBS Global Allocation Fund

    

0.25

    

UBS Engage For Impact Fund

    

0.25

    

UBS International Sustainable Equity Fund

    

0.25

    

UBS U.S. Small Cap Growth Fund

    

0.25

    

UBS Municipal Bond Fund

    

0.25

    

UBS Total Return Bond Fund

    

0.25

    

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 shares. At December 31, 2021, certain Funds owed UBS AM (US) service and distribution fees, and for the period ended December 31, 2021, certain Funds were informed by UBS AM (US) that it had earned sales charges as follows:

Fund

   Service and
distribution
fees owed		   Sales
charges
earned by
distributor		  

UBS Dynamic Alpha Fund—Class A

  

$

4,040

    

$

—

    

UBS Global Allocation Fund—Class A

    

39,106

      

—

    

UBS U.S. Small Cap Growth Fund—Class A

    

6,177

      

—

    

UBS Municipal Bond Fund—Class A

    

1,821

      

—

    

UBS Total Return Bond Fund—Class A

    

156

      

—

    

Transfer agency and related services fees

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

For the period ended December 31, 2021, UBS Financial Services Inc. received from BNY Mellon, not the Funds, total delegated service fees as follows:

Fund

   Delegated services
fees earned		  

UBS Dynamic Alpha Fund

  

$

7,513

    

UBS Global Allocation Fund

    

26,448

    

UBS Emerging Markets Equity Opportunity Fund

    

16,165

    

UBS Engage For Impact Fund

    

5,071

    

UBS International Sustainable Equity Fund

    

11,109

    

UBS US Dividend Ruler Fund

    

13,769

    

UBS US Quality Growth At Reasonable Price Fund

    

19,748

    

UBS U.S. Small Cap Growth Fund

    

2,713

    

UBS Municipal Bond Fund

    

5,947

    

UBS Sustainable Development Bank Bond Fund

    

5,719

    

UBS Total Return Bond Fund

    

452

    


158

The UBS Funds

Notes to financial statements (unaudited)

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 initially secured by cash, U.S. government securities and irrevocable letters of credit 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. In the event that the market value of the cash, U.S. government securities, and irrevocable letters of credit securing the loan falls below 100% of the market value for domestic securities, and 103% for foreign securities, the borrower must provide additional cash, U.S. government securities, and irrevocable letters of credit so that the total securing the loan is at least 102% of the market value for domestic securities and 105% of the market value for foreign securities.

Each Fund will regain ownership of loaned securities to exercise certain beneficial rights; however, each Fund may bear the risk of delay in recovery of, or even loss of rights in, the securities loaned should the borrower fail financially. The Fund receives compensation for lending its securities from interest or dividends earned on the cash, U.S. government securities and irrevocable letters of credit held as collateral, net of fee rebates paid to the borrower plus reasonable administrative and custody fees. Cash collateral received is invested in State Street Navigator Securities Lending Government Money Market Fund, which is included in the Fund's Portfolio of investments. State Street Bank and Trust Company serves as the Fund's lending agent.

At December 31, 2021, the following Funds had securities on loan at value, cash collateral and non-cash collateral as follows:

Fund

   Value of
securities on loan		   Cash
collateral		   Non-cash
collateral*		   Total
collateral		   Security types
held as non-cash collateral		  

UBS All China Equity Fund

  

$

68,065

    

$

4,332

    

$

67,884

    

$

72,216

    

U.S. Treasury Notes and U.S. Treasury Bills

  

UBS Dynamic Alpha Fund

    

1,552,056

      

1,289,086

      

295,852

      

1,584,938

    

U.S. Treasury Notes and U.S. Treasury Bills

  

UBS Global Allocation Fund

    

14,516,138

      

7,592,367

      

7,443,761

      

15,036,128

    

U.S. Treasury Notes and U.S. Treasury Bills

  

UBS Engage For Impact Fund

    

756,473

      

—

      

774,954

      

774,954

    

U.S. Treasury Notes and U.S. Treasury Bills

  

UBS International Sustainable Equity Fund

    

2,034,458

      

1,980,392

      

125,251

      

2,105,643

    

U.S. Treasury Notes and U.S. Treasury Bills

  

UBS U.S. Small Cap Growth Fund

    

5,894,611

      

2,111,754

      

4,047,722

      

6,159,476

    

U.S. Treasury Notes and U.S. Treasury Bills

  

UBS Total Return Bond Fund

    

118,999

      

121,600

      

—

      

121,600

        

* These securities are held for the benefit of the Fund at the Fund's custodian. The Fund cannot repledge or resell this collateral. As such, this collateral is excluded from the Statement of assets and liabilities.

The table below represents the disaggregation at December 31, 2021 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		  

Fund

   Equity
securities		   Corporate
bonds		   liabilities for
securities
lending
transactions		  

UBS All China Equity Fund

  

$

4,332

    

$

—

    

$

4,332

    

UBS Dynamic Alpha Fund

    

—

      

1,289,086

      

1,289,086

    

UBS Global Allocation Fund

    

7,592,367

      

—

      

7,592,367

    

UBS International Sustainable Equity Fund

    

1,980,392

      

—

      

1,980,392

    

UBS U.S. Small Cap Growth Fund

    

2,111,754

      

—

      

2,111,754

    

UBS Total Return Bond Fund

    

—

      

121,600

      

121,600

    


159

The UBS Funds

Notes to financial statements (unaudited)

Bank line of credit

The Fund participates with other funds managed by UBS AM in a $185 million committed credit facility (the "Committed Credit Facility") with State Street Bank and Trust Company. The Committed Credit Facility is to be utilized for temporary financing until the settlement of sales or purchases of portfolio securities, the repurchase or redemption of shares of a participating 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. The funds covered by the Committed Credit Facility have agreed to pay commitment fees on the average daily balance of the Committed Credit Facility not utilized. 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.

For the period ended December 31, 2021, the following Funds had borrowings as follows:

Fund

   Average daily
amount of
borrowing
outstanding		   Days
outstanding		   Interest
expense		   Weighted average
annualized
interest rate		  

UBS Emerging Markets Equity Opportunity Fund

  

$

10,152,596

      

5

    

$

2,031

      

1.440

%

  

UBS International Sustainable Equity Fund

    

5,785,935

      

12

      

2,783

      

1.443

    

UBS Municipal Bond Fund

    

803,501

      

7

      

188

      

1.200

    

At December 31, 2021, UBS International Sustainable Equity Fund had an outstanding borrowing of $1,351,726.

Commission recapture program

Certain Funds participate in a brokerage commission recapture program. These Funds have established commission recapture arrangements with certain participating brokers or dealers. If a Fund's investment manager chooses to execute a transaction through a participating broker subject to best price and execution, the broker will rebate a portion of the commission back to the Fund. Any collateral benefit received through participation in the commission recapture program is directed exclusively to the Fund. For the period ended December 31, 2021, there were no recaptured commissions on the Funds.

Purchases and sales of securities

For the period December 31, 2021, aggregate purchases and sales of portfolio securities, excluding short-term securities, were as follows:

Fund

  

Purchases

  

Sales

  

UBS All China Equity Fund

  

$

162,491

    

$

19,166

    

UBS Dynamic Alpha Fund

    

990,147

      

1,325,911

    

UBS Global Allocation Fund

    

129,048,775

      

137,169,005

    

UBS Emerging Markets Equity Opportunity Fund

    

216,799,234

      

415,466,833

    

UBS Engage For Impact Fund

    

17,219,440

      

9,125,577

    

UBS International Sustainable Equity Fund

    

127,261,855

      

178,150,511

    

UBS US Dividend Ruler Fund

    

42,363,369

      

12,305,687

    

UBS US Quality Growth At Reasonable Price Fund

    

59,175,165

      

13,389,938

    

UBS U.S. Small Cap Growth Fund

    

36,192,052

      

53,298,934

    

UBS Municipal Bond Fund

    

12,267,447

      

8,083,960

    

UBS Sustainable Development Bank Bond Fund

    

17,078,211

      

9,225,220

    

UBS Total Return Bond Fund

    

31,937,959

      

33,618,026

    


160

The UBS Funds

Notes to financial statements (unaudited)

Shares of beneficial interest

There is an unlimited number of $0.001 par value shares of beneficial interest authorized. Transactions in shares of beneficial interest for each of the Funds for the period ended December 31, 2021 were as follows:

UBS All China Equity Fund
For the six months ended December 31, 2021:

   

Class P

  
   

Shares

  

Amount

  

Shares sold

    

—

    

$

—

    

Net increase (decrease)

    

—

    

$

—

    

For the period ended June 30, 2021:

   

Class P1

  
   

Shares

  

Amount

  

Shares sold

    

200,000

    

$

2,000,000

    

Net increase (decrease)

    

200,000

    

$

2,000,000

    

1  For the period from February 23, 2021 (commencement of operations) through June 30, 2021.

UBS Dynamic Alpha Fund
For the six months ended December 31, 2021:

   

Class A

  

Class P

  
   

Shares

  

Amount

  

Shares

  

Amount

  

Shares sold

    

3,198

    

$

21,364

      

111,842

    

$

780,586

    

Shares repurchased

    

(221,637

)

    

(1,492,004

)

    

(257,796

)

    

(1,768,706

)

  

Dividends reinvested

    

282,505

      

1,714,805

      

197,351

      

1,231,472

    

Net increase (decrease)

    

64,066

    

$

244,165

      

51,397

    

$

243,352

    

  

For the year ended June 30, 2021:

   

Class A

  

Class P

  
   

Shares

  

Amount

  

Shares

  

Amount

  

Shares sold

    

4,428

    

$

28,574

      

211,816

    

$

1,431,574

    

Shares repurchased

    

(535,926

)

    

(3,458,032

)

    

(632,905

)

    

(4,188,830

)

  

Net increase (decrease)

    

(531,498

)

  

$

(3,429,458

)

    

(421,089

)

  

$

(2,757,256

)

  

  

UBS Global Allocation Fund
For the six months ended December 31, 2021:

   

Class A

  

Class P

  
   

Shares

  

Amount

  

Shares

  

Amount

  

Shares sold

    

19,261

    

$

241,643

      

64,315

    

$

953,979

    

Shares repurchased

    

(656,457

)

    

(9,407,362

)

    

(257,353

)

    

(3,788,025

)

  

Dividends reinvested

    

2,292,309

      

27,920,324

      

650,782

      

8,167,316

    

Net increase (decrease)

    

1,655,113

    

$

18,754,605

      

457,744

    

$

5,333,270

    

  


161

The UBS Funds

Notes to financial statements (unaudited)

For the year ended June 30, 2021:

   

Class A

  

Class P

  
   

Shares

  

Amount

  

Shares

  

Amount

  

Shares sold

    

10,038

    

$

136,618

      

244,148

    

$

3,438,467

    

Shares repurchased

    

(1,750,164

)

    

(23,572,518

)

    

(781,217

)

    

(10,944,548

)

  

Dividends reinvested

    

202,723

      

2,805,681

      

65,787

      

933,522

    

Net increase (decrease)

    

(1,537,403

)

  

$

(20,630,219

)

    

(471,282

)

  

$

(6,572,559

)

  

  

UBS Emerging Markets Equity Opportunity Fund
For the six months ended December 31, 2021:

   

Class P

  

Class P2

  
   

Shares

  

Amount

  

Shares

  

Amount

  

Shares sold

    

1,719,274

    

$

19,487,716

      

8,717,793

    

$

100,090,314

    

Shares repurchased

    

(4,996,946

)

    

(54,773,879

)

    

(24,355,240

)

    

(267,230,661

)

  

Dividends reinvested

    

1,943,668

      

18,562,033

      

4,939,035

      

47,414,730

    

Net increase (decrease)

    

(1,334,004

)

  

$

(16,724,130

)

    

(10,698,412

)

  

$

(119,725,617

)

  

  

For the year ended June 30, 2021:

   

Class P

  

Class P2

  
   

Shares

  

Amount

  

Shares

  

Amount

  

Shares sold

    

14,147,551

    

$

169,320,305

      

26,833,218

    

$

319,261,194

    

Shares repurchased

    

(3,025,956

)

    

(36,095,951

)

    

(6,974,249

)

    

(81,214,990

)

  

Dividends reinvested

    

127,176

      

1,540,098

      

545,332

      

6,642,141

    

Net increase (decrease)

    

11,248,771

    

$

134,764,452

      

20,404,301

    

$

244,688,345

    

  

UBS Engage For Impact Fund
For the six months ended December 31, 2021:

   

Class P

  

Class P2

  
   

Shares

  

Amount

  

Shares

  

Amount

  

Shares sold

    

121,089

    

$

1,737,571

      

583,771

    

$

8,480,730

    

Shares repurchased

    

(60,207

)

    

(875,565

)

    

(188,209

)

    

(2,746,555

)

  

Dividends reinvested

    

30,309

      

387,354

      

440,302

      

5,618,257

    

Net increase (decrease)

    

91,191

    

$

1,249,360

      

835,864

    

$

11,352,432

    

  

For the period ended June 30, 2021:

   

Class P

  

Class P22

  
   

Shares

  

Amount

  

Shares

  

Amount

  

Shares sold

    

1,369,755

    

$

17,043,521

      

3,075,952

    

$

43,396,675

    

Shares repurchased

    

(3,430,094

)

    

(47,437,737

)

    

(88,712

)

    

(1,255,623

)

  

Dividends reinvested

    

20,418

      

265,026

      

—

      

—

    

Net increase (decrease)

    

(2,039,921

)

  

$

(30,129,190

)

    

2,987,240

    

$

42,141,052

    

  

2  For the period February 24, 2021 (commencement of operations) through June 30, 2021.


162

The UBS Funds

Notes to financial statements (unaudited)

UBS International Sustainable Equity Fund
For the six months ended December 31, 2021:

   

Class A

  

Class P

  

Class P2

  
   

Shares

  

Amount

  

Shares

  

Amount

  

Shares

  

Amount

  

Shares sold

    

17,643

    

$

216,616

      

7,067,000

    

$

85,837,022

      

751,342

    

$

9,227,158

    

Shares repurchased

    

(60,481

)

    

(734,378

)

    

(13,313,324

)

    

(158,065,741

)

    

(165,414

)

    

(2,051,141

)

  

Dividends reinvested

    

62,958

      

671,131

      

2,573,269

      

27,482,511

      

422,701

      

4,514,447

    

Net increase (decrease)

    

20,120

    

$

153,369

      

(3,673,055

)

  

$

(44,746,208

)

    

1,008,629

    

$

11,690,464

    

    

For the period ended June 30, 2021:

   

Class A

  

Class P

  

Class P23

  
   

Shares

  

Amount

  

Shares

  

Amount

  

Shares

  

Amount

  

Shares sold

    

113,209

    

$

1,201,424

      

15,687,291

    

$

182,719,166

      

3,495,542

    

$

41,172,796

    

Shares repurchased

    

(166,275

)

    

(1,815,013

)

    

(6,573,685

)

    

(76,443,156

)

    

(226,942

)

    

(2,792,095

)

  

Dividends reinvested

    

7,173

      

84,210

      

267,600

      

3,149,650

      

33,491

      

394,187

    

Net increase (decrease)

    

(45,893

)

  

$

(529,379

)

    

9,381,206

    

$

109,425,660

      

3,302,091

    

$

38,774,888

    

    

3  For the period from October 30, 2020 (commencement of operations) through June 30, 2021.

UBS US Dividend Ruler Fund
For the six months ended December 31, 2021:

   

Class P

  
   

Shares

  

Amount

  

Shares sold

    

2,908,456

    

$

38,794,325

    

Shares repurchased

    

(643,208

)

    

(8,518,029

)

  

Dividends reinvested

    

219,574

      

2,883,002

    

Net increase (decrease)

    

2,484,822

    

$

33,159,298

    

For the period ended June 30, 2021:

   

Class P4

  
   

Shares

  

Amount

  

Shares sold

    

7,444,278

    

$

84,691,033

    

Shares repurchased

    

(1,078,574

)

    

(12,605,771

)

  

Dividends reinvested

    

27,009

      

304,926

    

Net increase (decrease)

    

6,392,713

    

$

72,390,188

    

4  For the period from July 9, 2020 (commencement of operations) through June 30, 2021.


163

The UBS Funds

Notes to financial statements (unaudited)

UBS US Quality Growth At Reasonable Price Fund
For the six months ended December 31, 2021:

   

Class P

  
   

Shares

  

Amount

  

Shares sold

    

4,208,647

    

$

58,800,672

    

Shares repurchased

    

(890,870

)

    

(12,422,746

)

  

Dividends reinvested

    

317,326

      

4,369,581

    

Net increase (decrease)

    

3,635,103

    

$

50,747,507

    

For the period ended June 30, 2021:

   

Class P4

  
   

Shares

  

Amount

  

Shares sold

    

10,980,973

    

$

123,322,191

    

Shares repurchased

    

(2,102,969

)

    

(24,559,546

)

  

Dividends reinvested

    

20,693

      

233,830

    

Net increase (decrease)

    

8,898,697

    

$

98,996,475

    

4  For the period from July 9, 2020 (commencement of operations) through June 30, 2021.

UBS U.S. Small Cap Growth Fund
For the six months ended December 31, 2021:

   

Class A

  

Class P

  
   

Shares

  

Amount

  

Shares

  

Amount

  

Shares sold

    

38,675

    

$

945,212

      

254,535

    

$

8,023,571

    

Shares repurchased

    

(221,498

)

    

(5,697,412

)

    

(711,282

)

    

(21,961,438

)

  

Dividends reinvested

    

272,963

      

5,486,549

      

1,200,697

      

28,804,727

    

Net increase (decrease)

    

90,140

    

$

734,349

      

743,950

    

$

14,866,860

    

  

For the year ended June 30, 2021:

   

Class A

  

Class P

  
   

Shares

  

Amount

  

Shares

  

Amount

  

Shares sold

    

257,901

    

$

6,742,911

      

1,935,839

    

$

57,059,671

    

Shares repurchased

    

(295,081

)

    

(7,733,170

)

    

(1,076,007

)

    

(31,440,072

)

  

Dividends reinvested

    

129,889

      

3,329,059

      

510,279

      

15,053,231

    

Net increase (decrease)

    

92,709

    

$

2,338,800

      

1,370,111

    

$

40,672,830

    

  

UBS Municipal Bond Fund
For the six months ended December 31, 2021:

   

Class A

  

Class P

  
   

Shares

  

Amount

  

Shares

  

Amount

  

Shares sold

    

—

    

$

—

      

710,320

    

$

7,728,319

    

Shares repurchased

    

(89,196

)

    

(969,685

)

    

(1,182,494

)

    

(12,870,876

)

  

Dividends reinvested

    

11,475

      

123,638

      

133,336

      

1,436,201

    

Net increase (decrease)

    

(77,721

)

  

$

(846,047

)

    

(338,838

)

  

$

(3,706,356

)

  

  


164

The UBS Funds

Notes to financial statements (unaudited)

For the year ended June 30, 2021:

   

Class A

  

Class P

  
   

Shares

  

Amount

  

Shares

  

Amount

  

Shares sold

    

—

    

$

—

      

3,234,611

    

$

35,344,732

    

Shares repurchased

    

(267,440

)

    

(2,906,597

)

    

(3,769,782

)

    

(41,168,503

)

  

Dividends reinvested

    

18,104

      

198,055

      

183,475

      

2,004,762

    

Net increase (decrease)

    

(249,336

)

  

$

(2,708,542

)

    

(351,696

)

  

$

(3,819,009

)

  

  

UBS Sustainable Development Bank Bond Fund
For the six months ended December 31, 2021:

   

Class P

  

Class P2

  
   

Shares

  

Amount

  

Shares

  

Amount

  

Shares sold

    

398,571

    

$

4,225,763

      

1,154,571

    

$

12,222,702

    

Shares repurchased

    

(249,618

)

    

(2,632,082

)

    

(504,331

)

    

(5,330,694

)

  

Dividends reinvested

    

1,745

      

18,417

      

42,703

      

450,498

    

Net increase (decrease)

    

150,698

    

$

1,612,098

      

692,943

    

$

7,342,506

    

  

For the period ended June 30, 2021:

   

Class P

  

Class P23

  
   

Shares

  

Amount

  

Shares

  

Amount

  

Shares sold

    

1,430,661

    

$

15,750,187

      

6,756,676

    

$

73,013,100

    

Shares repurchased

    

(3,148,022

)

    

(34,747,508

)

    

(660,559

)

    

(6,989,118

)

  

Dividends reinvested

    

19,415

      

214,348

      

102,495

      

1,102,672

    

Net increase (decrease)

    

(1,697,946

)

  

$

(18,782,973

)

    

6,198,612

    

$

67,126,654

    

  

3 For the period from October 30, 2020 (commencement of operations) through June 30, 2021.

UBS Total Return Bond Fund
For the six months ended December 31, 2021:

   

Class A

  

Class P

  
   

Shares

  

Amount

  

Shares

  

Amount

  

Shares sold

    

9,202

    

$

143,667

      

1,837

    

$

28,858

    

Shares repurchased

    

(4,494

)

    

(69,616

)

    

(109,766

)

    

(1,712,315

)

  

Dividends reinvested

    

273

      

4,261

      

14,422

      

225,353

    

Net increase (decrease)

    

4,981

    

$

78,312

      

(93,507

)

  

$

(1,458,104

)

  

  

For the year ended June 30, 2021:

   

Class A

  

Class P

  
   

Shares

  

Amount

  

Shares

  

Amount

  

Shares sold

    

1,735

    

$

27,000

      

19,241

    

$

306,021

    

Shares repurchased

    

(336

)

    

(5,337

)

    

(210,154

)

    

(3,306,353

)

  

Dividends reinvested

    

531

      

8,349

      

33,709

      

530,760

    

Net increase (decrease)

    

1,930

    

$

30,012

      

(157,204

)

  

$

(2,469,572

)

  

  


165

The UBS Funds

Notes to financial statements (unaudited)

Federal tax status

It is each Fund's policy to comply with all requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of their taxable income to their shareholders. In addition, by distributing during each calendar year substantially all of its net investment income, net realized capital gains and certain other amounts, if any, each Fund intends not to be subject to a federal excise tax. Accordingly, no federal income tax provision was required.

The tax character of distributions paid during the fiscal year ended June 30, 2021 was as follows:

Fund

   Distributions paid
from tax-exempt
income		   Distributions
paid from
ordinary income		   Distributions
paid from
long term
realized
capital gains		   Total
distributions
paid		  

UBS Global Allocation Fund

  

$

—

    

$

1,410,280

    

$

2,667,270

    

$

4,077,550

    

UBS Emerging Markets Equity Opportunity Fund

    

—

      

10,787,637

      

—

      

10,787,637

    

UBS Engage For Impact Fund

    

—

      

65,220

      

235,704

      

300,924

    

UBS International Sustainable Equity Fund

    

—

      

4,020,989

      

—

      

4,020,989

    

UBS US Dividend Ruler Fund

    

—

      

337,013

      

—

      

337,013

    

UBS US Quality Growth At Reasonable Price Fund

    

—

      

250,762

      

—

      

250,762

    

UBS U.S. Small Cap Growth Fund

    

—

      

6,327,434

      

12,787,307

      

19,114,741

    

UBS Municipal Bond Fund

    

1,703,034

      

37,074

      

972,985

      

2,713,093

    

UB Sustainable Development Bank Bond Fund

    

—

      

1,254,524

      

595,498

      

1,850,022

    

UBS Total Return Bond Fund

    

—

      

706,081

      

—

      

706,081

    

The tax character of distributions paid and components of accumulated earnings (deficit) on a tax basis current fiscal year will be determined after the Trust's fiscal year ending June 30, 2022.

For federal income tax purposes, the estimated cost and unrealized appreciation (depreciation) in value of investments, including derivatives, held at December 31, 2021 were as follows:

Fund

  

Cost of investments

   Gross unrealized
appreciation		   Gross unrealized
depreciation		   Net unrealized
appreciation
(depreciation)
on investments		  

UBS All China Equity Fund

  

$

1,912,051

    

$

22,150

    

$

(493,626

)

  

$

(471,476

)

  

UBS Dynamic Alpha Fund

    

37,175,506

      

1,134,302

      

(8,366,431

)

    

(7,232,129

)

  

UBS Global Allocation Fund

    

225,374,181

      

32,310,751

      

(4,105,355

)

    

28,205,396

    

UBS Emerging Markets Equity Opportunity Fund

    

725,308,129

      

57,547,964

      

(85,352,833

)

    

(27,804,869

)

  

UBS Engage For Impact Fund

    

50,932,326

      

11,266,756

      

(2,405,780

)

    

8,860,976

    

UBS International Sustainable Equity Fund

    

337,643,833

      

40,742,917

      

(24,685,048

)

    

16,057,869

    

UBS US Dividend Ruler Fund

    

106,927,053

      

15,569,037

      

(1,039,624

)

    

14,529,413

    

UBS US Quality Growth At Reasonable Price Fund

    

150,589,312

      

30,402,373

      

(728,058

)

    

29,674,315

    

UBS U.S. Small Cap Growth Fund

    

150,009,361

      

53,324,536

      

(10,174,153

)

    

43,150,383

    

UBS Municipal Bond Fund

    

100,509,384

      

4,442,065

      

(95,410

)

    

4,346,655

    

UB Sustainable Development Bank Bond Fund

    

90,982,294

      

679,302

      

(1,228,474

)

    

(549,172

)

  

UBS Total Return Bond Fund

    

36,133,963

      

921,567

      

(482,916

)

    

438,651

    

Net capital losses recognized by the Funds, 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 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.


166

The UBS Funds

Notes to financial statements (unaudited)

At June 30, 2021, the following Funds had net capital losses that will be carried forward indefinitely, as follows:

Fund

  

Short-term losses

  

Long-term losses

  

Net capital losses

  

UBS All China Equity Fund

  

$

106,114

    

$

—

    

$

106,114

    

UBS Dynamic Alpha Fund

    

18,340,107

      

13,544,679

      

31,884,786

    

UBS Total Return Bond Fund

    

1,853,913

      

770,813

      

2,624,726

    

During the fiscal year ended June 30, 2021, the following Funds had capital loss carryforwards utilized:

Fund

   Capital loss
carryforwards
utilized		  

UBS Emerging Markets Equity Opportunity Fund

  

$

12,454,148

    

UBS International Sustainable Equity Fund

    

8,595,504

    

Qualified late year losses are deemed to arise on the first business day of a Fund's next table year. For the fiscal year ended June 30, 2021, 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 Municipal Bond Fund

  

$

—

    

$

102,185

    

$

—

    

UBS Sustainable Development Bank Bond Fund

    

—

      

24,512

      

—

    

ASC 740-10 "Income Taxes—Overall" 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 December 31, 2021, 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 period ended December 31, 2021, 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, 2021 or since inception in the case of UBS All China Equity Fund, UBS Emerging Markets Equity Opportunity Fund, UBS Engage For Impact Fund, UBS US Dividend Ruler Fund, UBS US Quality Growth at Reasonable Price Fund and UBS Sustainable Development Bank Bond Fund remains subject to examination by the Internal Revenue Service and state taxing authorities.


167

The UBS Funds

General information (unaudited)

Quarterly portfolio schedule

The Funds filed its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission ("SEC") for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The Funds' Form N-PORT reports are available on the SEC's website at http://www.sec.gov. (Please note that on the SEC's website, the "filing type" designation for this information may be "NPORT-EX.") Additionally, you may obtain copies of such portfolio holdings schedules for the first and third quarters of each fiscal year from the funds upon request by calling 1-800-647 1568.

Proxy voting policies, procedures and record

You may obtain a description of the Fund's (1) proxy voting policies, (2) proxy voting procedures and (3) information regarding how the Fund 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 Fund directly at 1-800-647 1568, online on the Fund's website: www.ubs.com/ubsam-proxy, or on the EDGAR Database on the SEC's website (http://www.sec.gov).


168

PRESORTED
STANDARD
U.S. POSTAGE
PAID
COMPUTERSHARE

UBS Asset Management (Americas) Inc.

787 Seventh Avenue

New York, NY 10019-6028

S1627

 

Item 2. Code of Ethics.

 

Form N-CSR disclosure requirement not applicable to this filing of a semi-annual report.

 

Item 3. Audit Committee Financial Expert.

 

Form N-CSR disclosure requirement not applicable to this filing of a semi-annual report.

 

Item 4. Principal Accountant Fees and Services.

 

Form N-CSR disclosure requirement not applicable to this filing of a semi-annual report.

 

Item 5. Audit Committee of Listed Registrants.

 

Not applicable to the registrant.

 

Item 6. Schedule of Investments.

 

(a) Included as part of the report to shareholders filed under Item 1 of this form.

 

(b) Not applicable.

 

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

 

Not applicable to the registrant.

 

Item 8. Portfolio Managers of Closed-End Management Investment Companies.

 

Not applicable to the registrant.

 

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

 

Not applicable to the registrant.

 

 

 

Item 10. Submission of Matters to a Vote of Security Holders.

 

The Nominating Committee will consider nominees recommended by Qualifying Fund Shareholders if an Independent Trustee vacancy on the Board occurs. A Qualifying Fund Shareholder is a shareholder that: (i) owns of record, or beneficially through a financial intermediary, 1/2 of 1% or more of the Trust's outstanding shares and (ii) has been a shareholder of at least 1/2 of 1% of the Trust's total outstanding shares for 12 months or more prior to submitting the recommendation to the Nominating Committee. In order to recommend a nominee, a Qualifying Fund Shareholder should send a letter to the chairperson of the Nominating Committee, Ms. Adela Cepeda, care of Keith Weller, 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 Shareholder's letter should include: (i) the name and address of the Qualifying Fund Shareholder making the recommendation; (ii) the number of shares of each class and series of shares of the Trust which are owned of record and beneficially by such Qualifying Fund Shareholder and the length of time that such shares have been so owned by the Qualifying Fund Shareholder; (iii) a description of all arrangements and understandings between such Qualifying Fund Shareholder and any other person or persons (naming such person or persons) pursuant to which the recommendation is being made; (iv) the name and address of the nominee; and (v) the nominee's resume or curriculum vitae. The Qualifying Fund Shareholder's letter must be accompanied by a written consent of the individual to stand for election if nominated for the Board and to serve if elected by shareholders.

 

Item 11. Controls and Procedures.

 

(a)The registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended) are effective based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this document.

 

(b)The registrant’s principal executive officer and principal financial officer are aware of no changes in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal half-year that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.

 

Not applicable to the registrant.

 

Item 13. Exhibits.

 

(a)(1) Code of Ethics – Form N-CSR disclosure requirement not applicable to this filing of a semi-annual report.

 

(a)(2) Certifications of principal executive officer and principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 is attached hereto as Exhibit EX-99.CERT.

 

(a)(3) Written solicitation to purchase securities under Rule 23c-1 under the Investment Company Act of 1940 sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons – not applicable to the registrant.
   
 (a) (4) Change in the registrant's independent public accountant - not applicable to the registrant.

 

(b)Certifications of principal executive officer and principal financial officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 is attached hereto as Exhibit EX-99.906CERT.

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

The UBS Funds  
   
By: /s/ Igor Lasun  
  Igor Lasun  
  President  

 

Date:March 10, 2022  

 

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.

 

The UBS Funds  
   
By: /s/ Igor Lasun  
  Igor Lasun  
  President  

 

Date:March 10, 2022  

 

By: /s/ Joanne M. Kilkeary  
  Joanne M. Kilkeary  
  Vice President, Treasurer and Principal Accounting Officer  

 

Date:March 10, 2022  

 

 

 EX-99.CERT 2 tm221465d1_ex99-cert.htm EXHIBIT 99.CERT

Exhibit EX-99.CERT

 

Certifications

 

I, Igor Lasun, 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 registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

 

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements, for external purposes in accordance with generally accepted accounting principles;

 

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

 

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

 

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

By: /s/ Igor Lasun  
  Igor Lasun  
  President  

 

Date:  March 10, 2022

 

 

 

 

I, Joanne M. Kilkeary, 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 registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

 

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements, for external purposes in accordance with generally accepted accounting principles;

 

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

 

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

 

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

By: /s/ Joanne M. Kilkeary  
  Joanne M. Kilkeary  
  Vice President, Treasurer and Principal Accounting Officer  

 

Date:  March 10, 2022

 

 

 EX-99.906 CERT 3 tm221465d1_ex99-906cert.htm EXHIBIT 99.906 CERT

 

Exhibit EX-99.906CERT

 

Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)

 

In connection with the attached report of The UBS Funds (the “Registrant”) on Form N-CSR (the “Report”), each of the undersigned officers of the Registrant does hereby certify that, to the best of such officer’s knowledge:

 

1)the 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.

 

By: /s/ Igor Lasun  
  Igor Lasun  
  President  

 

Dated:March 10, 2022  

 

By: /s/ Joanne M. Kilkeary  
  Joanne M. Kilkeary  
  Vice President, Treasurer and Principal Accounting Officer  

 

Dated:March 10, 2022  

 

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.

 

 

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