N-14AE/A

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    As filed with the Securities and Exchange Commission on September 4, 2003.
                                                       File No.:    333-107707

                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM N-14
             REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

   /X/ Pre-Effective Amendment No. 1  /__/ Post-Effective Amendment No. ___

                        (Check appropriate box or boxes)

- ------------------------------- ------------------------------------------------
Exact Name of Registrant
as Specified in Charter:                      Area Code and Telephone Number:

The UBS Funds                                          (312) 222-7100
- --------------------------------------------------------------------------------

Address of Principal Executive Offices: (Number, Street, City, State, Zip Code)

One North Wacker Drive, Chicago, Illinois  60606
- --------------------------------------------------------------------------------
Name and Address of Agent for Service:            Approximate Date of Proposed
(Number and Street) (City) (State) (Zip Code)     Public Offering:

Amy R. Doberman, Esq.                             As soon as practicable after
51 West 52nd Street                               this Registration Statement
New York, NY  10019-6114                          becomes effective under the
- --------------------------------------------      Securities Act of 1933, as
Copies to:                                        amended.

Bruce G. Leto, Esq.
Stradley, Ronon, Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, PA  19103
- --------------------------------------------------------------------------------

              Calculation of Fee under the Securities Act of 1933:

     Title of Securities Being Registered:  Shares of beneficial  interest,  par
     value $0.001 per share, of UBS U.S. Small Cap Growth Fund. No Filing Fee is
     due  because  the  Registrant  relies on  Section  24(f) of the  Investment
     Company Act of 1940, as amended.

     Registrant hereby amends this Registration  Statement on such date or dates
     as may be necessary to delay its effective date until Registrant shall file
     a  further  amendment  that  specifically  states  that  this  Registration
     Statement shall thereafter become effective in accordance with Section 8(a)
     of the  Securities  Act of 1933,  as  amended,  or until this  Registration
     Statement  shall become  effective on such date as the  Commission,  acting
     pursuant to Section 8(a), shall determine.

     The UBS Funds has executed this Registration Statement.


                          UBS Enhanced NASDAQ-100 Fund
                 (a series of UBS Mutual Funds Securities Trust)

Dear Shareholder:

     Enclosed is a Notice of a Special Meeting of  Shareholders  (the "Meeting")
of the UBS Enhanced NASDAQ-100 Fund (the "Nasdaq-100  Fund"),  which is a series
of UBS Mutual Funds Securities Trust. The Meeting has been called for [_________
__, 2003],  at [Insert  Time] Eastern time, at 51 West 52nd Street,  16th Floor,
New York,  New York  10019-6114.  The  accompanying  Prospectus/Proxy  Statement
describes a proposal being  presented for your  consideration  and requests your
prompt attention and vote via the enclosed proxy card or by telephone or via the
Internet.

                   Please take a moment to fill out, sign and
                         return the enclosed Proxy Card!

     The Meeting is  extremely  important.  You are being asked to consider  and
approve an Agreement and Plan of Reorganization  (the "Agreement and Plan") that
would result in your shares of the Nasdaq-100 Fund being exchanged for shares of
the UBS U.S.  Small Cap Growth Fund (the "Small Cap Fund"),  a series of The UBS
Funds.  If the  shareholders  of the  Nasdaq-100  Fund approve the Agreement and
Plan, it is presently  expected that the Nasdaq -100 Fund would liquidate all of
its current holdings.  The Small Cap Fund would acquire substantially all of the
Nasdaq-100  Fund's  assets,  which  will then  consist  of cash,  subject to the
liabilities  of the  Nasdaq-100  Fund.  You will receive shares of the Small Cap
Fund equal in value to your shares of the Nasdaq-100 Fund. You will no longer be
a shareholder of the  Nasdaq-100  Fund, but will instead be a shareholder of the
Small Cap Fund.

     It is expected that the merger  contemplated by the Agreement and Plan will
be a taxable event to shareholders of the Nasdaq-100 Fund. As a result,  you may
recognize  gain or loss for  federal  income  tax  purposes  as a result  of the
exchange of your shares of the Nasdaq-100 Fund for shares of the Small Cap Fund.

     The Small Cap Fund and the  Nasdaq-100  Fund invest  principally  in equity
securities, as described in the Prospectus/Proxy  Statement. The Small Cap Fund,
like the  Nasdaq-100  Fund,  is  advised  and  sub-advised  by asset  management
subsidiaries  of UBS AG. By merging the Nasdaq-100 Fund into the Small Cap Fund,
UBS Global Asset Management believes that Nasdaq-100 Fund shareholders will have
the opportunity to benefit from the Small Cap Fund's small cap growth investment
strategy.  Nasdaq-100 Fund  shareholders  should also benefit from the Small Cap
Fund's actively managed, diversified investment portfolio and broader investment
mandate.  The  combination  of the two funds  will  create a larger  fund with a
larger asset base that may provide certain economies of scale, which may benefit
shareholders as well as the Small Cap Fund's investment advisor.

     Please take the time to review the entire  Prospectus/Proxy  Statement  and
vote now! Whether or not you plan to attend the Meeting, please vote your shares
by mail, by telephone or via the Internet. If you determine at a later date that
you wish to attend the Meeting, you may revoke your proxy and vote in person.

             Thank you for your prompt attention and participation.

                                             Very truly yours,



                                             Joseph A. Varnas
                                             President





                          UBS ENHANCED NASDAQ-100 FUND
                 (a series of UBS Mutual Funds Securities Trust)

                               51 West 52nd Street
                             New York, NY 10019-6114

                    NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

                       To be held on [_________ __, 2003]

To the Shareholders:

     NOTICE  IS  HEREBY  GIVEN  that a  Special  Meeting  of  Shareholders  (the
"Meeting") of UBS Enhanced  NASDAQ-100 Fund (the "Nasdaq-100 Fund"), a series of
UBS Mutual Funds Securities Trust (the "Securities  Trust"),  has been called by
the Board of Trustees of the  Securities  Trust and will be held at 51 West 52nd
Street,  16th Floor, New York, New York 10019-6114,  on [_________ ___, 2003] at
[Insert  Time]  Eastern  time.  The  Meeting is being  called for the  following
purposes:

     1.   To  vote  on an  Agreement  and  Plan of  Reorganization  between  the
          Securities Trust, on behalf of the Nasdaq-100 Fund, and The UBS Funds,
          on  behalf of the UBS U.S.  Small Cap  Growth  Fund  (the  "Small  Cap
          Fund"), that provides for: (i) the acquisition of substantially all of
          the assets,  subject to the  liabilities,  of the  Nasdaq-100  Fund in
          exchange  for  shares  of the  Small  Cap  Fund;  (ii)  the  pro  rata
          distribution  of shares of the Small Cap Fund to the  shareholders  of
          the Nasdaq-100  Fund; and (iii) the liquidation and dissolution of the
          Nasdaq-100 Fund.

     2.   To  transact  such other  business  as may  properly  come  before the
          Meeting or any adjournment thereof.

     The transaction contemplated by the Agreement and Plan of Reorganization is
described in the attached Prospectus/Proxy  Statement. A copy of the form of the
Agreement  and  Plan  of   Reorganization  is  attached  as  Exhibit  A  to  the
Prospectus/Proxy Statement.

     Shareholders  of record of the Nasdaq-100  Fund as of the close of business
on [Insert  Record  Date] are entitled to notice of, and to vote at, the Meeting
or any  adjournment  thereof.  Whether  or not you plan to attend  the  Meeting,
please  vote your  shares by  returning  the proxy card by mail in the  enclosed
postage-paid  envelope or by voting by telephone or via the Internet.  Your vote
is important.

                                             By Order of the Board of Trustees,



                                             Amy R. Doberman
                                             Secretary
[_________ __, 2003]

To secure the largest possible representation and to save the expense of further
mailings,  please mark your proxy card,  sign it, and return it in the  enclosed
envelope,  which  requires  no postage if mailed in the  United  States.  If you
prefer,  you may instead vote by telephone or via the  Internet.  You may revoke
your proxy at any time at or before the  Meeting or vote in person if you attend
the Meeting.



                           PROSPECTUS/PROXY STATEMENT

                              [_________ __, 2003]

                          Acquisition of the Assets of
                          UBS ENHANCED NASDAQ-100 FUND
                 (a series of UBS Mutual Funds Securities Trust)
                               51 West 52nd Street
                          New York, New York 10019-6114
                                 (800) 647-1568

                        By and in exchange for shares of
                         UBS U.S. SMALL CAP GROWTH FUND
                           (a series of The UBS Funds)
                             One North Wacker Drive
                             Chicago, Illinois 60606
                                 (800) 647-1568


     This  Prospectus/Proxy  Statement solicits proxies to be voted at a Special
Meeting of  Shareholders  (the  "Meeting") of UBS Enhanced  NASDAQ-100 Fund (the
"Nasdaq-100  Fund"),  a  series  of  UBS  Mutual  Funds  Securities  Trust  (the
"Securities  Trust"),  to  approve  or  disapprove  an  Agreement  and  Plan  of
Reorganization (the "Agreement and Plan").

     The Meeting will be held at 51 West 52nd Street,  16th Floor, New York, New
York  10019-6114,  on [_________  __, 2003] at [Insert  Time] Eastern time.  The
Board of Trustees of the Securities  Trust, on behalf of the Nasdaq-100 Fund, is
soliciting these proxies. This Prospectus/Proxy  Statement will first be sent to
shareholders on or about [Insert Record Date].

     If  shareholders  of the Nasdaq-100  Fund vote to approve the Agreement and
Plan,  substantially  all of the  assets,  subject  to the  liabilities,  of the
Nasdaq-100  Fund will be  acquired  by the UBS U.S.  Small Cap Growth  Fund (the
"Small Cap Fund"),  a series of The UBS Funds (the  "Trust"),  in  exchange  for
shares of the Small Cap Fund.  Shareholders of each class of the Nasdaq-100 Fund
(Class A, Class B, Class C and Class Y) will receive shares of the corresponding
class of the Small  Cap Fund  (Class  A,  Class B,  Class C or Class Y) equal in
value to their  investment in the Nasdaq-100 Fund. The Nasdaq-100 Fund will then
be liquidated.

     The Small Cap Fund's  investment  objective is to provide long-term capital
appreciation. The Nasdaq-100 Fund's investment objective is to seek higher total
return over the long term than the Nasdaq-100 Index.

     This  Prospectus/Proxy  Statement provides  information about the Small Cap
Fund that you should  know  before  investing.  You should  retain it for future
reference.  A Statement of Additional  Information,  dated [_________ __, 2003],
relating to this Prospectus/Proxy Statement, contains more information about the
Small  Cap  Fund,  the  Nasdaq-100  Fund and the  proposed  reorganization.  The
Statement  of  Additional  Information  has been filed with the  Securities  and
Exchange  Commission  ("SEC") and is incorporated  herein by reference.  You can
request  a free copy of the  Statement  of  Additional  Information  by  calling
1-800-647-1568,  or by writing to the Small Cap Fund at 51 West 52nd Street, New
York, New York 10019-6114, Attn. Secretary.

     The following documents, which are intended to provide you with information
about the Small Cap Fund, accompany this Prospectus/Proxy Statement:

     o    Prospectus of the Small Cap Fund, dated September 30, 2002 (as revised
          July 2, 2003), as supplemented through the date hereof (the "Small Cap
          Fund Prospectus"); and

     o    Annual  Report to  Shareholders  of the Small Cap Fund for the  fiscal
          year ended June 30, 2002 (the "Small Cap Fund Annual Report").

     The  Small  Cap Fund  Prospectus  and  Small  Cap Fund  Annual  Report  are
incorporated  herein by reference,  which means they are legally considered part
of this Prospectus/Proxy Statement.

     Documents  providing  information about the Nasdaq-100 Fund have been filed
with the SEC and are  listed  below.  You can  request a free copy of any of the
following documents by calling  1-800-647-1568,  or by writing to the Nasdaq-100
Fund at 51 West 52nd Street, New York, New York 10019-6114, Attn. Secretary:

     o    Prospectus  of  the  Nasdaq-100  Fund,  dated  January  28,  2003,  as
          supplemented   through   the  date  hereof   (the   "Nasdaq-100   Fund
          Prospectus");

     o    Statement of Additional  Information  of the  Nasdaq-100  Fund,  dated
          January  28,  2003,  as  supplemented  through  the date  hereof  (the
          "Nasdaq-100 Fund SAI");

     o    Annual Report to  Shareholders  of the Nasdaq-100  Fund for the fiscal
          year ended September 30, 2002 (the  "Nasdaq-100  Fund Annual Report");
          and

     o    Semi-Annual  Report to Shareholders of the Nasdaq-100 Fund for the six
          months  ended  March  31,  2003  (the   "Nasdaq-100  Fund  Semi-Annual
          Report").

     Each of the documents  listed above is  incorporated by reference into this
Prospectus/Proxy Statement.

     As with all mutual  funds,  the SEC has not approved or  disapproved  these
securities or passed upon the adequacy of this Prospectus/Proxy  Statement.  Any
representation to the contrary is a criminal offense.

     Mutual fund shares are not deposits or  obligations  of, or  guaranteed  or
endorsed  by, any bank,  and are not  insured by the Federal  Deposit  Insurance
Corporation,  the Federal  Reserve Board, or any other U.S.  government  agency.
Mutual fund shares  involve  investment  risks,  including  the possible loss of
principal.




                           Prospectus/Proxy Statement
                                TABLE OF CONTENTS
                                                                                   Page
                                                                                   ----

Cover Pages                                                                       Cover
SUMMARY
         What is the purpose of the proposal?
         Why is the Merger being proposed?
         What would happen if the Merger is not approved?
         How will the shareholder voting be handled?
         What are the general tax consequences of the Merger?
Comparisons of Some Important Features
         How do the investment objectives and policies of the Funds compare?
         How do the principal risks of investing in the Nasdaq-100 Fund compare
         to the principal risks of investing in the Small Cap Fund?
         Who manages the Funds?
         What are the fees and expenses of each Fund and what might they be
         after the Merger?
         Where can I find more financial information about the Funds?
         What are other key features of the Funds?
                  Administrative, Transfer Agency, Accounting and Custody
                  Services
                  Distribution Services and Rule 12b-1 Plans
                  Purchase, Exchange and Redemption Procedures
                  Dividends, Distributions and Taxes
REASONS FOR THE MERGER
INFORMATION ABOUT THE MERGER
         How will the Merger be carried out?
         Who will pay the expenses of the Merger?
         What are the tax consequences of the Merger?
         What should I know about Small Cap Fund Shares?
         How do shareholders rights and obligations of the Funds compare?
         What are the assets of the Funds and what might the capitalization be
         after the Merger?
COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES
         Are there any significant differences between the investment objectives
         and policies of the Funds?
         What are the principal risk factors associated with investments in the
         Funds?
         How do the investment restrictions of the Funds differ?
COMPARISON OF FUND PERFORMANCE
VOTING INFORMATION
         How many votes are necessary to approve the Agreement and Plan?
         How do I ensure my vote is accurately recorded?
         Can I revoke my proxy?
         What other matters will be voted upon at the Meeting?
         Who is entitled to vote?
         What other solicitations will be made?
INFORMATION ABOUT THE SMALL CAP FUND
INFORMATION ABOUT THE NASDAQ-100 FUND
INFORMATION ABOUT EACH FUND
PRINCIPAL HOLDERS OF SHARES




                                     SUMMARY

     This  is  only  a  summary  of  certain   information   contained  in  this
Prospectus/Proxy Statement. You should read the more complete information in the
rest of this  Prospectus/Proxy  Statement,  including  the  Agreement  and  Plan
(attached as Exhibit A), the Small Cap Fund  Prospectus  (included as Exhibit B)
and the Small Cap Fund Annual Report (included as Exhibit C).

What is the purpose of the proposal?

     The Board of Trustees of the Securities Trust (the "Securities Trust Board"
or the "Securities  Trust Trustees") has approved the Agreement and Plan for the
Nasdaq-100 Fund and recommends that  shareholders of the Nasdaq-100 Fund vote to
approve the Agreement and Plan. If  shareholders  of the Nasdaq-100 Fund approve
the Agreement and Plan, it is presently  expected that the Nasdaq-100 Fund would
liquidate all of its current  holdings,  and substantially all of the Nasdaq-100
Fund's assets, which will then consist of cash (subject to its liabilities) will
be  transferred  to the Small Cap Fund, in exchange for an equal value of shares
of the  Small  Cap  Fund.  These  shares  of the  Small  Cap Fund  will  then be
distributed  to  the  Nasdaq-100  Fund's  shareholders.  As  illustrated  in the
following chart,  shareholders of each class of the Nasdaq-100 Fund will receive
shares of the corresponding  class of the Small Cap Fund equal in value to their
investment in the Nasdaq-100 Fund:

========================================= =======================================================
         Shareholders who own:                                Will receive:
========================================= =======================================================
========================================= =======================================================
 Class A Shares of the Nasdaq-100 Fund    Class A Shares of the Small Cap Fund ("Small Cap Fund
  ("Nasdaq-100 Fund Class A Shares")                         Class A Shares")
========================================= =======================================================
========================================= =======================================================
 Class B Shares of the Nasdaq-100 Fund    Class B Shares of the Small Cap Fund ("Small Cap Fund
  ("Nasdaq-100 Fund Class B Shares")                         Class B Shares")
========================================= =======================================================
========================================= =======================================================
 Class C Shares of the Nasdaq-100 Fund    Class C Shares of the Small Cap Fund ("Small Cap Fund
  ("Nasdaq-100 Fund Class C Shares")                         Class C Shares")
========================================= =======================================================
========================================= =======================================================
 Class Y Shares of the Nasdaq-100 Fund    Class Y Shares of the Small Cap Fund ("Small Cap Fund
  ("Nasdaq-100 Fund Class Y Shares")                         Class Y Shares")
========================================= =======================================================

The  Nasdaq-100  Fund  will  then be  liquidated.  As a result  of the  proposed
transaction,  which is referred  to in this  Prospectus/Proxy  Statement  as the
"Merger," you will cease to be a shareholder of the Nasdaq-100 Fund and you will
become a shareholder of the Small Cap Fund. This exchange,  which is intended to
be a taxable  transaction for federal income tax purposes,  will occur on a date
agreed upon between the Securities Trust and the Trust.

     The Small Cap Fund is a series of the Trust, an investment  company that is
advised  by  UBS  Global  Asset  Management  (Americas)  Inc.  ("UBS  Global  AM
(Americas)")  and  sub-advised  by UBS Global Asset  Management  (New York) Inc.
("UBS Global AM (New York)").  The Nasdaq-100 Fund is a series of the Securities
Trust, an investment company that is advised by UBS Global Asset Management (US)
Inc. ("UBS Global AM") and  sub-advised by DSI  International  Management,  Inc.
("DSI").  UBS Global AM (Americas),  UBS Global AM (New York), UBS Global AM and
DSI  are  indirect,  wholly  owned  subsidiaries  of UBS  AG  ("UBS").  In  this
Prospectus/Proxy  Statement, the Small Cap Fund and the Nasdaq-100 Fund are each
referred to as a "Fund," and together as the "Funds."

Why is the Merger being proposed?

     UBS  Global  AM has  reviewed  its  mutual  funds and  determined  that the
Nasdaq-100 Fund, which is managed based on the enhanced indexing strategy of its
sub-advisor,  DSI, is unlikely to attract  additional assets and is not a viable
investment  product,  given the Nasdaq-100 Fund's current asset size. UBS Global
AM has reimbursed  the  Nasdaq-100  Fund for a portion of its expenses since the
Fund's  inception,  and UBS Global AM currently  is  obligated to continue  this
expense  waiver until  January,  31, 2004.  UBS Global AM may  determine  not to
continue the expense waiver for the  Nasdaq-100  Fund after January 31, 2004. In
addition,  UBS Global AM has recently  determined to focus primarily on its core
investment capabilities, which will no longer include enhanced indexing products
such as the Nasdaq-100 Fund.

     In addition, UBS Global Asset Management has decided to organize into three
distinct global investment  platforms:  Core Asset  Management,  Alternative and
Quantitative  Investments  ("AQI") and Real Estate.  DSI will be integrated into
the AQI  platform,  which  will  enable  DSI to  manage  alternative  investment
products, such as hedge funds. Due to certain compliance implications, including
possible  conflicts of interest  that may arise if DSI were to manage both hedge
funds and mutual funds, DSI has decided to cease managing mutual funds.

     Given the above  considerations,  Nasdaq-100 Fund's  management  determined
that a merger  of the Fund  would be in the  best  interests  of the  Nasdaq-100
Fund's  shareholders.  Consequently,  the Nasdaq-100 Fund's management submitted
the  proposed  Merger  for  the  approval  of the  Securities  Trust  Board.  In
evaluating the proposed Merger,  the Securities Trust Board considered,  as more
fully  described  below under  "Reasons for the Merger," the following  factors,
among others:

     o    The perceived volatility of a small cap growth fund, such as the Small
          Cap Fund, is similar to the perceived  volatility of a Nasdaq-oriented
          fund, such as the Nasdaq-100 Fund.

     o    For a period of one year  following  the  closing of the  Merger,  the
          expense ratio of each class of shares of the Small Cap Fund will be no
          higher than the expense ratio of the corresponding  class of shares of
          the  Nasdaq-100  Fund.  This is due to the  agreement of UBS Global AM
          (Americas) to waive a portion of its advisory fees.

     o    If the Merger is approved by shareholders  of the Nasdaq-100  Fund, it
          is contemplated that the investment advisory fee payable to UBS Global
          AM (Americas) by the Small Cap Fund will be contractually reduced from
          1.00%  to  0.85%  of  the  Fund's   average   daily  net  assets  upon
          consummation of the Merger.

     o    The  combined  fund will have a larger asset base and may benefit from
          economies of scale and any  corresponding  reduction in expenses  that
          result from such larger asset base.

     o    A  taxable  Merger  will  not be  adverse  to  the  vast  majority  of
          Nasdaq-100  Fund  shareholders  because  of  the  accumulated  deficit
          (consisting  of accumulated  capital and other losses,  and unrealized
          depreciation of investments) experienced by the Nasdaq-100 Fund in its
          holdings  since the Fund's  inception  in  calendar  year  2000;  as a
          result, Nasdaq-100 Fund shareholders who have experienced a decline in
          the net asset value of their Fund shares may  recognize a taxable loss
          on the  exchange  of their  Nasdaq-100  Fund shares for Small Cap Fund
          shares.  Based on the records of the Fund's transfer agent, as of June
          30, 2003, the vast majority of the Nasdaq-100 Fund shareholders  owned
          their  shares at a loss.  As a result,  UBS  Global AM  believes  that
          relatively few  shareholders  of the Nasdaq-100  Fund will recognize a
          gain because of the Merger (based upon current net asset values).

     o    UBS Global AM will bear all expenses  incurred in connection  with the
          Merger.

     o    Nasdaq-100 Fund  shareholders will not pay a front-end sales charge to
          become  shareholders  of the  Small  Cap Fund in  connection  with the
          Merger.

     o    Shareholders  of the Nasdaq-100  Fund will not experience any dilution
          in the value of their investments as a result of the Merger.

After consideration of these factors,  and for the reasons set forth below under
"REASONS FOR THE MERGER,"  the  Securities  Trust  Trustees  concluded  that the
Merger is in the best interests of the shareholders of the Nasdaq-100 Fund.

What would happen if the Merger is not approved?

     If the shareholders of the Nasdaq-100 Fund do not approve the Agreement and
Plan,  the  Merger  will not take  place,  and the  Securities  Trust  Board may
consider other possible courses of action, including liquidation and dissolution
of the Nasdaq-100 Fund.

                      The Securities Trust Board recommends
                that you vote to approve the Agreement and Plan.

How will the shareholder voting be handled?

     Shareholders of the Nasdaq-100 Fund who own shares at the close of business
on [Insert  Record  Date] (the  "Record  Date")  will be entitled to vote at the
Meeting.  Shareholders  will be  entitled  to one vote for each full share and a
fractional  vote for each  fractional  share  that they  hold.  To  approve  the
reorganization  of the  Nasdaq-100  Fund into the Small Cap Fund, a majority (as
defined under the  Investment  Company Act of 1940, as amended (the "1940 Act"))
of the  outstanding  voting shares of the Nasdaq-100 Fund must be voted in favor
of the Agreement and Plan.

     Please  vote  by  proxy  as  soon  as  you  receive  this  Prospectus/Proxy
Statement.  You may cast your vote by completing  and signing the enclosed proxy
card, or by telephone or via the Internet.  If you return your signed proxy card
or vote by telephone or via the Internet,  your votes will be officially cast at
the Meeting by the persons  appointed  as proxies.  You can revoke your proxy or
change  your  voting  instructions  at any time  until  the vote is taken at the
Meeting. For more details about shareholder voting, see the "Voting Information"
section of this Prospectus/Proxy Statement.

What are the general tax consequences of the Merger?

     It is anticipated  that the Merger will be a taxable event to  shareholders
of the  Nasdaq-100  Fund. If  shareholders  of the  Nasdaq-100  Fund approve the
reorganization,  it  is  currently  expected  that  the  Nasdaq-100  Fund  would
liquidate all of its current holdings and transfer cash to the Small Cap Fund in
connection  with the Merger.  Because of this  expectation  and the  significant
differences  in the Funds'  investment  objectives  and the manner in which each
Fund seeks to achieve its  investment  objective,  it is  contemplated  that the
reorganization   of  the  Nasdaq-100   Fund  will  not  qualify  as  a  tax-free
acquisition.  It is expected that  Stradley,  Ronon,  Stevens & Young,  LLP will
provide a legal opinion that the merger may be a taxable event to the Nasdaq-100
Fund's shareholders.

     If you hold shares of the Nasdaq-100 Fund in tax-advantaged  accounts, such
as retirement  plans, the Merger will have no immediate tax consequence for you.
If  you  hold  shares  of  the   Nasdaq-100   Fund  in  accounts  that  are  not
tax-advantaged,  the tax  effect of the  Merger  will be the same as if you sold
shares of the Nasdaq-100 Fund. This means that you will recognize a taxable gain
or loss for  federal  income tax  purposes,  depending  on whether the net asset
value of your shares in the Nasdaq-100 Fund at the time of the Merger is greater
or less than your tax basis in such shares.

     You should,  however,  consult your tax advisor regarding the effect of the
Merger,  if any,  in light of your  individual  circumstances.  You should  also
consult your tax advisor about state and local tax  consequences  of the Merger,
if any, because the information about tax consequences in this  Prospectus/Proxy
Statement  relates to the  federal  income tax  consequences  only.  For further
information about the tax consequences of the Merger, see "Information About the
Merger--What are the tax consequences of the Merger?"

COMPARISONS OF SOME IMPORTANT FEATURES

How do the investment objectives and policies of the Funds compare?

     There are significant  differences between the Funds' investment objectives
and policies.  The Small Cap Fund's investment objective is to provide long-term
capital  appreciation.  The Nasdaq-100  Fund's  investment  objective is to seek
higher total return over the long term than the Nasdaq-100  Index. The Small Cap
Fund seeks  capital  appreciation,  without  reference  to an explicit  index or
measure.  The  Nasdaq-100  Fund's  investment  objective is linked to a specific
index,  whereas the Small Cap Fund's  investment  objective is not.  Each Fund's
investment objective cannot be changed without shareholder approval.

     The Funds' holdings have dramatically different capitalizations.  The Small
Cap Fund invests  principally in equity securities of U.S. small  capitalization
companies.   For  these  purposes,  small  capitalization  companies  are  those
companies with market capitalizations  ranging from $100 million to $2.5 billion
at the time of  purchase.  The  Nasdaq-100  Fund invests  principally  in equity
securities  issued by  companies  represented  in the  Nasdaq-100  Index.  As of
September 30, 2002, the average market  capitalization  of the Nasdaq-100 Fund's
portfolio was $51.4 billion.  So, while both Funds invest in equity  securities,
the  market  capitalization  ranges  of  the  Funds'  portfolio  securities  are
different.

     In addition,  the Nasdaq-100 Fund, as a result of its investment  policy of
investing in equity securities of companies represented in the Nasdaq-100 Index,
has significant holdings in the technology sector (which includes biotechnology,
communications equipment,  semi-conductor equipment and products, and software).
In contrast,  the Small Cap Fund, which is not confined to purchasing securities
of companies included in an index or a pre-existing list, is permitted to invest
in a wider range of companies,  and is generally  more  diversified  across more
market sectors.

     The Small Cap Fund is more actively managed than the Nasdaq-100 Fund, which
is designed to more closely track the Nasdaq-100 Index. DSI, in sub-advising the
Nasdaq-100  Fund,  uses its  proprietary  enhanced Nasdaq 100 strategy (the "DSI
Proprietary Strategy"),  which consists of an adaptive stock ranking model and a
portfolio  construction  model.  DSI applies this  proprietary  strategy ranking
model to the stocks in the  Nasdaq-100  Index.  The  Nasdaq-100  Fund  generally
overweights  stocks that are ranked  positively  by the DSI ranking  model,  and
underweights stocks that are ranked negatively by the ranking model.

     By contrast,  in actively  managing the Small Cap Fund,  UBS Global AM (New
York) uses a small cap growth  investment  process that identifies a universe of
companies within the Fund's capitalization range, and employs proprietary models
to rank the companies on their performance  prospects.  UBS Global AM (New York)
then performs fundamental research on companies determined to be favorable under
its proprietary models in order to construct the Small Cap Fund's portfolio.

     Another  difference  between the Funds is their  classification  concerning
diversification.  As a  diversified  fund,  the Small Cap Fund  adheres  to more
stringent  requirements as to the percentage of assets it is permitted to invest
in the securities of a single issuer than does the Nasdaq-100  Fund,  which is a
non-diversified fund.

     For further information about the investment objectives and policies of the
Funds, see "Comparison of Investment Objectives and Policies."

How do the principal  risks of investing in the  Nasdaq-100  Fund compare to the
principal risks of investing in the Small Cap Fund?

     As with most investments, an investment in the Nasdaq-100 Fund or the Small
Cap Fund involves risks. There can be no guarantee against losses resulting from
an  investment in either Fund,  nor can there be any assurance  that a Fund will
achieve its investment objective. Certain risks associated with an investment in
each Fund are similar,  and include  those risks  associated  with  investing in
equity securities, fluctuations in the securities markets, foreign investing and
engaging in derivative transactions.

     However,  the risks of investing in each Fund also differ. An investment in
the Nasdaq-100 Fund is subject to the risks  associated with the DSI Proprietary
Strategy of overweighting some stocks and underweighting others. If stock prices
do not behave in the manner  anticipated by the DSI  Proprietary  Strategy,  the
Nasdaq-100 Fund could lose more money on  overweighted  stocks or forgo gains on
underweighted  stocks relative to the index,  resulting in lower performance for
the  Fund.  The  Nasdaq-100  Fund  is  subject  to  the  risks  associated  with
concentrating its investments in the stocks of a smaller number of companies and
market sectors (in  particular,  the technology  sector),  whereas the Small Cap
Fund is more diversified across issuers and sectors.  An investment in the Small
Cap Fund,  but not in the  Nasdaq-100  Fund, is subject to the risks  associated
with investments in small companies.

     For further  information  about the risks of  investing  in the Funds,  see
"Comparison of Investment Objectives and Policies."

Who manages the Funds?

     The  management  of the  business  and affairs of the Small Cap Fund is the
responsibility  of the Board of Trustees of the Trust (the "UBS Funds  Trustees"
or  "UBS  Funds  Board").  The  UBS  Funds  Trustees  elect  officers,  who  are
responsible for the day-to-day operations of the Small Cap Fund.

     UBS Global AM (Americas) is the  investment  advisor to the Small Cap Fund.
UBS Global AM  (Americas),  a Delaware  corporation  located at One North Wacker
Drive,  Chicago,  Illinois 60606, is an investment  advisor  registered with the
SEC. As of [_________  __, 2003],  UBS Global AM  (Americas)  had  approximately
$_____  billion  in assets  under  management.  UBS  Global AM (New  York),  the
sub-advisor to the Small Cap Fund, is an investment management firm managing, as
of [_________ __, 2003],  approximately $_____ billion in assets. The address of
UBS Global AM (New York) is 51 West 52nd Street,  New York, New York 10019-6114.
UBS Global AM (Americas) and UBS Global AM (New York), along with UBS Global AM,
the investment  advisor to the  Nasdaq-100  Fund and the  administrator  for the
Nasdaq-100  Fund and Small Cap Fund, and DSI, the  sub-advisor to the Nasdaq-100
Fund, are indirect, wholly owned subsidiaries of UBS, and are members of the UBS
Global Asset  Management  Division,  which had  approximately  $_____ billion in
assets under  management as of [_________ __, 2003].  UBS is an  internationally
diversified organization headquartered in Zurich,  Switzerland,  with operations
in many areas of the financial services industry.

     Investment  decisions  for the  Small  Cap Fund  are made by an  investment
management  team at UBS  Global  AM (New  York).  No  member  of the  investment
management  team  is  primarily  responsible  for  making   recommendations  for
portfolio purchases by the Small Cap Fund.

     Pursuant  to an  investment  advisory  agreement  relating to the Small Cap
Fund, UBS Global AM (Americas) is entitled to receive from the Small Cap Fund an
investment advisory fee equal, on an annual basis, to 1.00% of the average daily
net assets of the Fund.  UBS Global AM (Americas)  has  contractually  agreed to
waive its fees and/or to reimburse certain expenses so that the Small Cap Fund's
expenses do not exceed  1.40%,  2.15%,  2.15% and 1.15% of the average daily net
assets of its Class A, Class B, Class C and Class Y Shares, respectively, during
the Fund's fiscal year ending June 30, 2004.  Thereafter,  the expense limit for
the Small Cap Fund will be reviewed each year, at which time the continuation of
the expense  limit will be  discussed  by UBS Global AM  (Americas)  and the UBS
Funds  Trustees.  The  contractual  fee waiver  agreement also provides that UBS
Global AM  (Americas)  is entitled  to  reimbursement  of fees it waived  and/or
expenses it reimbursed  for a period of three years  following  such fee waivers
and expense  reimbursements,  provided that the  reimbursement  by the Small Cap
Fund of UBS  Global AM  (Americas)  will not cause the total  operating  expense
ratio to  exceed  any  contractual  limit in effect  for the Small Cap Fund.  In
addition,  if the Merger is approved by the shareholders of the Nasdaq-100 Fund,
it is contemplated  that,  effective upon the  consummation  of the Merger,  the
annual investment  advisory fee payable to UBS Global AM (Americas) by the Small
Cap Fund will be reduced  from 1.00% to 0.85% of the  Fund's  average  daily net
assets,  and the investment  advisory agreement between the Trust and UBS Global
AM (Americas) will be amended accordingly.

     The  management of the business and affairs of the  Nasdaq-100  Fund is the
responsibility  of the Securities Trust Trustees.  The Securities Trust Trustees
elect  officers,  who are  responsible  for  the  day-to-day  operations  of the
Nasdaq-100 Fund.

     UBS Global AM, a Delaware  corporation  located at 51 West 52nd Street, New
York, New York 10019-6114,  is an investment advisor registered with the SEC. As
of  [_________  __, 2003],  UBS Global AM had  approximately  $_____  billion in
assets under management.

     Pursuant to an investment advisory and administration agreement relating to
the  Nasdaq-100  Fund,  UBS Global AM is entitled to receive from the Nasdaq-100
Fund a fee for advisory and  administrative  services equal, on an annual basis,
to 0.75% of the  average  daily  net  assets  of the  Fund.  UBS  Global  AM has
contractually  agreed to waive its fees and/or to reimburse  certain expenses so
that the Nasdaq-100 Fund's expenses do not exceed 1.28%,  2.03%, 2.03% and 1.03%
of the  average  daily net  assets of its Class A,  Class B, Class C and Class Y
Shares,  respectively,  through  January 31, 2004.  After January 31, 2004,  the
expense limit for the Nasdaq-100  Fund will be reviewed each year, at which time
the Securities  Trust Board will discuss with UBS Global AM the  continuation of
the expense limit.  The contractual fee waiver  agreement also provides that the
Nasdaq-100  Fund will reimburse UBS Global AM for fees it waived and/or expenses
it reimbursed for the Nasdaq-100 Fund for a period of three years following such
fee waivers and expense  reimbursements,  as long as the Fund's reimbursement of
UBS Global AM will not cause the Fund's total operating  expense ratio to exceed
any contractual expense limit in effect for the Nasdaq-100 Fund.

     Since the inception of the Nasdaq-100  Fund, UBS Global AM has retained the
services of DSI to serve as the  sub-advisor  of the Fund and to be  responsible
for the  day-to-day  management of the  Nasdaq-100  Fund's  portfolio.  DSI is a
registered  investment advisor whose offices are located at 400 Atlantic Street,
5th Floor,  Stamford,  Connecticut  06901.  As of [_________ __, 2003],  DSI had
approximately  $_____  billion in assets under  management.  DSI has used a team
approach in its quantitative management of the Nasdaq-100 Fund's portfolio.

     If the Merger is approved,  the team at UBS Global AM (New York)  currently
managing the Small Cap Fund will continue to manage the combined  fund. DSI will
have no role in managing the combined fund.

What are the fees and  expenses  of each Fund and what  might  they be after the
Merger?

     The following tables describe the fees and expenses that you may pay if you
buy and hold shares of the Funds.  The sales charge  structures of the Funds are
identical.  The operating  expenses shown for the  Nasdaq-100  Fund are based on
expenses  incurred during the Nasdaq-100 Fund's fiscal year ending September 30,
2002. The operating expenses shown for the Small Cap Fund Class A Shares,  Small
Cap Fund Class B Shares, Small Cap Fund Class C Shares, and Small Cap Fund Class
Y Shares, before and after the Merger, are based on expenses incurred during the
Small Cap Fund's most recent fiscal year ending June 30, 2003.

                    FEES AND EXPENSES FOR THE NASDAQ-100 FUND
                             AND THE SMALL CAP FUND

                                SHAREHOLDER FEES
                    (fees paid directly from your investment)

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


                      Maximum Sales    Maximum Sales  Maximum  Contingent
                      Charge (Load)    Charge (Load)   Deferred Sales
                        (as a % of     on Purchases     Charge (Load)
Fund Names and           offering       (as a % of       (as a % of
Classes of Shares         price)      offering price)  offering price)   Exchange Fee
- --------------------- --------------- ---------------- ---------------- ----------------
- --------------------- --------------- ---------------- ---------------- ----------------
Class A
Nasdaq-100 Fund           5.50%            5.50%            None            None
Small Cap Fund            5.50%            5.50%            None            None
Small Cap Fund
after Merger              5.50%            5.50%            None            None

Class B
Nasdaq-100 Fund           5.00%             None            5.00%           None
Small Cap Fund            5.00%             None            5.00%           None
Small Cap Fund
after Merger              5.00%             None            5.00%           None

Class C
Nasdaq-100 Fund           2.00%            1.00%            1.00%           None
Small Cap Fund            2.00%            1.00%            1.00%           None
Small Cap Fund
after Merger              2.00%            1.00%            1.00%           None

Class Y
Nasdaq-100 Fund           None              None            None            None
Small Cap Fund            None              None            None            None
Small Cap Fund
after Merger              None              None            None            None
- ----------------------------------------- ------------------ ------------------- ------------------ ------------------

                                                     ANNUAL FUND OPERATING EXPENSES
                                             (expenses that are deducted from Fund assets)

- ----------------------------------- -------------- ------------- ---------- ------------ ------------------
                                                                    Total
                                                                    Annual       Management Fee
                                        Distribution                Fund         Waivers and
          Fund Names and   Management    and Service    Other     Operating        Expense           Net
         Classes of Share     Fees      (12b-1) Fees   Expenses   Expenses       Reimbursements    Expenses
- ------------------------- -------------- ------------- ---------- ------------ ------------------ ----------
          Class A
Nasdaq-100 Fund*              0.75%         0.25%      0.97%        1.97%           0.69%          1.28%
Small Cap Fund**              1.00%         0.25%      0.46%***     1.71%           0.31%          1.40%
Small Cap Fund After
Merger**                      0.85%****     0.25%      0.59%***     1.69%           0.41%          1.28%
          Class B
Nasdaq-100 Fund*              0.75%         1.00%      1.18%        2.93%           0.90%          2.03%
Small Cap Fund**              1.00%         1.00%      0.47%***     2.47%           0.32%          2.15%
Small Cap Fund After
Merger**                      0.85%****     1.00%      0.80%***     2.65%           0.62%          2.03%
          Class C
Nasdaq-100 Fund*              0.75%         1.00%      1.13%        2.88%           0.85%          2.03%
Small Cap Fund**              1.00%         1.00%      0.47%***     2.47%           0.32%          2.15%
Small Cap Fund After
Merger**                      0.85%****     1.00%      0.75%***     2.60%           0.57%          2.03%
          Class Y

Nasdaq-100 Fund*              0.75%          None      1.22%        1.97%           0.94%          1.03%
Small Cap Fund**              1.00%          None      0.49%***     1.49%           0.34%          1.15%
Small Cap Fund After          0.85%****      None      0.84%***     1.69%           0.66%          1.03%
Merger**
- --------------------------- ------------------ ------------- ------------ -------------- ----------------- -----------

*    The Securities  Trust,  with respect to the Nasdaq-100 Fund, and UBS Global
     AM have  entered into a written  agreement  pursuant to which UBS Global AM
     has  agreed to waive a portion  of its fees  and/or to  reimburse  expenses
     through January 31, 2004 to the extent that the Nasdaq-100  Fund's expenses
     otherwise would exceed the "Net Expenses" rate shown in the table above for
     each of the Nasdaq-100 Fund Class A Shares, Nasdaq-100 Fund Class B Shares,
     Nasdaq-100  Fund Class C Shares  and  Nasdaq-100  Fund  Class Y Shares,  as
     applicable. Pursuant to the written agreement, UBS Global AM is entitled to
     be  reimbursed  for any fees it waives and  expenses  it  reimburses  for a
     period  of  three   years   following   such  fee   waivers   and   expense
     reimbursements,  to the extent that such  reimbursement of UBS Global AM by
     the  Nasdaq-100  Fund  will not  cause the  Nasdaq-100  Fund to exceed  any
     applicable expense limit that is in place for the Fund.

**   The Trust, with respect to the Small Cap Fund, and UBS Global AM (Americas)
     have  entered  into a written  agreement  pursuant  to which UBS  Global AM
     (Americas)  has agreed to waive a portion of its fees  and/or to  reimburse
     expenses to the extent that the Small Cap Fund's  expenses,  for the fiscal
     year ending June 30, 2004,  otherwise  would exceed the "Net Expenses" rate
     shown in the table  above  for each of the  Small Cap Fund  Class A Shares,
     Small Cap Fund Class B Shares,  Small Cap Fund Class C Shares and Small Cap
     Fund Class Y Shares, as applicable.  Pursuant to the written agreement, UBS
     Global AM (Americas)  is entitled to be  reimbursed  for any fees it waives
     and expenses it reimburses  for a period of three years  following such fee
     waivers and expense  reimbursements,  to the extent that such reimbursement
     of UBS Global AM  (Americas) by the Small Cap Fund will not cause the Small
     Cap Fund to exceed any  applicable  expense  limit that is in place for the
     Fund.

***  Includes an administrative  fee of 0.075% paid by the Small Cap Fund to UBS
     Global AM.

**** If the Merger is approved by the  shareholders of the Nasdaq-100  Fund, UBS
     Global  AM  (Americas)  has  undertaken  to amend its  investment  advisory
     agreement  with the Trust on  behalf  of the  Small Cap Fund to reduce  the
     annual  investment  advisory  fee  payable  by the Small Cap Fund to 0.85%,
     effective upon the consummation of the Merger.

Examples:

     The  following  Examples  are  intended  to help  you  compare  the cost of
investing  in the  Nasdaq-100  Fund with the cost of  investing in the Small Cap
Fund.  The  Examples  assume  that you invest  $10,000 in each Fund for the time
periods  indicated  and  then  redeem  all of your  shares  at the end of  those
periods, unless otherwise stated. Each Example also assumes that your investment
has a 5% return each year.1 These are examples only, and do not represent future
expenses, which may be greater or less than those shown below.

- -------------------------------------- ------------- ------------- ------------ -------------
                                          1 Year       3 Years       5 Years      10 Years
- -------------------------------------- ------------- ------------- ------------ -------------

Class A
   Nasdaq-100 Fund                          $673        $1,071       $1,494        $2,667
   Small Cap Fund (Before Merger)           $684        $1,030       $1,399        $2,434
   Small Cap Fund (After Merger)            $673        $1,016       $1,381        $2,406
Class B (assuming sale of all
shares at end of period)
   Nasdaq-100 Fund                           706         1,122        1,664         2,749
   Small Cap Fund (Before Merger)            718         1,039        1,488         2,452
   Small Cap Fund (After Merger)             706         1,065        1,550         2,488
Class B (assuming no sale of shares)
   Nasdaq-100 Fund                           206           822        1,464         2,749
   Small Cap Fund (Before Merger)            218           740        1,288         2,452
   Small Cap Fund (After Merger)             206           765        1,350         2,488
Class C (assuming sale of all
shares at end of period)
   Nasdaq-100 Fund                           404           904        1,529         3,212
   Small Cap Fund (Before Merger)            416           832        1,374         2,854
   Small Cap Fund (After Merger)             404           847        1,416         2,963
Class C (assuming no sale of shares)
   Nasdaq-100 Fund                           304           904        1,529         3,212
   Small Cap Fund (Before Merger)            316           832        1,374         2,854
   Small Cap Fund (After Merger)             304           847        1,416         2,963
Class Y
   Nasdaq-100 Fund                           105           527          975         2,220
   Small Cap Fund (Before Merger)            117           438          781         1,750
   Small Cap Fund (After Merger)             105           468          856         1,943

1    The Funds' actual returns may be greater or less than the  hypothetical  5%
     return used. The 1-Year costs in the Examples for the  Nasdaq-100  Fund and
     the Small Cap Fund reflect net operating expenses after the contractual fee
     waivers and expense reimbursements.

Where can I find more financial information about the Funds?

     For the Small Cap Fund, per share information for the six-month semi-annual
period  ending  December  31, 2002 is shown  below under the heading  "Financial
Highlights."  The  Small  Cap  Fund  Annual  Report,   which   accompanies  this
Prospectus/Proxy  Statement as Exhibit C, includes a discussion of the Small Cap
Fund's  performance  during the past fiscal year and shows per share information
for the Small Cap Fund for the last five fiscal years.

     The  Nasdaq-100  Fund  Prospectus  and the  Nasdaq-100  Fund Annual  Report
contain further financial information about the Nasdaq-100 Fund. These documents
are available upon request (see "INFORMATION ABOUT THE NASDAQ-100 FUND").

For a comparison of the Funds' performance, see "COMPARISON OF FUND PERFORMANCE."

                   Financial Highlights of the Small Cap Fund

     The  tables  below set  forth  financial  data for one share of  beneficial
interest outstanding of the Small Cap Fund throughout the period presented.

- ------------------------------------------------------------------------ -------------------------
                                                                            For the Six-Month
                                                                          Period Ended December
Class A                                                                          31, 2002
- -------
                                                                               (Unaudited)
                                                                               -----------
- ------------------------------------------------------------------------ -------------------------
- ------------------------------------------------------------------------ -------------------------

Net asset value, beginning of period....................................        $    9.79
                                                                                ---------

Income (loss) from investment operations:
   Net investment income................................................            (0.04)*
   Net realized and unrealized gain (loss)..............................            (1.10)
                                                                                ----------

      Total income (loss) from investment operations....................            (1.14)
                                                                                ----------

Net asset value, end of period..........................................        $    8.65
                                                                                =========

      Total return......................................................           (11.64)%+

Ratios/supplemental data:
   Net assets, end of period (in 000s)..................................        $     3,332
   Ratio of expenses to average net assets:
       Before expense reimbursement and earnings credits................             1.70%**
       After expense reimbursement and earnings credits.................             1.40%**
   Ratio of net investment income (loss) to average net assets:
       Before expense reimbursement and earnings credits................            (1.22)%**
       After expense reimbursement and earnings credits.................            (0.92)%**
   Portfolio turnover rate..............................................            27%
- ------------------------------------------------------------------------ -------------------------

- ------------------------------------------------------------------------ -------------------------
Class B                                                                     For the Six-Month
- -------
                                                                          Period Ended December
                                                                                31, 2002*
                                                                               (Unaudited)
                                                                               -----------
- ------------------------------------------------------------------------ -------------------------
- ------------------------------------------------------------------------ -------------------------

Net asset value, beginning of period....................................        $    9.75
                                                                                ---------

Income (loss) from investment operations:
   Net investment income................................................            (0.07)*
   Net realized and unrealized gain (loss)..............................            (1.10)
                                                                                ----------

      Total income (loss) from investment operations....................            (1.17)
                                                                                ----------

Net asset value, end of period..........................................        $    8.58
                                                                                =========

      Total return......................................................           (12.00)%+

Ratios/supplemental data:
   Net assets, end of period (in 000s)..................................        $       701
   Ratio of expenses to average net assets:
       Before expense reimbursement and earnings credits................             2.47%**
       After expense reimbursement and earnings credits.................             2.15%**
   Ratio of net investment income (loss) to average net assets:
       Before expense reimbursement and earnings credits................            (1.99)%**
       After expense reimbursement and earnings credits.................            (1.67)%**
   Portfolio turnover rate..............................................            27%
- ------------------------------------------------------------------------ -------------------------

- ------------------------------------------------------------------------ -------------------------
Class C                                                                     For the Six-Month
- -------
                                                                          Period Ended December
                                                                                 31, 2002
                                                                               (Unaudited)
                                                                               -----------
- ------------------------------------------------------------------------ -------------------------
- ------------------------------------------------------------------------ -------------------------

Net asset value, beginning of period....................................        $    9.74
                                                                                ---------

Income (loss) from investment operations:
   Net investment income (loss).........................................            (0.07)*
   Net realized and unrealized gain (loss)..............................            (1.10)
                                                                                ----------

      Total income (loss) from investment operations....................            (1.17)
                                                                                ----------

Net asset value, end of period..........................................        $    8.57
                                                                                =========

      Total return......................................................           (12.01)%+

Ratios/supplemental data:
   Net assets, end of period (in 000s)..................................        $       635
   Ratio of expenses to average net assets:
       Before expense reimbursement and earnings credits................             2.43%**
       After expense reimbursement and earnings credits.................             2.15%**
   Ratio of net investment income (loss) to average net assets:
       Before expense reimbursement and earnings credits................            (1.95)%**
       After expense reimbursement and earnings credits.................            (1.67)%**
   Portfolio turnover rate..............................................            27%
- ------------------------------------------------------------------------ -------------------------

- ------------------------------------------------------------------------ -------------------------
Class Y                                                                     For the Six-Month
- -------
                                                                          Period Ended December
                                                                                31, 2002*
                                                                               (Unaudited)
                                                                               -----------
- ------------------------------------------------------------------------ -------------------------
- ------------------------------------------------------------------------ -------------------------

Net asset value, beginning of period....................................        $    9.92
                                                                                ---------

Income (loss) from investment operations:
   Net investment income (loss).........................................            (0.03)*
   Net realized and unrealized gain (loss)..............................            (1.12)
                                                                                ----------

      Total income (loss) from investment operations....................            (1.15)
                                                                                ----------

Net asset value, end of period..........................................        $    8.77
                                                                                =========

      Total return***...................................................           (11.59)%++

Ratios/supplemental data:
   Net assets, end of period (in 000s)..................................        $    30,683
   Ratio of expenses to average net assets:
       Before expense reimbursement and earnings credits................             1.49%**
       After expense reimbursement and earnings credits.................             1.15%**
   Ratio of net investment income (loss) to average net assets:
       Before expense reimbursement and earnings credits................            (1.00)%**
       After expense reimbursement and earnings credits.................            (0.66)%**
   Portfolio turnover rate..............................................            27%
- ------------------------------------------------------------------------ -------------------------

*    The net  investment  income per share data was  determined by using average
     shares outstanding throughout the period.
**   Annualized.
***  Class Y does not have sales charges.
+    The returns do not include sales charges and are non-annualized.
++   The total return calculation is non-annualized.

What are other key features of the Funds?

     Administrative,  Transfer  Agency,  Accounting  and Custody  Services.  UBS
Global  AM  serves  as the  administrator  to both  the  Small  Cap Fund and the
Nasdaq-100 Fund. As administrator, UBS Global AM provides various administrative
services to the Funds.  For the Nasdaq-100  Fund, these services are included in
the fee that the Fund pays pursuant to its investment  advisory  agreement.  For
the Small Cap Fund, UBS Global AM is responsible for  administering  the affairs
of the Small Cap Fund,  including  supervising  and  managing all aspects of the
Fund's  operations  (other than investment  advisory  activities)  pursuant to a
separate administration  contract.  Under the administration contract, the Small
Cap Fund pays UBS Global AM a fee, computed daily and paid monthly, at an annual
rate of  0.075% of the  average  daily  net  assets of the Small Cap Fund.  J.P.
Morgan Investor Services Company,  a corporate  affiliate of JPMorgan Chase Bank
("JPMorgan  Chase"),  provides  accounting,   portfolio  valuation  and  certain
administrative  services to the Small Cap Fund  pursuant to a Multiple  Services
Agreement between the Trust and JPMorgan Chase.

     PFPC Inc. is the transfer agent and dividend  disbursing agent for both the
Small Cap Fund and the  Nasdaq-100  Fund.  PFPC Inc., a subsidiary  of PNC Bank,
N.A., is located at 400 Bellevue Parkway, Wilmington, Delaware 19809.

     JPMorgan  Chase is the custodian of the  securities and other assets of the
Small Cap Fund. JPMorgan Chase is located at 270 Park Avenue, New York, New York
10017.  State Street Bank and Trust  Company,  located at 1776  Heritage  Drive,
North Quincy,  Massachusetts  02171,  serves as the custodian and  recordkeeping
agent for the Nasdaq-100 Fund.

     Distribution  Services  and Rule 12b-1  Plans.  The UBS Funds  Trustees and
Securities  Trust  Trustees  have each  appointed  UBS Global AM to serve as the
principal  underwriter  of the shares of each class of the Funds.  UBS Global AM
offers the shares of the Small Cap Fund and the shares of the Nasdaq-100 Fund on
a  best-efforts  basis  pursuant to separate  principal  underwriting  contracts
between UBS Global AM and the Trust, and UBS Global AM and the Securities Trust,
respectively.  In addition to its services in  distributing  shares of the Small
Cap Fund and Nasdaq-100  Fund, UBS Global AM also provides  ongoing  shareholder
services  to each  Fund.  UBS  Global AM is  authorized,  under  each  principal
underwriting contract, to enter into dealer agreements with other broker-dealers
(affiliated  and  non-affiliated)  with  respect  to  sales  of  shares  of  the
respective  Fund or in connection  with the  provision of service  activities (a
"Qualified Dealer").  UBS Global AM markets shares of the Small Cap Fund and the
Nasdaq-100 Fund directly or through Qualified Dealers.  With respect to both the
Small Cap Fund and the  Nasdaq-100  Fund,  when UBS Global AM  receives  service
fees,  distribution  fees or  sales  charges,  it may pay some or all of them to
Qualified Dealers.

     Rule 12b-1 Plans.  Each of the Small Cap Fund and the  Nasdaq-100  Fund has
adopted separate  shareholder  service and/or  distribution plans or "Rule 12b-1
Plans"  for the  Fund's  Class A Shares (a  "Class A  Plan"),  Class B Shares (a
"Class B  Plan")  and  Class C Shares  (a  "Class  C Plan")  (collectively,  the
"Plans").  Under the Plans of each Fund,  UBS Global AM is entitled to receive a
service fee, accrued daily and payable  monthly,  at the annual rate of 0.25% of
the average daily net assets of each class of shares of each Fund. UBS Global AM
uses the service  fees it receives  to  compensate  dealers and others for their
expenses  in  connection  with  providing  shareholder  services  for the Funds,
including the maintenance of shareholder accounts.

     In addition to the service fees, the Small Cap Fund and the Nasdaq-100 Fund
pay distribution  fees to UBS Global AM pursuant to each Fund's Class B Plan and
Class C Plan. The  distribution  fees are paid to UBS Global AM for its services
and expenses in  distributing  and promoting  Class B and Class C Shares.  These
expenses may include,  among others, the preparation,  printing and distribution
of  advertisements   and  sales  literature  for  prospective   investors;   the
distribution of prospectuses and other shareholder materials for sales purposes;
the  payment of  distribution  fees to  broker-dealers  that  enter into  dealer
agreements  with UBS Global AM; and the payment of other  expenses  allocated to
UBS Global AM's distribution activities. The distribution fees payable under the
Class B Plans and Class C Plans for the Funds may also be used to pay UBS Global
AM for  advancing  the  commission  costs to dealers with respect to the initial
sale of such shares.

     Under  its Class B Plan and  Class C Plan,  each Fund pays UBS  Global AM a
distribution fee, accrued daily and payable monthly,  at an annual rate of 0.75%
of the average daily net assets of the Fund's Class B Shares and Class C Shares,
respectively.

     Because  12b-1  fees are paid out of the  assets of a class of a Fund on an
on-going  basis,  over time these fees will increase the cost of a shareholder's
investment  and may cost the  shareholder  more than paying other types of sales
charges.

     Small Cap Fund  Class Y Shares  and  Nasdaq-100  Fund Class Y Shares do not
have Rule 12b-1 Plans.

     Purchase, Exchange and Redemption Procedures.  Procedures for the purchase,
exchange and redemption of shares of the Nasdaq-100  Fund and the Small Cap Fund
are similar. You may refer to the Nasdaq-100 Fund Prospectus,  and the Small Cap
Fund Prospectus,  which  accompanies this  Prospectus/Proxy  Statement,  for the
purchase,  exchange,  and  redemption  procedures  applicable to the  purchases,
exchanges and  redemptions of shares of the Nasdaq-100  Fund and Small Cap Fund,
respectively.  Set forth  below is a brief  description  of the basic  purchase,
exchange,  and redemption  procedures applicable to the shares of each Fund. The
shareholders  of the Nasdaq-100  Fund will not be subject to any front-end sales
charges described below in connection with the Merger.

     Shares of each Fund may be purchased  directly  from the Fund by contacting
its transfer agent, or through brokers,  dealers, other financial intermediaries
and financial  institutions  (banks and bank trust  departments) that have sales
agreements  with  the  Fund  (each  an  "Authorized   Dealer"),  or  through  an
intermediary   designated  by  an  Authorized  Dealer  to  accept  purchase  and
redemption orders  ("Sub-Designee").  Authorized  Dealers may charge transaction
fees for their  services in  connection  with the  purchase of shares of a Fund.
These  transaction  fees are not charged on shares  purchased  directly from the
Fund.

     Only specific  types of investors  are eligible to purchase  Small Cap Fund
Class Y Shares and  Nasdaq-100  Fund Class Y Shares.  You may refer to the Small
Cap Fund Prospectus,  which accompanies this Prospectus/Proxy Statement, and the
Nasdaq-100  Fund  Prospectus,  for more  information  concerning the eligibility
requirements for purchasing Class Y Shares of the Funds.

     The minimum  initial  investment for each class of the Nasdaq-100  Fund and
Small Cap Fund Class A Shares,  Small Cap Fund Class B Shares and Small Cap Fund
Class C Shares is $1,000, and each subsequent investment must be at least $100.

     Purchases of Class A Shares of each Fund are subject to a maximum front-end
sales charge of 5.50% of the offering  price,  with  reduced  sales  charges for
purchases of $50,000 or more, and no front-end sales charge imposed on purchases
of $1,000,000 or more. Purchases of $1,000,000 or more of Class A Shares of each
Fund,  however,  are subject to a contingent  deferred sales charge  ("CDSC") of
1.00% for shares redeemed within one year after purchase.

     Purchases  of Class B Shares of each Fund are not subject to a sales charge
on purchases, but are subject to a CDSC when shares are sold before the end of a
specified period.  Sales of Class B Shares of each Fund are subject to a CDSC as
shown in the table below:

If shares are sold within:  Percentage (based on amount of investment) by which
                            the shares' net asset value is multiplied:

                            Less than   $100,000 to  $250,000 to  $500,000 to
                             $100,000     $249,999    $499,999      $999,999
                             --------     --------    --------      --------
1st year since purchase         5%           3%          3%            2%
2nd year since purchase         4%           2%          2%            1%
3rd year since purchase         3%           2%          1%           None
4th year since purchase         2%           1%         None          None
5th year since purchase         2%          None        None          None
6th year since purchase         1%          None        None          None
7th year since purchase        None         None        None          None

     The CDSC for the Class B Shares of each Fund is calculated  by  multiplying
the lesser of the net asset  value of the shares at the time of  purchase or the
net asset value at the time of sale by the  applicable  percentage  shown in the
table  above.  Class B Shares of each Fund  automatically  convert to the Fund's
Class A Shares,  which have lower ongoing  expenses,  after the end of the sixth
year for purchases of less than  $100,000,  after the end of the fourth year for
purchases  of at least  $100,000  but less than  $250,000,  after the end of the
third year for purchases of at least $250,000 but less than $500,000,  and after
the end of the second year for  purchases of at least  $500,000 but less than $1
million.

     Regardless of the amount of the investment,  Class B Shares of Family Funds
("Family  Funds" include other UBS Funds,  UBS PACE Select funds and other funds
for which UBS Global AM serves as principal  underwriter)  purchased or acquired
prior to  November  5,  2001 and  exchanged  (including  exchanges  as part of a
reorganization,  such as the Merger)  for shares of the Funds after  November 5,
2001  (collectively,  "Prior  Class B Shares")  are subject to a deferred  sales
charge at the time of redemption at the following percentages: (i) 5%, if shares
are sold  within  the first  year  since  purchase;  (ii) 4%, if shares are sold
within the second year since  purchase;  (iii) 3%, if shares are sold within the
third year  since  purchase;  (iv) 2%, if shares  are sold  within the fourth or
fifth year since purchase;  and (v) 1%, if shares are sold within the sixth year
of purchase.  Prior Class B Shares held longer than six years are not subject to
a deferred sales charge and automatically  convert to Class A Shares, which have
lower ongoing expenses.  Shareholders who purchased or acquired  Nasdaq-100 Fund
Class B Shares prior to November 5, 2001,  will receive  Prior Class B Shares of
the Small Cap Fund in the Merger.

     The Class C Shares of each Fund are subject to a front-end  sales charge of
1.00% of the offering price,  and a CDSC of 1.00% of the shares' net asset value
if the shares are sold  within one year of  purchase.  The CDSC for each  Fund's
Class C Shares is calculated by multiplying the lesser of the net asset value of
the shares at the time of purchase or the net asset value at the time of sale by
1.00%.

     Each Fund may reduce or waive its sales  charges for certain  investors and
transactions  in the Fund's  shares.  For a complete  description of each Fund's
sales charges and the  exemptions  from such charges,  please refer to the Small
Cap Fund Prospectus,  which accompanies this Prospectus/Proxy Statement, and the
Statement of Additional Information relating to this Prospectus/Proxy Statement,
as well as the Nasdaq-100  Fund  Prospectus  and Nasdaq-100  Fund SAI. Small Cap
Fund Class Y Shares  and  Nasdaq-100  Fund  Class Y Shares are not  subject to a
front-end sales charge or a CDSC.

     The  purchase  price of shares  of each  Fund is based on net  asset  value
("NAV"),  plus any applicable sales charge.  The NAV per share for each class of
each Fund is calculated as of the close of regular trading (generally, 4:00 p.m.
Eastern  time) on each day that the New York Stock  Exchange  ("NYSE")  is open.
Purchase  orders for shares of each Fund  received  in good form by the close of
regular  trading on the NYSE are priced  according to the NAV determined on that
day;  otherwise,  they are priced  according  to the next  determined  price per
share. Each Fund reserves the right to reject any purchase request.

     Shares of each class of each Fund,  except the Class Y Shares of each Fund,
may be  exchanged  for  shares of the same  class of most  other  Family  Funds.
Exchanges in shares of both Funds are subject to the initial minimum  investment
requirements  to the same extent as purchases of the shares.  Exchanges  are not
subject to any sales charges at the time of the exchange.  Exchanges are treated
as  a  redemption  and  new  purchase  for  federal  income  tax  purposes,  and
accordingly, may have tax consequences for shareholders.

     Shares of each  class of each Fund may be  redeemed  at any time at the NAV
(minus any applicable  sales charge) next calculated after the Fund receives the
redemption order in good form. Shareholders of each Fund can redeem their shares
by  contacting  the  Fund's  transfer  agent or, if  shares  are held  through a
financial institution, by contacting the shareholders' investment professionals,
an Authorized  Dealer or a Sub-Designee.  Each  institution or professional  may
have its own procedures and requirements for selling shares of the Funds and may
charge fees.

     Dividends,  Distributions  and Taxes.  Each Fund normally declares and pays
income dividends and distributes any realized gains annually. Both the Small Cap
Fund and the Nasdaq-100 Fund automatically  reinvest distributions in additional
shares of the same class of that  Fund,  unless  the Fund is  notified  that the
shareholder elects to receive such distributions in cash.

     Distributions from both the Small Cap Fund and the Nasdaq-100 Fund, whether
received in cash or in additional  shares,  are generally subject to income tax,
unless the shares are held in a tax-exempt or tax deferred account.  In general,
distributions from either Fund are taxable to the shareholder as either ordinary
income or capital  gains.  Both the Small Cap Fund and  Nasdaq-100  Fund  notify
their  shareholders   annually  of  the  source  and  tax  status  of  all  Fund
distributions  for federal income tax purposes.  For more information  about the
tax  implications of investments in the Small Cap Fund and the Nasdaq-100  Fund,
see the Small  Cap Fund  Prospectus,  which  accompanies  this  Prospectus/Proxy
Statement,  the Nasdaq-100  Fund  Prospectus,  the Nasdaq-100  Fund SAI, and the
Statement of Additional Information relating to this Prospectus/Proxy Statement.

                             REASONS FOR THE MERGER

     UBS  Global  AM has  reviewed  its  mutual  funds and  determined  that the
Nasdaq-100 Fund, which is managed based on the enhanced indexing strategy of its
sub-advisor,  DSI, is unlikely to attract  additional assets and is not a viable
investment  product,  given the Nasdaq-100 Fund's current asset size. UBS Global
AM has reimbursed  the  Nasdaq-100  Fund for a portion of its expenses since the
Fund's  inception,  and UBS Global AM currently  is  obligated to continue  this
expense  waiver until  January,  31, 2004.  UBS Global AM may  determine  not to
continue the expense waiver for the  Nasdaq-100  Fund after January 31, 2004. In
addition,  UBS Global AM has recently  determined to focus primarily on its core
investment capabilities, which will no longer include enhanced indexing products
such as the Nasdaq-100 Fund.

     In addition, UBS Global Asset Management has decided to organize into three
distinct global investment  platforms:  Core Asset  Management,  Alternative and
Quantitative  Investments  ("AQI") and Real Estate.  DSI will be integrated into
the AQI  platform,  which  will  enable  DSI to  manage  alternative  investment
products, such as hedge funds. Due to certain compliance implications, including
possible  conflicts of interest  that may arise if DSI were to manage both hedge
funds and mutual funds, DSI has decided to cease managing mutual funds.

     For the reasons  described  above,  the Agreement and Plan was presented to
the Securities Trust Trustees for their consideration,  and the Securities Trust
Board,  on behalf of the Nasdaq-100  Fund,  determined,  as described  below, to
recommend that shareholders of the Nasdaq-100 Fund approve the Merger.

     In  conjunction  with the  presentation  of the  Agreement  and  Plan,  the
Securities  Trust  Trustees,  on behalf of the Nasdaq-100  Fund,  questioned UBS
Global  AM  about  the  potential  benefits  and  costs  of  the  Merger  to the
shareholders of the Nasdaq-100 Fund. In deciding  whether to recommend  approval
of the Merger to shareholders of the Nasdaq-100 Fund, the Securities Trust Board
considered a number of factors.  The  Securities  Trust  Trustees did not assign
relative weights to the factors or deem any one of them to be controlling in and
of itself. The factors included the following:

o    The Small Cap Fund has a broader  investment  mandate  than the  Nasdaq-100
     Fund, and is not confined to purchasing securities of companies represented
     in a particular securities index.

o    The perceived  volatility of a small cap growth fund, such as the Small Cap
     Fund, is similar to the perceived  volatility  of a  Nasdaq-oriented  fund,
     such as the Nasdaq-100 Fund.

o    Because of the Nasdaq-100 Fund's relatively small asset base (approximately
     $34  million),  UBS  Global  AM does not  believe  that it would be able to
     attract another  sub-advisor to manage the Nasdaq-100 Fund with an enhanced
     proprietary strategy. Absent such a strategy, the Nasdaq-100 Fund would not
     be viable on a long-term basis.

o    Nasdaq-100 Fund shareholders,  following the Merger,  will invest in a Fund
     that is managed  according to UBS Global AM's  experienced  U.S.  small cap
     growth equity investment strategy.

o    Nasdaq-100  Fund  shareholders  will not pay a  front-end  sales  charge to
     become shareholders of the Small Cap Fund in connection with the Merger.

o    UBS  Global AM will  bear all  expenses  incurred  in  connection  with the
     Merger.

o    A taxable  Merger will not be adverse to the vast  majority  of  Nasdaq-100
     Fund  shareholders  because  of  the  accumulated  deficit  (consisting  of
     accumulated  capital  and other  losses,  and  unrealized  depreciation  of
     investments)  experienced by the Nasdaq-100  Fund in its holdings since the
     Fund's  inception  in  calendar  year 2000;  as a result,  Nasdaq-100  Fund
     shareholders who have experienced a decline in the net asset value of their
     Fund  shares  may  recognize  a  taxable  loss  on the  exchange  of  their
     Nasdaq-100  Fund shares for Small Cap Fund shares.  Based on the records of
     the Fund's  transfer  agent,  as of June 30, 2003, the vast majority of the
     Nasdaq-100 Fund shareholders owned their shares at a loss. As a result, UBS
     Global AM believes that relatively few  shareholders of the Nasdaq-100 Fund
     will  recognize a gain because of the Merger  (based upon current net asset
     values).

o    Because the  proposed  Merger will be effected on the basis of the relative
     net asset values of the Funds, shareholders of the Nasdaq-100 Fund will not
     experience  any dilution in the value of their  investments  as a result of
     the Merger.

o    If the Merger is approved by  shareholders  of the Nasdaq-100  Fund and the
     Merger of the Funds is consummated, the shareholders of the Nasdaq-100 Fund
     will become shareholders of the Small Cap Fund.

o    For a period of one year  following the closing of the Merger,  the expense
     ratio of each class of shares of the Small Cap Fund will be no higher  than
     the expense ratio of the  corresponding  class of shares of the  Nasdaq-100
     Fund.  This is due to the  agreement of UBS Global AM (Americas) to waive a
     portion of its advisory fees.

o    If the Merger is approved by  shareholders  of the  Nasdaq-100  Fund, it is
     contemplated  that the  investment  advisory  fee  payable to UBS Global AM
     (Americas) by the Small Cap Fund will be  contractually  reduced from 1.00%
     to 0.85% of the Fund's  average daily net assets upon  consummation  of the
     Merger.

o    As shareholders of the Small Cap Fund,  Nasdaq-100 Fund shareholders  would
     continue to benefit  from the same  high-quality  fund  administration  and
     shareholder services as they currently enjoy.

o    The  combined  Fund  will have a larger  asset  base and may  benefit  from
     economies of scale and any corresponding  reduction in expenses that result
     from such larger asset base.

o    The Small Cap Fund may be better  positioned to attract  assets,  following
     the Merger, than the Nasdaq-100 Fund would be absent the reorganization.

     The Securities  Trust Board also  considered  that the  Nasdaq-100  Fund is
required  by its  prospectus  to invest in the stocks  listed in the  Nasdaq-100
Index. DSI thus has somewhat limited flexibility in making investment  decisions
for the Nasdaq-100 Fund, as compared to the broader  investment  mandate for UBS
Global AM (New York) in managing the Small Cap Fund. Furthermore, the Nasdaq-100
Fund is non-diversified  (unlike the Small Cap Fund, which is diversified),  and
the Nasdaq-100 Fund has a sizable  investment  concentration in companies in the
technology sector.

     The Securities Trust Trustees,  on behalf of the Nasdaq-100 Fund, concluded
that the Merger is in the best interests of the  shareholders  of the Nasdaq-100
Fund and that no  dilution  of value would  result for the  shareholders  of the
Nasdaq-100 Fund from the Merger. The Securities Trust Trustees believed that the
Merger  will  permit  shareholders  of  the  Nasdaq-100  Fund  to  pursue  their
investment goals in a larger portfolio without diluting shareholders' interests.
The  Securities  Trust  Board,  including  a majority  of the  Securities  Trust
Trustees who are not interested persons of the Securities Trust, then decided to
approve  the  Agreement  and  Plan and to  recommend  that  shareholders  of the
Nasdaq-100 Fund vote to approve the Merger.

     The UBS Funds  Trustees,  on behalf of the Small Cap Fund,  also determined
that  the  Merger  was in the  best  interests  of the  Small  Cap  Fund and its
shareholders and that no dilution of value would result to those shareholders.

     For the reasons  discussed  above, the Securities Trust Board, on behalf of
the Nasdaq-100 Fund, recommends that you vote FOR the Agreement and Plan.

     If the shareholders of the Nasdaq-100 Fund do not approve the Agreement and
Plan,  the Merger will not take place,  and the  Securities  Trust  Trustees may
consider other possible courses of action, including liquidation and dissolution
of the Nasdaq-100 Fund.

                          INFORMATION ABOUT THE MERGER

     This  information  is only a summary of the Agreement and Plan.  You should
read the actual Agreement and Plan. It is attached as Exhibit A and incorporated
herein by reference.

How will the Merger be carried out?

     If the  shareholders of the Nasdaq-100 Fund approve the Agreement and Plan,
the  Merger  will take place  after  various  conditions  are  satisfied  by the
Securities  Trust, on behalf of the Nasdaq-100 Fund, and by the Trust, on behalf
of the Small  Cap  Fund,  including  the  delivery  of  certain  documents.  The
Securities  Trust and the Trust will agree on the  specific  date for the actual
Merger to take place (the "Closing").

     If the  shareholders of the Nasdaq-100 Fund approve the Agreement and Plan,
it is  expected  that  the  Nasdaq-100  Fund  would  liquidate  all its  current
holdings.  The Nasdaq-100 Fund will deliver to the Small Cap Fund  substantially
all of its assets (which will consist of cash),  subject to its liabilities,  at
the Closing.  In exchange,  the  Securities  Trust,  on behalf of the Nasdaq-100
Fund, will receive Small Cap Fund Class A Shares, Small Cap Fund Class B Shares,
Small  Cap  Fund  Class C  Shares  and  Small  Cap Fund  Class Y  Shares,  to be
distributed  pro  rata  by  the  Nasdaq-100  Fund  to  its  shareholders  in the
corresponding classes, in complete liquidation and dissolution of the Nasdaq-100
Fund.  The value of the assets of the  Nasdaq-100  Fund to be  delivered  to the
Small Cap Fund shall be the value of such net assets computed as of the close of
business of the NYSE (normally, 4:00 p.m. Eastern time) on the last business day
prior to the Closing (the "Valuation Date").

     The stock transfer books of the Nasdaq-100 Fund will be permanently  closed
as of  the  Valuation  Date.  The  Nasdaq-100  Fund  will  accept  requests  for
redemption only if received in proper form before that time.  Requests  received
after that time will be  considered  requests to redeem  shares of the Small Cap
Fund.

     To the extent  permitted  by law,  the  Securities  Trust and the Trust may
agree to amend the Agreement  and Plan without  shareholder  approval.  They may
also agree to  terminate  and abandon the Merger at any time  before,  or to the
extent  permitted by law, after the approval of  shareholders  of the Nasdaq-100
Fund.

Who will pay the expenses of the Merger?

     UBS Global AM will pay all expenses incurred in connection with the Merger.

What are the tax consequences of the Merger?

     For federal income tax purposes,  it is expected that the reorganization of
the Nasdaq-100 Fund will not qualify for "tax-free" treatment under the Internal
Revenue Code of 1986,  as amended (the "Code").  This is because the  Nasdaq-100
Fund expects to liquidate  all of its current  holdings and transfer cash to the
Small  Cap  Fund in  connection  with  the  Merger,  as well as  because  of the
significant  differences in the Funds'  investment  objectives and the manner in
which each Fund seeks to achieve its investment objective.

     Therefore,  the Merger will be treated under the Code as if the  Nasdaq-100
Fund  sold its  current  holdings  for cash and then  used the cash to  purchase
shares of the Small Cap Fund,  followed by a liquidation of the Nasdaq-100  Fund
in which the shareholders of the Nasdaq-100 Fund are treated as exchanging their
shares  in the  Nasdaq-100  Fund for  shares  in the Small Cap Fund in a taxable
transaction.  For the  shareholders of the Nasdaq-100 Fund who hold their shares
in  tax-advantaged  accounts,  such as retirement plans, the Merger will have no
immediate tax  consequence.  Shareholders  who are subject to federal income tax
may  recognize  a gain or loss as a result of the Merger on the  exchange of the
Nasdaq-100 Fund shares for Small Cap Fund shares.  Any such gain or loss will be
equal to the difference between the basis of the Nasdaq-100 Fund shareholders in
their  Nasdaq-100  Fund shares and the fair  market  value of the Small Cap Fund
shares they receive in the Merger.

     The capital loss  carryovers of the Nasdaq-100  Fund that are not otherwise
utilized to offset any gains on the sale by the  Nasdaq-100  Fund of its current
holdings, prior to the Merger, will expire and not be available to the Small Cap
Fund. As a result, it is expected that a significant portion of the capital loss
carryovers of the Nasdaq-100  Fund,  which might otherwise have been utilized to
offset future capital gains, will expire unutilized. At September 30, 2002, on a
tax basis, the Nasdaq-100 Fund had unrealized  depreciation of investments equal
to $51,740,540  and capital losses that expire as follows:  $365,067  (2009) and
$19,411,471 (2010). In addition,  in accordance with U.S. Treasury  Regulations,
the Nasdaq-100  Fund elected to defer  $20,907,725 of net capital losses arising
after October 31, 2001, which are treated for tax purposes as arising on October
1, 2002.  In total,  the  Nasdaq-100  Fund had, as of September  30, 2002, a tax
basis accumulated  deficit of $92,424,803,  which, to the extent not utilized to
offset  any  gains on sale of  current  holdings  prior to the  Merger,  will go
unutilized.  However, to the extent that accumulated deficit is reflected in the
net asset value of the shares  presently held by  shareholders of the Nasdaq-100
Fund,  taxable  shareholders  will  likely  recognize  a  taxable  loss  on  the
liquidation of the Nasdaq-100 Fund.

     Shareholders of the Nasdaq-100  Fund may recognize  taxable gains or losses
if they redeem or exchange their shares of the Nasdaq-100 Fund before the Merger
or redeem or exchange their Small Cap Fund shares after the Merger. Shareholders
generally  will be liable for any taxes that are  associated  with  periodic  or
special distributions that occur prior to or after the reorganization, including
any distributions of realized gains from sales of portfolio securities.  In that
regard,  it is presently  expected that the Nasdaq-100  Fund would liquidate its
current  holdings and transfer cash to the Small Cap Fund in connection with the
Merger.  Please  note that  retirement  plans and  accounts  are  generally  not
affected by such tax consequences,  although  distributions  from  tax-qualified
plans are not exempt from tax consequences.

     You should consult your tax advisor  regarding the effect of the Merger, if
any, in light of your individual circumstances. You should also consult your tax
advisor  about  the state and local  tax  consequences  of the  Merger,  if any,
because this discussion only relates to the federal income tax consequences.

What should I know about the Small Cap Fund Shares?

     If the Merger is approved, full and fractional shares of the Small Cap Fund
will be issued without the  imposition of a front-end  sales charge or other fee
to  shareholders  of the  Nasdaq-100  Fund in  accordance  with  the  procedures
described above. When issued, each share will be duly and validly issued,  fully
paid, nonassessable and fully transferable. All shares have noncumulative voting
rights.  This gives holders of more than 50% of the shares voting the ability to
elect all of the members of the Board of Trustees of the Trust. If this happens,
holders of the remaining shares voting will not be able to elect any trustees.

     A shareholder of a class of shares of the Small Cap Fund will receive a pro
rata  share of all  distributions  arising  from the  Small  Cap  Fund's  assets
attributable to the class of shares owned by the shareholder, and upon redeeming
shares, will receive the portion of the Small Cap Fund's net assets attributable
to the class of shares  owned by the  shareholder  represented  by the  redeemed
shares.

     The  shares of the Small Cap Fund will be  recorded  to each  shareholder's
account on the books of the Small Cap Fund's transfer agent.  The Small Cap Fund
does not issue share certificates.

How do shareholder rights and obligations of the Funds compare?

     While  the Trust  and the  Securities  Trust  are  separate  entities,  and
governed  by  different  organizational   documents,  both  the  Trust  and  the
Securities  Trust are  organized  under the laws of the State of  Delaware,  and
shareholders of the Nasdaq-100 Fund will not experience a material  reduction in
their shareholder rights as a result of the Merger.

     Each  Trust is  organized  as a  Delaware  statutory  trust.  The  Trust is
governed by an Agreement and Declaration of Trust (the "Trust Agreement"). Under
the Trust Agreement,  the Trust has an unlimited number of authorized  shares of
beneficial interest, with each share having a par value of $0.001 per share. The
Securities  Trust is governed by an Amended and Restated Trust  Instrument  (the
"Trust Instrument").  Pursuant to the Trust Instrument, the Securities Trust has
an unlimited number of authorized shares of beneficial interest, with each share
having  a par  value  of  $0.001  per  share.  The UBS  Funds  Trustees  and the
Securities  Trust Trustees  (together,  the "Boards") may,  without  shareholder
approval, divide the authorized shares of the applicable trust into an unlimited
number of separate portfolios or series ("series"). The Boards may also, without
shareholder approval,  divide the series into two or more classes of shares. The
Trust currently  consists of fifteen series,  including the Small Cap Fund. Each
series of the Trust, including the Small Cap Fund, offers four classes of shares
(designated Class A Shares,  Class B Shares, Class C Shares and Class Y Shares).
The Securities Trust currently consists of two series,  including the Nasdaq-100
Fund.  The  Nasdaq-100  Fund offers four classes of shares  (designated  Class A
Shares,  Class B Shares,  Class C Shares and Class Y Shares). The Trust and each
series of the Trust,  as well as the Securities  Trust and each series  thereof,
including the Nasdaq-100 Fund, will continue indefinitely until terminated.

     With respect to a series of shares of the Trust and the  Securities  Trust,
shares of the same class  have equal  dividend,  distribution,  liquidation  and
voting rights, and fractional shares have proportionate  rights.  Each series or
class bears its own expenses  related to its  distribution  of shares (and other
expenses,  such as  transfer  agency,  shareholder  service  and  administration
expenses). Generally, shares of the Trust and the Securities Trust will be voted
in the aggregate  without  differentiation  between  separate series or classes;
provided however that, if a matter only affects certain series or classes,  then
only shares of the affected  series or classes shall be voted in the  aggregate.
Shares of the Securities Trust generally are voted by individual series, except:
(i) when  required  by the 1940  Act to be  voted  in the  aggregate  and not by
individual  series;  and (ii) when the Securities Trust Trustees have determined
that the matter affects only the interests of one or more classes, then only the
shareholders of the affected classes shall be entitled to vote.

     Under the Trust  Agreement  and the Trust  Instrument,  as well as relevant
state  law,  annual  meetings  of  shareholders  are not  required  to be  held.
Generally, each trust calls shareholder meetings only when specifically required
by federal law or by the law of its jurisdiction of  organization.  Shareholders
representing  one-tenth (10%) or more of the outstanding shares entitled to vote
on a matter may cause each trust to call a shareholder meeting.  With respect to
the Trust,  a shareholder  meeting is not required to be called upon the request
of  shareholders  entitled to cast less than a majority of all votes entitled to
be cast at such meeting to consider any matter that is substantially the same as
a matter voted on at any  shareholder  meeting held during the preceding  twelve
months.

     Under  Delaware  law and the Trust's  Trust  Agreement  and the  Securities
Trust's Trust Instrument,  shareholders of the Small Cap Fund and the Nasdaq-100
Fund,  respectively,  are not held personally  liable for the obligations of the
Trust, the Small Cap Fund, the Securities Trust or the Nasdaq-100 Fund.

What are the assets of the Funds and what might the capitalization be after the Merger?

     The  following  table sets forth,  as of June 30,  2003,  the assets of the
Small Cap Fund and the Nasdaq-100 Fund, and the estimated  capitalization of the
Small Cap Fund as  adjusted  to give effect to the  proposed  Merger.  The final
capitalization  of the Small Cap Fund is likely to be different  when the Merger
is consummated.

                                                                      Small Cap Fund
                               Small Cap Fund   Nasdaq-100 Fund         Class A
                                   Class A          Class A          after Merger
                                 (unaudited)      (unaudited)        (estimated)*
                               --------------------------------------------------------
Net assets                       $9,841,092       $10,986,445           $20,827,537
Total shares outstanding            983,944         3,311,607             2,082,404
Net asset value per share            $10.00             $3.32                $10.00

                                                                    Small Cap Fund
                               Small Cap Fund   Nasdaq-100 Fund         Class B
                                   Class B          Class B          after Merger
                                 (unaudited)      (unaudited)         (estimated)
                               --------------------------------------------------------
Net assets                       $1,131,982       $12,476,339           $13,608,321
Total shares outstanding            114,501         3,853,727             1,376,488
Net asset value per share             $9.89             $3.24                 $9.89

                                                                    Small Cap Fund
                               Small Cap Fund   Nasdaq-100 Fund         Class C
                                   Class C          Class C          after Merger
                                 (unaudited)      (unaudited)         (estimated)
                               --------------------------------------------------------
Net assets                         $757,125        $9,807,907           $10,565,032
Total shares outstanding             76,668         3,030,320             1,069,837
Net asset value per share             $9.88             $3.24                 $9.88

                                                                    Small Cap Fund
                               Small Cap Fund   Nasdaq-100 Fund         Class Y
                                   Class Y          Class Y          after Merger
                                 (unaudited)      (unaudited)         (estimated)
                               --------------------------------------------------------
Net assets                      $39,785,279          $676,572           $40,461,851
Total shares outstanding          3,918,764           202,490             3,985,405
Net asset value per share            $10.15             $3.34                $10.15

                COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES

     This section  describes the key  investment  policies of the Small Cap Fund
and  the  Nasdaq-100  Fund  and  certain  noteworthy   differences  between  the
investment strategies and policies of the Funds. For a more complete description
of the Small Cap Fund's investment policies and risks, you should read the Small
Cap Fund  Prospectus,  which  accompanies  this  Prospectus/Proxy  Statement  as
Exhibit B.

Are there any  significant  differences  between the  investment  objectives and
policies of the Funds?

     Investment  Objectives and  Investment  Strategies.  There are  significant
differences between the Funds' investment objectives and policies. The Small Cap
Fund's investment  objective is to provide long-term capital  appreciation.  The
Nasdaq-100 Fund's  investment  objective is to seek higher total return over the
long term than the  Nasdaq-100  Index.  While the Funds'  investment  objectives
share  long-term  time horizons,  their goals are different.  The Small Cap Fund
seeks capital  appreciation,  without reference to an explicit index or measure.
The  Nasdaq-100  Fund seeks a level of total return that is greater than that of
the Nasdaq-100 Index, a specific index. Each Fund's investment objective may not
be changed without shareholder approval.

     Unless otherwise stated,  each of the investment policies described in this
Prospectus/Proxy  Statement is a non-fundamental  policy. Policies or investment
restrictions  of a Fund that are  deemed to be  fundamental  may not be  changed
without the approval of the lesser of: (i) a majority of the outstanding  shares
of the Fund;  or (ii) 67% or more of the  shares  represented  at a  meeting  of
shareholders at which the holders of more than 50% of the outstanding  shares of
the Fund are represented. Policies or investment restrictions of a Fund that are
deemed  to be  non-fundamental  may be  changed  by  the  Fund's  Board  without
shareholder approval.

     Each Fund invests a substantial portion of its assets in equity securities.
Under normal market  conditions,  the Small Cap Fund invests at least 80% of its
net  assets  (plus  borrowings  for  investment  purposes,  if  any)  in  equity
securities of U.S. small  capitalization  companies.  For these purposes,  small
capitalization companies are those companies with market capitalizations of $2.5
billion  or less at the  time  of  purchase.  Under  normal  circumstances,  the
Nasdaq-100  Fund  invests at least 80% of its net assets (plus the amount of any
borrowing  for  investment  purposes)  in  common  stocks  issued  by  companies
represented  in the  Nasdaq-100  Index.  As a result of  investing  in companies
represented  in the Nasdaq-100  Index,  the  Nasdaq-100  Fund's equity  holdings
consist  primarily  of large  capitalization  common  stocks of U.S. and foreign
issuers.  As of September 30, 2002,  the average  market  capitalization  of the
Nasdaq-100 Fund's portfolio was $51.4 billion.

     While both Funds principally invest in equity securities, there are several
notable   differences  in  their   investment   policies.   First,   the  market
capitalization ranges of the Funds' portfolio securities are different, with the
Small Cap Fund investing in companies  whose market  capitalizations  range from
$100 million to $2.5 billion,  and the Nasdaq-100  Fund  generally  investing in
larger capitalization companies. Second, the Nasdaq-100 Fund, as a result of its
investment policy of investing in securities listed in the Nasdaq-100 Index, has
significant  weightings in the technology sector (which includes  biotechnology,
communications equipment,  semi-conductor equipment and products, and software).
The Small Cap Fund, which is not confined to purchasing  securities  represented
in a  pre-existing  list or index,  is  permitted  to invest in a wider range of
companies, and is generally more diversified across more sectors.

     Another significant difference between the Funds is that DSI and UBS Global
AM (New York)  utilize  different  strategies  and  processes  for analyzing and
selecting  securities to be purchased by the Funds. The Nasdaq-100 Fund seeks to
achieve its investment  objective by following the DSI  Proprietary  Strategy to
invest  principally  in a selection  of common  stocks that are  included in the
Nasdaq-100  Index./1/ The Nasdaq-100 Fund normally invests in a majority of stocks
in the  Nasdaq-100  and  weights  its  holdings  based  on the  DSI  Proprietary
Strategy.  Compared  to the  stock  weightings  in  the  Nasdaq-100  Index,  the
Nasdaq-100  Fund  overweights  stocks that the DSI  Proprietary  Strategy  ranks
positively,  and underweights stocks that the Strategy ranks negatively relative
to the Nasdaq-100  Index.  Generally,  the  Nasdaq-100  Fund gives stocks with a
neutral ranking the same weight as in the Nasdaq-100 Index.

- --------
/1/  The Nasdaq-100 Fund is not sponsored, endorsed, sold or promoted by Nasdaq,
     and Nasdaq makes no representation  regarding the advisability of investing
     in   the   Nasdaq-100   Fund.    Nasdaq-100(R),    Nasdaq-100(R)Index   and
     Nasdaq-100(R)are  trade or service  marks of Nasdaq and have been  licensed
     for use by UBS Global AM.

     The  Nasdaq-100  Fund  seeks  to  control  the  risk  of its  portfolio  by
maintaining a general  correlation of at least 90% between its  performance  and
the  performance  of the  Nasdaq-100  Index over  time,  with a  relatively  low
tracking error. To maintain this general correlation,  the Nasdaq-100 Fund gives
each stock in its portfolio a weighting  that is close to the  Nasdaq-100  Index
weighting  and, if necessary,  readjusts the  weighting  when it rebalances  the
portfolio.  The  Nasdaq-100  Fund also  considers  relative  industry and sector
weightings and market  capitalization.  The Nasdaq-100 Fund generally expects to
rebalance  its portfolio  monthly,  but may do so more often if DSI considers it
appropriate to do so. As of September 30, 2002, approximately 59.9% of the value
of the stocks  currently in the Nasdaq-100  Index was in the technology  sector,
and the  Nasdaq-100  Fund  expects that its  investments  will reflect a similar
concentration in the technology sector.

     In selecting  securities for the Nasdaq-100 Fund, DSI seeks to add value to
the Fund's  portfolio  through stock  selection  while  managing the Fund's risk
profile. DSI believes that:

o    undervalued securities with improving market fundamentals should outperform
     a given benchmark;

o    during different market environments,  different factors can become more or
     less significant; and

o    unintended deviations from the benchmark should be minimized.

     In deciding which stocks to buy and sell for the Nasdaq-100  Fund, DSI uses
its Proprietary Strategy,  which consists of an adaptive stock ranking model and
a portfolio  construction  model.  DSI has  developed a  quantitative,  dynamic,
bottom-up,  multi-factor model to rank the stocks in the Nasdaq-100 Index, using
relatively independent factors (such as earnings expectations,  earnings growth,
valuation, yield, return on equity and margins). DSI believes that these factors
have varying  influences  during  different phases of the stock market cycle and
reevaluates the relative  importance and weighting of each factor  monthly.  DSI
applies this adaptive stock ranking model to the stocks in the Nasdaq-100 Index,
so that the relative rankings of these stocks may change from month to month.

     In  contrast  to the  Nasdaq-100  Fund,  UBS Global AM (New York)  actively
manages the Small Cap Fund  through the  sub-advisor's  small cap growth  equity
investment process. In selecting  securities,  UBS Global AM (New York) seeks to
invest in companies that possess  dominant  market  positions or  franchises,  a
major technical edge, or a unique competitive advantage. To this end, UBS Global
AM (New York) considers earnings revision trends,  positive stock price momentum
and sales acceleration when selecting securities.  The Small Cap Fund may invest
in emerging growth companies,  which are companies that UBS Global AM (New York)
expects to experience  above-average  earnings or cash flow growth or meaningful
changes  in  underlying  asset  values.  In  constructing  the Small Cap  Fund's
portfolio,  UBS  Global AM (New  York)  relies  on its  proprietary  models  and
fundamental research on companies determined to be favorable under its models.

     Principal  Investments.  As stated above,  under normal market  conditions,
both Funds seek to achieve their investment objectives by investing primarily in
equity securities of U.S. and foreign issuers.

     Equity Securities. Each Fund's investments in equity securities may include
common  stock,  preferred  stock,  securities  such as warrants  or rights,  and
sponsored or unsponsored American,  European and Global depositary receipts. The
Nasdaq-100  Fund may also  invest in  convertible  debt  securities  and  equity
interests in trusts, partnerships, joint ventures or similar enterprises.

     Foreign  Investments.  Both  Funds are  permitted  to invest in the  equity
securities of foreign  companies.  The Small Cap Fund has an  investment  policy
that  permits  investments  of up to 20% of the  Fund's  net  assets in  foreign
securities.  The Nasdaq-100 Fund may invest in U.S. dollar  denominated  foreign
securities  that are included in the  Nasdaq-100  Index and traded on recognized
U.S. exchanges or on the U.S. over-the-counter market.

     Cash and Cash Equivalents.  Each Fund may invest a portion of its assets in
short-term  debt  securities   (including   repurchase  agreements  and  reverse
repurchase agreements) of corporations, the U.S. government and its agencies and
instrumentalities,  and banks and finance companies, which may be denominated in
any currency. Each Fund may also invest a portion of its assets in shares issued
by affiliated  or  unaffiliated  money market  mutual funds and similar  private
investment vehicles.  Both Funds may invest in cash equivalents for a variety of
reasons,  including for liquidity, in anticipation of shareholder redemptions of
Fund shares, to reinvest cash collateral from securities  lending activities and
as part of their normal investment programs.

     Under normal circumstances, each Fund may invest up to 20% of its assets in
cash or cash equivalent investments, such as money market instruments.  However,
in order to protect  against adverse market  conditions,  the Small Cap Fund may
take a temporary  defensive  position by  investing  up to 100% of its assets in
cash or cash  equivalents.  The  Nasdaq-100  Fund does not have a similar policy
with regard to investing for temporary defensive purposes. If the Small Cap Fund
invests  for  defensive  purposes,  it may be unable to  pursue  its  investment
objective.

     Derivatives.  Derivative  securities are those  securities whose values are
dependent upon the performance of one or more securities, indices or currencies.
Both Funds may (but are not required) to use options, futures contracts, options
on  future  contracts  and  forward  currency  contracts.   Each  Fund  may  use
derivatives  for a variety of reasons,  including  to reduce the risk of adverse
price  movements  while  investing cash received when  investors buy shares,  to
facilitate trading and to reduce transaction costs. Specifically, the Nasdaq-100
Fund may  (but is not  required  to) use  derivatives  as part of its  principal
investment strategy to simulate investment in the stocks in the Nasdaq-100 Index
stocks, while retaining a cash balance for Fund management purposes.

     Portfolio  Turnover.  Neither Fund considers  portfolio turnover rates when
making investment decisions.  The portfolio turnover rate for the Small Cap Fund
may exceed 100% and in some years 150%.  Increased portfolio turnover may result
in higher costs for brokerage commissions, dealer mark-ups and other transaction
costs.  It may also  result in  taxable  gains.  Higher  costs  associated  with
increased portfolio turnover may offset gains in a Fund's performance.

What are the principal risk factors associated with investments in the Funds?

     The risks of  investing  in the Funds are  similar.  Like all  investments,
investments in the Funds involve  risks.  There is no assurance that either Fund
will meet its  investment  objective.  The  achievement  of a Fund's  investment
objective  depends upon market  conditions  generally and on the  analytical and
portfolio management skills of the Fund's sub-advisor.  Investments in the Funds
are not  guaranteed;  you may  lose  money  by  investing  in the  Funds.  Other
principal  risks of investing  in the Funds are  highlighted  below.  Additional
risks of investing in each Fund,  along with further  details  about some of the
risks  described  below,  are  discussed in each Fund's  Statement of Additional
Information.

     Equity  Risk.  The  prices of common  stocks  and other  equity  securities
generally  fluctuate more than those of other investments.  They reflect changes
in the issuing company's  financial condition and changes in the overall market.
Common stocks  generally  represent the riskiest  investment in a company.  Each
Fund  could  lose a  substantial  part,  or even  all,  of its  investment  in a
company's stock.

     Market Risk.  The risk that the market value of a Fund's  investments  will
fluctuate  as the stock and bond  markets  fluctuate.  Market  risk may affect a
single issuer,  industry or sector of the economy,  or it may affect the markets
as a whole.

     Small  Company  Risk.  (Small Cap Fund only) The risk that  investments  in
smaller companies may be more volatile than investments in larger companies,  as
smaller  companies  generally  experience  higher growth and failure rates.  The
trading  volume of smaller  company  securities  is normally  lower than that of
larger  companies.  Such  securities may be less liquid than securities of large
company issuers, making it difficult to sell these securities at a time or price
desired. Changes in the demand for the securities of smaller companies generally
have a  disproportionate  effect on their market prices,  tending to make prices
rise more in  response  to buying  demand and fall more in  response  to selling
pressure.

     DSI  Proprietary  Strategy  Risk.  (Nasdaq-100  Fund only) By using the DSI
Proprietary  Strategy,  the  Nasdaq-100  Fund seeks higher total return over the
long  term than the  total  return  of the  Nasdaq-100  Index.  It  maintains  a
correlation  between the Fund's  performance and that of the Nasdaq-100 Index in
both rising and falling markets.  DSI attempts to achieve the Nasdaq-100  Fund's
objective by overweighting some stocks and underweighting others relative to the
Nasdaq-100 Index. If stock prices do not behave in the manner anticipated by the
DSI  Proprietary  Strategy,  the Nasdaq-100  Fund may not achieve its investment
objective  and could lose more money on  overweighted  stocks or forgo  gains on
underweighted stocks, resulting in lower performance than if the Nasdaq-100 Fund
were to simply  invest to track the  weightings  of the  Nasdaq-100  Index.  The
Nasdaq-100 Fund's performance also may deviate from that of the Nasdaq-100 Index
due to the daily cash flows to which the Fund is subject  and which will  result
in the  ongoing  purchases  and  sales of  stocks  and  transactional  expenses,
including  brokerage  fees. In addition,  the Nasdaq-100  Fund must pay fees and
expenses that are not borne by the Nasdaq-100 Index.

     Technology Sector Risk.  (Nasdaq-100 Fund only) The Nasdaq-100 Fund expects
to invest in the  stocks of  companies  in the  technology  sector as  necessary
generally to reflect the Nasdaq-100  Index's  concentration in this sector. As a
result, the Nasdaq-100 Fund is more susceptible to the risks that are associated
with  that  sector  than a fund  with a  broader  range  of  investments.  As of
September 30, 2002,  approximately  59.9% of the value of the stocks  underlying
the Nasdaq-100  Index was  represented  by companies in the  technology  sector,
which has shown  relatively  high  volatility  in price  performance.  The price
performance  of the  Nasdaq-100  Index  and the price of the  Nasdaq-100  Fund's
shares may be more  volatile when  compared to other  broad-based  stock indices
because of their  concentration  in the  technology  sector.  In  addition,  the
Nasdaq-100  Fund is more  susceptible to the risks that are associated with that
sector  than  a fund  with a  broader  range  of  investments,  and  the  Fund's
performance  will be  adversely  affected  by  unfavorable  developments  in the
technology  sector.  Individual issuers within the technology sector, as well as
the technology sector as a whole, can be significantly  affected by obsolescence
of existing  technology,  short product cycles,  falling prices and profits, and
competition from new market entrants.

     Single  Issuer  Concentration  Risk.  (Nasdaq-100  Fund only)  Because  the
Nasdaq-100 Fund is non-diversified, it can invest more of its assets in a single
issuer than a diversified fund can.  Specifically,  a  non-diversified  fund may
invest more than 5% of its total assets in  securities  of a single  issuer to a
greater extent than a diversified  fund.  The Nasdaq-100  Fund expects to invest
more than 5% of its total  assets in the  securities  of specific  companies  as
needed generally to follow the Nasdaq-100 Index. The identity and capitalization
weightings of the companies which represented 5% or more of the Nasdaq-100 Index
as of December 31, 2002 were as follows:  Microsoft Corporation (12.54%). When a
fund holds a large  position in the  securities  of one  issuer,  changes in the
financial  condition  or in the  market's  assessment  of that  issuer may cause
larger changes in the fund's total return and in the price of its shares than it
would for a more diversified fund.

     Foreign  Investing  Risk.  The value of each Fund's  investments in foreign
securities may fall due to adverse governmental,  political, social and economic
developments  abroad.  Also,  each Fund is  subject  to the risk of  changes  in
currency   valuations  and  differences  between  U.S.  and  foreign  regulatory
requirements and market practices.

     Derivatives Risk. The value of "derivatives" may rise or fall in value more
rapidly  than the  value  of other  investments.  For  some  derivatives,  it is
possible  for  each  Fund to lose  more  than  the  amount  it  invested  in the
derivative.  A Fund's use of  derivatives  may not succeed for various  reasons,
including  unexpected  changes  in the values of the  derivatives  or the assets
underlying  them.  Also,  if a Fund uses  derivatives  to adjust or "hedge"  the
overall risk of its portfolio, the hedge may not succeed if changes in the value
of the  derivatives  are not  matched  by  opposite  changes in the value of the
assets being hedged.

How do the investment restrictions of the Funds differ?

     The Small Cap Fund and the Nasdaq-100 Fund are subject to similar,  but not
identical,   fundamental   investment   restrictions   regarding   lending   and
underwriting.  The differences in these specific investment restrictions, and in
the Funds' other investment restrictions, are discussed below.

     The Funds have comparable investment restrictions relating to lending. Both
Funds will not make loans, although each Fund is permitted to lend its portfolio
securities and to enter into  repurchase  agreements  (which may be deemed to be
loans). Each Fund may lend it portfolio  securities to qualified  broker-dealers
and  institutional  investors  in an amount  up to 33 1/3% of its total  assets.
Also, certain  instruments (such as debt securities,  loan  participations,  and
interests therein) are explicitly excluded from the Funds' lending restrictions.
In this regard, the Nasdaq-100 Fund's restriction  explicitly  excludes from the
investment  restriction  a greater  array of debt  securities  and money  market
instruments (including bonds, debentures, investments in government obligations,
commercial  paper,  certificates  of deposit,  bankers'  acceptances and similar
instruments)  than the  Small Cap  Fund's  restriction.  The  Small  Cap  Fund's
investment  restriction  permits the Fund to engage in direct corporate loans in
accordance  with the Fund's  investment  policies,  and permits the Fund to make
loans to affiliated investment companies to the extent permitted by the 1940 Act
or any exemption therefrom that may be granted by the SEC.

     The Funds are  subject to  substantively  similar  investment  restrictions
relating to underwriting  securities.  The Small Cap Fund's restriction provides
that the Fund will not act as an underwriter, except to the extent that the Fund
may be deemed to be an underwriter  when disposing of securities it owns or when
selling its own shares. The Nasdaq-100 Fund's restriction provides that the Fund
will not engage in the business of  underwriting  securities  of other  issuers,
except to the extent that the Fund might be considered an underwriter  under the
federal  securities laws in connection with the Fund's  disposition of portfolio
securities.

     The Funds have differing fundamental  investment  restrictions with respect
to borrowing.  The Small Cap Fund may not borrow money, except that the Fund may
borrow  money  from  banks to the extent  permitted  by the 1940 Act,  or to the
extent permitted by any exemptions therefrom which may be granted by the SEC, or
for temporary or emergency purposes, and then in an amount not exceeding 33 1/3%
of the value of the Fund's  total  assets.  The  Nasdaq-100  Fund may not borrow
money,  except as permitted under the 1940 Act and then not in excess of 33 1/3%
of the Fund's total assets (including the amount of the senior securities issued
but reduced by any liabilities not constituting  senior  securities) at the time
of the issuance or borrowing.  Furthermore, the Nasdaq-100 Fund may borrow up to
an  additional 5% of its total assets (not  including  the amount  borrowed) for
temporary or emergency  purposes.  Finally,  the Nasdaq-100 Fund is subject to a
non-fundamental  investment  restriction that prohibits the Fund from purchasing
portfolio securities while borrowings in excess of 5% of the Fund's total assets
are   outstanding.   The  Small  Cap  Fund  is  not  subject  to  a   comparable
non-fundamental investment restriction.

     The Funds are subject to different  restrictions relating to issuing senior
securities.  The Small Cap Fund is prohibited from issuing  securities senior to
its presently authorized shares of beneficial interest,  except that the Fund is
not prohibited under the restriction  from (a) making any permitted  borrowings,
loans,  mortgages or pledges;  (b) entering  into  options,  futures  contracts,
forward contracts,  repurchase transactions or reverse repurchase  transactions;
or (c) making short sales of securities as described below. The Nasdaq-100 Fund,
by contrast,  is prohibited from issuing senior securities,  except as permitted
under the 1940 Act, and then not in excess of 33 1/3% of the Fund's total assets
(including the amount of the senior securities that have been issued but reduced
by any  liabilities  not  constituting  senior  securities),  at the time of the
issuance.

     The Funds have different  restrictions regarding short sales. The Small Cap
Fund's restriction,  unlike the Nasdaq-100 Fund's  restriction,  is fundamental.
The Small Cap Fund is permitted, under its investment restriction, to make short
sales of  securities,  to the extent  permitted  by the 1940 Act and any rule or
order thereunder,  or SEC staff  interpretations  thereof. The Nasdaq-100 Fund's
non-fundamental  investment  restriction states that the Fund will not engage in
short sales of securities or maintain a short position, except that the Fund may
(i) sell  securities  short "against the box," and (ii) maintain short positions
in connection with the Fund's use of financial options and futures,  forward and
spot currency  contracts,  swap  transactions  and other financial  contracts or
derivative instruments.

     There  are  notable  differences  in  the  Funds'  fundamental   investment
restrictions  relating  to  concentration.  The Small Cap Fund is  subject  to a
restriction  that provides that the Fund will not concentrate  (invest more than
25% of its net  assets)  in  securities  of issuers  in a  particular  industry,
whereas the Nasdaq-100 Fund is subject to a fundamental  investment  restriction
of not purchasing any security if, as a result of that purchase,  25% or more of
the Fund's total assets would be invested in securities of issuers  having their
principal  business  activities in the same  industry.  While both Funds exclude
securities  issued  or  guaranteed  by the U.S.  government,  its  agencies  and
instrumentalities  from their  restrictions,  the Nasdaq-100  Fund's  investment
restriction  differs  from the Small Cap  Fund's  restriction  in two  respects.
First,  municipal securities are explicitly excluded from the application of the
Nasdaq-100 Fund's 25% restriction,  while municipal  securities are not excluded
from the Small Cap Fund's restriction.  Second, the Nasdaq-100 Fund's investment
restriction contains an exclusion that provides that the Fund will invest 25% or
more of its total  assets in  securities  of  issuers  in the same  industry  if
necessary  to  replicate  the  weighting  of  that  particular  industry  in the
Nasdaq-100  Fund's benchmark index. The Small Cap Fund's  restriction  obviously
does not include a similar exception.

     While both Funds are subject to a fundamental  investment  restriction that
provides  that neither Fund will  purchase or sell real estate,  the  Nasdaq-100
Fund has more flexibility under its investment  restriction.  The Small Cap Fund
is permitted to purchase and sell  securities of real estate  investment  trusts
("REITs") under its restriction.  The Nasdaq-100 Fund, however, may purchase and
sell not only  securities  of REITs,  but also  securities of other issuers that
invest in real estate. The Nasdaq-100 Fund may also, under its restriction, make
investments in  mortgage-backed  securities,  mortgage  participations and other
instruments  supported by interests in real estate. In addition,  the Nasdaq-100
Fund may  exercise  rights  under  agreements  relating  to real  estate-related
securities,  including the right to enforce security  interests and to hold real
estate  acquired  by reason of such  enforcement  until the real  estate  can be
liquidated in an orderly manner.

     The Funds'  restrictions on investing in commodities  are similar,  but not
identical. The Small Cap Fund may not purchase or sell commodities,  except that
the Fund may purchase or sell  currencies,  may enter into futures  contracts on
securities, currencies and other indices or any other financial instruments, and
may purchase and sell options on such futures contracts. The Nasdaq-100 Fund may
not purchase or sell physical  commodities  unless they are acquired as a result
of owning securities or other instruments, but the Nasdaq-100 Fund may purchase,
sell or enter into  financial  options and  futures,  forward and spot  currency
contracts,  swap  transactions  and  other  financial  contracts  or  derivative
instruments.

     The Small  Cap Fund is  subject  to a  fundamental  investment  restriction
relating to diversification,  which provides that the Fund will not purchase the
securities  of any one  issuer  (other  than the U.S.  government  or any of its
agencies or  instrumentalities  or securities of other investment  companies) if
immediately  after such  investment:  (a) more than 5% of the value of the Small
Cap Fund's total  assets would be invested in such issuer;  or (b) more than 10%
of the outstanding  voting securities of such issuer would be owned by the Fund,
except  that up to 25% of the value of the Fund's  total  assets may be invested
without regard to such 5% and 10% limitations.  As a  non-diversified  fund, the
Nasdaq-100 Fund obviously is not subject to a comparable investment restriction.

     The Nasdaq-100 Fund is subject to a non-fundamental  investment restriction
prohibiting the Fund from purchasing securities on margin, except for short-term
credit  necessary  for clearance of portfolio  transactions  and except that the
Fund may make margin  deposits in connection  with its use of financial  options
and futures, forward and spot currency contracts,  swap transactions,  and other
financial contracts and derivative instruments. The Small Cap Fund does not have
a stated investment restriction relating to purchasing securities on margin.

     The Nasdaq-100 Fund is subject to a non-fundamental  investment restriction
that  provides that the Fund will not purchase  securities  of other  investment
companies,  except to the extent permitted by the 1940 Act or under the terms of
an exemptive order granted by the SEC, and except that this restriction does not
apply to  securities  received  or  acquired  as  dividends,  through  offers of
exchange,  or as a result of reorganization,  consolidation or merger. The Small
Cap Fund is not  subject  to an  explicit  investment  restriction  relating  to
investing in securities of other investment companies.

     Each Fund is  subject  to a  non-fundamental  investment  restriction  that
allows the Fund to invest up to 15% of its net assets in illiquid securities.

                         COMPARISON OF FUND PERFORMANCE

     The following bar charts and tables provide  information  about each Fund's
performance  and thus give some indication of the risks of an investment in each
Fund.  The bar charts  show how the Funds'  performance  has varied from year to
year. The bar chart for the Small Cap Fund shows Class Y Shares,  which have the
longest  performance  history of any class of shares of the Small Cap Fund,  and
the bar chart for the Nasdaq-100  Fund shows Class A Shares,  which is the class
with the longest  performance  history for that Fund. The Nasdaq-100  Fund's bar
chart does not  reflect  the effect of sales  charges on the  Nasdaq-100  Fund's
Class A Shares;  if it did reflect the sales  charges,  the total  returns shown
would be lower.  Class Y Shares of the Small Cap Fund,  unlike other  classes of
shares of the Fund, have no sales charges.  The returns in the bar chart for the
Nasdaq-100  Fund reflect the 0.25% service fee that Class A shares pay under the
12b-1  plans;  the  Class Y shares  of the  Funds  do not pay  12b-1  fees  and,
therefore,  such fees are not reflected in the bar chart for the Small Cap Fund.
Because the Class A shares and Class Y shares are subject to different fees, the
bar  charts may not  portray as  accurate a  comparison  of  performance  of the
Nasdaq-100 Fund and Small Cap Fund, then if identical classes were shown.

     The tables for the Funds  illustrate  how the  performance of each class of
shares, before taxes and for specified time periods, compares to that of a broad
measure of market performance.  In addition,  the tables present the performance
of the Class Y Shares of the Small Cap Fund and Class A Shares of the Nasdaq-100
Fund reflecting the impact of taxes.  After-tax returns are calculated using the
historical  highest  individual  federal  marginal  income  tax rates and do not
reflect the impact of state and local taxes.  Actual after-tax returns depend on
an investor's tax situation and are likely to differ from those shown. After-tax
returns shown are not relevant to investors  who hold their Fund shares  through
tax-deferred   arrangements  such  as  401(k)  plans  or  individual  retirement
accounts.  In some cases,  the return  after taxes may exceed the return  before
taxes due to an assumed tax benefit  from any losses on a sale of Fund shares at
the end of the period.  After-tax returns are shown only for Class Y and Class A
Shares,  respectively,  of the  Small  Cap Fund  and the  Nasdaq-100  Fund,  and
after-tax returns for the other classes will vary.

     Each Fund's past  performance,  before and after taxes,  does not primarily
indicate how the Fund will perform in the future.

- ------------------------------------------------------------ ---------------------------------------------------------
                      Small Cap Fund                                             Nasdaq-100 Fund
                      --------------                                             ---------------
- ------------------------------------------------------------ ---------------------------------------------------------
- ------------------------------------------------------------ ---------------------------------------------------------
              Total Return on Class Y Shares                              Total Return on Class A Shares
(1998 is the Fund's first full calendar year of operations)      (2001 is the Fund's first full calendar year of
                                                                                   operations)
- ------------------------------------------------------------ ---------------------------------------------------------
- ------------------------------------------------------------ ---------------------------------------------------------

[insert chart showing:  1998:  (6.72)%; 1999:  41.70%;       [insert chart showing:  2001:  (32.92)%; 2002:
2000:  22.42%; 2001:  (10.23)%; 2002:  (18.42)%]             (37.39)%]

Best quarter during years shown:  4th quarter 1999         Best quarter during years shown:  4th quarter 2001
32.94%                                                     34.57%

Worst quarter during years shown:  3rd quarter 1998        Worst quarter during years shown:  3rd quarter 2001
(23.86)%                                                   (36.22)%

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

                 Average Annual Total Returns, Small Cap Fund**
                    (for the periods ended December 31, 2002)


                     Class (Inception Date)                        1 Year    5 years   Life of Class
                     ----------------------                        ------    -------   -------------
Class A (12/31/98)
     Return Before Taxes                                          (23.04)%     N/A         4.38%
Class B (11/07/01)
     Return Before Taxes                                          (23.25)%     N/A       (13.70)%
Class C (11/19/01)
     Return Before Taxes                                          (20.86)%     N/A       (13.31)%
Class Y (9/30/97)
     Return Before Taxes                                          (18.42)%    3.46%        2.16%
     Return After Taxes on Distribution                           (18.42)%    1.82%        0.63%
     Return After Taxes on Distribution and Sale of Fund Shares   (11.31)%    2.32%        1.30%
Russell 2000 Growth Index (reflects no deduction for fees,        (30.26)%  (6.59)%         *
expenses, or taxes)


*    Average annual total returns for the Russell 2000 Growth Index for the life
     of each class were as follows:  Class A-(8.44)%;  Class  B-(19.85)%;  Class
     C-(23.15)%; Class Y-(7.80)%.

**   Returns reflect sales charges.


                 Average Annual Total Returns, Nasdaq-100 Fund**
                    (for the periods ended December 31, 2002)

                        Class (Inception Date)                          1 Year     Life of Class
                        ----------------------                          ------     -------------
Class A (4/26/00)
     Return Before Taxes                                                (40.78)%      (39.62)%
     Return After Taxes on Distributions                                (40.78)%      (39.62)%
     Return After Taxes on Distributions and Sale of Fund Shares        (25.04)%      (28.49)%
Class B (4/26/00)
     Return Before Taxes                                                (41.01)%      (39.54)%
Class C (4/26/00)
     Return Before Taxes                                                (39.09)%      (39.08)%
Class Y (4/26/00)
     Return Before Taxes                                                (37.21)%      (38.17)%
Nasdaq-100 Index (reflects no deduction for fees, expenses, or taxes)   (37.52)%          *

*    Average annual total returns for the Nasdaq-100  Index for the life of each
     class  were  as  follows:   Class  A-(37.66)%;   Class  B-(37.66)%;   Class
     C-(37.66)%; Class Y-(37.66)%.

**   Returns reflect sales charges.

                               VOTING INFORMATION

How many votes are necessary to approve the Agreement and Plan?

     The  presence,  in person or by proxy,  of  one-third  of the shares of the
Nasdaq-100  Fund entitled to vote at the Meeting  shall  constitute a quorum for
the  transaction  of  business  at the  Meeting.  Any  lesser  number  shall  be
sufficient for adjournments.  Provided that a quorum is present, the approval of
the Agreement and Plan requires the affirmative  vote of the lesser of: (i) more
than 50% of the outstanding  voting  securities of the Nasdaq-100  Fund; or (ii)
67% or more of the  voting  securities  of the  Nasdaq-100  Fund  present at the
Meeting,  if the  holders  of more  than 50% of the  Fund's  outstanding  voting
securities  are  present  or  represented  by proxy.  Each  shareholder  will be
entitled  to one  vote for  each  full  share,  and a  fractional  vote for each
fractional  share, of the Nasdaq-100 Fund held on the Record Date. If sufficient
votes to approve the proposal  are not received by the date of the Meeting,  the
Meeting may be adjourned to permit further solicitations of proxies.

     Abstentions  and  broker   non-votes  will  be  included  for  purposes  of
determining whether a quorum is present at the Meeting,  but will not be treated
as votes cast and,  therefore,  will not be counted for purposes of  determining
whether  the  matters  to be voted upon at the  Meeting  have been  approved  or
counted for purposes of approving an adjournment.

How do I ensure my vote is accurately recorded?

     You may  attend  the  Meeting  and vote in  person.  You may  also  vote by
completing  and signing the  attached  proxy card and mailing it in the enclosed
postage paid envelope. A proxy card is, in essence, a ballot. If you simply sign
and date the proxy but give no voting instructions, your shares will be voted in
favor of the Agreement  and Plan and in accordance  with the views of management
upon any unexpected  matters that come before the Meeting or any  adjournment of
the Meeting. You may also vote your shares by telephone or via the Internet.  To
vote in this manner, please see the instructions on the attached proxy card.

Can I revoke my proxy?

     You may  revoke  your  proxy at any time  before  it is voted by  sending a
written notice to the Nasdaq-100 Fund expressly  revoking your proxy, by signing
and forwarding to the Nasdaq-100  Fund a later-dated  proxy, or by attending the
Meeting and voting in person.

What other matters will be voted upon at the Meeting?

     The Securities  Trust Board does not intend to bring any matters before the
Meeting other than the Merger described in this Prospectus/Proxy  Statement.  It
is not aware of any other matters to be brought before the Meeting by others. If
any other matter legally comes before the Meeting,  proxies for which discretion
has been granted will be voted in accordance with the views of management.

Who is entitled to vote?

     All  shareholders of record of the Nasdaq-100 Fund at the close of business
on the Record Date will be entitled to vote at the meeting. The number of shares
of the Nasdaq-100 Fund and each of its four classes outstanding as of the Record
Date is listed below:

                                       Shares Outstanding
                                       ------------------

  Nasdaq-100 Fund                         [_________]
                                           ----------

  Nasdaq-100 Fund Class A Shares          [_________]
                                           ----------
  Nasdaq-100 Fund Class B Shares          [_________]
                                           ----------
  Nasdaq-100 Fund Class C Shares          [_________]
                                           ----------
  Nasdaq-100 Fund Class Y Shares          [_________]
                                           ----------

What other solicitations will be made?

     The Nasdaq-100 Fund will request broker-dealer firms, custodians,  nominees
and  fiduciaries  to forward  proxy  materials to the  beneficial  owners of the
shares held of record by such persons. Broker-dealer firms, custodians, nominees
and fiduciaries may be reimbursed by UBS Global AM for their reasonable expenses
incurred  in   connection   with  such  proxy   solicitation.   In  addition  to
solicitations  by mail,  officers and employees of the Securities  Trust and UBS
Global AM, without  additional or special  compensation,  may conduct additional
solicitations  by  telephone  and via the  Internet.  The  Securities  Trust has
engaged  [insert  name of firm],  a proxy  solicitation  firm,  to assist in the
solicitation of proxies for the Meeting, which is expected to cost approximately
$________. The costs of such solicitations,  and any additional solicitations of
any adjourned session, will be borne entirely by UBS Global AM.

                      INFORMATION ABOUT THE SMALL CAP FUND

     Information  about the Small Cap Fund is  included  in Exhibit B, the Small
Cap Fund Prospectus,  and Exhibit C, the Small Cap Fund Annual Report, which are
attached to and considered a part of this Prospectus/Proxy Statement. Additional
information  about the  Small Cap Fund is also  contained  in the  Statement  of
Additional   Information,   dated   [_________  __,  2003],   relating  to  this
Prospectus/Proxy  Statement,  which is incorporated by reference herein. You may
request a free copy of this Statement of Additional Information,  which has been
filed  with the SEC,  by calling  1-800-647-1568  or by writing to the Small Cap
Fund at 51 West 52nd Street, New York, New York 10019-6114.

     This Prospectus/Proxy Statement, which constitutes a part of a Registration
Statement filed with the SEC under the Securities Act of 1933, as amended, omits
certain of the information contained in the Registration Statement. Reference is
hereby  made to the  Registration  Statement  and to the  exhibits  thereto  for
further information with respect to the Small Cap Fund and the shares it offers.
Statements   contained  herein   concerning  the  provisions  of  documents  are
necessarily summaries of such documents, and each such statement is qualified in
its entirety by reference to the copy of the applicable  document filed with the
SEC.

                      INFORMATION ABOUT THE NASDAQ-100 FUND

     Information  about the Nasdaq-100  Fund is included in the Nasdaq-100  Fund
Prospectus,  the Nasdaq-100 Fund Annual Report, the Nasdaq-100 Fund SAI, and the
Statement of Additional  Information,  dated  [_________ __, 2003],  relating to
this  Prospectus/Proxy  Statement,  each of which is  incorporated  by reference
herein.  You may request free copies of these  documents,  which have been filed
with the SEC, by calling  1-800-647-1568 or by writing to the Nasdaq-100 Fund at
51 West 52nd Street, New York, New York 10019-6114.

                           INFORMATION ABOUT EACH FUND

     Each Fund files proxy materials,  reports,  and other  information with the
SEC in accordance with the informational requirements of the Securities Exchange
Act of 1934 and the 1940 Act. These materials can be inspected and copied at the
public reference facilities maintained by the SEC at Room 1200, 450 Fifth Street
N.W., Washington,  DC 20549. Also, copies of such materials can be obtained from
the Public  Reference Branch of the SEC, 450 Fifth Street N.W.,  Washington,  DC
20549,   at   prescribed   rates   or   from   the   SEC's   Internet   site  at
http://www.sec.gov.  To request  information  regarding the Funds,  you may also
send an e-mail to the SEC at publicinfo@sec.gov.

                           PRINCIPAL HOLDERS OF SHARES

     On the Record Date, the officers and trustees of the Securities Trust, as a
group,  owned less than 1% of the outstanding  voting shares of any class of the
Nasdaq-100 Fund.

     To the best  knowledge of the  Nasdaq-100  Fund,  as of the Record Date, no
person,  except as set forth in the table below, owned of record or beneficially
5% or more of the outstanding voting shares of any class of the Nasdaq-100 Fund:

      Class         Name and Address of Account       Share Amount      Percentage of Class
- ------------------- ------------------------------- ------------------- ----------------------
                                                  [TO BE INSERTED]

     On the Record Date,  the  officers  and trustees of the Trust,  as a group,
owned less than 1% of the outstanding shares of any class of the Small Cap Fund.

     To the best  knowledge  of the Small Cap Fund,  as of the Record  Date,  no
person,  except as set forth in the table below, owned of record or beneficially
5% or more of the outstanding voting shares of any class of the Small Cap Fund:

      Class         Name and Address of Account        Share Amount      Percentage of Class
- ------------------- ------------------------------ --------------------- ----------------------
                                [TO BE INSERTED]

              [Also include information regarding control persons.]

   [Please also indicate if shares are held beneficially, of record, or both.]




                     EXHIBITS TO PROSPECTUS/PROXY STATEMENT


Exhibit
- -------


A    Form of Agreement and Plan of  Reorganization  between the UBS Mutual Funds
     Securities  Trust (on behalf of the UBS Enhanced  NASDAQ-100  Fund) and The
     UBS Funds (on behalf of the UBS U.S. Small Cap Growth Fund)

B    Prospectus of the UBS U.S. Small Cap Growth Fund, dated September 30, 2002

C    Annual Report to  Shareholders  of the UBS U.S.  Small Cap Growth Fund, for
     the fiscal year ended June 30, 2002





                                                                       EXHIBIT A

                      AGREEMENT AND PLAN OF REORGANIZATION


     AGREEMENT  AND  PLAN  OF  REORGANIZATION,  made  as of  this  ____  day  of
____________,  2003,  by and  between The UBS Funds (the  "Trust"),  a statutory
trust created under the laws of the State of Delaware,  with its principal place
of business at One North Wacker Drive, Chicago, Illinois 60606, on behalf of its
series,  the UBS U.S.  Small Cap Growth  Fund (the  "Small Cap  Fund"),  and UBS
Mutual  Funds  Securities  Trust (the  "Securities  Trust"),  a statutory  trust
created  under the laws of the State of Delaware,  with its  principal  place of
business at 51 West 52nd Street, New York, New York 10019-6114, on behalf of its
series, the UBS Enhanced NASDAQ-100 Fund (the "Nasdaq-100 Fund").

                             PLAN OF REORGANIZATION

     The   reorganization   (hereinafter   referred   to   as   the   "Plan   of
Reorganization") will consist of: (i) the acquisition by the Trust, on behalf of
the Small Cap Fund, of substantially all of the property, assets and goodwill of
the  Nasdaq-100  Fund,  in exchange  solely for shares of  beneficial  interest,
$0.001 par value,  of (a) UBS U.S. Small Cap Growth  Fund-Class A shares ("Small
Cap Fund Class A Shares"),  (b) UBS U.S.  Small Cap Growth  Fund-Class  B shares
("Small Cap Fund Class B Shares"),  (c) UBS U.S.  Small Cap Growth  Fund-Class C
shares  ("Small  Cap Fund Class C  Shares"),  and (d) UBS U.S.  Small Cap Growth
Fund-Class Y shares ("Small Cap Fund Class Y Shares"), and the assumption by the
Trust,  on  behalf  of the Small  Cap  Fund,  of all of the  liabilities  of the
Nasdaq-100  Fund; (ii) the  distribution of (a) Small Cap Fund Class A Shares to
the  shareholders  of Class A shares of the Nasdaq-100  Fund  ("Nasdaq-100  Fund
Class A Shares"), (b) Small Cap Fund Class B Shares to the shareholders of Class
B shares of the Nasdaq-100 Fund  ("Nasdaq-100  Fund Class B Shares"),  (c) Small
Cap Fund Class C Shares to the  shareholders of Class C shares of the Nasdaq-100
Fund ("Nasdaq-100  Fund Class C Shares"),  and (d) Small Cap Fund Class Y Shares
to the shareholders of Class Y shares of the Nasdaq-100 Fund  ("Nasdaq-100  Fund
Class  Y  Shares"),   according  to  their  respective   interests  in  complete
liquidation of the Nasdaq-100  Fund; and (iii) the dissolution of the Nasdaq-100
Fund as soon as  practicable  after the  closing  (as  referenced  in  Section 3
hereof, hereinafter called the "Closing"), all upon and subject to the terms and
conditions  of  this   Agreement  and  Plan  of   Reorganization   ("Agreement")
hereinafter set forth. The Trust and the Securities Trust intend that the series
of steps  contemplated  by this  Agreement  be treated  for  federal  income tax
purposes as a taxable sale by the Nasdaq-100  Fund of its Net Assets (as defined
below) in complete  liquidation,  within the meaning of Sections 331 and 1001 of
the Internal Revenue Code of 1986, as amended (the "Code").

                                    AGREEMENT

     In order to consummate the Plan of  Reorganization  and in consideration of
the premises and of the  covenants and  agreements  hereinafter  set forth,  and
intending to be legally bound, the parties hereto covenant and agree as follows:

1.   Sale and Transfer of Assets and Liabilities, Liquidation and Dissolution of
     the Nasdaq-100 Fund

     (a) Subject to the terms and conditions of this Agreement,  and in reliance
on the  representations  and  warranties of the Trust herein  contained,  and in
consideration  of the  delivery  by the  Trust of the  number  of its  shares of
beneficial interest of the Small Cap Fund hereinafter  provided,  the Securities
Trust,  on behalf of the  Nasdaq-100  Fund,  agrees  that it will sell,  convey,
transfer  and  deliver  to the  Trust,  on behalf of the Small Cap Fund,  at the
Closing  provided for in Section 3, all of the liabilities,  debts,  obligations
and duties of any nature,  whether  accrued,  absolute,  contingent or otherwise
("Liabilities")  and  the  assets  of the  Nasdaq-100  Fund as of the  close  of
business (which  hereinafter shall be, unless otherwise noted, the regular close
of business of the New York Stock Exchange, Inc. ("NYSE")) ("Close of Business")
on the valuation  date (as defined in Section 3 hereof,  hereinafter  called the
"Valuation  Date"),  free  and  clear of all  liens,  encumbrances,  and  claims
whatsoever (other than shareholders'  rights of redemption and such restrictions
as might arise under the  Securities  Act of 1933,  as amended (the "1933 Act"),
with respect to privately  placed or otherwise  restricted  securities  that the
Nasdaq-100  Fund may have acquired in the ordinary  course of business),  except
for cash, bank deposits,  or cash equivalent  securities in an estimated  amount
necessary  (1) to pay the  Nasdaq-100  Fund's costs and expenses of carrying out
this Agreement (including,  but not limited to, fees of counsel and accountants,
and expenses of its liquidation and dissolution contemplated  hereunder),  which
costs and expenses shall be  established on the books of the Nasdaq-100  Fund as
liability reserves, (2) to discharge all of the Nasdaq-100 Fund's Liabilities on
its books at the Close of  Business on the  Valuation  Date  including,  but not
limited  to, its income  dividends  and  capital  gains  distributions,  if any,
payable  for any period  prior to, and  through,  the Close of  Business  on the
Valuation  Date, and excluding  those  liabilities  and  obligations  that would
otherwise be discharged at a later date in the ordinary course of business,  and
(3) to pay such contingent  liabilities as the trustees of the Securities  Trust
shall reasonably deem to exist against the Nasdaq-100 Fund, if any, at the Close
of Business on the Valuation  Date, for which  contingent and other  appropriate
liability  reserves shall be  established  on the books of the  Nasdaq-100  Fund
(hereinafter  "Net Assets").  The Securities  Trust, on behalf of the Nasdaq-100
Fund, shall also retain any and all rights that it may have over and against any
person that may have  accrued up to and  including  the Close of Business on the
Valuation  Date.  The  Securities  Trust agrees to use  commercially  reasonable
efforts  to  identify  all of the  Nasdaq-100  Fund's  Liabilities  prior to the
Valuation  Date and to discharge all such known  Liabilities  on or prior to the
Valuation Date.

     (b) Subject to the terms and conditions of this Agreement,  and in reliance
on the  representations and warranties of the Securities Trust herein contained,
and in consideration of such sale, conveyance, transfer, and delivery, the Trust
agrees at the  Closing  to assume  the  Liabilities,  on behalf of the Small Cap
Fund,  and to deliver to the  Nasdaq-100  Fund: (i) the number of Small Cap Fund
Class A Shares,  determined  by dividing  the net asset value per share of Small
Cap Fund Class A Shares as of the Close of Business on the Valuation Date by the
net  asset  value  per share of  Nasdaq-100  Fund  Class A Shares as of Close of
Business on the  Valuation  Date,  and  multiplying  the result by the number of
outstanding shares of the Nasdaq-100 Fund Class A Shares as of Close of Business
on the  Valuation  Date;  (ii) the  number  of Small  Cap Fund  Class B  Shares,
determined  by dividing  the net asset value per share of Small Cap Fund Class B
Shares as of Close of Business on the Valuation  Date by the net asset value per
share of Nasdaq-100 Fund Class B Shares as of Close of Business on the Valuation
Date,  and  multiplying  the  result  by the  number  of  outstanding  shares of
Nasdaq-100  Fund Class B Shares as of Close of Business on the  Valuation  Date;
(iii) the number of Small Cap Fund Class C Shares,  determined  by dividing  the
net  asset  value  per  share of Small  Cap Fund  Class C Shares  as of Close of
Business on the  Valuation  Date by the net asset value per share of  Nasdaq-100
Fund  Class C  Shares  as of  Close  of  Business  on the  Valuation  Date,  and
multiplying  the result by the number of outstanding  shares of Nasdaq-100  Fund
Class C Shares  as of Close of  Business  on the  Valuation  Date;  and (iv) the
number of Small Cap Fund Class Y Shares,  determined  by dividing  the net asset
value per share of Small Cap Fund Class Y Shares as of Close of  Business on the
Valuation  Date by the net  asset  value per share of  Nasdaq-100  Fund  Class Y
Shares as of Close of Business on the Valuation Date, and multiplying the result
by the  number of  outstanding  shares of  Nasdaq-100  Fund Class Y Shares as of
Close of Business on the Valuation  Date. All such values shall be determined in
the manner and as of the time set forth in Section 2 hereof.

     (c) As soon as practicable following the Closing, the Nasdaq-100 Fund shall
dissolve and distribute pro rata to its  shareholders  of record as of the Close
of Business on the  Valuation  Date,  the shares of  beneficial  interest of the
Small Cap Fund received by the Nasdaq-100  Fund pursuant to this Section 1. Such
dissolution  and  distribution  shall be accomplished  by the  establishment  of
accounts  on the  share  records  of the  Small  Cap Fund of the type and in the
amounts  due  such  shareholders  pursuant  to this  Section  1 based  on  their
respective holdings of shares of the Nasdaq-100 Fund as of the Close of Business
on the Valuation Date. Fractional shares of beneficial interest of the Small Cap
Fund shall be carried to the third decimal place. No  certificates  representing
shares  of  beneficial  interest  of the  Small  Cap  Fund  will  be  issued  to
shareholders of the Nasdaq-100 Fund.

     (d) At the Closing, each shareholder of record of the Nasdaq-100 Fund as of
the record date (the  "Distribution  Record  Date")  with  respect to any unpaid
dividends  and other  distributions  that were  declared  prior to the  Closing,
including any dividend or distribution declared pursuant to Section 9(e) hereof,
shall have the right to receive such unpaid  dividends  and  distributions  with
respect  to the  shares of the  Nasdaq-100  Fund that  such  person  had on such
Distribution Record Date.

2.   Valuation

     (a) The value of the  Nasdaq-100  Fund's Net Assets to be  acquired  by the
Small Cap Fund  hereunder  shall be  computed as of the Close of Business on the
Valuation Date using the valuation procedures set forth in the Nasdaq-100 Fund's
currently effective prospectus and statement of additional information.

     (b) The net asset value of a share of beneficial  interest of the Small Cap
Fund Class A Shares, the Small Cap Fund Class B Shares, the Small Cap Fund Class
C Shares  and the  Small  Cap Fund  Class Y Shares  shall be  determined  to the
nearest full cent as of the Close of Business on the Valuation  Date,  using the
valuation  procedures  set  forth in the Small Cap  Fund's  currently  effective
prospectus and statement of additional information.

     (c) The net asset value of a share of beneficial interest of the Nasdaq-100
Fund Class A Shares,  Nasdaq-100  Fund Class B Shares,  Nasdaq-100  Fund Class C
Shares,  and  Nasdaq-100  Fund Class Y Shares shall be determined to the nearest
full cent as of the Close of Business on the Valuation Date, using the valuation
procedures as set forth in the Nasdaq-100 Fund's currently effective  prospectus
and statement of additional information.

3.   Closing and Valuation Date

     The Valuation  Date shall be  ____________  __, 200_, or such later date as
mutually agreed to in writing by the Trust and the Securities Trust. The Closing
shall take place at the  principal  office of UBS Global Asset  Management  (US)
Inc., 51 West 52nd Street, New York, New York 10019-6114, at approximately 10:00
a.m.  Eastern  time on the first  business day  following  the  Valuation  Date.
Notwithstanding  anything  herein  to the  contrary,  in the  event  that on the
Valuation Date (a) the NYSE shall be closed to trading or trading  thereon shall
be  restricted,  or (b) trading or the  reporting of trading on such exchange or
elsewhere  shall be  disrupted  so that,  in the  judgment  of the  Trust or the
Securities  Trust,  accurate  appraisal  of the  value of the net  assets of the
Nasdaq-100 Fund or the Small Cap Fund is impracticable, the Valuation Date shall
be postponed  until the first business day after the day when trading shall have
been fully resumed without restriction or disruption,  reporting shall have been
restored and accurate appraisal of the value of the net assets of the Nasdaq-100
Fund and the Small Cap Fund is  practicable in the judgment of the Trust and the
Securities  Trust.  The Securities  Trust shall have provided for delivery as of
the Closing of those Net Assets of the Nasdaq-100  Fund to be transferred to the
Small Cap Fund's custodian,  JPMorgan Chase Bank, 270 Park Avenue, New York, New
York 10017.  Also, the  Securities  Trust shall deliver at the Closing a list of
names and addresses of the  shareholders  of record of  Nasdaq-100  Fund Class A
Shares,  Nasdaq-100  Fund  Class B Shares,  Nasdaq-100  Fund  Class C Shares and
Nasdaq-100 Fund Class Y Shares, and the number of shares of beneficial  interest
of such classes owned by each such  shareholder,  indicating  thereon which such
shares are  represented  by  outstanding  certificates  and which by  book-entry
accounts,  all as of the Close of Business on the Valuation  Date,  certified by
its transfer  agent,  or by its President or Vice President to the best of their
knowledge  and  belief.  The Trust  shall  issue and  deliver a  certificate  or
certificates  evidencing the shares of the Small Cap Fund to be delivered at the
Closing to said transfer agent registered in such manner as the Securities Trust
may request, or provide evidence  satisfactory to the Securities Trust that such
shares of beneficial  interest of the Small Cap Fund have been  registered in an
open account on the books of the Small Cap Fund in such manner as the Securities
Trust may request.

4.   Representations and Warranties by the Securities Trust

     The Securities Trust represents and warrants to the Trust that:

     (a) The Securities Trust is a statutory trust created under the laws of the
State of Delaware on December  23,  1999,  and is validly  existing  and in good
standing  under  the laws of that  State.  The  Securities  Trust,  of which the
Nasdaq-100 Fund is a  non-diversified  separate series, is duly registered under
the Investment  Company Act of 1940, as amended (the "1940 Act"), as an open-end
management  investment company. Such registration is in full force and effect as
of the date  hereof and will be in full force and effect as of the  Closing  and
all of its shares  sold have been sold  pursuant  to an  effective  registration
statement  filed under the 1933 Act,  except for any shares sold pursuant to the
private  offering  exemption  for the  purpose of raising the  required  initial
capital.

     (b) The  Securities  Trust is  authorized  to issue an unlimited  number of
shares of beneficial  interest of the Nasdaq-100  Fund,  $0.001 par value.  Each
outstanding share of the Nasdaq-100 Fund is duly and validly issued, fully paid,
non-assessable  and has full voting rights and,  except for any such shares sold
pursuant to the private offering  exemption for purposes of raising the required
initial capital, is fully transferable.

     (c) The financial statements appearing in the Nasdaq-100 Fund Annual Report
to Shareholders for the fiscal year ended September 30, 2002, audited by Ernst &
Young LLP, and the unaudited  financial  statements  appearing in the Nasdaq-100
Fund Semi-Annual Report to Shareholders for the six-month period ended March 31,
2003,  copies of which have been  delivered  to the Trust,  fairly  present  the
financial  position of the Nasdaq-100  Fund as of the dates  indicated,  and the
results  of its  operations  for  the  periods  indicated,  in  conformity  with
generally  accepted  accounting  principles  applied on a consistent basis. When
available,  a copy of the financial  statements appearing in the Nasdaq-100 Fund
Annual  Report to  Shareholders  for the fiscal year ended  September  30, 2003,
audited by Ernst & Young LLP, will be delivered to the Trust,  which will fairly
present the financial  position of the Nasdaq-100 Fund as of the date indicated,
and the results of its operations for the period  indicated,  in conformity with
generally accepted accounting principles applied on a consistent basis.

     (d) The books and  records of the  Nasdaq-100  Fund made  available  to the
Trust  and/or its  counsel  are true and correct in all  material  respects  and
contain no material omissions with respect to the business and operations of the
Nasdaq-100 Fund.

     (e)  The  statement  of  assets  and  liabilities  to be  furnished  by the
Securities  Trust as of the  Close of  Business  on the  Valuation  Date for the
purpose of determining the number of shares of beneficial  interest of the Small
Cap Fund to be issued pursuant to Section 1 hereof will  accurately  reflect the
Net Assets of the Nasdaq-100 Fund and outstanding shares of beneficial interest,
as of such date, in conformity  with generally  accepted  accounting  principles
applied on a consistent basis.

     (f) At the  Closing,  the  Securities  Trust will have good and  marketable
title to all of the securities and other assets shown on the statement of assets
and liabilities referred to in subsection (e) above, free and clear of all liens
or encumbrances of any nature whatsoever except such restrictions as might arise
under the 1933 Act with  respect to  privately  placed or  otherwise  restricted
securities that the Securities Trust may have acquired in the ordinary course of
business and such  imperfections  of title or  encumbrances as do not materially
detract  from the value or use of the  assets  subject  thereto,  or  materially
affect title thereto.

     (g) The Securities  Trust has the necessary  power and authority to conduct
its business and the business of the Nasdaq-100  Fund as such businesses are now
being conducted.

     (h) The Securities Trust is not a party to or obligated under any provision
of its Trust Instrument, By-Laws, or any material contract or any other material
commitment or  obligation,  and is not subject to any order or decree that would
be violated by its execution of or performance  under this Agreement and Plan of
Reorganization.

     (i) The  Securities  Trust has full power and  authority  to enter into and
perform its obligations under this Agreement, subject to approval of the Plan of
Reorganization by the Nasdaq-100 Fund's shareholders.  Except as provided in the
immediately preceding sentence, the execution,  delivery and performance of this
Agreement have been duly and validly  authorized,  executed and delivered by it,
and  this  Agreement   constitutes  its  legal,  valid  and  binding  obligation
enforceable  against it in accordance with its terms,  subject as to enforcement
to the  effect of  bankruptcy,  insolvency,  reorganization,  arrangement  among
creditors, moratorium, fraudulent transfer or conveyance, and other similar laws
of general  applicability  relating  to or  affecting  creditor's  rights and to
general equity principles.

     (j)  Neither  the  Securities  Trust nor the  Nasdaq-100  Fund is under the
jurisdiction  of a Court in a Title 11 or similar  case  within  the  meaning of
Section 368(a)(3)(A) of the Code.

     (k)  The  Securities   Trust  does  not  have  any  unamortized  or  unpaid
organizational fees or expenses that are allocable to the Nasdaq-100 Fund.

     (l) The  Nasdaq-100  Fund has since its  inception  satisfied,  will at the
Closing  satisfy,  and  consummation  of the  transactions  contemplated by this
Agreement will not cause it to fail to satisfy, for any period, the requirements
of Subchapter M of the Code relating to qualification as a regulated  investment
company.

     (m)  The  Securities   Trust,  or  its  agents,   (i)  holds  a  valid  tax
identification number certification form for each Nasdaq-100 Fund shareholder of
record,  which  form can be  associated  with  reportable  payments  made by the
Nasdaq-100 Fund to such shareholder, and/or (ii) has otherwise timely instituted
the appropriate backup  withholding  procedures with respect to such shareholder
as provided by Section 3406 of the Code.

5.   Representations and Warranties by the Trust

     The Trust represents and warrants to the Securities Trust that:

     (a) The Trust is a statutory  trust and was  created  under the laws of the
State of  Delaware  on August  13,  1993,  and is validly  existing  and in good
standing under the laws of that State. The Trust, of which the Small Cap Fund is
a diversified  separate series of shares, is duly registered under the 1940 Act,
as an open-end management investment company, such registration is in full force
and  effect as of the date  hereof or will be in full force and effect as of the
Closing  and all of its  shares  sold have been sold  pursuant  to an  effective
registration  statement  filed  under the 1933 Act,  except for any shares  sold
pursuant  to the  private  offering  exemption  for the  purpose of raising  the
required initial capital.

     (b) The  Trust is  authorized  to issue an  unlimited  number  of shares of
beneficial  interest,  $0.001 par value, of the Small Cap Fund. Each outstanding
share of the Small Cap Fund is fully  paid,  non-assessable  and has full voting
rights  and,  except  for any  shares  sold  pursuant  to the  private  offering
exemption  for  purposes  of raising  the  required  initial  capital,  is fully
transferable.  The  shares of  beneficial  interest  of the Small Cap Fund to be
issued  pursuant  to Section 1 hereof  will,  upon their  issuance,  be duly and
validly issued and fully paid and  non-assessable,  fully  transferable and have
full voting rights.

     (c) At the  Closing,  each class of shares of  beneficial  interest  of the
Small Cap Fund to be issued  pursuant to this  Agreement  will be  eligible  for
offering to the public in those states of the United States and jurisdictions in
which the  corresponding  class of shares of the  Nasdaq-100  Fund are presently
eligible for offering to the public, and there are an unlimited number of shares
registered  under the 1933 Act such that  there is a  sufficient  number of such
shares to permit the transfers contemplated by this Agreement to be consummated.

     (d) The  statement  of assets and  liabilities  of the Small Cap Fund to be
furnished by the Trust as of the Close of Business on the Valuation Date for the
purpose of determining the number of shares of beneficial  interest of the Small
Cap Fund to be issued pursuant to Section 1 hereof will  accurately  reflect the
net assets of the Small Cap Fund and outstanding shares of beneficial  interest,
as of such date, in conformity  with generally  accepted  accounting  principles
applied on a consistent basis.

     (e) At the Closing, the Trust will have good and marketable title to all of
the securities and other assets shown on the statement of assets and liabilities
referred to in subsection (d) above, free and clear of all liens or encumbrances
of any nature whatsoever, except such restrictions as might arise under the 1933
Act with respect to privately placed or otherwise restricted securities that the
Trust  may  have   acquired  in  the  ordinary   course  of  business  and  such
imperfections  of title or  encumbrances  as do not materially  detract from the
value or use of the assets subject thereto, or materially affect title thereto.

     (f) The Trust has the necessary power and authority to conduct its business
and  the  business  of the  Small  Cap  Fund as such  businesses  are now  being
conducted.

     (g) The Trust is not a party to or  obligated  under any  provision  of its
Agreement and  Declaration of Trust,  By-laws,  or any material  contract or any
other  material  commitment  or  obligation,  and is not subject to any order or
decree that would be  violated by its  execution  of or  performance  under this
Agreement.

     (h) The Trust has full power and  authority  to enter into and  perform its
obligations  under this  Agreement.  The execution,  delivery and performance of
this Agreement have been duly and validly authorized,  executed and delivered by
it, and this  Agreement  constitutes  its legal,  valid and binding  obligation,
enforceable against it in accordance with its terms,  subject in all respects to
the  effects  of  bankruptcy,  insolvency,  reorganization,  arrangements  among
creditors, moratorium, fraudulent transfer or conveyance, and other similar laws
of  general  applicability  relating  to or  affecting  creditors  rights and to
general equity principles.

     (i) The books and  records  of the  Small  Cap Fund made  available  to the
Securities  Trust  and/or  its  counsel  are true and  correct  in all  material
respects  and contain no material  omissions  with  respect to the  business and
operations of the Small Cap Fund.

     (j) The  Small  Cap Fund has since  its  inception  satisfied,  will at the
Closing  satisfy,  and  consummation  of the  transactions  contemplated by this
Agreement will not cause it to fail to satisfy, for any period, the requirements
of Subchapter M of the Code relating to qualification as a regulated  investment
company.

6.   Representations and Warranties by the Securities Trust and the Trust

     The  Securities  Trust and the Trust each  represents  and  warrants to the
other that:

     (a)  There  are  no  legal,   administrative   or  other   proceedings   or
investigations  against it, or, to its  knowledge,  threatened  against it, that
would materially affect its financial condition or its ability to consummate the
transactions  contemplated by this Agreement.  It is not charged with, or to its
knowledge,  threatened  with,  any  violation or  investigation  of any possible
violation of any provisions of any federal,  state or local law or regulation or
administrative ruling relating to any aspect of its business.

     (b)  There are no known  actual or  proposed  deficiency  assessments  with
respect to any taxes payable by it.

     (c) It has duly and timely filed,  on behalf of the Nasdaq-100  Fund or the
Small Cap Fund, as  appropriate,  all Tax (as defined below) returns and reports
(including  information  returns),  which  are  required  to be  filed  by  such
Nasdaq-100  Fund or Small Cap Fund, and all such returns and reports  accurately
state the amount of Tax owed for the periods covered by the returns,  or, in the
case of information  returns,  the amount and character of income required to be
reported by such  Nasdaq-100 Fund or Small Cap Fund. On behalf of the Nasdaq-100
Fund or the Small Cap Fund, as  appropriate,  it has paid or made  provision and
properly  accounted for all Taxes (as defined below) due or properly shown to be
due on such returns and reports.  The amounts set up as provisions  for Taxes in
the books and records of the Nasdaq-100  Fund or Small Cap Fund, as appropriate,
as of the Close of Business on the Valuation  Date will, to the extent  required
by generally accepted  accounting  principles,  be sufficient for the payment of
all Taxes of any kind, whether accrued, due, absolute,  contingent or otherwise,
which were or which may be payable by the Nasdaq-100  Fund or Small Cap Fund, as
appropriate, for any periods or fiscal years prior to and including the Close of
Business on the Valuation Date,  including all Taxes imposed before or after the
Close of Business on the Valuation Date that are attributable to any such period
or fiscal year. No return filed by it, on behalf of the Nasdaq-100 Fund or Small
Cap Fund, as  appropriate,  is currently  being audited by the Internal  Revenue
Service or by any state or local taxing  authority.  As used in this  Agreement,
"Tax" or "Taxes" means all federal, state, local and foreign (whether imposed by
a country or  political  subdivision  or  authority  thereunder)  income,  gross
receipts,  excise,  sales,  use, value added,  employment,  franchise,  profits,
property,  ad valorem or other taxes, stamp taxes and duties, fees,  assessments
or charges,  whether  payable  directly  or by  withholding,  together  with any
interest and any penalties,  additions to tax or additional  amounts  imposed by
any  taxing  authority  (foreign  or  domestic)  with  respect  thereto.  To its
knowledge,  there  are no  levies,  liens  or  encumbrances  relating  to  Taxes
existing,  threatened  or pending with  respect to the assets of the  Nasdaq-100
Fund or Small Cap Fund, as appropriate.

     (d) All information  provided to the Securities  Trust by the Trust, and by
the Securities  Trust to the Trust,  for inclusion in, or transmittal  with, the
Prospectus/Proxy  Statement  with  respect to this  Agreement  pursuant to which
approval of the Nasdaq-100 Fund shareholders  will be sought,  shall not contain
an  untrue  statement  of a  material  fact,  or omit to state a  material  fact
required to be stated in order to make the statements made therein,  in light of
the circumstances under which they were made, not misleading.

     (e) Except in the case of the Securities Trust with respect to the approval
of the Nasdaq-100 Fund's  shareholders of the Agreement,  no consent,  approval,
authorization or order of any court or governmental  authority,  or of any other
person  or  entity,  is  required  for  the  consummation  of  the  transactions
contemplated by this  Agreement,  except as may be required by the 1933 Act, the
Securities  Exchange Act of 1934, as amended (the "1934 Act"),  the 1940 Act, or
state securities laws or Delaware  statutory trust laws (including,  in the case
of each of the foregoing, the rules and regulations thereunder).

7.   Covenants of the Securities Trust

     (a)  The  Securities  Trust  covenants  to  operate  the  business  of  the
Nasdaq-100 Fund as presently conducted between the date hereof and the Closing.

     (b) The  Securities  Trust  undertakes  that the  Nasdaq-100  Fund will not
acquire the shares of beneficial  interest of the Small Cap Fund for the purpose
of  making   distributions   thereof  other  than  to  the   Nasdaq-100   Fund's
shareholders.

     (c)  The  Securities  Trust  covenants  that  by  the  Closing,  all of the
Nasdaq-100  Fund's federal and other Tax returns and reports  required by law to
be filed on or before  such date shall have been filed and all federal and other
Taxes  shown as due on said  returns  shall have  either  been paid or  adequate
liability reserves shall have been provided for the payment of such Taxes.

     (d) The Securities  Trust will at the Closing provide the Trust with a copy
of the shareholder ledger accounts,  including,  without  limitation,  the name,
address and taxpayer  identification  number of each shareholder of record,  the
number of shares held by each shareholder,  the dividend reinvestment  elections
applicable to each shareholder, and the backup withholding and nonresident alien
withholding certifications, notices or records on file with the Securities Trust
with  respect  to  each  shareholder,  for all  shareholders  of  record  of the
Nasdaq-100  Fund shares as of the Close of Business on the Valuation  Date,  who
are to become  shareholders of the Small Cap Fund as a result of the transfer of
assets that is the subject of this Agreement, certified by its transfer agent or
its President or its Vice President to the best of their knowledge and belief.

     (e) The  Securities  Trust agrees to mail to each  shareholder of record of
the  Nasdaq-100  Fund entitled to vote at the meeting of  shareholders  at which
action on this Agreement is to be considered,  in sufficient time to comply with
requirements as to notice thereof, a Prospectus/Proxy Statement that complies in
all material  respects  with the  applicable  provisions of Section 14(a) of the
1934 Act,  and  Section  20(a) of the 1940 Act,  and the rules and  regulations,
respectively, thereunder.

     (f) The  Securities  Trust shall supply to the Trust,  at the Closing,  the
statement  of the  assets and  liabilities  described  in  Section  4(e) of this
Agreement in conformity with the requirements described in such Section.

8.   Covenants of the Trust

     (a) The Trust covenants that the shares of beneficial interest of the Small
Cap Fund to be issued and delivered to the Nasdaq-100 Fund pursuant to the terms
of Section 1 hereof shall have been duly  authorized as of the Closing and, when
so issued  and  delivered,  shall be  registered  under  the 1933 Act,  duly and
validly  issued,  and fully paid and  non-assessable,  and no shareholder of the
Small Cap Fund shall  have any  statutory  or  contractual  preemptive  right of
subscription or purchase in respect thereof.

     (b) The Trust  covenants  to operate the  business of the Small Cap Fund as
presently conducted between the date hereof and the Closing.

     (c) The Trust  covenants  that by the Closing,  all of the Small Cap Fund's
federal  and other tax  returns  and  reports  required by law to be filed on or
before  such date shall have been filed and all federal and other taxes shown as
due on said returns shall have either been paid or adequate  liability  reserves
shall have been provided for the payment of such taxes.

     (d) The Trust shall supply to the  Securities  Trust,  at the Closing,  the
statement of assets and liabilities  described in Section 5(d) of this Agreement
in conformity with the requirements described in such Section.

     (e) The Trust  will file with the United  States  Securities  and  Exchange
Commission (the  "Commission")  a Registration  Statement on Form N-14 under the
1933 Act  ("Registration  Statement"),  relating  to the  shares  of  beneficial
interest of the Small Cap Fund issuable hereunder, and will use its best efforts
to provide that such  Registration  Statement  becomes  effective as promptly as
practicable.  At the time such Registration Statement becomes effective,  it (i)
will comply in all material respects with the applicable  provisions of the 1933
Act,  the 1934 Act and the 1940 Act, and the rules and  regulations  promulgated
thereunder;  and (ii) will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements  therein not misleading.  At the time the Registration  Statement
becomes effective,  at the time of the Nasdaq-100 Fund's shareholders'  meeting,
and at the Closing,  the  prospectus  and  statement of  additional  information
included in the Registration Statement will not contain an untrue statement of a
material fact or omit to state a material fact  necessary to make the statements
therein,  in the light of the  circumstances  under  which they were  made,  not
misleading.

9.   Conditions Precedent to be Fulfilled by the Securities Trust and the Trust


     The  obligations of the Securities  Trust and the Trust to effectuate  this
Agreement  and the Plan of  Reorganization  hereunder  shall be  subject  to the
following respective conditions:

     (a) That (i) all the  representations  and  warranties  of the other  party
contained  herein shall be true and correct in all  material  respects as of the
Closing,  with the same effect as though  made as of and at such date;  (ii) the
other party shall have performed all  obligations  required by this Agreement to
be performed  by it at or prior to the Closing;  and (iii) the other party shall
have  delivered  to such party a  certificate  signed by the  President  or Vice
President and by the Secretary or equivalent officer to the foregoing effect.

     (b) That the other party shall have  delivered  to such party a copy of the
resolutions  approving  this  Agreement  adopted by the other  party's  Board of
Trustees, certified by the Secretary or equivalent officer.

     (c) That the  Commission  shall  not have  issued an  unfavorable  advisory
report under Section  25(b) of the 1940 Act, nor  instituted  nor  threatened to
institute   any   proceeding   seeking  to  enjoin  the   consummation   of  the
reorganization  contemplated  hereby under Section 25(c) of the 1940 Act, and no
other  legal,   administrative  or  other  proceeding  shall  be  instituted  or
threatened that would materially and adversely affect the financial condition of
either party or would prohibit the transactions contemplated hereby.

     (d) That this Agreement and the Plan of Reorganization and the transactions
contemplated  hereby shall have been approved by the  appropriate  action of the
shareholders  of the  Nasdaq-100  Fund at an annual or  special  meeting  or any
adjournment thereof.

     (e)  That the  Nasdaq-100  Fund  shall  have  declared  a  distribution  or
distributions  prior to the  Valuation  Date that,  together  with all  previous
distributions, shall have the effect of distributing to its shareholders (i) all
of its ordinary  income and all of its capital gain net income,  if any, for the
period  from the close of its last  fiscal  year to the Close of Business on the
Valuation Date, and (ii) any undistributed  ordinary income and capital gain net
income from any prior period. Capital gain net income has the meaning given such
term by Section 1222(9) of the Code.

     (f) That prior to or at the  Closing,  the  Securities  Trust and the Trust
shall receive an opinion from Stradley,  Ronon,  Stevens & Young, LLP ("Stradley
Ronon") to the effect that,  provided  the  acquisition  contemplated  hereby is
carried out in accordance  with this Agreement and in accordance  with customary
representations  provided by the Securities  Trust and the Trust in certificates
delivered to Stradley  Ronon,  while not free from doubt under  current law, the
acquisition  by the Small Cap Fund of  substantially  all of the  assets and the
assumption of the  liabilities of the Nasdaq-100 Fund in exchange solely for the
Small Cap Fund shares to be issued pursuant to Section 1 hereof, followed by the
distribution  by the Nasdaq-100  Fund to its  shareholders of the Small Cap Fund
shares in complete  liquidation  of the  Nasdaq-100  Fund,  should result in the
recognition  of gain or loss to the  Nasdaq-100  Fund and its  shareholders  for
federal  income tax purposes under Sections 331 and 1001 of the Code, but not to
the Small Cap Fund and its shareholders.

     (g) That the Trust  shall have  received  an opinion in form and  substance
reasonably satisfactory to it from Dechert,  counsel to the Securities Trust, to
the  effect  that,  subject  in all  respects  to  the  effects  of  bankruptcy,
insolvency,  arrangement  among creditors,  moratorium,  fraudulent  transfer or
conveyance,  and other  similar  laws of general  applicability  relating  to or
affecting creditors' rights and to general equity principles:

          (1) The  Securities  Trust was created as a statutory  trust under the
     laws of the State of Delaware on December 23, 1999, and is validly existing
     and in good standing under the laws of the State of Delaware;

          (2) The Securities Trust is authorized to issue an unlimited number of
     shares of beneficial  interest,  $0.001 par value, of the Securities  Trust
     and of the Nasdaq-100 Fund.  Assuming that the initial shares of beneficial
     interest of the  Nasdaq-100  Fund were issued in  accordance  with the 1940
     Act, and the Trust Instrument and By-Laws of the Securities Trust, and that
     all other such outstanding  shares of the Nasdaq-100 Fund were sold, issued
     and paid for in accordance with the terms of the Nasdaq-100 Fund prospectus
     in effect at the time of such sales,  each such  outstanding  share is duly
     and validly issued, fully paid,  non-assessable,  and except for any shares
     sold pursuant to the private offering exemption for purposes of raising the
     required initial capital, is fully transferable and has full voting rights;

          (3) The Securities Trust is an open-end management  investment company
     registered as such under the 1940 Act;

          (4) Except as disclosed in the Nasdaq-100  Fund's currently  effective
     prospectus,  such counsel does not know of any material  suit,  action,  or
     legal or  administrative  proceeding  pending  or  threatened  against  the
     Securities  Trust,  the unfavorable  outcome of which would  materially and
     adversely affect the Securities Trust or the Nasdaq-100 Fund;

          (5) To such counsel's knowledge, no consent,  approval,  authorization
     or order of any court, governmental authority or agency is required for the
     consummation by the Securities  Trust of the  transactions  contemplated by
     this  Agreement,  except such as have been obtained under the 1933 Act, the
     1934 Act, the 1940 Act, and Delaware laws  (including,  in the case of each
     of the foregoing,  the rules and regulations thereunder) and such as may be
     required under state securities laws;

          (6) Neither the execution,  delivery nor performance of this Agreement
     by the Securities Trust violates any provision of its Trust Instrument, its
     By-Laws,  or the provisions of any agreement or other instrument,  known to
     such  counsel  to which  the  Securities  Trust is a party or by which  the
     Securities Trust is otherwise bound; and

          (7) This Agreement has been duly and validly authorized,  executed and
     delivered  by the  Securities  Trust and  represents  the legal,  valid and
     binding  obligation of the Securities Trust and is enforceable  against the
     Securities Trust in accordance with its terms.

     In giving  the  opinions  set forth  above,  Dechert  may state  that it is
relying on certificates  of the officers of the Securities  Trust with regard to
matters  of  fact  and  certain   certifications   and  written   statements  of
governmental  officials  with  respect to the good  standing  of the  Securities
Trust.

     (h) That the  Securities  Trust shall have  received an opinion in form and
substance  reasonably  satisfactory  to it from Stradley  Ronon,  counsel to the
Trust, to the effect that, subject in all respects to the effects of bankruptcy,
insolvency,  arrangement  among creditors,  moratorium,  fraudulent  transfer or
conveyance,  and other  similar  laws of general  applicability  relating  to or
affecting creditors' rights and to general equity principles:

          (1) The Trust is a statutory  trust and was created  under the laws of
     the State of Delaware on August 13,  1993,  and is validly  existing and in
     good standing under the laws of the State of Delaware;

          (2) The Trust is authorized to issue an unlimited  number of shares of
     beneficial interest,  $0.001 par value. Assuming that the initial shares of
     beneficial  interest of the Small Cap Fund were issued in  accordance  with
     the  1940 Act and the  Trust's  Agreement  and  Declaration  of  Trust  and
     By-laws,  and that all other such outstanding  shares of the Small Cap Fund
     were sold,  issued and paid for in  accordance  with the terms of the Small
     Cap  Fund's  prospectus  in  effect  at the time of such  sales,  each such
     outstanding share is duly and validly issued,  fully paid,  non-assessable,
     freely transferable and has full voting rights;

          (3) The Trust is an open-end management  investment company registered
     as such under the 1940 Act;

          (4) Except as  disclosed in the Small Cap Fund's  currently  effective
     prospectus,  such counsel does not know of any material  suit,  action,  or
     legal or administrative proceeding pending or threatened against the Trust,
     the unfavorable  outcome of which would materially and adversely affect the
     Trust or the Small Cap Fund;

          (5) The  shares  of  beneficial  interest  of the Small Cap Fund to be
     issued  pursuant to the terms of Section 1 hereof have been duly authorized
     and,  when issued and  delivered as provided in this  Agreement,  will have
     been duly and validly issued and fully paid and will be  non-assessable  by
     the  Trust or the  Small  Cap Fund,  and to such  counsel's  knowledge,  no
     shareholder has any preemptive right to subscription or purchase in respect
     thereof;

          (6) To such counsel's knowledge, no consent,  approval,  authorization
     or order of any court, governmental authority or agency is required for the
     consummation  by  the  Trust  of  the  transactions  contemplated  by  this
     Agreement,  except such as have been obtained  under the 1933 Act, the 1934
     Act, the 1940 Act, and Delaware laws (including, in the case of each of the
     foregoing, the rules and regulations thereunder and such as may be required
     under state securities laws);

          (7) Neither the execution,  delivery nor performance of this Agreement
     by the Trust  violates any provision of its Agreement  and  Declaration  of
     Trust, its By-laws, or the provisions of any agreement or other instrument,
     known to such  counsel  to which the Trust is a party or by which the Trust
     is otherwise bound; and

          (8) This Agreement has been duly and validly authorized,  executed and
     delivered  by the  Trust  and  represents  the  legal,  valid  and  binding
     obligation of the Trust and is enforceable  against the Trust in accordance
     with its terms.

     In giving the opinions set forth above, Stradley Ronon may state that it is
relying on  certificates  of the officers of the Trust with regard to matters of
fact and certain certifications and written statements of governmental officials
with respect to the good standing of the Trust.

     (i) That the Trust's  Registration  Statement with respect to the shares of
beneficial  interest  of the Small Cap Fund to be  delivered  to the  Nasdaq-100
Fund's  shareholders  in  accordance  with  Section 1 hereof  shall have  become
effective,  and no stop order  suspending the  effectiveness of the Registration
Statement or any amendment or supplement  thereto,  shall have been issued prior
to the Closing or shall be in effect at the Closing,  and no proceedings for the
issuance of such an order shall be pending or threatened on that date.

     (j) That the  shares  of  beneficial  interest  of the Small Cap Fund to be
delivered in accordance  with Section 1 hereof shall be eligible for sale by the
Trust with each state  commission  or agency  with  which  such  eligibility  is
required  in order  to  permit  the  shares  lawfully  to be  delivered  to each
Nasdaq-100 Fund shareholder.

     (k) That at the Closing,  the Securities Trust, on behalf of the Nasdaq-100
Fund,  transfers to the Small Cap Fund  aggregate  Net Assets of the  Nasdaq-100
Fund  comprising  at least 90% in fair market  value of the total net assets and
70% in fair market value of the total gross assets  recorded on the books of the
Nasdaq-100 Fund at the Close of Business on the Valuation Date.

10.  Brokerage Fees and Expenses; Other Agreements

     (a) The Securities  Trust and the Trust each represents and warrants to the
other that there are no broker or finders' fees payable by it in connection with
the transaction provided for herein.

     (b) The expenses of entering  into and carrying out the  provisions of this
Agreement,  whether  or not  consummated,  shall be borne  by UBS  Global  Asset
Management (US) Inc.

     (c) Any other provision of this Agreement to the contrary  notwithstanding,
any liability of the  Securities  Trust under this Agreement with respect to any
series  of  the  Securities  Trust,  or  in  connection  with  the  transactions
contemplated herein with respect to any series of the Securities Trust, shall be
discharged only out of the assets of that series of the Securities Trust, and no
other series of the Securities Trust shall be liable with respect thereto.

     (d) Any other provision of this Agreement to the contrary  notwithstanding,
any  liability of the Trust under this  Agreement  with respect to any series of
the Trust,  or in  connection  with the  transactions  contemplated  herein with
respect to any series of the Trust,  shall be discharged  only out of the assets
of that  series of the Trust,  and no other  series of the Trust shall be liable
with respect thereto.

11.  Indemnification by the Securities Trust and the Nasdaq-100 Fund

     The Securities  Trust and the Nasdaq-100 Fund hereby agree to indemnify and
hold the Trust and the Small Cap Fund and each of them  harmless  from all loss,
liability  and  expense  (including  reasonable  counsel  fees and  expenses  in
connection  with the contest of any claim) which the Trust or the Small Cap Fund
may incur or  sustain  by reason of the fact that (i) the Trust or the Small Cap
Fund shall be  required to pay any  obligation  of the  Securities  Trust or the
Nasdaq-100 Fund, whether consisting of Tax deficiencies or otherwise, based upon
a claim or claims against the Securities  Trust or the Nasdaq-100 Fund that were
omitted or not fully  reflected in the  financial  statements to be delivered to
the Trust in connection with the Closing; (ii) any representations or warranties
made by the Securities  Trust in Sections 4 or 6 hereof should prove to be false
or erroneous in any material  respect;  (iii) any covenant has been  breached in
any  material  respect;  or  (iv)  any  claim  is  made  alleging  that  (a) the
Prospectus/Proxy  Statement delivered to the shareholders of the Nasdaq-100 Fund
in connection with this transaction,  or (b) the Registration  Statement on Form
N-14 of which such  Prospectus/Proxy  Statement forms a part, included an untrue
statement of a material  fact or omitted to state a material  fact  necessary to
make the statements therein, in light of the circumstances under which they were
made,  not  misleading,  except  insofar  as such  claim  is  based  on  written
information  furnished  to the  Securities  Trust by the Trust,  its  investment
adviser or distributor.

12.  Indemnification by the Trust and the Small Cap Fund

     The Trust and the Small Cap Fund  hereby  agree to  indemnify  and hold the
Trustees of the Securities Trust and the Nasdaq-100 Fund harmless from all loss,
liability  and  expenses  (including  reasonable  counsel  fees and  expenses in
connection  with the  contest of any claim)  which the  Securities  Trust or the
Nasdaq-100  Fund may  incur  or  sustain  by  reason  of the  fact  that (i) any
representations or warranties made by the Trust in Sections 5 or 6 hereof should
prove false or  erroneous in any  material  respect;  (ii) any covenant has been
breached by the Trust or the Small Cap Fund in any  material  respect;  or (iii)
any claim is made alleging that (a) the Prospectus/Proxy  Statement delivered to
the shareholders of the Nasdaq-100 Fund in connection with this transaction,  or
(b) the  Registration  Statement  on Form  N-14 of which  such  Prospectus/Proxy
Statement  forms a part,  included  an untrue  statement  of a material  fact or
omitted to state a material fact  necessary to make the statements  therein,  in
light of the  circumstances  under which they were made, not misleading,  except
insofar as such claim is based on written information  furnished to the Trust by
the Securities Trust, its investment adviser or distributor.

13.  Notice of Claim of Indemnification

     In the event that any claim is made against the Trust or the Small Cap Fund
in respect of which  indemnity  may be sought by the Trust or the Small Cap Fund
from the  Securities  Trust,  the  Nasdaq-100  Fund or the  shareholders  of the
Nasdaq-100  Fund under Section 11 of this  Agreement,  or, in the event that any
claim is made against the Securities  Trust or the Nasdaq-100 Fund in respect of
which  indemnity may be sought by the Securities  Trust or the  Nasdaq-100  Fund
from the Trust or the Small Cap Fund  under  Section 12 of this  Agreement,  the
party seeking  indemnification  (the "Indemnified Party") shall, with reasonable
promptness and before  payment of such claim,  give written notice of such claim
to the  other  party  (the  "Indemnifying  Party").  If no  objection  as to the
validity  of the  claim  is made in  writing  to the  Indemnified  Party  by the
Indemnifying Party within thirty (30) days after giving notice hereunder,  then,
the Indemnified  Party may pay such claim and shall be entitled to reimbursement
therefor,  pursuant to this  Agreement.  If,  prior to the  termination  of such
thirty-day period, objection in writing as to the validity of such claim is made
to the Indemnified  Party, the Indemnified  Party shall withhold payment thereof
until the validity of the claim is established  (i) to the  satisfaction  of the
Indemnifying  Party;  or (ii) by a final  determination  of a court of competent
jurisdiction,  whereupon the  Indemnified  Party may pay such claim and shall be
entitled to  reimbursement  thereof,  pursuant to this Agreement;  or (iii) with
respect to any Tax claims,  within seven (7) calendar days following the earlier
of (A) an agreement between the Securities Trust and the Trust that an indemnity
amount is payable,  (B) an assessment of a Tax by a taxing  authority,  or (C) a
"determination"  as defined in Section 1313(a) of the Code. For purposes of this
Section 13, the term "assessment" shall have the same meaning as used in Chapter
63 of the Code and Treasury Regulations thereunder,  or any comparable provision
under  the  laws  of the  appropriate  taxing  authority.  In the  event  of any
objection by the  Indemnifying  Party,  the  Indemnifying  Party shall  promptly
investigate the claim, and if it is not satisfied with the validity thereof, the
Indemnifying  Party shall conduct the defense against such claim.  All costs and
expenses   incurred  by  the   Indemnifying   Party  in  connection   with  such
investigation   and  defense  of  such  claim  shall  be  borne  by  it.   These
indemnification  provisions  are in addition to, and not in  limitation  of, any
other rights the parties may have under applicable law.

14.  Termination; Waiver; Order


     (a) Anything  contained in this Agreement to the contrary  notwithstanding,
this Agreement may be terminated and the Plan of Reorganization abandoned at any
time  (whether  before or after  approval  thereof  by the  shareholders  of the
Nasdaq-100 Fund) prior to the Closing as follows:

          (1) by  mutual  consent  of the  Securities  Trust  and the  Trust  in
     writing;

          (2) by the Trust if any  condition  precedent to its  obligations  set
     forth in  Section  9 has not  been  fulfilled  or  waived  by the  Trust in
     writing; or

          (3)  by  the  Securities  Trust  if  any  condition  precedent  to its
     obligations  set forth in Section 9 has not been fulfilled or waived by the
     Securities Trust in writing.

     (b) If the  transactions  contemplated  by this  Agreement  have  not  been
consummated  by  ____________  __,  2004,  this  Agreement  shall  automatically
terminate on that date,  unless a later date is agreed to in writing by both the
Securities Trust and the Trust.

     (c)  In  the  event  of  termination  of  this  Agreement  pursuant  to the
provisions  hereof,  the same shall become void and have no further effect,  and
there shall not be any liability on the part of either the  Securities  Trust or
the Trust or persons who are their trustees, officers, agents or shareholders in
respect of this Agreement.

     (d) At any time prior to the  Closing,  any of the terms or  conditions  of
this  Agreement  may be waived  by either  the  Securities  Trust or the  Trust,
respectively (whichever is entitled to the benefit thereof).

     (e) The respective  representations,  warranties and covenants contained in
Sections 4-8 hereof shall expire with, and be terminated by, the consummation of
the Plan of Reorganization.

     (f) If any order or orders of the Commission with respect to this Agreement
shall be issued  prior to the Closing and shall  impose any terms or  conditions
that are determined by action of the Board of Trustees of the  Securities  Trust
or the  Board  of  Trustees  of the  Trust  to be  acceptable,  such  terms  and
conditions shall be binding as if a part of this Agreement  without further vote
or approval of the shareholders of the Nasdaq-100 Fund, unless such further vote
is required by applicable law, or by mutual consent of the parties.

15.  Final Tax Returns and Forms 1099 of the Nasdaq-100 Fund

     (a) After the Closing, the Securities Trust shall or shall cause its agents
to prepare any federal,  state or local Tax returns,  including  any Forms 1099,
required  to be filed by the  Securities  Trust with  respect to the  Nasdaq-100
Fund's final taxable year ending with its complete liquidation and for any prior
periods or taxable years and shall further cause such Tax returns and Forms 1099
to be duly filed with the appropriate taxing authorities.

     (b)  Notwithstanding  the  provisions  of  Section 1 hereof,  any  expenses
incurred by the Securities  Trust or the Nasdaq-100 Fund (other than for payment
of Taxes) in connection  with the preparation and filing of said Tax returns and
Forms  1099  after the  Closing,  shall be borne by the  Nasdaq-100  Fund to the
extent such  expenses  have been or should have been  accrued by the  Nasdaq-100
Fund in the  ordinary  course  without  regard  to the  Plan  of  Reorganization
contemplated by this Agreement.

16.  Cooperation and Exchange of Information

     The  Trust and the  Securities  Trust  will  provide  each  other and their
respective  representatives  with such  cooperation and information as either of
them  reasonably  may  request of the other in filing any Tax  returns,  amended
return or claim for refund,  determining  a liability  for Taxes or a right to a
refund of Taxes or  participating in or conducting any audit or other proceeding
in respect of Taxes.  Each party or their  respective  agents  will retain for a
period of six (6) years  following  the Closing all returns,  schedules and work
papers and all material  records or other  documents  relating to Tax matters of
the Nasdaq-100 Fund and Small Cap Fund for its taxable period first ending after
the Closing and for all prior taxable periods.

17.  Entire Agreement and Amendments

     This Agreement  embodies the entire Agreement between the parties and there
are no  agreements,  understandings,  restrictions,  or  warranties  between the
parties other than those set forth herein or herein provided for. This Agreement
may be amended  only by mutual  consent of the parties in writing.  Neither this
Agreement  nor any  interest  herein may be assigned  without the prior  written
consent of the other party.

18.  Counterparts

     This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an  original,  but all such  counterparts  together  shall
constitute but one instrument.

19.  Notices

     Any notice,  report,  or demand  required or permitted by any  provision of
this  Agreement  shall be in  writing  and shall be deemed to have been given if
delivered or mailed,  first class postage prepaid,  addressed to the Trust at 51
West 52nd Street, New York, New York 10019-6114, Attention: Secretary, or to the
Securities  Trust  at 51 West  52nd  Street,  New  York,  New  York  10019-6114,
Attention: Secretary.

20.  Governing Law

     This Agreement  shall be governed by and carried out in accordance with the
laws of the State of Delaware.

21.  Effect of Facsimile Signature

     A facsimile  signature of an  authorized  officer of a party hereto on this
Agreement and/or any transfer document shall have the same effect as if executed
in the original by such officer.

     IN WITNESS  WHEREOF,  the Trust and the  Securities  Trust have each caused
this  Agreement and Plan of  Reorganization  to be executed on its behalf by its
duly authorized officers, all as of the day and year first-above written.

                                      THE UBS FUNDS, ON BEHALF
                                      OF THE UBS U.S. SMALL CAP GROWTH FUND
Attest:

By:    ____________________________   By:    ___________________________________

Title:   __________________________   Title:   _________________________________





                                      UBS MUTUAL FUNDS SECURITIES TRUST, ON
                                      BEHALF OF THE UBS ENHANCED NASDAQ-100 FUND
Attest:

By:    ____________________________   By:    ___________________________________

Title:   __________________________   Title:   _________________________________





                                    EXHIBIT B

[The Prospectus of the Small Cap Fund, dated September 30, 2002 (as revised July
2, 2003), as previously filed via EDGAR, is incorporated herein by reference and
will be included with the mailing to shareholders.]





                                    EXHIBIT C

[The  Annual  Report to  Shareholders  of the Small Cap Fund for the fiscal year
ended June 30, 2002, as previously  filed via EDGAR, is  incorporated  herein by
reference and will be included in the mailing to Shareholders.]





                           VOTE THIS PROXY CARD TODAY!

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                                 website:  https://vote.proxy-direct.com.

                            3.   Enter your 14 digit Control Number from
                                 your Proxy Card.

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                            5.   Do not mail your Proxy Card when you vote
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                  Please detach at perforation before mailing.



PROXY   SPECIAL MEETING OF SHAREHOLDERS OF UBS ENHANCED NASDAQ-100 FUND   PROXY
                             [_______________, 2003]

The undersigned  hereby revokes all previous proxies for his shares and appoints
as proxies  Todd Lebo and Evelyn  DeSimone,  and each of them (with the power of
substitution)  to vote for the undersigned all shares of beneficial  interest of
the  undersigned  in the UBS  Enhanced  NASDAQ-100  Fund, a series of UBS Mutual
Funds  Securities  Trust,  at the Special  Meeting of Shareholders to be held at
[Insert Time] Eastern  time,  on [_________  __, 2003],  at 51 West 52nd Street,
16th  Floor,  New  York,  New  York  10019-6114,  and  any  adjournment  thereof
("Meeting"),  with  all the  power  the  undersigned  would  have if  personally
present. The shares represented by this card will be voted as instructed.

UNLESS INDICATED TO THE CONTRARY,  THIS PROXY SHALL BE DEEMED TO GRANT AUTHORITY
TO VOTE "FOR" THE PROPOSAL  RELATING TO THE  REORGANIZATION  OF THE UBS ENHANCED
NASDAQ-100  FUND, A SERIES OF UBS MUTUAL FUNDS  SECURITIES  TRUST,  INTO THE UBS
U.S.  SMALL CAP GROWTH  FUND,  A SERIES OF THE UBS FUNDS.  IF ANY OTHER  MATTERS
PROPERLY COME BEFORE THE SPECIAL  MEETING ABOUT WHICH THE PROXIES WERE NOT AWARE
PRIOR TO THE TIME OF SOLICITATION, AUTHORIZATION IS GIVEN TO THE PROXIES TO VOTE
IN THEIR DISCRETION.

VOTE VIA THE INTERNET:  https://vote.proxy-direct.com
VOTE VIA THE TELEPHONE:  1-866-241-6194
- ---------------------------------------------------------------------
CONTROL NUMBER:
- ---------------------------------------------------------------------

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


Signature


Signature (if held jointly)


Date                                            EAW_12958





                      EACH SHAREHOLDER'S VOTE IS IMPORTANT
                        PLEASE SIGN, DATE AND RETURN YOUR
                                   PROXY TODAY






                  Please detach at perforation before mailing.



THIS PROXY IS BEING  SOLICITED  FOR THE BOARD OF  TRUSTEES  OF UBS MUTUAL  FUNDS
SECURITIES TRUST, ON BEHALF OF ITS SERIES, THE UBS ENHANCED NASDAQ-100 FUND, AND
RELATES TO THE PROPOSAL INDICATED BELOW.

When  properly  signed,  the  proxy  will be voted as  instructed  below.  If no
instruction is given for a proposal, a vote will be made "For" that proposal.

TO VOTE, MARK THE BLOCKS BELOW IN BLUE OR BLACK INK.  Example:

The Board of Trustees recommends a vote FOR the following Proposal.


1.   To approve an Agreement and Plan of Reorganization between UBS   FOR   AGAINST  ABSTAIN
     Mutual Funds Securities Trust, on behalf of its series, UBS
     Enhanced NASDAQ-100 Fund (the "Nasdaq-100 Fund"), and The UBS    [ ]     [ ]      [ ]
     Funds, on behalf of its series, UBS U.S. Small Cap Growth Fund
     (the "Small Cap Fund"), that provides for the acquisition of
     substantially all of the assets, subject to the liabilities,
     of the Nasdaq-100 Fund in exchange for shares of the Small Cap
     Fund, the distribution of such shares to the shareholders of
     the Nasdaq-100 Fund, and the complete liquidation and
     dissolution of the Nasdaq-100 Fund.



 Please date and sign the reverse side of this proxy and return it promptly in
   the enclosed envelope. This proxy will not be voted unless it is dated and
                         signed exactly as instructed.



Part B
- ------
                       STATEMENT OF ADDITIONAL INFORMATION
                                       FOR
                                  THE UBS FUNDS
                            Dated _________ __, 2003


Acquisition of the Assets of the
UBS ENHANCED NASDAQ-100 FUND
(a series of UBS Mutual Funds Securities Trust)


By and in exchange for shares of the
UBS U.S. SMALL CAP GROWTH FUND
(a series of The UBS Funds)


     This Statement of Additional  Information  ("SAI") relates  specifically to
the proposed  acquisition  (the  "Merger") of  substantially  all of the assets,
subject to the liabilities, of the UBS Enhanced NASDAQ-100 Fund (the "Nasdaq-100
Fund"), a series of UBS Mutual Funds Securities Trust (the "Securities  Trust"),
in  exchange  for shares of the UBS U.S.  Small Cap Growth  Fund (the "Small Cap
Fund"), a series of The UBS Funds (the "Trust").

     This SAI also includes the following  documents,  which are attached to and
legally considered to be a part of this SAI:

1.   Pro Forma Financial  Statements  reflecting the financial  situation of the
     Small Cap Fund  following  the Merger as if the  Merger had taken  place on
     June 30, 2003.

2.   Statement of Additional  Information of the Small Cap Fund, dated September
     30, 2002.

3.   Annual  Report of the Small Cap Fund for the  fiscal  year  ended  June 30,
     2002.

4.   Semi-Annual Report for the period ended December 31, 2002.

5.   Annual Report of the  Nasdaq-100  Fund for the fiscal year ended  September
     30, 2002.

     This SAI is not a Prospectus;  you should read this SAI in conjunction with
the Prospectus/Proxy Statement, dated _________ __ 2003, relating to the Merger.
You  can  request  a  copy  of  the   Prospectus/Proxy   Statement   by  calling
1-800-647-1568  or by writing to the Small Cap Fund at 51 West 52nd Street,  New
York, New York 10019-6114, Attn. Secretary.





                         PRO FORMA FINANCIAL STATEMENTS

Pro Forma Portfolio of Investments (unaudited)
June 30, 2003
                                                    Shares                                      Market Value
                                  ------------------------------------------ ----------------------------------------------------

                                     UBS U.S.    UBS Enhanced                  UBS U.S.    UBS Enhanced              Pro Forma
                                    Small Cap     Nasdaq-100     Pro Forma    Small Cap     Nasdaq-100   Adjustments  Combined
                                   Growth Fund       Fund        Combined    Growth Fund      Fund

U.S. Equities -- 99.09%
Aerospace & Defense -- 0.46%
Engineered Support Systems, Inc.       9,450                       9,450      $  395,482                            $  395,482

Airlines -- 0.11%
Ryanair Holdings PLC, ADR*                           2,000         2,000                         89,800                 89,800

Air Freight & Couriers -- 0.25%
C.H. Robinson Worldwide, Inc.                        3,200         3,200                        113,792                113,792
Expeditors International of
Washington, Inc.                                     2,900         2,900                        100,456                100,456
                                      --------------------------------------   -------------------------     -------------------
                                         -           6,100         6,100             -          214,248                214,248
                                      --------------------------------------   -------------------------     -------------------
Auto Parts & Equipment -- 0.78%
American Axle & Manufacturing
Holdings, Inc.*                       24,100                      24,100         575,990                               575,990
Gentex Corp.*                                        3,100         3,100                         94,891                 94,891
                                      --------------------------------------   -------------------------      -----------------
                                      24,100         3,100        27,200         575,990         94,891                670,881
                                      --------------------------------------  --------------------------      -----------------
Banks -- 4.83%
BankUnited Financial Corp., Class A*  36,400                      36,400         733,460                               733,460
New York Community Bancorp, Inc.      46,595                      46,595       1,355,448                             1,355,448
Sterling Bancshares, Inc.             40,400                      40,400         528,432                               528,432
UCBH Holdings, Inc.                   52,800                      52,800       1,514,304                             1,514,304
                                      --------------------------------------   ------------------------      -----------------
                                     176,195           -         176,195       4,131,644            -                4,131,644
                                      --------------------------------------  -------------------------      -----------------
Beverages -- 0.68%
Cott Corp.*                           28,000                      28,000         579,320                               579,320

Biotechnology -- 4.58%
Amgen, Inc.*                                        22,100        22,100                      1,468,324              1,468,324
Biogen, Inc.*                                        6,400         6,400                        243,200                243,200
Cephalon, Inc.*                                      2,400         2,400                         98,784                 98,784
Chiron Corp.*                                        9,400         9,400                        410,968                410,968
Genzyme Corp.*                                       9,400         9,400                        392,920                392,920
Gilead Sciences, Inc.*                               7,200         7,200                        400,176                400,176
Human Genome Sciences, Inc.*                         3,600         3,600                         45,792                 45,792
ICOS Corp.*                                          1,400         1,400                         51,450                 51,450
IDEC Pharmaceuticals Corp.*                          6,600         6,600                        224,400                224,400
Invitrogen Corp.*                                    2,300         2,300                         88,251                 88,251
Medimmune, Inc.*                                     9,600         9,600                        349,152                349,152
Millennium Pharmaceuticals                           9,000         9,000                        141,570                141,570
                                      --------------------------------------   ------------------------      -----------------
                                         -          89,400        89,400             -        3,914,987              3,914,987
                                      --------------------------------------   ------------------------      -----------------
Broadcasting & Cable TV -- 1.10%
Cumulus Media, Inc., Class A*         38,700                      38,700         732,591                               732,591
Salem Communications
Corp., Class A*                       10,600                      10,600         212,117                               212,117
                                      --------------------------------------   ------------------------      -----------------
                                      49,300           -          49,300         944,708            -                  944,708
                                      --------------------------------------  ------------------------      -----------------
Capital Goods -- 1.01%
Cognex Corp.*                         32,100                      32,100         717,435                               717,435
Sigma-Aldrich Corp.                                  2,700         2,700                        146,286                146,286
                                      --------------------------------------   ------------------------      -----------------
                                      32,100         2,700        34,800         717,435        146,286                863,721
                                      --------------------------------------   ------------------------      -----------------
Chemicals -- 0.65%
Albemarle Corp.                       19,800                      19,800         553,806                               553,806

Commercial Services &  Supplies
- -- 1.70%
Apollo Group, Inc.,Class A*                          6,750         6,750                        416,880                416,880
Cintas Corp.                                         7,900         7,900                        279,976                279,976
Fiserv Inc.*                                         9,800         9,800                        348,978                348,978
Paychex, Inc.                                       13,850        13,850                        405,944                405,944
                                      --------------------------------------   ------------------------      -----------------
                                         -          38,300        38,300             -        1,451,778              1,451,778
                                      --------------------------------------   ------------------------      -----------------
Communications Equipment -- 4.09%
ADC Telecommunications, Inc.*                       29,800        29,800                         69,374                 69,374
Brocade Communications Systems, Inc.*                9,100         9,100                         53,599                 53,599
CIENA Corp.*                                        14,100        14,100                         73,179                 73,179
Cisco Systems, Inc.*                                95,800        95,800                      1,598,902              1,598,902
Comverse Technology Inc.*                            6,600         6,600                         99,198                 99,198
JDS Uniphase Corp.*                                 50,800        50,800                        178,308                178,308
Juniper Networks, Inc.*                              8,500         8,500                        105,145                105,145
Qualcomm, Inc.                                      35,900        35,900                      1,283,425              1,283,425
Tellabs, Inc.*                                       5,300         5,300                         34,821                 34,821
                                      --------------------------------------   ------------------------      -----------------
                                         -         255,900       255,900             -        3,495,951              3,495,951
                                      --------------------------------------   ------------------------      -----------------
Computers & Peripherals -- 2.28%
Apple Computer, Inc.*                               18,600        18,600                        355,632                355,632
Dell Computer Corp.*                                36,200        36,200                      1,156,952              1,156,952
Network Appliance, Inc.*                            12,900        12,900                        209,109                209,109
Sun Microsystems, Inc.*                             48,900        48,900                        224,940                224,940
                                      --------------------------------------   ------------------------      -----------------
                                         -         116,600       116,600             -        1,946,633              1,946,633
                                      --------------------------------------   ------------------------      -----------------
Computer Software -- 12.84%
Adobe Systems, Inc.                                  8,100         8,100                        259,767                259,767
BEA Systems, Inc.*                                  14,700        14,700                        159,642                159,642
Borland Software Corp.*               43,600                      43,600         425,972                               425,972
Citrix Systems, Inc.*                                8,700        8,700                         177,132                177,132
Compuware Corp.*                                     8,600        8,600                          49,622                 49,622
Electronic Arts, Inc.*                               5,700        5,700                         421,743                421,743
Fair, Isaac Corp.                     22,200                      22,200       1,142,190                             1,142,190
Intuit, Inc.*                                        9,700         9,700                        431,941                431,941
Magma Design Automation, Inc.*        37,500                      37,500         643,125                               643,125
Mercury Interactive Corp.*             9,200         3,900        13,100         355,212        150,579                505,791
Microsoft Corp.                                    137,800       137,800                      3,529,058              3,529,058
Oracle Corp.*                                       82,300        82,300                        989,246                989,246
PeopleSoft, Inc.*                                   16,300        16,300                        286,717                286,717
Siebel Systems, Inc.*                               20,700        20,700                        197,478                197,478
Symantec Corp.*                                      5,700         5,700                        250,002                250,002
Synopsis, Inc.*                                      3,100         3,100                        191,735                191,735
THQ, Inc.*                            22,550                      22,550         405,900                               405,900
Verisity Ltd.*                        38,600                      38,600         460,884                               460,884
Veritas Software Co.*                               15,600        15,600                        447,252                447,252
                                      --------------------------------------   ------------------------      -----------------
                                     173,650       340,900       514,550       3,433,283      7,541,914             10,975,197
                                      --------------------------------------   ------------------------      -----------------
Construction -- 1.17%
Hovnanian Enterprises, Inc.*           8,600                       8,600         506,970                               506,970
NVR, Inc.*                             1,200                       1,200         493,200                               493,200
                                      --------------------------------------   ------------------------      -----------------
                                       9,800           -           9,800       1,000,170            -                1,000,170
                                      --------------------------------------   ------------------------      -----------------
Construction & Engineering
- -- 0.77%
EMCOR Group, Inc.*                    13,300                      13,300         656,488                               656,488

Consumer -- 0.62%
Leapfrog Enterprises, Inc.*           16,600                      16,600         528,046                               528,046

Containers & Packaging -- 0.12%
Smurfit-Stone Container Corp.*                       7,900         7,900                        102,937                102,937

Distiller & Vintners -- 1.07%
Constellation Brands,
 Inc., Class A*                       29,100                      29,100         913,740                               913,740

Diversified Telecommunication
Services -- 0.05%
Telefonaktiebolaget
LM Ericsson, ADR*                                    4,160         4,160                         44,221                 44,221

Electric Components -- 2.40%
American Power Conversion Corp.*                     4,900         4,900                         76,391                 76,391
Artisan Components, Inc.*             19,900                      19,900         449,939                               449,939
Cree, Inc.*                           14,900                      14,900         242,572                               242,572
Foundry Networks, Inc.*               37,900                      37,900         545,760                               545,760
Molex, Inc.                                          3,600         3,600                         97,164                 97,164
Smith, A.O., Corp.                    22,700                      22,700         639,005                               639,005
                                      --------------------------------------   ------------------------      -----------------
                                      95,400         8,500       103,900       1,877,276        173,555              2,050,831
                                      --------------------------------------   ------------------------      -----------------
Electronics -- 1.30%
Benchmark Electronics, Inc.*          25,000                      25,000         769,000                               769,000
Flextronics International Ltd.*                     21,100        21,100                        219,229                219,229
Sanmina - SCI Corp.*                                18,900        18,900                        119,259                119,259
                                      --------------------------------------   ------------------------      -----------------
                                      25,000        40,000        65,000         769,000        338,488              1,107,488
                                      --------------------------------------   ------------------------      -----------------
Energy -- 3.13%
Patina Oil & Gas Corp.                20,700                      20,700         665,505                               665,505
Patterson-UTI Energy, Inc.*           16,800         2,100        18,900         544,320         68,040                612,360
Quicksilver Resources, Inc.*          23,500                      23,500         562,825                               562,825
Tetra Technologies, Inc.*             28,100                      28,100         833,165                               833,165
                                      --------------------------------------   ------------------------      -----------------
                                      89,100         2,100        91,200       2,605,815         68,040              2,673,855
                                      --------------------------------------   ------------------------      -----------------
Financial Services -- 1.70%
First Niagara Financial
Group, Inc.                           14,500                      14,500         202,420                               202,420
Harbor Florida Bancshares, Inc.       14,400                      14,400         345,024                               345,024
Investors Financial Services Corp.    31,100                      31,100         902,211                               902,211
                                      --------------------------------------   ------------------------      -----------------
                                      60,000           -          60,000       1,449,655            -                1,449,655
                                      --------------------------------------   ------------------------      -----------------
Food Distributors -- 0.78%
Performance Food Group Co.*           18,100                      18,100         669,700                               669,700

Gene -- 0.65%
Affymetrix, Inc.*                      9,900                       9,900         195,129                               195,129
InterMune, Inc.*                       6,400                       6,400         103,104                               103,104
Telik, Inc.*                          15,800                      15,800         253,906                               253,906
                                      --------------------------------------   ------------------------      -----------------
                                      32,100           -          32,100         552,139            -                  552,139
                                      --------------------------------------   ------------------------      -----------------
Health: Drugs -- 1.17%
Amylin Pharmaceuticals, Inc.*         13,200                      13,200         288,948                               288,948
Taro Pharmaceutical Industries*       13,000                      13,000         713,440                               713,440
                                      --------------------------------------   ------------------------      -----------------
                                      26,200           -          26,200       1,002,388            -                1,002,388
                                      --------------------------------------   ------------------------      -----------------
Health: Non-Drugs -- 8.30%
Advanced Neuromdulation
Systems, Inc.*                        17,200                      17,200         890,444                               890,444
Biomet, Inc.                                        12,400        12,400                        355,384                355,384
DENTSPLY International, Inc.                         2,300         2,300                         94,070                 94,070
Express Scripts, Inc.*                               3,000         3,000                        204,960                204,960
First Health Group Corp.*                            3,700         3,700                        102,120                102,120
Fisher Scientific
International, Inc.*                  13,000                      13,000         453,700                               453,700
Henry Schein, Inc.*                                  1,400         1,400                         73,276                 73,276
Inamed Corp.*                         14,700                      14,700         789,243                               789,243
Lincare Holdings, Inc.*                              4,000         4,000                        126,040                126,040
Patterson Dental Co. *                26,000         2,200        28,200       1,179,880         99,836              1,279,716
Pediatrix Medical Group, Inc.*        27,200                      27,200         969,680                               969,680
ResMed, Inc.*                          6,400                       6,400         250,880                               250,880
Select Medical Corp.*                 32,000                      32,000         794,560                               794,560
VCA Antech, Inc.*                     36,100                      36,100         706,477                               706,477
                                      --------------------------------------   ------------------------      -----------------
                                     172,600        29,000       201,600       6,034,864      1,055,686              7,090,550
                                      --------------------------------------   ------------------------      -----------------
Healthcare Facility -- 1.16%
Odyssey HealthCare, Inc.*             26,850                      26,850         993,450                               993,450

Industrial Supplies -- 0.10%
Fastenal Co.                                         2,400         2,400                         81,456                 81,456

Insurance -- 1.24%
Hilb, Rogal & Hamilton Co.             9,400                       9,400         319,976                               319,976
Hub International Ltd.                21,900                      21,900         374,490                               374,490
RLI Corp.                             11,100                      11,100         365,190                               365,190
                                      --------------------------------------   ------------------------      -----------------
                                      42,400           -          42,400       1,059,656            -                1,059,656
                                      --------------------------------------   ------------------------      -----------------
Internet & Catalog Retail
- -- 1.43%
Amazon.com, Inc.*                                    9,300         9,300                        339,357                339,357
eBay, Inc.*                                          8,500         8,500                        885,530                885,530
                                      --------------------------------------   ------------------------      -----------------
                                         -          17,800        17,800             -        1,224,887              1,224,887
                                      --------------------------------------   ------------------------      -----------------
Internet Software & Services
- -- 2.52%
Avocent Corp.*                        14,100                      14,100         422,013                               422,013
Check Point Software Technologies
 Ltd.*                                               8,600         8,600                        168,130                168,130
Interactive Corp.*                                  16,000        16,000                        633,120                633,120
Monster Worldwide Inc.*                              3,100         3,100                         61,163                 61,163
Overture Services, Inc.*              21,200                      21,200         384,356                               384,356
VeriSign, Inc.*                                      8,800         8,800                        121,704                121,704
Yahoo!, Inc.*                                       11,000        11,000                        360,360                360,360
                                      --------------------------------------   ------------------------      -----------------
                                      35,300        47,500        82,800         806,369      1,344,477              2,150,846
                                      --------------------------------------   ------------------------      -----------------
IT Consulting & Services
- -- 2.51%
CACI International,
Inc., Class A*                        28,900                      28,900         991,270                               991,270
Cognizant Technology
Solutions Corp.*                      47,400                      47,400       1,154,664                             1,154,664
                                      --------------------------------------   ------------------------      -----------------
                                      76,300           -          76,300       2,145,934            -                2,145,934
                                      --------------------------------------   ------------------------      -----------------
Leisure Products -- 0.36%
Action Performance Companies,
 Inc.                                 16,200                      16,200         307,800                               307,800

Machinery Industrial -- 1.73%
ESCO Technologies, Inc.*              15,800                      15,800         695,200                               695,200
Flowserve Corp.*                      23,200                      23,200         456,344                               456,344
PACCAR, Inc.                                         4,800         4,800                        324,288                324,288
                                      --------------------------------------   ------------------------      -----------------
                                      39,000         4,800        43,800       1,151,544        324,288              1,475,832
                                      --------------------------------------   ------------------------      -----------------
Media -- 1.79%
Comcast Corp., Class A*                             34,500        34,500                      1,041,210              1,041,210
Echostar Communications Corp.*                       8,700         8,700                        301,194                301,194
Lamar Advertising Co.*                               2,100         2,100                         73,941                 73,941
Pixar, Inc.*                                         1,900         1,900                        115,596                115,596
                                      --------------------------------------   ------------------------      -----------------
                                         -          47,200        47,200             -        1,531,941              1,531,941
                                      --------------------------------------   ------------------------      -----------------
Non-Durables -- 0.94%
Moore Wallace, Inc.*                  55,000                      55,000         807,400                               807,400

Pharmaceuticals -- 3.04%
Isis Pharmaceuticals, Inc.*           36,500                      36,500         193,450                               193,450
Neurocrine Biosciences, Inc.*         13,400                      13,400         669,196                               669,196
NPS Pharmaceuticals, Inc.*            18,000                      18,000         438,120                               438,120
Penwest Pharmaceuticals Co.*          27,000                      27,000         657,990                               657,990
Sangstat Medical Corp.*               18,900                      18,900         247,401                               247,401
Teva Pharmaceutical Industries
Ltd., ADR                                            6,900         6,900                        392,817                392,817
                                      --------------------------------------   ------------------------      -----------------
                                     113,800         6,900       120,700       2,206,157        392,817              2,598,974
                                      --------------------------------------   ------------------------      -----------------
Real Estate -- 2.30%
American Financial Realty
TR (REIT)                             29,300                      29,300         436,863                               436,863
Jones Lang LaSalle, Inc.*             24,500                      24,500         387,100                               387,100
Mills Corp. (The) (REIT)              16,800                      16,800         563,640                               563,640
Ventas, Inc. (REIT)                   38,100                      38,100         577,215                               577,215
                                      --------------------------------------   ------------------------      -----------------
                                     108,700           -         108,700       1,964,818            -                1,964,818
                                      --------------------------------------   ------------------------      -----------------
Research & Development -- 0.78%
Pharmaceutical Product
Development, Inc.*                    23,200                      23,200         666,536                               666,536

Restaurants -- 2.35%
Panera Bread Co., Class A*            17,100                      17,100         684,000                               684,000
Ruby Tuesday, Inc.                    33,700                      33,700         833,401                               833,401
Starbucks Corp.*                                    20,200        20,200                        495,304                495,304
                                      --------------------------------------   ------------------------      -----------------
                                      50,800        20,200        71,000       1,517,401        495,304              2,012,705
                                      --------------------------------------   ------------------------      -----------------
Retail-Computers/Electronics
- -- 0.61%
Electronics Boutique Holdings
Corp.*                                22,400                      22,400         517,664                               517,664

Retail-Apparel -- 2.55%
Chico's FAS, Inc.*                    50,700                      50,700       1,067,235                             1,067,235
Gart Sports Co.*                      15,700                      15,700         445,252                               445,252
Petco Animal Supplies, Inc.*          30,600                      30,600         665,244                               665,244
                                      --------------------------------------   ------------------------      -----------------
                                      97,000           -          97,000       2,177,731            -                2,177,731
                                      --------------------------------------   ------------------------      -----------------
Retail-Food -- 0.11%
Whole Foods Market, Inc.*                            1,900         1,900                         90,307                 90,307

Retail-Multi-Line -- 0.59%
Costco Wholesale Corp.*                              8,800         8,800                        322,080                322,080
Dollar Tree Stores, Inc.*                            5,700         5,700                        180,861                180,861
                                     --------------------------------------    ------------------------      -----------------
                                         -          14,500        14,500             -          502,941                502,941
                                      --------------------------------------   ------------------------      -----------------
Retail-Specialty -- 1.28%
Bed, Bath & Beyond, Inc.*                           14,500        14,500                        562,745                562,745
CDW Corp.*                                           3,500         3,500                        160,300                160,300
PetSmart, Inc.*                                      3,900         3,900                         65,013                 65,013
Ross Stores, Inc.*                                   2,100         2,100                         89,754                 89,754
Staples, Inc.*                                      11,600        11,600                        212,860                212,860
                                      --------------------------------------   ------------------------      -----------------
                                         -          35,600        35,600             -        1,090,672              1,090,672
                                      --------------------------------------   ------------------------      -----------------
Semiconductor Equipment &
Products -- 0.38%
Rudolph Technologies, Inc.*           20,500                      20,500         327,180                               327,180

Semiconductors -- 8.65%
Altera Corp.*                                       19,700        19,700                        323,080                323,080
Applied Materials, Inc.*                            30,800        30,800                        488,488                488,488
Broadcom Corp.*                                      5,900         5,900                        146,969                146,969
Exar Corp.*                           32,700                      32,700         517,641                               517,641
Formfactor, Inc.*                      1,500                       1,500          26,550                                26,550
Intel Corp.                                         86,300        86,300                      1,793,659              1,793,659
Intersil Corp.*                       23,852                      23,852         634,702                               634,702
KLA-Tencor Corp.*                                    8,100         8,100                        376,569                376,569
Linear Technology Corp.                             15,400        15,400                        496,034                496,034
Maxim Integrated Products, Inc.                     16,700        16,700                        570,973                570,973
Microchip Technology, Inc.                           6,425         6,425                        158,248                158,248
Novellus Systems, Inc.*                              5,100         5,100                        186,767                186,767
NVIDIA Corp.*                                        7,600         7,600                        174,876                174,876
Pericom Semiconductor Corp.*          23,900                      23,900         222,270                               222,270
Power Integrations, Inc.*             25,500                      25,500         620,160                               620,160
QLogic Corp.*                                        4,300         4,300                        207,819                207,819
RF Micro Devices, Inc.*                              7,200         7,200                         43,344                 43,344
Xilinx, Inc.*                                       16,100        16,100                        407,491                407,491
                                      --------------------------------------   ------------------------      -----------------
                                     107,452       229,625       337,077       2,021,323      5,374,317              7,395,640
                                      --------------------------------------   ------------------------      -----------------
Services-Data Processing -- 0.61%
Factset Research Systems, Inc.        11,800                      11,800         519,790                               519,790

Services-Diversified Commercial
- -- 1.82%
Career Education Corp.*               22,800                      22,800       1,559,976                             1,559,976

Transportation -- 0.52%
UTI Worldwide, Inc.                   14,300                      14,300         446,017                               446,017

Wireless Telecommunication
Services -- 1.13%
Nextel Communications, Inc.*                        45,800        45,800                        828,064                828,064
PanAmSat Corp.*                                      7,600         7,600                        140,068                140,068
                                      --------------------------------------   -----------------------      ------------------
                                         -          53,400        53,400             -          968,132                968,132
                                      --------------------------------------   -------------------------      ----------------
Total U.S. Equities
(Cost $103,103,577)                1,983,697     1,428,485     3,412,182      50,587,695     34,100,954             84,688,649
                                      --------------------------------------  -------------------------      -----------------

Short-Term Investments -- 8.24%
Other -- 8.24%
UBS Supplementary Trust
  U.S. Cash Management Prime
Fund  (Cost $7,061,939)            7,037,939           -       7,037,939       7,037,939            -                7,037,939

Investment of Cash Collateral
from Securities Loaned -- 0.81%
Money Market Funds -- 0.81%
Aim Liquid Assets                                       77            77                             77                     77
UBS Private Money Market Fund LLC                  693,723       693,723                        693,723                693,723
Deutsche Cash Reserves                                 200           200                            200                    200
                                      --------------------------------------    -----------------------      -----------------
Total Money Market Funds
(Cost $694,000)                          -         694,000       694,000             -          694,000                694,000
                                      --------------------------------------    -----------------------      -----------------
Total Investments
                                      --------------------------------------    -----------------------      -----------------
(Cost $110,858,516) -- 108.14%     9,021,636                   9,021,636      57,625,634     34,794,954             92,420,588
                                      --------------------------------------    -----------------------      -----------------
Liabilities, less cash
and other assets  -- (8.14)%                                                  (6,110,156)      (847,692)           (6,957,848)
                                      --------------------------------------    -----------------------      -----------------
Net Assets -- 100%                 9,021,636           -       9,021,636      51,515,478     33,947,262             85,462,740
                                      ======================================    =======================      ==================


* Non-income producing security.

                            See accompany notes to proforma financial statements





UBS U.S. Small Cap Growth Fund
UBS Enhanced Nasdaq-100 Fund
Proforma Statement of Assets and Liabilities
June 30, 2003 (unaudited)

                                                      UBS U.S. Small Cap   UBS Enhanced
                                                        Growth Fund      Nasdaq-100 Fund      Adjustment    Combined
                                                      -----------------  -----------------  ------------   ------------
Assets
Investments in securities, at value
 (cost - $52,206,140 and $58,653,376
respectively)                                             $ 57,625,634       $ 34,794,954                 $ 92,420,588
Cash                                                             3,837                  -                        3,837
Receivable for investments sold                              1,067,536                  -                    1,067,536
Dividends and interest receivable                                8,026                674                        8,700
Receivable for shares sold                                     200,614              9,941                      210,555
Other assets                                                       653             46,607                       47,260
                                                      -----------------  -----------------  ------------   ------------

Total assets                                                58,906,300         34,852,176             -     93,758,476
                                                      -----------------  -----------------  ------------   ------------

Liabilities
Payable for investments purchased                            6,264,381                  -                    6,264,381
Payable for cash collateral for securities loaned                    -            694,000                      694,000
Payable for capital shares                                   1,001,317             38,832                    1,040,149
Accrued expenses and other liabilities                         125,124            172,082                      297,206
                                                      -----------------  -----------------  ------------   ------------
Total liabilities                                            7,390,822            904,914             -      8,295,736
                                                      -----------------  -----------------  ------------   ------------

Net assets                                                  51,515,478         33,947,262                   85,462,740

Outstanding shares of beneficial interest,
$0.001 par value                                            49,316,429        115,645,558   (81,323,721)(b) 83,638,266
Accumulated undistributed  net investment
income                                                        (266,296)          (374,575)                    (640,871)
Accumulated net realized losses from
investment transactions                                     (2,954,149)       (57,465,299)   57,465,299 (b) (2,954,149)
Net unrealized appreciation of investments                   5,419,494        (23,858,422)   23,858,422 (b)  5,419,494
                                                      -----------------  -----------------  ------------
Net assets applicable to shares outstanding               $ 51,515,478       $ 33,947,262    $        -    $ 85,462,740
                                                      =================  =================  ============   ============

  Class A:
Net assets                                                $ 9,841,092       $ 10,986,445                   $ 20,827,537
                                                          ------------      -------------                  ------------
Shares outstanding                                            983,944          3,311,607     (2,213,147)(a) 2,082,404
                                                              --------         ----------                   ---------
Net asset value and offering price per share                  $ 10.00             $ 3.32                      $ 10.00
                                                              ========            =======                     =======

  Class B:
Net assets                                                $ 1,131,982       $ 12,476,339                   $ 13,608,321
                                                          ------------      -------------                  ------------
Shares outstanding                                            114,501          3,853,727     (2,591,740)(a) 1,376,488
                                                              --------         ----------                   ---------
Net asset value and offering price per share                   $ 9.89             $ 3.24                       $ 9.89
                                                               =======            =======                      ======


  Class C:
Net assets                                                  $ 757,125        $ 9,807,907                   $ 10,565,032
                                                            ----------       ------------                  ------------
Shares outstanding                                             76,668          3,030,320     (2,037,151)(a) 1,069,837
                                                               -------         ----------                   ---------
Net asset value and offering price per share                   $ 9.88             $ 3.24                       $ 9.88
                                                               =======            =======                      ======

  Class Y:
Net assets                                               $ 39,785,279          $ 676,572                   $ 40,461,851
                                                         -------------         ----------                  ------------
Shares outstanding                                          3,918,764            202,490       (135,849)(a)  3,985,405
                                                            ----------           --------                    ---------
Net asset and redemption value per share                      $ 10.15             $ 3.34                       $ 10.15
                                                              ========            =======                      =======



(a)  Acquisition  by UBS U.S.  Small Cap Growth Fund of UBS Enhanced  Nasdaq-100
Fund and  issuance of UBS U.S.  Small Cap Growth Fund shares in exchange for all
of the outstanding shares of UBS Enhanced Nasdaq-100 Fund

(b)  Reclassification  of realized  and  unrealized  losses of the UBS  Enhanced
Nadaq-100 Fund due to the merger.

             See accompanying notes to proforma financial statements




UBS U.S. Small Cap Growth Fund
UBS Enhanced Nasdaq-100 Fund
Proforma Statement of Operations
June 30, 2003 (unaudited)

                                                     UBS U.S. Small Cap   UBS Enhanced
                                                      Growth Fund      Nasdaq-100 Fund      Adjustment    Combined
                                                     ----------------  -----------------  ------------   ------------

Investment income:
  Dividend (net of withholding
taxes of $518 and $331)                                     $  155,593          $  50,948            -      $ 206,541
  Interest                                                      28,699              2,956            -         31,655
                                                       ----------------  -----------------  -----------   ------------
                                                               184,292             53,904            -        238,196
                                                       ----------------  -----------------  -----------   ------------

Expenses:
  Investment advisory and administration fees                  392,582            235,098       98,753  (a)   726,433
  Shareholder distribution and servicing fees                   22,696            235,663                     258,359
  Transfer agency and service fees                              21,907            127,781                     149,688
  Trustees/Directors' fees                                       4,745              1,630                       6,375
  Legal and audit fees                                          24,657             57,960      (57,960) (b)    24,657
  Reports and notices to shareholders                           24,634             96,616      (45,000) (b)    76,250
  Federal and state registration fees                           64,168             43,032      (20,000) (b)    87,200
  Custody and accounting                                        19,480             20,235                      39,715
  Other expenses                                                 1,593              7,395                       8,988
                                                       ----------------  -----------------  -----------   ------------
                                                               576,462            825,411     (122,960) (b) 1,377,667
  Less: fee waivers and reimbursements
from investment advisor                                       (125,873)          (264,686)    (186,960)     (203,599)
                                                       ----------------  -----------------  -----------   ------------
  Net expenses                                                 450,589            560,725       64,000      1,174,068
                                                       ----------------  -----------------  -----------   ------------
  Net investment income                                       (266,297)          (506,822)     (64,000)      (935,872)
                                                       ----------------  -----------------  -----------   ------------

Realized and unrealized gains (losses
from investment transactions:
  Net realized gains (losses)
  from investment transactions                              (1,381,955)         1,265,009            -       (116,946)
  Net change in unrealized appreciation
  (depreciation) of investments                              3,331,910         23,069,298            -     26,401,208
                                                       ----------------  -----------------  -----------   ------------
Net realized and unrealized gains (losses)
from investment activities                                   1,949,955         24,334,307            -     26,284,262
                                                       ----------------  -----------------  -----------   ------------
Net increase (decrease) in net assets
resulting from operations                                  $ 1,683,658       $ 23,827,485   $  (64,000)    25,348,390
                                                      ================   ================   ===========    ===========


- ------------------
(a) Reflects change in management fee after merger to 85 bps.
(b) Certain pro forma basis  expenses  have been  adjusted to reflect  estimated
cost savings arising from the merger.




NOTES TO PRO FORMA FINANCIAL STATEMENTS (Unaudited)

NOTE 1--Basis of Combination:

     At a  special  meeting  of the  Board of  Trustees  of The UBS  Funds  (the
"Trust") held on July 28, 2003, the Board of Trustees  approved an Agreement and
Plan  of  Reorganization   pursuant  to  which,   subject  to  approval  by  the
shareholders of UBS Enhanced  Nasdaq-100 Fund  ("Nasdaq-100  Fund"), a series of
UBS Mutual  Funds  Securities  Trust  Nasdaq-100  Fund will  transfer all of its
assets,  subject to its  liabilities,  to UBS U.S.  Small Cap  Growth  Fund (the
"Fund"),  a series of the Trust,  in exchange for a number of shares of the Fund
equal in value to the net assets of Nasdaq-100 Fund (the "Exchange").  Shares of
the Fund then will be distributed to Nasdaq-100 Fund  shareholders on a pro rata
basis in liquidation of Nasdaq-100 Fund.

     The  Exchange  will be  accounted  for as a taxable  merger  of  investment
companies.  The unaudited pro forma  statement of  investments  and statement of
assets and liabilities reflect the financial position of the Fund and Nasdaq-100
Fund at June 30, 2003. The unaudited pro forma statement of operations  reflects
the results of operations of the Fund and Nasdaq-100  Fund for the twelve months
ended  June 30,  2003.  These  statements  have  been  derived  from the  Funds'
respective  books and records  utilized in calculating  daily net asset value at
the dates indicated above under generally accepted  accounting  principles.  The
historical cost of investment  securities of the Fund will be carried forward to
the Fund,  as the  surviving  entity,  and results of operations of the Fund for
pre-combination  periods  will not be  restated.  The cost  basis of  investment
securities of the Nasdaq-100 Fund carried  forward to the surviving  entity will
be the fair market  value of  investment  securities  at the close of the merger
date.  The  fiscal  year ends for the Fund and  Nasdaq-100  Fund are June 30 and
September 30, respectively.

     The  pro  forma   statements  of  investments,   statement  of  assets  and
liabilities and statement of operations  should be read in conjunction  with the
historical  financial  statements  of the  funds  included  or  incorporated  by
reference in the respective  Statements of Additional  Information of the funds.
The pro forma combined  financial  statements are presented for information only
and may not necessarily be representative of what the actual combined  financial
statements would have been had the reorganization occurred at June 30, 2003.

NOTE 2--Portfolio Valuation:

     Securities for which market  quotations are readily available are valued at
the last  available  sales  price on the  exchange  or market on which  they are
principally traded, or lacking any sales, at the last available bid price on the
exchange or market on which such securities are principally  traded. U.S. equity
securities  traded  over-the-counter  are  valued at the most  recent bid price.
Investments in affiliated  investment  companies are valued at the daily closing
net asset  value of the  respective  investment  company.  Securities  for which
market quotations are not readily  available,  including  restricted  securities
that are  subject  to  limitations  on their  sale,  are valued at fair value as
determined  in good faith by or under the  direction of the  respective  trust's
Board of Trustees. Short-term obligations with a maturity of 60 days or less are
valued at amortized cost, which approximates market value.

NOTE 3--Shares of Beneficial Interest:

     The pro forma net asset value per share assumes 3,420,257 additional shares
of beneficial  interest of the Fund were issued in connection  with the Exchange
as of June 30,  2003.  The pro forma number of shares that would be issuable was
calculated by dividing the net assets of Nasdaq-100 Fund at June 30, 2003 by the
net asset value per share per class of the Fund at June 30, 2003.  The pro forma
combined  number of Class A, Class B, Class C and Class Y shares  outstanding of
2,082,404,  1,376,488,  1,069,837  and  3,985,405,  respectively,   consists  of
1,098,460,  1,261,987,  993,169  and 66,641  shares,  respectively,  issuable to
Nasdaq-100 Fund as a result of the Exchange,  and 983,944,  114,501,  76,668 and
3,918,764 shares, respectively, of the Fund outstanding at June 30, 2003.

NOTE 4--Pro Forma Operating Expenses:

     The  accompanying  pro forma financial  statements  reflect changes in fund
expenses as if the  Exchange,  had taken place on June 30, 2003.  Although it is
anticipated that there will be an elimination of certain duplicative expenses as
a  result  of the  Exchange,  the  actual  amount  of such  expenses  cannot  be
determined because it is not possible to predict the cost of future operations.

NOTE 5--Merger Costs:

     Merger costs are estimated at  approximately  $120,000 and are not included
in the pro forma  statement of operations  since UBS Global Asset  Management is
paying these costs.  These costs represent the estimated  expenses of management
of the Trust and UBS Mutual Funds Series Trust  carrying out  obligations  under
the Exchange,  and consist of  management's  estimate of legal fees,  accounting
fees, printing costs and mailing charges related to the Exchange.


NOTE 6--Federal Income Taxes:

     Each fund has elected to be taxed as a "regulated investment company" under
the Internal Revenue Code of 1986, as amended (the "Code").  After the Exchange,
the Fund intends to continue to qualify as a regulated  investment  company,  if
such  qualification is in the best interests of its  shareholders,  by complying
with the provisions  available to certain  investment  companies,  as defined in
applicable  sections of the Code,  and to make  distributions  of taxable income
sufficient to relieve the Fund from all, or  substantially  all,  Federal income
taxes.

     The identified cost of investments for the Funds is substantially  the same
for both  financial  accounting  and Federal  income tax purposes.  The tax cost
basis of investment  securities of the  Nasdaq-100  Fund carried  forward to the
surviving  entity will be the fair market value of investment  securities at the
close of the merger date of investments.





[The Statement of Additional Information for the Small Cap Fund, dated September
30, 2002, as previously filed via EDGAR, is incorporated herein by reference and
           will be mailed to any shareholder who requests this SAI.]





[The Semi-Annual  Report of the Small Cap Fund for the period ended December 31,
2002, as previously  filed via EDGAR,  is  incorporated  herein by reference and
will be mailed to any shareholders who requests this SAI.]

[The Annual Report of the  Nasdaq-100  Fund for the fiscal year ended  September
30, 2002, as previously filed via EDGAR, is incorporated herein by reference and
will be mailed to any shareholder who requests this SAI.]

- --------
1    The Nasdaq-100 Fund is not sponsored, endorsed, sold or promoted by Nasdaq,
     and Nasdaq makes no representation  regarding the advisability of investing
     in   the   Nasdaq-100   Fund.    Nasdaq-100(R),    Nasdaq-100(R)Index   and
     Nasdaq-100(R)are  trade or service  marks of Nasdaq and have been  licensed
     for use by UBS Global AM.


                                    PART C

                                OTHER INFORMATION

Item 15. Indemnification

     Indemnification  of the  Registrant's  Trustees is provided  for in Article
     VII, Sections 2 through 4 of the Registrant's  Agreement and Declaration of
     Trust dated August 9, 1993, as amended, as follows:

     Section 2. Indemnification and Limitation of Liability.  The Trustees shall
     not be responsible or liable in any event for any neglect or wrong-doing of
     any  officer,  agent,  employee,  Manager or Principal  Underwriter  of the
     Trust,  nor shall any Trustee be responsible for the act or omission of any
     other Trustee,  and, subject to the provisions of the Bylaws, the Trust out
     of its assets may  indemnify  and hold  harmless each and every Trustee and
     officer of the Trust from and against any and all claims,  demands,  costs,
     losses,  expenses, and damages whatsoever arising out of or related to such
     Trustee's  performance  of his or her duties as a Trustee or officer of the
     Trust;  provided  that  nothing  herein  contained  shall  indemnify,  hold
     harmless or protect any Trustee or officer from or against any liability to
     the Trust or any  Shareholder to which he or she would otherwise be subject
     by reason of wilful  misfeasance,  bad faith,  gross negligence or reckless
     disregard of the duties involved in the conduct of his or her office.

     Every note,  bond,  contract,  instrument,  certificate or undertaking  and
     every  other  act or thing  whatsoever  issued,  executed  or done by or on
     behalf of the Trust or the Trustees or any of them in  connection  with the
     Trust shall be  conclusively  deemed to have been issued,  executed or done
     only in or with  respect to their or his or her  capacity  as  Trustees  or
     Trustee,  and such  Trustees  or  Trustee  shall not be  personally  liable
     thereon.

     Section 3. Trustee's Good Faith Action,  Expert Advice,  No Bond or Surety.
     The  exercise by the Trustees of their  powers  hereunder  shall be binding
     upon everyone  interested in or dealing with the Trust.  A Trustee shall be
     liable  to the  Trust  and to any  Shareholder  solely  for  his or her own
     willful  misfeasance,  bad faith, gross negligence or reckless disregard of
     the duties  involved  in the conduct of the office of Trustee and shall not
     be liable for errors of judgment or mistakes of fact or law.  The  Trustees
     may take advice of counsel or other experts with respect to the meaning and
     operation of this  Declaration of Trust and shall be under no liability for
     any act or  omission  in  accordance  with such  advice nor for  failing to
     follow such advice.  The Trustees shall not be required to give any bond as
     such, nor any surety if a bond is required.

     Section 4.  Insurance.  The Trustees shall be entitled and empowered to the
     fullest extent permitted by law to purchase with Trust assets insurance for
     liability and for all expenses,  reasonably incurred or paid or expected to
     be paid by a Trustee or officer in connection with any claim,  action, suit
     or proceeding  in which he or she becomes  involved by virtue of his or her
     capacity or former capacity with the Trust,  whether or not the Trust would
     have the power to  indemnify  him or her against such  liability  under the
     provisions of this Article.

     Indemnification  of  Registrant's  custodian,  transfer  agent,  accounting
     services  provider,  administrator  and distributor  against certain stated
     liabilities is provided until May 9, 1997 under the following documents:

     (a)  Section 12 of Accounting  Services  Agreement,  between the Registrant
          and  Fund/Plan  Services,  Inc.,  incorporated  herein by reference to
          Post-Effective Amendment No. 16 to Registrant's Registration Statement
          on Form N-1A (File Nos. 33-47287 and 811-6637),  Exhibit 9(c) as filed
          electronically on February 15, 1996.

     (b)  Section 8 of  Administration  Agreement  between  the  Registrant  and
          Fund/Plan  Services,   Inc.,   incorporated  herein  by  reference  to
          Post-Effective Amendment No. 16 to Registrant's Registration Statement
          on Form N-1A (File Nos. 33-47287 and 811-6637),  Exhibit 9(b) as filed
          electronically on February 15, 1996.

     (c)  Section 14 of Custodian  Agreement  between the Registrant and Bankers
          Trust  Company,  incorporated  herein by reference  to  Post-Effective
          Amendment No. 13 to Registrant's  Registration  Statement on Form N-1A
          (File Nos. 33-47287 and 811-6637), Exhibit Nos. 8(a) and 8(b) as filed
          electronically on September 20, 1995.

     (d)  Section 19 of Shareholder  Services  Agreement between  Registrant and
          Fund/Plan  Services,   Inc.,   incorporated  herein  by  reference  to
          Post-Effective Amendment No. 16 to Registrant's Registration Statement
          on Form N-1A (File Nos. 33-47287 and 811-6637),  Exhibit 9(a) as filed
          electronically on February 15, 1996.

     (e)  Section  8  of  the  Underwriting  Agreement  between  Registrant  and
          Fund/Plan Broker Services,  Inc. are incorporated  herein by reference
          to  Post-Effective  Amendment  No.  16  to  Registrant's  Registration
          Statement on Form N-1A (File Nos. 33-47287 and 811-6637),  Exhibit No.
          (6) as filed electronically on February 15, 1996.

     Effective May 10, 1997, indemnification of Registrant's custodian, transfer
     agent, accounting services provider,  administrator and distributor against
     certain stated liabilities is provided for in the following documents:

     (a)  Sections I.8(a),  I.8(c)(iii),I.10,  II.A.2,  II.B.5,  II.C.6, III.1.,
          III.2.(b) through  III.2.(e),  III.4.(e) and III.9.(b) of the Multiple
          Services  Agreement  dated May 9, 1997,  as  amended,  between  Morgan
          Stanley Trust Company,  as succeeded by The Chase  Manhattan Bank, and
          the  Registrant  on  behalf  of  each  series  of  the  Registrant  is
          incorporated  by  reference  to  Post-Effective  Amendment  No.  25 to
          Registrant's  Registration  Statement on Form N-1A (Nos.  33-47287 and
          811-6637) as filed electronically on March 1, 1999.

     Effective  November 5, 2001,  indemnification  of Registrant's  distributor
     against  certain  stated  liabilities  is  provided  for in  the  following
     document:

     (a)  Section 9(a) of the Principal Underwriting Contract between UBS Global
          Asset Management (US) Inc. and the Registrant on behalf of each series
          dated November 5, 2001 is incorporated by reference to  Post-Effective
          Amendment No. 37 to Registrant's  Registration  Statement on Form N-1A
          (Nos. 33-47287 and 811-6637) as filed electronically on July 19, 2002.

     Effective August 20, 2001,  indemnification of Registrant's  transfer agent
     against  certain  stated  liabilities  is  provided  for in  the  following
     document:

     (a)  Section 12 of the  Transfer  Agency  and  Related  Services  Agreement
          between UBS Global Asset  Management  (US) Inc. and the  Registrant on
          behalf  of each  series  dated  August  20,  2001 is  incorporated  by
          reference  to   Post-Effective   Amendment  No.  38  to   Registrant's
          Registration  Statement on Form N-1A (Nos.  33-47287 and  811-6637) as
          filed electronically on July 19, 2002.

Item 16. Exhibits

     1.   Charter Documents.

     A.   (1)  Certificate of Trust of the  Registrant  dated August 9, 1993, as
               filed with the Office of the  Secretary  of State of the State of
               Delaware on August 13, 1993, is incorporated  herein by reference
               to Post-Effective  Amendment No. 21 to Registrant's  Registration
               Statement  on Form N-1A (Nos.  33-47287  and  811-6637)  as filed
               electronically  with the U.S.  Securities and Exchange Commission
               ("SEC") on September 15, 1998.

          (2)  Amendment  to  Certificate  of  Trust  dated  February  15,  2002
               changing  the  Trust's  name to The UBS  Funds,  is  incorporated
               herein  by  reference  to  Post-Effective  Amendment  No.  39  to
               Registrant's  Registration  Statement on Form N-1A (Nos. 33-47287
               and 811-6637) as filed  electronically  with the SEC on September
               30, 2002.

     B.   (1)  Agreement  and  Declaration  of Trust (the  "Declaration")  dated
               August 19, 1993, as amended,  of the  Registrant is  incorporated
               herein  by  reference  to  Post-Effective  Amendment  No.  21  to
               Registrant's  Registration  Statement on Form N-1A (Nos. 33-47287
               and 811-6637) as filed  electronically  with the SEC on September
               15, 1998.

          (2)  Amendment  No.  1 to the  Declaration,  dated  May  21,  2001  is
               incorporated herein by reference to Post-Effective  Amendment No.
               34 to  Registrant's  Registration  Statement  on Form N-1A  (Nos.
               33-47287 and  811-6637) as filed  electronically  with the SEC on
               July 31, 2001.

               (3)  Amendment  No. 2 to the  Declaration  dated July 29, 2002 to
                    change the  principal  place of  business  of the Trust,  is
                    incorporated herein by reference to Post-Effective Amendment
                    No. 39 to Registrant's  Registration  Statement on Form N-1A
                    (Nos.  33-47287 and 811-6637) as filed  electronically  with
                    the SEC on September 30, 2002.

     C.   Certificates of the Secretary/Assistant Secretary of the Registrant to
          the Declaration re: applicable resolutions pertaining to:

               (a)  Meeting held August 9, 1993  designating  initial  eight (8)
                    Series of shares (from The UBS Funds,  Inc.) is incorporated
                    herein by reference to  Post-Effective  Amendment  No. 21 to
                    Registrant's  Registration  Statement  on  Form  N-1A  (Nos.
                    33-47287 and 811-6637) as filed  electronically with the SEC
                    on September 15, 1998.

               (b)  Meeting held  November 8, 1993  creating  Class B Shares and
                    redesignating  Class A  Shares  is  incorporated  herein  by
                    reference to Post-Effective Amendment No. 21 to Registrant's
                    Registration  Statement  on Form  N-1A  (Nos.  33-47287  and
                    811-6637) as filed  electronically with the SEC on September
                    15, 1998.

               (c)  Meeting  held  February 21, 1995 adding Class A and B shares
                    to the  Brinson  Short-Term  Global  Income Fund and Brinson
                    U.S. Cash  Management Fund and adding Class C shares for all
                    Series is incorporated herein by reference to Post-Effective
                    Amendment No. 21 to Registrant's  Registration  Statement on
                    Form   N-1A   (Nos.   33-47287   and   811-6637)   as  filed
                    electronically with the SEC on September 15, 1998.

               (d)  Meeting  held May 22, 1995  redesignating  Class A shares to
                    Brinson  Class  shares and Class C shares to SwissKey  Class
                    shares is incorporated herein by reference to Post-Effective
                    Amendment No. 21 to Registrant's  Registration  Statement on
                    Form   N-1A   (Nos.   33-47287   and   811-6637)   as  filed
                    electronically with the SEC on September 15, 1998.

               (e)  Unanimous  written consent of Trustees  executed on July 27,
                    1995   changing   the  names  of  Series,   as  follows  and
                    redesignating  the  Brinson  Class  and  SwissKey  Class  is
                    incorporated herein by reference to Post-Effective Amendment
                    No. 21 to Registrant's  Registration  Statement on Form N-1A
                    (Nos.  33-47287 and 811-6637) as filed  electronically  with
                    the SEC on September 15, 1998:

                    (i)  Redesignation  of the Brinson Global Fund to the Global
                         Fund;

                    (ii) Redesignation  of the  Brinson  Global Bond Fund to the
                         Global Bond Fund;

                    (iii)Redesignation  of the Brinson  Non-U.S.  Equity Fund to
                         the Non-U.S. Equity Fund;

                    (iv) Redesignation  of the Brinson Global Equity Fund to the
                         Global Equity Fund;

                    (v)  Redesignation  of the Brinson  U.S.  Equity Fund to the
                         U.S. Equity Fund;

                    (vi) Redesignation of the Brinson U.S.  Balanced Fund to the
                         U.S. Balanced Fund;

                    (vii)Redesignation  of the  Brinson  U.S.  Bond  Fund to the
                         U.S. Bond Fund.

               (f)  Meeting   held   November  20,  1995   eliminating   Brinson
                    Short-Term  Global  Income  Fund is  incorporated  herein by
                    reference to Post-Effective Amendment No. 21 to Registrant's
                    Registration  Statement  on Form  N-1A  (Nos.  33-47287  and
                    811-6637) as filed  electronically with the SEC on September
                    15, 1998.

               (g)  Meeting  held  August  26,  1996   eliminating   U.S.   Cash
                    Management  Fund  and  Non-U.S.  Bond  Fund is  incorporated
                    herein by reference to  Post-Effective  Amendment  No. 21 to
                    Registrant's  Registration  Statement  on  Form  N-1A  (Nos.
                    33-47287 and 811-6637) as filed  electronically with the SEC
                    on September 15, 1998.

               (h)  Meeting held May 19, 1997  redesignating  Brinson Fund Class
                    as Brinson Fund -- Class I and adding  Brinson Fund -- Class
                    N is  incorporated  herein by  reference  to  Post-Effective
                    Amendment No. 21 to Registrant's  Registration  Statement on
                    Form   N-1A   (Nos.   33-47287   and   811-6637)   as  filed
                    electronically with the SEC on September 15, 1998.

               (i)  Meeting   held   November   24,  1997   adding  U.S.   Large
                    Capitalization  Equity Fund and adding Brinson Fund -- Class
                    I Shares,  SwissKey  Fund Class and Brinson  Fund -- Class N
                    Shares to such Series is incorporated herein by reference to
                    Post-Effective Amendment No. 21 to Registrant's Registration
                    Statement on Form N-1A (Nos. 33-47287 and 811-6637) as filed
                    electronically with the SEC on September 15, 1998.

               (j)  Meeting held August 24, 1998 approving  redesignation of the
                    SwissKey  Class  to  the  UBS  Investment   Funds  Class  is
                    incorporated herein by reference to Post-Effective Amendment
                    No. 27 to Registrant's  Registration  Statement on Form N-1A
                    (Nos.  33-47287 and 811-6637) as filed  electronically  with
                    the SEC on May 3, 1999.

               (k)  Meeting held August 24, 1998 approving  redesignation of the
                    Non-U.S.  Equity Fund to the Global (ex-U.S.) Equity Fund is
                    incorporated herein by reference to Post-Effective Amendment
                    No. 27 to Registrant's  Registration  Statement on Form N-1A
                    (Nos.  33-47287 and 811-6637) as filed  electronically  with
                    the SEC on May 3, 1999.

               (l)  Meeting held August 24, 1998  establishing  and  designating
                    the  U.S.  Large  Capitalization  Growth  Fund,  U.S.  Small
                    Capitalization  Fund, High Yield Bond Fund, Emerging Markets
                    Equity  Fund and  Emerging  Markets  Debt  Fund  and  adding
                    Brinson Fund - Class I Shares, UBS Investment Funds class of
                    shares and  Brinson  Fund - Class N Shares to such Series is
                    incorporated herein by reference to Post-Effective Amendment
                    No. 27 to Registrant's  Registration  Statement on Form N-1A
                    (Nos.  33-47287 and 811-6637) as filed  electronically  with
                    the SEC on May 3, 1999.

               (m)  Meeting held November 23, 1998  redesignating the High Yield
                    Bond   Fund  to  the  High   Yield   Fund  and  U.S.   Small
                    Capitalization Fund as the U.S. Small Capitalization  Growth
                    Fund is incorporated  herein by reference to  Post-Effective
                    Amendment No. 27 to Registrant's  Registration  Statement on
                    Form   N-1A   (Nos.   33-47287   and   811-6637)   as  filed
                    electronically with the SEC on May 3, 1999.

               (n)  Meeting held February 28, 2000  establishing and designating
                    the Global  Technology Fund, Global Biotech Fund, U.S. Small
                    Cap Equity Fund, U.S. Value Equity Fund and U.S. Real Estate
                    Equity Fund and adding  Brinson Fund -- Class I Shares,  UBS
                    Investment Funds class of shares and Brinson Fund -- Class N
                    Shares to such Series is incorporated herein by reference to
                    Post-Effective Amendment No. 30 to Registrant's Registration
                    Statement on Form N-1A (Nos. 33-47287 and 811-6637) as filed
                    electronically with the SEC on May 2, 2000.

               (o)  Meeting held February 28, 2000  redesignating the U.S. Large
                    Capitalization Equity Fund, U.S. Large Capitalization Growth
                    and U.S. Small Capitalization  Growth Fund as the U.S. Large
                    Cap Equity Fund,  U.S.  Large Cap Growth Fund and U.S. Small
                    Cap Growth Fund,  respectively,  is  incorporated  herein by
                    reference to Post-Effective Amendment No. 30 to Registrant's
                    Registration  Statement  on Form N- 1A  (Nos.  33-47287  and
                    811-6637)  as  filed  electronically  with the SEC on May 2,
                    2000.

               (p)  Meeting  held  August  21,  2000  redesignating  the  Global
                    (Ex-U.S.)  Equity Fund as the  International  Equity Fund is
                    incorporated herein by reference to Post-Effective Amendment
                    No. 33 to Registrant's  Registration  Statement on Form N-1A
                    (Nos.  33-47287 and 811-6637) as filed  electronically  with
                    the SEC on December 7, 2000.

               (q)  Meeting held May 21, 2001  redesignating  the Global Fund as
                    the Global Balanced Fund is incorporated herein by reference
                    to   Post-Effective   Amendment   No.  34  to   Registrant's
                    Registration  Statement  on Form  N-1A  (Nos.  33-47287  and
                    811-6637) as filed  electronically  with the SEC on July 31,
                    2001.

               (r)  Meeting  held May 21, 2001  creating  Brinson  Fund-Class  A
                    Shares, Brinson Fund-Class B Shares and Brinson Fund-Class C
                    Shares of each Series is incorporated herein by reference to
                    Post-Effective Amendment No. 34 to Registrant's Registration
                    Statement on Form N-1A (Nos. 33-47287 and 811-6637) as filed
                    electronically with the SEC on July 31, 2001.

               (s)  Meeting  held  May  21,  2001   redesignating   the  Brinson
                    Fund-Class  I Shares as the Brinson  Fund-Class  Y Shares of
                    each  Series  is   incorporated   herein  by   reference  to
                    Post-Effective Amendment No. 34 to Registrant's Registration
                    Statement on Form N-1A (Nos. 33-47287 and 811-6637) as filed
                    electronically with the SEC on July 31, 2001.

               (t)  Meeting  held May 21,  2001  abolishing  the UBS  Investment
                    Funds Class of Shares of each Series is incorporated  herein
                    by  reference  to   Post-Effective   Amendment   No.  34  to
                    Registrant's  Registration  Statement  on  Form  N-1A  (Nos.
                    33-47287 and 811-6637) as filed  electronically with the SEC
                    on July 31, 2001.

               (u)  Unanimous written consent of Trustees executed June 20, 2002
                    changing the name of UBS Global  Balanced Fund to UBS Global
                    Allocation  Fund is  incorporated  herein  by  reference  to
                    Post-Effective Amendment No. 38 as filed electronically with
                    the SEC on July 19, 2002.

               (v)  Meeting  held June 3, 2002  regarding  the  liquidation  and
                    dissolution  of UBS  Global  Technology  Fund and UBS Global
                    Biotech  Fund  is   incorporated   herein  by  reference  to
                    Post-Effective Amendment No. 39 as filed electronically with
                    the SEC on September 30, 2002.

     2.   By-Laws.

          A.   By-Laws of The UBS Funds  (f/k/a The Brinson  Funds) dated August
               9, 1993, are incorporated  herein by reference to  Post-Effective
               Amendment No. 17 to Registrant's  Registration  Statement on Form
               N-1A (File Nos. 33-47287 and 811-6637),  as filed  electronically
               with the SEC on August 29, 1996.

          B.   Amendment  to the By-Laws  dated  April 25, 2002 is  incorporated
               herein by reference to  Post-Effective  Amendment No. 37 as filed
               electronically with the SEC on July 19, 2002.

     3.   Voting Trust Agreement.

          Not applicable.

     4.   Agreement of Acquisition, Reorganization, Merger and Liquidation.

          Form of  Agreement  and Plan of  Reorganization  is filed  herewith as
          Exhibit A to the Prospectus/Proxy Statement.

     5.   Instruments Defining the Rights of Security Holders.

          A.   Form  of  Specimen   Share   Certificate  of  The  UBS  Funds  is
               incorporated herein by reference to Post-Effective  Amendment No.
               21 to  Registrant's  Registration  Statement  on Form N-1A  (Nos.
               33-47287 and  811-6637) as filed  electronically  with the SEC on
               September 15, 1998.

               The rights of  security  holders of the  Registrant  are  further
               defined in the following sections of the Registrant's By-Laws and
               Declaration  and are herein  incorporated  by  reference  to such
               documents as applicable:

                    (1)  By-Laws.

                    Article II - "Voting," Section 7 and Section 10.

                    (2)  Declaration.

                    Article III - "Shares," Section 1, Section 2 and Section 6.

     6.   Investment Advisory Contracts.

          A.   Investment  Advisory  Agreement  dated July 1, 2002  between  UBS
               Global Asset  Management  (Americas) Inc. (the "Advisor") and the
               Registrant  on  behalf  of the  UBS  Global  Allocation  Fund  is
               incorporated herein by reference to Post-Effective  Amendment No.
               39 to  Registrant's  Registration  Statement  on Form N-1A  (Nos.
               33-47287 and  811-6637) as filed  electronically  with the SEC on
               September 30, 2002.

          B.   Investment  Advisory  Agreement  dated July 1, 2002  between  the
               Advisor and the  Registrant on behalf of the UBS Global Bond Fund
               is incorporated  herein by reference to Post-Effective  Amendment
               No. 39 to Registrant's  Registration Statement on Form N-1A (Nos.
               33-47287 and  811-6637) as filed  electronically  with the SEC on
               September 30, 2002.

          C.   Investment  Advisory  Agreement  dated April 25, 1995 between the
               Advisor  and the  Registrant  on behalf of the UBS  International
               Equity Fund series, and Secretary's  Certificate relating thereto
               is incorporated  herein by reference to Post-Effective  Amendment
               No. 21 to Registrant's  Registration Statement on Form N-1A (Nos.
               33-47287 and  811-6637) as filed  electronically  with the SEC on
               September 15, 1998.

               (1)  Certificate of the Secretary and  resolutions  redesignating
                    the Global (Ex-U.S.) Equity Fund as the International Equity
                    Fund is incorporated  herein by reference to  Post-Effective
                    Amendment No. 33 to Registrant's  Registration  Statement on
                    Form   N-1A   (Nos.   33-47287   and   811-6637)   as  filed
                    electronically with the SEC on December 7, 2000.

          D.   Investment  Advisory  Agreement  dated July 1, 2002  between  the
               Advisor  and the  Registrant  on behalf of the UBS Global  Equity
               Fund (f/k/a  Brinson  Global Equity Fund) series is  incorporated
               herein  by  reference  to  Post-Effective  Amendment  No.  39  to
               Registrant's  Registration  Statement on Form N-1A (Nos. 33-47287
               and 811-6637) as filed  electronically  with the SEC on September
               30, 2002.

          E.   Investment  Advisory  Agreement  dated July 1, 2002  between  the
               Advisor and the Registrant on behalf of the UBS U.S.  Equity Fund
               (f/k/a Brinson U.S. Equity Fund) series is incorporated herein by
               reference  to  Post-Effective  Amendment  No. 39 to  Registrant's
               Registration  Statement on Form N-1A (Nos. 33-47287 and 811-6637)
               as filed electronically with the SEC on September 30, 2002.

          F.   Investment  Advisory  Agreement  dated July 1, 2002  between  the
               Advisor  and the  Registrant  on behalf of the UBS U.S.  Balanced
               Fund (f/k/a Brinson U.S.  Balanced  Fund) series is  incorporated
               herein  by  reference  to  Post-Effective  Amendment  No.  39  to
               Registrant's  Registration  Statement on Form N-1A (Nos. 33-47287
               and 811-6637) as filed  electronically  with the SEC on September
               30, 2002.

          G.   Investment  Advisory  Agreement  dated July 1, 2002  between  the
               Advisor and the  Registrant  on behalf of the UBS U.S.  Bond Fund
               (f/k/a Brinson U.S. Bond Fund) series is  incorporated  herein by
               reference  to  Post-Effective  Amendment  No. 39 to  Registrant's
               Registration  Statement on Form N-1A (Nos. 33-47287 and 811-6637)
               as filed electronically with the SEC on September 30, 2002.

          H.   Investment  Advisory  Agreement  dated July 1, 2002  between  the
               Advisor and the  Registrant  on behalf of the UBS U.S.  Large Cap
               Growth  Fund  series  is  incorporated  herein  by  reference  to
               Post-Effective  Amendment  No.  39 to  Registrant's  Registration
               Statement  on Form N-1A (Nos.  33-47287  and  811-6637)  as filed
               electronically with the SEC on September 30, 2002.

          I.   Investment  Advisory  Agreement  dated July 1, 2002  between  the
               Advisor and the  Registrant  on behalf of the UBS U.S.  Small Cap
               Growth  Fund  series  is  incorporated  herein  by  reference  to
               Post-Effective  Amendment  No.  39 to  Registrant's  Registration
               Statement  on Form N-1A (Nos.  33-47287  and  811-6637)  as filed
               electronically with the SEC on September 30, 2002.

          J.   Investment  Advisory  Agreement  dated July 1, 2002  between  the
               Advisor and the  Registrant  on behalf of the UBS High Yield Fund
               series is  incorporated  herein by  reference  to  Post-Effective
               Amendment No. 39 to Registrant's  Registration  Statement on Form
               N-1A (Nos.  33-47287 and 811-6637) as filed  electronically  with
               the SEC on September 30, 2002.

          K.   Investment Advisory Agreement dated December 10, 1998 between the
               Advisor and the Registrant on behalf of the UBS Emerging  Markets
               Equity  Fund  series  is  incorporated  herein  by  reference  to
               Post-Effective  Amendment  No.  25 to  Registrant's  Registration
               Statement  on Form N-1A (Nos.  33-47287  and  811-6637)  as filed
               electronically with the SEC on March 1, 1999.

               (1)  Form  of  Certificate  of  the  Secretary  and   resolutions
                    restating  the  Investment  Advisory  Agreement  of the  UBS
                    Emerging  Markets  Equity  Fund is  incorporated  herein  by
                    reference to Post-Effective Amendment No. 34 to Registrant's
                    Registration  Statement  on Form  N-1A  (Nos.  33-47287  and
                    811-6637) as filed  electronically  with the SEC on July 31,
                    2001.

          L.   Investment Advisory Agreement dated December 10, 1998 between the
               Advisor and the Registrant on behalf of the UBS Emerging  Markets
               Debt  Fund  series  is   incorporated   herein  by  reference  to
               Post-Effective  Amendment  No.  25 to  Registrant's  Registration
               Statement  on Form N-1A (Nos.  33-47287  and  811-6637)  as filed
               electronically with the SEC on March l, 1999.

               (1)  Form  of  Certificate  of  the  Secretary  and   resolutions
                    restating  the  Investment  Advisory  Agreement  of the  UBS
                    Emerging  Markets  Debt  Fund  is  incorporated   herein  by
                    reference to Post-Effective Amendment No. 34 to Registrant's
                    Registration  Statement  on Form  N-1A  (Nos.  33-47287  and
                    811-6637) as filed  electronically  with the SEC on July 31,
                    2001.

          M.   Investment  Advisory  Agreement  dated May 23,  2000  between the
               Advisor and the  Registrant  on behalf of the UBS U.S.  Small Cap
               Equity  Fund  series  is  incorporated  herein  by  reference  to
               Post-Effective  Amendment  No.  31 to  Registrant's  Registration
               Statement  on Form N-1A (Nos.  33-47287  and  811-6637)  as filed
               electronically with the SEC on August 29, 2000.

               (1)  Form  of  Certificate  of  the  Secretary  and   resolutions
                    restating  the  Investment  Advisory  Agreement  of the U.S.
                    Small Cap Equity Fund is incorporated herein by reference to
                    Post-Effective Amendment No. 34 to Registrant's Registration
                    Statement on Form N-1A (Nos. 33-47287 and 811-6637) as filed
                    electronically with the SEC on July 31, 2001.

          N.   Investment  Advisory  Agreement  dated July l, 2002  between  the
               Advisor and the Registrant on behalf of the UBS U.S. Value Equity
               Fund series is incorporated herein by reference to Post-Effective
               Amendment No. 39 to Registrant's  Registration  Statement on Form
               N-1A (Nos.  33-47287 and 811-6637) as filed  electronically  with
               the SEC September 30, 2002.

          O.   Investment  Advisory Agreement dated December 7, 2000 between the
               Advisor and the  Registrant on behalf of the UBS U.S. Real Estate
               Equity  Fund  series  is  incorporated  herein  by  reference  to
               Post-Effective  Amendment  No.  34 to  Registrant's  Registration
               Statement  on Form N-1A (Nos.  33-47287  and  811-6637)  as filed
               electronically with the SEC on July 31, 2001.

               (1)  Form  of  Certificate  of  the  Secretary  and   resolutions
                    restating the Investment  Advisory Agreement of the UBS U.S.
                    Real Estate Equity Fund is incorporated  herein by reference
                    to   Post-Effective   Amendment   No.  34  to   Registrant's
                    Registration  Statement  on Form  N-1A  (Nos.  33-47287  and
                    811-6637) as filed  electronically  with the SEC on July 31,
                    2001.

          P.   Sub-Advisory Agreement dated December 7, 2000 between the Advisor
               and  UBS  Global  Asset  Management  (New  York),  Inc.  and  the
               Registrant on behalf of the UBS U.S. Large Cap Growth Fund series
               is incorporated  herein by reference to Post-Effective  Amendment
               No. 34 to Registrant's  Registration Statement on Form N-1A (Nos.
               33-47287 and  811-6637) as filed  electronically  with the SEC on
               July 31, 2001.

          Q.   Sub-Advisory Agreement dated December 7, 2000 between the Advisor
               and  UBS  Global  Asset  Management  (New  York),  Inc.  and  the
               Registrant on behalf of the UBS U.S. Small Cap Growth Fund series
               is incorporated  herein by reference to Post-Effective  Amendment
               No. 34 to Registrant's  Registration Statement on Form N-1A (Nos.
               33-47287 and  811-6637) as filed  electronically  with the SEC on
               July 31, 2001.

          R.   Sub-Advisory Agreement dated December 7, 2000 between the Advisor
               and  UBS  Global  Asset  Management  (New  York),  Inc.  and  the
               Registrant  on behalf of the UBS U.S.  High Yield Fund  series is
               incorporated herein by reference to Post-Effective  Amendment No.
               34 to  Registrant's  Registration  Statement  on Form N-1A  (Nos.
               33-47287 and  811-6637) as filed  electronically  with the SEC on
               July 31, 2001.

          S.   Sub-Advisory Agreement dated December 7, 2000 between the Advisor
               and  UBS  Global  Asset  Management  (New  York),  Inc.  and  the
               Registrant  on behalf of the UBS U.S.  Real  Estate  Equity  Fund
               series is  incorporated  herein by  reference  to  Post-Effective
               Amendment No. 34 to Registrant's  Registration  Statement on Form
               N-1A (Nos.  33-47287 and 811-6637) as filed  electronically  with
               the SEC on July 31, 2001.

     7.   Underwriting or Distribution Contracts.

          Principal Underwriting  Contract,  dated November 5, 2001, between UBS
          Global Asset Management (US) Inc. (f/k/a Brinson  Advisors,  Inc.) and
          the Registrant is incorporated  herein by reference to  Post-Effective
          Amendment  No.  37 as  filed  electronically  with the SEC on July 19,
          2002.

     8.   Bonus, Profit Sharing, Pension or Other Similar Contracts.

          Not Applicable.

     9.   Custodian Agreements.

          A.   Custodial  arrangements are provided under the Multiple  Services
               Agreement  dated May 9, 1997,  as amended  through  December  10,
               1998,  between  Morgan Stanley Trust Company and succeeded by The
               Chase Manhattan Bank, and the Registrant on behalf of each series
               of  the  Registrant  is  incorporated   herein  by  reference  to
               Post-Effective  Amendment  No.  25 to  Registrant's  Registration
               Statement  on Form N-1A (Nos.  33-47287  and  811-6637)  as filed
               electronically with the SEC on March 1, 1999.

               (1)  Amendment  dated May 9, 2000 relating to Fee  Obligation and
                    Continuation of the Registrant's Multiple Services Agreement
                    is  incorporated   herein  by  reference  to  Post-Effective
                    Amendment No. 34 to Registrant's  Registration  Statement on
                    Form   N-1A   (Nos.   33-47287   and   811-6637)   as  filed
                    electronically with the SEC on July 31, 2001.

               (2)  Amended  Schedule A, as amended  through  April 28, 2000, to
                    the  Registrant's  Multiple  Services  Agreement  Securities
                    Lending Authorization is incorporated herein by reference to
                    Post-Effective Amendment No. 31 to Registrant's Registration
                    Statement on Form N-1A (Nos. 33-47287 and 811-6637) as filed
                    electronically with the SEC on August 29, 2000.

               (3)  Amended Attachment A, as amended through August 19, 2002, to
                    the  Registrant's  Multiple  Services  Agreement  Securities
                    Lending Authorization is incorporated herein by reference to
                    Post-Effective Amendment No. 39 to Registrant's Registration
                    Statement on Form N-1A (Nos. 33-47287 and 811-6637) as filed
                    electronically with the SEC on September 30, 2002.

               (4)  Revised  Schedule B3, as approved through August 19, 2002 to
                    the Registrant's Multiple Services Agreement is incorporated
                    herein by reference to  Post-Effective  Amendment  No. 39 to
                    Registrant's  Registration  Statement  on  Form  N-1A  (Nos.
                    3347287 and 811-6637) as filed  electronically  with the SEC
                    on September 30, 2002.

               (5)  Amended  Schedule B 1 and  Schedule  F, as  amended  through
                    April  28,  2000,  to  the  Registrant's  Multiple  Services
                    Agreement   is   incorporated   herein   by   reference   to
                    Post-Effective Amendment No. 31 to Registrant's Registration
                    Statement on Form N-1A (Nos. 33-47287 and 811-6637) as filed
                    electronically with the SEC on August 29, 2000.

               (6)  Amendment, dated May 21, 2001 relating to the Appointment of
                    Brinson  Advisors,  Inc.  to serve as  administrator  to the
                    Trust is incorporated  herein by reference to Post-Effective
                    Amendment No. 39 to Registrant's  Registration  Statement on
                    Form   N-1A   (Nos.   33-47287   and   811-6637)   as  filed
                    electronically with the SEC on September 30, 2002.

          B.   Co-custodial  arrangements  between  Investors  Bank & Trust  and
               Chase Global Funds  Services  Company dated  December 18, 1998 is
               incorporated herein by reference to Post-Effective  Amendment No.
               25 to  Registrant's  Registration  Statement  on Form N-1A  (Nos.
               33-47287 and  811-6637) as filed  electronically  with the SEC on
               March 1, 1999.

     10.  Rule 12b-1 Plans and Rule 18f-3 Plans.

          A.   Rule 12b-1 Plans.

               (1)  Shareholder  Services Plan dated October 29, 2001 as revised
                    April 8, 2002,  relating  to Class A shares  (f/k/a  Brinson
                    Fund Class A shares)  of each  series of the  Registrant  is
                    incorporated herein by reference to Post-Effective Amendment
                    No. 38 to Registrant's  Registration  Statement on Form N-1A
                    (Nos.  33-47287 and 811-6637) as filed  electronically  with
                    the SEC on July 19, 2002.

               (2)  12b-1 plan dated  October 29, 2001 as revised April 8, 2002,
                    relating to the Class B shares (f/k/a/  Brinson Fund Class B
                    shares) of each  series of the  Registrant  is  incorporated
                    herein by reference to  Post-Effective  Amendment  No. 38 to
                    Registrant's  Registration  Statement  on  Form  N-1A  (Nos.
                    33-47287 and 811-6637) as filed  electronically with the SEC
                    on July 19, 2002.

               (3)  12b-1 plan dated  October 29, 2001 as revised April 8, 2002,
                    relating to the Class C shares  (f/k/a  Brinson Fund Class C
                    shares) of each  series of the  Registrant  is  incorporated
                    herein by reference to  Post-Effective  Amendment  No. 38 to
                    Registrant's  Registration  Statement  on  Form  N-1A  (Nos.
                    33-47287 and 811-6637) as filed  electronically with the SEC
                    on July 19, 2002.

          B.   Rule 18f-3 Plans.

               (1)  Revised Multiple Class Plan adopted May 22, 1995, as amended
                    through June 11, 1999,  pursuant to Rule 18f--3 on behalf of
                    each  series of the  Registrant  is  incorporated  herein by
                    reference to Post-Effective Amendment No. 30 to Registrant's
                    Registration  Statement  on Form  N-1A  (Nos.  33-47287  and
                    811-6637)  as  filed  electronically  with the SEC on May 2,
                    2000.

                    (a)  Appendix A to the  Registrant's  Revised Multiple Class
                         Plan adopted May 22, 1995, as amended through April 28,
                         2000, adding the Global Technology Fund, Global Biotech
                         Fund,  U.S.  Small Cap Equity Fund,  U.S.  Value Equity
                         Fund and U.S.  Real Estate Equity Fund pursuant to Rule
                         18f-3  is   incorporated   herein   by   reference   to
                         Post-Effective   Amendment   No.  30  to   Registrant's
                         Registration  Statement on Form N-1A (Nos. 33-47287 and
                         811-6637) as filed  electronically  with the SEC on May
                         2, 2000.

               (2)  Amended and Restated Multiple Class Plan, adopted on May 22,
                    1995,  as amended and restated on May 21, 2001,  pursuant to
                    Rule  18f-3 on behalf of each  series of the  Registrant  is
                    incorporated herein by reference to Post-Effective Amendment
                    No. 34 to Registrant's  Registration  Statement on Form N-1A
                    (Nos.  33-47287 and 811-6637) as filed  electronically  with
                    the SEC on July 31, 2001.

     11.  An opinion and consent of counsel as to the legality of the securities
          being registered,  indicating whether they will, when sold, be legally
          issued, fully paid and nonassessable.

          Legal opinion of Stradley, Ronon, Stevens & Young, LLP, counsel to the
          Registrant,  dated  September  27,  2002,  as to the  legality  of the
          securities  being  registered is  incorporated  herein by reference to
          Post-Effective Amendment No. 39 to Registrant's Registration Statement
          on Form N-1A (Nos. 33-47287 and 811-6637) as filed electronically with
          the SEC on September 30, 2002.

     12.  An  opinion,  and  consent to their use,  of counsel or, in lieu of an
          opinion,  a copy of the  revenue  ruling  from  the  Internal  Revenue
          Service,  supporting the tax matters and  consequences to shareholders
          discussed in the prospectus.

          Form of tax opinion of Stradley,  Ronon, Stevens & Young, LLP, counsel
          to the  Registrant,  supporting  the tax matters and  consequences  to
          shareholders  discussed  in the  Prospectus/Proxy  Statement  is filed
          electronically as Exhibit No. EX-99.12.

     13.  Other Material Contracts.

          A.   Administration  Agreement,  dated May 21, 2001,  between  Brinson
               Advisors,  Inc.  and the  Registrant  is  incorporated  herein by
               reference   to   Post-Effective   Amendment   No.   37  as  filed
               electronically with the SEC on July 19, 2002.

          B.   Administration Agreement,  dated May 21, 2001, as revised June 3,
               2002,  between  UBS  Global  Asset  Management  (US) Inc.  (f/k/a
               Brinson Advisors Inc.) and the Registrant is incorporated  herein
               by  reference  to  Post-Effective   Amendment  No.  38  as  filed
               electronically with the SEC on July 19, 2002.

          C.   Transfer Agency and Related Services Agreement,  dated August 20,
               2001, between PFPC Inc. and the Registrant is incorporated herein
               by  reference  to  Post-Effective   Amendment  No.  38  as  filed
               electronically with the SEC on July 19, 2002.

     14.  Other Opinions and Consents.

          Consents of Ernst &  Young, LLP,  independent  auditors to the UBS
          U.S.  Small Cap Growth Fund and the UBS Enhanced  NASDAQ-100  Fund are
          incorporated   herein  by   reference  to  the   Registrant's   initial
          Registration    Statement    on   Form    N-14    (Accession    Number
          0001137439-03-000073),  as filed electronically with the SEC on August
          5, 2003.

     15.  Omitted Financial Statements.

          Not Applicable.

     16.  Power of Attorney.

          A.   Powers  of  Attorney   appointing  Amy  R.  Doberman,   David  M.
               Goldenberg,  Bruce G. Leto, Mark A. Sheehan and Jana L. Cresswell
               as  attorneys-in-fact  and agents to Frank K.  Reilly,  Walter E.
               Auch, Edward M. Roob and Paul H. Schubert are incorporated herein
               by reference to  Post-Effective  Amendment No. 39 to Registrant's
               Registration  Statement on Form N-1A (Nos.  3347287 and 811-6637)
               as filed electronically with the SEC on September 30, 2002.

          B.   Powers  of  Attorney  dated  May  19,  2003,  appointing  Amy  R.
               Doberman, David M. Goldenberg, Bruce G. Leto, Mark A. Sheehan and
               Jana L.  Cresswell  as  attorneys-in-fact  and agents to Brian M.
               Storms and Joseph Varnas, are incorporated herein by reference to
               the  Registrant's  initial  Registration  Statement  on Form N-14
               (Accession Number 0001137439-03-000073),  as filed electronically
               with the SEC on August 5, 2003.

     17.  Additional Exhibits.

                  Not Applicable.

Item 17.          Undertakings

     (1)  Insofar  as   indemnification   for  liabilities   arising  under  the
          Securities  Act of 1933 may be  permitted to  directors,  officers and
          controlling  persons  of the  Registrant  pursuant  to Rule 484 of the
          Securities Act of 1933, as amended (the "1933 Act"), or otherwise, the
          Registrant  has been advised that in the opinion of the Securities and
          Exchange  Commission such  indemnification is against public policy as
          expressed  in the 1933 Act and is,  therefore,  unenforceable.  In the
          event that a claim for indemnification against such liabilities (other
          than the payment by the  Registrant of expenses  incurred or paid by a
          director,  officer  or  controlling  person of the  Registrant  in the
          successful  defense of any action,  suit or proceeding) is asserted by
          such  director,  officer  or  controlling  person in  connection  with
          securities  being  registered,  the  Registrant  will,  unless  in the
          opinion of its  counsel  the matter  has been  settled by  controlling
          precedent,  submit to a court of appropriate jurisdiction the question
          whether  such  indemnification  by  it is  against  public  policy  as
          expressed  in  the  1933  Act  and  will  be  governed  by  the  final
          adjudication of such issue.

     (2)  The undersigned  registrant agrees that prior to any public reoffering
          of the securities  registered through the use of a prospectus which is
          a part of this  registration  statement  by any person or party who is
          deemed to be an  underwriter  within the meaning of Rule 145(c) of the
          1933 Act,  the  reoffering  prospectus  will  contain the  information
          called for by the  applicable  registration  form for  reofferings  by
          persons who may be deemed underwriters, in addition to the information
          called for by the other items of the applicable form.

     (3)  The undersigned  registrant agrees that every prospectus that is filed
          under  paragraph  (1) above will be filed as a part of an amendment to
          the registration statement and will not be used until the amendment is
          effective,  and that, in determining any liability under the 1933 Act,
          each post-effective amendment shall be deemed to be a new registration
          statement for the securities offered therein,  and the offering of the
          securities  at that time shall be deemed to be the  initial  bona fide
          offering of them.

     (4)  The  undersigned  registrant  undertakes  to file,  by  post-effective
          amendment, a copy of the opinion of counsel as to certain tax matters,
          within a reasonable time after receipt of such opinion.


                                   SIGNATURES

As required by the  Securities  Act of 1933,  as amended (the "1933 Act"),  this
Registration  Statement has been signed on behalf of the  Registrant in the City
of New York, and the State of New York on the 4th day of September 2003.

                                                     THE UBS FUNDS


                                           By:/s/Joseph Varnas
                                              --------------------------------
                                                Joseph Varnas*
                                                President



     As required by the 1933 Act, this registration statement has been signed by
the following persons in the capacities and on the dates indicated.



         Signature            Title                        Date
         ---------            -----                        ----

/s/Joseph Varnas           President                September 4, 2003
- -------------------
Joseph Varnas*

/s/Brian M.Storms          Trustee                  September 4, 2003
- -------------------
Brian M. Storms*

/s/Frank K. Reilly         Chairman and             September 4, 2003
- -------------------        Trustee
Frank K. Reilly*

/s/Paul H. Schubert        Principal Accounting     September 4, 2003
- -------------------        Officer and Treasurer
Paul H. Schubert*

s/Walter E. Auch           Trustee                  September 4, 2003
- -------------------
Walter E. Auch*

/s/Edward M. Roob          Trustee                 September 4, 2003
- -------------------
Edward M. Roob*


     * By:  /s/David M. Goldenberg
            --------------------------------------------
             David M. Goldenberg, Attorney-in-Fact
             (Pursuant to Power of Attorney, incorporated herein by reference)





EXHIBIT INDEX

    Exhibit No.                     Exhibit
    -----------                     -------

EX-99.12                            Form of Tax Opinion of Stradley, Ronon,
                                    Stevens & Young, LLP

EX-99.12

                              ______________, 2003



Board of Trustees
The UBS Funds
One North Wacker Drive
Chicago, Illinois 60606

Board of Trustees
UBS Mutual Funds Securities Trust
51 West 52nd Street
New York, New York 10019

     Re:  Agreement and Plan of Reorganization  (the "Agreement") made as of the
          ____ day of ______,  2003,  by and between The UBS Funds,  a statutory
          trust created  under the laws of the State of Delaware (the  "Trust"),
          on behalf of its  series,  the UBS U.S.  Small  Cap  Growth  Fund (the
          "Acquiring  Fund"),  and the UBS  Mutual  Funds  Securities  Trust,  a
          statutory  created  under  the  laws of the  State  of  Delaware  (the
          "Securities  Trust"),  on  behalf  of its  series,  the  UBS  Enhanced
          Nasdaq-100 Fund (the "Acquired Fund")


Gentlemen:

     You have  requested  our  opinion  concerning  certain  federal  income tax
consequences of the reorganization of the Acquired Fund (the  "Reorganization"),
which will  consist  of:  (i) the  acquisition  by the  Trust,  on behalf of the
Acquiring Fund, of substantially all of the property, assets and goodwill of the
Acquired Fund, in exchange solely for shares of beneficial interest,  $0.001 par
value, of (a) Acquiring  Fund-Class A shares  ("Acquiring Fund Class A Shares"),
(b)  Acquiring  Fund-Class  B shares  ("Acquiring  Fund  Class B  Shares"),  (c)
Acquiring  Fund-Class  C  shares  ("Acquiring  Fund  Class C  Shares"),  and (d)
Acquiring Fund-Class Y shares ("Acquiring Fund Class Y Shares" and together with
Acquiring Fund Class A Shares,  Acquiring Fund Class B Shares and Acquiring Fund
Class C Shares,  the "Acquiring Fund Shares" which are voting  securities),  and
the  assumption  by the Trust,  on behalf of the  Acquiring  Fund, of all of the
liabilities of the Acquired Fund;  (ii) the  distribution  of (a) Acquiring Fund
Class A  Shares  to the  shareholders  of Class A shares  of the  Acquired  Fund
("Acquired  Fund  Class A  Shares"),  (b)  Acquiring  Fund Class B Shares to the
shareholders  of Class B shares of the  Acquired  Fund  ("Acquired  Fund Class B
Shares"),  (c)  Acquiring  Fund  Class C Shares to the  shareholders  of Class C
shares of the Acquired Fund ("Acquired Fund Class C Shares"),  and (d) Acquiring
Fund Class Y Shares to the  shareholders  of Class Y shares of the Acquired Fund
("Acquired Fund Class Y Shares," and together with Acquired Fund Class A Shares,
Acquired  Fund Class B Shares and Acquired  Fund Class C Shares,  the  "Acquired
Fund Shares"),  according to their respective interests, in complete liquidation
of the Acquired Fund; and (iii) the dissolution of the Acquired Fund, as soon as
practicable after the Closing of the Reorganization, all upon and subject to the
terms and conditions of this Agreement.

     In  rendering  our  opinion,  we have  reviewed  and relied  upon:  (a) the
Agreement,  made as of the __ day of ____,  2003,  by and between the Trust,  on
behalf  of the  Acquiring  Fund,  and the  Securities  Trust,  on  behalf of the
Acquired Fund; (b) the proxy materials  provided to shareholders of the Acquired
Fund in connection with the Special  Shareholders'  Meeting of the Acquired Fund
held  on  _________,   2003;   (c)  certain   representations   concerning   the
Reorganization made to us by the Trust, on behalf of the Acquiring Fund, and the
Securities  Trust, on behalf of the Acquired Fund, in a letter dated  _________,
2003 (the "Representation Letter"); (d) all other documents, financial and other
reports and corporate  minutes we deemed relevant or  appropriate;  and (e) such
statutes, regulations,  rulings and decisions as we deemed material in rendering
this  opinion.  All terms used herein,  unless  otherwise  defined,  are used as
defined in the Agreement.

     For purposes of this  opinion,  we have assumed that the Acquired  Fund, on
the Closing of the  Reorganization,  satisfies,  and  immediately  following the
Closing,  the  Acquiring  Fund will  continue to satisfy,  the  requirements  of
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"),  for
qualification as a regulated investment company.

     Based on the foregoing,  and provided the  Reorganization is carried out in
accordance with the applicable  laws of the State of Delaware,  the terms of the
Agreement and the statements in the Representation Letter with regard to matters
of fact,  it is our opinion  that:  While not free from doubt under current law,
the acquisition by the Acquiring Fund of substantially all of the assets and the
assumption of the  liabilities  of the Acquired Fund in exchange  solely for the
Acquiring Fund Shares,  followed by the distribution by the Acquired Fund to its
shareholders  of the  Acquiring  Fund  Shares  in  complete  liquidation  of the
Acquired Fund,  should result in the recognition of gain or loss to the Acquired
Fund and to its shareholders for federal income tax purposes under Sections 1001
and 331 of the Code, but not to the Acquiring Fund and its shareholders.

     Our opinion is based upon the Code,  the applicable  Treasury  Regulations,
the present positions of the Internal Revenue Service (the "Service") as are set
forth  in   published   revenue   rulings   and  revenue   procedures,   present
administrative positions of the Service, and existing judicial decisions, all of
which are subject to change either  prospectively  or  retroactively.  We do not
undertake to make any continuing analysis of the facts or relevant law following
the Closing of the Reorganization.

     Our opinion is conditioned  upon the performance by the Trust, on behalf of
the Acquiring Fund, and the Securities Trust, on behalf of the Acquired Fund, of
their undertakings in the Agreement and the  Representation  Letter. Our opinion
is limited to the transactions incident to the Reorganization  described herein,
and no opinion is rendered with respect to (i) any other transaction or (ii) the
effect, if any, of the Reorganization (and/or the transactions incident thereto)
on  any  other  transaction  and/or  the  effect,  if  any,  of any  such  other
transaction on the Reorganization.

     This opinion is being rendered to the Trust,  on behalf of its series,  the
Acquiring Fund and the Securities  Trust, on behalf of its series,  the Acquired
Fund, and may be relied upon only by such funds and the shareholders of each. We
hereby  consent to the use of this  opinion  as an  exhibit to the  Registration
Statement  of the  Acquiring  Fund on Form  N-14,  and any  amendments  thereto,
covering  the  registration  of the  shares  of the  Acquiring  Fund  under  the
Securities Act of 1933, as amended, to be issued in the Reorganization.



                                 Very truly yours,

                                 STRADLEY, RONON, STEVENS & YOUNG, LLP


                                 By:
                                      ------------------------------------------
                                                            , a partner