The UBS Funds 497 as filed January 29, 2008

497 1 supplement.htm The UBS Funds 497 as filed January 29, 2008

[UBS LOGO]

The UBS Funds

Prospectus Supplement

January 29, 2008

Dear Investor,

The purpose of this supplement is to update the Prospectus of the series of The
UBS Funds dated October 28, 2007 as follows:

1. The following supplements information contained on page 4 in the Prospectus
section entitled "UBS Dynamic Alpha Fund - Investment objective,
strategies, securities selection and risks":

The fourth paragraph under the sub-heading "Principal investment strategies" is
deleted in its entirety and replaced by the following:

The Fund may invest in other open-end investment companies advised by the
Advisor to gain exposure to the global loan asset class, as well as various
other asset classes permitted for investment by the Fund. The Fund does not
pay fees in connection with its investment in the investment companies
advised by the Advisor, but may pay expenses associated with such
investments.

2. The following supplements information contained on page 12 in the
Prospectus section entitled "UBS Global Allocation Fund - Investment
objective, strategies, securities selection and risks":

The second paragraph under the sub-heading "Principal investment strategies" is
deleted in its entirety and replaced by the following:

Investments in fixed income securities may include, but are not limited to,
debt securities of governments throughout the world (including the United
States), their agencies and instrumentalities, debt securities of
corporations, mortgage-backed securities and asset-backed securities.
Investments in equity securities may include, but are not limited to,
common stock and preferred stock. The Fund may invest in other open-end
investment companies advised by the Advisor to gain exposure to the
emerging markets, global loan and high yield asset classes, as well as
various other asset classes permitted for investment by the Fund. The Fund
does not pay fees in connection with its investment in the investment
companies advised by the Advisor, but may pay expenses associated with such
investments.

3. The following supplements information contained on page 22 in the
Prospectus section entitled "UBS Global Frontier Fund - Investment
objective, strategies, securities selection and risks":

The second to last paragraph under the sub-heading "Principal investment
strategies" is deleted in its entirety and replaced by the following:

The Fund may invest all or a portion of its assets in Underlying Funds to
gain exposure to various asset classes. For instance, the Fund may invest a
portion of its assets in the UBS Opportunistic Loan Relationship Fund
series of UBS Relationship Funds to gain exposure to the global loan
market. The Fund does not pay fees in connection with its investments in
the Underlying Funds, but may pay expenses associated with such
investments.

4. The following supplements information contained on pages 42-44 in the
Prospectus section entitled "UBS U.S. Equity Alpha Fund - Investment
objective, strategies, securities selection and risks":

The following sentence is added to the end of the first paragraph under the
sub-heading "Principal investment strategies":

In addition, up to 20% of the Fund's net assets may be invested in
securities of foreign companies in developed countries, including long and
short positions in foreign equity securities and securities with
equity-like characteristics.

The following section is added after the third bullet point under the
sub-heading "Principal risks":

o Foreign investing risk--The risk that prices of the Fund's investments
in foreign securities may go down because of unfavorable foreign
government actions, political instability or the absence of accurate
information about foreign issuers. In addition, a decline in the value
of foreign currencies relative to the US dollar will reduce the value
of securities denominated in those currencies. Also, foreign
securities are sometimes less liquid and harder to buy, sell and to
value than securities of US issuers.

5. The following supplements information contained on page 48 in the
Prospectus section entitled "UBS U.S. Large Cap Equity Fund - Investment
objective, strategies, securities selection and risks":

The first paragraph under the sub-heading "Principal investment strategies" is
deleted in its entirety and replaced by the following:

Under normal circumstances, the Fund invests at least 80% of its net assets
(plus borrowings for investment purposes, if any) in equity securities of
US large capitalization companies. The Fund defines large capitalization
companies as those with a market capitalization of at least $3 billion. The
Fund may invest up to 20% of its net assets in the securities of US
companies that have market capitalizations within the range of the Russell
1000 Index but below $3 billion in market capitalization and/or the
securities of foreign companies in developed countries. Investments in
equity securities may include, but are not limited to, dividend-paying
securities, common stock, preferred stock, shares of investment companies,
convertible securities, warrants and rights.

In addition, foreign currency agreements are added to the list of permissible
derivative instruments included in the second paragraph under the sub-heading
"Principal investment strategies."

The following section is added after the first bullet point under the
sub-heading "Principal risks":

6. The following supplements information contained on page 77 in the
Prospectus section entitled "UBS Absolute Return Bond Fund - Investment
objective, strategies, securities selection and risks":

The fourth paragraph under the sub-heading "Principal investment strategies" is
deleted in its entirety and replaced by the following:

The Fund may invest in other open-end investment companies advised by the
Advisor to gain exposure to the emerging markets, securitized mortgage,
global loan and high yield asset classes, as well as other asset classes
permitted for investment by the Fund. The Fund does not pay fees in
connection with its investment in the investment companies advised by the
Advisor, but may pay expenses associated with such investments.

7. The following supplements information contained on page 86 in the
Prospectus section entitled "UBS Global Bond Fund - Investment objective,
strategies, securities selection and risks":

The last paragraph under the sub-heading "Securities selection" is deleted in
its entirety and replaced by the following:

The Fund may invest in other open-end investment companies advised by the
Advisor to gain exposure to the emerging markets debt, global loan and high
yield asset classes, as well as other asset classes permitted for
investment by the Fund. The Fund does not pay fees in connection with its
investment in the investment companies advised by the Advisor, but may pay
expenses associated with such investments.

8. The following supplements information contained on pages 92-94 in the
Prospectus section entitled "UBS High Yield Fund - Investment objective,
strategies, securities selection and risks":

The following paragraph is added as the last paragraph under the sub-heading
"Principal investment strategies":

In addition, the Fund may, but is not required to, invest up to 20% of its
net assets in the UBS Opportunistic Loan Relationship Fund series of UBS
Relationship Funds (the "Loan Fund") to gain exposure to the global loan
market to the extent permitted by an exemptive order received by the Fund.
The Fund does not pay fees in connection with its investment in the Loan
Fund, but may pay expenses associated with such investments. The Loan Fund
invests primarily in loan assignments, loan participations and other
investments that provide exposure to loans, which may be US dollar or
non-US dollar denominated and may have all types of interest rate payment
and reset terms, including floating, variable and fixed rate. These
investments may be of any credit quality, but are generally below
investment grade. In addition, the Fund's investment in shares of the Loan
Fund provides the Fund with exposure to senior secured, senior unsecured,
subordinated and junior loan assignments and participations, as well as to
other instruments that provide exposure to loans.

The following paragraph is added as the last bullet point under the sub-heading
"Principal risks":

Risks of investments in loans--The possible fluctuations in the Loan Fund's
value would directly affect the value of the Fund to the extent that the
Fund is invested in the Loan Fund. With respect to the Loan Fund, an
increase in demand for loans may adversely affect the rate of interest
payable on loans acquired by the Loan Fund, thus reducing returns of the
Loan Fund. Extreme increases in prevailing interest rates may cause an
increase in loan defaults which may cause a decline in the Loan Fund's
value. A decrease in interest rates could adversely affect the income
earned by the Loan Fund from its loans. Moreover, because floating rates on
loans only reset periodically, changes in prevailing interest rates may
cause a fluctuation in the Loan Fund's value for the floating rate
securities in which the Loan Fund invests. In addition, in the event that a
borrower in a loan defaults, the collateral securing a loan may be found
invalid, may be used to pay other outstanding obligations of the borrower
under applicable law or may be difficult to liquidate. The Loan Fund's
access to the collateral may be limited or delayed by bankruptcy and other
insolvency laws. Unsecured loans are not supported by collateral, which
results in a greater risk of loss. The Advisor has chosen to remain on the
public side of all loan transactions, meaning it refuses access to
non-public information. The Advisor effectively manages loans based only on
available public material to allow greater use of common credit research
across loans and the publicly traded bonds and equities of the borrowers.
However, this lack of access to non-public information means that the
Advisor does not receive information that would otherwise be useful in
reviewing the credit quality and underlying financial condition of the
borrower. In certain instances, however, the Advisor may seek access to
non-public information with respect to a particular loan currently held by
the Loan Fund if the loan has defaulted or is in danger of default or if
the Fund is a material holder of the loan during a significant change in
the terms of the loan. In these situations the Advisor may be restricted
from trading the loan or other debt and equity securities of the borrower
while it is in possession of such material, non-public information, even if
such loan or other security is declining in value. With respect to the Loan
Fund's investment in participations in loans, the Loan Fund has rights that
are more limited than the rights of lenders or of persons who acquire a
loan by assignment. In addition, the Loan Fund assumes the credit risk of
the lender selling the participation, as well as the credit risk of the
borrower. In the event of the insolvency of the lender selling the
participation, the Loan Fund may be treated as a general creditor of the
lender and may not have a senior claim to the lender's interest in the
loan. Certain investments in loans or other securities in the Loan Fund may
be considered illiquid. Loans are generally not traded on a national
securities exchange, but are traded on active secondary markets. Economic
and other events (whether real or perceived) can reduce the demand for
certain loans or loans generally, which may reduce market prices and cause
the Loan Fund's net asset value per share to fall. The frequency and
magnitude of such changes cannot be predicted. No active trading market may
exist for some loans and certain loans may be subject to restrictions on
resale. In addition, a secondary market may be subject to irregular trading
activity, wide bid/ask spreads and extended trade settlement periods, which
may impair the ability of the Loan Fund to realize full value and thus
cause a decline in the Loan Fund's net asset value.

9. The following supplements information contained on page 100 in the
Prospectus section entitled "UBS U.S. Bond Fund - Investment objective,
strategies, securities selection and risks":

The last paragraph under the sub-heading "Securities selection" is deleted in
its entirety and replaced by the following:

10. Effective on December 31, 2007, Brian Singer was no longer the lead
portfolio manager for the UBS Dynamic Alpha Fund, UBS Global Allocation
Fund and UBS Global Frontier Fund. Edwin Denson, Thomas Clarke and Neil
Williams replaced Mr. Singer as the lead portfolio managers in charge of
the UBS Dynamic Alpha Fund's day-to-day operations; Edwin Denson and Thomas
Clarke replaced Mr. Singer as the lead portfolio managers in charge of the
UBS Global Allocation Fund's day-to-day operations; and Edwin Denson
replaced Mr. Singer as the lead portfolio manager in charge of the UBS
Global Frontier Fund's day-to-day operations. Therefore, on pages 119-120
in the Prospectus, the section entitled "UBS Dynamic Alpha Fund, UBS Global
Allocation Fund and UBS Global Frontier Fund" under the heading
"Management" and the sub-heading "Portfolio management" is replaced in its
entirety by the following:

UBS Dynamic Alpha Fund

Edwin Denson, Thomas Clarke and Neil Williams are the lead portfolio
managers for the Fund. Messrs. Denson, Clarke and Williams have access to
certain members of the fixed-income and equities investment management
teams, each of whom is allocated a specified portion of the portfolio over
which he or she has independent responsibility for research, security
selection, and portfolio construction. The team members also have access to
additional portfolio managers and analysts within the various asset classes
and markets in which the Fund invests. Mr. Denson and Mr. Williams, as
senior portfolio managers for the Fund, have responsibility for allocating
the portfolio among the various managers and analysts, occasionally
implementing trades on behalf of analysts on the team and reviewing the
overall composition of the portfolio to ensure its compliance with its
stated investment objectives and strategies. Mr. Clarke, as senior
portfolio manager for the Fund, has responsibility for setting the currency
strategies and making all currency decisions for the Fund, occasionally
implementing trades on behalf of analysts on the team and reviewing the
overall composition of the portfolio to ensure its compliance with its
stated investment objectives and strategies. Information about Messrs.
Denson, Clarke and Williams is provided below.

Edwin Denson is an Executive Director and has been a senior asset
allocation analyst at UBS Global Asset Management since 2005. Mr. Denson is
a member of the Asset Allocation Analysis and Strategy team. Previously, he
served as director and asset allocation analyst with UBS Global Asset
Management since 2001. Mr. Denson has been involved with the management of
the Fund's portfolio since its inception and assumed his present role in
2007.

Thomas Clarke is a Managing Director and Head of Currency Analysis and
Strategy at UBS Global Asset Management. Mr. Clarke has been an investment
professional at UBS Global Asset Management since 2000. Mr. Clarke has been
involved with the management of the Fund's portfolio since its inception
and assumed his present role in 2007.

Neil Williams is a Managing Director and has been Head of Asset Allocation
at UBS Global Asset Management since 2003. Mr. Williams has been involved
with the management of the Fund's portfolio since its inception and assumed
his present role in 2007.

UBS Global Allocation Fund

Edwin Denson and Thomas Clarke are the lead portfolio managers for the
Fund. Mr. Denson and Mr. Clarke have access to certain members of the
fixed-income and equities investment management teams, each of whom is
allocated a specified portion of the portfolio over which he or she has
independent responsibility for research, security selection, and portfolio
construction. The team members also have access to additional portfolio
managers and analysts within the various asset classes and markets in which
the Fund invests. Mr. Denson, as senior portfolio manager for the Fund, has
responsibility for allocating the portfolio among the various managers and
analysts, occasionally implementing trades on behalf of analysts on the
team and reviewing the overall composition of the portfolio to ensure its
compliance with its stated investment objectives and strategies. Mr.
Clarke, as senior portfolio manager for the Fund, has responsibility for
setting the currency strategies and making all currency decisions for the
Fund, occasionally implementing trades on behalf of analysts on the team
and reviewing the overall composition of the portfolio to ensure its
compliance with its stated investment objectives and strategies.
Information about Mr. Denson and Mr. Clarke is provided below.

UBS Global Frontier Fund

Edwin Denson is the lead portfolio manager for the Fund. Mr. Denson has
access to certain members of the fixed-income and equities investment
management teams, each of whom is allocated a specified portion of the
portfolio over which he or she has independent responsibility for research,
security selection, and portfolio construction. The team members also have
access to additional portfolio managers and analysts within the various
asset classes and markets in which the Fund invests. Mr. Denson, as senior
portfolio manager for the Fund, has responsibility for allocating the
portfolio among the various managers and analysts, determining the amount
of leverage to use in the portfolio, occasionally implementing trades on
behalf of analysts on the team and reviewing the overall composition of the
portfolio to ensure its compliance with its stated investment objectives
and strategies. Information about Mr. Denson is provided below.

In addition, Bruno Bertocci, the portfolio manager for the UBS Global Equity
Fund, was replaced by Nicholas Melhuish effective on January 1, 2008. Therefore,
on page 120 in the Prospectus, the section entitled "UBS Global Equity Fund"
under the heading "Management" and the sub-heading "Portfolio management" is
replaced in its entirety by the following:

UBS Global Equity Fund

Nicholas Melhuish is the portfolio manager for the UBS Global Equity Fund.
He is responsible for the day-to-day management of the Fund's portfolio.
Mr. Melhuish has access to global analysts who are responsible for
researching, projecting cash flow and providing a basis for determining
which securities are attractively valued. Mr. Melhuish works closely with
the analysts to decide how to structure the UBS Global Equity Fund.
Information about Mr. Melhuish is provided below.

Nicholas Melhuish is a Managing Director and has been Head of Global
Equities at UBS Global Asset Management since 2007. Previously, Mr.
Melhuish was the lead portfolio manager and team head for the traditional
global equity strategy at Nicholas Applegate Capital Management from 2003
through 2007. Mr. Melhuish has been a portfolio manager of the Fund since
2008.

PLEASE BE SURE TO RETAIN THIS IMPORTANT INFORMATION WITH YOUR PROSPECTUS DATED
OCTOBER 28, 2007.

Item # zs-324

[UBS LOGO]

The UBS Funds

Statement of Additional Information Supplement

January 29, 2008

Dear Investor,

The purpose of this supplement is to update the statement of additional
information of the series of The UBS Funds dated October 28, 2007 ("SAI") as
follows:

1. The third paragraph under the heading "Investments relating to all Funds"
and the sub-heading "Investment company securities and investments in
affiliated investment companies" on page 17 of the SAI is replaced in its
entirety by the following:

In lieu of investing directly in certain high yield, higher risk
securities, the Funds may invest a portion of their assets in the UBS
Opportunistic High Yield Relationship Fund. The investment objective of the
UBS Opportunistic High Yield Relationship Fund is to maximize total return,
consisting of capital appreciation and current income, while controlling
risk. Under normal circumstances, the UBS Opportunistic High Yield
Relationship Fund invests at least 80% of its net assets (plus borrowings
for investment purposes, if any) in fixed income securities that provide
higher yields and are lower rated. High yield, lower rated fixed income
securities are those rated below investment grade.

In addition, to gain exposure to loan assignments, loan participations and
other investments in the global loan market, certain Funds may invest a
portion of their assets in the UBS Opportunistic Loan Relationship Fund
(the "Loan Fund"). The investment objective of the Loan Fund is to maximize
total return, consisting of current income and capital appreciation, while
controlling risk. Under normal circumstances, the Loan Fund invests at
least 80% of its net assets (plus borrowings for investment purposes, if
any) in loans or other financial instruments that provide exposure to
loans. See "Investment strategies--Loan participations and assignments" for
addition information and risks of the Funds' investment in the Loan Fund.

2. The following section is added after the sub-section entitled "Structured
notes" under the heading "Investments relating to UBS Dynamic Alpha Fund,
UBS Global Allocation Fund, UBS Global Frontier Fund, UBS Absolute Return
Bond Fund, UBS Global Bond Fund, UBS High Yield Fund and UBS U.S. Bond
Fund" on page 34 of the SAI:

Loan participations and assignments

Each Fund (other than the UBS High Yield Fund) may invest up to 5% of its
net assets, and the UBS High Yield Fund may invest up to 20% of its net
assets, in the Loan Fund to gain exposure to the global loan market. The
Loan Fund primarily invests in floating, variable and fixed rate loans made
to or issued by US and non-US companies and partnerships typically through
loan assignments, but also through participations in loans. The Loan Fund
primarily invests in senior secured loans, but may also purchase senior
unsecured, subordinated, and junior loans. Loans in general are subject to
the general risks of fixed income investing including credit, prepayment,
extension and, to a lesser extent, interest rate risks. The possible
fluctuations in the Loan Fund's value would directly affect the value of a
Fund to the extent that the Fund is invested in the Loan Fund and,
therefore, the Funds are subject to the same risks as the Loan Fund.

A senior loan is typically originated, negotiated and structured by a US or
foreign commercial bank, insurance company, finance company or other
financial institution (the "Agent") for a group of loan investors. The
Agent typically administers and enforces the loan on behalf of the other
loan investors and typically holds any collateral on behalf of the loan
investors. Loan interests primarily take the form of assignments purchased
in the primary or secondary market. Senior loans typically hold the most
senior position in the capital structure of a business entity, and
therefore have priority over the claims of most or all other creditors on
the borrower's cash flow in the event of default. Senior secured loans are
typically secured with specific collateral and have a claim on the assets
and/or stock of the borrower that is senior to that held by subordinated
debtholders and stockholders of the borrower. Senior unsecured loans are
not supported by collateral and, in such cases, the Loan Fund would not
have a claim on any specific asset or stock of the borrower, which results
in a greater risk of loss. The proceeds of senior loans primarily are used
to finance leveraged buyouts, recapitalizations, mergers, acquisitions,
stock repurchases, dividends, and, to a lesser extent, to finance internal
growth and for other corporate purposes. The amount of public information
available with respect to senior loans may be less extensive than that
available for registered or exchange listed securities.

Junior loans or second lien loans are subject to the same general risks
inherent to any loan investment, but due to their lower place in a
borrower's capital structure and possible unsecured status, junior loans
involve a higher degree of overall risk than senior loans of the same
borrower. A junior loan may have a claim on the same collateral pool as the
senior loan or it may be secured by a separate set of assets, such as
property, plants, or equipment.

The Loan Fund purchases loans primarily through assignments, but may also
purchase participation interests in loans. The agent and the original
lenders of a loan typically have the right to sell interests
("participations") in their share of the loan to other participants or to
assign all or a portion of their interests ("assignments") in the loan to
other parties. When the Loan Fund purchases an assignment, it typically has
a direct contractual relationship with the borrower and may enforce
compliance by the borrower with the terms of the loan agreement. The
purchaser of an assignment typically succeeds to all the rights and
obligations under the loan agreement of the assigning loan investor and
becomes a loan investor under the loan agreement with the same rights and
obligations as the assigning loan investor. Assignments may, however, be
arranged through private negotiations between potential assignees and
potential assignors, and the rights and obligations acquired by the
purchaser of an assignment may differ from, and be more limited than, those
held by the assigning loan investor.

When the Loan Fund acquires a participation in a loan, it typically has a
contractual relationship only with the lender, not with the borrower, and,
therefore, the Loan Fund generally has no right to enforce compliance by
the borrower with the terms of the loan agreement. As a result, the Loan
Fund may have the right to receive payments of principal, interest and any
fees to which it is entitled only from the loan investor selling the
participation and only upon receipt by such loan investor of such payments
from the borrower. In connection with purchasing participations, the Loan
Fund may not directly benefit from the collateral supporting the loan in
which it has purchased the participation. As a result, the Loan Fund
assumes the credit risk of both the borrower and the loan investor selling
the participation. Certain participations may be structured in a manner
designed to avoid purchasers of participations being subject to the credit
risk of the lender with respect to the participation. Even under such a
structure, in the event of the lender's insolvency, the lender's servicing
of the participation may be delayed and the assignability of the
participation may be impaired. The Loan Fund will acquire participations
only if the lender interpositioned between the Loan Fund and the borrower
is determined by the Advisor to be creditworthy. In the event of the
insolvency of the loan investor selling a participation, the Loan Fund may
be treated as a general creditor of such loan investor. The selling loan
investors and other persons interpositioned between such loan investors and
the Loan Fund with respect to such participations will likely conduct their
principal business activities in the banking, finance and financial
services industries.

The rate of interest payable on floating rate corporate loans or corporate
debt securities is established as the sum of a base lending rate, such as
the London Inter-Bank Offered Rate (LIBOR), plus a specified margin
(typically between 2% to 4%). The Advisor believes that such spreads
significantly reduce the impact of interest rate movements as compared to
other debt securities. The interest rate on LIBOR-based loans and
securities is reset periodically, typically at regular intervals ranging
between 30 and 90 days. In the alternative, a portion of the Loan Fund's
investments may consist of loans with interest rates that are fixed for the
term of the loan. Investment with longer interest rate reset periods or
fixed interest rates may increase fluctuations in the Loan Fund's share
price as a result of changes in interest rates.

Loans are generally not traded on a national securities exchange, but are
traded on active secondary markets. Economic and other events (whether real
or perceived) can reduce the demand for certain loans or loans generally,
which may reduce market prices and cause the Loan Fund's net asset value
per share to fall. The frequency and magnitude of such changes cannot be
predicted. No active trading market may exist for some loans and certain
loans may be subject to restrictions on resale. In addition, a secondary
market may be subject to irregular trading activity, wide bid/ask spreads
and extended trade settlement periods, which may impair the ability of the
Loan Fund to realize full value and thus cause a decline in its net asset
value.

The Advisor has chosen to remain on the public side of all loan
transactions by refusing access to non-public information about a borrower
that may otherwise be available to the portfolio manager or his team as a
consequence of typical loan terms requiring borrowers to provide non-public
information periodically to lenders. The Adviser refuses such non-public
information as the receipt of such information would require the portfolio
manager and his team to be "walled off" from other portfolio managers,
traders and research staff, which would inhibit the Loan Fund's opportunity
to leverage research and analysis from other portfolio management teams and
may increase the costs of the Loan Fund. However, by not receiving the
non-public information about a borrower, the portfolio manager and credit
analysts may not receive certain information to which the Loan Fund would
otherwise have been entitled that otherwise may have affected its decision
to invest in the loan. In certain instances, however, the Advisor may seek
access to non-public information with respect to a particular loan
currently held by the Loan Fund if the loan has defaulted or is in danger
of default or if the Fund is a material holder of the loan during a
significant change in the terms of the loan. In these situations the
Advisor may be restricted from trading the loan or other debt and equity
securities of the borrower while it is in possession of such material,
non-public information, even if such loan or other security is declining in
value.

3. The first paragraph under the heading "Investments relating to UBS Dynamic
Alpha Fund, UBS Global Allocation Fund, UBS Global Frontier Fund, UBS
Global Equity Fund, UBS International Equity Fund, UBS U.S. Equity Alpha
Fund, UBS U.S. Large Cap Equity Fund, UBS U.S. Large Cap Growth Fund, UBS
U.S. Large Cap Value Equity Fund, UBS U.S. Mid Cap Growth Equity Fund, UBS
U.S. Small Cap Growth Fund and UBS High Yield Fund" and the sub-heading
"Equity securities" on pages 18-19 of the SAI is replaced in its entirety
by the following:

The Funds may invest in a broad range of equity securities of US and non-US
issuers, including, but not limited to, common stocks of companies or
closed-end investment companies, preferred stocks, debt securities
convertible into or exchangeable for common stock, securities such as
warrants or rights that are convertible into common stock and sponsored or
unsponsored American, European and Global depositary receipts ("Depositary
Receipts"). The issuers of unsponsored Depositary Receipts are not
obligated to disclose material information in the United States. The Funds,
except for the UBS U.S. Mid Cap Growth Equity Fund and UBS U.S. Small Cap
Growth Fund, expect their US equity investments to emphasize large and mid
capitalization companies. The UBS U.S. Mid Cap Growth Equity Fund expects
its US equity investments to emphasize mid capitalization companies. The
UBS U.S. Small Cap Growth Fund expects its US equity investments to
emphasize small capitalization companies. The UBS Dynamic Alpha Fund, UBS
Global Allocation Fund, UBS Global Frontier Fund, UBS Global Equity Fund,
UBS International Equity Fund, UBS U.S. Equity Alpha Fund and UBS U.S. Mid
Cap Growth Equity Fund may also invest in small capitalization companies.
The equity markets in the non-US component of the Funds will typically
include available shares of larger capitalization companies but may also
include intermediate and small capitalization companies. Capitalization
levels are measured relative to specific markets, thus large, intermediate
and small capitalization ranges vary country by country. The UBS Dynamic
Alpha Fund, UBS Global Allocation Fund, UBS Global Frontier Fund, UBS U.S.
Equity Alpha Fund and UBS U.S. Mid Cap Growth Equity Fund may invest in
equity securities of companies considered by the Advisor to be in their
post-venture capital stage, or "post-venture capital companies." A
post-venture capital company is a company that has received venture capital
financing either: (a) during the early stages of the company's existence or
the early stages of the development of a new product or service, or (b) as
part of a restructuring or recapitalization of the company. The UBS Dynamic
Alpha Fund, UBS Global Allocation Fund, UBS Global Frontier Fund, UBS
Global Equity Fund, UBS International Equity Fund and UBS U.S. Mid Cap
Growth Equity Fund may invest in equity securities of issuers in emerging
markets and in securities with respect to which the return is derived from
the equity securities of issuers in emerging markets.

4. The UBS U.S. Equity Alpha Fund and UBS U.S. Large Cap Equity Fund are added
to the list of Funds in the heading "Investments relating to the UBS
Dynamic Alpha Fund, UBS Global Allocation Fund, UBS Global Frontier Fund,
UBS Global Equity Fund, UBS International Equity Fund, UBS U.S Large Cap
Growth Fund, UBS U.S. Mid Cap Growth Equity Fund, UBS U.S. Small Cap Growth
Fund, UBS Absolute Return Bond Fund, UBS Global Bond Fund, UBS High Yield
Fund and UBS U.S. Bond Fund" on page 19 of the SAI to reflect the ability
of such Funds to invest in foreign securities of developed countries and
forward foreign currency contracts, among other investments. In addition,
the chart on page B-1 of "Appendix B--Risk Summary" of the SAI is revised
to indicate that "Foreign country & currency" risk apply to the UBS U.S.
Equity Alpha Fund and the UBS U.S. Large Cap Equity Fund.

5. Effective on December 31, 2007, Brian Singer was no longer the lead
portfolio manager for the UBS Dynamic Alpha Fund, UBS Global Allocation
Fund and UBS Global Frontier Fund. Edwin Denson, Thomas Clarke and Neil
Williams replaced Mr. Singer as the lead portfolio managers in charge of
the UBS Dynamic Alpha Fund's day-to-day operations; Edwin Denson and Thomas
Clarke replaced Mr. Singer as the lead portfolio managers in charge of the
UBS Global Allocation Fund's day-to-day operations; and Edwin Denson
replaced Mr. Singer as the lead portfolio manager in charge of the UBS
Global Frontier Fund's day-to-day operations. Therefore, on page 68 of the
SAI, the information presented with respect to Brian Singer under the
heading "Investment advisory, principal underwriting and other service
arrangements" and the sub-heading "Portfolio managers," including the
corresponding footnotes presented on page 70, is replaced in its entirety
by the following:

Registered investment Other pooled investment
companies vehicles Other accounts
----------------------------- -------------------------- ---------------------------
Assets Assets Assets
managed (in managed (in managed (in
Portfolio Manager (Funds managed) Number millions) Number millions) Number millions)
------------------------------------------ ------------------------------- --------------------------- ---------------------------
Edwin Denson(1)
(UBS Dynamic Alpha Fund, UBS Global
Allocation Fund and UBS Global Frontier
Fund) 11 $13,680 21(2) $26,984 25 $5,206

Thomas Clarke(1)
(UBS Dynamic Alpha Fund and UBS Global
Allocation) 7 $12,682 21(2) $27,065 11 $3,185

Neil Williams(1)
(UBS Dynamic Alpha Fund) 3 $3,621 4 $5,175 7 $1,212

(1) Edwin Denson, Thomas Clarke and Neil Williams began managing their
respective Funds effective on December 31, 2007. Information provided for
Messrs. Denson, Clarke and Williams is as of September 30, 2007.

(2) One account with assets of approximately $187 million has an advisory fee
based upon the performance of the account.

In addition, Bruno Bertocci, the portfolio manager for the UBS Global
Equity Fund, was replaced by Nicholas Melhuish effective on January 1, 2008.
Therefore, on page 69 of the SAI, the information presented with respect to
Bruno Bertocci under the heading "Investment advisory, principal underwriting
and other service arrangements" and the sub-heading "Portfolio managers" is
replaced in its entirety by the following:"

Registered investment Other pooled investment
companies vehicles Other accounts
----------------------------------- ----------------------------- ----------------------------- -----------------------------
Portfolio Manager (Funds managed) Number Assets managed Number Assets managed Number Assets managed
----------------------------------- ----------------------------- ----------------------------- -----------------------------
Nicholas Melhuish(b)
(UBS Global Equity Fund 2 $399.9 13 $307 9 $4,260

(b) Nicholas Melhuish began managing the Fund effective on January 1, 2008.
Information provided for Mr. Melhuish is as of September 30, 2007.

Also, on page 72 of the SAI, the information presented with respect to
Brian Singer and Bruno Bertocci under the Heading "Investment advisory,
principal underwriting and other service arrangements" and the sub-heading
"Portfolio managers" is deleted in its entirety and the following information is
added into the table on page 72:

Portfolio Manager/Fund* Range of shares owned**
-------------------------------------------------------------
Edwin Denson
UBS Dynamic Alpha Fund None
UBS Global Allocation Fund $50,001-$100,000
UBS Global Frontier Fund None

Thomas Clarke
UBS Dynamic Alpha Fund None
UBS Global Allocation None

Neil Williams
UBS Dynamic Alpha Fund None

Nicholas Melhuish
UBS Global Equity Fund None

PLEASE BE SURE TO RETAIN THIS IMPORTANT INFORMATION WITH YOUR STATEMENT OF
ADDITIONAL INFORMATION DATED OCTOBER 28, 2007.

Item # ZS-325