the ubs funds prospectus

The UBS FundsProspectus | October 28, 2016

UBS Core Plus Bond FundClass: A: BNBDX, C: BNOCX, P: BPBDX

Not FDIC Insured. May lose value. No bank guarantee.

This prospectus offers Class A, Class C and Class P shares in one of the nine series of The UBS Funds (the “Trust”)listed above (“Fund”).

The Board of Trustees of the Trust on September 8, 2016 approved certain actions to liquidate and dissolve theFund. The liquidation is expected to be completed on or about December 30, 2016. In connection with the liquida-tion, the Board approved effective November 4, 2016, the closure of each class of the Fund to new investments,including new investors, additional purchases from existing investors (except as noted below) and purchases forexchange from other funds, and the closure of each class of the Fund to reinvestments of dividends and distribu-tions. Therefore the Fund will no longer offer shares for purchase. However, existing investors may continue to pur-chase shares through certain 401(k) plans until it is practicable for such contributions to be terminated. Also inconnection with the liquidation, effective November 4, 2016, the annual Rule 12b-1 distribution fee of 0.50% ofaverage net assets that is charged to the shareholders of Class C shares is waived. The annual service fee of 0.25%of average net assets that is charged on Class A shares and Class C shares will not be waived.

Shareholders of the Fund on December 30, 2016 will have their accounts liquidated and the proceeds will be deliv-ered to them. For those shareholders with taxable accounts and for federal, state and local income tax purposes:(a) any liquidation proceeds paid to such shareholder should generally be treated as received by such shareholder inexchange for the shareholder’s shares and the shareholder will therefore generally recognize a taxable gain or loss;(b) in connection with the liquation, the Fund may declare taxable distributions of its income and/or capital gain;and (c) an exchange out of the Fund prior to the date of liquidation may be considered a taxable transaction andsuch shareholders may recognize a gain or loss. Shareholders should consult their tax advisers regarding the effectof the Fund’s liquidation in light of their individual circumstances.

As with all mutual funds, the U.S. Securities and Exchange Commission (“SEC”) has not approved or disapprovedany Fund’s shares or determined whether this prospectus is complete or accurate. To state otherwise is a crime.

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Contents

The UBS FundsWhat every investor should know about the fund

Fund summary Page• UBS Core Plus Bond Fund 3

More information about the fund• UBS Core Plus Bond Fund—Investment objective, strategies, securities selection and risks 8

Your investmentInformation for managing your fund account• Managing your fund account 13• Flexible pricing 13• Buying shares 17• Selling shares 19• Exchanging shares 20• Pricing and valuation 21

Additional informationAdditional important information about the fund• Management 24• Disclosure of portfolio holdings 25• Dividends and taxes 25• Supplemental investment advisor performance information 28• Financial highlights 31• Where to learn more about the fund Back cover

Please find the UBS family of funds privacy notice on page 34 of this prospectus.

Please find the UBS Asset Management business continuity planning overview on page 35 of this prospectus.

The fund is not a complete or balanced investment program.

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UBS Core Plus Bond FundFund Summary

Investment objectiveThe Fund seeks to maximize total return, consisting ofcapital appreciation and current income.

Fees and expensesThese tables describe the fees and expenses that youmay pay if you buy and hold shares of the Fund. Youmay qualify for a sales charge waiver or discount if youand your family invest, or agree to invest in the future,at least $100,000 in the Fund. More information aboutthese and other discounts and waivers, as well as eligi-bility requirements for each share class, is available fromyour financial advisor and in “Managing your fundaccount” on page 13 of the Fund’s prospectus and in“Reduced sales charges, additional purchase, exchangeand redemption information and other services” onpage 75 of the Fund’s statement of additional informa-tion (“SAI”).

Shareholder fees (fees paid directly from your investment)

Class A Class C Class P

Maximum front-end sales charge(load) imposed on purchases(as a % of offering price) 3.75% None None

Maximum contingent deferredsales charge (load) (CDSC)(as a % of purchase or salesprice, whichever is less) None1 0.75% None

Annual fund operating expenses (expenses that you payeach year as a percentage of the value of your investment)

Class A Class C Class P

Management fees 0.50% 0.50% 0.50%

Distribution and/or service(12b-1) fees 0.25 0.75 None

Other expenses 0.87 1.06 0.86

Acquired fund fees and expenses 0.03 0.03 0.03

Total annual fund operatingexpenses2 1.65 2.34 1.39

Less management fee waiver/expensereimbursements 0.98 1.17 0.97

Total annual fund operatingexpenses after management feewaiver/expense reimbursements2,3,4 0.67 1.17 0.42

1 Purchases of $1 million or more that were not subject to a front-end sales chargeare subject to a 1% CDSC if sold within one year of the purchase date.

2 Since the “Acquired fund fees and expenses” are not directly borne by the Fund,they are not reflected in the Fund’s financial statements, and therefore theamounts listed in “Total annual fund operating expenses” and “Total annualfund operating expenses after management fee waiver/expense reimbursements”will differ from those presented in the Financial highlights.

3 In connection with the liquidation, expected to be completed on or aboutDecember 30, 2016, the Board approved, effective November 4, 2016, the waiv-er of the annual Rule 12b-1 distribution fee of 0.50% of average net assets thatis charged to the shareholders of Class C shares, and the elimination of allCDSCs assessed on redemptions that are charged on Class A shares (on purchas-es of $1,000,000 or more) and Class C shares. The annual management fee andthe annual service fee of 0.25% of average net assets that is charged on Class Ashares and Class C shares will not be waived. With respect to exchanges ofshares of the Fund for shares of another UBS Family Fund, the length of time youheld your shares of the Fund will still be considered when determining whetheryou must pay a CDSC when you sell the shares of the UBS Family Fund acquiredin the exchange. These changes are not reflected in the fee and expense tablesabove or the expense example below.

4 The Trust, with respect to the Fund, and UBS Asset Management (Americas) Inc.the Fund’s investment advisor (“UBS AM (Americas)” or the “Advisor”), haveentered into a written agreement pursuant to which the Advisor has agreed towaive a portion of its management fees and/or to reimburse expenses (excludingexpenses incurred through investment in other investment companies, interest,taxes, brokerage commissions and extraordinary expenses) to the extent neces-sary so that the Fund’s ordinary operating expenses (excluding expenses incurredthrough investment in other investment companies, interest, taxes, brokeragecommissions and extraordinary expenses), through the period endingOctober 27, 2017, do not exceed 0.64% for Class A shares, 1.14% for Class Cshares and 0.39% for Class P shares. Pursuant to the written agreement, theAdvisor is entitled to be reimbursed for any fees it waives and expenses it reimburses to the extent such reimbursement can be made during the three years

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following the period during which such fee waivers and expense reimbursementswere made, provided that the reimbursement of the Advisor by the Fund will notcause the Fund to exceed any applicable expense limit that is in place for theFund. The fee waiver/expense reimbursement agreement may be terminated bythe Fund’s Board of Trustees at any time and also will terminate automaticallyupon the expiration or termination of the Fund’s advisory contract with theAdvisor. Upon termination of the fee waiver/expense reimbursement agreement,however, the UBS AM (Americas)’s three year recoupment rights will survive.

ExampleThis example is intended to help you compare the costof investing in the Fund with the cost of investing inother mutual funds. The example assumes that youinvest $10,000 in the Fund for the time periods indicat-ed and then sell all of your shares at the end of thoseperiods unless otherwise stated. The example alsoassumes that your investment has a 5% return eachyear and that the Fund’s operating expenses remain thesame. The costs described in the example reflect theexpenses of the Fund that would result from the con-tractual fee waiver and expense reimbursement agree-ment with the Advisor for the first year only. Althoughyour actual costs may be higher or lower, based onthese assumptions, your costs would be:

1 year 3 years 5 years 10 years

Class A $441 $783 $1,149 $2,177

Class C (assuming sale of allshares at end of period) 194 618 1,144 2,586

Class C (assuming no saleof shares) 119 618 1,144 2,586

Class P 43 344 668 1,584

Portfolio turnoverThe Fund pays transaction costs, such as mark-ups,when it buys and sells securities (or “turns over” itsportfolio). A higher portfolio turnover rate may indicatehigher transaction costs and may result in higher taxeswhen Fund shares are held in a taxable account. Thesecosts, which are not reflected in annual fund operatingexpenses or in the example, affect the Fund’s perform-ance. During the most recent fiscal year, the Fund’s port-folio turnover rate was 949% of the average value of itsportfolio.

Principal strategiesPrincipal investmentsUnder normal circumstances, the Fund invests at least80% of its net assets (plus borrowings for investmentpurposes, if any) in bonds, which are defined as fixedincome securities. The Fund may invest in fixed incomesecurities of any maturity, but generally invests in securi-ties having an initial maturity of greater than one year.

The Fund’s investments in fixed income securities mayinclude, but are not limited to, securities of the US gov-ernment, its agencies and government-sponsored enter-prises, securities guaranteed by the US government,corporate debt securities of US and non-US issuers,including convertible securities, obligations of non-US

governments or their subdivisions, agencies and govern-ment-sponsored enterprises, obligations of internationalagencies or supranational entities, mortgage-backed(including commercial and residential mortgage-backedsecurities) and asset-backed securities, and other securi-tized and structured securities.

The Fund may invest up 35% of its net assets in foreignfixed income securities, with up to 30% of its net assetsin fixed income securities denominated in foreign cur-rencies. Under normal conditions, the Fund expects tolimit foreign currency exposure to 20% of the Fund’snet assets.

The Fund generally invests in investment grade securi-ties. However, the Fund may invest up to 30% of its netassets in any combination of high yield (lower-rated or“junk bonds”) securities, emerging market fixed incomesecurities or other non-investment grade securities, pro-vided that no more than 15% of its net assets may beinvested in developed market high yield securities andno more than 15% of its net assets may be invested inemerging market securities. Depending on its assess-ment of market conditions, the Advisor may choose toallocate the Fund’s assets in any combination amongthese types of investments or may choose not to investin these types of investments.

The Fund may, but is not required to, use exchange-traded or over-the-counter (“OTC”) derivative instru-ments for risk management purposes or as part of theFund’s investment strategies. Generally, derivatives arefinancial contracts whose value depends upon, or isderived from, the value of an underlying asset, referencerate, index or other market factor, and may relate tostocks, bonds, interest rates, credit, currencies or curren-cy exchange rates, commodities and related indexes.The derivatives in which the Fund may invest includeoptions (including, but not limited to, options onfutures, forwards and swap agreements), futures, for-ward agreements, swap agreements (including, interestrate, total return, currency, credit default and inflationswaps), credit-linked securities and structured invest-ments. All of these derivatives may be used for riskmanagement purposes, such as hedging against a spe-cific security or currency, or to manage or adjust the riskprofile of the Fund. In addition, all of the derivativeinstruments listed above may be used for investment(non-hedging) purposes to earn income; to enhancereturns; to replace more traditional direct investments;to obtain exposure to certain markets; to establish netshort positions for individual sectors, markets, currenciesor securities or to adjust the Fund’s portfolio duration.

The Fund may engage in active and frequent trading ofportfolio securities to achieve its principal investmentstrategies.



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In preparation for the liquidation of the Fund, the Fund’sassets may be invested in money market instruments orheld in cash. In this regard, the Fund will no longer beinvesting according to its investment objective.

Management processThe Advisor uses an investment style focused on invest-ment fundamentals. The Advisor believes that invest-ment fundamentals determine and define investmentvalue. The Advisor seeks to identify and exploit periodicdifferences between market prices and fundamental val-ue. In analyzing price/value differences, the Advisor alsotakes into account cyclical market drivers that may influ-ence near term dynamics of market prices.

The Advisor considers various factors and incorporatesnumerous tools to construct and manage investmentportfolios. Through a combination of top-down macro-economic analysis and forecasting and intensive bottom-up issuer-specific research, the Advisor makesactive decisions related to duration, yield curve position-ing, relative sector, issuer, and quality exposures. Bothquantitative and qualitative analysis is employed to allfacets of portfolio construction and management with acomprehensive focus on risk management in bothabsolute and benchmark-relative terms.

Main risksAll investments carry a certain amount of risk and theFund cannot guarantee that it will achieve its invest-ment objective. You may lose money by investing in theFund. An investment in the Fund is not a deposit of thebank and is not insured or guaranteed by the FederalDeposit Insurance Corporation or any other governmentagency. Below are some of the specific risks of investingin the Fund.

Interest rate risk: An increase in prevailing interestrates typically causes the value of fixed income securitiesto fall. Changes in interest rates will likely affect the val-ue of longer-duration fixed income securities more thanshorter-duration securities and higher quality securitiesmore than lower quality securities. When interest ratesare falling, some fixed income securities provide that theissuer may repay them earlier than the maturity date,and if this occurs the Fund may have to reinvest theserepayments at lower interest rates. The risks associatedwith rising interest rates may be more pronounced inthe near future due to the current period of historicallylow rates.

Credit risk: The risk that the Fund could lose money ifthe issuer or guarantor of a fixed income security, or thecounterparty to or guarantor of a derivative contract, isunable or unwilling to meet its financial obligations. Thisrisk is likely greater for lower quality investments thanfor investments that are higher quality.

US Government securities risk: There are differenttypes of US government securities with different levelsof credit risk, including the risk of default, depending onthe nature of the particular government support for thatsecurity. For example, a US government-sponsored enti-ty, although chartered or sponsored by an Act ofCongress, may issue securities that are neither insurednor guaranteed by the US Treasury and are thereforeriskier than those that are.

Liquidity risk: The risk that investments cannot bereadily sold at the desired time or price, and the Fundmay have to accept a lower price or may not be able tosell the security at all. An inability to sell securities canadversely affect the Fund’s value or prevent the Fundfrom taking advantage of other investment opportuni-ties. Liquid portfolio investments may become illiquid orless liquid after purchase by the Fund due to low tradingvolume, adverse investor perceptions and/or other mar-ket developments. In recent years, the number andcapacity of dealers that make markets in fixed incomesecurities has decreased. Consequently, the decline indealers engaging in market making trading activitiesmay increase liquidity risk, which can be more pro-nounced in periods of market turmoil. Liquidity risk maybe magnified in a rising interest rate environment orwhen investor redemptions from fixed income fundsmay be higher than normal, causing increased supply inthe market due to selling activity. Liquidity risk includesthe risk that the Fund will experience significant netredemptions at a time when it cannot find willing buy-ers for its portfolio securities or can only sell its portfoliosecurities at a material loss.

High yield bond risk: The risk that the issuer of bondswith ratings of BB (Standard & Poor’s Financial ServicesLLC (“S&P”) or Fitch Ratings, Inc. (“Fitch”)), or Ba(Moody’s Investors Service, Inc. (“Moody’s”)) or below,or deemed of equivalent quality, will default or other-wise be unable to honor a financial obligation (alsoknown as lower-rated or “junk bonds”). These securitiesare considered to be predominately speculative withrespect to an issuer’s capacity to pay interest and repayprincipal in accordance with the terms of the obliga-tions. Lower-quality bonds are more likely to be subjectto an issuer’s default or downgrade than investmentgrade (higher quality) bonds.

Mortgage- and asset-backed securities risk: TheFund may invest in mortgage- and asset-backed securi-ties that are subject to prepayment or call risk, which isthe risk that the borrower’s payments may be receivedearlier or later than expected due to changes in prepay-ment rates on underlying loans. Faster prepaymentsoften happen when interest rates are falling. As a result,the Fund may reinvest these early payments at lowerinterest rates, thereby reducing the Fund’s income.Conversely, when interest rates rise, prepayments mayhappen more slowly, causing the security to lengthen in



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duration. Longer duration securities tend to be morevolatile. Securities may be prepaid at a price less thanthe original purchase value. An unexpectedly high rateof defaults on the mortgages held by a mortgage poolmay adversely affect the value of mortgage-backedsecurities and could result in losses to the Fund.

Market risk: The risk that the market value of theFund’s investments may fluctuate, sometimes rapidly orunpredictably, as the stock and bond markets fluctuate.Market risk may affect a single issuer, industry, or sectorof the economy, or it may affect the market as a whole.

Foreign investing risk: The value of the Fund’s invest-ments in foreign securities may fall due to adverse politi-cal, social and economic developments abroad and dueto decreases in foreign currency values relative to the USdollar. Investments in foreign government bonds involvespecial risks because the Fund may have limited legalrecourse in the event of default. Also, foreign securitiesare sometimes less liquid and more difficult to sell andto value than securities of US issuers. These risks aregreater for investments in emerging market issuers. Inaddition, investments in emerging market issuers maydecline in value because of unfavorable foreign govern-ment actions, greater risks of political instability or theabsence of accurate information about emerging mar-ket issuers.

Derivatives risk: The value of “derivatives”—so calledbecause their value “derives” from the value of anunderlying asset, reference rate or index—may rise orfall more rapidly than other investments. It is possiblefor the Fund to lose more than the amount it invested inthe derivative. The risks of investing in derivative instru-ments also include market risk, management risk, coun-terparty risk (which is the risk that a counterparty to aderivative contract is unable or unwilling to meet itsfinancial obligations) and the risk that changes in thevalue of a derivative may not correlate perfectly with theunderlying asset, rate, index or overall market securities.Derivatives relating to fixed income markets are espe-cially susceptible to interest rate risk and credit risk. Inaddition, many types of swaps and other non-exchangetraded derivatives may be subject to liquidity risk, creditrisk and mispricing or valuation complexity. These deriv-atives risks are different from, and may be greater than,the risks associated with investing directly in securitiesand other instruments.

Leverage risk associated with financial instruments: The use of financial instruments toincrease potential returns, including derivatives used forinvestment (non-hedging) purposes, may cause theFund to be more volatile than if it had not been lever-aged. The use of leverage may also accelerate the veloc-ity of losses and can result in losses to the Fund thatexceed the amount originally invested.

Management risk: The risk that the investment strate-gies, techniques and risk analyses employed by theAdvisor may not produce the desired results.

Portfolio turnover risk: High portfolio turnover fromfrequent trading will increase the Fund’s transactioncosts and may increase the portion of the Fund’s capitalgains that are realized for tax purposes in any givenyear. The Fund does not restrict the frequency of tradingin order to limit expenses or the tax effect that its distri-butions may have on shareholders.

PerformanceRisk/return bar chart and tableThe performance information that follows shows theFund’s performance information in a bar chart and anaverage annual total returns table. The information pro-vides some indication of the risks of investing in theFund by showing changes in the Fund’s performancefrom year to year and by showing how the Fund’s aver-age annual total returns compare with those of a broadmeasure of market performance. Index reflects nodeduction for fees, expenses or taxes. The Fund’s pastperformance (before and after taxes) is not necessarilyan indication of how the Fund will perform in thefuture. Updated performance for the Fund is available atwww.ubs.com/us-mutualfundperformance.

After-tax returns are calculated using the historical high-est individual federal marginal income tax rates and donot reflect the impact of state and local taxes. Actualafter-tax returns depend on an investor’s tax situationand may differ from those shown. In addition, the after-tax returns shown are not relevant to investors whohold Fund shares through tax-deferred arrangements,such as 401(k) plans or individual retirement accounts.After-tax returns for other classes will vary from theClass P shares’ after-tax returns shown.

Total return (Class P)

Total return January 1-September 30, 2016: 5.91%Best quarter during calendar years shown—3Q 2009: 5.28%Worst quarter during calendar years shown—1Q 2008: (6.16)%

-5

-10

-15

5

0

10

-202006 2007 2008 2009 2010 2011 2012 2013 2014 2015

15%

8.01%8.01%4.35%4.35%

7.74%7.74%10.91%10.91%

(0.22)%(0.22)%

5.66%5.66% 6.90%6.90%

1.68%1.68%

(1.05)%(1.05)%

(14.01)%(14.01)%

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Average annual total returns (figures reflect sales charges)(for the periods ended December 31, 2015)

Class (inception date) 1 year 5 years 10 years

Class A (6/30/97)Return before taxes (4.21)% 2.68% 2.13%

Class C (11/8/01)Return before taxes (1.58) 2.97 2.00

Class P (8/31/95)Return before taxes (0.22) 3.74 2.76

Return after taxes on distributions (1.27) 2.53 1.14

Return after taxes on distributionsand sale of fund shares (0.12) 2.37 1.46

Bloomberg Barclays US Aggregate Index 0.55 3.25 4.51

Investment advisorUBS Asset Management (Americas) Inc. serves as theinvestment advisor to the Fund.

Portfolio manager• Scott E. Dolan, portfolio manager of the Fund since

2012.• John Dugenske, portfolio manager of the Fund since

2012.• Craig G. Ellinger, portfolio manager of the Fund since

2012.

Purchase & sale of Fund sharesYou may purchase, redeem or exchange shares of theFund on any business day, which is any day the New

York Stock Exchange is open for business. You may pur-chase, redeem or exchange shares of the Fund eitherthrough a financial advisor or directly from the Fund. Ingeneral, the minimum initial investment is $1,000 andthe minimum subsequent investment is $100.

Tax informationThe dividends and distributions you receive from theFund are taxable and generally will be taxed as ordinaryincome, unless you are investing through a tax deferredarrangement, such as a 401(k) plan or an individualretirement account, in which case your distributionsgenerally will be taxed when withdrawn from the tax-deferred account.

Payments to broker/dealers and other financialintermediariesIf you purchase the Fund through a broker-dealer orother financial intermediary (such as a bank), the Fundand its related companies may pay the intermediary forthe sale of Fund shares and related services. These pay-ments may create a conflict of interest by influencingthe broker-dealer or other intermediary and your finan-cial advisor to recommend the Fund over another invest-ment. Ask your financial advisor or visit your financialintermediary’s Web site for more information.



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Investment objective, strategies, securities selection and risksFund objectiveThe Fund seeks to maximize total return, consisting ofcapital appreciation and current income.

Principal investment strategiesUnder normal circumstances, the Fund invests at least80% of its net assets (plus borrowings for investmentpurposes, if any) in bonds, which are defined as fixedincome securities. The Fund may invest in fixed incomesecurities of any maturity, but generally invests in securi-ties having an initial maturity of greater than one year.Investments in fixed income securities may include, butare not limited to, securities of the US government, itsagencies and government-sponsored enterprises, securi-ties guaranteed by the US government, corporate debtsecurities of US and non-US issuers, including convert-ible securities, obligations of non-US governments ortheir subdivisions, agencies and government-sponsoredenterprises, obligations of international agencies orsupranational entities, mortgage-backed (includingcommercial and residential mortgage-backed securities)and asset-backed securities, and other securitized andstructured securities.

The Fund may, but is not required to, use derivative instru-ments for risk management purposes or as part of theFund’s investment strategies. Generally, derivatives arefinancial contracts whose value depends upon, or isderived from, the value of an underlying asset, referencerate, index or other market factor, and may relate tostocks, bonds, interest rates, credit, currencies or currencyexchange rates, commodities and related indexes.Examples of derivatives include options (including, but notlimited to, options on futures, forwards and swap agree-ments), futures, forward agreements, swap agreements(including, but not limited to, interest rate, total return,currency, credit default and inflation swaps), credit-linkedsecurities and structured investments. The Fund may usederivatives to earn income and enhance returns, to man-age or adjust the risk profile of the Fund, to replace moretraditional direct investments, to obtain exposure to cer-tain markets, to establish net short positions in individualsectors, markets or securities, or to adjust the Fund’s port-folio duration.

The Fund may invest up 35% of its net assets in foreignfixed income securities, with up to 30% of its net assetsin fixed income securities denominated in foreign cur-rencies. Under normal conditions, the Fund expects tolimit foreign currency exposure to 20% of the Fund’snet assets.

The Fund generally invests in investment grade fixedincome securities. Investment grade fixed income securi-ties possess a minimum rating of BBB- by Standard &Poor’s Financial Services LLC (“S&P”) or Fitch Ratings, Inc(“Fitch”), or Baa3 by Moody’s Investors Service, Inc.(“Moody’s”) or, if unrated, are determined to be of comparable quality by the Advisor.

However, the Fund may invest up to 30% of its netassets in any combination of high yield (lower-rated or“junk bonds”) securities, emerging market fixed incomesecurities or other non-investment grade securities, pro-vided that no more than 15% of its net assets may beinvested in developed market high yield securities andno more than 15% of its net assets may be invested inemerging market securities. Depending on its assess-ment of market conditions, the Advisor may choose toallocate the Fund’s assets in any combination amongthese types of investments or may choose not to investin these types of investments.

In addition, pursuant to a fundamental investment poli-cy, the Fund, under normal circumstances, invests atleast 65% of its total assets in investment grade USdebt securities with an initial maturity of more than oneyear. The Fund may engage in active and frequent trad-ing of portfolio securities to achieve its principal invest-ment strategies.

The Fund will notify shareholders at least 60 days priorto any change in its policy of investing at least 80% ofits net assets (plus borrowings for investment purposes,if any) in bonds.

In preparation for the liquidation of the Fund, the Fund’sassets may be invested in money market instruments orheld in cash. In this regard, the Fund will no longer beinvesting according to its investment objective.

Securities selectionThe Advisor’s investment style is focused on investmentfundamentals. The Advisor believes that investment fun-damentals determine and describe future cash flows

More information about the fund—UBS Core Plus Bond Fund

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that define long term investment value. The Advisortries to identify and exploit periodic discrepanciesbetween market prices and fundamental value. In ana-lyzing these price/value differences, the Advisor alsotakes into account cyclical market drivers that may influ-ence near term dynamics of market prices. The resultinginvestment signals are used to determine the relevantbuilding blocks for portfolio construction.

To implement this style, the Advisor purchases securitiesfor the Fund by using active asset allocation strategiesacross US fixed income markets and active securityselection within each market. The Fund can hold securi-ties that are not included in its benchmark index. Thus,the relative weightings of different types of securities inthe Fund’s portfolio will not necessarily match those ofthe benchmark. In deciding which securities to empha-size, the Advisor uses both quantitative and fundamen-tal analysis to identify securities that are under-pricedrelative to their fundamental value.

When determining fundamental value, the Advisor con-siders broadly based market data and indices that repre-sent asset classes or markets and economic variablessuch as real interest rates, inflation and monetary policy.The valuation of asset classes reflects an integrated, fun-damental analysis of US markets.

The Advisor emphasizes those fixed income market sec-tors, and selects for the Fund those securities thatappear to be most undervalued relative to their yieldsand potential risks. A stringent, research-basedapproach to issuer selection helps the Advisor to identifythe credit quality and relative attractiveness of individualissuers. The Advisor selects individual securities forinvestment by using duration, yield curve and sectoranalysis. “Duration” is a measure of price sensitivity of afixed income investment or portfolio (expressed as %change in price) to a 1 percentage point (i.e., 100 basispoints) change in interest rates, accounting for optional-ity in bonds such as prepayment risk and call/put fea-tures. A longer duration means an increased likelihoodof interest rate sensitivity. For example, when the levelof interest rates increases by 0.10%, the price of a fixedincome security or a portfolio of fixed income securitieshaving a duration of five years generally will decrease byapproximately 0.50%. Conversely, when the level ofinterest rates decreases by 0.10%, the price of a fixedincome security or a portfolio of fixed income securitieshaving a duration of five years generally will increase by

approximately 0.50%. In analyzing the relative attrac-tiveness of sectors and securities, the Advisor considers:

• Duration

• Yield

• Potential for capital appreciation

• Current credit quality as well as possible creditupgrades or downgrades

• Narrowing or widening of spreads between sectors,securities of different credit qualities or securities ofdifferent maturities

• For mortgage-related and asset-backed securities,anticipated changes in average prepayment rates

The Fund may invest in cash or cash equivalent instru-ments, including shares of an affiliated investment com-pany. When market conditions warrant, the Fund maymake substantial temporary defensive investments incash equivalents, which may affect the Fund’s ability topursue its investment objective. The Advisor activelymanages the Fund. As such, the Fund may have highportfolio turnover, which may result in higher costs fortransactions and taxable gains. The trading costs andtax effects associated with portfolio turnover mayadversely affect the Fund’s performance.

The Fund may lend its portfolio securities to generateadditional income.

The Fund may invest in other open-end investmentcompanies advised by the Advisor to gain exposure tocertain markets. The Fund does not pay fees in connec-tion with its investment in the investment companiesadvised by the Advisor, but may pay expenses associatedwith such investments.

More about risksAn investment in the Fund is not guaranteed; you maylose money by investing in the Fund. The other risks pre-sented by an investment in the Fund are:

• Interest rate risk—The risk that changing interest ratesmay adversely affect the value of an investment. Anincrease in prevailing interest rates typically causes thevalue of fixed income securities to fall, while a decline




10

in prevailing interest rates may cause the market valueof fixed income securities to rise. Changes in interestrates will affect the value of longer-term fixed incomesecurities more than shorter-term securities and higherquality securities more than lower quality securities.Interest rate changes can be sudden and unpre-dictable, and are influenced by a number of factorsincluding government policy, inflation expectationsand supply and demand. A substantial increase ininterest rates may have an adverse impact on the liq-uidity and valuation of a security, especially those withlonger maturities. Changes in government monetarypolicy, including changes in tax policy or changes in acentral bank’s implementation of specific policy goals,may have a substantial impact on interest rates. Therecan be no guarantee that any particular governmentor central bank policy will be continued, discontinuedor changed nor that any such policy will have thedesired effect on interest rates. The risks associatedwith rising interest rates may be more pronounced inthe near future due to the current period of historical-ly low rates.

• Credit and high yield bond risk—The risk that an issuermay default or otherwise be unable to honor a finan-cial obligation. Bonds with ratings of BB (S&P or Fitch)or Ba (Moody’s) or below may have increased risks ofdefault (also known as lower-rated or “junk bonds”).These securities are considered to be predominatelyspeculative with respect to an issuer’s capacity to payinterest and repay principal in accordance with theterms of the obligations. Lower-rated bonds are morelikely to be subject to an issuer’s default or downgradethan investment grade (higher-rated) bonds.

• US Government securities risk—Credit risk is the riskthat the issuer will not make principal or interest pay-ments when they are due. There are different types ofUS government securities with different relative levelsof credit risk depending on the nature of the particulargovernment support for that security. US governmentsecurities may be supported by (i) the full faith andcredit of the United States; (ii) the ability of the issuer toborrow from the US Treasury; (iii) the credit of the issu-ing agency, instrumentality or government-sponsoredentity; (iv) pools of assets (e.g., mortgage-backed secu-rities); or (v) the United States in some other way. Insome cases, there is even the risk of default. For exam-ple, for asset backed securities there is the risk thoseassets will decrease in value below the face value of the

security. Similarly, for certain agency-issued securitiesthere is no guarantee the US government will supportthe agency if it is unable to meet its obligations.Further, the US government and its agencies and instrumentalities do not guarantee the market value oftheir securities; consequently, the value of such securities will fluctuate.

• Liquidity risk—The risk that the Fund may have diffi-culty or may not be able to sell its investments.Illiquidity may result from political, economic or issuerspecific events; changes in a specific market’s size orstructure, including the number of participants; oroverall market disruptions. When there is no willingbuyer and investments cannot be readily sold at thedesired time or price, the Fund may have to accept alower price or may not be able to sell the security atall. An inability to sell securities can adversely affectthe Fund’s value or prevent the Fund from being ableto take advantage of other investment opportunities.Liquid portfolio investments may become illiquid orless liquid after purchase by the Fund due to low trad-ing volume, adverse investor perceptions and/or othermarket developments. In recent years, the numberand capacity of dealers that make markets in fixedincome securities has decreased. Consequently, thedecline in dealers engaging in market making tradingactivities may increase liquidity risk, which can bemore pronounced in periods of market turmoil.Liquidity risk may be magnified in a rising interest rateenvironment or when investor redemptions from fixedincome funds may be higher than normal, causingincreased supply in the market due to selling activity.Liquidity risk includes the risk that the Fund will expe-rience significant net redemptions at a time when itcannot find willing buyers for its portfolio securities orcan only sell its portfolio securities at a material loss.

• Prepayment or call risk—The risk that issuers will pre-pay fixed rate obligations when interest rates fall, forc-ing the Fund to reinvest in obligations with lowerinterest rates than the original obligations. Wheninterest rates are rising, slower prepayments mayextend the duration of the securities and may reducetheir value.

• Mortgage- and asset-backed securities risk—The Fundmay invest in mortgage- and asset-backed securitiesthat are subject to prepayment or call risk, which isthe risk that the borrower’s payments may be received




11

earlier or later than expected due to changes in pre-payment rates on underlying loans. Faster prepayments often happen when interest rates arefalling. As a result, the Fund may reinvest these earlypayments at lower interest rates, thereby reducing theFund’s income. Conversely, when interest rates rise,prepayments may happen more slowly, causing thesecurity to lengthen in duration. Longer duration securities tend to be more volatile. Securities may beprepaid at a price less than the original purchase value. An unexpectedly high rate of defaults on themortgages held by a mortgage pool may adverselyaffect the value of mortgage-backed securities andcould result in losses to the Fund.

• Market risk—The risk that the market value of theFund’s investments will fluctuate as the stock andbond markets fluctuate. Market risk may affect a sin-gle issuer, industry or section of the economy, or itmay affect the market as a whole.

• Foreign investing risk—The risk that prices of theFund’s investments in foreign securities may go downbecause of unfavorable foreign government actions,political instability or the absence of accurate informa-tion about foreign issuers. In addition, political, diplo-matic, or regional conflicts, terrorism or war, socialand economic instability, and internal or external poli-cies or economic sanctions limiting or restricting for-eign investment, the movement of assets or othereconomic activity may affect the value and liquidity offoreign securities. Also, a decline in the value of for-eign currencies relative to the US dollar will reduce thevalue of securities denominated in those currencies.Also, foreign securities are sometimes less liquid andharder to sell and to value than securities of USissuers. Each of these risks is more severe for securitiesof issuers in emerging market countries.

• Derivatives risk—Derivatives involve risks differentfrom, and possibly greater than, the risks associatedwith investing directly in securities and other instru-ments. Derivatives require investment techniques andrisk analyses different from those of other invest-ments. If the Advisor incorrectly forecasts the value ofsecurities, currencies, interest rates, or other economicfactors in using derivatives, the Fund might have beenin a better position if the Fund had not entered intothe derivatives. While some strategies involving deriva-tives can protect against the risk of loss, the use of

derivatives can also reduce the opportunity for gain oreven result in losses by offsetting favorable pricemovements in other Fund investments. Derivativesalso involve the risk of mispricing or improper valua-tion, the risk that changes in the value of a derivativemay not correlate perfectly with the underlying asset,rate, index, or overall securities markets, and counter-party and credit risk (the risk that the other party to aswap agreement or other derivative will not fulfill itscontractual obligations, whether because of bankrupt-cy or other default). With respect to futures and cer-tain swaps, there is a risk of loss by the Fund of theinitial and variation margin deposits in the event ofbankruptcy of a futures commission merchant(“FCM”) with which the Fund has an open position ina futures or swaps contract, or the central counterpar-ty in a swap contract. The assets of the Fund may notbe fully protected in the event of the bankruptcy ofthe FCM or central counterparty. The Fund is also sub-ject to the risk that the FCM could use the Fund’sassets to satisfy its own financial obligations or thepayment obligations of another customer to the cen-tral counterparty. Credit risk of cleared swap partici-pants is concentrated in a few clearinghouses, and theconsequences of insolvency of a clearinghouse are notclear. Gains or losses involving some options, futures,and other derivatives may be substantial (for example,for some derivatives, it is possible for the Fund to losemore than the amount the Fund invested in the deriv-atives). Some derivatives tend to be more volatile thanother investments, resulting in larger gains or losses inresponse to market changes. Derivatives are subject toa number of other risks, including liquidity risk (thepossible lack of a secondary market for derivatives andthe resulting inability of the Fund to sell or otherwiseclose out the derivatives) and interest rate risk (somederivatives are more sensitive to interest rate changesand market price fluctuations). The Fund’s use ofderivatives may cause the Fund to realize higheramounts of short-term capital gains (generally taxedat ordinary income tax rates) than if the Fund had notused such instruments. Finally, the regulation of swapsand other derivatives is a rapidly changing area of lawand it is not possible to predict fully the effects of cur-rent or future regulation. It is possible that develop-ments in government regulation of various types ofderivatives could affect the character, timing andamount of the Fund’s taxable income or gains; maylimit or prevent the Fund from using or limit the Fund’suse of these instruments effectively as a part of its




12

investment strategy; and could adversely affect theFund’s ability to achieve its investment objective. TheFund’s use of derivatives may be limited by therequirements for taxation of the Fund as a regulatedinvestment company. New requirements, even if notdirectly applicable to the Fund, may increase the costof the Fund’s investments and cost of doing business.Recent legislation proposes new regulation of funds’use of derivative instruments. The extent and impactof the regulation are not yet fully known and may notbe for some time. New regulation of derivatives maymake derivatives more costly, may limit the availabilityof derivatives or may otherwise adversely affect thevalue or performance of derivatives.

• Leverage risk associated with financialinstruments—Certain derivatives that the Fund mayuse may create leverage. Derivatives that involve lever-age can result in losses to the Fund that exceed theamount originally invested in the derivatives.

• Management risk—The risk that the investmentstrategies, techniques and risk analyses employed bythe Advisor may not produce the desired results. TheAdvisor may be incorrect in its assessment of the valueof securities or assessment of market or interest ratetrends, which can result in losses to the Fund.

• Securities lending risk—Securities lending involves thelending of portfolio securities owned by the Fund toqualified broker-dealers and financial institutions whoprovide collateral to the Fund in connection with theseloans. Securities lending involves the risk that the bor-rower may fail to return the securities in a timely man-ner or at all. As a result, the Fund may lose money andthere may be a delay in recovering the loaned securi-ties. The Fund also could lose money if it does notrecover the securities and/or the value of the collateralfalls, including the value of investments made withcash collateral.

• Portfolio turnover risk—High portfolio turnover fromfrequent trading will increase the Fund’s transactioncosts and may increase the portion of the Fund’s capi-tal gains that are realized for tax purposes in any givenyear. This, in turn, may increase the Fund’s taxable distributions in that year. Frequent trading also mayincrease the portion of the Fund’s realized capitalgains that is considered “short-term” for tax purpos-es. Shareholders will pay higher taxes on distributionsthat represent short-term capital gains than theywould pay on distributions that represent long-termcapital gains. The Fund does not restrict the frequencyof trading in order to limit expenses or the tax effectthat its distributions may have on shareholders.

Other informationExclusion of Advisor from commodity pool operator definition—With respect to the Fund, theFund’s Advisor has claimed an exclusion from the defini-tion of “commodity pool operator” (“CPO”) under theCommodity Exchange Act (“CEA”) and the rules of theCFTC and, therefore, is not subject to CFTC registrationor regulation as a CPO. In addition, the Advisor is relyingupon a related exclusion from the definition of “com-modity trading advisor” (“CTA”) under the CEA and therules of the CFTC.

The terms of the CPO exclusion require the Fund,among other things, to adhere to certain limits on itsinvestments in “commodity interests.” Commodityinterests include commodity futures, commodity optionsand swaps, which in turn include non-deliverable for-ward currency agreements, as further described in theFund’s statement of additional information (“SAI”).Because the Advisor and the Fund intend to complywith the terms of the CPO exclusion at this time, theFund will limit its investments in these types of instru-ments. The Fund is not intended as a vehicle for tradingin the commodity futures, commodity options or swapsmarkets. The CFTC has neither reviewed nor approvedthe Advisor’s reliance on these exclusions, or the Fund,its investment strategies or this prospectus.




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Managing your fund accountFlexible pricingThe Fund offers three classes of shares—Class A,Class C and Class P. Each class has different salescharges and ongoing expenses. You can choose theclass that is best for you, based on how much you planto invest and how long you plan to hold your shares ofthe Fund(s). Class P shares are only available to certaintypes of investors.

The Fund has adopted separate plans pertaining to theClass A and Class C shares of the Fund underRule 12b-1 that allow the Fund to pay service and (forClass C shares) distribution fees for the sale of theFund’s shares and services provided to shareholders.Because the 12b-1 distribution fees for Class C sharesare paid out of the Fund’s assets on an ongoing basis,over time they will increase the cost of your investmentand may cost you more than if you paid other types ofsales charges, such as the front-end sales charge forClass A shares.

You may qualify for a waiver of certain sales charges onClass A and Class C shares. See “Sales charge waiversfor Class A and Class C shares” later in this prospectus.You may also qualify for a reduced sales charge onClass A shares. See “Sales charge reductions for Class Ashares” later in this prospectus.

Class A sharesClass A shares have a front-end sales charge that isincluded in the offering price of the Class A shares. Thissales charge is paid at the time of purchase and is notinvested in the Fund. The Fund’s Class A shares pay anannual service (12b-1) fee of 0.25% of average netassets on an ongoing basis. Class A shares pay no distri-bution fees. The ongoing expenses for Class A sharesare lower than for Class C shares.

The Class A sales charges for the Fund are described inthe following table:

Class A sales charges. Sales charge as a percentage of: Reallowance to selected dealers as percentage Amount of investment Offering price Net amount invested of offering price

Less than $100,000 3.75% 3.90% 3.25%

$100,000 to $249,999 3.25 3.36 2.75

$250,000 to $499,999 2.25 2.30 2.00

$500,000 to $999,999 1.75 1.78 1.50

$1,000,000 and over1 None None May pay up to 1.002

1 A contingent deferred sales charge of 1% of the shares’ offering price or the net asset value at the time of sale by the shareholder, whichever isless, is charged on sales of shares made within one year of the purchase date. Class A shares representing reinvestment of dividends are notsubject to this 1% charge. Withdrawals in the first year after purchase of up to 12% of the value of the fund account under the Fund’sAutomatic Cash Withdrawal Plan are not subject to this charge.

2 For sales of $1 million or more, UBS Asset Management (US) Inc. (“UBS AM (US)”) pays to the dealer an amount based upon the followingschedule: 1.00% on the first $3 million and 0.75% on the next $2 million.

If you intend to purchase more than $5 million ofClass A shares, you should instead purchase Class Pshares, which have lower on-going expenses.

Class C sharesClass C shares pay an annual 12b-1 distribution fee of0.50% of average net assets. Class C shares of the Fundalso pay an annual 12b-1 service fee of 0.25% of average net assets. Class C shares do not convert to

another class of shares. This means that you will pay the12b-1 fees for as long as you own your shares.

Class C shares also have a contingent deferred salescharge of 0.75%, applicable if you sell your shares with-in one year of the date you purchased them. We calcu-late the deferred sales charge on sales of Class C sharesby multiplying 0.75% by the lesser of the net asset valueof the Class C shares at the time of purchase or the netasset value at the time of sale.



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Sales charge waivers for Class A and Class C sharesClass A front-end sales charge waivers—Front-end salescharges will be waived if you buy Class A shares withproceeds from the following sources:

1. Redemptions from any registered mutual fund forwhich UBS AM (US) or any of its affiliates serves asprincipal underwriter if you:

• Originally paid a front-end sales charge on theshares; and

• Reinvest the money within 60 days of the redemp-tion date.

The Fund’s front-end sales charges will also not apply toClass A purchases by or through:

1. Employees of UBS Group AG (“UBS”) and its sub-sidiaries and members of the employees’ immediatefamilies; and members of the Board ofDirectors/Trustees (and former Board members whoretire from such Boards after December 1, 2005) ofany investment company for which UBS AM (US) orany of its affiliates serve as principal underwriter.

2. Trust companies and bank trust departments invest-ing on behalf of their clients if clients pay the bankor trust company an asset-based fee for trust orasset management services.

3. Retirement plans and deferred compensation plansthat have assets of at least $1 million or at least25 eligible employees.

4. Broker-dealers and other financial institutions(including registered investment advisors and finan-cial planners) that have entered into a selling agree-ment with UBS AM (US) (or otherwise have anarrangement with a broker-dealer or other financialinstitution with respect to sales of Fund shares), onbehalf of clients participating in a fund supermarket,wrap program, or other program in which clientspay a fee for advisory services, executing transac-tions in Fund shares, or for otherwise participatingin the program.

5. Employees of broker-dealers and other financialinstitutions (including registered investment advisorsand financial planners) that have entered into a sell-ing agreement with UBS AM (US) (or otherwise hav-ing an arrangement with a broker-dealer or other

financial institution with respect to sales of Fundshares), and their immediate family members, asallowed by the internal policies of their employer.

6. Insurance company separate accounts.

7. Shareholders of the Class N shares of any UBS Fundwho held such shares at the time they were redesig-nated as Class A shares.

8. Reinvestment of capital gains distributions and dividends.

9. College savings plans organized underSection 529 of the Internal Revenue Code(the “IRC”).

10. Broker-dealers or other financial institutions thathave entered into an agreement with UBS AM (US)to offer Class A shares through a no-load networkor platform or self-directed investment brokerageaccounts, in which clients may or may not pay atransaction fee to the broker-dealer or financial institution.

Class A and Class C shares contingent deferred salescharge waivers—The contingent deferred sales chargewill be waived for:

• Redemptions of Class A shares by former holders ofClass N shares;

• Exchanges between funds for which UBS AM (US) orone of its affiliates serves as principal underwriter, ifpurchasing the same class of shares;

• Redemptions following the death or disability of theshareholder or beneficial owner;

• Tax-free returns of excess contributions from employeebenefit plans;

• Distributions from employee benefit plans, includingthose due to plan termination or plan transfer;

• Redemptions made in connection with the AutomaticCash Withdrawal Plan, provided that such redemptions:

– are limited annually to no more than 12% of theoriginal account value;



15

– are made in equal monthly amounts, not to exceed1% per month; and

– the minimum account value at the time theAutomatic Cash Withdrawal Plan was initiated wasno less than $5,000;

• Redemptions of shares purchased through certainretirement plans;

• Broker-dealers or other financial institutions that haveentered into an agreement with UBS AM (US) to offerClass A shares through a no-load network or platformor self-directed investment brokerage accounts, inwhich clients may or may not pay a transaction fee tothe broker-dealer or financial institution.

Sales charge reductions for Class A shares right ofaccumulation. A purchaser of Class A shares may qual-ify for a reduction of the front-end sales charge on pur-chases of Class A shares by combining a currentpurchase with certain other Class A, Class C and/orClass P shares of Family Funds (“Family Funds” includeother UBS Funds, PACE Select funds and other funds forwhich UBS AM (US) serves as principal underwriter)1

already owned. To determine if you qualify for a reduc-tion of the front-end sales charge, the amount of yourcurrent purchase is added to the current net asset valueof your other Class A, Class C and/or Class P shares, aswell as those Class A, Class C and/or Class P shares ofyour spouse and children under the age of 21 and whoreside in the same household. If you are the sole ownerof a company, you may also add any company accounts,including retirement plan accounts invested in Class A,Class C and/or Class P shares of the Family Funds.Companies with one or more retirement plans may addtogether the total plan assets invested in Class A,Class C and/or Class P shares of the Family Funds todetermine the front-end sales charge that applies. Toqualify for the discount on a purchase through a finan-cial institution, when each purchase is made, theinvestor or institution must provide UBS AM (US) withsufficient information to verify that the purchase qualifies for the privilege or discount. The right of accu-mulation may be amended or terminated by UBS AM(US) at any time as to purchases occurring thereafter.

Shares purchased through a broker/dealer may be sub-ject to different procedures concerning Rights ofAccumulation. Please contact your investment profes-sional for more information.

Letter of IntentInvestors may also obtain reduced sales charges forClass A shares for investments of a particular amount bymeans of a written Letter of Intent, which expresses theinvestor’s intention to invest that amount within a periodof 13 months in shares of one or more Family Funds.1

Each purchase of Class A shares under a Letter of Intentwill be made at the public offering price applicable at thetime of such purchase to a single transaction of the totaldollar amount indicated in the Letter of Intent. A Letterof Intent may include purchases of Class A, Class Cand/or Class P shares made not more than three monthsprior to the date that the investor signs a Letter of Intentand during the 13-month period in which the Letter ofIntent is in effect; however, the 13-month period duringwhich the Letter of Intent is in effect will begin on thedate on which the Letter of Intent is signed.

Investors do not receive credit for shares purchased bythe reinvestment of distributions. Investors qualifying fora right of accumulation discount (described above) maypurchase shares under a single Letter of Intent.

The Letter of Intent is not a binding obligation upon theinvestor to purchase the full amount indicated. The min-imum initial investment under a Letter of Intent is 5% ofsuch amount, which must be invested immediately.Class A shares purchased with the first 5% of suchamount may be held in escrow to secure payment ofthe higher sales charge applicable to the shares actuallypurchased if the full amount indicated is not purchased.When the full amount indicated has been purchased,the escrow will be released. If an investor desires toredeem escrowed shares before the full amount hasbeen purchased, the shares will be released only if theinvestor pays the sales charge that, without regard tothe Letter of Intent, would apply to the total investmentmade to date.

Letter of Intent forms may be obtained from UBS AM(US) or from investment professionals. Investors shouldread the Letter of Intent carefully.

1 Please note that any Family Fund that is a money market fund will not count for purposes of the right of accumulation discount or for purposesof satisfying the forms of a Letter of Intent.



16

Shares purchased through a broker/dealer may be subjectto different procedures concerning Letters of Intent. Pleasecontact your investment professional for more information.

Note on sales charge reductions and waivers forClass A and Class C sharesAdditional information concerning sales charge reduc-tions and waivers is available in the Fund’s SAI. If youthink you qualify for any of the sales charge waivers orreductions described previously, you may need to notifyand/or provide documentation to UBS AM (US). You willalso need to notify UBS AM (US) of the existence of oth-er accounts in which there are holdings eligible to beaggregated to meet certain sales load breakpoints.Information you may need to provide to UBS AM (US)may include:

• Information or records regarding shares of the Fund orother funds held in all accounts at any financial intermediary;

• Information or records regarding shares of the Fund orother funds held in any account at any financial inter-mediary by related parties of the shareholder, such asmembers of the same family; and/or

• Any information that may be necessary for UBS AM(US) to determine your eligibility for a reduction orwaiver of a sales charge.

For more information, you should contact your invest-ment professional or call 1-800-647 1568. If you wantinformation on the Automatic Cash Withdrawal Plan,see the SAI or contact your investment professional.Also, information regarding the Fund’s distributionarrangements and the applicable sales charge reduc-tions and waivers is available on the Fund’s Web Site,free of charge, at http://www.ubs.com/us/en/asset_management/individual_investors/mutual_fund.html

Class P sharesShareholders pay no front-end or deferred sales chargeson Class P shares. UBS AM (US), the principal under-writer of the Fund, may make payments out of its ownresources to certain affiliated dealers (e.g., UBS FinancialServices Inc.) and, from time to time, unaffiliated dealersin UBS AM (US)’s sole discretion. Only specific types ofinvestors can purchase Class P shares.

The following are eligible to purchase Class P shares:

• Shareholders of the Class I shares of any UBS Fundwho held such shares as of the date the shares wereredesignated Class Y shares (now designated Class Pshares);

• Retirement plans with 5,000 or more eligible employ-ees or $100 million or more in plan assets;

• Retirement plan platforms/programs that include Fundshares if the platform/program covers plan assets of atleast $100 million;

• Trust companies and bank trust departments purchas-ing shares on behalf of their clients in a fiduciarycapacity;

• Banks, registered investment advisors and other finan-cial institutions purchasing Fund shares for their clientsas part of an advisory program;

• College savings plans organized under Section 529 ofthe IRC, if shareholder servicing fees are paid exclu-sively outside of the participating funds;

• Other investors as approved by the Fund’s Board ofTrustees;

• Shareholders who invest a minimum initial amount of$5 million in the Fund. An institutional investor mayaggregate its holdings with holdings of certain relatedinstitutional investors to meet the foregoing minimums;

• Foundations, Endowments and Religious and othercharitable organizations described inSection 501(c)(3) of the IRC that invest a minimum initial amount of $2,500,000;

• Employees of UBS AM (Americas) and UBS AM (US),as long as the employee establishes an account in hisor her name directly at the Fund’s transfer agent andpurchases a minimum initial amount of $50,000;

• Members of the Board of Directors/Trustees (and for-mer Board members who retire from such Boards afterDecember 1, 2005) of any investment company forwhich UBS AM (US) or any of its affiliates serves asprincipal underwriter, subject to a minimum initial pur-chase amount of $50,000 in an account established



17

by the member in his or her name directly at theFund’s transfer agent; and

• Investors who are clients of a wrap fee advisory pro-gram, including those programs sponsored by UBSAM (Americas) or its affiliates, and who invest a mini-mum initial amount of $1,000 (with a minimum sub-sequent investment of $100), unless waived byagreement or otherwise with UBS AM (US).

Class P shares do not pay ongoing 12b-1 distribution orservice fees. The ongoing expenses for Class P sharesare the lowest of all the classes.

Buying sharesYou can buy Fund shares through your investment pro-fessional at a broker-dealer or other financial institutionwith which UBS AM (US) has a dealer agreement.

If you wish to invest in other Family Funds, you can doso by:

• Contacting your investment professional (if you havean account at a financial institution that has enteredinto a dealer agreement with UBS AM (US));

• Buying shares through the transfer agent as describedlater in this prospectus; or

• Opening an account by exchanging shares fromanother Family Fund.

Selected securities dealers or other financial institutions,including UBS Financial Services Inc., may charge a pro-cessing fee to confirm a purchase. UBS Financial ServicesInc. currently charges a fee of $5.25.

The Fund and UBS AM (US) reserve the right to reject apurchase order or suspend the offering of shares.

Through financial institutions/professionalsAs mentioned above, the Fund has entered into one ormore sales agreements with brokers, dealers or otherfinancial intermediaries (“Service Providers”), as well aswith financial institutions (banks and bank trust depart-ments) (each an “Authorized Dealer”). The AuthorizedDealer, or intermediaries designated by the AuthorizedDealer (a “Sub-designee”), may in some cases beauthorized to accept purchase and redemption ordersthat are in “good form” on behalf of the Fund. The

Fund will be deemed to have received a purchase orredemption order when the Authorized Dealer or Sub-designee receives the order in good form. Such orderswill be priced at the Fund’s net asset value next comput-ed after such order is received in good form by theAuthorized Dealer or Sub-designee. These AuthorizedDealers may charge the investor a transaction fee or oth-er fee for their services at the time of purchase. Thesefees would not be otherwise charged if you purchasedshares directly from the Fund. It is the responsibility ofsuch Authorized Dealers or Sub-designees to promptlyforward purchase orders with payments to the Fund.

Additional compensation to affiliated dealerUBS AM (US) pays its affiliate, UBS Financial ServicesInc., the following additional compensation in connec-tion with the sale of Fund shares in consideration of dis-tribution, marketing support and other services:

• Fees on Program Assets: 0.05% (5 basis points) perannum of the value of the average monthly assetsthat are invested in the Fund sold through certainwrap fee advisory programs, to be computed and paidon a quarterly basis; and

• Fees on Retail (i.e., Non-Program) Assets: a quarterlyfee at the annual rate of 0.05% (5 basis points) of thenet asset value of all Fund shares, other than excludedshares, in the UBS Financial Services Inc. accounts asof the end of such quarter, valued as of the close ofbusiness on the last business day of the quarter.

UBS Financial Services Inc. charges a minimum of$75,000 per calendar year for distribution, marketingsupport and other services.

The foregoing payments are made by UBS AM (US) outof its own resources. These payments are often referredto as “revenue sharing.”

Additional compensation to financial institution(s)UBS AM (US) or the Advisor may pay compensation, outof the Advisor’s profits and not as an additional chargeto the Fund, to certain financial institutions (which mayinclude banks, securities dealers and other industry pro-fessionals) for the sale and/or distribution of Fund sharesor the retention and/or servicing of Fund investors andFund shares. These payments are often referred to as“revenue sharing.” Revenue sharing payments are paidin addition to any distribution or servicing fees payable



18

under a 12b-1 or service plan of the Fund, any recordkeeping or sub-transfer agency fees payable by theFund, or other fees described in the fee tables or else-where in the prospectus or SAI. Revenue sharing pay-ments are paid from the Advisor’s own resources andnot as an additional charge to the Fund.

The level of revenue sharing payments made to financialinstitutions may be a fixed fee or based upon one ormore of the following factors: gross sales, current assetsand/or number of accounts of the Fund attributable tothe financial institution, or other factors as agreed to bythe Advisor and the financial institution or any combina-tion thereof. The amount of the revenue share may bedifferent for different financial institutions. For specificinformation about revenue sharing arrangements for aparticular financial institution please see the SAI.

In some circumstances, revenue sharing payments maycreate an incentive for a financial institution, its employ-ees or associated persons to recommend or sell sharesof the Fund to you. You should consult with your finan-cial advisor and review carefully any disclosure by thefinancial institution as to compensation received.

Minimum investments:Class A and Class C shares (except retirement accounts):

To open an account: $1,000To add to an account: $100

Class A and Class C shares (retirement accounts):

To open an account: $250To add to an account: $25

Class P shares:

To open an account: $5,000,000To add to an account: $0

The Fund may waive or reduce these amounts for (or asotherwise noted in the prospectus):

• Employees of UBS AM (US) or its affiliates; or

• Participants in certain pension plans, retirementaccounts, unaffiliated investment programs or theFund’s automatic investment plan.

Market timers. The interests of the Fund’s long-termshareholders and their ability to manage their invest-ments may be adversely affected when their shares arerepeatedly bought and sold in response to short-termmarket fluctuations—also known as “market timing.”Market timing may cause the Fund to have difficultyimplementing long-term investment strategies, becauseit cannot predict how much cash it will have to invest.Market timing also may force the Fund to sell portfoliosecurities at disadvantageous times to raise the cashneeded to buy a market timer’s Fund shares. Markettiming also may materially increase the Fund’s transac-tion costs, administrative costs or taxes. These factorsmay hurt the Fund’s performance and its shareholders.

In addition, the nature of the Fund’s portfolio holdingsmay allow a shareholder to engage in a short-term trad-ing strategy to take advantage of possible delaysbetween the change in the Fund’s portfolio holdingsand the reflection of that change in the Fund’s net assetvalue (often called “arbitrage market timing”). Such adelay may occur if the Fund has significant investmentsin non-US securities, where due to time zone differ-ences, the value of those securities is established sometime before the Fund calculates its net asset value. Insuch circumstances, the available market prices for suchnon-US securities may not accurately reflect the latestindications of value at the time the Fund calculates itsnet asset value. There is a possibility that arbitrage mar-ket timing may dilute the value of Fund shares ifredeeming shareholders receive proceeds (and buyingshareholders receive shares) based upon a net asset val-ue that does not reflect appropriate fair value prices.One of the objectives of the Fund’s fair value pricingprocedures is to minimize the possibilities of this type ofarbitrage market timing.

The Board of Trustees of the Trust has adopted the fol-lowing policies as a means to discourage, detect andprevent market timing. The Fund will reject purchaseorders and exchanges into the Fund by any person,group or account that UBS AM (Americas), as the Fund’sAdvisor and Administrator, determines to be a markettimer. UBS AM (Americas) maintains market timing pre-vention procedures under which it reviews daily reportsfrom the Fund’s transfer agent of all accounts thatengaged in transactions in Fund shares that exceed aspecified monetary threshold and effected such transac-tions within a certain period of time to evaluatewhether any such account had engaged in market tim-



19

ing activity. In evaluating the account transactions, UBSAM (Americas) will consider the potential harm of thetrading or exchange activity to the Fund or its share-holders. If UBS AM (Americas) determines, in its sole dis-cretion, that a shareholder has engaged in markettiming, the shareholder will be permanently barred frommaking future purchases or exchanges into the Fund.Additionally, in making a determination as to whether ashareholder has engaged in market timing, the share-holder’s account may be temporarily barred from mak-ing additional investments into the Fund pending adefinitive determination. In addition, if a FinancialAdvisor is identified as the Financial Advisor of two ormore accounts that have engaged in market timing,UBS AM (Americas) may prohibit the Financial Advisorfrom making additional purchases of the Fund on behalfof its clients.

Shares of the Fund may be held through omnibusaccount arrangements, whereby a broker-dealer, invest-ment advisor, retirement plan sponsor or other financialintermediary (each a “Financial Intermediary”) maintainsan omnibus account with the Fund for trading on behalfof its customers or participants. Omnibus accounts areaccounts that aggregate the transactions of underlyingshareholders, thus making it difficult to identify individ-ual underlying account holder activity. UBS AM(Americas) reviews purchase and redemption activity inomnibus accounts on a daily basis to seek to identify anunusual pattern of trading activity within a short periodof time. If UBS AM (Americas) detects an unusual pat-tern of trading activity, UBS AM (Americas) will notifythe Financial Intermediary of the omnibus account andwill request that the Financial Intermediary provideunderlying account detail. If UBS AM (Americas) identi-fies market timing activity, it will instruct the FinancialIntermediary to block the customer or participant fromfurther purchases of Fund shares. In the event that theFinancial Intermediary cannot identify and block the cus-tomer or participant, UBS AM (Americas) will require theFinancial Intermediary to block the particular plan fromfurther purchases of Fund shares. UBS AM (Americas)also will periodically request underlying account detailfor omnibus accounts for review and analysis.

While the Fund will seek to take actions (directly andwith the assistance of Financial Intermediaries) that willdetect market timing, the Fund’s efforts may not becompletely successful in minimizing or eliminating suchtrading activity.

When it is determined that a Financial Intermediary’s fre-quent trading policies and procedures sufficiently pro-tect Fund shareholders, the Fund and UBS AM(Americas) may rely on the Financial Intermediary’s fre-quent trading policies and procedures with respect totransactions by shareholders investing through theFinancial Intermediary rather than applying the Fund’smarket timing prevention procedures. The determina-tion to rely on a Financial Intermediary’s frequent trad-ing policies and procedures will be made after a reviewof the policies and procedures by the Legal andCompliance Departments of UBS AM (Americas). TheChief Compliance Officer of UBS AM (Americas) willdetermine whether the policies and procedures suffi-ciently protect Fund shareholders. The types of FinancialIntermediaries that may have frequent trading policiesand procedures on which the Fund and UBS AM(Americas) may rely may include broker-dealers, advi-sors, clearing firms, bank trust departments, retirementplan administrators, other record keepers and certainFinancial Intermediary through which a shareholder mayown Fund shares may impose frequent trading restric-tions that differ from those of the Fund. If you have purchased shares through a Financial Intermediary asdescribed above, you should contact your FinancialIntermediary to determine the frequent trading restric-tions that apply to your account.

Certain types of transactions will also be exempt fromthe market timing prevention procedures. These exempttransactions are purchases and redemptions through theAutomatic Cash Withdrawal Plan, purchases through anautomatic investment plan, redemptions by wrap feeaccounts that have an automatic rebalancing featureand that have been identified to the Fund’s principalunderwriter and transfer agent, certain non-participantdirected transactions in retirement plans, and purchasesand redemptions by UBS funds of funds.

Selling sharesYou can sell your Fund shares at any time. If you ownmore than one class of shares, you should specify whichclass you want to sell. If you do not, the Fund willassume that you want to sell shares in the followingorder: Class A, then Class C and last, Class P.

If you want to sell shares that you purchased recently,the Fund may delay payment until it verifies that it hasreceived good payment. If you hold your shares througha financial institution, you can sell shares by contactingyour investment professional, or an Authorized Dealer



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or Sub-designee, for more information. Important note:Each institution or professional may have its own proce-dures and requirements for selling shares and maycharge fees. If you purchased shares through the Fund’stransfer agent, you may sell them as explained later inthis prospectus.

If you sell Class A shares and then repurchase Class Ashares of the same Fund within 365 days of the sale,you can reinstate your account without paying a salescharge.

Securities dealers or other financial institutions, includ-ing UBS Financial Services Inc., may charge a fee toprocess a redemption of shares. UBS Financial ServicesInc. currently charges a fee of $5.25.

The Fund reserves the right to pay redemptions “inkind” (i.e., payment in securities rather than cash) if theinvestment you are redeeming is large enough to affectthe Fund’s operations (for example, if it represents morethan $250,000 or 1% of the Fund’s assets). In these cas-es, you might incur brokerage costs converting the secu-rities to cash. The securities included in a redemption inkind may include illiquid securities that may not beimmediately saleable.

It costs the Fund money to maintain shareholderaccounts. Therefore, the Fund reserves the right torepurchase all shares in any account that has a net assetvalue of less than $500. Any applicable deferred salescharge may be assessed on such redemptions. If theFund elects to do this with your account, it will notifyyou that you can increase the amount invested to $500or more within 60 days. The Fund will not repurchaseshares in accounts that fall below $500 solely becauseof a decrease in the Fund’s net asset value.

To help the government fight the funding of terrorismand money laundering activities, federal law requires allfinancial institutions to obtain, verify and record infor-mation that identifies each person who opens anaccount. If you do not provide the information request-ed, the Fund may not be able to maintain your account.If the Fund is unable to verify your identity or that ofanother person(s) authorized to act on your behalf, theFund and UBS AM (Americas) reserve the right to closeyour account and/or take such other action they deemreasonable or required by law. Fund shares will beredeemed and valued in accordance with the net asset

value next calculated after the determination has beenmade to close the account.

Exchanging sharesYou may exchange Class A, Class C or Class P shares ofthe Fund for shares of the same class of most otherFamily Funds.

You will not pay either a front-end sales charge or adeferred sales charge when you exchange shares. Also,you may have to pay a deferred sales charge if you latersell the shares you acquired in the exchange. The Fundwill use the date of your original share purchase todetermine whether you must pay a deferred salescharge when you sell the shares of the fund acquired inthe exchange.

Other Family Funds may have different minimum invest-ment amounts. You may not be able to exchange yourshares if the value of shares you exchange is not as largeas the minimum investment amount in that other fund.Further, other Family Funds may have different eligibilityrequirements for purchase. You may not be able toexchange your shares if you are not eligible to purchaseshares of the other Family Fund.

You may exchange shares of one fund for shares ofanother Family Fund only after the first purchase hassettled and the first fund has received your payment.

If you hold your Fund shares through a financial institu-tion, you may exchange your shares by placing an orderwith that institution. If you hold Fund shares throughthe Fund’s transfer agent, you may exchange yourshares as explained below.

The Fund may modify or terminate the exchange privi-lege at any time.

Transfer agentIf you wish to invest in the Fund or any other of theFamily Funds through the Fund’s transfer agent, BNYMellon Investment Servicing (US) Inc., you can obtain anapplication by calling 1-800-647 1568. You must com-plete and sign the application and mail it, along with acheck to the transfer agent.

You may also sell or exchange your shares by writing tothe Fund’s transfer agent. Your letter must include:



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• Your name and address;

• Your account number;

• The name of the fund whose shares you are selling,and if exchanging shares, the name of the fundwhose shares you want to buy;

• The dollar amount or number of shares you want tosell and/or exchange; and

• A guarantee of each registered owner’s signature. Asignature guarantee may be obtained from a financialinstitution, broker, dealer or clearing agency that is aparticipant in one of the medallion programs recog-nized by the Securities Transfer Agents Association.These are: Securities Transfer Agents MedallionProgram (STAMP), Stock Exchanges MedallionProgram (SEMP) and the New York Stock ExchangeMedallion Signature Program (MSP). The Fund will notaccept signature guarantees that are not part of theseprograms.

Applications to purchase shares (along with a check),and letters requesting redemptions of shares orexchanges of shares through the transfer agent shouldbe mailed to:

BNY Mellon Investment Serving (US) Inc.UBS Asset ManagementP.O. Box 9786Providence, RI 02940

You do not have to complete an application when youmake additional investments in the same Fund.

Unless you specifically elect otherwise, you will receivetelephone privileges when you open your account,allowing you to obtain your account information, andconduct a number of transactions by phone, including:buy, sell, or exchange shares of the Fund; use electronicfunds transfer or wire to buy or sell shares of the Fund;change your address; and add or change account servic-es by calling 1-800-647 1568.

As long as we follow reasonable security proceduresand act on instructions we reasonably believe are gen-uine, we will not be responsible for any losses that mayoccur from unauthorized requests. We will requestaccount information and also may record calls. To help

safeguard your account, keep your account informationconfidential and verify the accuracy of your confirma-tion statements immediately after you receive them.Contact us immediately if you believe someone hasobtained unauthorized access to your account. Certainmethods of contacting us (such as by phone) may beunavailable or delayed during periods of unusual marketactivity. If you have telephone privileges on your accountand want to discontinue them, please contact us forinstructions. You may reinstate these privileges at anytime in writing.

Note that telephone privileges may not be available toall Family Funds. The Fund may modify, suspend or ter-minate telephone privileges at any time. For more infor-mation, you should contact your investmentprofessional or call 1-800-647 1568.

Transfer of account limitationsIf you hold your shares with UBS Financial Services, Inc.or another securities firm, please note that if youchange securities firms, you may not be able to transferyour Fund shares to an account at the new securitiesfirm. Fund shares may only be transferred to an accountheld with a securities dealer or financial intermediarythat has entered into an agreement with the Fund’sprincipal underwriter. If you cannot transfer your sharesto another firm, you may choose to hold the sharesdirectly in your own name with the Fund’s transferagent, BNY Mellon Investment Serving (US) Inc. Pleasecontact your broker or financial advisor, for informationon how to transfer your shares to the Fund’s transferagent. If you transfer your shares to the Fund’s transferagent, the Fund’s principal underwriter may be namedas the dealer of record and you will receive ongoingaccount statements from BNY Mellon InvestmentServing (US) Inc.

Should you decide to sell your shares of the Fund in lieuof transfer, you will pay a CDSC if those fees are appli-cable. Should you have any questions regarding theportability of your Fund shares, please contact your bro-ker or financial advisor.

Pricing and valuationThe price at which you may buy, sell or exchange Fundshares is based on net asset value per share. The Fundgenerally calculates its net asset value on days that theNew York Stock Exchange (“NYSE”) is open. The Fundcalculates net asset value separately for each class as of



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the close of regular trading on the NYSE (generally,4:00 p.m., Eastern time). The NYSE normally is notopen, and the Fund does not price its shares, on mostnational holidays and on Good Friday. To the extent thatthe Fund’s assets are traded in other markets on dayswhen the NYSE is not open, the value of the Fund’sassets may be affected on those days. If trading on theNYSE is halted for the day before 4:00 p.m., Easterntime, the Fund’s net asset value per share generally willstill be calculated as of the close of regular trading onthe NYSE. The time at which the Fund calculates its netasset value and until which purchase, sale or exchangeorders are accepted may be changed as permitted bythe SEC.

Your price for buying, selling or exchanging shares willbe based on the net asset value (adjusted for any appli-cable sales charges) that is next calculated after theFund receives your order in good form. If you place yourorder on a day the NYSE is not open, your price for buy-ing, selling or exchanging shares will be based on thenet asset value (adjusted for any applicable salescharges) that is calculated on the next day that theNYSE is open. If you place your order through a financialinstitution, your financial advisor is responsible for mak-ing sure that your order is promptly sent to the Fund.

The Fund calculates its net asset value based on the cur-rent market value, where available, for its portfolio secu-rities. The Fund normally obtains market values for theirinvestments from independent pricing sources and broker-dealers. Independent pricing sources may usereported last sale prices, official market closing prices,current market quotations or valuations from computer-ized “evaluation” systems that derive values based oncomparable investments. An evaluation system incorpo-rates parameters such as security quality, maturity andcoupon, and/or research and evaluations by its staff,including review of broker-dealer market price quota-tions, if available, in determining the valuation of theportfolio securities or instruments. If a market value isnot readily available from an independent pricing sourcefor a particular investments, that investment is valued atfair value as determined in good faith by or under thedirection of the Trust’s Board of Trustees.

The amortized cost method of valuation, which approxi-mates market value, generally is used to value short-term debt instruments with 60 days or less remaining tomaturity, unless the Board (or a committee designated

by it) determines that this does not represent fair value.Investments in open-end investment companies are val-ued at the daily closing net asset value of the respectiveinvestment company. Investments in non-registeredinvestment companies are also valued at the daily netasset value. All investments quoted in foreign currenciesare valued daily in US dollars on the basis of the foreigncurrency exchange rates prevailing at the time such val-uation is determined by the Fund’s custodian. Foreigncurrency exchange rates are generally determined as ofthe close of the NYSE.

Investments traded in the OTC market and listed on TheNASDAQ Stock Market, Inc. (“NASDAQ”) normally arevalued at the NASDAQ Official Closing Price. Other OTCsecurities are normally valued at the last bid price on thevaluation date available prior to valuation. Investmentsthat are listed on US and foreign stock exchanges nor-mally are valued at the market closing price, the last saleprice on the day the securities are valued or, lacking anysales on such day, at the last available bid price.

The Trust’s Board of Trustees has delegated to theEquities, Fixed Income, and Multi-Asset ValuationCommittee the responsibility for making fair value deter-minations with respect to the Fund’s portfolio holdings.The types of investments for which such fair value pric-ing may be necessary include, but are not limited to: for-eign investments under some circumstances, asdiscussed below; investments of an issuer that hasentered into a restructuring; investments whose tradinghas been halted or suspended; fixed-income securitiesthat are in default and for which there is no currentmarket value quotation; and investments that arerestricted as to transfer or resale. The need to fair valuethe Fund’s portfolio investments may also result fromlow trading volume in foreign markets or thinly tradeddomestic investments, and when a security subject to atrading limit or collar on the exchange or market onwhich it is primarily traded reaches the “limit up” or“limit down” price and no trading has taken place atthat price. Various factors may be reviewed in order tomake a good faith determination of a instrument’s fairvalue. These factors include, but are not limited to, fun-damental analytical data relating to the investment; thenature and duration of restrictions on disposition of theinvestments; and the evaluation of forces that influencethe market in which the investments are purchased andsold.



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The Fund expects to price most of its portfolio holdingsbased on current market value, as discussed previously.Securities and assets for which market quotations arenot readily available may be valued based uponappraisals received from a pricing service using a com-puterized evaluation system or formula method thattakes into consideration market indices, matrices, yieldcurves and other specific adjustments. This may result inthe investments being valued at a price different fromthe price that would have been determined had theevaluation or formula method not been used.Investments also may be valued based on appraisalsderived from information concerning the investments orsimilar investments received from recognized dealers inthose holdings. If the Fund concludes that a marketquotation is not readily available for a portfolio invest-ment for any number of reasons, including the occur-rence of a “significant event” (e.g., natural disaster orgovernmental action), after the close of trading in itsprincipal domestic or foreign market but before theclose of regular trading on the NYSE, the Fund may usefair value methods to reflect those events. This policy isintended to assure that the Fund’s net asset value fairlyreflects the value of its portfolio holdings as of the timeof pricing. The Fund may use a systematic fair valuationmodel provided by an independent third party to valueinvestments principally traded in foreign markets inorder to adjust for possible stale pricing that may occurbetween the close of the foreign exchanges and thetime for valuation. The systematic fair valuation modelmay use calculations based on indices of domestic secu-rities and other appropriate indicators, such as prices ofrelevant ADRs and futures contracts. If an investment isvalued at a “fair value,” that value is likely to be differ-ent from the last quoted market price for the invest-ment. In cases where investments are traded on morethan one exchange, the investments are valued on theexchange designated as the primary market by UBS AM(Americas), the investment advisor of the Fund.

Valuing investments at fair value involves greaterreliance on judgment than valuing investments thathave readily available market quotations. Fair valuedeterminations can also involve reliance on quantitativemodels employed by a fair value pricing service. Therecan be no assurance that the Fund could obtain the fairvalue assigned to an investment if it were to sell theinvestment at approximately the time at which the Funddetermines its net asset value per share. As a result, theFund’s sale or redemption of its shares at net asset val-

ue, at a time when a holding or holdings are valued atfair value, may have the effect of diluting or increasingthe economic interest of existing shareholders.

The Fund may invest in investments that trade primarilyin foreign markets that trade on weekends or other dayson which the Fund does not calculate its net asset value.As a result, the Fund’s net asset value may change ondays when you will not be able to buy and sell your Fundshares. Certain investments in which the Fund invests aretraded in markets that close before 4:00 p.m., Easterntime. Normally, developments that occur between theclose of the foreign markets and 4:00 p.m., Easterntime, will not be reflected in the Fund’s net asset value.However, if the Fund determines that such developmentsare so significant that they will materially affect the valueof the Fund’s investments, the Fund may adjust the previ-ous closing prices to reflect what the Board believes tobe the fair value of these investments as of 4:00 p.m.,Eastern time.

Futures contracts are generally valued at the settlementprice established each day on the exchange on which theyare traded. Forward foreign currency contracts are valueddaily using forward exchange rates quoted by independ-ent pricing services. Swaps are marked-to-market dailybased upon values from third party vendors or quotationsfrom market makers to the extent available and thechange in value, if any, is recorded as an unrealized gainor loss on the Statement of assets and liabilities. In theevent that market quotations are not readily available ordeemed unreliable, the swap is valued at fair value asdetermined in good faith by or under the direction of theBoard (or a committee designated by it).

The Fund’s portfolio holdings may also consist of sharesof other investment companies in which the Fundinvests. The value of each such investment company willbe its net asset value at the time the Fund’s shares arepriced. Each investment company calculates its net assetvalue based on the current market value for its portfolioholdings. Each investment company values securitiesand other instruments in a manner as described in thatinvestment company’s prospectus.

Additional information about the Fund’s current netasset value per share is available to investors on theFund’s Web Site at http://www.ubs.com/us/en/asset_ management/individual_investors/mutual_fund.html.



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ManagementInvestment advisorUBS Asset Management (Americas) Inc., a Delaware cor-poration located at 1285 Avenue of the Americas, NewYork, NY 10019, is an investment advisor registeredwith the SEC. UBS AM (Americas) serves as the invest-ment advisor to the Fund by managing the investmentof assets of the Fund. As of June 30, 2016, the Advisorhad approximately $144 billion in assets under manage-ment. The Advisor is an indirect asset management sub-sidiary of UBS Group AG and a member of the UBSAsset Management Division, which had approximately$647 billion in assets under management as of June 30,2016. UBS is an internationally diversified organizationheadquartered in Zurich, Switzerland, with operations inmany areas of the financial services group of industries.

Portfolio managementThe Advisor’s investment professionals are organizedinto investment management teams, with a particularteam dedicated to a specific asset class. Information isprovided below for those portfolio managers withineach investment management team that are primarilyresponsible for coordinating the day-to-day manage-ment of the Fund.

Scott E. Dolan, John Dugenske and Craig G. Ellinger arethe members of the investment management team andare jointly and primarily responsible for the day-to-daymanagement of the Fund’s portfolio. Messrs. Dolan,Dugenske and Ellinger have access to a globally inte-grated team of credit analysts and other members ofthe Fixed Income investment management team whomay contribute to research, security selection and port-folio construction. Messrs. Dolan, Dugenske and Ellingerare responsible for the overall portfolio and for review-ing the overall composition of the portfolio to ensure itscompliance with the Fund’s stated investment objectivesand strategies. Information about Messrs. Dolan,Dugenske and Ellinger is provided below.

Scott E. Dolan is Head of US Multi-Sector Fixed IncomeMulti-Sector Strategies and a Managing Director at UBSAM (Americas). Prior to joining UBS Asset Managementin 2008, Mr. Dolan was a managing director and headof securitized assets for Citigroup AlternativeInvestments. Prior to joining Citigroup, Mr. Dolan was a

managing director and head of mortgages and struc-tured assets for Bear Stearns Asset Management and asenior mortgage trader at the Clinton Group. Mr. Dolanalso worked at Deutsche Asset Management as a man-aging director and co-head of the Rates Group responsi-ble for strategy, security selection and trading for MBS,ABS, agencies and treasuries. Mr. Dolan started hiscareer at Scudder, Stevens and Clark, where he man-aged total return fixed income mutual funds and institu-tional portfolios. Mr. Dolan has been a portfoliomanager of the Fund since 2012.

John Dugenske is Head of Fixed Income and a GroupManaging Director at UBS AM (Americas). Prior to join-ing UBS Asset Management in 2009, Mr. Dugenskespent over four years at the former asset managementbusiness of Lehman Brothers, which encompassedLehman Brothers Asset Management and NeubergerBerman, where he most recently held the position ofHead of European and Middle East Fixed Income, basedin London. Mr. Dugenske has been a portfolio managerof the Fund since 2012.

Craig G. Ellinger is Head of US Investment Grade andGlobal High Yield Fixed Income and a ManagingDirector at UBS Asset Management. Mr. Ellinger hasbeen an investment professional with UBS AssetManagement since 2000 and a portfolio manager ofthe Fund since 2012.

Advisory feesThe effective investment advisory fees (expressed as amonthly fee at an annual rate multiplied by the averagedaily net assets of the Fund) payable to the Advisor,before fee waivers and/or expense reimbursements, ifapplicable, by the Fund, are presented in the followingtables as of the one month ended June 30, 2016.During the fiscal year ended June 30, 2016 the Fundpaid the Advisor investment advisory fees as set forth ineach respective Fund’s expenses and fee table in the lineitem “Management fees.”

The Advisor has contractually agreed to waive its feesand/or reimburse certain expenses so that the ordinaryoperating expenses of the Fund (excluding expensesincurred through investment in other investment com-panies, interest, taxes, brokerage commissions andextraordinary expenses) do not exceed the amounts list-ed in the footnotes to the Expense Tables. The contrac-



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Effective gross advisory fee as of Advisory fee breakpoint scheduleFund June 30, 2016 Assets under management Fee

UBS Core Plus Bond Fund 0.50% $0 – $500 million 0.500% On the next $500 million – 1 billion 0.475 On the next $1 billion – $1.5 billion 0.450 On the next $1.5 billion – $2 billion 0.425 Above $2 billion 0.400

AdministratorUBS AM (Americas) is also the administrator of theFund. The Fund pays UBS AM (Americas) an annual con-tract rate of 0.075% of its average daily net assets foradministrative services.

Disclosure of portfolio holdingsThe Fund will file its complete schedule of portfolioholdings with the SEC for the first and third quarters ofeach fiscal year on Form N-Q. The Fund’s Forms N-Q areavailable on the SEC’s Web Site at www.sec.gov. TheFund’s Forms N-Q may be reviewed and copied at theSEC’s Public Reference Room in Washington, D.C.Information on the operation of the SEC’s PublicReference Room may be obtained by calling202-551 8090. Additionally, you may obtain copies ofForms N-Q from the Fund upon request by calling1-800-647 1568. The Fund’s complete schedule of port-folio holdings for the second and fourth quarters ofeach fiscal year is filed with the SEC on Form N-CSR andappears in the semiannual and annual reports, respec-tively, sent to shareholders. The semiannual and annualreports for the Fund will be posted on the Fund’s WebSite at http://www.ubs.com/us/en/asset_management/individual_investors/mutual_fund.html. Please consultthe Fund’s SAI for a description of the policies and

procedures that govern disclosure of the Fund’s portfolio holdings.

Dividends and taxesDividends and distributionsThe Fund intends to qualify each year as a regulatedinvestment company under the IRC. As a regulatedinvestment company, the Fund generally pays no federalincome tax on the income and gains it distributes toyou. The Fund expects to declare and distribute all of itsnet investment income, if any, to shareholders as divi-dends monthly. The Fund will distribute net realized capital gains, if any, at least annually, usually inDecember. The Fund may distribute such income divi-dends and capital gains more frequently, if necessary, inorder to reduce or eliminate federal excise or incometaxes on the Fund. The amount of any distribution willvary, and there is no guarantee the Fund will pay eitheran income dividend or a capital gains distribution.

Classes with higher expenses are expected to have lower income dividends.

You will receive income dividends and capital gain distri-butions in additional shares of the same class of theFund unless you notify your investment professional orthe Fund in writing that you elect to receive them in

tual fee waiver and/or expense reimbursement agree-ment will remain in place for the period endingOctober 27, 2017. Thereafter, the expense limit for theFund will be reviewed each year, at which time the con-tinuation of the expense limit will be discussed by theAdvisor and the Board of Trustees. The contractual feewaiver agreement also provides that the Advisor is enti-tled to reimbursement of fees it waived and/or expensesit reimbursed to the extent such reimbursement can bemade during the three years following the period duringwhich such fee waivers and expense reimbursements

were made, provided that the reimbursement by theFund of the Advisor will not cause the total operatingexpense ratio to exceed the contractual limit as thenmay be in effect for the Fund.

A discussion regarding the basis for the Board ofTrustees’ approval of the investment advisory agreementbetween the Trust and the Advisor on behalf of theFund is available in the Fund’s most-recent annualreport to shareholders for the period ended June 30.



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cash. Clients who own Fund shares through certainwrap fee programs may not have the option of electingto receive dividends in cash. Distribution options may bechanged at any time by requesting a change in writing.Dividends and distributions are reinvested on the rein-vestment date at the net asset value determined at theclose of business on that date.

Annual statements—Each year, the Fund will send youan annual statement (Form 1099) of your account activi-ty to assist you in completing your federal, state andlocal tax returns. Distributions declared in December toshareholders of record in such month, but paid inJanuary, are taxable as if they were paid in December.Prior to issuing your statement, the Fund makes everyeffort to reduce the number of corrected forms mailedto you. However, if the Fund finds it necessary to reclas-sify its distributions or adjust the cost basis of any cov-ered shares (defined below) sold or exchanged after youreceive your tax statement, the Fund will send you a cor-rected Form 1099.

Avoid “buying a dividend”—At the time you purchaseyour Fund shares, the Fund’s net asset value may reflectundistributed income, undistributed capital gains, or netunrealized appreciation in value of portfolio securitiesheld by the Fund. For taxable investors, a subsequentdistribution to you of such amounts, although constitut-ing a return of your investment, would be taxable.Buying shares in the Fund just before it declares anincome dividend or capital gains distribution is some-times known as “buying a dividend.”

TaxesFund distributions—The Fund expects, based on itsinvestment objective and strategies, that its distribu-tions, if any, will be taxable as ordinary income, capitalgains, or some combination of both. This is truewhether you reinvest your distributions in additionalFund shares or receive them in cash.

For federal income tax purposes, Fund distributions ofshort-term capital gains are taxable to you as ordinaryincome. Fund distributions of long-term capital gains aretaxable to you as long-term capital gains no matter howlong you have owned your shares. Because the incomeof the Fund primarily is derived from investments earn-ing interest rather than dividend income, generally noneor only a small portion of the income dividends paid toyou by the Fund is anticipated to be qualified dividendincome eligible for taxation by individuals at long-term

capital gain tax rates provided certain holding periodrequirements are met.

The use of derivatives by the Fund may cause the Fundto realize higher amounts of ordinary income or short-term capital gain, distributions from which are taxableto individual shareholders at ordinary income tax ratesrather than at the more favorable tax rates for long-term capital gain.

Sale or redemption of Fund shares—If you are a taxableinvestor, when you sell or redeem your shares in theFund, you may realize a capital gain or loss. For tax pur-poses, an exchange of your Fund shares for shares of adifferent Family Fund is the same as a sale. Any lossincurred on the sale or exchange of Fund shares held forsix months or less will be treated as a long-term capitalloss to the extent of capital gain distributions receivedwith respect to such shares. The Fund is required toreport to you and the Internal Revenue Service (“IRS”)annually on Form 1099-B not only the gross proceeds ofFund shares you sell or redeem but also the cost basis ofFund shares you sell or redeem that were purchased oracquired on or after January 1, 2012 (“covered shares”).Cost basis will be calculated using the Fund’s defaultmethod of average cost, unless you instruct the Fund touse a different calculation method. Shareholders shouldcarefully review the cost basis information provided bythe Fund and make any additional basis, holding periodor other adjustments that are required when reportingthese amounts on their federal income tax returns. Ifyour account is held by your investment representative(financial advisor or other broker), please contact thatrepresentative with respect to reporting of cost basisand available elections for your account. Their defaultmethod for cost basis reporting may be different thanthe Fund’s default method. Tax-advantaged retirementaccounts will not be affected.

Medicare tax—An additional 3.8% Medicare tax isimposed on certain net investment income (includingordinary dividends and capital gain distributions receivedfrom the Fund and net gains from redemptions or othertaxable dispositions of Fund shares) of US individuals,estates and trusts to the extent that such person’s“modified adjusted gross income” (in the case of anindividual) or “adjusted gross income” (in the case of anestate or trust) exceeds a threshold amount. ThisMedicare tax, if applicable, is reported by you on, andpaid with, your federal income tax return.



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Backup withholding—By law, if you do not provide theFund with your proper taxpayer identification numberand certain required certifications, you may be subjectto backup withholding on any distributions of income,capital gains, or proceeds from the sale of your shares.The Fund also must withhold if the IRS instructs it to doso. When withholding is required, the amount will be28% of any distributions or proceeds paid.

State and local taxes—Fund distributions and gains fromthe sale or exchange of your Fund shares generally aresubject to state and local taxes.

Non-US investors—Non-US investors may be subject toUS withholding tax at a 30% or lower treaty rate andUS estate tax and are subject to special US tax certifica-tion requirements to avoid backup withholding andclaim any treaty benefits. Exemptions from US withhold-ing tax are provided for certain capital gain dividendspaid by the Fund from net long-term capital gains, inter-est-related dividends paid by the Fund from its qualifiednet interest income from US sources and short-termcapital gain dividends, if such amounts are reported bythe Fund. However, any such dividends and distributionsof income and capital gains will be subject to backupwithholding at a rate of 28% if you fail to properly certi-fy that you are not a US person.

Other reporting and withholding requirements—Underthe Foreign Account Tax Compliance Act (“FATCA”), theFund will be required to withhold a 30% tax on the following payments or distributions made by the Fundto certain foreign entities, referred to as foreign financialinstitutions or non-financial foreign entities, that fail tocomply (or be deemed compliant) with extensive report-ing and withholding requirements designed to informthe US Department of the Treasury of US-owned foreigninvestment accounts: (a) income dividends and (b) afterDecember 31, 2018, certain capital gain distributions,return of capital distributions and proceeds arising fromthe sale of Fund shares. The Fund may disclose the infor-mation that it receives from its shareholders to the IRS,non-US taxing authorities or other parties as necessaryto comply with FATCA or similar laws. Withholding alsomay be required if a foreign entity that is a shareholderof the Fund fails to provide the Fund with appropriatecertifications or other documentation concerning its sta-tus under FATCA.

This discussion of “Dividends and taxes” is notintended or written to be used as tax advice.Because everyone’s tax situation is unique, youshould consult your tax professional about federal,state, local, or foreign tax consequences beforemaking an investment in the Fund.



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Supplemental investment advisor performance informationBecause the Advisor has managed other advisoryaccounts (including registered investment companies)for many years in a substantially similar manner to theway in which the Advisor manages the Fund, the fol-lowing supplemental performance information is beingprovided to assist prospective investors in making aninformed investment decision. The tables on the follow-ing pages provide performance information for compos-ites of all applicable advisory accounts (“AccountComposite Performance”) managed by the Advisor withsubstantially similar investment objectives, policies andinvestment strategies as the Fund. The AccountComposite Performance was obtained from the recordsmaintained by the Advisor. The following presentationalso shows the Account Composite Performance adjust-ed to reflect the Fund’s Class A current net expenses,which include the effect of fee waivers and/or expensereimbursements, as applicable, and also reflects theClass A front-end sales charge of 3.75%. The perform-ance of one or more appropriate unmanaged bench-mark indexes, not adjusted for any fees or expenses, isalso provided for each composite.

Please note that the Account Composite Performance isnot the Fund’s own historical performance. The AccountComposite Performance should not be considered asubstitute for the Fund’s performance, and the Account

Composite Performance is not necessarily an indicationof the Fund’s future performance. The accounts includ-ed in the Account Composite Performance (with theexception of the registered investment companies) werenot necessarily subject to certain investment limitations,diversification requirements and other restrictionsimposed on mutual funds by the 1940 Act and the IRC,which, if applicable, may have adversely affected theperformance of these accounts.

The Account Composite Performance is calculated dif-ferently than the method used for calculating Fund per-formance pursuant to SEC guidelines. Compositesconsisting of more than one portfolio are asset weight-ed by beginning-of-period asset values. Investmentresults are time-weighted performance calculations rep-resenting total return. Returns are calculated using geo-metric linking of monthly returns. Composites arevalued at least monthly, taking into account cash flows.All realized and unrealized capital gains and losses areincluded. Interest income from fixed income securities isaccrued. Investment transactions are accounted for on atrade date basis. Results include all actual fee-paying,discretionary client portfolios including those clients nolonger with the Advisor. Portfolios are included in thecomposite beginning with the first full month of per-formance to the present or to the cessation of theclient’s relationship with the Advisor. Terminatedaccounts are included through the last full month inwhich they were fully invested, and no alterations ofcomposites have occurred due to changes in personnel.

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Supplemental performance information for the advisor of UBS Core Plus Bond Fund*

Composite performance: U.S. Core Plus Composite (“CPC”)July 1, 1995 through December 31, 2015

Composite performance: CPCFor periods ended December 31, 2015

CPC: net CPC: gross return after return before Bloomberg expenses CPC: net expenses Barclays US and sales return after and sales AggregateYear charge1 expenses2 charge Index3

1 year (4.22)% (0.49)% 0.15% 0.55%

5 years 2.64 3.43 4.09 3.25

10 years 2.49 2.89 3.62 4.51

Since inception 4.41 4.60 5.42 5.52

20%

-10

10

-0

-20

Year

1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015

CPC: net return after expenses (%)2

Bloomberg Barclays US Aggregate Index (%)3

*Returns expressed in US dollars.1 Adjusted to reflect Class A shares’ current net expenses and the new maximum front-end sales charge, 3.75%, which is effective June 1, 2016.

For periods prior to Class A shares’ inception, the earliest expense ratio was used to calculate the net returns.2 Adjusted to reflect Class A shares’ current net expenses but not adjusted to reflect the maximum front-end sales charge. For periods prior to

Class A shares’ inception, the earliest expense ratio was used to calculate the net returns.3 The Bloomberg Barclays US Aggregate Index is an unmanaged broad based index designed to measure the US dollar-denominated, investment-

grade, taxable bond market. The index includes bonds from the Treasury, government-related, corporate, mortgage-backed, asset-backed and commercial mortgage-backed sectors. Investors should note that indices do not reflect the deduction of fees, expenses or taxes.

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JOB: 16-16022-3 CYCLE#;BL#: 13; 0 TRIM: 8.25" x 10.75" COMPOSITECOLORS: Black, ~note-color 2, ~note-color 3 GRAPHICS: 16022-3_Core Plus Bond_L.eps V1.5

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Supplemental performance information for the advisor of UBS Core Plus Bond Fund*

Composite performance: CPCJuly 1, 1995 through December 31, 2015

CPC: net CPC: gross return after return before Bloomberg expenses CPC: net expenses Barclays US and sales return after and sales AggregateYear charge1 expenses2 charge Index3

19954 2.53% 6.52% 6.97% 6.31%

1996 0.98 4.92 5.80 3.63

1997 5.22 9.32 10.24 9.65

1998 3.29 7.31 8.22 8.67

1999 (2.87) 0.92 1.77 (0.83)

2000 6.09 10.22 11.15 11.62

2001 3.65 7.69 8.60 8.44

2002 4.95 9.04 9.96 10.25

2003 0.55 4.46 5.35 4.10

2004 0.05 3.95 4.83 4.34

2005 (2.07) 1.74 2.60 2.43

2006 0.49 4.40 5.29 4.33

2007 (3.07) 0.71 1.56 6.97

2008 (13.47) (10.10) (9.33) 5.24

2009 6.10 10.24 11.05 5.93

2010 3.73 7.77 8.46 6.54

2011 3.42 7.45 8.13 7.84

2012 1.47 5.42 6.10 4.21

2013 (5.16) (1.47) (0.83) (2.02)

2014 2.56 6.56 7.24 5.97

2015 (4.22) (0.49) 0.15 0.55

*Returns expressed in US dollars.1 Adjusted to reflect Class A shares’ current net expenses and the new maximum front-end sales charge, 3.75%, which is effective June 1, 2016.

For periods prior to Class A shares’ inception, the earliest expense ratio was used to calculate the net returns.2 Adjusted to reflect Class A shares’ current net expenses but not adjusted to reflect the maximum front-end sales charge. For periods prior to

Class A shares’ inception, the earliest expense ratio was used to calculate the net returns.3 The Bloomberg Barclays US Aggregate Index is an unmanaged broad based index designed to measure the US dollar-denominated, investment-

grade, taxable bond market. The index includes bonds from the Treasury, government-related, corporate, mortgage-backed, asset-backed andcommercial mortgage-backed sectors. Investors should note that indices do not reflect the deduction of fees, expenses or taxes.

4 Performance is presented for July 1, 1995 through December 31, 1995.

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The financial highlights tables are intended to help youunderstand the Fund’s financial performance for thepast five years (or, if shorter, the period of the Fund’soperations). Certain information reflects financial resultsfor a single Fund share. The total returns in the tablerepresent the rate that an investor would have earned(or lost) on an investment in the Fund (assuming rein-vestment of all dividends and distributions).

The selected financial information in the followingtables has been derived from the financial statements

audited by the Fund’s independent registered publicaccounting firm, Ernst & Young LLP, whose unqualifiedreport thereon (the “Report”) appears in the Fund’sAnnual Report to Shareholders dated June 30, 2016(the “Annual Report”). Additional performance andfinancial data and related notes are contained in theAnnual Report, which is available without charge uponrequest. The Fund’s financial statements for the fiscalyear ended June 30, 2016 and the Report are incorpo-rated by reference into the SAI.

Financial highlights

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UBS Core Plus Bond FundThe table below sets forth financial data for one share of beneficial interest outstanding throughout each year presented.

Class A

Year ended June 30,

2016 2015 2014 2013 2012

Net asset value, beginning of year $9.05 $9.18 $8.91 $9.13 $8.70

Income (loss) from investment operations:Net investment income1 0.15 0.15 0.17 0.16 0.20Net realized and unrealized gain (loss) 0.26 0.01 0.33 (0.15) 0.46Net increase from payment by advisor 0.003 — — — —

Total income (loss) from investment operations 0.41 0.16 0.50 0.01 0.66

Less dividends/distributions:From net investment income (0.20) (0.29) (0.23) (0.23) (0.23)

Net asset value, end of year $9.26 $9.05 $9.18 $8.91 $9.13

Total investment return2 4.62%4 1.69% 5.68% 0.06% 7.64%

Ratios to average net assets:Expenses before fee waivers and/or expense reimbursement 1.62% 1.73% 1.69% 1.58% 1.45%Expenses after fee waivers and/or expense reimbursement 0.64% 0.64% 0.64% 0.64% 0.64%Net investment income 1.66% 1.60% 1.89% 1.77% 2.18%

Supplemental data:Net assets, end of year (000’s) $5,129 $2,205 $3,226 $6,951 $7,606Portfolio turnover rate 949% 744% 506% 374% 509%

Class P

Year ended June 30,

2016 2015 2014 2013 2012

Net asset value, beginning of year $9.03 $9.17 $8.89 $9.11 $8.69

Income (loss) from investment operations:Net investment income1 0.17 0.17 0.19 0.19 0.22Net realized and unrealized gain (loss) 0.26 0.003 0.34 (0.16) 0.45Net increase from payment by advisor 0.003 — — — —

Total income from investment operations 0.43 0.17 0.53 0.03 0.67

Less dividends/distributions:From net investment income (0.22) (0.31) (0.25) (0.25) (0.25)

Net asset value, end of year $9.24 $9.03 $9.17 $8.89 $9.11

Total investment return2 4.87%4 1.84% 6.08% 0.31% 7.80%

Ratios to average net assets:Expenses before fee waivers and/or expense reimbursement 1.36% 1.43% 1.38% 1.20% 1.12%Expenses after fee waivers and/or expense reimbursement 0.39% 0.39% 0.39% 0.39% 0.39%Net investment income 1.91% 1.83% 2.13% 2.04% 2.44%

Supplemental data:Net assets, end of year (000’s) $31,796 $28,541 $25,431 $26,425 $33,501Portfolio turnover rate 949% 744% 506% 374% 509%

Financial highlights

1 Calculated using the average shares method.2 Total investment return is calculated assuming a $10,000 investment on the first day of each year reported, reinvestment of all dividends and

distributions, if any, at net asset value on the ex-dividend dates, and a sale at net asset value on the last day of each year reported. The figuresdo not include any applicable sales charges; results would be lower if they were included. Returns do not reflect the deduction of taxes that ashareholder would pay on Fund dividends/distributions or the redemption of Fund shares.



33

3 Amount represents less than $0.005 per share.4 During the year ended June 30, 2016, the Advisor reimbursed the Fund $774 for a trading error, which had no impact on the Fund’s total

return.

Class C

Year ended June 30,

2016 2015 2014 2013 2012

$9.02 $9.15 $8.88 $9.10 $8.68

0.11 0.10 0.12 0.12 0.150.25 0.01 0.33 (0.16) 0.450.003 — — — —

0.36 0.11 0.45 (0.04) 0.60

(0.15) (0.24) (0.18) (0.18) (0.18)

$9.23 $9.02 $9.15 $8.88 $9.10

4.10%4 1.19% 5.30% (0.55)% 7.01%

2.31% 2.36% 2.28% 2.02% 1.91%1.14% 1.14% 1.14% 1.14% 1.14%1.16% 1.09% 1.38% 1.29% 1.70%

$1,240 $1,268 $1,435 $1,724 $2,187949% 744% 506% 374% 509%



34

Funds’ privacy noticeThis notice describes the privacy policy of the UBS Family of Funds, the PACE Funds and all closed-end funds man-aged by UBS Asset Management (collectively, the “Funds”). The Funds are committed to protecting the personalinformation that they collect about individuals who are prospective, current or former investors.

The Funds collect personal information in order to process requests and transactions and to provide customer serv-ice. Personal information, which is obtained from applications and other forms or correspondence submitted to theFunds, may include name(s), address, e-mail address, telephone number, date of birth, social security number orother tax identification number, bank account information, information about your transactions and experienceswith the Funds, and any affiliation a client has with UBS Financial Services Inc. or its affiliates (“PersonalInformation”).

The Funds limit access to Personal Information to those individuals who need to know that information in order toprocess transactions and service accounts. These individuals are required to maintain and protect the confidentialityof Personal Information and to follow established procedures. The Funds maintain physical, electronic and procedur-al safeguards to protect Personal Information and to comply with applicable laws and regulations.

The Funds may share Personal Information with their affiliates to facilitate the servicing of accounts and for otherbusiness purposes, or as otherwise required or permitted by applicable law. The Funds may also share PersonalInformation with non-affiliated third parties that perform services for the Funds, such as vendors that provide dataor transaction processing, computer software maintenance and development, and other administrative services.When the Funds share Personal Information with a non-affiliated third party, they will do so pursuant to a contractthat includes provisions designed to ensure that the third party will uphold and maintain privacy standards whenhandling Personal Information. In addition to sharing information with non-affiliated third parties to facilitate theservicing of accounts and for other business purposes, the Funds may disclose Personal Information to non-affiliatedthird parties as otherwise required or permitted by applicable law. For example, the Funds may disclose PersonalInformation to credit bureaus or regulatory authorities to facilitate or comply with investigations; to protect againstor prevent actual or potential fraud, unauthorized transactions, claims or other liabilities; or to respond to judicial orlegal process, such as subpoena requests.

Except as described in this privacy notice, the Funds will not use Personal Information for any other purpose unlessthe Funds describe how such Personal Information will be used and clients are given an opportunity to declineapproval of such use of Personal Information relating to them (or affirmatively approve the use of PersonalInformation, if required by applicable law). The Funds endeavor to keep their customer files complete and accu-rate. The Funds should be notified if any Personal Information needs to be corrected or updated. Please call1-800-647 1568 with any questions or concerns regarding your Personal Information or this privacy notice.

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UBS Asset Management, Americas RegionBusiness Continuity Planning Overview

UBS Asset Management affiliates UBS Asset Management (US) and UBS Asset Management (Americas) protectinformation assets, processes, and customer data from unpredictable events through preparation and testing of acomprehensive business continuity capability. This capability seeks recovery of the technology infrastructure andinformation, and prevention of the loss of company or customer information and transactions. In the event of a cri-sis scenario, we will recover those functions deemed to be critical to our business and our clients, and strive toresume processing within predefined time frames following a disaster declaration (typically 4-6 hours). Business con-tinuity processes provide us the ability to continue critical business functions regardless of the type, scope, or dura-tion of a localized event. However, these processes are dependent upon various external resources beyond ourcontrol, such as regional telecommunications, transportation networks, and other public utilities.

Essential elements of the business continuity plan include:

• Crisis communication procedures: Action plans for coordinating essential communications for crisis manage-ment leaders, employees, and key business partners

• Information technology backup and recovery procedures: Comprehensive technology and data manage-ment plans designed to protect the integrity and quick recovery of essential technology infrastructure and data

• Disaster recovery site: Alternative dedicated workspace, technology infrastructure, and systems support that isdesigned to be fully operational within 2-4 hours of a disaster declaration

• Testing regimen: The business continuity plan is reviewed on a quarterly basis and tested on an annual basis,including full activation of the disaster recovery facility. In addition, all IT application recovery plans are updatedand tested annually.

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If you want more information about the Fund, the fol-lowing documents are available free upon request:

Annual/Semiannual ReportsAdditional information about the Fund’s investments isavailable in the Fund’s annual and semiannual reports toshareholders. In the Fund’s annual reports, you will finda discussion of the market conditions and investmentstrategies that significantly affected the Fund’s perform-ance during the last fiscal year.

Statement of Additional Information (SAI)The SAI provides more detailed information about theFund and is incorporated by reference into this prospec-tus (i.e., it is legally considered a part of this prospectus).

You may obtain free copies of the Fund’s annual andsemiannual reports and the SAI, and discuss your ques-tions about the Fund, by contacting the Fund directly at1-800-647 1568, or by contacting your investment pro-fessional. The annual and semiannual reports and theSAI may also be obtained, free of charge, by accessingthe documents on the Fund’s Web Site athttp://www.ubs.com/us/en/asset_management/individual_investors/mutual_fund.html.

You may review and copy information about the Fund,including shareholder reports and the SAI, at the PublicReference Room of the U.S. Securities and ExchangeCommission (SEC) in Washington, D.C. You may obtaininformation about the operations of the SEC’s PublicReference Room by calling the SEC at 202-551 8090.You may get copies of reports and other informationabout the Fund:

• For a fee, by electronic request at [email protected] by writing the SEC’s Public Reference Section,Washington, D.C. 20549-1520; or

• Free from the EDGAR Database on the SEC’s InternetWeb Site at: http://www.sec.gov.

©UBS 2016. All rights reserved.The UBS FundsInvestment Company Act File No. 811-6637UBS Asset Management (Americas) Inc.is a subsidiary of UBS Group AG.S1655

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JOB: 16-16022-3 CYCLE#;BL#: 13; 0 TRIM: 8.25" x 10.75" COMPOSITECOLORS: Black, ~note-color 2, ~note-color 3 GRAPHICS: UBS_logo_semibold_K.eps V1.5

the ubs funds prospectus

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