UBS PRIVATE INVESTOR FUNDS INC, N-1A EL, 1995-11-17

UBS PRIVATE INVESTOR FUNDS INC
N-1A EL, 1995-11-17

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As filed with the Securities and Exchange Commission on November 17, 1995
Registration No. 33- _______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No.
Post-Effective Amendment No.

and

REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
Amendment No.
(Check appropriate box or boxes)
UBS Private Investor Funds, Inc.
(Exact name of registrant as specified in charter)
c/o Signature Financial Group, Inc.
6 St. James Avenue
Boston, Massachusetts 02116 02116
(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, including Area Code: (617) 423-0800

c/o Signature Financial Group, Inc.
6 St. James Avenue
Boston, Massachusetts 02116

(Name and Address of Agent for Service)

Copies to:

Stephen K. West, Esq.
Sullivan & Cromwell
125 Broad Street
New York, New York 10004

Approximate date of proposed public offering: As soon as practicable after
the effective date of this Registration Statement.
It is proposed that this filing will become effective (check appropriate
box):
[ ] immediately upon filing pursuant to paragraph (b)
[ ] on (date) pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph a(2)
[ ] on (date) pursuant to paragraph (a)(2) of rule 485
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for
a previously filed post-effective amendment.

The Registrant elects, pursuant to Rule 24f-2 of the Investment Company
Act General Rules and Regulations, to register an indefinite number of
shares of its capital stock.

[The Master Portfolio Trust has also executed this Registration
Statement.]

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

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NOTE

This Registration Statement of UBS Private Investor Funds, Inc. contains

four Prospectuses, two Statements of Additional Information (the "SAIs")

and two Part C's.

The UBS Tax Exempt Bond Fund Prospectus relates to the SAI and Part C

marked "The UBS Tax Exempt Bond Fund". The remaining three Prospectuses

relate to the SAI and Part C marked "The UBS Bond Fund, The UBS U.S. Equity

Fund, The UBS International Equity Fund".

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UBS PRIVATE INVESTOR FUNDS, INC.
THE UBS TAX EXEMPT BOND FUND
CROSS-REFERENCE SHEET

PART A

FORM N-1A
ITEM NUMBER CAPTION IN PROSPECTUS

1. Cover Page . . . . . . . . . . . Outside Cover Page of Prospectus

2. Synopsis . . . . . . . . . . . . Investors for Whom the Fund is
Designed

3. Condensed Financial
Information . . . . . . . . . Not applicable

4. General Description of
Registrant . . . . . . . . . . Organization; Investment
Objective and Policies;
Additional Investment Information
and Risk Factors; Investment
Restrictions

5. Management of the Fund . . . . . Management; Shareholder Services;
Expenses

5A.Management's Discussion of
Fund . . . . . . . . . . . . . Not applicable

6. Capital Stock and
Other Securities . . . . . . . Dividends and Distributions; Net
Asset Value; Organization; Taxes

7. Purchase of Securities
Being Offered . . . . . . . . Purchase of Shares; Net Asset
Value

8. Redemption or Repurchase . . . . Redemption of Shares; Net Asset
Value

9. Pending Legal Proceedings . . . Not applicable

Part B
FORM N-1A CAPTION IN STATEMENT
ITEM NUMBER OF ADDITIONAL INFORMATION

10. Cover Page . . . . . . . . . . Outside Front Cover Page

11. Table of Contents . . . . . . . Table of Contents

12. General Information and
History . . . . . . . . . . . Not applicable

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13. Investment Objectives and
Policies . . . . . . . . . . Investment Objectives and
Policies; Investment
Restrictions; Portfolio
Transactions

14. Management of the Fund . . . . Directors

15. Control Persons and Principal
Holders of Securities . . . . Organization

16. Investment Advisory and
Other Services . . . . . . . Investment Advisor; Sub-
Administrator; Distributor;
Custodian; Shareholder Services;
Independent Accountants; Expenses

17. Brokerage Allocation and
Other Practices . . . . . . . Portfolio Transactions

18. Capital Stock and Other
Securities . . . . . . . . . General; Organization

19. Purchase, Redemption and
Pricing of Securities
Being Offered . . . . . . . . Purchase of Shares; Redemption of
Shares; Exchange of Shares;
Dividends and Distributions; Net
Asset Value

20. Tax Status . . . . . . . . . . Taxes

21. Underwriters . . . . . . . . . Distributor; Purchase of Shares;
Net Asset Value

22. Calculation of Performance
Data . . . . . . . . . . . . Not applicable

23. Financial Statements . . . . . Financial Statements

Part C

Information required to be included in Part C is set forth under the
appropriate item heading.

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UBS PRIVATE INVESTOR FUNDS, INC.
THE UBS BOND FUND
THE UBS U.S. EQUITY FUND
THE UBS INTERNATIONAL EQUITY FUND
CROSS-REFERENCE SHEET

PART A

FORM N-1A
ITEM NUMBER CAPTION IN PROSPECTUS

1. Cover Page . . . . . . . . . . . . Outside Cover Page of Prospectus

2. Synopsis . . . . . . . . . . . . . Investors for Whom the Fund is
Designed

3. Condensed Financial
Information . . . . . . . . . . Not applicable

4. General Description of
Registrant . . . . . . . . . . . Organization; Master-Feeder
Structure; Investment Objective
and Policies; Additional
Investment Information and Risk
Factors; Investment Restrictions

5. Management of the Fund . . . . . . Management; Shareholder Services;
Expenses

5A.Management's Discussion of
Fund . . . . . . . . . . . . . . Not applicable

6. Capital Stock and
Other Securities . . . . . . . . Dividends and Distributions; Net
Asset Value; Organization; Taxes;
Master-Feeder Structure

7. Purchase of Securities
Being Offered . . . . . . . . . Purchase of Shares; Net Asset
Value

8. Redemption or Repurchase . . . . . Redemption of Shares; Net Asset
Value

9. Pending Legal Proceedings . . . . Not applicable

PART B
FORM N-1A CAPTION IN STATEMENT
ITEM NUMBER OF ADDITIONAL INFORMATION

10. Cover Page . . . . . . . . . . . Outside Front Cover Page

11. Table of Contents . . . . . . . . Table of Contents

12. General Information and
History . . . . . . . . . . . . Not applicable

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13. Investment Objectives and
Policies . . . . . . . . . . . Investment Objectives and
Policies; Investment
Restrictions; Portfolio
Transactions

14. Management of the Fund . . . . . Directors and Trustees

15. Control Persons and Principal
Holders of Securities . . . . . Organization

16. Investment Advisory and
Other Services . . . . . . . . Investment Advisor; Sub-
Administrator; Distributor;
Custodian; Shareholder Services;
Independent Accountants; Expenses

17. Brokerage Allocation and
Other Practices . . . . . . . . Portfolio Transactions

18. Capital Stock and Other
Securities . . . . . . . . . . General; Organization

19. Purchase, Redemption and
Pricing of Securities
Being Offered . . . . . . . . . Purchase of Shares; Redemption of
Shares; Exchange of Shares;
Dividends and Distributions; Net
Asset Value

20. Tax Status . . . . . . . . . . . Taxes

21. Underwriters . . . . . . . . . . Distributor; Purchase of Shares;
Net Asset Value

22. Calculation of Performance
Data . . . . . . . . . . . . . Not applicable

23. Financial Statements . . . . . . Financial Statements

PART C

Information required to be included in Part C is set forth under the
appropriate item heading.<PAGE>
<PAGE> 1
Subject to Completion Dated November 17, 1995

PROSPECTUS

The UBS Tax Exempt Bond Fund
6 St. James Avenue
Boston, Massachusetts 02116
For information call (800) [________]

The UBS Tax Exempt Bond Fund (the "Fund") seeks to provide a high level of
current income exempt from federal income tax consistent with moderate risk
of capital and maintenance of liquidity. It is designed for investors who
seek tax exempt yields greater than those generally available from a
portfolio of short-term tax exempt obligations and who are willing to incur
the greater price fluctuation of intermediate-term instruments.

The Fund is a diversified no-load mutual fund for which there are no sales
charges or exchange or redemption fees. The Fund is one of several series
of UBS Private Investor Funds, Inc. (the "Company"), an open-end management
investment company organized as a corporation under Maryland law.

The Fund is advised by the New York Branch (the "Branch" or the "Advisor")
of Union Bank of Switzerland (the "Bank").

This Prospectus sets forth concisely the information about the Fund that a
prospective investor ought to know before investing. It should be read and
retained for future reference. A Statement of Additional Information, dated
[_________], 1996, provides further discussion of certain topics referred
to in this Prospectus and other matters that may be of interest to
investors. The Statement of Additional Information has been filed with the
Securities and Exchange Commission and is incorporated herein by reference
and is available without charge upon written request from the Company or
the Distributor (as defined herein) at the addresses set forth in the back
cover of the Prospectus or by calling (800) [_________].

Investments in the Fund are not deposits with or obligations of, or
guaranteed or endorsed by, Union Bank of Switzerland or any other bank.
Shares of the Fund are not insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other governmental agency.
An investment in the Fund is subject to risks that may cause the value of
the investment to fluctuate. When the investment is redeemed, the value may
be higher or lower than the amount originally invested by the investor.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.

Prospectus Dated [_________], 1996.

<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.

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<PAGE> 1

The UBS Tax Exempt Bond Fund

INVESTORS FOR WHOM THE FUND IS DESIGNED

The UBS Tax Exempt Bond Fund (the "Fund") is designed for investors seeking
a higher level of current income that is exempt from federal income tax
from a portfolio of tax exempt securities than that available from a
portfolio of short-term tax exempt obligations and who are willing to incur
the greater price fluctuation of intermediate-term instruments. The Fund
seeks to achieve its investment objective by investing primarily in
municipal securities that earn interest exempt from federal income tax in
the opinion of the issuer's bond counsel. See "Investment Objective and
Policies".

The minimum initial investment in the Fund is $25,000, except that the
minimum initial investment is $10,000 for shareholders of another series of
UBS Private Investor Funds, Inc. (the "Company"). The minimum subsequent
investment for all investors is $5,000. These minimums may be waived for
certain accounts. See "Purchase of Shares". If shareholders reduce their
total investment in shares of the Fund to less than $10,000, their
investment will be subject to mandatory redemption. See "Redemption of
Shares--Mandatory Redemption". The Fund is one of several series of the
Company, an open-end management investment company organized as a Maryland
corporation.

This Prospectus describes the Fund's investment objective and policies,
management and operations to enable investors to decide if the Fund suits
their investment needs.

The following table illustrates that Fund investors incur no shareholder
transaction expenses: their investment in the Fund is subject only to the
operating expenses set forth below as a percentage of the Fund's average
daily net assets. Fund expenses are discussed below under Management,
Expenses and Shareholder Services.

Shareholder Transaction Expenses

Sales Load Imposed on Purchases . . . . . . . . . . . . . . . . None
Sales Load Imposed on Reinvested Dividends . . . . . . . . . . None

Deferred Sales Load . . . . . . . . . . . . . . . . . . . . . . None
Redemption Fees . . . . . . . . . . . . . . . . . . . . . . . . None
Exchange Fees . . . . . . . . . . . . . . . . . . . . . . . . . None

Expense Table
Annual Operating Expenses*
Advisory Fees, After Fee Waivers** . . . . . . . . . . . . . . 0.00%

Rule 12b-1 Fees . . . . . . . . . . . . . . . . . . . . . . . . None
Other Expenses, After Expense Reimbursements*** . . . . . . . . 0.80%
Total Operating Expenses, After Fee Waivers and Expense
Reimbursements** . . . . . . . . . . . . . . . . . . . . . . . 0.80%

* Expenses are expressed as a percentage of the Fund's projected average
daily net assets and are based on estimates of the expenses to be incurred
during the current fiscal year, after any applicable fee waivers and
expense reimbursements. Without such fee waivers and expense
reimbursements, Total Operating Expenses would be equal to, on an annual
basis, 2.74% of the Fund's average daily net assets. See "Management".

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** The New York Branch (the "Branch" or the "Advisor") of Union Bank of
Switzerland (the "Bank") has agreed to waive its advisory fees and
reimburse the Fund for any of its operating expenses to the extent that the
Fund's total operating expenses exceed, on an annual basis, 0.80% of the
Fund's average daily net assets. The Advisor may modify or discontinue
this fee waiver and expense limitation at any time in the future with
thirty days' notice to the Fund. See "Expenses."

*** The fees and expenses in Other Expenses, After Expense Reimbursements
include fees payable to Signature Financial Group, Inc. ("Signature") under
the Administration Agreement, fees payable to Investors Bank and Trust
Company (the "Custodian") as custodian and fees payable to the Branch under
the Shareholder Servicing Agreement. For a more detailed description of
contractual fee arrangements, including expense reimbursements, and of the
fees and expenses included in Other Expenses, see "Management" and
"Shareholder Services."

Example

An investor would pay the following expenses on a $1,000 investment,
assuming a 5% annual return and a redemption at the end of each time
period:

1 Year . . . . . . . . . . . . . . . . . . . . . . . . . . . $8

3 Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . $26

The above Expense Table is designed to assist investors in understanding
the various direct and indirect costs and expenses that Fund investors are
expected to bear. In connection with the above Example, please note that
$1,000 is less than the Fund's minimum investment requirement and that
there are no redemption or exchange fees of any kind. See "Purchase of
Shares" and "Redemption of Shares". The Example is hypothetical; it is
included solely for illustrative purposes, and assumes the continuation of
the fee waivers and expense reimbursements represented in the above
"Expense Table". It should not be considered a representation of future
performance; actual expenses may be more or less than those shown.

INVESTMENT OBJECTIVE AND POLICIES

The Fund's investment objective and policies are described below.
Additional information about the Fund's investment policies appears in the
Statement of Additional Information (the "SAI") under Investment Objectives
and Policies. There can be no assurance that the Fund's investment
objective will be achieved. The Fund's investment objective is to provide a
high level of current income exempt from federal income tax consistent with
moderate risk of capital and maintenance of liquidity. See "Taxes".

The Fund attempts to achieve its investment objective by investing
primarily in municipal securities that pay interest that is, in the opinion
of bond counsel for the issuer, exempt from federal income tax. As a
fundamental policy, during normal market conditions, the Fund will invest
at least 80% of its net assets in obligations exempt from federal income
taxation. Interest on these securities may be subject to state and local
taxes. For more detailed information regarding tax matters, including the
applicability of the alternative minimum tax, see "Taxes". The remainder of
the Fund's portfolio may be invested in U.S. dollar-denominated debt
securities of foreign and domestic issuers.

The Advisor anticipates that the duration (as defined below) of the Fund's
portfolio will usually be between 1 and 7 years. In view of the Fund's
durations, under normal market conditions, the Fund's yield can be expected
to be higher and its net asset value less stable than those of a money
market fund. Duration is a measure of the weighted average maturity of the
bonds held in the portfolio and can be used to measure the portfolio's
sensitivity to changes in interest rates. The maturities of the individual
securities in the Fund's portfolio may vary widely from its durations,
however, and may be as long as thirty years. The Advisor will select long-
term or short-term securities for the Fund depending on several factors,
including whether the Advisor believes interest rates will rise or fall in
the future.

The Fund intends to manage its portfolio actively in pursuit of its
investment objective. Portfolio transactions are undertaken principally to
accomplish the Fund's objective in relation to expected movements in the
general level of interest rates, but the Fund may also engage in short-term
trading consistent with its objective. To the extent the Fund engages in
short-term trading, it may incur increased transaction and tax costs. See
"Taxes" below. The portfolio turnover rate for the Fund is expected to be
under 100%. See "Portfolio Transactions" in the SAI.

The value of the Fund's investments will generally fluctuate inversely with
changes in prevailing interest rates. The value of the Fund's investments
will also be affected by changes in the creditworthiness of issuers and
other market factors. The quality criteria applied in selecting portfolio
securities are intended to minimize adverse price changes due to credit
considerations. The value of the Fund's municipal securities can also be
affected by market reaction to legislative consideration of various tax
reform proposals. Although the net asset value of the Fund fluctuates, the
Fund attempts to preserve the value of its investments to the extent
consistent with its objective.

Municipal Bonds. The Fund may invest in bonds issued by or on behalf of
states, territories and possessions of the United States and the District
of Columbia and their political subdivisions, agencies, authorities and
instrumentalities. These obligations may be general obligation bonds
secured by the issuer's pledge of its full faith, credit and taxing power
for the payment of principal and interest, or they may be revenue

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bonds payable from specific revenue sources, but not generally backed by
the issuer's taxing power. These include industrial development bonds where
payment is the responsibility of the private industrial user of the
facility financed by the bonds. The Fund may invest more than 25% of its
assets in industrial development bonds, but may not invest more than 25% of
its assets in industrial development bonds in projects of similar type or
in the same state.

Municipal Notes. The Fund may also invest in municipal notes of various
types, including notes issued in anticipation of receipt of taxes, the
proceeds of the sale of bonds, other revenues or grant proceeds, as well as
municipal commercial paper and municipal demand obligations such as
variable rate demand notes and master demand obligations. The interest rate
on variable rate demand notes is adjustable at periodic intervals as
specified in the notes. Master demand obligations permit the investment of
fluctuating amounts at periodically adjusted interest rates. They are
governed by agreements between the municipal issuer and the Advisor acting
as agent, for no additional fee, in its capacity as the Fund's Advisor and
as fiduciary for other clients. Although master demand obligations are not
marketable to third parties, the Fund considers them to be liquid because
they are payable on demand. For more information about municipal notes, see
"Investment Objectives and Policies" in the SAI.

Taxable Bonds. The Fund intends to invest its assets principally in tax
exempt securities. However, it may invest up to 20% of its net assets in a
broad range of U.S. dollar denominated debt securities of domestic and
foreign issuers, the interest income from which may be subject to federal,
state and local income taxes. These include debt securities of various
types and maturities, e.g., debentures, notes, mortgage securities,
equipment trust certificates and other collateralized securities,
securities of the United States government and zero coupon securities.
Collateralized securities are backed by a pool of assets such as loans or
receivables that generate cash flow to cover the payments due on the
securities. Collateralized securities are subject to certain risks,
including a decline in the value of the collateral backing the security,
failure of the collateral to generate the anticipated cash flow or in
certain cases more rapid prepayment because of events affecting the
collateral, such as accelerated prepayment of mortgages or other loans
backing these securities or destruction of equipment subject to equipment
trust certificates. In the event of any such prepayment, the Fund will be
required to reinvest the proceeds of prepayments at interest rates
prevailing at the time of reinvestment, which may be lower. In addition,
the value of zero coupon securities, which do not pay interest, is more
volatile than that of interest bearing debt securities with the same
maturity. The Fund does not expect to invest more than 5% of its assets in
securities of foreign issuers. See "Additional Investment Information and
Risk Factors" for further information on foreign investments and
convertible securities. The Portfolio may purchase nonpublicly offered debt
securities. See "Illiquid Investments; Privately Placed and Other
Unregistered Securities."

The Fund may invest in money market instruments that meet the quality
requirements described below, except that short-term municipal obligations
of New York State issuers may be rated MIG-2 by Moody's Investors Service
Inc. ("Moody's") or SP-2 by Standard & Poor's Corporation ("Standard &
Poor's"). Under normal circumstances, the Fund will purchase these
securities to invest temporary cash balances or to maintain liquidity to
meet withdrawals. However, the Fund may also invest in money market
instruments, without limit, as a temporary defensive measure taken during,
or in anticipation of, adverse market conditions.

Quality Information. The Fund will not purchase any municipal obligation
unless it is rated at least Aaa, Aa, A, Baa, MIG-1 or Prime-1 by Moody's or
AAA, AA, A, BBB, SP-1 or A1 by Standard & Poor's (except for short-term
obligations of New York State issuers as described above) or, if it is
unrated, in the Advisor's opinion it is of comparable quality. It is the
Fund's current policy that its non-municipal debt securities will be rated
at least Baa or BBB by Moody's or Standard & Poor's, respectively. These
standards must be satisfied at the time an investment is made. If the
quality of the investment later declines, the Fund may continue to hold the
investment. Securities rated Baa by Moody's or BBB by Standard & Poor's are
considered investment grade, but have some speculative characteristics.

ADDITIONAL INVESTMENT INFORMATION AND RISK FACTORS

The Fund may purchase municipal obligations together with puts, municipal
obligations on a when-issued or delayed delivery basis, enter into
repurchase and reverse repurchase agreements, purchase synthetic variable
rate instruments, loan its portfolio securities and purchase certain
privately placed securities and enter into certain hedging transactions
that may involve options on securities and securities indices, futures
contracts and options on futures contracts and currency options.

When-Issued and Delayed Delivery Securities. The Fund may purchase
securities on a when-issued or delayed delivery basis. Delivery of and
payment for these securities may take as long as a month or more after the
date of the purchase commitment. The value of these securities is subject
to market fluctuation during this period and no interest or income accrues
to the Fund until settlement. At the time of settlement a when-issued
security may be valued at less than its purchase price. Between the trade
and settlement dates, the Fund will maintain a segregated account with the
Custodian consisting of a portfolio of securities with a value at least
equal to these commitments. When entering into a when-issued or delayed
delivery transaction,

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<PAGE> 4

the Fund will rely on the other party to consummate the transaction; if the
other party fails to do so, the Fund may be disadvantaged. It is the Fund's
current policy not to enter into when-issued commitments exceeding in the
aggregate 15% of the market value of the Fund's total assets less
liabilities (excluding the obligations created by these commitments).

Repurchase Agreements. The Fund may engage in repurchase agreement
transactions with brokers, dealers or banks that meet the credit guidelines
established by the Company's Board of Directors (the "Directors" or the
"Board"). In a repurchase agreement, the Fund buys a security from a seller
that has agreed to repurchase it at a mutually agreed upon date and price,
reflecting the interest rate effective for the term of the agreement. The
term of these agreements is usually from overnight to one week. A
repurchase agreement may be viewed as a fully collateralized loan of money
by the Fund to the seller. The Fund always receives securities with a
market value at least equal to the purchase price plus accrued interest as
collateral and this value is maintained during the term of the agreement.
If the seller defaults and the collateral's value declines, the Fund might
incur a loss. If bankruptcy proceedings are commenced with respect to the
seller, the Fund's realization upon the disposition of collateral may be
delayed or limited. Investments in repurchase agreements maturing in more
than seven days and certain other investments that may be considered
illiquid are subject to certain limitations. See "Illiquid Investments;
Privately Placed and Other Unregistered Securities" below.

Reverse Repurchase Agreements. The Fund is permitted to enter into reverse
repurchase agreements. In a reverse repurchase agreement, the Fund sells a
security and agrees to repurchase it at a mutually agreed upon date and
price, reflecting the interest rate effective for the term of the
agreement. It may also be viewed as the borrowing of money by the Fund and,
therefore, is a form of leverage. Leverage may cause the Fund's gains or
losses, if any, to be magnified. For more information, including
limitations on the use of reverse repurchase agreements, see "Investment
Objectives and Policies" in the SAI.

Securities Lending. Subject to applicable investment restrictions, the Fund
may lend its securities. The Fund may lend its securities if such loans are
secured continuously by cash or equivalent collateral or by a letter of
credit in favor of the Fund at least equal at all times to 100% of the
market value of the securities loaned, plus accrued interest. While such
securities are on loan, the borrower will pay the Fund any income accruing
thereon. Loans will be subject to termination by the Fund in the normal
settlement time, generally three business days after notice, or by the
borrower on one day's notice. Borrowed securities must be returned when the
loan is terminated. Any gain or loss in the market price of the borrowed
securities that occurs during the term of the loan inures to the Fund. The
Fund may pay reasonable finders' and custodial fees in connection with a
loan. In addition, the Fund will consider all the facts and circumstances,
including the creditworthiness of the borrowing financial institution, and
the Fund will not make any loans in excess of one year. The Fund will not
lend its securities to any officer, Director, employee or affiliate or
placement agent of the Fund, or the Advisor, Administrator or Distributor,
unless otherwise permitted by applicable law.

Taxable Investments. The Fund attempts primarily to invest its assets in
tax exempt municipal securities; however, the Fund is permitted to invest
up to 20% of the value of its net assets in securities the interest income
on which may be subject to federal, state or local income taxes. The Fund
may make taxable investments pending the investment of proceeds from
earlier sales of its portfolio securities or when--in the opinion of the
Advisor--adverse market conditions exist. In abnormal market conditions,
if, in the judgment of the Advisor tax exempt securities satisfying the
Fund's investment objective may not be purchased, the Fund may, for
defensive purposes only, temporarily invest more than 20% of its net assets
in taxable investments. The taxable investments permitted for the Fund
include obligations of the U.S. Government and its agencies and
instrumentalities, bank obligations, commercial paper, the debt securities
of domestic and foreign issuers and repurchase agreements and other debt
securities that meet the Fund's quality requirements. See "Taxes".

Puts. The Fund may purchase, without limit, municipal bonds or notes
together with the right to resell them at an agreed price or yield within a
specified period prior to maturity. This right to resell is known as a put.
The aggregate price paid for securities with puts may be higher than the
price which otherwise would be paid. Consistent with the Fund's investment
objective and subject to the supervision of the Directors, the purpose of
this practice is to permit the Fund to be fully invested in tax exempt
securities while maintaining the necessary liquidity to purchase securities
on a when-issued basis, to meet unusually large withdrawals, to purchase at
a later date securities other than those subject to the put and to
facilitate the Advisor's ability to manage the portfolio actively. The
principal risk of puts is that the put writer may default on its obligation
to repurchase. The Advisor will monitor each writer's ability to meet its
obligations under puts.

The Fund uses the amortized cost method to value all municipal securities
with maturities of less than 60 days; when these securities are subject to
puts separate from the underlying securities, no value is assigned to the
puts. The cost of any such put is carried as an unrealized loss from the
time of purchase until it is exercised or expires. See "Investment
Objectives and Policies" in the SAI for the valuation

<PAGE>
<PAGE> 5

procedure if the Fund were to invest in municipal securities with
maturities of 60 days or more that are subject to separate puts.

Synthetic Variable Rate Instruments. The Fund may invest in certain
synthetic variable rate instruments. Such instruments generally involve the
deposit of a long-term tax exempt bond in a custody or trust arrangement
and the creation of a mechanism to adjust the long-term interest rate on
the bond to a variable short-term rate and a right (subject to certain
conditions) on the part of the purchaser to tender it periodically to a
third party at par. The Advisor will review the structure of synthetic
variable rate instruments to identify credit and liquidity risks (including
the conditions under which the right to tender the instrument would no
longer be available) and will monitor those risks. In the event that the
right to tender the instrument is no longer available, the risk to the Fund
will be that of holding the long-term bond.

Illiquid Investments; Privately Placed and Other Unregistered Securities.
The Fund may not acquire any illiquid securities if, as a result thereof,
more than 15% of the market value of the Fund's net assets would be in
illiquid investments. Subject to that non-fundamental policy limitation,
the Fund may acquire investments that are illiquid or have limited
liquidity, such as private placements or investments that are not
registered under the Securities Act of 1933, as amended (the "Securities
Act"), and cannot be offered for public sale in the United States without
first being registered. An illiquid investment is any investment that
cannot be disposed of within seven days in the normal course of business at
approximately the amount at which it is valued by the Fund. Repurchase
agreements maturing in more than seven days are considered illiquid and, as
such, are subject to the limitations set forth in this paragraph. The price
the Fund pays for illiquid securities or receives upon resale may be lower
than the price paid or received for similar securities with a more liquid
market. Accordingly, the valuation of these securities will reflect any
limitations on their liquidity.

The Fund may also purchase Rule 144A securities sold to institutional
investors without registration under the Securities Act. These securities
may be determined to be liquid in accordance with guidelines established by
the Advisor and approved by the Board. The Board will monitor the Advisor's
implementation of these guidelines on a periodic basis.

Futures and Options Transactions. The Fund is permitted to enter into the
futures and options transactions described below for hedging purposes.

The Fund may purchase exchange traded and over-the-counter ("OTC") put and
call options on fixed income securities or indices of fixed income
securities, purchase and sell futures contracts on indices of fixed income
securities, and purchase put and call options on futures contracts on
indices of fixed income securities. The Fund may use these techniques for
hedging purposes, but not for speculation.

The Fund may use these techniques to manage its exposure to changing
interest rates and/or security prices. Some options and futures strategies,
including selling futures contracts and buying puts, tend to hedge the
Fund's investments against price fluctuations. Other strategies, including
buying futures contracts, writing puts and calls, and buying calls, tend to
increase market exposure. Options and futures contracts may be combined
with each other or with forward contracts in order to adjust the risk and
return characteristics of the Fund's overall strategy in a manner deemed
appropriate to the Advisor and consistent with the Fund's objective and
policies. Because combined options positions involve multiple trades, they
result in higher transaction costs and may be more difficult to open and
close out.

The Fund's use of these transactions is a highly specialized activity,
which involves investment strategies and risks different from those
associated with ordinary portfolio securities transactions, and there can
be no guarantee that their use will increase the Fund's return. While the
Fund's use of these instruments may reduce certain risks associated with
owning its portfolio securities, these techniques themselves entail certain
other risks. If the Advisor applies a strategy at an inappropriate time or
judges market conditions or trends incorrectly, such strategies may lower
the Fund's return. Certain strategies limit the Fund's opportunity to
realize gains as well as limiting its exposure to losses. The Fund could
experience losses if the prices of its options and futures positions were
poorly correlated with its other investments, or if it could not close out
its positions because of an illiquid secondary market. In addition, the
Fund will incur transaction costs, including trading commissions and option
premiums, in connection with these transactions and these transactions
could significantly increase the Fund's turnover rate.

The Fund may purchase put and call options on securities, indices of
securities and futures contracts, or purchase and sell futures contracts,
only if such options are written by other persons and if (i) the aggregate
premiums paid on all such options that are held at any time do not exceed
20% of the Fund's net assets and (ii) the aggregate margin deposits
required on all such futures or options thereon held at any time do not
exceed 5% of the Fund's net assets.

<PAGE>
<PAGE> 6

OPTIONS

Purchasing Put and Call Options. By purchasing a put option, the Fund
obtains the right (but not the obligation) to sell the instrument
underlying the option at a fixed strike price. In return for this right,
the Fund pays the current market price for the option (known as the option
premium). Options have various types of underlying instruments, including
specific securities, currencies, indices of securities, indices of
securities prices and futures contracts. The Fund may terminate its
position in a put option it has purchased by allowing it to expire or by
exercising the option. The Fund may also close out a put option position by
entering into an offsetting transaction, if a liquid market exists. If the
option is allowed to expire, the Fund will lose the entire premium it paid.
If the Fund exercises a put option on a security, it will sell the
instrument underlying the option at the strike price. If the Fund exercises
an option on an index, settlement is in cash and does not involve the
actual sale of securities. American style options may be exercised on any
day up to their expiration date. European style options may be exercised
only on their expiration date.

The buyer of a typical put option can expect to realize a gain if the price
of the underlying instrument falls substantially. However, if the price of
the instrument underlying the option does not fall enough to offset the
cost of purchasing the option, a put buyer can expect to suffer a loss
(limited to the amount of the premium paid plus related transaction costs).

The features of call options are essentially the same as those of put
options, except that the purchaser of a call option obtains the right to
purchase, rather than sell, the instrument underlying the option at the
option's strike price. A call buyer typically attempts to participate in
potential price increases of the instrument underlying the option with risk
limited to the cost of the option if security prices fall. At the same
time, the buyer can expect to suffer a loss if security prices do not rise
sufficiently to offset the cost of the option.

Selling (Writing) Put and Call Options. When the Fund writes a put option,
it takes the opposite side of the transaction from the option's purchaser.
In return for receipt of the premium, the Fund assumes the obligation to
pay the strike price for the instrument underlying the option if the other
party to the option chooses to exercise it. The Fund may seek to terminate
its position in a put option it writes before exercise by purchasing an
offsetting option in the market at its current price. If the market is not
liquid for a put option the Fund has written, however, the Fund must
continue to be prepared to pay the strike price while the option is
outstanding, regardless of price changes, and must continue to post margin
as discussed below.

If the price of the underlying instrument rises, a put writer would
generally expect to profit, although its gain would be limited to the
amount of the premium it received. If security prices remain the same over
time, it is likely that the writer will also profit, because it should be
able to close out the option at a lower price. If security prices fall,
however, the put writer would expect to suffer a loss. This loss should be
less than the loss from purchasing and holding the underlying instrument
directly, however, because the premium received for writing the option
should offset a portion of the decline.

Writing a call option obligates the Fund to sell or deliver the option's
underlying instrument in return for the strike price upon exercise of the
option. The characteristics of writing call options are similar to those of
writing put options, except that writing calls generally is a profitable
strategy if prices remain the same or fall. Through receipt of the option
premium a call writer offsets part of the effect of a price decrease. At
the same time, because a call writer must be prepared to deliver the
underlying instrument in return for the strike price, even if its current
value is greater, a call writer gives up some ability to participate in
security price increases.

The writer of an exchange traded put or call option on a security, an index
of securities or a futures contract is required to deposit cash or
securities or a letter of credit as margin and to make mark-to-market
payments of variation margin if and as the position becomes unprofitable.

Options on Indices. The Fund is permitted to enter into options
transactions and may purchase put and call options on any securities index
based on securities in which the Fund may invest. Options on securities
indices are similar to options on securities, except that the exercise of
securities index options is settled by cash payment and does not involve
the actual purchase or sale of securities. In addition, these options are
designed to reflect price fluctuations in a group of securities or segment
of the securities market rather than price fluctuations in a single
security. The Fund, in purchasing or selling index options, is subject to
the risk that the value of its portfolio securities may not change as much
as an index because the Fund's investments generally will not match the
composition of an index.

For a number of reasons, a liquid market may not exist and thus the Fund
may not be able to close out an option position that it has previously
entered into. When the Fund purchases an OTC option, it will be relying on
its counterparty to perform its obligations, and the Fund may incur
additional losses if the counterparty is unable to perform.

<PAGE>
<PAGE> 7

FUTURES CONTRACTS

When the Fund purchases a futures contract, it agrees to purchase a
specified quantity of an underlying instrument at a specified future date
and price or to make or receive a cash payment based on the value of a
securities index. When the Fund sells a futures contract, it agrees to sell
a specified quantity of the underlying instrument at a specified future
date and price or to receive or make a cash payment based on the value of a
securities index. The price at which the purchase and sale will take place
is fixed when the Fund enters into the contract. Futures can be held until
their delivery dates or the positions can be (and normally are) closed out
before then. There is no assurance, however, that a liquid market will
exist when a Fund wishes to close out a particular position.

When the Fund purchases a futures contract, the value of the futures
contract tends to increase and decrease in tandem with the value of its
underlying instrument. Therefore, purchasing futures contracts will tend to
increase the Fund's exposure to positive and negative price fluctuations in
the underlying instrument, much as if it had purchased the underlying
instrument directly. When the Fund sells a futures contract, by contrast,
the value of its futures position will tend to move in a direction contrary
to the value of the underlying instrument. Selling futures contracts on
securities similar to those held by the Fund, therefore, will tend to
offset both positive and negative market price changes, much as if the
underlying instrument had been sold. Because there are a limited number of
types of exchange-traded options and futures contracts, it is likely that
these standardized instruments will not exactly match the Fund's current or
anticipated investments. The Fund may invest in futures contracts and
options thereon based on securities with different issuers, maturities, or
other characteristics from the securities in which it typically invests,
which involves a risk that the options or futures position will not track
the performance of the Fund's other investments.

The purchaser or seller of a futures contract is not required to deliver or
pay for the underlying instrument unless the contract is held until the
delivery date. However, when the Fund buys or sells a futures contract it
will be required to deposit "initial margin" with the Custodian in a
segregated account in the name of its futures broker, known as a futures
commission merchant ("FCM"). Initial margin deposits are typically equal to
a small percentage of the contract's value. If the value of either party's
position declines, that party will be required to make additional
"variation margin" payments equal to the change in value on a daily basis.
The party that has a gain may be entitled to receive all or a portion of
this amount. The Fund may be obligated to make payments of variation margin
at a time when it is disadvantageous to do so. Furthermore, it may not
always be possible for the Fund to close out its futures positions. Until
it closes out a futures position, the Fund will be obligated to continue to
pay variation margin. Initial and variation margin payments do not
constitute purchasing on margin for purposes of the Fund's investment
restrictions. In the event of the bankruptcy of an FCM that holds margin on
behalf of the Fund, the Fund may be entitled to return of margin owed to it
only in proportion to the amount received by the FCM's other customers,
potentially resulting in losses to the Fund.

The Fund will segregate liquid, high grade assets in connection with its
use of options and futures contracts to the extent required by the SEC.
Securities held in a segregated account cannot be sold while the futures
contract or option is outstanding, unless they are replaced with other
suitable assets. As a result, there is a possibility that the segregation
of a large percentage of the Fund's assets could impede portfolio
management or the Fund's ability to meet redemption requests or other
current obligations.

For further information about the Fund's use of futures and options and a
more detailed discussion of associated risks, see "Investment Objectives
and Policies" in the SAI.

INVESTMENT RESTRICTIONS

The Fund's investment objective, together with the investment restrictions
described below and in the SAI, except as noted, are deemed fundamental
policies, i.e., they may be changed only with the approval of the holders
of a majority of the Fund's outstanding voting securities (as defined in
the Investment Company Act of 1940, as amended (the "1940 Act")).

As a diversified investment company, 75% of the Fund's total assets are
subject to the following fundamental limitation: the Fund may not invest
more than 5% of its total assets in the securities of any one issuer,
except U.S. Government securities. See "Investment Objectives and
Policies--Quality and Diversification Requirements" in the SAI.

The Fund may not (i) enter into reverse repurchase agreements or other
permitted borrowings that constitute senior securities under the 1940 Act,
exceeding in the aggregate 10% of the value of the Fund's total assets,
(ii) borrow money, except from banks for extraordinary or emergency
purposes, mortgage, pledge or hypothecate any assets except in connection
with any such borrowings in amounts up to 10% of the value of the Fund's
total assets at the time of such borrowing or purchase securities while
borrowings and other

<PAGE>
<PAGE> 8

senior securities exceed 5% of its total assets; or (iii) acquire
industrial revenue bonds if as a result more than 5% of Fund's total assets
would be invested in industrial revenue bonds where payment of principal
and interest is the responsibility of companies with fewer than three years
of operating history (including predecessor companies).

For a more detailed discussion of the above investment restrictions, as
well as a description of certain other investment restrictions, see
"Investment Restrictions" in the SAI.

MANAGEMENT

Directors. The Board establishes the general policies of the Company, is
responsible for the overall management of the Company and reviews the
performance of the Fund's Advisor, Administrator, Custodian, Distributor,
Shareholder Servicing Agent and other service providers. Additional
information about the Company's Board of Directors and officers appears in
the SAI under the heading "Directors".

Advisor. The Fund has retained the services of the Branch as investment
advisor. The Branch, which operates out of offices located at 299 Park
Avenue, New York, New York, is licensed by the Superintendent of Banks of
the State of New York under the banking laws of the state of New York and
is subject to banking laws and regulations applicable to a foreign bank
that operates a New York branch.

The Bank has branches, agencies, representative offices and subsidiaries in
Switzerland and in more than 40 cities outside Switzerland, including, in
the United States, New York City, Chicago, Houston, Los Angeles and San
Francisco. In addition to the receipt of deposits and the making of loans
and advances, the Bank through its offices and subsidiaries, engages in a
wide range of banking and financial activities typical of the world's major
international banks, including fiduciary, investment advisory and custodial
services and foreign exchange in the United States, Swiss, Asian and Euro-
capital markets. The Bank is one of the world's leading asset managers.

Active in North America since 1946, the Bank employs a staff of over 2,000
in its branches, agencies, representative offices and subsidiaries in North
America. Private banking services in the United States are provided
primarily through the Branch, as well as through offices in Los Angeles.
In addition, UBS Asset Management (New York) Inc., an indirect wholly-owned
subsidiary of the Bank with assets under management totaling $33.9 billion
as of December 31, 1994, offers primarily U.S. dollar-based asset
management services to institutions (including pension and other employee
benefit trusts), individuals, corporations and other entities in the areas
of equities, fixed income, real estate, oil and gas and timber investments.

At June 30, 1995, the Bank (including its consolidated subsidiaries) had
total assets of $307.4 billion (unaudited) and equity capital and reserves
of $19.7 billion (unaudited). (The Bank's financial statements are
denominated in Swiss francs. The exchange rate at June 30, 1995 was Sfr.
1.148 to one U.S. dollar.)

The Advisor provides investment advice, portfolio management and certain
administrative services to the Fund. Subject to the supervision of the
Directors, the Advisor makes the Fund's day-to-day investment decisions,
arranges for the execution of portfolio transactions and generally manages
the Fund's investments and operations. See "Investment Advisor" in the SAI.

Ronald W. Fleming is primarily responsible for the day-to-day management
and implementation of the Advisor's process for the Fund. Mr. Fleming is a
Vice President of the Advisor and is responsible for asset allocation and
security selection for other domestic fixed income portfolios, including
several tax exempt portfolios. Mr. Fleming holds an undergraduate degree
from Kent State University and has done post graduate work at the Wharton
School and has 19 years of investment experience.

In addition to the above-listed investment advisory services, the Advisor
also provides the Fund with certain administrative services. Subject to the
supervision of the Board, the Advisor is responsible for: establishing
performance standards for the Fund's third-party service providers and
overseeing and evaluating the performance of such entities; providing and
presenting quarterly management reports to the Directors; supervising the
preparation of reports for Fund shareholders; establishing voluntary
expense limitations for the Fund and providing any resultant expense
reimbursement to the Fund; monitoring the Fund's compliance with all
federal and state securities and other regulatory requirements; and
monitoring the Fund's compliance with federal tax laws and regulations,
including the Fund's status as a "regulated investment company" under the
Internal Revenue Code of 1986, as amended (the "Code").

Under the Advisory Agreement, the Fund will pay the Advisor a fee,
calculated daily and payable monthly, at an annual rate of 0.45% of the
Fund's average net assets. The Advisor has voluntarily agreed to waive its
advisory fees and reimburse the Fund for any of its expenses to the extent
that the Fund's total operating expenses exceed, on an annual basis, 0.80%
of the Fund's average daily net assets. The Advisor may modify or
discontinue this fee waiver and expense limitation at any time in the
future with thirty days' notice to the Fund. See "Expenses".

<PAGE>
<PAGE> 9

Investments in the Fund are not deposits with or obligations of, or
guaranteed or endorsed by, the Branch or any other bank.

Administrator. Under the Administration Agreement with the Company,
Signature, an affiliate of the Distributor (defined below), serves as the
Fund's administrator. In this capacity, Signature administers all aspects
of the Fund's day-to-day operations, subject to the supervision of the
Advisor and the Board, except as set forth under "Advisor", "Distributor",
"Custodian" and "Shareholder Services". As administrator, Signature: (i)
furnishes general office facilities and ordinary clerical and related
services for day-to-day operations including recordkeeping
responsibilities; (ii) takes responsibility for compliance with all
applicable federal and state securities and other regulatory requirements;
(iii) is responsible for the registration of sufficient Fund shares under
federal and state securities laws; (iv) takes responsibility for monitoring
the Fund's status as a "regulated investment company" under the Code; and
(v) performs administrative and managerial oversight of the activities of
the Fund's custodian, transfer agent and other agents or independent
contractors.

Under the Administration Agreement, the Fund has agreed to pay Signature an
administrative fee, calculated daily and payable monthly, at an annual rate
of 0.10% of the Fund's first $100 million of average net assets, plus
0.075% of the Fund's next $100 million of average net assets, plus 0.05% of
the Fund's average net assets in excess of $200 million.

Distributor. Under the Distribution Agreement, Signature Broker-Dealer
Services, Inc. (the "Distributor"), located at 6 St. James Avenue, Boston,
MA 02116, serves as the distributor of Fund shares. The Distributor is a
wholly-owned direct subsidiary of Signature and is a registered broker-
dealer. The Distributor does not receive a fee pursuant to the terms of the
Distribution Agreement.

Custodian. Investors Bank and Trust Company ("IBT" or the "Transfer
Agent"), whose principal offices are located at 89 South Street, Boston,
Massachusetts 02111, serves as the Fund's custodian and transfer and
dividend disbursing agent. See "Custodian" in the SAI.

SHAREHOLDER SERVICES

The Company has entered into a Shareholder Servicing Agreement with the
Branch under which the private banking and investment services division
("INVS") of the Branch provides shareholder services to Fund shareholders
who are also clients of the Branch. These services include: establishing
and/or maintaining shareholder accounts and records; assisting investors
seeking to purchase or redeem Fund shares; providing performance
information relating to the Fund; and responding to shareholder inquiries.
The Company has agreed to pay INVS for these services at an annual rate of
0.25% of the average daily net assets of the shareholder accounts so
serviced. Under the terms of the Shareholder Servicing Agreement, INVS may
delegate one or more of its responsibilities to other entities at its
expense.

EXPENSES

In addition to the fees of the Advisor, Signature, the Shareholder
Servicing Agent and IBT, the Fund will be responsible for other expenses
including brokerage costs and litigation and extraordinary expenses. The
Advisor has agreed to waive fees and reimburse expenses as necessary, if,
in any fiscal year, the sum of the Fund's expenses exceeds the limits set
by applicable regulations of state securities commissions. Such annual
limits are currently 2.5% of the first $30 million of average net assets,
2% of the next $70 million of such net assets and 1.5% of such net assets
in excess of $100 million. The Advisor has also voluntarily agreed to limit
the total operating expenses of the Fund, excluding extraordinary expenses,
to an annual rate of 0.80% of the Fund's average daily net assets. The
Advisor may modify or discontinue this voluntary expense limitation at any
time in the future with thirty days' notice to the Fund.

The Fund may allocate brokerage transactions to its affiliates and the
Advisor's affiliates. Brokerage transactions may be allocated to these
affiliates only if the commissions received by such affiliates are fair and
reasonable when compared to the commissions paid to unaffiliated brokers in
connection with comparable transactions. See "Portfolio Transactions" in
the SAI.

PURCHASE OF SHARES

General Information on Purchases. Investors may purchase Fund shares only
through the Distributor. All purchase orders must be accepted by the
Distributor. The Company also reserves the right to determine the purchase
orders that it will accept and it reserves the right to cease offering its
shares at any time. The shares of the Fund may be purchased only in those
states where they may be lawfully sold.

The Fund's business days are the days the New York Stock Exchange is open.

<PAGE>
<PAGE> 10

The shares of the Fund are sold on a continuous basis without a sales
charge at the net asset value per share next determined after receipt and
acceptance of a purchase order by the Distributor. The Fund calculates its
net asset value at the close of business. See "Net Asset Value". The
minimum initial investment in the Fund is $25,000, except that the minimum
initial investment is $10,000 for shareholders of another series of the
Company. The minimum subsequent investment in the Fund for all investors is
$5,000. The minimum initial investment for employees of the Bank and its
affiliates is $5,000. The minimum subsequent investment is $1,000. These
minimum investment requirements may be waived for certain retirement plans
or accounts for the benefit of minors. For purposes of the minimum
investment requirements, the Fund may aggregate investments by related
shareholders. Investors will receive the number of full and fractional
shares of the Fund equal to the dollar amount of their subscription divided
by the net asset value per share of the Fund as next determined on the day
that the investors subscription is accepted. See "Purchase of Shares" in
the SAI.

Purchase orders in proper form received by the Distributor prior to 4:00
p.m. New York time or the close of regular trading on the New York Stock
Exchange (the "NYSE"), whichever is earlier, are effective and executed at
the net asset value next determined that day. Purchase orders received
after 4:00 p.m. New York time or the close of the NYSE, whichever is
earlier, will be executed at the net asset value determined on the next
business day. Investors become record shareholders of the Fund on the next
day ("day two") after they place their subscription order, provided the
Custodian receives payment for the shares on day two. As record
shareholders, investors are entitled to earn dividends.

Fund shares may be purchased in the following methods:

UBS Bank Clients: UBS Private Bank Clients should request an INVS
representative to assist them in placing a purchase order with the
Distributor.

Through the Distributor: Shareholders who do not currently maintain a
private banking relationship with the Bank may purchase shares of the Fund
directly from the Distributor by wire transfer or mail.

The Transfer Agent will maintain the accounts for all shareholders who
purchase Fund shares directly through the Distributor. For account balance
information and shareholder services, such shareholders should contact the
Transfer Agent at (800) [____________] or in writing at UBS Private
Investor Funds, Inc., c/o Investors Bank and Trust Company, P.O. Box 1537
MFD 23, Boston, MA 02205-1537.

By wire: Purchases may be made by federal funds wire. To place a purchase
order with the Fund, the shareholder must telephone the Transfer Agent at
(800) [_______________] for specific instructions.

Subject to the minimum purchase requirements discussed above, shares
purchased by federal funds wire will be effected at the net asset value per
share next determined after acceptance of the order.

A completed account application must promptly follow any wire order for an
initial purchase. No account application is required for subsequent
purchases. Completed account applications may be mailed or sent via
facsimile. Shareholders should contact the Transfer Agent for further
instructions regarding account applications.

By mail: Subject to the minimum purchase requirements discussed above,
shareholders may purchase shares of the Fund through the Distributor by
completing an account application and mailing it, together with a check
payable to "UBS Private Investor Funds, Inc.", to UBS Private Investor
Funds, Inc., c/o Investors Bank and Trust Company, P.O. Box 1537 MFD 23,
Boston, MA 02205-1537.

Account applications are not required for subsequent purchases, however,
the shareholder's account number must be clearly marked on the check to
ensure proper credit. Subsequent purchases may also be made by mailing a
check together with the detachable purchase order that accompanies
transaction confirmations.

Checks are subject to collection at full value. For shares purchased by
check, dividend payments and redemption proceeds, if any, will be delayed
until such funds are collected, which may take up to 15 days from the date
of purchase.

REDEMPTION OF SHARES

General Information on Redemptions. A shareholder may redeem all or any
number of the shares registered in its name at any time at the net asset
value next determined after a redemption request in proper form is received
by the Distributor. The Fund calculates its net asset value at the close of
business. See "Net Asset Value".

<PAGE>
<PAGE> 11

is effective and is executed at the net asset value next determined that
day. Redemption orders received after 4:00 p.m. New York time or the close
of regular trading on the NYSE, whichever is earlier, will be executed at
the net asset value determined on the next business day. Proceeds of an
effective redemption are generally deposited the next business day in
immediately available funds to the account designated by the redeeming
shareholder or mailed to the shareholder's address of record, in accordance
with the shareholder's instructions.

Shareholders will continue to earn dividends through the day of redemption.

Fund shares may be redeemed in the following methods:

UBS Bank Clients: Shareholders who are UBS Private Bank Clients should
request an INVS representative to assist them in placing a redemption order
with the Distributor.

Through the Distributor: Shareholders who are not Bank clients may redeem
Fund shares by telephone or mail.

By telephone: Telephone redemptions may be made by calling the Transfer
Agent at (800) [__________]. Redemption orders will be accepted until 4:00
p.m. New York time or the close of regular trading on the NYSE, whichever
is earlier. Telephone redemption requests are limited to those shareholders
who have previously elected this service. Such shareholders risk possible
loss of principal and interest in the event of a telephone redemption not
authorized by them. The Fund and the Transfer Agent will employ reasonable
procedures to verify that telephone redemption instructions are genuine and
will require that shareholders electing such an option provide a form of
personal identification. The failure by the Fund or the Transfer Agent to
employ such procedures may cause the Fund or the Transfer Agent to be
liable for any losses incurred by investors due to telephone redemptions
based upon unauthorized or fraudulent instructions. The telephone
redemption option may be modified or discontinued at any time upon 60 days
notice to shareholders.

By mail: Redemption requests may also be mailed to the Transfer Agent,
identifying the Fund, the dollar amount or number of shares to be redeemed
and the shareholder's account number. The request must be signed in exactly
the same manner as the account is registered (e.g., if there is more than
one owner of the shares, all must sign). In all cases, all signatures on a
redemption request must be signature guaranteed by an eligible guarantor
institution which includes a domestic bank, a domestic savings and loan
institution, a domestic credit union, a member bank of the Federal Reserve
System or a member firm of a national securities exchange, pursuant to the
Fund's standards and procedures; if the guarantor institution belongs to
one of the Medallion Signature programs, it must use the specific
"Medallion Guaranteed" stamp (guarantees by notaries public are not
acceptable). Further documentation, such as copies of corporate resolutions
and instruments of authority, may be requested from corporations,
administrators, executors, personal representatives, trustees or custodians
to evidence the authority of the person or entity making the redemption
request. The redemption request in proper form should be sent to UBS
Private Investor Funds, Inc., c/o Investors Bank and Trust Company, P.O.
Box 1537 MFD 23, Boston, MA 02205-1537.

Mandatory Redemption. If the value of a shareholder's holdings in the Fund
falls below $10,000 because of a redemption of shares, the shareholder's
remaining shares may be redeemed 60 days after written notice unless the
account is increased to $10,000 or more. For example, a shareholder whose
initial and only investment is $10,000 may be subject to mandatory
redemption resulting from any redemption that causes his or her investment
to fall below $10,000.

Further Redemption Information. Investors should be aware that redemptions
may not be processed unless the redemption request is submitted in proper
form. To be in proper form, the Fund must have received the shareholder's
taxpayer identification number and address. As discussed under "Taxes"
below, the Fund may be required to impose "back-up" withholding of federal
income tax on dividends, distributions and redemptions when non-corporate
investors have not provided a certified taxpayer identification number. In
addition, if an investor sends a check to the Distributor for the purchase
of Fund shares and shares are purchased with funds made available by the
Distributor before the check has cleared, the transmittal of redemption
proceeds from the sale of those shares will not occur until the check used
to purchase such shares has cleared, which may take up to 15 days.
Redemption delays may be avoided by purchasing shares by federal funds
wire.

The right of redemption may be suspended or the date of payment postponed
for up to seven days and for such other periods as the 1940 Act or the
Securities and Exchange Commission (the "SEC") may permit. See "Redemption
of Shares" in the SAI.

EXCHANGE OF SHARES

<PAGE>
<PAGE> 12

each of those funds. Shares are exchanged on the basis of relative net
asset value per share. Exchanges are in effect redemptions from one fund
and purchases of another fund and the usual purchase and redemption
procedures and requirements are applicable to exchanges. See "Purchase of
Shares" and "Redemption of Shares" in this Prospectus and in the
prospectuses of the other Company series. See also "Additional Information"
below for an explanation of the telephone exchange policy.

Shareholders subject to federal income tax who exchange shares in one fund
for shares in another fund may recognize capital gain or loss for federal
income tax purposes. The Fund reserves the right to discontinue, alter or
limit its exchange privilege at any time. For investors in certain states,
state securities laws may restrict the availability of the exchange
privilege.

DIVIDENDS AND DISTRIBUTIONS

The Fund will declare daily, and pay monthly, dividends from its net
investment income. The Fund may also declare an additional dividend of net
investment income in a given year to the extent necessary to avoid the
imposition of federal excise taxes on the Fund.

Substantially all of the Fund's net realized capital gains, if any, will be
declared and paid on an annual basis, except that an additional capital
gains distribution may be made in a given year to the extent necessary to
avoid the imposition of federal excise taxes on the Fund. Declared
dividends and distributions are payable to shareholders of record on the
record date.

Dividends and capital gains distributions paid by the Fund are
automatically reinvested in additional Fund shares unless the shareholder
has elected in writing to have them paid in cash. Dividends and
distributions to be paid in cash are credited to the account designated by
the shareholder or sent by check to the shareholder's address of record, in
accordance with the shareholder's instructions. The Fund reserves the right
to discontinue, alter or limit the automatic reinvestment privilege at any
time.

NET ASSET VALUE

The Fund's net asset value per share equals the value of the Fund's total
assets less the amount of its liabilities, divided by the number of its
outstanding shares, rounded to the nearest cent. Expenses, including the
fees payable to the Fund's service providers, are accrued daily. Securities
for which market quotations are readily available are valued at market
value. All other securities will be valued at "fair value". See "Net Asset
Value" in the SAI for information on the valuation of the Fund's portfolio
securities.

The Fund computes its net asset value once daily at the close of business
on Monday through Friday, except that the net asset value is not computed
for the Fund on a day in which no orders to purchase or redeem Fund shares
have been received or on the following legal holidays: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. On days when U.S. trading markets close
early in observance of these holidays, the Fund expects to close for
purchases and redemptions at the same time.

ORGANIZATION

UBS Private Investor Funds, Inc., a Maryland corporation incorporated on
November 16, 1995, is an open-end management investment company registered
under the 1940 Act and organized as a series fund. The Company has no prior
history. The Company is currently authorized to issue shares in four
series: The UBS Bond Fund Series; The UBS Tax Exempt Bond Fund Series; The
UBS International Equity Fund Series; and The UBS U.S. Equity Fund Series.
Each outstanding share of the Company will have a pro rata interest in the
assets of its series, but it will have no interest in the assets of any
other Company series. Only shares of The UBS Tax Exempt Bond Fund Series
are offered through this Prospectus.

Shareholder inquiries may be directed to the Company in writing at [ ____ ]
and by telephone at [ ____ ].

Shareholders of the Fund are entitled to one vote for each share and to the
appropriate fractional vote for each fractional share. There is no
cumulative voting. Shares have no preemptive or conversion rights. Shares
are fully paid and nonassessable when issued by the Company. The Fund does
not intend to hold meetings of shareholders annually. The Board may call
meetings of shareholders for action by shareholder vote as may be required
by the 1940 Act or the Company's Articles of Incorporation or Bylaws. For
further organizational information, including certain shareholder rights,
see "Organization" in the SAI.

The Company expects that, immediately prior to the initial public offering
of its shares, the sole holder of its capital stock will be Signature.

<PAGE>
<PAGE> 13

TAXES

The following discussion of tax consequences is based on U.S. federal tax
laws in effect on the date of this Prospectus. These laws and regulations
are subject to change by legislative or administrative action. Investors
are urged to consult their own tax advisors with respect to specific
questions as to federal taxes and with respect to the applicability of
state or local taxes. See "Taxes" in the SAI. Annual statements as to the
current federal tax status of distributions, if applicable, are mailed to
shareholders after the end of the taxable year for the Fund.

The Fund intends to qualify to pay exempt-interest dividends to its
shareholders by having, at the close of each quarter of its taxable years,
at least 50% of its total assets in tax-exempt securities. An exempt-
interest dividend is that part of a distribution made by the Fund that
consists of interest received by the Fund on tax-exempt securities.
Shareholders will not incur any federal income tax liability on the amount
of exempt-interest dividends received by them from the Fund. In view of the
investment policy of the Fund, it is expected that a substantial portion of
its dividends will be exempt-interest dividends, although the Fund may from
time to time realize and distribute net short-term and long-term capital
gains and may invest limited amounts in taxable securities under certain
circumstances.

If a correct and certified taxpayer identification number is not on file,
the Fund is required, subject to certain exemptions, to withhold 31% of
certain payments made or distributions declared to non-corporate
shareholders.

Interest on certain tax exempt municipal obligations issued after August 7,
1986 is a preference item for purposes of the alternative minimum tax
applicable to individuals and corporations. Under tax regulations to be
issued, the portion of an exempt-interest dividend of a regulated
investment company that is allocable to these obligations will be treated
as a preference item for purposes of the alternative minimum tax.

Corporations should, however, be aware that interest on all municipal
securities will be included in calculating (i) adjusted current earnings
for purposes of the alternative minimum tax applicable to them, (ii) the
additional tax imposed on certain corporations by the Superfund Revenue Act
of 1986, and (iii) the foreign branch profits tax imposed on effectively
connected earnings and profits of United States branches of foreign
corporations. Furthermore, special tax provisions may apply to certain
financial institutions and property and casualty insurance companies, and
they should consult their tax advisors before purchasing shares of the
Fund.

Distributions of taxable income and realized net short-term capital gains
in excess of net long-term capital losses, if any, are taxable as ordinary
income to Fund shareholders, whether such distributions are taken in cash
or reinvested in additional shares. Distributions of this type to corporate
shareholders of the Fund will not qualify for the dividends-received
deduction because the income of the Fund will not consist of dividends paid
by United States corporations.

Distributions of net long-term capital gains in excess of net short-term
capital losses are taxable to Fund shareholders as long-term capital gains
regardless of how long a shareholder has held shares in the Fund and
regardless of whether taken in cash or reinvested in additional shares.
Long-term capital gains distributions to corporate shareholders are not
eligible for the dividends-received deduction.

Any distribution of net investment income or capital gains will have the
effect of reducing the net asset value of Fund shares held by a shareholder
by the same amount per share as the distribution. If such a distribution
reduces the net asset value of such shareholder's holdings in the Fund
below the price that the shareholder paid for such shares, the distribution
will still be taxable to that shareholder. Shareholders may be
proportionally liable for taxes on the Fund's income and capital gains, but
shareholders not subject to tax on their income will not be required to pay
tax on amounts distributed to them.

Any gain or loss realized on the redemption or exchange of Fund shares by a
shareholder who is not a dealer in securities will be treated as long-term
capital gain or loss if the shares have been held for more than one year,
and otherwise as short-term capital gain or loss. However, any loss
realized by a shareholder upon the redemption or exchange of shares in the
Fund held for six months or less will be treated as a long-term capital
loss to the extent of any long-term capital gain distributions received by
the shareholder with respect to such shares.

<PAGE>
<PAGE> 14

ADDITIONAL INFORMATION

The Fund will send its shareholders annual and semi-annual reports. The
financial statements appearing in annual reports will be audited by
independent accountants. Shareholders will also be sent confirmations of
each purchase and redemption and monthly statements reflecting all account
activity, including dividends and any distributions whether reinvested in
additional shares or paid in cash.

All shareholders are given the privilege to initiate transactions
automatically by telephone upon opening an account. However, an investor
should be aware that a transaction authorized by telephone and reasonably
believed to be genuine by the Company, INVS, the Transfer Agent or the
Distributor may subject the investor to risk of loss if such instruction is
subsequently found not to be genuine. The Company and its service providers
will employ reasonable procedures, including requiring investors to give a
form of personal identification and tape recording of telephonic
instructions, to confirm that telephonic instructions by investors are
genuine; if it does not, it or the service provider may be liable for any
losses due to unauthorized or fraudulent instructions.

The Fund may advertise "total return" and non-standardized total return
data. The total return shows what an investment in the Fund would have
earned over a specified period of time (one, five or ten years or since
commencement of operations, if less) assuming that all Fund distributions
and dividends were reinvested on the reinvestment dates during the period
and assuming the redemption of such investment at the end of each period.
This method of calculating total return is required by SEC regulations.
Yield and total return data similarly calculated, unless otherwise
indicated, over other specified periods of time may also be used. All
performance figures are based on historical earnings and are not intended
to indicate future performance. Performance information may be obtained by
calling the Distributor at (800) [ ].

<PAGE>
<PAGE> BACK COVER

UBS PRIVATE INVESTOR FUNDS, INC.

Investment Advisor The UBS Tax Exempt Bond Fund

Union Bank of Switzerland
New York Branch
299 Park Avenue
New York, New York 10171
(212) 821-3000

Administrator
PROSPECTUS
Signature Financial Group, Inc.
6 St. James Avenue
Boston, Massachusetts 02116 _____________ __, 1996

Custodian and Transfer Agent

Investors Bank and Trust Company
89 South Street
Boston, Massachusetts 02111
<TABLE>
<S> <S>
No person has been authorized
to give any information or to make
Distributor any representations other than those
contained in this Prospectus in
Signature Broker-Dealer Services, Inc. connection with the offer of the
6 St. James Avenue Fund shares made by this Prospectus,
Boston, Massachusetts 02116 and, if given or made, such other
information or representations must
not be relied upon as having been
authorized by the Fund. This
Prospectus does not constitute an
offer to sell, or a solicitation of
an offer to buy, by the Fund in any
jurisdiction in which such offer to
sell or solicitation may not
lawfully be made.
</TABLE>
TABLE OF CONTENTS
Page
Investors for Whom the Fund is Designed . . 1
Investment Objective And Policies . . . . . 2
Additional Investment Information and
Risk Factors . . . . . . . . . . . . . . 4
Options . . . . . . . . . . . . . . . . . . 7
Futures Contracts . . . . . . . . . . . . . 8
Investment Restrictions . . . . . . . . . . 9
Management . . . . . . . . . . . . . . . . 10
Shareholder Services . . . . . . . . . . . 11
Purchase of Shares . . . . . . . . . . . . 12
Redemption of Shares . . . . . . . . . . . 13
Exchange of Shares . . . . . . . . . . . . 14
Dividends and Distributions . . . . . . . . 15
Net Asset Value . . . . . . . . . . . . . . 15
Organization . . . . . . . . . . . . . . . 15
Taxes . . . . . . . . . . . . . . . . . . . 16
Additional Information . . . . . . . . . . 17<PAGE>
<PAGE> 1

Subject to Completion Dated November 17, 1995

PROSPECTUS

The UBS Bond Fund
6 St. James Avenue
Boston, Massachusetts 02116
For information call (800) [__________]

Unlike other mutual funds that directly acquire and manage their own
portfolio of securities, the Fund seeks to achieve its investment objective
by investing all of its investable assets in The Master Bond Portfolio (the
"Portfolio"), a corresponding open-end management investment company having
the same investment objective as the Fund. The Fund employs a two-tier
master-feeder structure that is more fully described under the section
captioned Master-Feeder Structure.

The Portfolio is advised by the New York Branch (the "Branch" or the
"Advisor") of Union Bank of Switzerland (the "Bank").

This Prospectus sets forth concisely the information about the Fund that a
prospective investor ought to know before investing. It should be read and
retained for future reference. A Statement of Additional Information, dated
[__________], 1996, provides further discussion of certain topics referred
to in this Prospectus and other matters that may be of interest to
investors. The Statement of Additional Information has been filed with the
Securities and Exchange Commission and is incorporated herein by reference
and is available without charge upon written request from the Company or
the Distributor (as defined herein) at the addresses set forth on the back
cover of the Prospectus or by calling (800) [____________].

Prospectus Dated [___________], 1996.

<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STAATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY
NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE
REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT
CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR
SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH
OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.<PAGE>
<PAGE> 1

The UBS Bond Fund

INVESTORS FOR WHOM THE FUND IS DESIGNED

The UBS Bond Fund (the "Fund") is designed for investors seeking a higher
total return from a portfolio of debt securities issued by foreign and
domestic companies than that generally available from a portfolio of short-
term obligations in exchange for some risk of capital. The Fund seeks to
achieve its investment objective by investing all of its investable assets
in The Master Bond Portfolio (the "Portfolio"), an open-end management
investment company having the same investment objective as the Fund.
Because the investment characteristics and experience of the Fund will
correspond directly with those of the Portfolio, the discussion in this
Prospectus focuses on the investments and investment policies of the
Portfolio. The net asset value of shares of the Fund fluctuates with
changes in the value of the investments in the Portfolio. See "Investment
Objective and Policies--Quality Information."

The Portfolio may make various types of investments in seeking its
objective. Among the permissible investments for the Portfolio are bonds
and debt instruments of foreign and domestic companies. The Portfolio may
also invest in futures contracts, options, forward contracts on foreign
currencies and certain privately placed securities. For further information
about these investments and related investment techniques, see "Investment
Objective and Policies" discussed below.

This Prospectus describes the Fund's investment objective and policies,
management and operations to enable investors to decide if the Fund suits
their investment needs. The Fund operates through a two-tier master-feeder
structure. The Company's Board of Directors (the "Directors" or the
"Board") believes that this structure provides Fund shareholders with the
opportunity to achieve certain economies of scale that would otherwise be
unavailable if the shareholders' investments were not pooled with other
investors sharing similar investment objectives.

The following table illustrates that Fund investors incur no shareholder
transaction expenses: their investment in the Fund is subject only to the
operating expenses set forth below for the Fund and the Portfolio, as a
percentage of average daily net assets of the Fund. These operating
expenses include expenses incurred by the Fund and expenses incurred by the
Portfolio that are allocable to the Fund. The Directors believe that the
aggregate per share expenses of the Fund and the Portfolio will be
approximately equal to and may be less than the expenses that the Fund
would incur if it retained the services of an investment advisor and
invested its assets directly in portfolio securities. Fund and Portfolio
expenses are discussed below under the headings "Management" and
"Shareholder Services".

Shareholder Transaction Expenses

Sales Load Imposed on Purchases . . . . . . . . . . . . . . . . . . . None
Sales Load Imposed on Reinvested Dividends . . . . . . . . . . . . . None
Deferred Sales Load . . . . . . . . . . . . . . . . . . . . . . . . . None
Redemption Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . None
Exchange Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . None
<PAGE>
<PAGE> 2

Expense Table

Annual Operating Expenses*

Advisory Fees, After Fee Waivers** . . . . . . . . . . . . 0.00%
Rule 12b-1 Fees . . . . . . . . . . . . . . . . . . . . . . None
Other Expenses, After Expense Reimbursements*** . . . . . . 0.80%
Total Operating Expenses, After Fee Waivers
and Expense Reimbursements** . . . . . . . . . . . . . 0.80%

* Expenses are expressed as a percentage of the Fund's projected average
daily net assets and are based on estimates of the expenses to be incurred
during the current fiscal year, after any applicable fee waivers and
expense reimbursements. Without such fee waivers and expense
reimbursements, Total Operating Expenses would be equal, on an annual
basis, to 6.40% of the Fund's average daily net assets. See "Management".

** The New York Branch (the "Branch" or the "Advisor") of Union Bank of
Switzerland (the "Bank") has agreed to waive fees and reimburse the Fund
for any of its operating expenses (including those the Fund incurs
indirectly through the Portfolio) to the extent that the Fund's total
operating expenses exceed, on an annual basis, 0.80% of the Fund's average
daily net assets. The Advisor may modify or discontinue this fee waiver
and expense limitation at any time in the future with thirty days' notice
to the Fund. See "Expenses".

*** The fees and expenses in Other Expenses, After Expense Reimbursements
include fees payable to Signature Financial Group, Inc. ("Signature") under
Administration Agreements with the Fund and the Portfolio, fees payable to
Investors Bank and Trust Company (the "Custodian") as custodian of the Fund
and the Portfolio and fees payable to the Branch under the Shareholder
Servicing Agreement. For a more detailed description of contractual fee
arrangements, including expense reimbursements, and of the fees and
expenses included in Other Expenses, see "Management" and "Shareholder
Services".

Example

An investor would pay the following expenses on a $1,000 investment,
assuming a 5% annual return and a redemption at the end of each time
period:

1 Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8
3 Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . $26

The above Expense Table is designed to assist investors in understanding
the various direct and indirect costs and expenses that Fund investors are
expected to bear and reflects the expenses of the Fund and the Fund's share
of the Portfolio's expenses. In connection with the above Example, please
note that $1,000 is less than the Fund's minimum investment requirement and
that there are no redemption or exchange fees of any kind. See "Purchase of
Shares" and "Redemption of Shares". The Example is hypothetical; it is
included solely for illustrative purposes, and assumes the continuation of
the fee waivers and expense reimbursements represented in the above
"Expense Table". It should not be considered a representation of future
performance; actual expenses may be more or less than those shown.

MASTER-FEEDER STRUCTURE

Unlike other mutual funds that directly acquire and manage their own
portfolio of securities, the Fund seeks to achieve its investment objective
by investing all of its investable assets in the Portfolio, a separate
investment company with the same investment objective as the Fund. The
Portfolio is one of three (3) series of the [Master
<PAGE>
<PAGE> 3

Portfolio Trust] (the "Trust"). See "Organization". The investment
objective of the Fund and the Portfolio may be changed only with the
approval of the holders of the outstanding shares of the Fund and the
Portfolio, respectively.

In addition to selling beneficial interests to the Fund, the Portfolio may
sell beneficial interests to other mutual funds or institutional investors.
Such investors will invest in the Portfolio on the same terms and
conditions as the Fund and will pay a proportionate share of the
Portfolio's expenses. However, other entities investing in the Portfolio
may sell shares of their own fund using a different pricing structure than
the Fund's. Such different pricing structures may result in differences in
returns experienced by investors in other funds that invest in the
Portfolio. Such differences in returns are not uncommon and are present in
other mutual fund structures. Information concerning other holders of
interests in the Portfolio is available from the Advisor at (800)
[___________].

The Fund may withdraw its investment in the Portfolio at any time if the
Board determines that it is in the Fund's best interests to do so. Upon any
such withdrawal, the Board would consider what action might be taken,
including the investment of all the Fund's assets in another pooled
investment entity having the same investment objective and restrictions as
the Fund or the retaining of an investment advisor to manage the Fund's
assets in accordance with the investment policies described below with
respect to the Portfolio.

Certain changes in the Portfolio's investment objective, policies or
restrictions, or a failure by the Fund's shareholders to approve a change
in the Portfolio's investment objective or restrictions, may require the
Fund to withdraw its investments in the Portfolio. Any such withdrawal
could result in an in-kind distribution of portfolio securities (as opposed
to a cash distribution) by the Portfolio to the Fund. In this event, the
portfolio securities distributed to the Fund might or might not be readily
marketable. Such a distribution may result in the Fund having a less
diversified portfolio of investments or adversely affect the Fund's
liquidity, and the Fund could incur brokerage, tax or other charges in
converting such securities to cash. Notwithstanding the above, there are
other means for meeting shareholder redemption requests, such as borrowing.

Smaller funds investing in the Portfolio may be materially affected by the
actions of larger funds investing in the Portfolio. For example, if a large
fund withdraws from the Portfolio, the remaining funds may subsequently
experience higher pro rata operating expenses, thereby lowering returns.
Additionally, because the Portfolio would become smaller, it may become
less diversified, resulting in potentially increased portfolio risk
(however, these possibilities also exist for traditionally structured funds
which have large or institutional investors who may withdraw from a fund).
Also, funds with a greater pro rata ownership in the Portfolio could have
effective voting control of its operations. Except as permitted by the
Securities and Exchange Commission (the "SEC"), whenever the Fund is
requested to vote on matters pertaining to the Portfolio (other than a vote
by the Fund to continue the operation of the Portfolio upon the withdrawal
of another investor in the Portfolio), the Company will hold a meeting of
Fund shareholders and will cast all of its votes proportionately as
instructed by the Fund's shareholders. See "Organization" in the Statement
of Additional Information ("SAI"). The Company will vote the shares held by
Fund shareholders who do not give voting instructions in the same
proportion as the Fund shareholders who did give voting instructions.
Shareholders of the Fund who do not vote will have no effect on the outcome
of such matters.

For more information about the Portfolio's investment objective, policies
and restrictions, see "Investment Objective and Policies", "Additional
Investment Information and Risk Factors" and "Investment Restrictions". For
more information about the Portfolio's management and expenses, see
"Management". For more information about changing the investment objective,
policies and restrictions of the Fund or the Portfolio, see "Investment
Restrictions".
<PAGE>
<PAGE> 4

INVESTMENT OBJECTIVE AND POLICIES

The Fund's objective is to provide a high total return from a portfolio of
debt securities issued by foreign and domestic companies, consistent with
moderate risk of capital and maintenance of liquidity. Total return will
consist of realized and unrealized capital gains and losses plus net
income. Although the net asset value of the Fund will fluctuate, the Fund
attempts to preserve the value of its investments to the extent consistent
with its investment objective. The Fund attempts to achieve its objective
by investing all of its investable assets in The Master Bond Portfolio, an
open-end management investment company having the same investment objective
as the Fund.

The Fund is designed for investors who seek a total return over time that
is higher than that generally available from a portfolio of shorter-term
obligations while recognizing the greater price fluctuation of longer-term
instruments. The Fund may also be a convenient way to add fixed income
exposure to diversify an investor's existing portfolio.

The Advisor actively manages the Portfolio's duration (defined below), the
allocation of securities across market sectors and the selection of
specific securities within sectors. Based on fundamental economic and
capital markets research, the Advisor adjusts the duration of the Portfolio
in light of market conditions and the Advisor's opinion regarding future
interest rates. For example, if interest rates are expected to fall, the
duration may be lengthened to take advantage of the anticipated increase in
bond prices. The Advisor also actively allocates the Portfolio's assets
among the broad sectors of the fixed income market including, but not
limited to, U.S. Government and agency securities, corporate securities,
private placements, asset-backed securities and mortgage related
securities. The Advisor intends to identify and purchase specific
securities that it believes are undervalued using quantitative tools,
analyses of credit risk, the expertise of a dedicated trading desk, and the
judgment of fixed income portfolio managers and analysts. Under normal
circumstances, The Advisor intends to keep at least 65% of the Portfolio's
assets invested in bonds.

Duration is a measure of the weighted average maturity of the bonds held in
the portfolio and can be used to measure the Portfolio's sensitivity to
changes in interest rates. The Portfolio's benchmark is the Lehman
Government Corporate Intermediate Bond Index, which currently has a
duration of approximately 3.25 years. The Portfolio intends to have a
duration between 0.5 years shorter and 0.5 years longer than its benchmark.
The maturities of the Portfolio's individual securities may vary widely
from its duration, however, and may be as long as thirty years.

The Portfolio intends to actively manage its securities in pursuit of its
investment objective. Portfolio transactions are undertaken principally to
accomplish the Portfolio's objective in relation to expected movements in
the general level of interest rates, but the Portfolio may also engage in
short-term trading consistent with its objective. To the extent the
Portfolio engages in short-term trading, it may incur increased
transactions costs.

Corporate Bonds. The Portfolio may invest in a broad range of debt
securities of domestic and foreign issuers. These include debt securities
of various types and maturities, e.g., debentures, notes, mortgage
securities, equipment trust certificates and other collateralized
securities and zero coupon securities. Collateralized securities are backed
by a pool of assets such as loans or receivables that generate cash flow to
cover the payments due on the securities. Collateralized securities are
subject to certain risks, including a decline in the value of the
collateral backing the security, failure of the collateral to generate the
anticipated cash flow or in certain cases more rapid prepayment because of
events affecting the collateral, such as accelerated prepayment of
mortgages or other loans backing these securities or destruction of
equipment subject to equipment trust certificates. In the event of any such
prepayment, the Portfolio will be required to reinvest the proceeds of
prepayments at interest rates prevailing at the time of <PAGE>
<PAGE> 5

reinvestment, which may be lower than the interest rates on the prepaid
securities. In addition, the value of zero coupon securities, which do not
pay interest, is more volatile than that of interest bearing debt
securities with the same maturity. The Portfolio does not intend to invest
in common stock but may invest to a limited degree in convertible debt or
preferred stocks. The Portfolio does not expect to invest more than 25% of
its total assets in securities of foreign issuers. If the Portfolio invests
in non-U.S. dollar denominated securities, it may hedge its foreign
currency exposure. The Portfolio may purchase nonpublicly offered debt
securities. See "Illiquid Investments; Privately Placed and Other
Unregistered Securities." See "Additional Investment Information and Risk
Factors" for further information on foreign investments and convertible
securities.

Government Obligations. The Portfolio may invest in obligations issued or
guaranteed by the U.S. Government and backed by the full faith and credit
of the United States. These securities include Treasury securities,
obligations of the Government National Mortgage Association ("GNMA
Certificates"), the Farmers Home Administration and the Export Import Bank.
GNMA Certificates are mortgage-backed securities that evidence an undivided
interest in mortgage pools. These securities are subject to more rapid
repayment than their stated maturity would indicate because prepayments of
principal on mortgages in the pool are passed through to the holder of the
securities. During periods of declining interest rates, prepayments of
mortgages in the pool can be expected to increase. The pass-through of
these prepayments would have the effect of reducing the Portfolio's
positions in these securities and requiring the Portfolio to reinvest the
prepayments at interest rates prevailing at the time of reinvestment. The
Portfolio may also invest in obligations issued or guaranteed by U.S.
Government agencies or instrumentalities where the Portfolio must look
principally to the issuing or guaranteeing agency for ultimate repayment;
some examples of agencies or instrumentalities issuing these obligations
are the Federal Farm Credit System, the Federal Home Loan Banks and the
Federal National Mortgage Association. Although these governmental issuers
are responsible for payments on their obligations, they do not guarantee
their market value. See "Investment Objectives and Policies" in the SAI for
a more detailed discussion of the Portfolio's investments in government
securities.

The Portfolio may also invest in municipal obligations, which may be
general obligations of the issuer or payable only from specific revenue
sources. However, the Portfolio will invest only in municipal obligations
that have been issued on a taxable basis or have an attractive yield
excluding tax considerations. In addition, the Portfolio may invest in debt
securities of foreign governments and governmental entities. See
"Additional Investment Information and Risk Factors" for further
information on foreign investments.

Money Market Instruments. The Portfolio may purchase money market
instruments to invest temporary cash balances or to maintain liquidity to
meet withdrawals. However, the Portfolio may also invest, without limit, in
money market instruments as a temporary defensive measure taken during, or
in anticipation of, adverse market conditions. The money market investments
permitted for the Portfolio include obligations of the U.S. Government and
its agencies and instrumentalities, other debt securities, commercial
paper, bank obligations and repurchase agreements. For more detailed
information about these money market investments, see "Investment
Objectives and Policies" in the SAI.

Quality Information. It is a current policy of the Portfolio that under
normal circumstances at least sixty-five percent (65%) of its investment in
bonds will consist of securities that are rated at least A by Moody's
Investors Service, Inc. ("Moody's") or Standard & Poor's Corporation
("Standard & Poor's") or that are unrated and in the Advisor's opinion are
of comparable quality. Up to thirty percent (30%) of the Portfolio's bonds
may consist of debt securities rated Baa or better by Moody's or BBB or
better by Standard & Poor's or are unrated and in the Advisor's opinion are
of comparable quality. Up to five percent (5%) of the Portfolio's bonds may
be invested in debt securities that are rated Ba or better by Moody's or BB
or better by Standard & Poor's or are unrated and in the Advisor's opinion
are of comparable quality. Securities rated Baa by Moody's or BBB by
Standard & Poor's are considered investment grade, but have some
speculative characteristics. Securities rated Ba by Moody's or BB by
Standard & Poor's are below investment grade and considered to be
speculative with regard to payment of interest and principal. These
standards must be satisfied at the time an investment is made. If the
quality of the investment later declines, the Portfolio may continue to
hold the investment. <PAGE>
<PAGE> 6

The Portfolio may also purchase obligations on a when-issued or delayed
delivery basis, enter into repurchase and reverse repurchase agreements,
engage in mortgage dollar roll transactions, loan its portfolio securities,
purchase certain privately placed securities and enter into certain hedging
transactions that may involve options on securities and securities indices,
futures contracts and options on futures contracts. For a discussion of
these investments and investment techniques, see "Additional Investment
Information and Risk Factors".

ADDITIONAL INVESTMENT INFORMATION AND RISK FACTORS

Convertible Securities. The convertible securities in which the Portfolio
may invest include any debt securities or preferred stocks that may be
converted into common stock or that carry the right to purchase common
stock. Convertible securities entitle the holder to exchange the securities
for a specified number of shares of common stock, usually of the same
company, at specified prices within a certain period of time.

When-Issued and Delayed Delivery Securities. The Portfolio may purchase
securities on a when-issued or delayed delivery basis. Delivery of and
payment for these securities may take as long as a month or more after the
date of the purchase commitment. The value of these securities is subject
to market fluctuation during this period and no interest or income accrues
to the Portfolio until settlement. At the time of settlement, a when-issued
security may be valued at less than its purchase price. Between the trade
and settlement dates, the Portfolio will maintain a segregated account with
the Custodian consisting of a portfolio of high grade, liquid debt
securities with a value at least equal to these commitments. When entering
into a when-issued or delayed delivery transaction, the Portfolio will rely
on the other party to consummate the transaction; if the other party fails
to do so, the Portfolio may be disadvantaged. It is the current policy of
the Portfolio not to enter into when-issued commitments exceeding in the
aggregate 15% of the market value of the Portfolio's total assets less
liabilities (excluding the obligations created by these commitments).

Repurchase Agreements. The Portfolio may engage in repurchase agreement
transactions with brokers, dealers or banks that meet the credit guidelines
established by the Trust's Board of Trustees (the "Trustees"). In a
repurchase agreement, the Portfolio buys a security from a seller that has
agreed to repurchase it at a mutually agreed upon date and price,
reflecting the interest rate effective for the term of the agreement. The
term of these agreements is usually from overnight to one week. A
repurchase agreement may be viewed as a fully collateralized loan of money
by the Portfolio to the seller. The Portfolio always receives securities as
collateral with a market value at least equal to the purchase price plus
accrued interest and this value is maintained during the term of the
agreement. If the seller defaults and the collateral's value declines, the
Portfolio might incur a loss. If bankruptcy proceedings are commenced with
respect to the seller, the Portfolio's realization upon the disposition of
collateral may be delayed or limited. Investments in repurchase agreements
maturing in more than seven days and certain other investments that may be
considered illiquid are limited. See "Illiquid Investments; Privately
Placed and Other Unregistered Securities" below.

Reverse Repurchase Agreements. The Portfolio is permitted to enter into
reverse repurchase agreements. In a reverse repurchase agreement, the
Portfolio sells a security and agrees to repurchase it at a mutually agreed
upon date and price, reflecting the interest rate effective for the term of
the agreement. It may also be viewed as the borrowing of money by the
Portfolio and, therefore, is a form of leverage. Leverage may cause any
gains or losses of the Portfolio to be magnified. For more information,
including limitations on the use of reverse repurchase agreements, see
"Investment Objectives and Policies" in the SAI and "Investment
Restrictions" below.

Securities Lending. Subject to applicable investment restrictions, the
Portfolio may lend its securities. The Portfolio may lend its securities if
such loans are secured continuously by cash or equivalent collateral or by
a letter of credit in favor of the Portfolio at least equal at all times to
100% of the market value of the securities loaned, plus accrued interest.
While such securities are on loan, the borrower will pay the Portfolio any
income accruing thereon. Loans will be subject to termination by the
Portfolio in the normal settlement time, generally three business days
after <PAGE>
<PAGE> 7

notice, or by the borrower on one day's notice. Borrowed securities must be
returned when the loan is terminated. Any gain or loss in the market price
of the borrowed securities that occurs during the term of the loan inures
to the Portfolio and its respective investors. The Portfolio may pay
reasonable finders' and custodial fees in connection with a loan. In
addition, the Portfolio will consider all the facts and circumstances,
including the creditworthiness of the borrowing financial institution, and
the Portfolio will not make any loans in excess of one year. The Portfolio
will not lend its securities to any officer, Trustee, Director, employee or
affiliate or placement agent of the Company, the Portfolio, or the Advisor,
Administrator or Distributor, unless otherwise permitted by applicable law.

Foreign Investment Information. The Portfolio may invest in foreign
securities. Investments in securities of foreign issuers and in obligations
of foreign branches of domestic banks involve somewhat different investment
risks from those affecting securities of U.S. domestic issuers. There may
be limited publicly available information with respect to foreign issuers,
and foreign issuers are not generally subject to uniform accounting,
auditing and financial standards and requirements comparable to those
applicable to domestic companies. Dividends and interest paid by foreign
issuers may be subject to withholding and other foreign taxes that may
decrease the net return on foreign investments as compared to dividends and
interest paid to the Portfolio by domestic companies.

Investors should realize that the value of the Portfolio's investments in
foreign securities may be adversely affected by changes in political or
social conditions, diplomatic relations, confiscatory taxation,
expropriation, nationalization, limitation on the removal of funds or
assets, or imposition of (or change in) exchange control or tax regulations
in those foreign countries. In addition, changes in government
administrations or economic or monetary policies in the United States or
abroad could result in appreciation or depreciation of portfolio securities
and could favorably or unfavorably affect the Portfolio's operations.
Furthermore, the economies of individual foreign nations may differ from
the U.S. economy, favorably or unfavorably, in areas such as growth of
gross national product, rate of inflation, capital reinvestment, resource
self-sufficiency and balance of payments position; it may also be more
difficult to obtain and enforce a judgment against a foreign issuer. Any
foreign investments made by the Portfolio must be made in compliance with
U.S. and foreign currency restrictions and tax laws restricting the amounts
and types of foreign investments.

In addition, while the volume of transactions effected on foreign stock
exchanges has increased in recent years, in most cases it remains
appreciably below that of domestic security exchanges. Accordingly, the
Portfolio's foreign investments may be less liquid and their prices may be
more volatile than comparable investments in securities of U.S. companies.
Moreover, the settlement periods for foreign securities, which are often
longer than those for securities of U.S. issuers, may affect portfolio
liquidity. In buying and selling securities on foreign exchanges,
purchasers normally pay fixed commissions that are generally higher than
the negotiated commissions charged in the United States. In addition, there
is generally less government supervision and regulation of securities
exchanges, brokers and issuers located in foreign countries than in the
United States.

The Portfolio may invest in securities of foreign issuers directly or in
the form of American Depositary Receipts ("ADRs"), European Depositary
Receipts ("EDRs") or other similar securities of foreign issuers. These
securities may not necessarily be denominated in the same currency as the
securities they represent. ADRs are receipts typically issued by a U.S.
bank or trust company evidencing ownership of the underlying foreign
securities. Certain institutions issuing ADRs may not be sponsored by the
issuer of the underlying foreign securities. A non-sponsored depository may
not provide the same shareholder information that a sponsored depository is
required to provide under its contractual arrangements with the foreign
issuer. EDRs are receipts issued by a European financial institution
evidencing a similar arrangement. Generally, ADRs, in registered form, are
designed for use in the U.S. securities markets, and EDRs, in bearer form,
are designed for use in European securities markets.

Because investments in foreign securities involve foreign currencies, the
value of assets as measured in U.S. dollars may be affected, favorably or
unfavorably, by changes in currency exchange rates and in exchange control
regulations, including currency blockage. See "Foreign Currency Exchange
Transactions" below.<PAGE>
<PAGE> 8

Foreign Currency Exchange Transactions. Because the Portfolio may buy and
sell securities and receive interest and dividends in currencies other than
the U.S. dollar, the Portfolio may, from time-to-time, enter into foreign
currency exchange transactions. The Portfolio may enter into these
transactions on a spot (i.e., cash) basis at the spot rate prevailing in
the foreign currency exchange market, use forward currency contracts to
purchase or sell foreign currencies, use currency futures contracts or
purchase options thereon or purchase currency options.

A forward foreign currency exchange contract is an obligation of the
Portfolio to purchase or sell a specific currency at a future date, which
may be any fixed number of days from the date of the contract. Currency
options give the buyer the right, but not the obligation, to purchase or
sell a fixed amount of a specific currency at a fixed price at a future
date. These contracts are entered into in the interbank market directly
between currency traders (usually large commercial banks) and their
customers. A forward foreign currency exchange contract generally has no
deposit requirement, and is traded at a net price without commission. The
Portfolio will not enter into these foreign currency exchange transactions
for speculative purposes. Foreign currency exchange transactions do not
eliminate fluctuations in the local currency prices of the Portfolio's
securities or in foreign exchange rates, or prevent loss if the local
currency prices of these securities should decline.

A currency futures contract is a contract involving an obligation to
deliver or acquire the specified amount of a currency at a specified price
at a specified future time. Futures contracts may be settled on a net cash
payment basis rather than by the sale and delivery of the underlying
currency.

The Portfolio may enter into foreign currency exchange transactions in an
attempt to protect against changes in foreign currency exchange rates
between the trade and settlement dates of specific securities transactions
or anticipated securities transactions. The Portfolio may use these
techniques to hedge against a change in foreign currency exchange rates
(with the U.S. dollar or other foreign currencies) that would cause a
decline in the value of existing investments denominated or principally
traded in a foreign currency.

Although these transactions are intended to minimize the risk of loss due
to a decline in the value of the hedged currency, these transactions also
limit any potential gain that might be realized should the value of the
hedged currency increase. Additionally, the premiums paid by the Portfolio
for currency or futures options increase the Portfolio's transaction costs.
Similarly, the cost of the Portfolio's spot currency exchange transactions
is generally the difference between the bid and offer spot rate of the
currency being purchased or sold. The precise matching of these
transactions and the value of the securities involved will not generally be
possible because the future value of such securities in foreign currencies
will change as a consequence of market movements in the value of such
securities between the date such a transaction is entered into and the date
it matures. The projection of currency market movements is extremely
difficult and the successful execution of a hedging strategy is highly
uncertain.

Illiquid Investments; Privately Placed and Other Unregistered Securities.
The Portfolio may not acquire any illiquid securities if, as a result
thereof, more than 15% of the market value of the Portfolio's net assets
would be in illiquid investments. Subject to that non-fundamental policy
limitation, the Portfolio may acquire investments that are illiquid or have
limited liquidity, such as private placements or investments that are not
registered under the Securities Act of 1933, as amended (the "Securities
Act"), and cannot be offered for public sale in the United States without
first being registered. An illiquid investment is any investment that
cannot be disposed of within seven days in the normal course of business at
approximately the amount at which it is valued by the Portfolio. Repurchase
agreements maturing in more than seven days are considered illiquid
investments and, as such, are subject to the limitations set forth in this
paragraph. The price the Portfolio pays for illiquid securities or receives
upon resale may be lower than the price paid or received for similar
securities with a more liquid market. Accordingly, the valuation of these
securities will reflect any limitations on their liquidity.

Advisor and approved by the Trustees. The Trustees will monitor the
Advisor's implementation of these guidelines on a periodic basis.

Futures and Options Transactions. The Portfolio is permitted to enter into
the futures and options transactions described below for hedging purposes.

The Portfolio may purchase exchange traded and over-the-counter ("OTC") put
and call options on fixed income securities or indices of fixed income
securities, enter into forward contracts, purchase and sell futures
contracts on indices of fixed income securities, purchase put and call
options on futures contracts on indices of fixed income securities and
purchase options on currencies. The Portfolio may use these techniques for
hedging purposes, but not for speculation.

The Portfolio may use these techniques to manage its exposure to changing
interest rates and/or security prices. Some options and futures strategies,
including selling futures contracts and buying puts, tend to hedge the
Portfolio's investments against price fluctuations. Other strategies,
including buying futures contracts, writing puts and calls, and buying
calls, tend to increase market exposure. Options and futures contracts may
be combined with each other or with forward contracts in order to adjust
the risk and return characteristics of the Portfolio's overall strategy in
a manner deemed appropriate to the Advisor and consistent with the
Portfolio's objective and policies. Because combined options positions
involve multiple trades, they result in higher transaction costs and may be
more difficult to open and close out.

The Portfolio's use of these transactions is a highly specialized activity,
which involves investment strategies and risks different from those
associated with ordinary portfolio securities transactions, and there can
be no guarantee that their use will increase the Portfolio's return. While
the Portfolio's use of these instruments may reduce certain risks
associated with owning its portfolio securities, these techniques
themselves entail certain other risks. If the Advisor applies a strategy at
an inappropriate time or judges market conditions or trends incorrectly,
such strategies may lower the Portfolio's return. Certain strategies limit
the Portfolio's opportunity to realize gains as well as limiting its
exposure to losses. The Portfolio could experience losses if the prices of
its options and futures positions were poorly correlated with its other
investments, or if it could not close out its positions because of an
illiquid secondary market. In addition, the Portfolio will incur
transaction costs, including trading commissions and option premiums, in
connection with these transactions and these transactions could
significantly increase the Portfolio's turnover rate.

The Portfolio may purchase put and call options on securities, currencies,
indices of securities and futures contracts, or purchase and sell futures
contracts, only if such options are written by other persons and if (i) the
aggregate premiums paid on all such options that are held at any time do
not exceed 20% of the Portfolio's net assets and (ii) the aggregate margin
deposits required on all such futures or options thereon held at any time
do not exceed 5% of the Portfolio's net assets.

OPTIONS

Purchasing Put and Call Options. By purchasing a put option, the Portfolio
obtains the right (but not the obligation) to sell the instrument
underlying the option at a fixed strike price. In return for this right,
the Portfolio pays the current market price for the option (known as the
option premium). Options have various types of underlying instruments,
including specific securities, currencies, indices of securities, indices
of securities prices and futures contracts. The Portfolio may terminate its
position in a put option it has purchased by allowing it to expire or by
exercising the option. The Portfolio may also close out a put option
position by entering into an offsetting transaction, if a liquid market
exists. If the option is allowed to expire, the Portfolio will lose the
entire premium it paid. If the Portfolio exercises a put option on a
security, it will sell the instrument underlying the option at the strike
price. If the Portfolio exercises an option on an index, settlement is in
cash and does not involve the <PAGE>
<PAGE> 10

actual sale of securities. American style options may be exercised on any
day up to their expiration date. European style options may be exercised
only on their expiration date.

Selling (Writing) Put and Call Options. When the Portfolio writes a put
option, it takes the opposite side of the transaction from the option's
purchaser. In return for receipt of the premium, the Portfolio assumes the
obligation to pay the strike price for the instrument underlying the option
if the other party to the option chooses to exercise it. The Portfolio may
seek to terminate its position in a put option it writes before exercise by
purchasing an offsetting option in the market at its current price. If the
market is not liquid for a put option the Portfolio has written, however,
the Portfolio must continue to be prepared to pay the strike price while
the option is outstanding, regardless of price changes, and must continue
to post margin as discussed below.

Writing a call option obligates the Portfolio to sell or deliver the
option's underlying instrument in return for the strike price upon exercise
of the option. The characteristics of writing call options are similar to
those of writing put options, except that writing calls generally is a
profitable strategy if prices remain the same or fall. Through receipt of
the option premium a call writer offsets part of the effect of a price
decrease. At the same time, because a call writer must be prepared to
deliver the underlying instrument in return for the strike price, even if
its current value is greater, a call writer gives up some ability to
participate in security price increases.

Options on Indices. The Portfolio is permitted to enter into options
transactions and may purchase put and call options on any securities index
based on securities in which the Portfolio may invest. Options on
securities indices are similar to options on securities, except that the
exercise of securities index options is settled by cash payment and does
not involve the actual purchase or sale of securities. In addition, these
options are designed to reflect price fluctuations in a group of securities
or segment of the securities market rather than price fluctuations in a
single security. The Portfolio, in purchasing or selling index options, is
subject to the risk that the value of its portfolio securities may not
change as much as an index because the Portfolio's investments generally
will not match the composition of an index.

counterparty to perform its obligations, and the Portfolio may incur
additional losses if the counterparty is unable to perform.

FUTURES CONTRACTS

When the Portfolio purchases a futures contract, it agrees to purchase a
specified quantity of an underlying instrument at a specified future date
and price or to make or receive a cash payment based on the value of a
securities index. When the Portfolio sells a futures contract, it agrees to
sell a specified quantity of the underlying instrument at a specified
future date and price or to receive or make a cash payment based on the
value of a securities index. The price at which the purchase and sale will
take place is fixed when the Portfolio enters into the contract. Futures
can be held until their delivery dates or the positions can be (and
normally are) closed out before then. There is no assurance, however, that
a liquid market will exist when a Portfolio wishes to close out a
particular position.

When the Portfolio purchases a futures contract, the value of the futures
contract tends to increase and decrease in tandem with the value of its
underlying instrument. Therefore, purchasing futures contracts will tend to
increase the Portfolio's exposure to positive and negative price
fluctuations in the underlying instrument, much as if it had purchased the
underlying instrument directly. When the Portfolio sells a futures
contract, by contrast, the value of its futures position will tend to move
in a direction contrary to the value of the underlying instrument. Selling
futures contracts on securities similar to those held by the Portfolio,
therefore, will tend to offset both positive and negative market price
changes, much as if the underlying instrument had been sold. Because there
are a limited number of types of exchange-traded options and futures
contracts, it is likely that these standardized instruments will not
exactly match the Portfolio's current or anticipated investments. The
Portfolio may invest in futures contracts and options thereon based on
currencies or on securities with different issuers, maturities, or other
characteristics from the securities in which it typically invests, which
involves a risk that the options or futures position will not track the
performance of the Portfolio's other investments.

The purchaser or seller of a futures contract is not required to deliver or
pay for the underlying instrument unless the contract is held until the
delivery date. However, when the Portfolio buys or sells a futures contract
it will be required to deposit "initial margin" with the Custodian in a
segregated account in the name of its futures broker, known as a futures
commission merchant ("FCM"). Initial margin deposits are typically equal to
a small percentage of the contract's value. If the value of either party's
position declines, that party will be required to make additional
"variation margin" payments equal to the change in value on a daily basis.
The party that has a gain may be entitled to receive all or a portion of
this amount. The Portfolio may be obligated to make payments of variation
margin at a time when it is disadvantageous to do so. Furthermore, it may
not always be possible for the Portfolio to close out its futures
positions. Until it closes out a futures position, the Portfolio will be
obligated to continue to pay variation margin. Initial and variation margin
payments do not constitute purchasing on margin for purposes of the
Portfolio's investment restrictions. In the event of the bankruptcy of an
FCM that holds margin on behalf of the Portfolio, the Portfolio may be
entitled to return of margin owed to it only in proportion to the amount
received by the FCM's other customers, potentially resulting in losses to
the Portfolio.

The Portfolio will segregate liquid, high grade assets in connection with
its use of options and futures contracts to the extent required by the SEC.
Securities held in a segregated account cannot be sold while the futures
contract or option is outstanding, unless they are replaced with other
suitable assets. As a result, there is a possibility that the segregation
of a large percentage of the Portfolio's assets could impede portfolio
management or the Portfolio's ability to meet redemption requests or other
current obligations.

For further information about the Portfolio's use of futures and options
and a more detailed discussion of associated risks, see "Investment
Objectives and Policies" in the SAI.<PAGE>
<PAGE> 12

INVESTMENT RESTRICTIONS

The investment objective of the Fund and the Portfolio, together with the
investment restrictions described below and in the SAI, except as noted,
are deemed fundamental policies, i.e., they may be changed only with the
approval of the holders of a majority of the outstanding voting securities
(as defined in the Investment Company Act of 1940, as amended (the "1940
Act")) of the Fund and the Portfolio, respectively. The Fund has the same
investment restrictions as the Portfolio, except that the Fund may invest
all of its investable assets in another open-end investment company with
the same investment objective and restrictions (such as the Portfolio) and
the Fund may retain an investment advisor to manage the Fund's assets in
accordance with the investment policies and restrictions set forth below.
References below to the Fund's investment restrictions also include the
Portfolio's investment restrictions.

As a diversified investment company, 75% of the Fund's total assets are
subject to the following fundamental limitations: (a) the Fund may not
invest more than 5% of its total assets in the securities of any one
issuer, except U.S. Government securities; and (b) the Fund may not own
more than 10% of the outstanding voting securities of any one issuer.

The Fund may not: (i) purchase the securities or other obligations of
issuers conducting their principal business activity in the same industry
if its investments in such industry would exceed 25% of the value of the
Fund's total assets, except this limitation shall not apply to investments
in U.S. Government securities; (ii) enter into reverse repurchase
agreements and other permitted borrowings that constitute senior securities
under the 1940 Act, exceeding in the aggregate one-third of the market
value of the Fund's total assets, less certain liabilities; (iii) borrow
money, except from banks for extraordinary or emergency purposes; (iv)
purchase securities while borrowings, including reverse repurchase
agreements, exceed 5% of its total assets; or (v) mortgage, pledge or
hypothecate any assets except in connection with any such borrowing and in
amounts not to exceed one-third of the value of the Fund's total assets
less certain liabilities at the time of such borrowing. For a more
detailed discussion of the above investment restrictions, as well as a
description of certain other investment restrictions, see "Investment
Restrictions" and "Additional Information" in the SAI.

MANAGEMENT

Directors and Trustees. Pursuant to the Declaration of Trust, the Trustees
establish the Portfolio's general policies, are responsible for the overall
management of the Trust and review the actions of the Advisor,
Administrator and other service providers. Similarly, the Directors set the
Company's general policies, are responsible for the overall management of
the Company and review the performance of its service providers. Additional
information about the Company's Board of Directors and officers appears in
the SAI under the heading "Directors and Trustees". The Trustees are also
Directors of the Company, which raises certain conflicts of interest. The
Company and the Trust have adopted written procedures reasonably
appropriate to deal with these conflicts should they arise.

Advisor. The Fund has not retained the services of an investment advisor
because the Fund seeks to achieve its investment objective by investing all
of its investable assets in the Portfolio. The Portfolio has retained the
services of the Branch as investment advisor. The Branch, which operates
out of offices located at 299 Park Avenue, New York, New York, is licensed
by the Superintendent of Banks of the State of New York under the banking
laws of the State of New York and is subject to banking laws and
regulations applicable to a foreign bank that operates a New York branch.

international banks, including fiduciary, investment advisory and custodial
services and foreign exchange in the United States, Swiss, Asian and Euro-
capital markets. The Bank is one of the world's leading asset managers.

Active in North America since 1946, the Bank employs a staff of over 2,000
in its branches, agencies, representative offices and subsidiaries in North
America. Private banking services in the United States are provided
primarily through the Branch, as well as through offices in Los Angeles.
In addition, UBS Asset Management (New York) Inc., an indirect, wholly-
owned subsidiary of the Bank with assets under management totaling $33.9
billion as of December 31, 1994, offers primarily U.S. dollar-based asset
management services to institutions (including pension and other employee
benefit trusts), individuals, corporations and other entities in the areas
of equities, fixed income, real estate, oil and gas and timber investments.

The Branch provides investment advice, portfolio management and certain
administrative services to the Portfolio. Subject to the supervision of the
Trustees, the Branch makes the Portfolio's day-to-day investment decisions,
arranges for the execution of portfolio transactions and generally manages
the Portfolio's investments and operations. See "Investment Advisor" in the
SAI.

The Advisor uses a sophisticated, disciplined, collaborative process for
managing all asset classes. Louis N. Cohen is primarily responsible for the
day-to-day management and implementation of the Advisor's process for the
Portfolio. Mr. Cohen is a Vice President of the Advisor and is responsible
for managing several portfolios and is responsible for all credit research
relating to the issuers in which these portfolios invest. Mr. Cohen
received both a B.A. and M.B.A. from New York University and has seventeen
years of investment experience.

In addition to the above-listed investment advisory services, the Advisor
also provides the Fund and the Portfolio with certain administrative
services. Subject to the supervision of the Board and Trustees,
respectively, the Advisor is responsible for: establishing performance
standards for the third-party service providers of the Fund and Portfolio
and overseeing and evaluating the performance of such entities; providing
and presenting quarterly management reports to the Directors and the
Trustees; supervising the preparation of reports for Fund and Portfolio
shareholders; establishing voluntary expense limitations for the Fund and
providing any resultant expense reimbursement to the Fund; monitoring the
Fund's compliance with all federal and state securities and other
regulatory requirements; and monitoring the Fund's compliance with federal
tax laws and regulations, including the Fund's status as a "regulated
investment company" under the Internal Revenue Code of 1986, as amended
(the "Code").

The Advisor provides its administrative services to the Fund pursuant to a
Management Agreement between the Advisor and the Company, on behalf of the
Fund. The Advisor does not receive a fee from the Fund pursuant to the
terms of the Management Agreement.

Under the Trust's Advisory Agreement, the Portfolio will pay the Advisor a
fee, calculated daily and payable monthly, at an annual rate of 0.45% of
the Portfolio's average net assets. The Advisor has voluntarily agreed to
waive its advisory fees and reimburse the Fund for any of its expenses to
the extent that the Fund's total operating expenses exceed, on an annual
basis, 0.80% of the Fund's average daily net assets. The Advisor may
modify or discontinue this fee waiver and expense limitation at any time in
the future with thirty days' notice to the Fund. See "Expenses".

Investments in the Fund are not deposits with or obligations of, or
guaranteed or endorsed by, the Branch or any other bank.<PAGE>
<PAGE> 14

Administrator. Under Administration Agreements with the Company and the
Trust, Signature Financial Group, Inc. ("Signature" or the
"Administrator"), an affiliate of the Distributor (defined below), serves
as the Administrator of the Fund and the Portfolio. In this capacity,
Signature administers all aspects of the Fund's and the Portfolio's day-to-
day operations, subject to the supervision of the Advisor, and the Board
and Trustees, respectively, except as set forth under "Advisor",
"Distributor", "Custodian" and "Shareholder Services". As Administrator,
Signature: (i) furnishes general office facilities and ordinary clerical
and related services for day-to-day operations including recordkeeping
responsibilities; (ii) takes responsibility for compliance with all
applicable federal and state securities and other regulatory requirements;
(iii) is responsible for the registration of sufficient Fund shares under
federal and state securities laws; (iv) takes responsibility for monitoring
the Fund's status as a regulated investment company under the Code; and (v)
performs administrative and managerial oversight of the activities of the
custodian, transfer agent and other agents or independent contractors of
the Fund and the Portfolio.

Under the Company's Administration Agreement, the Fund has agreed to pay
Signature a fee, calculated daily and payable monthly, at an annual rate of
0.05% of the Fund's first $100 million of average net assets plus 0.025% of
the next $100 million of average net assets. Signature does not receive a
fee from the Fund on average net assets in excess of $200 million.

Under the Trust's Administration Agreement, the Portfolio has agreed to pay
Signature a fee, calculated daily and payable monthly, at an annual rate of
0.05% of the Portfolio's average net assets.

Custodian. Investors Bank and Trust Company ("IBT" or the "Transfer
Agent"), whose principal offices are located at 89 South Street, Boston,
Massachusetts 02111, serves as the custodian and transfer and dividend
disbursing agent for the Portfolio and the Fund. See "Custodian" in the
SAI.

SHAREHOLDER SERVICES

The Company has entered into a Shareholder Servicing Agreement with the
Branch under which the private banking and investment services division
("INVS") of the Branch provides shareholder services to Fund shareholders
who are also clients of the Branch. These services include: establishing
and maintaining shareholder accounts and records; assisting investors
seeking to purchase or redeem Fund shares; providing performance
information relating to the Fund; and responding to shareholder inquiries.
The Company has agreed to pay INVS for these services at an annual rate of
0.25% of the average daily net assets of the shareholder accounts so
serviced. Under the terms of the Shareholder Servicing Agreement, INVS may
delegate one or more of its responsibilities to other entities at its
expense.

EXPENSES

In addition to the fees of the Advisor, Signature and IBT, the Fund will be
responsible for, or will indirectly bear through its interest in the
Portfolio, other expenses including brokerage costs and litigation and
extraordinary expenses. The Advisor has agreed to waive fees and reimburse
expenses as necessary if, in any fiscal year, the sum of the Fund's
expenses exceeds the limits set by applicable regulations of state
securities commissions. Such annual limits are currently 2.5% of the first
$30 million of average net assets, 2% of the next $70 million of such net
assets and 1.5% of such net assets in excess of $100 million. The Advisor
has also voluntarily agreed to limit the total
<PAGE>
<PAGE> 15

operating expenses of the Fund, excluding extraordinary expenses, to an
annual rate of 0.80% of the Fund's average daily net assets. The Advisor
may modify or discontinue this voluntary expense limitation at any time in
the future with thirty days' notice to the Fund.

The Fund and the Portfolio may allocate brokerage transactions to their
affiliates and the Advisor's affiliates. Brokerage transactions may be
allocated to these affiliates only if the commissions received by such
affiliates are fair and reasonable when compared to the commissions paid to
unaffiliated brokers in connection with comparable transactions. See
"Portfolio Transactions" in the SAI.

PURCHASE OF SHARES

The business days of the Fund and the Portfolio are the days the New York
Stock Exchange is open.

The shares of the Fund are sold on a continuous basis without a sales
charge at the net asset value per share next determined after receipt and
acceptance of a purchase order by the Distributor. The Fund calculates its
net asset value at the close of business. See "Net Asset Value". The
minimum initial investment in the Fund is $25,000, except that the minimum
initial investment is $10,000 for shareholders of another series of the
Company. The minimum subsequent investment in the Fund for all investors is
$5,000. The minimum initial investment for employees of the Bank and its
affiliates is $5,000. The minimum subsequent investment is $1,000. These
minimum investment requirements may be waived for certain retirement plans
or accounts for the benefit of minors. For purposes of the minimum
investment requirements, the Fund may aggregate investments by related
shareholders. Investors will receive the number of full and fractional
shares of the Fund equal to the dollar amount of their subscription divided
by the net asset value per share of the Fund as next determined on the day
that the investor's subscription is accepted. See "Purchase of Shares" in
the SAI.

Purchase orders in proper form received by the Distributor prior to
4:00 p.m. New York time or the close of regular trading on the New York
Stock Exchange (the "NYSE"), whichever is earlier, are effective and
executed at the net asset value next determined that day. Purchase orders
received after 4:00 p.m. New York time or the close of the NYSE, whichever
is earlier, will be executed at the net asset value determined on the next
business day. Investors become record shareholders of the Fund on the next
day ("day two") after they place their subscription order, provided the
Custodian receives payment for the shares on day two. As record
shareholders, investors are entitled to earn dividends.

Fund shares may be purchased in the following methods:

UBS Bank Clients: UBS Private Bank Clients should request an INVS
representative to assist them in placing a purchase order with the
Distributor.

The Transfer Agent will maintain the accounts for all shareholders who
purchase Fund shares directly through the Distributor. For account balance
information and shareholder services, such shareholders should contact the
Transfer Agent at (800) [____________] or in writing at UBS Private
Investor Funds, Inc., c/o Investors Bank & Trust Company, P.O. Box 1537 MFD
23, Boston, MA 02205-1537.
<PAGE>
<PAGE> 16

By wire: Purchases may be made by federal funds wire. To place a purchase
order with the Fund, the shareholder must telephone the Transfer Agent at
(800) [__________] for specific instructions.

Subject to the minimum purchase requirements discussed above, shares
purchased by federal funds wire will be effected at the net asset value per
share next determined after acceptance of the order.

By mail: Subject to the minimum purchase requirements discussed above,
shareholders may purchase shares of the Fund through the Distributor by
completing an account application and mailing it, together with a check
payable to "UBS Private Investor Funds, Inc.", to UBS Private Investor
Funds, Inc., c/o Investors Bank & Trust Company, P.O. Box 1537 MFD 23,
Boston, MA 02205-1537.

REDEMPTION OF SHARES

A redemption order will be effected provided the Distributor receives such
an order prior to 4:00 p.m. New York time or the close of regular trading
on the NYSE, whichever is earlier. The redemption of Fund shares is
effective and is executed at the net asset value next determined that day.
Redemption orders received after 4:00 p.m. New York time or the close of
regular trading on the NYSE, whichever is earlier, will be executed at the
net asset value determined on the next business day. Proceeds of an
effective redemption are generally deposited the next business day in
immediately available funds to the account designated by the redeeming
shareholder or mailed to the shareholder's address of record, in accordance
with the shareholder's instructions.

Shareholders will continue to earn dividends through the day of redemption.

Fund shares may be redeemed in the following methods:

UBS Bank Clients: Shareholders who are UBS Private Bank Clients should
request an INVS representative to assist them in placing a redemption order
with the Distributor.

Through the Distributor: Shareholders who are not Bank clients may redeem
Fund shares by telephone or mail.

not authorized by them. The Fund and the Transfer Agent will employ
reasonable procedures to verify that telephone redemption instructions are
genuine and will require that shareholders electing such an option provide
a form of personal identification. The failure by the Fund or the Transfer
Agent to employ such procedures may cause the Fund or the Transfer Agent to
be liable for any losses incurred by investors due to telephone redemptions
based upon unauthorized or fraudulent instructions. The telephone
redemption option may be modified or discontinued at any time upon 60 days
notice to shareholders.

By mail: Redemption requests may also be mailed to the Transfer Agent,
identifying the Fund, the dollar amount or number of shares to be redeemed
and the shareholder's account number. The request must be signed in
exactly the same manner as the account is registered (e.g., if there is
more than one owner of the shares, all must sign). In all cases, all
signatures on a redemption request must be signature guaranteed by an
eligible guarantor institution which includes a domestic bank, a domestic
savings and loan institution, a domestic credit union, a member bank of the
Federal Reserve System or a member firm of a national securities exchange,
pursuant to the Fund's standards and procedures; if the guarantor
institution belongs to one of the Medallion Signature programs, it must use
the specific "Medallion Guaranteed" stamp (guarantees by notaries public
are not acceptable). Further documentation, such as copies of corporate
resolutions and instruments of authority, may be requested from
corporations, administrators, executors, personal representatives, trustees
or custodians to evidence the authority of the person or entity making the
redemption request. The redemption request in proper form should be sent to
UBS Private Investor Funds, Inc., c/o Investors Bank & Trust Company, P.O.
Box 1537 MFD 23, Boston, MA 02205-01537.

The right of redemption may be suspended or the date of payment postponed
for up to seven days and for such other periods as the 1940 Act or the SEC
may permit. See "Redemption of Shares" in the SAI.

EXCHANGE OF SHARES

An investor may exchange Fund shares for shares of any other series of the
Company, without charge. An exchange may be made so long as after the
exchange the investor has shares, in each series in which it remains an
investor, with a value equal to or greater than each such series' minimum
investment amount. See "Purchase of Shares" in the prospectuses of the
other Company series for the minimum investment amounts for each of those
funds. Shares are exchanged on the basis of relative net asset value per
share. Exchanges are in effect redemptions from one fund and purchases of
another fund and the usual purchase and redemption procedures and
requirements are applicable to exchanges. See "Purchase of Shares" and
"Redemption of Shares" in this Prospectus and in the prospectuses of the
other Company series. See also "Additional Information" below for an
explanation of the telephone exchange policy.
<PAGE>
<PAGE> 18

RETIREMENT PLANS

The Fund has available a form of Individual Retirement Account ("IRA") for
investment in Fund shares. Self-employed individuals may purchase shares
of the Fund through tax-deductible contributions to existing retirement
plans known as Self-Employed Retirement Plans ("SERPs"). Fund shares may
also be a suitable investment for "401(k) Plans" which allow their
participants to invest in qualified pension plans on a tax-deferred basis.
The Fund does not currently act as sponsor to such plans.

The minimum initial investment for all such retirement plans is $2,000. The
minimum for all subsequent investments is $500.

Under the Code, individuals may make wholly or partly tax-deductible IRA
contributions of up to $2,000 annually, depending on whether they are
active participants in an employer-sponsored plan and on their income
level. However, dividends and distributions held in the account are not
taxed until withdrawn in accordance with the provisions of the Code. An
individual with a non-working spouse may establish a separate IRA for the
spouse under the same conditions and contribute a combined maximum of
$2,250 annually to one or both IRAs provided that no more than $2,000 may
be contributed to the IRA of either spouse.

Investors should be aware that they may be subject to penalties or
additional taxes on contributions to or withdrawals from IRAs or other
retirement plans under certain circumstances. Prior to a withdrawal,
shareholders may be required to certify as to their age and awareness of
such restrictions in writing. Bank clients desiring information concerning
investments through IRAs or other retirement plans should contact their
Branch representative. Non-Bank clients may obtain such information by
calling the Transfer Agent at (800) [___________].

DIVIDENDS AND DISTRIBUTIONS

The Fund will declare daily, and pay monthly, dividends from its daily net
investment income. The Fund may also declare an additional dividend of net
investment income in a given year to the extent necessary to avoid the
imposition of federal excise taxes on the Fund.

Substantially all of the Fund's realized net capital gains, if any, will be
declared and paid on an annual basis, except that an additional capital
gains distribution may be made in a given year to the extent necessary to
avoid the imposition of federal excise taxes on the Fund. Declared
dividends and distributions are payable to shareholders of record on the
record date.

Dividends and capital gains distributions paid by the Fund are
automatically reinvested in additional Fund shares unless the shareholder
has elected, in writing, to have them paid in cash. Dividends and
distributions to be paid in cash are credited to the account designated by
the shareholder or sent by check to the shareholder's address of record, in
accordance with the shareholder's instructions. The Fund reserves the right
to discontinue, alter or limit the automatic reinvestment privilege at any
time.
<PAGE>
<PAGE> 19

NET ASSET VALUE

The Fund's net asset value per share equals the value of the Fund's total
assets (i.e., the value of its investment in the Portfolio plus its other
assets) less the amount of its liabilities, divided by the number of its
outstanding shares, rounded to the nearest cent. Expenses, including the
fees payable to the service providers of the Fund and the Portfolio, are
accrued daily. Securities for which market quotations are readily available
are valued at market value. All other securities will be valued at "fair
value". See "Net Asset Value" in the SAI for information on the valuation
of the Portfolio's assets and liabilities.

ORGANIZATION

UBS Private Investor Funds, Inc.

UBS Private Investor Funds, Inc., a Maryland corporation incorporated on
November 16, 1995, is an open-end management investment company registered
under the 1940 Act and organized as a series fund. The Company has no prior
history. The Company is currently authorized to issue shares in four
series: The UBS Bond Fund Series; The UBS Tax Exempt Bond Fund Series; The
UBS International Equity Fund Series; and The UBS U.S. Equity Fund Series.
Each outstanding share of the Company will have a pro rata interest in the
assets of its series, but it will have no interest in the assets of any
other Company series. Only shares of The UBS Bond Fund Series are offered
through this Prospectus.

Shareholder inquiries may be directed to the Company in writing, at
[______________________________________] and by telephone, at
[___________________].

The Declaration of Trust provides that no Trustee, shareholder, officer,
employee, or agent of the Trust shall be held to any personal liability,
nor shall resort be had to their private property for the satisfaction of
any obligation or claim or otherwise in connection with the affairs of the
Portfolio, but that only the Trust property shall be liable.

Shareholders of the Fund are entitled to one vote for each share and to the
appropriate fractional vote for each fractional share. There is no
cumulative voting. Shares have no preemptive or conversion rights. Shares
are fully paid and nonassessable when issued by the Company. The Company
has adopted a policy of not issuing share certificates. The Company does
not intend to hold meetings of shareholders annually. The Directors may
call meetings of shareholders for action by shareholder vote as may be
required by its Articles of Incorporation or the 1940 Act. For further
organizational information, including certain shareholder rights, see
"Organization" in the SAI.

Master Portfolio Trust.

[Master Portfolio Trust], an unincorporated business trust formed under
[__________] law, was organized on [______________], 1995. The Declaration
of Trust permits the Trustees to issue an unlimited number of full and
fractional shares ($0.001 par value) of one or more series. To date, three
(3) series have been authorized, of which The Master Bond Portfolio is one.
<PAGE>
<PAGE> 20

The Declaration of Trust provides that the Fund and other entities
investing in the Portfolio (e.g., other investment companies, insurance
company separate accounts and common and commingled trust funds) will each
be liable for all the obligations of the Portfolio. However, the risk of
the Fund incurring financial loss on account of such liability is limited
to circumstances in which both inadequate insurance existed and the
Portfolio itself was unable to meet its obligations. Accordingly, the
Trustees believe that neither the Fund nor its shareholders will be
adversely affected by reason of the Fund's investment in the Portfolio.

The Company expects that, immediately prior to the initial public offering
of its shares, the sole holder of its capital stock will be Signature.

TAXES

The Company intends to qualify the Fund as a separate regulated investment
company under Subchapter M of the Code. As a regulated investment company,
the Fund should not be subject to federal income taxes or federal excise
taxes if all of its net investment income and capital gains less any
available capital loss carryforwards are distributed to shareholders within
allowable time limits. The Portfolio intends to qualify as an association
treated as a partnership for federal income tax purposes. As such, the
Portfolio should not be subject to tax. The status of the Fund as a
regulated investment company is dependent on, among other things, the
Portfolio's continued qualification as a partnership for federal income tax
purposes.

Distributions of net investment income and realized net short-term capital
gains in excess of net long-term capital losses are taxable as ordinary
income to Fund shareholders, whether such distributions are taken in cash
or reinvested in additional shares. Distributions of this type to corporate
shareholders of the Fund will not qualify for the dividends-received
deduction because the income of the Fund will not consist of dividends paid
by United States corporations.

exchange of shares in the Fund held for six months or less will be treated
as a long-term capital loss to the extent of any long-term capital gain
distributions received by the shareholder with respect to such shares.

ADDITIONAL INFORMATION

The Fund will send its shareholders annual and semi-annual reports. The
financial statements appearing in annual reports will be audited by
independent accountants. Shareholders also will be sent confirmations of
each purchase and redemption and monthly statements reflecting all account
activity, including dividends and any distributions whether reinvested in
additional shares or paid in cash.

The Fund may make historical performance information available and may
compare its performance to other investments or relevant indices, including
data from Lipper Analytical Services, Inc., Micropal Inc., Morningstar
Inc., Ibbotson Associates, Standard & Poor's 500 Composite Stock Price
Index, the Dow Jones Average, the Frank Russell Indices, the EAFE Index,
the Financial Times World Stock Index and other industry publications.

The Fund may advertise "total return" and non-standardized total return
data. The total return shows what an investment in the Fund would have
earned over a specified period of time (one, five or ten years or since
commencement of operations, if less) assuming that all Fund distributions
and dividends were reinvested on the reinvestment dates during the period
and assuming the redemption of such investment at the end of each period.
This method of calculating total return is required by regulations of the
SEC. Yield and total return data similarly calculated, unless otherwise
indicated, over other specified periods of time may also be used. All
performance figures are based on historical earnings and are not intended
to indicate future performance. Performance information may be obtained by
calling the Distributor at (800) [ ].
<PAGE>
<PAGE> 22
Investment Advisor of the Portfolio

Union Bank of Switzerland
UBS PRIVATE INVESTOR FUNDS, INC.
299 Park Avenue New York Branch
The UBS Bond Fund New York, New York 10171
(212) 821-3000

Administrator

Signature Financial Group, Inc.
6 St. James Avenue
Boston, Massachusetts 02116

PROSPECTUS
Custodian and Transfer Agent

Investors Bank and Trust Company [_____________ __], 1996
89 South Street
Boston, Massachusetts 02111

Distributor

Signature Broker-Dealer
Services, Inc. No person has been authorized
6 St. James Avenue to give any information or to make
Boston, Massachusetts 02116 any representations other than
those contained in this Prospectus
in connection with the offer of
TABLE OF CONTENTS the Fund shares made by this
Prospectus, Page and, if given
Investors for Whom the Fund is or made, such other information or
Designed . . . . . . . . . . 1 representations must not be relied
Master-Feeder Structure . . . . 2 upon as having been authorized by
Investment Objective and the Fund. This Prospectus does not
Policies . . . . . . . . 4 constitute an offer to sell, or a
Additional Investment solicitation of an offer to buy,
Information and Risk by the Fund in any jurisdiction in
Factors. . . . . . . . . . . 6 which such offer to sell or
Options . . . . . . . . . . . . 9 solicitation may not lawfully
Futures Contracts . . . . . . . 11 be made.
Investment Restrictions . . . . 12
Management . . . . . . . . . . 12
Shareholder Services . . . . . 14
Expenses . . . . . . . . . . . 14
Purchase of Shares . . . . . . 15
Redemption of Shares . . . . . 16
Exchange of Shares . . . . . . 17
Retirement Plans . . . . . . . 18
Dividends and Distributions . . 18
Net Asset Value . . . . . . . . 18
Organization . . . . . . . . . 19
Taxes . . . . . . . . . . . . . 20
Additional Information . . . . 21<PAGE>
<PAGE> 1

Subject to Completion Dated November 17, 1995

PROSPECTUS

THE UBS U.S. EQUITY FUND
6 ST. JAMES AVENUE
BOSTON, MASSACHUSETTS 02116
FOR INFORMATION CALL (800) [________]

The UBS U.S. Equity Fund (the "Fund") seeks to provide a high level of
current income by investing principally in dividend-paying equity
securities of domestic corporations. In selecting these securities, the
Fund will also consider the potential for capital appreciation. It is the
intention of the Advisor (defined below) that the average income yield of
the common stocks held by the Fund be at least 50% greater than that of the
Standard and Poor's 500 Composite Stock Price Index (the "S&P 500 Index")
and have less price volatility than the S&P 500 Index. There is no
assurance that the Fund will achieve its stated objective.

UNLIKE OTHER MUTUAL FUNDS THAT DIRECTLY ACQUIRE AND MANAGE THEIR OWN
PORTFOLIO OF SECURITIES, THE FUND SEEKS TO ACHIEVE ITS INVESTMENT OBJECTIVE
BY INVESTING ALL OF ITS INVESTABLE ASSETS IN THE MASTER U.S. EQUITY
PORTFOLIO (THE "PORTFOLIO"), A CORRESPONDING OPEN-END MANAGEMENT INVESTMENT
COMPANY HAVING THE SAME INVESTMENT OBJECTIVE AS THE FUND. THE FUND EMPLOYS
A TWO-TIER MASTER-FEEDER STRUCTURE THAT IS MORE FULLY DESCRIBED UNDER THE
SECTION CAPTIONED MASTER-FEEDER STRUCTURE.

The Portfolio is advised by the New York Branch (the "Branch" or the
"Advisor") of Union Bank of Switzerland (the "Bank").

This Prospectus sets forth concisely the information about the Fund that a
prospective investor ought to know before investing. It should be read and
retained for future reference. A Statement of Additional Information, dated
[__________], 1996, provides further discussion of certain topics referred
to in this Prospectus and other matters that may be of interest to
investors. The Statement of Additional Information has been filed with the
Securities and Exchange Commission and is incorporated herein by reference
and is available without charge upon written request from the Company or
Distributor (as defined herein) at the addresses set forth on the back
cover of the Prospectus, or by calling (800) [________].

INVESTMENTS IN THE FUND ARE NOT DEPOSITS WITH OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, UNION BANK OF SWITZERLAND OR ANY OTHER BANK.
SHARES OF THE FUND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER GOVERNMENTAL AGENCY.
AN INVESTMENT IN THE FUND IS SUBJECT TO RISKS THAT MAY CAUSE THE VALUE OF
THE INVESTMENT TO FLUCTUATE. WHEN THE INVESTMENT IS REDEEMED, THE VALUE MAY
BE HIGHER OR LOWER THAN THE AMOUNT ORIGINALLY INVESTED BY THE INVESTOR.

PROSPECTUS DATED [__________], 1996.

<PAGE>
<PAGE> 2

The UBS U.S. Equity Fund

INVESTORS FOR WHOM THE FUND IS DESIGNED

The UBS U.S. Equity Fund (the "Fund") is designed for investors seeking a
high level of current income and the potential for long-term capital
appreciation with lower investment risk and volatility than is normally
available from common stock funds. Because of the risks associated with
common stock investments, the Fund is intended to be a long-term investment
vehicle and is not intended to provide investors with a means for
speculating on short-term market movements. The Fund seeks to achieve its
investment objective by investing all of its investable assets in The
Master U.S. Equity Portfolio (the "Portfolio"), an open-end management
investment company having the same investment objective as the Fund.
Because the investment characteristics and experience of the Fund will
correspond directly with those of the Portfolio, the discussion in this
Prospectus focuses on the investments and investment policies of the
Portfolio. The net asset value of shares of the Fund fluctuates with
changes in the value of the investments in the Portfolio.

The Portfolio may make various types of investments in seeking its
objective. Among the permissible investments for the Portfolio are futures
contracts, options and certain privately placed securities. The Portfolio's
investments in securities of smaller or less established issuers involve
risks and may be more volatile and less liquid than the securities of
larger or more established domestic issuers. For further information about
these investments and related investment techniques, see "Investment
Objective and Policies" discussed below.

This Prospectus describes the investment objective and policies, management
and operations of the Fund to enable investors to decide if the Fund suits
their needs. The Fund operates through a two-tier master-feeder structure.
The Company's Board of Directors (the "Directors" or the "Board") believes
that this structure provides Fund shareholders with the opportunity to
achieve certain economies of scale that would otherwise be unavailable if
the shareholders' investments were not pooled with other investors sharing
similar investment objectives.

The following table illustrates that investors in the Fund incur no
shareholder transaction expenses: their investment in the Fund is subject
only to the operating expenses set forth below for the Fund and the
Portfolio, as a percentage of average daily net assets of the Fund. These
operating expenses include expenses incurred by the Fund and expenses
incurred by the Portfolio that are allocable to the Fund. The Directors
believe that the aggregate per share expenses of the Fund and the Portfolio
will be approximately equal to and may be less than the expenses that the
Fund would incur if it retained the services of an investment advisor and
invested its assets directly in portfolio securities. Fund and Portfolio
expenses are discussed below under the headings Management and Shareholder
Services.

<TABLE>

<S> <S>
Shareholder Transaction Expenses
Sales Load Imposed on Purchases . . . . . . . . . . . . . . . . . . . . . . . . None
Sales Load Imposed on Reinvested Dividends . . . . . . . . . . . . . . . . . . None
Deferred Sales Load . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . None
Redemption Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . None
Exchange Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . None
</TABLE>

<PAGE>
<PAGE> 3

EXPENSE TABLE
ANNUAL OPERATING EXPENSES<F1>

<S> <C>
Advisory Fees, After Fee Waivers<F2> . . . . . . . . . . . . . . . . . . . . . . 0.00%
Rule 12b-1 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . None
Other Expenses, After Expense Reimbursements<F3> . . . . . . . . . . . . . . . . 0.90%
Total Operating Expenses, After Fee Waivers and Expense Reimbursements<F2> . . . 0.90%

<FN>
<F1> Expenses are expressed as a percentage of the Fund's projected average daily net assets
and are based on estimates of the expenses to be incurred during the current fiscal year,
after any applicable fee waivers and expense reimbursements. Without such fee waivers and
expense reimbursements, Total Operating Expenses would be equal, on an annual basis, to 4.56%
of the Fund's average daily net assets. See "Management".

<F2> The New York Branch (the "Branch" or the "Advisor") of Union Bank of Switzerland (the
"Bank") has agreed to waive fees and reimburse the Fund for any of its operating expenses
(including those the Fund incurs indirectly through the Portfolio) to the extent that the
Fund's total operating expenses exceed, on an annual basis, 0.90% of the Fund's average daily
net assets. The Advisor may modify or discontinue this fee waiver and expense limitation at
any time in the future with thirty days' notice to the Fund. See "Expenses".

<F3> The fees and expenses in Other Expenses, After Expense Reimbursements include fees
payable to Signature Financial Group, Inc. ("Signature") under Administration Agreements with
the Fund and the Portfolio, fees payable to Investors Bank and Trust Company (the
"Custodian") as custodian of the Fund and the Portfolio and the fees payable to the Branch
under the Shareholder Servicing Agreement. For a more detailed description of contractual fee
arrangements, including expense reimbursements, and of the fees and expenses included in
Other Expenses, see "Management" and "Shareholder Services".

</FN>
</TABLE>

EXAMPLE

An investor would pay the following expenses on a $1,000 investment, assuming
a 5% annual return and a redemption at the end of each time period:

1 Year . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . $9

3 Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $29

The above Expense Table is designed to assist investors in understanding
the various direct and indirect costs and expenses that Fund investors are
expected to bear and reflects the expenses of the Fund and the Fund's share
of the Portfolio's expenses. In connection with the above Example, please
note that $1,000 is less than the Fund's minimum investment requirement and
that there are no redemption or exchange fees of any kind. See "Purchase of
Shares" and "Redemption of Shares". THE EXAMPLE IS HYPOTHETICAL; IT IS
INCLUDED SOLELY FOR ILLUSTRATIVE PURPOSES, AND ASSUMES THE CONTINUATION OF
THE FEE WAIVERS AND EXPENSE REIMBURSEMENTS REPRESENTED IN THE ABOVE
"EXPENSE TABLE". IT SHOULD NOT BE CONSIDERED A REPRESENTATION OF FUTURE
PERFORMANCE; ACTUAL EXPENSES MAY BE MORE OR LESS THAN THOSE SHOWN.

MASTER-FEEDER STRUCTURE

Unlike other mutual funds that directly acquire and manage their own
portfolio of securities, the Fund seeks to achieve its investment objective
by investing all of its investable assets in the Portfolio, a separate
investment company with the same investment objective as the Fund. The
Portfolio is one of three (3) series of the [Master Portfolio] Trust (the
"Trust"). See "Organization". The investment objective of the Fund and the
Portfolio may

<PAGE>
<PAGE> 4

be changed only with the approval of the holders of the outstanding shares
of the Fund and the Portfolio, respectively.

<PAGE>
<PAGE> 5

INVESTMENT OBJECTIVE AND POLICIES

The investment objective of the Fund and the Portfolio is described below,
together with the policies they employ in their efforts to achieve this
objective. Additional information about the investment policies of the Fund
and the Portfolio appears in the SAI under "Investment Objectives and
Policies". The Fund attempts to achieve its investment objective by
investing all of its investable assets in The Master U.S. Equity Portfolio,
an open-end management investment company having the same investment
objective as the Fund. There can be no assurance that the investment
objective of the Fund or the Portfolio will be achieved.

The objective of the Portfolio is to provide a high level of current income
by investing principally in dividend-paying equity securities of domestic
issuers. In the selection of these securities, the Portfolio will also
consider the potential for capital appreciation. The average income yield
of the Portfolio's common stocks is expected to be higher than that of the
S&P 500 Index. It is also the objective of the Portfolio that the
Portfolio's investments have less price volatility than the S&P 500 Index.

Under normal circumstances, the Portfolio will invest at least 80% of its
assets in income-producing equity securities, including dividend-paying
common stocks and securities which are convertible into common stocks. The
Portfolio intends to invest in securities that generate relatively high
levels of dividend income and have the potential for capital appreciation.
These generally include common stocks of established, high-quality U.S.
corporations. In addition, the Portfolio will seek to diversify its
investment over a carefully selected list of securities in order to
moderate the risks inherent in equity investments.

The Portfolio will invest in an equity security following a fundamental
analysis of the issuing company. An important part of this analysis will be
the examination of the company's ability to maintain its dividend. The
Advisor believes that dividend income has proved to be an important
component of total return. For example, during the ten-year period ended
September 1994, reinvested dividend income accounted for approximately 26%
of the total return of the S&P 500 Index. Also, the Advisor believes that
dividend income tends to be a more stable source of total return than
capital appreciation. While the price of a company's common stock can be
significantly affected by market fluctuations and other short-term factors,
its dividend level usually has greater stability. For this reason,
securities that pay a high level of dividend income tend to be less
volatile in price than comparable securities that pay a lower level of
dividend income.

Although the Portfolio intends to invest primarily in equity securities, it
may invest up to 20% of its assets in certain cash investments and certain
short-term fixed income securities. See "Investment Objectives and
Policies--Quality and Diversification Requirements" in the SAI. Such
securities may be used to invest uncommitted cash balances, to maintain
liquidity to meet shareholder redemptions or to take a temporarily
defensive position against potential stock market declines. These
securities include: obligations of the United States Government and its
agencies or instrumentalities; commercial paper, bank certificates of
deposit and bankers' acceptances; and repurchase agreements collateralized
by these securities. The Portfolio may purchase nonpublicly offered debt
securities. See "Illiquid Investments; Privately Placed and Other
Unregistered Securities."

The Portfolio may also utilize equity futures contracts and options to a
limited extent. Specifically, the Portfolio may enter into futures
contracts and options provided that such positions are established for
hedging purposes only. See "Futures Contracts".

The Portfolio intends to actively manage its securities in pursuit of its
investment objective. Although it generally seeks to invest for the long-
term, the Portfolio retains the right to sell securities irrespective of
how long they have been held. It is anticipated that the annual portfolio
turnover of the Portfolio will not exceed 100%. To the extent the Portfolio
engages in short-term trading, it may incur increased transaction costs.

<PAGE>
<PAGE> 6

EQUITY INVESTMENTS. Under normal circumstances, the Advisor intends to
invest at least 80% of the Portfolio's assets in the equity securities of
domestic issuers. These investments will consist of common stocks and
other securities with equity characteristics such as preferred stock,
warrants, rights and convertible securities. The Portfolio's primary equity
investments are the common stocks of established domestic companies. The
common stock in which the Portfolio may invest includes the common stock of
any class or series or any similar equity interest such as trust or limited
partnership interests. See "Additional Investment Information and Risk
Factors". The Portfolio invests in domestic securities listed on domestic
securities exchanges and securities traded in domestic over-the-counter
markets, and may invest in certain restricted or unlisted securities. See
"Additional Investment Information and Risk Factors".

ADDITIONAL INVESTMENT INFORMATION AND RISK FACTORS

CONVERTIBLE SECURITIES. The convertible securities in which the Portfolio
may invest include any debt securities or preferred stocks that may be
converted into common stock or that carry the right to purchase common
stock. Convertible securities entitle the holder to exchange the securities
for a specified number of shares of common stock, usually of the same
company, at specified prices within a certain period of time.

WHEN-ISSUED AND DELAYED DELIVERY SECURITIES. The Portfolio may purchase
securities on a when-issued or delayed delivery basis. Delivery of and
payment for these securities may take as long as a month or more after the
date of the purchase commitment. The value of these securities is subject
to market fluctuation during this period and no interest or income accrues
to the Portfolio until settlement. At the time of settlement a when-issued
security may be valued at less than its purchase price. Between the trade
and settlement dates, the Portfolio will maintain a segregated account with
the Custodian consisting of a portfolio of high grade, liquid debt with a
value at least equal to these commitments. When entering into a when-issued
or delayed delivery transaction, the Portfolio will rely on the other party
to consummate the transaction; if the other party fails to do so, the
Portfolio may be disadvantaged. It is the current policy of the Portfolio
not to enter into when-issued commitments exceeding in the aggregate 15% of
the market value of the Portfolio's total assets less liabilities
(excluding the obligations created by these commitments).

REPURCHASE AGREEMENTS. The Portfolio may engage in repurchase agreement
transactions with brokers, dealers or banks that meet the credit guidelines
established by the Trust's Board of Trustees (the "Trustees"). In a
repurchase agreement, the Portfolio buys a security from a seller that has
agreed to repurchase it at a mutually agreed upon date and price,
reflecting the interest rate effective for the term of the agreement. The
term of these agreements is usually from overnight to one week. A
repurchase agreement may be viewed as a fully collateralized loan of money
by the Portfolio to the seller. The Portfolio always receives securities as
collateral with a market value at least equal to the purchase price plus
accrued interest and this value is maintained during the term of the
agreement. If the seller defaults and the collateral's value declines, the
Portfolio might incur a loss. If bankruptcy proceedings are commenced with
respect to the seller, the Portfolio's realization upon the disposition of
collateral may be delayed or limited. Investments in repurchase agreements
maturing in more than seven days and certain other investments that may be
considered illiquid are limited. See "Illiquid Investments; Privately
Placed and Other Unregistered Securities" below.

REVERSE REPURCHASE AGREEMENTS. The Portfolio is permitted to enter into
reverse repurchase agreements. In a reverse repurchase agreement, the
Portfolio sells a security and agrees to repurchase it at a mutually agreed
upon date and price, reflecting the interest rate effective for the term of
the agreement. It may also be viewed as the borrowing of money by the
Portfolio and, therefore, is a form of leverage. Leverage may cause any
gains or losses of the Portfolio to be magnified. For more information,
including limitations on the use of reverse repurchase agreements, see
"Investment Objectives and Policies" in the SAI.

<PAGE>
<PAGE> 7

SECURITIES LENDING. Subject to applicable investment restrictions, the
Portfolio may lend its securities. The Portfolio may lend its securities if
such loans are secured continuously by cash or equivalent collateral or by
a letter of credit in favor of the Portfolio at least equal at all times to
100% of the market value of the securities loaned, plus accrued interest.
While such securities are on loan, the borrower will pay the Portfolio any
income accruing thereon. Loans will be subject to termination by the
Portfolio in the normal settlement time, generally three business days
after notice, or by the borrower on one day's notice. Borrowed securities
must be returned when the loan is terminated. Any gain or loss in the
market price of the borrowed securities that occurs during the term of the
loan inures to the Portfolio and its respective investors. The Portfolio
may pay reasonable finders' and custodial fees in connection with a loan.
In addition, the Portfolio will consider all the facts and circumstances,
including the creditworthiness of the borrowing financial institution, and
the Portfolio will not make any loans in excess of one year. The Portfolio
will not lend its securities to any officer, Trustee, Director, employee or
affiliate or placement agent of the Company, the Portfolio, or the Advisor,
Administrator or Distributor, unless otherwise permitted by applicable law.

ILLIQUID INVESTMENTS; PRIVATELY PLACED AND OTHER UNREGISTERED SECURITIES.
The Portfolio may not acquire any illiquid securities if, as a result
thereof, more than 15% of the market value of the Portfolio's net assets
would be in illiquid investments. In addition, the Portfolio will not
invest more than 5% of the market value of its total assets in restricted
securities that cannot be offered for public sale in the United States
without first being registered under the Securities Act of 1933, as amended
(the "Securities Act"). Subject to those non-fundamental policy
limitations, the Portfolio may acquire investments that are illiquid or
have limited liquidity, such as private placements or investments that are
not registered under the Securities Act. An illiquid investment is any
investment that cannot be disposed of within seven days in the normal
course of business at approximately the amount at which it is valued by the
Portfolio. Repurchase agreements maturing in more than seven days are
considered illiquid investments and, as such, are subject to the
limitations set forth in this paragraph. The price the Portfolio pays for
illiquid securities or receives upon resale may be lower than the price
paid or received for similar securities with a more liquid market.
Accordingly, the valuation of these securities will reflect any limitations
on their liquidity.

The Portfolio may also purchase Rule 144A securities sold to institutional
investors without registration under the Securities Act. These securities
may be determined to be liquid in accordance with guidelines established by
the Advisor and approved by the Trustees. The Trustees will monitor the
Advisor's implementation of these guidelines on a periodic basis.

MONEY MARKET INSTRUMENTS. The Portfolio is permitted to invest in money
market instruments although it intends to stay invested in equity
securities to the extent practical in light of its objectives and long-term
investment perspective. The Portfolio may make money market investments
pending other investments or settlements, for liquidity or in adverse
market conditions. Such money market investments may include obligations of
the U.S. Government and its agencies and instrumentalities, commercial
paper, bank obligations and repurchase agreements. For more detailed
information about these money market investments, see "Investment
Objectives and Policies" in the SAI.

FUTURES AND OPTIONS TRANSACTIONS. The Portfolio is permitted to enter into
the futures and options transactions described below for hedging purposes
only.

The Portfolio may purchase exchange traded and over-the-counter ("OTC") put
and call options on equity securities or indices of equity securities,
enter into forward contracts, purchase and sell futures contracts on
indices of equity securities and purchase put and call options on futures
contracts on indices of equity securities.

The Portfolio may use these techniques for hedging purposes, but not for
speculation.

<PAGE>
<PAGE> 8

The Portfolios use of these transactions is a highly specialized activity
which involves investment strategies and risks different from those
associated with ordinary portfolio securities transactions, and there can
be no guarantee that their use will increase the Portfolio's return. While
the Portfolio's use of these instruments may reduce certain risks
associated with owning its portfolio securities, these techniques
themselves entail certain other risks. If the Advisor applies a strategy at
an inappropriate time or judges market conditions or trends incorrectly,
such strategies may lower the Portfolio's return. Certain strategies limit
the Portfolio's opportunity to realize gains as well as limiting its
exposure to losses. The Portfolio could experience losses if the prices of
its options and futures positions were poorly correlated with its other
investments, or if it could not close out its positions because of an
illiquid secondary market. In addition, the Portfolio will incur
transaction costs, including trading commissions and option premiums, in
connection with these transactions and these transactions could
significantly increase the Portfolio's turnover rate.

The Portfolio may purchase put and call options on securities, indices of
securities and futures contracts, or purchase and sell futures contracts,
only if such options are written by other persons and if (i) the aggregate
premiums paid on all such options that are held at any time do not exceed
20% of the Portfolio's net assets and (ii) the aggregate margin deposits
required on all such futures or options thereon held at any time do not
exceed 5% of the Portfolio's net assets.

OPTIONS

PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, the Portfolio
obtains the right (but not the obligation) to sell the instrument
underlying the option at a fixed strike price. In return for this right,
the Portfolio pays the current market price for the option (known as the
option premium). Options have various types of underlying instruments,
including specific securities, indices of securities, indices of securities
prices and futures contracts. The Portfolio may terminate its position in a
put option it has purchased by allowing it to expire or by exercising the
option. The Portfolio may also close out a put option position by entering
into an offsetting transaction, if a liquid market exists. If the option is
allowed to expire, the Portfolio will lose the entire premium it paid. If
the Portfolio exercises a put option on a security, it will sell the
instrument underlying the option at the strike price. If the Portfolio
exercises an option on an index, settlement is in cash and does not involve
the actual sale of securities. American style options may be exercised on
any day up to their expiration date. European style options may be
exercised only on their expiration date.

<PAGE>
<PAGE> 9

option with risk limited to the cost of the option if security prices fall.
At the same time, the buyer can expect to suffer a loss if security prices
do not rise sufficiently to offset the cost of the option.

SELLING (WRITING) PUT AND CALL OPTIONS. When the Portfolio writes a put
option, it takes the opposite side of the transaction from the option's
purchaser. In return for receipt of the premium, the Portfolio assumes the
obligation to pay the strike price for the instrument underlying the option
if the other party to the option chooses to exercise it. The Portfolio may
seek to terminate its position in a put option it writes before exercise by
purchasing an offsetting option in the market at its current price. If the
market is not liquid for a put option the Portfolio has written, however,
the Portfolio must continue to be prepared to pay the strike price while
the option is outstanding, regardless of price changes, and must continue
to post margin as discussed below.

OPTIONS ON INDICES. The Portfolio is permitted to enter into options
transactions and may purchase put and call options on any securities index
based on securities in which the Portfolio may invest. Options on
securities indices are similar to options on securities, except that the
exercise of securities index options is settled by cash payment and does
not involve the actual purchase or sale of securities. In addition, these
options are designed to reflect price fluctuations in a group of securities
or segment of the securities market rather than price fluctuations in a
single security. The Portfolio, in purchasing or selling index options, is
subject to the risk that the value of its portfolio securities may not
change as much as an index because the Portfolio's investments generally
will not match the composition of an index.

For a number of reasons, a liquid market may not exist and thus the
Portfolio may not be able to close out an option position that it has
previously entered into. When the Portfolio purchases an OTC option, it
will be relying on its counterparty to perform its obligations, and the
Portfolio may incur additional losses if the counterparty is unable to
perform.

FUTURES CONTRACTS

<PAGE>
<PAGE> 10

enters into the contract. Futures can be held until their delivery dates or
the positions can be (and normally are) closed out before then. There is no
assurance, however, that a liquid market will exist when a Portfolio wishes
to close out a particular position.

When the Portfolio purchases a futures contract, the value of the futures
contract tends to increase and decrease in tandem with the value of its
underlying instrument. Therefore, purchasing futures contracts will tend to
increase the Portfolio's exposure to positive and negative price
fluctuations in the underlying instrument, much as if it had purchased the
underlying instrument directly. When the Portfolio sells a futures
contract, by contrast, the value of its futures position will tend to move
in a direction contrary to the value of the underlying instrument. Selling
futures contracts or securities similar to those held by the Portfolio,
therefore, will tend to offset both positive and negative market price
changes, much as if the underlying instrument had been sold. Because there
are a limited number of types of exchange-traded options and futures
contracts, it is likely that these standardized instruments will not
exactly match the Portfolio's current or anticipated investments. The
Portfolio may invest in futures contracts and options thereon based on
securities with different issuers, maturities, or other characteristics
from the securities in which it typically invests, which involves a risk
that the options or futures position will not track the performance of the
Portfolio's other investments.

The purchaser or seller of a futures contract is not required to deliver or
pay for the underlying instrument unless the contract is held until the
delivery date. However, when the Portfolio buys or sells a futures contract
it will be required to deposit "initial margin" with the Custodian in a
segregated account in the name of its futures broker, known as a futures
commission merchant ("FCM"). Initial margin deposits are typically equal to
a small percentage of the contract's value. If the value of either party's
position declines, that party will be required to make additional
"variation margin" payments equal to the change in value on a daily basis.
The party that has a gain may be entitled to receive all or a portion of
this amount. The Portfolio may be obligated to make payments of variation
margin at a time when it is disadvantageous to do so. Furthermore, it may
not always be possible for the Portfolio to close out its futures
positions. Until it closes out a futures position, the Portfolio will be
obligated to continue to pay variation margin. Initial and variation margin
payments do not constitute purchasing on margin for purposes of the
Portfolio's investment restrictions. [In the event of the bankruptcy of an
FCM that holds margin on behalf of the Portfolio, the Portfolio may be
entitled to return of margin owed to it only in proportion to the amount
received by the FCM's other customers, potentially resulting in losses to
the Portfolio.

The Portfolio will segregate liquid, high-grade assets in connection with
its use of options and futures contracts to the extent required by the SEC.
Securities held in a segregated account cannot be sold while the futures
contract or option is outstanding, unless they are replaced with other
suitable assets. As a result, there is a possibility that the segregation
of a large percentage of the Portfolio's assets could impede portfolio
management or the Portfolio's ability to meet redemption requests or other
current obligations.

For further information about the Portfolio's use of futures and options
and a more detailed discussion of associated risks, see "Investment
Objectives and Policies" in the SAI.

INVESTMENT RESTRICTIONS

The investment objective of the Fund and the Portfolio, together with the
investment restrictions described below and in the SAI, except as noted,
are deemed fundamental policies, i.e., they may be changed only with the
approval of the holders of a majority of the outstanding voting securities
(as defined in the Investment Company Act of 1940, as amended (the "1940
Act")), of the Fund and the Portfolio, respectively. The Fund has the same
investment restrictions as the Portfolio, except that the Fund may invest
all of its investable assets in another open-end investment company with
the same investment objective and restrictions (such as the Portfolio) and
the Fund may retain an investment advisor to manage the Fund's assets in
accordance with the

<PAGE>
<PAGE> 11

investment policies and restrictions set forth below. References below to
the Fund's investment restrictions also include the Portfolio's investment
restrictions.

The Fund may not: (i) purchase the securities or other obligations of
issuers conducting their principal business activity in the same industry
if its investments in such industry would exceed 25% of the value of the
Fund's total assets, except this limitation shall not apply to investments
in U.S. Government securities; (ii) enter into reverse repurchase
agreements and other permitted borrowings that constitute senior securities
under the 1940 Act, exceeding in the aggregate one-third of the market
value of the Fund's total assets less certain liabilities; or (iii) borrow
money, except from banks for extraordinary or emergency purposes; (iv)
purchase securities while borrowings, including reverse repurchase
agreements, exceed 5% of its total assets; or (v) mortgage, pledge or
hypothecate any assets except in connection with any such borrowing and in
amounts not to exceed one-third of the value of the Fund's total assets
less certain liabilities at the time of such borrowing.

For a more detailed discussion of the above investment restrictions, as
well as a description of certain other investment restrictions, see
"Investment Restrictions" and "Additional Information" in the SAI.

MANAGEMENT

DIRECTORS AND TRUSTEES. Pursuant to the Declaration of Trust, the Trustees
establish the Portfolio's general policies, are responsible for the overall
management of the Trust and review the actions of the Advisor,
Administrator and other service providers. Similarly, the Directors set the
Company's general policies, are responsible for the overall management of
the Company and review the performance of its service providers. Additional
information about the Company's Board of Directors and officers appears in
the SAI under the heading "Directors and Trustees". The Trustees are also
Directors of the Company, which raises certain conflicts of interest. The
Company and the Trust have adopted written procedures reasonably
appropriate to deal with these conflicts should they arise.

ADVISOR. The Fund has not retained the services of an investment advisor
because the Fund seeks to achieve its investment objective by investing all
of its investable assets in the Portfolio. The Portfolio has retained the
services of the Branch as investment advisor. The Branch, which operates
out of offices located at 299 Park Avenue, New York, New York, is licensed
by the Superintendent of Banks of the State of New York under the banking
laws of the State of New York and is subject to banking laws and
regulations applicable to a foreign bank that operates a New York branch.

The Bank has branches, agencies, representative offices and subsidiaries in
Switzerland and in more than 40 cities outside Switzerland, including, in
the United States, New York City, Chicago, Houston, Los Angeles and San
Francisco. In addition to the receipt of deposits and the making of loans
and advances, the Bank, through its offices and subsidiaries, engages in a
wide range of banking and financial activities typical of the world's major
international banks, including fiduciary, investment advisory and custodial
services and foreign exchange in the United States, Swiss, Asian and Euro-
capital markets. The Bank is one of the world's leading asset managers.

<PAGE>
<PAGE> 12

Management (New York) Inc., an indirect, wholly-owned subsidiary of the
Bank with assets under management totaling $33.9 billion as of December 31,
1994, offers primarily U.S. dollar-based asset management services to
institutions (including pension and other employee benefit trusts),
individuals, corporations and other entities in the areas of equities,
fixed income, real estate, oil and gas and timber investments.

The Advisor provides investment advice, portfolio management and certain
administrative services to the Portfolio. Subject to the supervision of the
Trustees, the Advisor makes the Portfolio's day-to-day investment
decisions, arranges for the execution of portfolio transactions and
generally manages the Portfolio's investments and operations. See
"Investment Advisor" in the SAI.

The Advisor uses a sophisticated, disciplined, collaborative process for
managing all asset classes. Nancy Tengler is primarily responsible for the
day-to-day management and implementation of the Advisor's process for the
Portfolio. Ms. Tengler is a Managing Director-Senior Portfolio Manager of
the Advisor's Value Equities Group. Ms. Tengler is responsible for managing
several portfolios and researching investment opportunities in several
industries, including the pharmaceutical and electric utilities industries.
Ms. Tengler co-authored a book entitled Relative Dividend Yield--Common
Stock Investing for Income and Appreciation, and has twelve years of
investment experience. Ms. Tengler received a B.A. degree from Point Loma
College.

Under the Trust's Advisory Agreement, the Portfolio will pay the Advisor a
fee, calculated daily and payable monthly, at an annual rate of 0.60% of
the Portfolio's average net assets. The Advisor has voluntarily agreed to
waive its advisory fees and reimburse the Fund for any of its expenses to
the extent that the Fund's total operating expenses exceed, on an annual
basis, 0.90% of the Fund's average daily net assets. The Advisor may modify
or discontinue this fee waiver and expense limitation at any time in the
future with thirty days' notice to the Fund. See "Expenses".

INVESTMENTS IN THE FUND ARE NOT DEPOSITS WITH OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, THE BRANCH OR ANY OTHER BANK.

ADMINISTRATOR. Under Administration Agreements with the Company and the
Trust, Signature Financial Group, Inc. ("Signature" or the
"Administrator"), an affiliate of the Distributor (defined below), serves
as the Administrator of the Fund and the Portfolio. In this capacity,
Signature administers all aspects of the Fund's and the Portfolio's day-to-
day operations, subject to the supervision of the Advisor and the Board and
Trustees,

<PAGE>
<PAGE> 13

respectively, except as set forth under "Advisor", "Distributor",
"Custodian" and "Shareholder Services". As Administrator, Signature: (i)
furnishes general office facilities and ordinary clerical and related
services for day-to-day operations including recordkeeping
responsibilities; (ii) takes responsibility for compliance with all
applicable federal and state securities and other regulatory requirements;
(iii) is responsible for the registration of sufficient Fund shares under
federal and state securities laws; (iv) takes responsibility for monitoring
the Fund's status as a "regulated investment company" under the Code; and
(v) performs administrative and managerial oversight of the activities of
the custodian, transfer agent and other agents or independent contractors
of the Fund and the Portfolio.

Under the Trust's Administration Agreement, the Portfolio has agreed to pay
Signature a fee, calculated daily and payable monthly, at an annual rate of
0.05% of the Portfolio's average net assets.

DISTRIBUTOR. Under the Distribution Agreement, Signature Broker-Dealer
Services, Inc. (the "Distributor"), located at 6 St. James Avenue, Boston,
MA 02116, serves as the distributor of Fund shares. The Distributor is a
wholly-owned direct subsidiary of Signature and is a registered broker-
dealer. The Distributor does not receive a fee pursuant to the terms of the
Distribution Agreement.

CUSTODIAN. Investors Bank and Trust Company ("IBT" or the "Transfer
Agent"), whose principal offices are located at 89 South Street, Boston,
Massachusetts 02111, serves as the custodian and transfer and dividend
disbursing agent for the Portfolio and the Fund. See "Custodian" in the
SAI.

SHAREHOLDER SERVICES

EXPENSES

In addition to the fees of the Advisor, Signature and the Transfer Agent,
the Fund will be responsible for, or will indirectly bear through its
interest in the Portfolio, other expenses including brokerage costs and
litigation and extraordinary expenses. The Advisor has agreed to waive fees
and reimburse expenses as necessary, if, in any fiscal year, the sum of the
Fund's expenses exceeds the limits set by applicable regulations of state
securities commissions. Such annual limits are currently 2.5% of the first
$30 million of average net assets, 2% of the next $70 million of such net
assets and 1.5% of such net assets in excess of $100 million. The Advisor
has also voluntarily agreed to limit the total operating expenses of the
Fund, excluding extraordinary expenses, to an annual rate of 0.90% of the
Fund's average daily net assets. The Advisor may modify or discontinue this
voluntary expense limitation at any time in the future with thirty days'
notice to the Fund.

<PAGE>
<PAGE> 14

PURCHASE OF SHARES

GENERAL INFORMATION ON PURCHASES. Investors may purchase Fund shares only
through the Distributor. All purchase orders must be accepted by the
Distributor. The Company also reserves the right to determine the purchase
orders that it will accept and it reserves the right to cease offering its
shares at any time. The shares of the Fund may be purchased only in those
states where they may be lawfully sold.

The business days of the Fund and the Portfolio are the days the New York
Stock Exchange is open.

The shares of the Fund are sold on a continuous basis without a sales
charge at the net asset value per share next determined after receipt and
acceptance of a purchase order by the Distributor. The Fund calculates its
net asset value at the close of business. See "Net Asset Value". The
minimum initial investment in the Fund is $25,000, except that the minimum
initial investment is $10,000 for shareholders of another series of the
Company. The minimum subsequent investment in the Fund for all investors is
$5,000. The minimum initial investment for employees of the Bank and its
affiliates is $5,000. The minimum subsequent investment is $1,000. These
minimum investment requirements may be waived for certain retirement plans
or accounts for the benefit of minors. For purposes of the minimum
investment requirements, the Fund may aggregate investments by related
shareholders. Investors will receive the number of full and fractional
shares of the Fund equal to the dollar amount of their subscription divided
by the net asset value per share of the Fund as next determined on the day
that the investor's subscription is accepted. See "Purchase of Shares" in
the SAI.

Purchase orders in proper form received by the Distributor prior to 4:00
p.m. New York time or the close of regular trading on the New York Stock
Exchange (the "NYSE"), whichever is earlier, are effective and executed at
the net asset value next determined that day. Purchase orders received
after 4:00 p.m. New York time or the close of the NYSE, whichever is
earlier, will be executed at the net asset value determined on the next
business day. Investors become record shareholders of the Fund on the day
they place their subscription order, provided it is received by the
Distributor before 4:00 p.m. As record shareholders, investors are entitled
to earn dividends.

Fund shares may be purchased in the following methods:

UBS BANK CLIENTS: UBS Private Bank Clients should request an INVS
representative to assist them in placing a purchase order with the
Distributor.

THROUGH THE DISTRIBUTOR: Shareholders who do not currently maintain a
private banking relationship with the Bank may purchase shares of the Fund
directly from the Distributor by wire transfer or mail.

The Transfer Agent will maintain the accounts for all shareholders who
purchase Fund shares directly through the Distributor. For account balance
information and shareholder services, such shareholders should contact the
Transfer Agent at (800) [________] or in writing at UBS Private Investor
Funds, Inc., c/o Investors Bank and Trust Company, P.O. Box 1537 MFD 23,
Boston, MA 02205-1537.

By wire: Purchases may be made by federal funds wire. To place a purchase
order with the Fund, the shareholder must telephone the Transfer Agent at
(800) [________] for specific instructions.

<PAGE>
<PAGE> 15

Subject to the minimum purchase requirements discussed above, shares
purchased by federal funds wire will be effected at the net asset value per
share next determined after acceptance of the order.

REDEMPTION OF SHARES

GENERAL INFORMATION ON REDEMPTIONS. A shareholder may redeem all or any
number of the shares registered in its name at any time at the net asset
value next determined after a redemption request in proper form is received
by the Distributor. The Fund calculates its net asset value at the close of
business. See "Net Asset Value".

Shareholders will not be record holders for dividend purposes on the day
that they redeem Fund shares.

Fund shares may be redeemed in the following methods:

UBS BANK CLIENTS: Shareholders who are Bank clients should request an INVS
representative to assist them in placing a redemption order with the
Distributor.

THROUGH THE DISTRIBUTOR: Shareholders who are not Bank clients may redeem
Fund shares by telephone or mail.

By telephone: Telephone redemptions may be made by calling the Transfer
Agent at (800) [_______]. Redemption orders will be accepted until
4:00 p.m. New York time or the close of regular trading on the NYSE,
whichever is earlier. Telephone redemption requests are limited to those
shareholders who have

<PAGE>
<PAGE> 16

previously elected this service. Such shareholders risk possible loss of
principal and interest in the event of a telephone redemption not
authorized by them. The Fund and the Transfer Agent will employ reasonable
procedures to verify that telephone redemption instructions are genuine and
will require that shareholders electing such as option provide a form of
personal identification. The failure by the Fund or the Transfer Agent to
employ such procedures may cause the Fund or the Transfer Agent to be
liable for any losses incurred by investors due to telephone redemptions
based upon unauthorized or fraudulent instructions. The telephone
redemption option may be modified or discontinued at any time upon 60 days
notice to shareholders.

By mail: Redemption requests may also be mailed to the Transfer Agent,
identifying the Fund, the dollar amount or number of shares to be redeemed
and the shareholder's account number. The request must be signed in exactly
the same manner as the account is registered (e.g., if there is more than
one owner of the shares, all must sign). In all cases, all signatures on a
redemption request must be signature guaranteed by an eligible guarantor
institution which includes a domestic bank, a domestic savings and loan
institution, a domestic credit union, a member bank of the Federal Reserve
System or a member firm of a national securities exchange; pursuant to the
Fund's standards and procedures; if the guarantor institution belongs to
one of the Medallion Signature programs, it must use the specific
"Medallion Guaranteed" stamp (guarantees by notaries public are not
acceptable). Further documentation, such as copies of corporate resolutions
and instruments of authority, may be requested from corporations,
administrators, executors, personal representatives, trustees or custodians
to evidence the authority of the person or entity making the redemption
request. The redemption request in proper form should be sent to UBS
Private Investor Funds, Inc., c/o Investors Bank and Trust Company, P.O.
Box 1537 MFD 23, Boston, MA 02205-1537.

MANDATORY REDEMPTION. If the value of a shareholder's holdings in the Fund
falls below $10,000 because of a redemption of shares, the shareholder's
remaining shares may be redeemed 60 days after written notice unless the
account is increased to $10,000 or more. For example, a shareholder whose
initial and only investment is $10,000 may be subject to mandatory
redemption resulting from any redemption that causes his or her investment
to fall below $10,000.

FURTHER REDEMPTION INFORMATION. Investors should be aware that redemptions
may not be processed unless the redemption request is submitted in proper
form. To be in proper form, the Fund must have received the shareholder's
taxpayer identification number and address. As discussed under "Taxes"
below, the Fund may be required to impose "back-up" withholding of federal
income tax on dividends, distributions and redemptions when non-corporate
investors have not provided a certified taxpayer identification number. In
addition, if an investor sends a check to the Distributor for the purchase
of Fund shares and shares are purchased with funds made available by the
Distributor before the check has cleared, the transmittal of redemption
proceeds from the sale of those shares will not occur until the check used
to purchase such shares has cleared, which may take up to 15 days.
Redemption delays may be avoided by purchasing shares by federal funds
wire.

EXCHANGE OF SHARES

<PAGE>
<PAGE> 17

and requirements are applicable to exchanges. See "Purchase of Shares" and
"Redemption of Shares" in this Prospectus and in the prospectuses for the
other Company series. See also "Additional Information" below for an
explanation of the telephone exchange policy.

RETIREMENT PLANS

The Fund has available a form of Individual Retirement Account ("IRA") for
investment in Fund shares. Self-employed individuals may purchase shares of
the Fund through tax-deductible contributions to existing retirement plans
known as Self-Employed Retirement Plans ("SERPs"). Fund shares may also be
a suitable investment for "401(k) Plans" which allow their participants to
invest in qualified pension plans on a tax-deferred basis. The Fund does
not currently act as sponsor to such plans.

The minimum initial investment for all such retirement plans is $2,000. The
minimum for all subsequent investments is $500.

Investors should be aware that they may be subject to penalties or
additional taxes on contributions to or withdrawals from IRAs or other
retirement plans under certain circumstances. Prior to a withdrawal,
shareholders may be required to certify as to their age and awareness of
such restrictions in writing. Bank clients desiring information concerning
investments through IRAs or other retirement plans should contact their
Bank representative. Non-Bank clients may obtain such information by
calling the Transfer Agent at (800) [___________].

DIVIDENDS AND DISTRIBUTIONS

Dividends consisting of substantially all of the Fund's net investment
income, if any, are declared and paid annually. The Fund may also declare
an additional dividend of net investment income in a given year to the
extent necessary to avoid the imposition of federal excise taxes on the
Fund.

<PAGE>
<PAGE> 18

NET ASSET VALUE

ORGANIZATION

UBS PRIVATE INVESTOR FUNDS, INC.

UBS Private Investor Funds, Inc., a Maryland corporation incorporated on
November 16, 1995, is an open-end management investment company registered
under the 1940 Act and organized as a series fund. The Company has no prior
history. The Company is currently authorized to issue shares in four
series: The UBS Bond Fund Series; The UBS Tax Exempt Bond Fund Series; The
UBS International Equity Fund Series; and The UBS U.S. Equity Fund Series.
Each outstanding share of the Company will have a pro rata interest in the
assets of its series, but it will have no interest in the assets of any
other Company series. Only shares of The UBS U.S. Equity Fund Series are
offered through this Prospectus.

Shareholder inquiries may be directed to the Company in writing, at
[______________________________________], and by telephone, at
[_______________________].

Shareholders of the Fund are entitled to one vote for each share and to the
appropriate fractional vote for each fractional share. There is no
cumulative voting. Shares have no preemptive or conversion rights. Shares
are fully paid and nonassessable when issued by the Company. The Company
has adopted a policy of not issuing share certificates. The Company does
not intend to hold meetings of shareholders annually. The Directors may
call meetings of shareholders for action by shareholder vote as may be
required by its Articles of Incorporation or the 1940 Act. For further
organizational information, including certain shareholder rights, see
"Organization" in the SAI.

MASTER PORTFOLIO TRUST

[Master Portfolio Trust], an unincorporated business trust formed under
[________] law, was organized on [________], 1995. The Declaration of Trust
permits the Trustees to issue an unlimited number of full and fractional
shares ($0.001 par value) of one or more series. To date, three (3) series
have been authorized, of which The Master U.S. Equity Portfolio is one.

<PAGE>
<PAGE> 19

The Company expects that, immediately prior to the initial public offering
of its shares, the sole holder of its capital stock will be Signature.

TAXES

Distributions of net investment income and realized net short-term capital
gains in excess of net long-term capital losses are taxable as ordinary
income to Fund shareholders whether such distributions are taken in cash or
reinvested in additional shares.

Any distribution of net investment income or capital gains will have the
effect of reducing the net asset value of Fund shares held by a shareholder
by the same amount per share as the distribution. If such a distribution
reduces the net asset value of such shareholder's holdings in the Fund
below the price that the shareholder paid for such shares, the distribution
will still be taxable to the shareholder. Shareholders may be
proportionally liable for taxes on the Fund's income and capital gains, but
shareholders not subject to tax on their income will not be required to pay
tax on amounts distributed to them.

<PAGE>
<PAGE> 20

redemption or exchange of shares in the Fund held for six months or less
will be treated as a long-term capital loss to the extent of any long-term
capital gain distributions received by the shareholder with respect to such
shares.

<PAGE>
<PAGE> 21

ADDITIONAL INFORMATION

The Fund will send its shareholders annual and semi-annual reports. The
financial statements appearing in annual reports will be audited by
independent accountants. Shareholders also will be sent confirmations of
each purchase and redemption and monthly statements reflecting all account
activity, including dividends and any distributions reinvested in
additional shares or paid in cash.

The Fund may make historical performance information available and may
compare its performance to other investments or relevant indices, including
data from Lipper Analytical Services, Inc., Micropal Inc., Morningstar
Inc., Ibbotson Associates, S&P 500 Index, the Dow Jones Average, the Frank
Russell Indices, the Financial Times World Stock Index and other industry
publications.

The Fund may advertise "total return" and non-standardized total return
data. The total return shows what an investment in the Fund would have
earned over a specified period of time (one, five or ten years or since
commencement of operations, if less) assuming that all Fund distributions
and dividends were reinvested on the reinvestment dates during the period
and assuming the redemption of such investment at the end of each period.
This method of calculating total return is required by regulations of the
SEC. Yield and total return data similarly calculated, unless otherwise
indicated, over other specified periods of time may also be used. All
performance figures are based on historical earnings and are not intended
to indicate future performance. Performance information may be obtained by
calling the Distributor at (800) [ ].

<PAGE>
<PAGE> 22

INVESTMENT ADVISOR OF THE PORTFOLIO

Union Bank of Switzerland - New York Branch
299 Park Avenue
New York, New York 10171
(212) 821-3000

ADMINISTRATOR

Signature Financial Group, Inc.
6 St. James Avenue
Boston, Massachusetts 02116

CUSTODIAN AND TRANSFER AGENT

Investors Bank and Trust Company
89 South Street
Boston, Massachusetts 02111

DISTRIBUTOR

Signature Broker-Dealer Services, Inc.
6 St. James Avenue
Boston, Massachusetts 02116

TABLE OF CONTENTS
Page

Investors for Whom the Fund is
Designed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Master-Feeder Structure . . . . . . . . . . . . . . . . . . . . . . . . 2
Investment Objective and
Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Additional Investment
Information and Risk Factors . . . . . . . . . . . . . . . . . . . . 5
Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Futures Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Investment Restrictions . . . . . . . . . . . . . . . . . . . . . . . . 9
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Shareholder Services . . . . . . . . . . . . . . . . . . . . . . . . . 12
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Purchase of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Redemption of Shares . . . . . . . . . . . . . . . . . . . . . . . . . 14
Exchange of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Retirement Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Dividends and Distributions . . . . . . . . . . . . . . . . . . . . . . 16
Net Asset Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Additional Information . . . . . . . . . . . . . . . . . . . . . . . . 19

UBS PRIVATE INVESTOR FUNDS,
INC.

The UBS U.S. Equity Fund

PROSPECTUS

[_____________ __], 1996

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN CONNECTION
WITH THE OFFER OF THE FUND SHARES MADE BY THIS PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, BY THE FUND IN ANY
JURISDICTION IN WHICH SUCH OFFER TO SELL OR SOLICITATION MAY NOT LAWFULLY
BE MADE.<PAGE>
<PAGE> 1

Subject to Completion Dated November 17, 1995

PROSPECTUS

THE UBS INTERNATIONAL EQUITY FUND
6 ST. JAMES AVENUE
BOSTON, MASSACHUSETTS 02116
FOR INFORMATION CALL (800) [________]

The UBS International Equity Fund (the "Fund") seeks to provide a high
total return from a portfolio of equity securities of foreign corporations.
It is designed for investors with a long-term investment horizon who want
to diversify their investments by adding international equities and take
advantage of investment opportunities outside the United States.

UNLIKE OTHER MUTUAL FUNDS THAT DIRECTLY ACQUIRE AND MANAGE THEIR OWN
PORTFOLIO OF SECURITIES, THE FUND SEEKS TO ACHIEVE ITS INVESTMENT OBJECTIVE
BY INVESTING ALL OF ITS INVESTABLE ASSETS IN THE MASTER INTERNATIONAL
EQUITY PORTFOLIO (THE "PORTFOLIO"), A CORRESPONDING OPEN-END MANAGEMENT
INVESTMENT COMPANY HAVING THE SAME INVESTMENT OBJECTIVE AS THE FUND. THE
FUND EMPLOYS A TWO-TIER MASTER-FEEDER STRUCTURE THAT IS MORE FULLY
DESCRIBED UNDER THE SECTION CAPTIONED MASTER-FEEDER STRUCTURE.

The Portfolio is advised by the New York Branch (the "Branch" or the
"Advisor") of Union Bank of Switzerland (the "Bank") and UBS International
Investment (the "Sub-Advisor" and, together with the Advisor, the
"Advisors") .

This Prospectus sets forth concisely the information about the Fund that a
prospective investor ought to know before investing. It should be read and
retained for future reference. A Statement of Additional Information, dated
[__________], 1996, provides further discussion of certain topics referred
to in this Prospectus and other matters that may be of interest to
investors. The Statement of Additional Information has been filed with the
Securities and Exchange Commission and is incorporated herein by reference
and is available without charge upon written request from the Company or
the Distributor (as defined herein) at the addresses set forth on the back
cover of the Prospectus, or by calling (800) [________].

PROSPECTUS DATED [__________], 1996.

<PAGE>
<PAGE> 2

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
<PAGE>
<PAGE> 3

The UBS International Equity Fund

INVESTORS FOR WHOM THE FUND IS DESIGNED

The UBS International Equity Fund (the "Fund") is designed for investors
who want to participate in the risks and returns associated with equity
securities issued by foreign corporations. The Fund seeks to achieve its
investment objective by investing all of its investable assets in The
Master International Equity Portfolio (the "Portfolio"), an open-end
management investment company having the same investment objective as the
Fund. Because the investment characteristics and experience of the Fund
will correspond directly with those of the Portfolio, the discussion in
this Prospectus focuses on the investments and investment policies of the
Portfolio. The net asset value of Fund shares fluctuates with changes in
the value of the investments in the Portfolio.

The Portfolio may make various types of investments in seeking its
objective. Among the permissible investments for the Portfolio are common
stocks and other securities with equity characteristics issued by foreign
companies. The Portfolio may also invest in futures contracts, options,
forward contracts on foreign currencies and certain privately placed
securities. The Portfolio's investments in securities of foreign issuers,
including issuers in emerging markets, involve foreign investment risks and
may be more volatile and less liquid than the securities of domestic
issuers. For further information about these investments and related
investment techniques, see "Investment Objective and Policies" discussed
below.

The minimum initial investment in the Fund is $25,000, except that the
minimum initial investment is $10,000 for shareholders of another series of
UBS Private Investor Funds, Inc. (the "Company"). The minimum subsequent
investment for all investors is $5,000. These minimum amounts may be waived
for certain accounts. See "Purchase of Shares". If shareholders reduce
their total investment in shares of the Fund to less than $10,000, their
investment will be subject to mandatory redemption. See "Redemption of
Shares--Mandatory Redemption." The Fund is one of several series of the
Company, an open-end management investment company organized as a Maryland
corporation.

SHAREHOLDER TRANSACTION EXPENSES

Sales Load Imposed on Purchases . . . . . . . . . . . . . . . . . None
Sales Load Imposed on Reinvested Dividends . . . . . . . . . . . None
Deferred Sales Load . . . . . . . . . . . . . . . . . . . . . . . None
Redemption Fees, . . . . . . . . . . . . . . . . . . . . . . . . None
Exchange Fees . . . . . . . . . . . . . . . . . . . . . . . . . . None
<PAGE>
<PAGE> 2

<TABLE>
EXPENSE TABLE
ANNUAL OPERATING EXPENSES<F1>
<S> <C>
Advisory Fees, After Fee Waivers<F2> . . . . . . . . . . . . . . 0.00%
Rule 12b-1 Fees . . . . . . . . . . . . . . . . . . . . . . . . . None
Other Expenses, After Expense Reimbursements<F3> . . . . . . . . 1.40%
Total Operating Expenses, After Fee Waivers and Expense
Reimbursements<F2> . . . . . . . . . . . . . . . . . . . . . . . 1.40%

<FN>
<F1> Expenses are expressed as a percentage of the Fund's projected
average daily net assets and are based on estimates of the expenses to be
incurred during the current fiscal year, after any applicable fee waivers
and expense reimbursements. Without such fee waivers and expense
reimbursements, Total Operating Expenses would be equal, on an annual
basis, to 9.63% of the Fund's average daily net assets. See "Management".

<F2> The New York Branch (the "Branch" or the "Advisor") of Union Bank of
Switzerland (the "Bank") has agreed to waive fees and reimburse the Fund
for any of its operating expenses (including those the Fund incurs
indirectly through the Portfolio) to the extent that the Fund's total
operating expenses exceed, on an annual basis 1.40% of the Fund's average
daily net assets. The Advisor may modify or discontinue this fee waiver and
expense limitation at any time in the future with thirty days' notice to
the Fund. See "Expenses".

<F3> The fees and expenses in Other Expenses, After Expense Reimbursements
include fees payable to Signature Financial Group, Inc. ("Signature") under
Administration Agreements with the Fund and the Portfolio, fees payable to
Investors Bank and Trust Company (the "Custodian") as custodian of the Fund
and the Portfolio and fees payable to the Branch under the Shareholder
Servicing Agreement. For a more detailed description of contractual fee
arrangements, including expense reimbursements, and of the fees and
expenses included in Other Expenses, see "Management" and "Shareholder
Services".

</FN>
</TABLE>

EXAMPLE

An investor would pay the following expenses on a $1,000 investment,
assuming a 5% annual return and a redemption at the end of each time
period:

1 Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . $14
3 Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$44

The above Expense Table is designed to assist investors in understanding
the various direct and indirect costs and expenses that Fund investors are
expected to bear and reflects the expenses of the Fund and the Fund's share
of the Portfolio's expenses. In connection with the above Example, please
note that $1,000 is less than the Fund's minimum investment requirement and
that there are no redemption or exchange fees of any kind. See "Purchase of
Shares" and "Redemption of Shares". THE EXAMPLE IS HYPOTHETICAL; IT IS
INCLUDED SOLELY FOR ILLUSTRATIVE PURPOSES, AND ASSUMES THE CONTINUATION OF
THE FEE WAIVERS AND EXPENSE REIMBURSEMENTS REPRESENTED IN THE ABOVE
"EXPENSE TABLE". IT SHOULD NOT BE CONSIDERED A REPRESENTATION OF FUTURE
PERFORMANCE; ACTUAL EXPENSES MAY BE MORE OR LESS THAN THOSE SHOWN.

MASTER-FEEDER STRUCTURE

Unlike other mutual funds that directly acquire and manage their own
portfolio of securities, the Fund seeks to achieve its investment objective
by investing all of its investable assets in the Portfolio, a separate
investment company with the same investment objective as the Fund. The
Portfolio is one of three (3) series of the [Master
<PAGE>
<PAGE> 3

Portfolio] Trust (the "Trust"). See "Organization". The investment
objective of the Fund and the Portfolio may be changed only with the
approval of the holders of the outstanding shares of the Fund and the
Portfolio, respectively.

Smaller funds investing in the Portfolio may be materially affected by the
actions of larger funds investing in the Portfolio. For example, if a large
fund withdraws from the Portfolio, the remaining funds may subsequently
experience higher pro rata operating expenses, thereby lowering returns.
Additionally, because the Portfolio would become smaller, it may become
less diversified, resulting in potentially increased portfolio risk
(however, these possibilities also exist for traditionally structured funds
which have large or institutional investors who may withdraw from a fund).
Also, funds with a greater pro rata ownership in the Portfolio could have
effective voting control of its operations. Except as permitted by the
Securities and Exchange Commission (the "SEC"), whenever the Fund is
requested to vote on matters pertaining to the Portfolio (other than a vote
by the Fund to continue the operation of the Portfolio upon the withdrawal
of another investor in the Portfolio), the Company will hold a meeting of
Fund shareholders and will cast Fund votes proportionately as instructed by
the Fund's shareholders. See "Organization" in the Statement of Additional
Information ("SAI"). The Company will vote the shares held by Fund
shareholders who do not give voting instructions in the same proportion as
the Fund shareholders who did give voting instructions. Shareholders of the
Fund who do not vote will have no effect on the outcome of such matters.

INVESTMENT OBJECTIVE AND POLICIES

The Fund's investment objective is to provide a high total return from a
portfolio of equity securities of foreign corporations. Total return will
consist of realized and unrealized capital gains and losses plus net
income. The Fund attempts to achieve its investment objective by investing
all of its investable assets in The Master International Equity Portfolio,
an open-end management investment company having the same investment
objective as the Fund. The Fund is designed for investors with a long-term
investment horizon who want to diversify their investments by adding
international equities and take advantage of investment opportunities
outside the United States.

[The Portfolio seeks to achieve its investment objective through a strict
value discipline] concentrating on fundamentally sound companies that are
typically selling at below market valuations and that will grow at above-
market rates. The emphasis on value leads to investments in companies with
relatively low price/earnings and price/book value ratios and high yields.

The Advisor is responsible for supervising the management of the
Portfolio's investments. Consistent with these duties, the Advisor has
entered into a Sub-Advisory Agreement with UBS International Investment
("UBSII" or the "Sub-Advisor" and, together with the Advisor, the
"Advisors"), whereby the Sub-Advisor is primarily responsible for the day-
to-day investment decisions for the Portfolio. The Advisor is solely
responsible for paying the Sub-Advisor for these services. The Sub-Advisor
is an affiliate of the Advisor.

The Advisors actively manage currency exposure, in conjunction with country
and stock allocations, in an attempt to protect and possibly enhance the
Portfolio's market value. Through the use of forward foreign currency
exchange contracts, futures contracts and options on currencies, the
Advisors will adjust the Portfolio's foreign currency weightings to reduce
its exposure to currencies deemed unattractive as market conditions
warrant, based on fundamental research, technical factors and the judgment
of the Advisors' experienced currency managers. For more information on
foreign currency exchange transactions, see "Additional Investment
Information and Risk Factors".

The Portfolio intends to actively manage its securities in pursuit of its
investment objective. The Portfolio does not expect to trade in securities
for short-term profits; however, when circumstances warrant, securities may
be sold without regard to the length of time held. To the extent the
Portfolio engages in short-term trading, it may incur increased transaction
costs.

EQUITY INVESTMENTS. Under normal circumstances, the Advisors intend to keep
at least 65% of the value of the Portfolio's total assets in equity
securities of foreign issuers, consisting of common stocks and other
securities with equity characteristics such as preferred stock, warrants,
rights and convertible securities. The Portfolio's primary equity
investments are the common stock of established companies based in
developed countries outside the United States. The Portfolio will invest in
companies based in at least five foreign countries, including the United
Kingdom, France, Japan, Germany and Switzerland. The common stock in which
the Portfolio may invest includes the common stock of any class or series
or any similar equity interest such as trust or limited partnership
interests. The Portfolio may also invest in securities of issuers located
in developing countries. See "Additional Investment Information and Risk
Factors". The Portfolio will invest in securities listed on foreign or
domestic securities exchanges and securities traded in foreign or domestic
over-the-counter markets, and may invest in certain restricted or unlisted
securities.<PAGE>
<PAGE> 5

The Portfolio may also invest in money market instruments denominated in
U.S. dollars and other currencies, securities on a when-issued or delayed
delivery basis, enter into repurchase and reverse repurchase agreements,
loan its portfolio securities, purchase certain privately placed
securities, enter into forward contracts on foreign currencies, purchase
options on currencies and enter into certain hedging transactions that may
involve options on securities and securities indices, futures contracts and
options on futures contracts. For a discussion of these investments and
investment techniques, see "Additional Investment Information and Risk
Factors".

ADDITIONAL INVESTMENT INFORMATION AND RISK FACTORS

Investments in non-U.S. issuers involve certain risks and considerations
not typically associated with investments in U.S. issuers. These risks
include greater price volatility, reduced liquidity and the significantly
smaller market capitalization of most non-U.S. securities markets, more
substantial government involvement in the economy, higher rates of
inflation, greater social, economic and political uncertainty and the risk
of nationalization or expropriation of assets and risk of war.

WHEN-ISSUED AND DELAYED DELIVERY SECURITIES. The Portfolio may purchase
securities on a when-issued or delayed delivery basis. Delivery of and
payment for these securities may take as long as a month or more after the
date of the purchase commitment. The value of these securities is subject
to market fluctuation during this period and no interest or income accrues
to the Portfolio until settlement. At the time of settlement, a when-issued
security may be valued at less than its purchase price. Between the trade
and settlement dates, the Portfolio will maintain a segregated account with
the Custodian consisting of a portfolio of high-grade, liquid debt
securities with a value at least equal to these commitments. When entering
into a when-issued or delayed delivery transaction, the Portfolio will rely
on the other party to consummate the transaction; if the other party fails
to do so, the Portfolio may be disadvantaged. It is the current policy of
the Portfolio not to enter into when-issued commitments exceeding in the
aggregate 15% of the market value of the Portfolio's total assets less
liabilities (excluding the obligations created by these commitments).

date and price, reflecting the interest rate effective for the term of the
agreement. It may also be viewed as the borrowing of money by the Portfolio
and, therefore, is a form of leverage. Leverage may cause any gains or
losses of the Portfolio to be magnified. For more information, including
limitations on the use of reverse repurchase agreements, see "Investment
Objectives and Policies" in the SAI and "Investment Restrictions" below.

SECURITIES LENDING. Subject to applicable investment restrictions, the
Portfolio may lend its securities. The Portfolio may lend its securities if
such loans are secured continuously by cash or equivalent collateral or by
a letter of credit in favor of the Portfolio at least equal at all times to
100% of the market value of the securities loaned, plus accrued interest.
While such securities are on loan, the borrower will pay the Portfolio any
income accruing thereon. Loans will be subject to termination by the
Portfolio in the normal settlement time, generally three business days
after notice, or by the borrower on one day's notice. Borrowed securities
must be returned when the loan is terminated. Any gain or loss in the
market price of the borrowed securities that occurs during the term of the
loan inures to the Portfolio and its respective investors. The Portfolio
may pay reasonable finders' and custodial fees in connection with a loan.
In addition, the Portfolio will consider all the facts and circumstances,
including the creditworthiness of the borrowing financial institution, and
the Portfolio will not make any loans in excess of one year. The Portfolio
will not lend its securities to any officer, Trustee, Director, employee or
affiliate or Placement Agent of the Company, the Portfolio, or the Advisor,
Sub-Advisor, Administrator or Distributor, unless otherwise permitted by
applicable law.

RISK FACTORS OF FOREIGN SECURITIES. The Portfolio will invest primarily in
foreign securities. Investments in securities of foreign issuers and in
obligations of foreign branches applicable to domestic banks involve
somewhat different investment risks from those affecting securities of U.S.
issuers. There may be limited publicly available information with respect
to foreign issuers, and foreign issuers are not generally subject to
uniform accounting, auditing and financial standards and requirements
comparable to those applicable to domestic companies. Dividends and
interest paid by foreign issuers may be subject to withholding and other
foreign taxes that may decrease the net return on foreign investments as
compared to dividends and interest paid to the Portfolio by domestic
companies.

Although the Portfolio invests primarily in securities of established
issuers based in developed foreign countries, it may also invest in
securities of issuers in emerging market countries. Investments in
securities of issuers in
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<PAGE> 7

emerging market countries may involve a high degree of risk and many may be
considered speculative. These investments carry all of the risks of
investing in securities of foreign issuers outlined in this section to a
heightened degree. These heightened risks include: (i) greater risks of
expropriation, confiscatory taxation, nationalization, and less social,
political and economic stability; (ii) the small current size of the
markets for securities of emerging market issuers and the currently low or
non-existent volume of trading, resulting in limited liquidity and in price
volatility; (iii) certain national policies that may restrict the
Portfolio's investment opportunities including restrictions on investing in
issuers or industries deemed sensitive to relevant national interests; and
(iv) the absence of developed legal structures governing private or foreign
investment and private property.

FOREIGN CURRENCY EXCHANGE TRANSACTIONS. Because the Portfolio will buy and
sell securities and will receive interest and dividends in currencies other
than the U.S. dollar, the Portfolio may, from time to time, enter into
foreign currency exchange transactions. The Portfolio may enter into these
transactions on a spot (i.e., cash) basis at the spot rate prevailing in
the foreign currency exchange market, use forward currency contracts to
purchase or sell foreign currencies, use currency futures contracts or
purchase options thereon or purchase currency options.

Although these transactions are intended to minimize the risk of loss due
to a decline in the value of the hedged currency, these transactions also
limit any potential gain that might be realized should the value of the
hedged currency increase. Additionally, the premiums paid by the Portfolio
for currency or futures options increase the Portfolio's transaction costs.
Similarly, the cost of the Portfolio's spot currency exchange transactions
is generally the difference between the bid and offer spot rate of the
currency being purchased or sold. Moreover, forward contracts that convert
one foreign currency into another foreign currency will cause the Portfolio
to assume the risk of fluctuations in the value of the currency purchased
vis-a-vis the hedged currency and the U.S. dollar. The precise matching of
these transactions and the value of the securities involved will not
generally be possible because the future value of such securities in
foreign currencies will change as a consequence of market movements in the
value of such securities between the date such a transaction is entered
into and the date it matures. The projection of currency market movements
is extremely difficult and the successful execution of a hedging strategy
is highly uncertain.

ILLIQUID INVESTMENTS; PRIVATELY PLACED AND OTHER UNREGISTERED SECURITIES.
The Portfolio may not acquire any illiquid securities if, as a result
thereof, more than 15% of the market value of the Portfolio's net assets
would be in illiquid investments. Subject to that non-fundamental policy
limitation, the Portfolio may acquire investments that are illiquid or have
limited liquidity, such as private placements or investments that are not
registered under the Securities Act of 1933, as amended (the "Securities
Act"). An illiquid investment is any investment that cannot be disposed of
within seven days in the normal course of business at approximately the
amount at which it is valued by the Portfolio. Repurchase agreements
maturing in more than seven days are considered illiquid investments and,
as such, are subject to the limitations set forth in this paragraph. The
price the Portfolio pays for illiquid securities or receives upon resale
may be lower than the price paid or received for similar securities with a
more liquid market. Accordingly, the valuation of these securities will
reflect any limitations on their liquidity.

The Portfolio may also purchase Rule 144A securities sold to institutional
investors without registration under the Securities Act. These securities
may be determined to be liquid in accordance with guidelines established by
the Advisors and approved by the Trustees. The Trustees will monitor the
Advisors' implementation of these guidelines on a periodic basis.

MONEY MARKET INSTRUMENTS. The Portfolio is permitted to invest in money
market instruments although it intends to stay invested in equity
securities to the extent practical in light of its objectives and long-term
investment perspective. The Portfolio may make money market investments
pending other investments or settlements, for liquidity or in adverse
market conditions. Such money market investments may include obligations of
the U.S. Government and its agencies and instrumentalities, other debt
securities, commercial paper, bank obligations and repurchase agreements.
The Portfolio may purchase nonpublicly offered debt securities. The
Portfolio may also invest in short-term obligations of sovereign foreign
governments, their agencies, instrumentalities and political subdivisions.
For more detailed information about these money market investments, see
Investment Objectives and Policies in the SAI.

FUTURES AND OPTIONS TRANSACTIONS. The Portfolio is permitted to enter into
the futures and options transactions described below for hedging purposes.
The Portfolio may purchase exchange traded and over-the-counter ("OTC") put
and call options on equity securities or indices of equity securities,
enter into forward contracts, purchase and sell futures contracts on
indices of equity securities, purchase put and call options on futures
contracts on indices of equity securities and purchase options on
currencies. The Portfolio may use these techniques for hedging purposes,
but not for speculation.

The Portfolio may use these techniques to manage its exposure to changing
interest rates, currency exchange rates and/or security prices. Some
options and futures strategies, including selling futures contracts and
buying puts, tend to hedge the Portfolio's investments against price
fluctuations. Other strategies, including buying futures contracts, writing
puts and calls, and buying calls, tend to increase market exposure. Options
and futures contracts may be
<PAGE>
<PAGE> 9

combined with each other or with forward contracts in order to adjust the
risk and return characteristics of the Portfolio's overall strategy in a
manner deemed appropriate to the Advisors and consistent with the
Portfolio's objective and policies. Because combined options positions
involve multiple trades, they result in higher transaction costs and may be
more difficult to open and close out.

The Portfolio's use of these transactions is a highly specialized activity,
which involves investment strategies and risks different from those
associated with ordinary portfolio securities transactions, and there can
be no guarantee that their use will increase the Portfolio's return. While
the Portfolio's use of these instruments may reduce certain risks
associated with owning its portfolio securities, these techniques
themselves entail certain other risks. If the Advisors apply a strategy at
an inappropriate time or judge market conditions or trends incorrectly,
such strategies may lower the Portfolio's return. Certain strategies limit
the Portfolio's opportunity to realize gains as well as limiting its
exposure to losses. The Portfolio could experience losses if the prices of
its options and futures positions were poorly correlated with its other
investments, or if it could not close out its positions because of an
illiquid secondary market. In addition, the Portfolio will incur
transaction costs, including trading commissions and option premiums, in
connection with these transactions and these transactions could
significantly increase the Portfolio's turnover rate.

The Portfolio may purchase put and call options on securities, currencies,
indices of securities and futures contracts, or purchase and sell futures
contracts, only (i) for hedging purposes and (ii), to the extent such
transactions are not for hedging purposes, if the aggregate initial margin
and premiums required to establish such positions do not exceed 5% of the
Portfolios net assets.

OPTIONS

PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, the Portfolio
obtains the right (but not the obligation) to sell the instrument
underlying the option at a fixed strike price. In return for this right,
the Portfolio pays the current market price for the option (known as the
option premium). Options have various types of underlying instruments,
including specific securities, currencies, indices of securities, indices
of securities prices, and futures contracts. The Portfolio may terminate
its position in a put option it has purchased by allowing it to expire or
by exercising the option. The Portfolio may also close out a put option
position by entering into an offsetting transaction, if a liquid market
exists. If the option is allowed to expire, the Portfolio will lose the
entire premium it paid. If the Portfolio exercises a put option on a
security, it will sell the instrument underlying the option at the strike
price. If the Portfolio exercises an option on an index, settlement is in
cash and does not involve the actual sale of securities. American style
options may be exercised on any day up to their expiration date. European
style options may be exercised only on their expiration date.

to pay the strike price for the instrument underlying the option if the
other party to the option chooses to exercise it. The Portfolio may seek to
terminate its position in a put option it writes before exercise by
purchasing an offsetting option in the market at its current price. If the
market is not liquid for a put option the Portfolio has written, however,
the Portfolio must continue to be prepared to pay the strike price while
the option is outstanding, regardless of price changes, and must continue
to post margin as discussed below.

FUTURES CONTRACTS

When the Portfolio purchases a futures contract, the value of the futures
contract tends to increase and decrease in tandem with the value of its
underlying instrument. Therefore, purchasing futures contracts will tend to
increase the Portfolio's exposure to positive and negative price
fluctuations in the underlying instrument, much as if it had purchased the
underlying instrument directly. When the Portfolio sells a futures
contract, by contrast, the value of its futures position will tend to move
in a direction contrary to the value of the underlying instrument. Selling
futures contracts or securities similar to those held by the Portfolio,
therefore, will tend to offset both positive and negative market price
changes, much as if the underlying instrument had been sold. Because there
are a limited number of types of exchange-traded options and futures
contracts, it is likely that the these standardized instruments will not
exactly match the Portfolio's current or anticipated investments. The
Portfolio may invest in futures contracts and options thereon based on
currencies or on securities with different issuers, maturities, or other
characteristics from the securities in which it typically invests, which
involves a risk that the options or futures position will not track the
performance of the Portfolio's other investments.

The purchaser or seller of a futures contract is not required to deliver or
pay for the underlying instrument unless the contract is held until the
delivery date. However, when the Portfolio buys or sells a futures contract
it will be required to deposit "initial margin" with the Custodian in a
segregated account in the name of its futures broker, known as a futures
commission merchant ("FCM"). Initial margin deposits are typically equal to
a small percentage of the contract's value. If the value of either party's
position declines, that party will be required to make additional
"variation margin" payments equal to the change in value on a daily basis.
The party that has a gain may be entitled to receive all or a portion of
this amount. The Portfolio may be obligated to make payments of variation
margin at a time when it is disadvantageous to do so. Furthermore, it may
not always be possible for the Portfolio to close out its futures
positions. Until it closes out a futures position, the Portfolio will be
obligated to continue to pay variation margin. Initial and variation margin
payments do not constitute purchasing on margin for purposes of the
Portfolio's investment restrictions. In the event of the bankruptcy of an
FCM that holds margin on behalf of the Portfolio, the Portfolio may be
entitled to return of margin owed to it only in proportion to the amount
received by the FCM's other customers, potentially resulting in losses to
the Portfolio.

For further information about the Portfolio's use of futures and options
and a more detailed discussion of associated risks, see "Investment
Objectives and Policies" in the SAI.

INVESTMENT RESTRICTIONS

The Fund may not: (i) purchase the securities or other obligations of
issuers conducting their principal business activity in the same industry
if its investments in such industry would exceed 25% of the value of the
Fund's total assets, except this limitation shall not apply to investments
in U.S. Government securities; (ii) enter into reverse repurchase
agreements and other permitted borrowings that constitute senior securities
under the 1940 Act, exceeding in the aggregate one-third of the market
value of the Fund's total assets, less certain liabilities; or (iii) borrow
money, except from banks for extraordinary or emergency purposes;
(iv) purchase securities while borrowings, including reverse repurchase
agreements, exceed 5% of its total assets; or (v) mortgage, pledge or
hypothecate any assets except in connection with any such borrowing
(including reverse repurchase agreements) and in amounts not to exceed one-
third of the value of the Fund's total assets less certain liabilities at
the time of such borrowing. For a more detailed discussion of the above
investment restrictions, as well as a description of certain other
investment restrictions, see "Investment Restrictions" in the SAI.

MANAGEMENT

DIRECTORS AND TRUSTEES. Pursuant to the Declaration of Trust, the Trustees
establish the Portfolio's general policies, are responsible for the overall
management of the Trust and review the actions of the Advisor, Sub-Advisor,
Administrator and other service providers. Similarly, the Directors set the
Company's general policies, are responsible for the overall management of
the Company and review the performance of its service providers. Additional
information about the Company's Board of Directors and officers appears in
the SAI under the heading "Directors and Trustees". The Trustees are also
Directors of the Company, which raises certain conflicts of interest. The
Company and the Trust have adopted written procedures reasonably
appropriate to deal with these conflicts should they arise.

ADVISORS. The Fund has not retained the services of an investment advisor
because the Fund seeks to achieve its investment objective by investing all
of its investable assets in the Portfolio. The Portfolio has retained the
services of the Branch as investment advisor and UBSII as investment sub-
advisor. The Branch, which operates out of offices located at 299 Park
Avenue, New York, New York, is licensed by the Superintendent of Banks of
the State of New York under the banking laws of the State of New York and
is subject to banking laws and regulations applicable to a foreign bank
that operates a New York branch. UBSII, with principal offices at Triton
Court, 14 Finbury Square, London, England, EC2A 1PD, is a [___]
corporation.

The Bank has branches, agencies, representative offices and subsidiaries in
Switzerland and in more than 40 cities outside Switzerland, including, in
the United States, New York City, Chicago, Houston, Los Angeles and San
Francisco. In addition to the receipt of deposits and the making of loans
and advances, the Bank, through its offices and subsidiaries (including
UBSII), engages in a wide range of banking and financial activities typical
of the world's major international banks, including fiduciary, investment
advisory and custodial services and foreign exchange in the United States,
Swiss, Asian and Euro-capital markets. The Bank is one of the world's
leading asset managers.

Active in North America since 1946, the Bank employs a staff of over 2,000
in its branches, agencies, representative offices and subsidiaries in North
America. Private banking services in the United States are provided
primarily through the Branch, as well as through offices in Los Angeles. In
addition, UBS Asset Management (New York) Inc., an indirect, wholly-owned
subsidiary of the Bank with assets under management totaling $33.9 billion
as of December 31, 1994, offers primarily U.S. dollar-based asset
management services to institutions (including pension and other employee
benefit trusts), individuals, corporations and other entities in the areas
of equities, fixed
<PAGE>
<PAGE> 13

income, real estate, oil and gas and timber investments. UBSII has assets
under management totaling [$___] billion as of [__], 199[_].

The Advisors provide investment advice, portfolio management and certain
administrative services to the Portfolio. Subject to the supervision of
the Trustees and the Advisor, the Sub-Advisor makes the Portfolio's day-to-
day investment decisions, arranges for the execution of portfolio
transactions and generally manages the Portfolio's investments and
operations. See "Investment Advisor" in the SAI.

The Sub-Advisor uses a sophisticated, disciplined, collaborative process
for managing all asset classes. Robin Apps is primarily responsible for the
day-to-day management and implementation of the Sub-Advisor's process for
the Portfolio. Mr. Apps is a Director of the Sub-Advisor and is responsible
for researching investment opportunities in the Far East and Europe. Mr.
Apps received a bachelors degree from Birmingham University and has
fourteen years of investment experience. Mr. Apps is also qualified as an
actuary.

Under the Trust's Advisory Agreement, the Portfolio will pay the Advisor a
fee, calculated daily and payable monthly, at an annual rate of 0.85% of
the Portfolio's average net assets. The Advisor has voluntarily agreed to
waive its advisory fees and reimburse the Fund for any of its expenses to
the extent that the Fund's total operating expenses exceed, on an annual
basis, 1.40% of the Fund's average daily net assets. The Advisor may
modify or discontinue this fee waiver and expense limitation at any time in
the future with thirty days' notice to the Fund. See "Expenses".

Pursuant to the Sub-Advisory Agreement between the Advisor and the Sub-
Advisor, the Advisor has agreed to pay the Sub-Advisor a fee, calculated
daily and payable monthly, at an annual rate of 0.75% of the Portfolio's
first $20 million of average net assets, plus 0.50% of the next $30 million
of average net assets, plus 0.40% of the Portfolio's average net assets in
excess of $50 million. The Advisor is solely responsible for paying the
Sub-Advisor this fee.

INVESTMENTS IN THE FUND ARE NOT DEPOSITS WITH OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, THE BRANCH OR ANY OTHER BANK.

ADMINISTRATOR. Under Administration Agreements with the Company and the
Trust, Signature Financial Group, Inc. ("Signature"), an affiliate of the
Distributor (defined below), serves as the administrator of the Fund and
the
<PAGE>
<PAGE> 14

Portfolio. In this capacity, Signature administers all aspects of the
Fund's and the Portfolio's day-to-day operations, subject to the
supervision of the Advisor and the Board and Trustees, respectively, except
as set forth under "Advisor", "Distributor", "Custodian" and "Shareholder
Services". As Administrator, Signature: (i) furnishes general office
facilities and ordinary clerical and related services for day-to-day
operations including recordkeeping responsibilities; (ii) takes
responsibility for compliance with all applicable federal and state
securities and other regulatory requirements; (iii) is responsible for the
registration of sufficient Fund shares under federal and state securities
laws; (iv) takes responsibility for monitoring the Fund's status as a
regulated investment company under the Code; and (v) performs
administrative and managerial oversight of the activities of the custodian,
transfer agent and other agents or independent contractors of the Fund and
the Portfolio.

Under the Trust's Administration Agreement, the Portfolio has agreed to pay
Signature a fee, calculated daily and payable monthly, at an annual rate of
0.05% of the Portfolio's average net assets.

SHAREHOLDER SERVICES

The Company has entered into a Shareholder Servicing Agreement with the
Branch under which the private banking and investment services division
("INVS") of the Branch provides shareholder services to Fund shareholders
who are also clients of the Branch. These services include: establishing
and maintaining shareholder accounts and records; assisting investors
seeking to purchase or redeem Fund shares; providing performance
information relating to the Fund; and responding to shareholder inquires.
The Company has agreed to pay INVS for these services at an annual rate of
0.25% of the average daily net assets of the shareholder accounts so
serviced. Under the terms of the Shareholder Servicing Agreement, INVS may
delegate one or more of its responsibilities to other entities at its
expense.

EXPENSES

In addition to the fees of the Advisor, Signature and IBT, the Fund will be
responsible for, or will indirectly bear through its interest in the
Portfolio, other expenses including brokerage costs and litigation and
extraordinary expenses. The Advisor has agreed to waive fees and reimburse
expenses as necessary, if, in any fiscal year, the sum of the Fund's
expenses exceeds the limits set by applicable regulations of state
securities commissions. Such annual limits are currently 2.5% of the first
$30 million of average net assets, 2% of the next $70 million of such net
assets and 1.5% of such net assets in excess of $100 million. The Advisor
has also voluntarily agreed to limit the total operating expenses of the
Fund, excluding extraordinary expenses, to an annual rate of 1.40% of the
Fund's
<PAGE>
<PAGE> 15

average daily net assets. The Advisor may modify or discontinue this
voluntary expense limitation at any time in the future with thirty days'
notice to the Fund.

The Fund and the Portfolio may allocate brokerage transactions to their
affiliates and the Advisors' affiliates. Brokerage transactions may be
allocated to these affiliates only if the commissions received by such
affiliates are fair and reasonable when compared to the commissions paid to
unaffiliated brokers in connection with comparable transactions. See
"Portfolio Transactions" in the SAI.

PURCHASE OF SHARES

The business days of the Fund and the Portfolio are the days the New York
Stock Exchange is open.

The shares of the Fund are sold on a continuous basis without a sales
charge at the net asset value per share next determined after receipt and
acceptance of a purchase order by the Distributor. The Fund calculates its
net asset value at the close of business. See "Net Asset Value". The
minimum initial investment in the Fund is $25,000, except that the minimum
initial investment is $10,000 for shareholders of another series of the
Company. The minimum subsequent investment in the Fund for all investors is
$5,000. The minimum initial investment for employees of the Bank and its
affiliates is $5,000. The minimum subsequent is $1,000. These minimum
investment requirements may be waived for certain retirement plans or
accounts for the benefit of minors. For purposes of the minimum investment
requirements, the Fund may aggregate investments by related shareholders.
Investors will receive the number of full and fractional shares of the Fund
equal to the dollar amount of their subscription divided by the net asset
value per share of the Fund as next determined on the day that the
investor's subscription is accepted. See "Purchase of Shares" in the SAI.

Purchase orders in proper form received by the Distributor prior to
4:00 p.m. New York time or the close of regular trading on the New York
Stock Exchange (the "NYSE"), whichever is earlier, are effective and
executed at the net asset value next determined that day. Purchase orders
received after 4:00 p.m. New York time or the close of the NYSE, whichever
is earlier, will be executed at the net asset value determined on the next
business day. Investors become record shareholders of the Fund on the day
they place their subscription order, provided it is received by the
Distributor before 4:00 p.m. As record shareholders, investors are entitled
to earn dividends.

Fund shares may be purchased in the following methods:

UBS BANK CLIENTS: Bank clients should request an INVS representative to
assist them in placing a purchase order with the Distributor.

The Transfer Agent will maintain the accounts for all shareholders who
purchase Fund shares directly through the Distributor. For account balance
information and shareholder services, such shareholders should contact the
Transfer Agent at (800) [__________] or in writing at UBS Private Investor
Funds, Inc., c/o Investors Bank and Trust Company, P.O. Box 1537 MFD 23,
Boston, MA 02205-1537.
<PAGE>
<PAGE> 16

By wire: Purchases may be made by federal funds wire. To place a purchase
order with the Fund, the shareholder must telephone the Transfer Agent at
(800) [__________] for specific instructions.

Subject to the minimum purchase requirements discussed above, shares
purchased by federal funds wire will be effected at the net asset value per
share next determined after acceptance of the order.

By mail: Subject to the minimum purchase requirements discussed above,
shareholders may purchase shares of the Fund through the Distributor by
completing an account application and mailing it, together with a check
payable to "UBS Private Investor Funds, Inc.", to: UBS Private Investor
Funds, Inc., c/o Investors Bank and Trust Company, P.O. Box 1537 MFD 23,
Boston, MA 02205-1537.

REDEMPTION OF SHARES

Shareholders will not be recordholders for dividend purposes on the day
that they redeem Fund shares.

Fund shares may be redeemed in the following methods:

UBS BANK CLIENTS: Shareholders who are Bank clients should request an INVS
representative to assist them in placing a redemption order with the
Distributor.

THROUGH THE DISTRIBUTOR: Shareholders who are not Bank clients may redeem
Fund shares by telephone or mail.

this service. Such shareholders risk possible loss of principal and
interest in the event of a telephone redemption not authorized by them.
The Fund and the Transfer Agent will employ reasonable procedures to verify
that telephone redemption instructions are genuine and will require that
shareholders electing such an option provide a form of personal
identification. The failure by the Fund or the Transfer Agent to employ
such procedures may cause the Fund or the Transfer Agent to be liable for
any losses incurred by investors due to telephone redemptions based upon
unauthorized or fraudulent instructions. The telephone redemption option
may be modified or discontinued at any time upon 60 days notice to
shareholders.

By mail: Redemption requests may also be mailed to the Transfer Agent,
identifying the Fund, the dollar amount or number of shares to be redeemed
and the shareholders account number. The request must be signed in exactly
the same manner as the account is registered (e.g., if there is more than
one owner of the shares, all must sign). In all cases, all signatures on a
redemption request must be signature guaranteed by an eligible guarantor
institution which includes a domestic bank, a domestic savings and loan
institution, a domestic credit union, a member bank of the Federal Reserve
System or a member firm of a national securities exchange, pursuant to the
Fund's standards and procedures; if the guarantor institution belongs to
one of the Medallion Signature programs, it must use the specific
"Medallion Guaranteed" stamp (guarantees by notaries public are not
acceptable). Further documentation, such as copies of corporate
resolutions and instruments of authority, may be requested from
corporations, administrators, executors, personal representatives, trustees
or custodians to evidence the authority of the person or entity making the
redemption request. The redemption request in proper form should be sent
to UBS Private Investor Funds, Inc., c/o Investors Bank and Trust Company,
P.O. Box 1537 MFD 23, Boston, MA 02205-1537.

The right of redemption may be suspended or the date of payment postponed
for up to seven days and for such other periods as the 1940 Act or the SEC
may permit. See "Redemption of Shares" in the SAI.

EXCHANGE OF SHARES

the other Company series. See also "Additional Information" below for an
explanation of the telephone exchange policy.

RETIREMENT PLANS

The Fund has available a form of Individual Retirement Account ("IRA") for
investment in Fund shares. Self-employed individuals may purchase shares
of the Fund through tax-deductible contributions to existing retirement
plans known as Self-Employed Retirement Plans ("SERP's") Fund shares may
also be a suitable investment for "401(k) Plans" which allow their
participants to invest in qualified pension plans on a tax-deferred basis.
The Fund does not currently act as sponsor to such plans.

The minimum initial investment for all such retirement plans is $2,000. The
minimum for all subsequent investments is $500.

Investors should be aware that they may be subject to penalties or
additional taxes on contributions to or withdrawals from IRAs or other
retirement plans under certain circumstances. Prior to a withdrawal,
shareholders may be required to certify as to their age and awareness of
such restrictions in writing. Bank clients desiring information concerning
investments through IRAs or other retirement plans should contact their
Bank representative. Non-Bank clients may obtain such information by
calling the Transfer Agent at (800) [___________].

DIVIDENDS AND DISTRIBUTIONS

NET ASSET VALUE

The Fund's net asset value per share equals the value of the Fund's total
assets (i.e., the value of its investment in the Portfolio plus its other
assets) less the amount of its liabilities, divided by the number of its
outstanding shares, rounded to the nearest cent. Expenses, including the
fees payable to the service providers of the Fund and the Portfolio, are
accrued daily. Securities for which market quotations are readily available
are valued at market value. All other securities will be valued at "fair
value." See "Net Asset Value" in the SAI for information on the valuation
of the Portfolio's assets and liabilities.

Many of the securities held by the Portfolio will consist of securities
primarily listed on foreign exchanges and these securities may trade on
days when the Fund's net asset value is not calculated. Consequently, the
value of these securities may be significantly affected on days when an
investor will be unable to redeem its shares.

ORGANIZATION

UBS PRIVATE INVESTOR FUNDS, INC.

UBS Private Investor Funds, Inc., a Maryland corporation incorporated on
November 16, 1995, is an open-end management investment company registered
under the 1940 Act and organized as a series fund. The Company has no prior
history. The Company is currently authorized to issue shares in four
series: The UBS Bond Fund Series; The UBS Tax Exempt Bond Fund Series; The
UBS International Equity Fund Series; and The UBS U.S. Equity Fund Series.
Each outstanding share of the Company will have a pro rata interest in the
assets of its series, but it will have no interest in the assets of any
other Company series. Only shares of The UBS International Equity Fund
Series are offered through this Prospectus.

Shareholder inquiries may be directed to the Company in writing, at
[____________] and by telephone, at [_____________].

Shareholders of the Fund are entitled to one vote for each share and to the
appropriate fractional vote for each fractional share. There is no
cumulative voting. Shares have no preemptive or conversion rights. Shares
are fully paid and nonassessable when issued by the Company. The Company
has adopted a policy of not issuing share certificates. The Company does
not intend to hold meetings of shareholders annually. The Directors may
call meetings of shareholders for action by shareholder vote as may be
required by its Articles of Incorporation or the 1940 Act. For further
organizational information, including certain shareholder rights, see
"Organization" in the SAI.

MASTER PORTFOLIO TRUST

The Company expects that, immediately prior to the initial public offering
of its shares, the sole holder of its capital stock will be Signature.

TAXES

Distributions of net investment income and realized net short-term capital
gains in excess of net long-term capital losses are taxable as ordinary
income to shareholders of the Fund whether such distributions are taken in
cash or reinvested in additional shares. Distributions of this type to
corporate shareholders of the Fund will not qualify for the dividends-
received deduction because the income of the Fund will not consist of
dividends paid by United States corporations.

Any distribution of net investment income or capital gains will have the
effect of reducing the net asset value of Fund shares held by a shareholder
by the same amount as the distribution. If such a distribution reduces the
net asset value of such shareholder's holdings in the Fund below the price
that the shareholder paid for such shares, the distribution will still be
taxable to that shareholder. Shareholders may be proportionally liable for
taxes on the
<PAGE>
<PAGE> 21

Fund's income and capital gains, but shareholders not subject to tax on
their income will not be required to pay tax on amounts distributed to
them.

The Portfolio is subject to foreign withholding taxes with respect to
income received from sources within certain foreign countries. So long as
more than 50% of the value of the Portfolio's total assets at the close of
any taxable year consists of stock or securities of foreign corporations,
the Fund may elect to treat its proportionate share of foreign income taxes
paid by the Portfolio as paid directly by the Fund's shareholders. The Fund
will make such an election only if it deems it to be in the best interests
of its shareholders and will notify shareholders in writing each year if it
makes the election and of the amount of foreign income taxes, if any, to be
treated as paid by the shareholders. If the Fund makes the election, each
shareholder will be required to include in income its proportionate share
of the amount of foreign income taxes paid by the Portfolio and will be
entitled to claim either a credit (which is subject to certain
limitations), or, if the shareholder itemizes deductions, a deduction for
its share of the foreign income taxes in computing its federal income tax
liability. No deduction will be permitted to individuals in computing their
alternative minimum tax liability.

ADDITIONAL INFORMATION

The Fund may advertise "total return" and non-standardized total return
data. The total return shows what an investment in the Fund would have
earned over a specified period of time (one, five or ten years or since
commencement of operations, if less) assuming that all Fund distributions
and dividends were reinvested on the reinvestment dates during the period
and assuming the redemption of such investment at the end of each period.
This method of calculating total return is required by regulations of the
SEC. Yield and total return data similarly calculated, unless otherwise
indicated, over other specified periods of time may also be used. All
performance figures are based on historical earnings and are not intended
to indicate future performance. Performance information may be obtained by
calling the Distributor at (800) [ ].

INVESTMENT ADVISOR OF THE PORTFOLIO

Union Bank of Switzerland - New York Branch
299 Park Avenue
New York, New York 10171
(212) 821-3000

ADMINISTRATOR

Signature Financial Group, Inc.
6 St. James Avenue
Boston, Massachusetts 02116

CUSTODIAN AND TRANSFER AGENT

Investors Bank and Trust Company
89 South Street
Boston, Massachusetts 02111

DISTRIBUTOR

Signature Broker-Dealer Services, Inc.
6 St. James Avenue
Boston, Massachusetts 02116

TABLE OF CONTENTS
Page

Investors for Whom the Fund is Designed . . . . . . . . . . . . . . . .
Master-Feeder Structure . . . . . . . . . . . . . . . . . . . . . . . .
Investment Objective and Policies . . . . . . . . . . . . . . . . . . .
Additional Investment Information
and Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . .
Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Futures Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment Restrictions . . . . . . . . . . . . . . . . . . . . . . . .
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shareholder Services . . . . . . . . . . . . . . . . . . . . . . . . .
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase of Shares . . . . . . . . . . . . . . . . . . . . . . . . . .
Redemption of Shares . . . . . . . . . . . . . . . . . . . . . . . . .
Exchange of Shares . . . . . . . . . . . . . . . . . . . . . . . . . .
Retirement Plans . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends and Distributions . . . . . . . . . . . . . . . . . . . . . .
Net Asset Value . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional Information . . . . . . . . . . . . . . . . . . . . . . . .
<PAGE>
<PAGE> 22

UBS PRIVATE INVESTOR FUNDS, INC.

THE UBS INTERNATIONAL EQUITY FUND

PROSPECTUS

[_____________ __], 1996

UBS PRIVATE INVESTOR FUNDS, INC.

STATEMENT OF ADDITIONAL INFORMATION

THE UBS TAX EXEMPT BOND FUND

Subject to Completion Dated November 17, 1995

THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS, AND SHOULD BE
READ IN CONJUNCTION WITH THE PROSPECTUS DATED [________], 1996 (THE
"PROSPECTUS"), FOR THE FUND LISTED ABOVE, AS SUPPLEMENTED FROM TIME TO
TIME. COPIES OF THE PROSPECTUS MAY BE OBTAINED WITHOUT CHARGE FROM
SIGNATURE BROKER-DEALER SERVICES, INC. AT THE ADDRESS AND PHONE NUMBER SET
FORTH HEREIN.
<PAGE>
<PAGE>

Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws
of any such State.
<PAGE>
<PAGE>

TABLE OF CONTENTS

Page

GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
INVESTMENT OBJECTIVES AND POLICIES . . . . . . . . . . . . . . . . . . 1
INVESTMENT RESTRICTIONS . . . . . . . . . . . . . . . . . . . . . . . 12
DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
INVESTMENT ADVISOR . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ADMINISTRATOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
DISTRIBUTOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
CUSTODIAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SHAREHOLDER SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . 20
INDEPENDENT ACCOUNTANTS . . . . . . . . . . . . . . . . . . . . . . . 20
EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
PURCHASE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . 21
REDEMPTION OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . 22
EXCHANGE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . 22
DIVIDENDS AND DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . 23
NET ASSET VALUE . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
PERFORMANCE DATA . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
PORTFOLIO TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . 25
ORGANIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . 29
REPORT OF INDEPENDENT ACCOUNTANTS . . . . . . . . . . . . . . . . . . 30
FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . F-1
<PAGE>
<PAGE> SAI-1

GENERAL

UBS Private Investor Funds, Inc. (the "Company") currently issues shares in
four series: The UBS Bond Fund; The UBS Tax Exempt Bond Fund; The UBS
International Equity Fund; and The UBS U.S. Equity Fund. Each series is a
series of the Company, an open-end management investment company organized
as a Maryland corporation. The Company was organized on November 16, 1995.
This Statement of Additional Information ("SAI") describes the investment
objectives and policies, management and operation of The UBS Tax Exempt
Bond Fund (the "Fund") to enable investors to determine if the Fund suits
their investment needs. As more fully described herein, the Fund invests
primarily in securities of states, territories and possessions of the
United States and their political subdivisions, agencies and
instrumentalities, the interest of which is exempt from federal income tax.

This SAI provides additional information with respect to the Fund, and
should be read in conjunction with its current Prospectus. Capitalized
terms not otherwise defined in this SAI have the meanings accorded to them
in the Fund's Prospectus. The Company's executive offices are located at
6 St. James Avenue, Boston, Massachusetts 02116.

INVESTMENT OBJECTIVES AND POLICIES

The Fund is designed for investors who seek tax exempt yields greater than
those generally available from a portfolio of short-term tax exempt
obligations and who are willing to incur the greater price fluctuation of
longer-term investments. The Fund's investment objective is to provide a
high level of current income exempt from federal income tax consistent with
moderate risk of capital and maintenance of liquidity. See "Taxes". The
Fund attempts to achieve this investment objective by investing primarily
in securities of states, territories and possessions of the United States
and their political subdivisions, agencies and instrumentalities, the
interest of which is exempt from federal income tax in the opinion of bond
counsel for the issuer. However, the Fund may invest up to 20% of its net
assets in securities the interest income on which may be subject to
federal, state and local taxes. The Fund seeks to maintain a current yield
that is greater than that obtainable from a portfolio of short-term tax
exempt obligations, subject to certain quality restrictions. See "Quality
and Diversification Requirements".

MONEY MARKET INSTRUMENTS

As discussed in the Prospectus, the Fund may invest in money market
instruments to the extent consistent with its investment objective and
policies. A description of the various types of money market instruments
that may be purchased appears below. See "Quality and Diversification
Requirements".
<PAGE>
<PAGE> SAI-2

U.S. TREASURY SECURITIES. The Fund may invest in direct obligations of the
U.S. Treasury, including Treasury Bills, Notes and Bonds, all of which are
backed as to principal and interest payments by the full faith and credit
of the United States.

ADDITIONAL U.S. GOVERNMENT OBLIGATIONS. The Fund may invest in obligations
issued or guaranteed by U.S. Government agencies or instrumentalities.
These obligations may or may not be backed by the "full faith and credit"
of the United States. In the case of securities not backed by the full
faith and credit of the United States, the Fund must look principally to
the federal agency issuing or guaranteeing the obligation for ultimate
repayment, and may not be able to assert a claim against the United States
itself in the event the agency or instrumentality does not meet its
commitments. Securities in which the Fund may invest that are not backed by
the full faith and credit of the United States include, but are not limited
to, obligations of the Tennessee Valley Authority, the Federal Home Loan
Mortgage Corporation and the U.S. Postal Service, each of which has the
right to borrow from the U.S. Treasury to meet its obligations, and the
obligations of the Federal Farm Credit System and the Federal Home Loan
Banks, both of whose obligations may be satisfied only by the individual
credits of each issuing agency. Securities that are backed by the full
faith and credit of the United States include obligations of the Government
National Mortgage Association, the Farmers Home Administration, and the
Export-Import Bank.

BANK OBLIGATIONS. The Fund, unless otherwise noted in the Prospectus or
below, may invest in negotiable certificates of deposit, time deposits and
bankers' acceptances of (i) banks, savings and loan associations and
savings banks that have more than $2 billion in total assets and are
organized under the laws of the United States or any state, (ii) foreign
branches of these banks and (iii) U.S. branches of foreign banks of
equivalent size (Yankees). The Fund may not invest in obligations of
foreign branches of foreign banks. The Fund will not invest in obligations
for which the New York Branch (the "Branch" or the "Advisor") of Union Bank
of Switzerland (the "Bank"), or any of its affiliated persons, is the
ultimate obligor or accepting bank. The Fund may not invest in obligations
of international banking institutions designated or supported by national
governments to promote economic reconstruction, development or trade
between nations (e.g., the European Investment Bank, the Inter-American
Development Bank or the World Bank).

COMMERCIAL PAPER. The Fund may invest in commercial paper, including
Master Demand obligations. Master Demand obligations are obligations that
provide for a periodic adjustment in the interest rate paid and permit
daily changes in the amount borrowed. Master Demand obligations are
governed by agreements between the issuer and the Advisor acting as agent,
for no additional fee, in its capacity as investment advisor to the Fund
and as a fiduciary for other clients for whom it exercises investment
discretion. The monies loaned to the borrower come from accounts managed by
the Advisor or its affiliates, pursuant to arrangements with such accounts.
Interest and principal payments are credited to such accounts. The Advisor,
acting as a fiduciary on behalf of its clients, has the right to increase
or decrease the amount provided to the borrower under an obligation. The
borrower has the
<PAGE>
<PAGE> SAI-3

right to pay without penalty all or any part of the principal amount then
outstanding on an obligation together with interest to the date of payment.
Because these obligations typically provide that the interest rate is tied
to the Federal Reserve commercial paper composite rate, the rate on Master
Demand obligations is subject to change. Repayment of a Master Demand
obligation to participating accounts depends on the ability of the borrower
to pay the accrued interest and principal of the obligation on demand,
which is continuously monitored by the Advisor. Because Master Demand
obligations typically are not rated by credit rating agencies, the Fund may
invest in such unrated obligations only if at the time of an investment the
obligation is determined by the Advisor to have a credit quality which
satisfies the Fund's quality restrictions. See "Quality and Diversification
Requirements". Although there is no secondary market for Master Demand
obligations, such obligations are considered to be liquid because they are
payable upon demand. The Fund does not have any specific percentage
limitation on investments in Master Demand obligations.

REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements with
brokers, dealers or banks that meet the credit guidelines approved by the
Company's Board of Directors (the "Directors" or the "Board"). In a
repurchase agreement, the Fund buys a security from a seller that has
agreed to repurchase the same security at a mutually agreed upon date and
price. The resale price normally is in excess of the purchase price,
reflecting an agreed upon interest rate. This interest rate is effective
for the period of time the Fund is invested in the agreement and is not
related to the coupon rate on the underlying security. A repurchase
agreement may also be viewed as a fully collateralized loan of money by the
Fund to the seller. The period of these repurchase agreements will usually
be short, from overnight to one week, and at no time will the Fund invest
in repurchase agreements for more than thirteen months. The securities that
are subject to repurchase agreements, however, may have maturity dates in
excess of thirteen months from the effective date of the repurchase
agreement. The Fund will always receive securities as collateral whose
market value is, and during the entire term of the agreement remains, at
least equal to 100% of the dollar amount invested by the Fund in each
agreement plus accrued interest, and the Fund will make payment for such
securities only upon physical delivery or upon evidence of book entry
transfer to the account of the Custodian. If the seller defaults, the Fund
might incur a loss if the value of the collateral securing the repurchase
agreement declines and might incur disposition costs in connection with
liquidating the collateral. In addition, if bankruptcy proceedings are
commenced with respect to the seller of the security, realization of
proceeds upon the disposition of the collateral by the Fund may be delayed
or limited.

CORPORATE BONDS AND OTHER DEBT SECURITIES

The Fund may invest up to 20% of its net assets in a U.S. dollar-
denominated debt securities of domestic and foreign issuers. See
"Investment Objectives and Policies" in the Prospectus.
<PAGE>
<PAGE> SAI-4

TAX EXEMPT OBLIGATIONS

As discussed in the Prospectus, the Fund will invest in tax exempt
obligations to the extent consistent with its investment objective and
policies. The various types of tax exempt obligations that the Fund may
purchase are described in the Prospectus and below. See "Quality and
Diversification Requirements".

MUNICIPAL BONDS. Municipal bonds are debt obligations issued by the
states, territories and possessions of the United States and the District
of Columbia, by their political subdivisions and by duly constituted
authorities and corporations. For example, states, territories, possessions
and municipalities may issue municipal bonds to raise funds for various
public purposes such as airports, housing, hospitals, mass transportation,
schools, water and sewer works. They may also issue municipal bonds to
refund outstanding obligations and to meet general operating expenses.
Public authorities issue municipal bonds to obtain funding for privately
operated facilities, such as housing and pollution control facilities, for
industrial facilities or for water supply, gas, electricity or waste
disposal facilities.

Municipal bonds may be general obligation or revenue bonds. General
obligation bonds are secured by the issuer's pledge of its full faith,
credit and taxing power for the payment of principal and interest. Revenue
bonds are payable from revenues derived from particular facilities, from
the proceeds of a special excise tax or from other specific revenue
sources. They are not generally payable from the general taxing power of a
municipality.

MUNICIPAL NOTES. Municipal Notes are divided into three categories of
short-term obligations: municipal notes, municipal commercial paper and
municipal demand obligations.

Municipal Notes are short-term obligations with a maturity at the time of
issuance ranging from six months to five years. The principal types of
municipal notes include tax anticipation notes, bond anticipation notes,
revenue anticipation notes, grant anticipation notes and project notes.
Notes sold in anticipation of collection of taxes, a bond sale, or receipt
of other revenues are usually general obligations of the issuing
municipality or agency.

Municipal commercial paper typically consists of very short-term,
unsecured, negotiable promissory notes that are sold to meet the seasonal
working capital or interim construction financing needs of a municipality
or agency. While these obligations are intended to be paid from general
revenues or refinanced with long-term debt, they frequently are backed by
letters of credit, lending agreements, note repurchase agreements or other
credit facility agreements offered by banks or institutions.

Municipal demand obligations are subdivided into two types: Variable Rate
Demand Notes and Master Demand obligations.
<PAGE>
<PAGE> SAI-5

Variable Rate Demand Notes are tax exempt municipal obligations or
participation interests that provide for a periodic adjustment in the
interest rate paid on the notes. They permit the holder to demand payment
of the notes, or to demand purchase of the notes at a purchase price equal
to the unpaid principal balance, plus accrued interest either directly by
the issuer or by drawing on a bank's letter of credit or guaranty issued
with respect to such note. The issuer of the municipal obligation may have
a corresponding right to prepay at its discretion the outstanding principal
of the note plus accrued interest upon notice comparable to that required
for the holder to demand payment. The Variable Rate Demand Notes in which
the Fund may invest are payable, or are subject to purchase, on demand
usually on notice of seven calendar days or less. The terms of the notes
provide that interest rates are adjustable at intervals ranging from daily
to six months, and the adjustments are based upon the prime rate of a bank
or other appropriate interest rate index specified in the respective notes.
Variable Rate Demand notes are valued at amortized cost; no value is
assigned to the right of the holder to receive the par value of the
obligation upon demand or notice.

Master Demand obligations are tax exempt municipal obligations that provide
for a periodic adjustment in the interest rate paid and permit daily
changes in the amount borrowed. The interest on such obligations is, in the
opinion of counsel for the borrower, exempt from federal income tax. For a
description of the attributes of Master Demand obligations, see "Money
Market Instruments" above. Although there is no secondary market for Master
Demand obligations, such obligations are considered to be liquid because
they are payable upon demand. The Fund has no specific percentage
limitations on investments in Master Demand obligations.

PUTS. The Fund may purchase, without limit, municipal bonds or notes
together with the right to resell the bonds or notes to the seller at an
agreed price or yield within a specified period prior to the maturity date
of the bonds or notes. Such a right to resell is commonly known as a "put".
The aggregate price for bonds or notes with puts may be higher than the
price for bonds or notes without puts. Consistent with its investment
objective and subject to the supervision of the Board, the purpose of this
practice is to permit the Fund to be fully invested in tax exempt
securities while preserving the necessary liquidity to purchase securities
on a when-issued basis, to meet unusually large redemptions, and to
purchase at a later date securities other than those subject to the put.
The principal risk of puts is that the writer of the put may default on its
obligation to repurchase. The Advisor will monitor each writer's ability to
meet its obligations under puts.

Puts may be exercised prior to the expiration date in order to fund
obligations to purchase other securities or to meet redemption requests.
These obligations may arise during periods in which proceeds from sales of
interests in the Fund and from recent sales of portfolio securities are
insufficient to meet such obligations or when the funds available are
otherwise allocated for investment. In addition, puts may be exercised
prior to the expiration date in order to take advantage of alternative
investment opportunities or if the Advisor revises its evaluation of the
creditworthiness of the issuer of the underlying security. In determining
<PAGE>
<PAGE> SAI-6

whether to exercise puts prior to their expiration date and in selecting
which puts to exercise, the Advisor considers the amount of cash available
to the Fund, the expiration dates of the available puts, any future
commitments for securities purchases, alternative investment opportunities,
the desirability of retaining the underlying securities and the yield,
quality and maturity dates of the underlying securities.

The Fund values municipal bonds and notes subject to puts with remaining
maturities of less than 60 days by the amortized cost method. If the Fund
invests in municipal bonds and notes with maturities of 60 days or more
that are subject to puts separate from the underlying securities, the puts
and the underlying securities will be valued at fair value as determined in
accordance with procedures established by the Board. The Board will, in
determining the value of a put, consider, among other factors, the
creditworthiness of the writer of the put, the duration of the put, the
dates on which or the periods during which the put may be exercised and the
applicable rules and regulations of the Securities and Exchange Commission
("SEC"). Prior to investing in such securities, the Fund, if deemed
necessary based upon the advice of counsel, will apply to the SEC for an
exemptive order, which may not be granted, relating to the valuation of
such securities.

Because the value of the put is partly dependent on the ability of the put
writer to meet its obligation to repurchase, the Fund's policy is to enter
into put transactions only with municipal securities dealers who are
approved by the Advisor. Each dealer will be approved on its own merits and
it is the Fund's general policy to enter into put transactions only with
those dealers that present a minimal credit risk. In connection with such a
determination, the Board will regularly review the Advisor's list of
approved dealers, taking into consideration, among other things, the
ratings, if available, of their debt securities, their reputation in the
municipal securities markets, their net worth, their efficiency in
consummating transactions and any collateral arrangements, such as letters
of credit, securing the puts written by them. Commercial bank dealers
normally will be members of the Federal Reserve System, and other dealers
will be members of the National Association of Securities Dealers, Inc. or
members of a national securities exchange. The Fund intends to limit its
use of put writers to those entities having an outstanding debt rating of
Aa or better by Moodys Investor's Service, Inc. ("Moody's") or AA or better
by Standard & Poor's Corporation ("Standard & Poor's"), or will be of
comparable quality in the Advisor's opinion or such put writers'
obligations will be collateralized and of comparable quality in the
Advisor's opinion. The Board has directed the Advisor not to enter into put
transactions with any dealer that in the judgment of the Advisor presents
more than a minimal credit risk. If a dealer defaults on its obligation to
repurchase an underlying security, the Fund is unable to predict whether
all or any portion of any loss sustained could subsequently be recovered
from such dealer.

The Company has been advised by counsel that the Fund will be considered
the owner of the securities subject to the puts so that the interest on the
securities is tax exempt income to the Fund. Such advice of counsel is
based on certain assumptions concerning the terms of the puts and the
attendant circumstances.
<PAGE>
<PAGE> SAI-7

The Fund may also invest up to 20% of the value of its net assets in the
U.S. dollar-denominated debt instruments of domestic and foreign issuers.
In abnormal market conditions, the Fund may, for defensive purposes only,
temporarily invest more than 20% of its net assets in debt securities the
interest on which is subject to federal income taxes. In no event will the
Fund invest more than 5% of its total assets in the securities of foreign
issuers. The Fund intends to limit its purchase of non-municipal debt
securities to those issuers rated at least Baa by Moody's or BBB by
Standard and Poor's or, if unrated, issuers of equal creditworthiness.

ADDITIONAL INVESTMENTS

WHEN-ISSUED AND DELAYED DELIVERY SECURITIES. The Fund may purchase
securities on a when-issued or delayed delivery basis. For example,
delivery of and payment for these securities can take place a month or more
after the date of the purchase commitment. The purchase price and the
interest rate payable, if any, on the securities are fixed on the purchase
commitment date or at the time the settlement date is fixed. The value of
such securities is subject to market fluctuation and no interest accrues to
the Fund until settlement takes place. At the time the Fund commits to
purchase securities on a when-issued or delayed delivery basis, it will
record the transaction, reflect the value of such securities each day in
determining its net asset value and, if applicable, calculate the maturity
for the purposes of average maturity from that date. At the time of
settlement, a when-issued security may be valued at less than the purchase
price. To facilitate such acquisitions, the Fund will maintain with the
Custodian a segregated account with liquid assets, consisting of cash, U.S.
Government securities or other high-quality, liquid securities, in an
amount at least equal to the value of such commitments. On delivery dates
for such transactions, the Fund will meet its obligations from maturities
or sales of the securities held in the segregated account and/or from cash
flow. If the Fund chooses to dispose of the right to acquire a when-issued
security prior to its acquisition, it could, as with the disposition of any
other portfolio obligation, incur a gain or loss due to market fluctuation.
It is the Fund's current policy not to enter into when-issued commitments
exceeding in the aggregate 15% of the market value of its total assets,
less liabilities (excluding the obligations created by when-issued
commitments).

INVESTMENT COMPANY SECURITIES. Securities of other investment companies
may be acquired by the Fund to the extent that such purchases are
consistent with its investment objectives and restrictions and are
permitted under the Investment Company Act of 1940, as amended (the "1940
Act"). The 1940 Act requires that, as determined immediately after a
purchase is made, (i) not more than 5% of the value of the Fund's total
assets will be invested in the securities of any one investment company,
(ii) not more than 10% of the value of the Fund's total assets will be
invested in securities of investment companies as a group and (iii) not
more than 3% of the outstanding voting stock of any one investment company
will be owned by the Fund. As a shareholder of another investment company,
the Fund would bear, along with other shareholders, its pro rata portion of
the other investment
<PAGE>
<PAGE> SAI-8

company's expenses, including advisory fees. These expenses would be in
addition to the advisory and other expenses that the Fund would bear in
connection with its own operations.

REVERSE REPURCHASE AGREEMENTS. The Fund may enter into reverse repurchase
agreements. In a reverse repurchase agreement, the Fund sells a security
and agrees to repurchase the same security at a mutually agreed upon date
and price. For purposes of the 1940 Act, reverse purchase agreements are
considered borrowings by the Fund and, therefore, a form of leverage. The
Fund will invest the proceeds of borrowings under reverse repurchase
agreements. In addition, the Fund will enter into a reverse repurchase
agreement only when the interest income to be earned from the investment of
the proceeds is greater than the interest expense of the repurchase
agreement. The Fund will not invest the proceeds of a reverse repurchase
agreement for a period that exceeds the term of the reverse repurchase
agreement. The Fund may not enter into reverse repurchase agreements if
such repurchase agreements, together with the Fund's other borrowings,
would exceed 10% of the Fund's total assets, less liabilities (excluding
obligations created by such borrowings and reverse repurchase agreements).
See "Investment Restrictions". The Fund will establish and maintain with
the Custodian a separate account with a portfolio of securities in an
amount at least equal to its obligations under its reverse repurchase
agreements.

SECURITIES LENDING. The Fund may lend its securities if such loans are
secured continuously by cash or equivalent collateral or by a letter of
credit in favor of the Fund at least equal at all times to 100% of the
market value of the securities loaned, plus accrued interest. While such
securities are on loan, the borrower will pay the Fund any income accruing
thereon. Loans will be subject to termination by the Fund in the normal
settlement time, generally three business days after notice, or by the
borrower on one day's notice. Borrowed securities must be returned when the
loan is terminated. Any gain or loss in the market price of the borrowed
securities that occurs during the term of the loan inures to the benefit of
the Fund. The Fund may pay reasonable finders' and custodial fees in
connection with a loan. In addition, the Fund will consider all facts and
circumstances including the creditworthiness of the borrowing financial
institution and the Fund will not make any loans in excess of one year. The
Fund will not lend its securities to any officer, Director, employee, or
affiliate or placement agent of the Company, or the Advisor, Administrator
or Distributor, unless otherwise permitted by applicable law.

PRIVATELY PLACED AND CERTAIN UNREGISTERED SECURITIES. The Fund may invest
in privately placed, restricted, Rule 144A or other unregistered securities
as described in the Prospectus.

As to illiquid investments, the Fund is subject to a risk that it might not
be able to sell such securities at a price that the Fund deems reflective
of their value. Where an illiquid security must be registered under the
Securities Act of 1933, as amended (the "Securities Act"), before it may be
resold, the Fund may be obligated to pay all or part of the registration
expenses and a considerable period may elapse between the time the Fund
decides to sell and
<PAGE>
<PAGE> SAI-9

the time the Fund is permitted to sell under an effective registration
statement. If, during such a period, adverse market conditions develop, the
Fund might obtain a less favorable price than that which prevailed when it
decided to sell.

SYNTHETIC VARIABLE RATE INSTRUMENTS. The Fund may invest in certain
synthetic variable rate instruments as described in the Prospectus. In the
case of some types of instruments, credit enhancements are not provided and
if certain events occur, including a default in the payment of principal or
interest on the underlying bond, a downgrading of the bond below investment
grade or a loss of the bond's tax exempt status then the put will terminate
and the Fund will bear the risk of holding a long-term bond.

QUALITY AND DIVERSIFICATION REQUIREMENTS

The Fund intends to meet the diversification requirements of the 1940 Act.
To meet these requirements, 75% of the Fund's assets are subject to the
following fundamental limitation: the Fund may not invest more than 5% of
its total assets in the securities of any one issuer, except obligations of
the U.S. Government, its agencies and instrumentalities. As for the 25% of
the Fund's assets not subject to the limitation described above, there is
no limitation on investment of these assets under the 1940 Act, so that all
of such assets may be invested in securities of any one issuer, subject to
the limitation of any applicable state securities laws. Investments not
subject to the limitations described above could involve an increased risk
to the Fund should an issuer, or a state or its related entities, be unable
to make interest or principal payments or should the market value of such
securities decline.

For purposes of diversification and concentration under the 1940 Act,
identification of the issuer of municipal bonds or notes depends on the
terms and conditions of the obligation. If the assets and revenues of an
agency, authority, instrumentality or other political subdivision are
separate from those of the government creating the subdivision and the
obligation is backed only by the assets and revenues of the subdivision,
such subdivision is regarded as the sole issuer. Similarly, in the case of
an industrial development revenue bond or pollution control revenue bond,
if the bond is backed only by the assets and revenues of the
nongovernmental user, the nongovernmental user is regarded as the sole
issuer. If in either case the creating government or another entity
guarantees an obligation, the guaranty is regarded as a separate security
and treated as an issue of such guarantor. Because securities issued or
guaranteed by states or municipalities are not voting securities, there is
no limitation on the percentage of a single issuer's securities that the
Fund may own so long as it does not invest more than 5% of its total assets
that are subject to the diversification limitation in the securities of
such issuer, except obligations issued or guaranteed by the U.S.
Government. Consequently, the Fund may invest in a greater percentage of
the outstanding securities of a single issuer than would an investment
company which invests in voting securities. See "Investment Restrictions".
<PAGE>
<PAGE> SAI-10

The Fund invests principally in a diversified portfolio of "high grade" and
"investment grade" tax exempt securities. On the date of investment (i)
municipal bonds must be rated within the four highest ratings of Moody's,
currently Aaa, Aa, A, and Baa, or of Standard & Poor's, currently AAA, AA,
A, and BBB, (ii) municipal notes must be rated MIG-1 by Moody's or SP-1 by
Standard & Poor's (or, in the case of New York State municipal notes, MIG-1
or MIG-2 by Moody's or SP-1 or SP-2 by Standard & Poor's) and (iii)
municipal commercial paper must be rated Prime-1 by Moody's or A1 by
Standard & Poor's or, if not rated by either Moody's or Standard & Poor's,
issued by an issuer either (a) having an outstanding debt issue rated A or
higher by Moody's or Standard & Poor's or (b) having comparable quality in
the opinion of the Advisor. The Fund may invest in other tax exempt
securities that are not rated if, in the opinion of the Advisor, such
securities are of comparable quality to the rated securities discussed
above. In addition, at the time the Fund invests in any commercial paper,
bank obligation, repurchase agreement, or other debt obligations, the
issuer must have outstanding debt rated Baa or BBB or higher by Moody's or
Standard & Poor's, respectively, the issuer's parent corporation, if any,
must have outstanding commercial paper rated Prime-1 by Moody's or A-1 by
Standard & Poor's, or if no such ratings are available, the investment must
be of comparable quality in the Advisor's opinion.

OPTIONS AND FUTURES TRANSACTIONS

EXCHANGE TRADED AND OVER THE COUNTER OPTIONS. All options purchased or
sold by the Fund will be exchange traded or will be purchased or sold by
securities dealers ("over-the-counter" or "OTC options") that meet
creditworthiness standards approved by the Board. Exchange-traded options
are obligations of the Options Clearing Corporation. In OTC options, the
Fund relies on the dealer from which it purchased the option to perform if
the option is exercised. Thus, when a Fund purchases an OTC option, it
relies on the dealer from which it purchased the option to make or take
delivery of the underlying securities. Failure by the dealer to do so would
result in the loss of the premium paid by the Fund as well as loss of the
expected benefit of the transaction.

The staff of the SEC has taken the position that, in general, purchased OTC
options and the underlying securities used to cover written OTC options are
illiquid securities. However, the Fund may treat as liquid the underlying
securities used to cover written OTC options, provided it has arrangements
with certain qualified dealers who agree that the Fund may repurchase any
option it writes for a maximum price to be calculated by a predetermined
formula. In these cases, the OTC option itself would only be considered
illiquid to the extent that the maximum repurchase price under the formula
exceeds the intrinsic value of the option.

FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS. The Fund is permitted
to enter into futures and options transactions and may purchase or sell
(write) futures contracts and purchase put and call options, including put
and call options on futures
<PAGE>
<PAGE> SAI-11

contracts. Futures contracts obligate the buyer to take and the seller to
deliver at a future date a specified quantity of a financial instrument or
an amount of cash based on the value of a securities index. Currently,
futures contracts are available on various types of fixed-income
securities, including but not limited to U.S. Treasury bonds, notes and
bills, Eurodollar certificates of deposit and on indices of fixed income
securities.

Unlike a futures contract, which requires the parties to buy and sell a
security or make a cash settlement payment based on changes in a financial
instrument or securities index on an agreed date, an option on a futures
contract entitles its holder to decide on or before a future date whether
to enter into such a contract. If the holder decides not to exercise its
option, the holder may close out the option position by entering into an
offsetting transaction or may decide to let the option expire and forfeit
the premium thereon. The purchaser of an option on a futures contract pays
a premium for the option but makes no initial margin payments or daily
payments of cash in the nature of "variation" margin payments to reflect
the change in the value of the underlying contract as does a purchaser or
seller of a futures contract.

The seller of an option on a futures contract receives the premium paid by
the purchaser and may be required to pay initial margin. Amounts equal to
the initial margin and any additional collateral required on any options on
futures contracts sold by the Fund are paid by the Fund into a segregated
account, in the name of the Futures Commission Merchant, as required by the
1940 Act and the SEC's interpretations thereunder.

COMBINED POSITIONS. The Fund may purchase and write options in combination
with each other, or in combination with futures or forward contracts, to
adjust the risk and return characteristics of the overall position. For
example, the Fund may purchase a put option and write a call option on the
same underlying instrument, in order to construct a combined position whose
risk and return characteristics are similar to selling a futures contract.
Another possible combined position would involve writing a call option at
one strike price and buying a call option at a lower price, in order to
reduce the risk of the written call option in the event of a substantial
price increase. Because combined options positions involve multiple trades,
they result in higher transaction costs and may be more difficult to open
and close out.

CORRELATION OF PRICE CHANGES. Because there are a limited number of types
of exchange-traded options and futures contracts, it is likely that the
standardized options and futures contracts available will not exactly match
the Fund's current or anticipated investments. The Fund may invest in
options and futures contracts based on securities with different issuers,
maturities, or other characteristics from the securities in which it
typically invests, which involves a risk that the options or futures
position will not track the performance of the Fund's other investments.

Options and futures contracts prices can also diverge from the prices of
their underlying instruments, even if the underlying instruments match the
Fund's investments well. Options
<PAGE>
<PAGE> SAI-12

and futures contracts prices are affected by such factors as current and
anticipated short-term interest rates, changes in volatility of the
underlying instrument, and the time remaining until expiration of the
contract, which may not affect security prices the same way. Imperfect
correlation may also result from differing levels of demand in the options
and futures markets and the securities markets, from structural differences
in how options and futures and securities are traded, or from imposition of
daily price fluctuation limits or trading halts. The Fund may purchase or
sell options and futures contracts with a greater or lesser value than the
securities it wishes to hedge or intends to purchase in order to attempt to
compensate for differences in volatility between the contract and the
securities, although this may not be successful in all cases. If price
changes in the Fund's options or futures positions are poorly correlated
with its other investments, the positions may fail to produce anticipated
gains or result in losses that are not offset by gains in other
investments.

LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There is no assurance a liquid
market will exist for any particular option or futures contract at any
particular time even if the contract is traded on an exchange. In addition,
exchanges may establish daily price fluctuation limits for options and
futures contracts and may halt trading if a contract's price moves up or
down more than the limit in a given day. On volatile trading days when the
price fluctuation limit is reached or a trading halt is imposed, it may be
impossible for the Fund to enter into new positions or close out existing
positions. If the market for a contract is not liquid because of price
fluctuation limits or otherwise, it could prevent prompt liquidation of
unfavorable positions, and could potentially require the Fund to continue
to hold a position until delivery or expiration regardless of changes in
its value. As a result, the Fund's access to other assets held to cover its
options or futures positions could also be impaired. See "Exchange Traded
and Over the Counter Options" above for a discussion of the liquidity of
options not traded on an exchange.

POSITION LIMITS. Futures exchanges can limit the number of futures and
options on futures contracts that can be held or controlled by an entity.
If an adequate exemption cannot be obtained, the Fund or the Advisor may be
required to reduce the size of its futures and options positions or may not
be able to trade a certain futures or options contract in order to avoid
exceeding such limits.

ASSET COVERAGE FOR FUTURES CONTRACTS AND OPTIONS POSITIONS. The Fund
intends to comply with Section 4.5 of the regulations under the Commodity
Exchange Act, which limits the extent to which the Fund can commit assets
to initial margin deposits and option premiums. In addition, the Fund will
comply with SEC guidelines with respect to coverage of options and futures
contracts by mutual funds, and if the guidelines so require, will set aside
appropriate liquid assets in a segregated custodial account in the amount
prescribed. Securities held in a segregated account cannot be sold and will
be considered illiquid while the futures contract or option is outstanding,
unless they are replaced with other suitable assets. As a result, there is
a possibility that the segregation of a large
<PAGE>
<PAGE> SAI-13

percentage of the Fund's assets could impede portfolio management or the
Fund's ability to meet redemption requests or other current obligations.

INVESTMENT RESTRICTIONS

The investment restrictions below have been adopted by the Directors with
respect to the Fund. Except where otherwise noted, these investment
restrictions are "fundamental" policies which, under the 1940 Act, may not
be changed without the "vote of a majority of the outstanding voting
securities" of the Fund. The "vote of a majority of the outstanding voting
securities" under the 1940 Act is the lesser of (a) 67% or more of the
Fund's voting shares present at a shareholders' meeting if the holders of
more than 50% of the outstanding voting shares are present or represented
by proxy, or (b) more than 50% of the Fund's outstanding voting shares. The
limitations described below apply at the time the Fund purchases the
securities.

The Fund may not:

1. Borrow money, except from banks for extraordinary or emergency
purposes and then only in amounts up to 10% of the value of its total
assets (including the amount borrowed) taken at cost at the time of
such borrowing, less liabilities (not including the amount borrowed)
or, except in connection with reverse repurchase agreements permitted
by Investment Restriction 8, mortgage, pledge, or hypothecate any
assets except in connection with any such borrowing in amounts up to
10% of the value of its total assets at the time of such borrowing. It
will not purchase securities while borrowings (including reverse
repurchase agreements) exceed 5% of its net assets; provided, however,
that it may increase its interest in an open-end management investment
company with the same investment objective and restrictions while such
borrowings are outstanding and provided further that for purposes of
this restriction, short-term credits necessary for the clearance of
transactions are not considered borrowings. This borrowing provision
facilitates the orderly sale of portfolio securities, for example, in
the event of abnormally heavy redemption requests and is not for
investment purposes. Collateral arrangements for premium and margin
payments in connection with its hedging activities are not deemed to
be a pledge of assets;

2. Purchase the securities or other obligations of any one issuer if,
immediately after such purchase, more than 5% of the value of its
total assets would be invested in securities or other obligations of
any one such issuer. Each state and each political subdivision, agency
or instrumentality of such state and each multi-state agency of which
such state is a member will be a separate issuer if the security is
backed only by the assets and revenue of that issuer. If the security
is guaranteed by another entity, the guarantor will be deemed to be
the
<PAGE>
<PAGE> SAI-14

issuer.* This limitation shall not apply to securities issued or
guaranteed by the U.S. Government, its agencies or instrumentalities
or to permitted investments of up to 25% of its total assets;

3. Invest more than 25% of its total assets in securities of governmental
units located in any one state, territory, or possession of the United
States. It may invest more than 25% of its total assets in industrial
developments and pollution control obligations whether or not the
users of facilities financed by such obligations are in that same
industry;**

4. Purchase industrial revenue bonds if, as a result of such purchase,
more than 5% of its total assets would be invested in industrial
revenue bonds where payments of principal and interest are the
responsibility of companies with fewer than three years of operating
history (including any predecessors);

5. Make loans, except through the purchase or holding of debt obligations
(including privately placed securities) or the entering into of
repurchase agreements or loans of portfolio securities in accordance
with its investment objective and policies (see "Investment Objective
and Policies");

6. Purchase or sell puts, calls, straddles, spreads, or any combination
thereof (except to the extent that securities subject to a demand
obligation, stand-by commitments and puts may be purchased (see
"Investment Objective and Policies") and its interests in hedging
activities as described under "Investment Objectives and Policies"),
real estate, commodities or commodity contracts (except for its
interest in hedging activities as described under "Investment
Objective and Policies"), interests in oil, gas, or mineral
exploration or development programs (including limited partnerships).
However, purchases of municipal bonds, notes, commercial paper or
other obligations secured by interests in real estate are permitted;

7. Purchase securities on margin, make short sales of securities, or
maintain a short position, except in the course of its hedging
activities, unless at all times when a short position is open it owns
an equal amount of such securities; provided that this restriction
shall not be deemed to be applicable to the purchase or sale of when-
issued or delayed delivery securities;

*For purposes of interpretation of Investment Restriction No. 2
"guaranteed by another entity" includes credit substitutions, such as
letters of credit or insurance, unless the Advisor determines that the
security meets the relevant credit standards without regard to the credit
substitution.

**Pursuant to an interpretation of the staff of the SEC, the Fund may
not invest more than 25% of its assets in industrial development bonds in
projects of similar type or in the same state.
<PAGE>
<PAGE> SAI-15

8. Issue any senior security, except as appropriate to evidence
indebtedness that it is permitted to incur pursuant to Investment
Restriction No. 1 and except that it may enter into reverse repurchase
agreements, provided that the aggregate of all senior securities,
including reverse repurchase agreements, shall not exceed 10% of the
market value of its total assets (including the amounts borrowed),
less liabilities (excluding obligations created by such borrowings and
reverse repurchase agreements). Hedging activities as described in
"Investment Objective and Policies" shall not be considered senior
securities for purposes hereof;

9. Acquire securities of other investment companies, except as permitted
by the 1940 Act; or

10. Act as an underwriter of securities.

NON-FUNDAMENTAL INVESTMENT RESTRICTIONS. The investment restrictions
described below are not fundamental policies of the Fund and may be changed
by the Directors. These non-fundamental investment policies provide that
the Fund may not:

(i) acquire any illiquid securities, such as repurchase agreements with
more than seven days to maturity or fixed time deposits with a duration of
over seven calendar days, if as a result thereof, more than 15% of the
market value of it net assets would be in investments that are illiquid; or

(ii) acquire U.S. dollar-denominated debt securities issued by foreign
companies or governments, except that the Fund may acquire debt securities
issued by foreign issuers if, as a result thereof, no more than 5% of its
total assets would be invested in such foreign securities.

There will be no violation of any investment restriction if that
restriction is complied with at the time the relevant action is taken
notwithstanding a later change in market value of an investment, in net or
total assets, in the securities rating of the investment or any other later
change.

DIRECTORS

The Company's Board consists of three (3) directors. The Board is
responsible for the overall management of the Fund, including the general
supervision and review of its investment activities. The Board, in turn,
elects the officers of the Company. The addresses and principal
occupations of the Company's Directors and officers are listed below. As
of [_____], 1996, the Directors and officers of the Company owned of
record, as a group, less than 1% of the outstanding shares of the Company.
None of the Company's Directors or officers receive compensation from the
Company exceeding $60,000 per fiscal year.
<PAGE>
<PAGE> SAI-16

POSITION WITH PRINCIPAL OCCUPATIONS DURING
NAME AND ADDRESS THE COMPANY THE PAST FIVE YEARS AGE

[TO COME]

[* "Interested Person" within the meaning of the 1940 Act.]

INVESTMENT ADVISOR

Pursuant to an Advisory Agreement between the Company and the Branch, the
Branch serves as the Fund's investment advisor. The Advisor was
incorporated under the laws of [Switzerland] on [_____________]. Subject
to the supervision of the Directors, the Advisor makes the Fund's day-to-
day investment decisions, arranges for the execution of portfolio
transactions, generally manages the Fund's investments and provides certain
administrative services.

The investment advisory services provided by the Branch to the Fund are not
exclusive under the terms of the Advisory Agreement. The Branch is free to
and does render similar investment advisory services to others. The Branch
serves as investment advisor to personal investors and other investment
companies and acts as fiduciary for trusts, estates and employee benefit
plans. Certain of the assets of trusts and estates under management are
invested in common trust funds for which the Branch serves as trustee. The
accounts managed or advised by the Branch have varying investment
objectives and the Branch invests assets of such accounts in investments
substantially similar to, or the same as, the Fund's. Such accounts are
supervised by officers and employees of the Branch who may also be acting
in similar capacities for the Fund. See "Portfolio Transactions".

The Bank has branches, agencies, representative offices and subsidiaries in
Switzerland and in more than 40 cities outside Switzerland, including, in
the United States, New York City, Chicago, Houston, Los Angeles and San
Francisco. In addition to the receipt of deposits and the making of loans
and advances, the Bank, through its offices and subsidiaries, engages in a
wide range of banking and financial activities typical of the world's major
international banks, including fiduciary, investment advisory and custodial
services and foreign exchange in the United States, Swiss, Asian and Euro-
capital markets. The Bank is one of the world's leading asset managers.

owned subsidiary of the Bank with assets under management totaling $33.9
billion as of December 31, 1994, offers primarily U.S. dollar-based asset
management services to institutions (including pension and other employee
benefit trusts), individuals, corporations and other entities in the areas
of equities, fixed income, real estate, oil and gas and timber investments.

At June 30, 1995, the Bank (including its consolidated subsidiaries) had
total assets of $307.4 billion (unaudited) and equity capital and reserves
of $19.7 billion (unaudited). (The Bank's financial statements are
denominated in Swiss Francs. The exchange rate at June 30, 1995 was Sfr.
1.148 to one U.S. dollar.)

The basis of the Advisor's investment process is fundamental investment
research, as the firm believes that fundamentals should determine an
asset's value over the long-term. The Advisor currently employs [_____]
full-time research analysts devoted to equity, fixed income, capital
market, credit and economic research in investment management divisions
located in [_______________________] to cover countries, industries and
companies on site. The Advisor's experienced investment professionals
review the economic, political and other forces affecting the value of the
municipal bond market.

The Advisor is a registered investment adviser under the Investment
Advisers Act of 1940, as amended.

In addition to the above discussed advisory services, the Advisor also
provides certain administrative services to the Fund. In this capacity, the
Advisor, subject to the supervision of the Board, is also responsible for:
establishing performance standards for the Fund's third-party service
providers and overseeing and evaluating the performance of such entities;
providing and presenting quarterly management reports to the Directors;
assisting in the preparation of reports for Fund shareholders; establishing
voluntary expense limitations for the Fund and providing any resultant
expense reimbursement to the Fund; monitoring the Fund's compliance with
all federal and state securities and other regulatory requirements; and
monitoring the Fund's compliance with federal tax laws and regulations,
including the Fund's status as a "regulated investment company" under the
Internal Revenue Code of 1986, as amended (the "Code").

The Advisory Agreement will continue in effect until [__________], 1997,
and thereafter will be subject to annual approval by the Directors or the
vote of a majority of the Fund's outstanding voting securities (as defined
in the 1940 Act), provided that in either case the continuance also is
approved by a majority of the Directors who are not interested persons (as
defined in the 1940 Act) of the Company by vote cast in person at a meeting
called for the purpose of voting on such approval. The Advisory Agreement
will terminate automatically if assigned and is terminable at any time
without penalty by a vote of a majority of the Directors or by a vote of
the holders of a majority (as defined in the 1940 Act) of the Fund's
outstanding shares on 60 days' written notice to the Advisor. The Advisory
Agreement is also terminable by the Advisor on 90 days' written notice to
the Fund. See "Additional Information".

The Glass-Steagall Act and other applicable laws generally prohibit banks,
such as Union Bank of Switzerland, from engaging in the business of
underwriting or distributing securities, and the Board of Governors of the
Federal Reserve System has issued an interpretation to the effect that
under these laws a bank holding company registered under the federal Bank
Holding Company Act or certain subsidiaries thereof may not sponsor,
organize, or control a registered open-end investment company continuously
engaged in the issuance of its shares, such as the Company. The
interpretation does not prohibit a holding company or a subsidiary thereof
from acting as investment advisor and custodian to such an investment
company. The Advisor believes that it may perform the services for the Fund
contemplated by the Advisory Agreement without violating the Glass-Steagall
Act or other applicable banking laws or regulations. State laws on this
issue may differ from the interpretation of relevant federal law, and banks
and financial institutions may be required to register as dealers pursuant
to state securities laws. However, it is possible that future changes in
either federal or state statutes and regulations concerning the permissible
activities of banks or trust companies, as well as further judicial or
administrative decisions and interpretations of present and future statutes
and regulations, might prevent the Advisor from continuing to perform such
services for the Fund.

If the Advisor were prohibited from acting as the Fund's investment
advisor, it is expected that the Directors would recommend to shareholders
that they approve the Fund's entering into a new investment advisory
agreement with another qualified investment advisor selected by the Board.

ADMINISTRATOR

Under the Administration Agreement with the Company, Signature Financial
Group, Inc. ("Signature" or the "Administrator"), an affiliate of the
Distributor, serves as the Fund's administrator. In this capacity it
administers all aspects of the Fund's day-to-day operations, subject to the
supervision of the Advisor and the Directors, except as set forth under the
sections captioned "Investment Advisor", "Distributor", "Custodian" and
"Shareholder Services". As Administrator, Signature (i) furnishes general
office facilities and ordinary
<PAGE>
<PAGE> SAI-19

clerical and related services for day-to-day operations, including
recordkeeping responsibilities; (ii) is responsible for complying with all
applicable federal and state securities and other regulatory requirements
including, without limitation, preparing, mailing and filing (but not
paying for) registration statements, prospectuses, statements of additional
information, proxy statements and all required reports to the Fund's
shareholders, the SEC and state securities commissions; (iii) is
responsible for the registration of sufficient Fund shares under federal
and state securities laws; (iv) takes responsibility for monitoring the
Fund's status as a "regulated investment company" under the Code; and (v)
performs administrative and managerial oversight of the activities of the
Fund's custodian, transfer agent and other agents or independent
contractors.

Under the Administration Agreement, the Fund has agreed to pay Signature an
administration fee, calculated daily and payable monthly, at an annual rate
of 0.10% of the first $100 million of the Fund's average net assets, plus
0.075% of the next $100 million of the Fund's average net assets, plus
0.05% of the Fund's average net assets in excess of $200 million.

The Administration Agreement may be renewed or amended by the Directors
without shareholder vote. The Administration Agreement is terminable at any
time without penalty by a vote of a majority of the Directors on not more
than 60 days' written notice nor less than 30 days' written notice to the
other party. The Administrator may subcontract for the performance of its
obligations under the Administration Agreement with the prior written
consent of the Directors. If the Administrator subcontracts all or a
portion of its duties to another party, the Administrator shall be fully
responsible for the acts and omissions of any such subcontractor(s) as it
would be for its own acts or omissions.

DISTRIBUTOR

Signature Broker-Dealer Services, Inc. (the "Distributor") serves as the
exclusive distributor of the Fund's shares and holds itself available to
receive purchase orders for such shares. In this capacity, the Distributor
has been granted the right, as the Fund's agent, to solicit and accept
orders for the purchase of Fund shares in accordance with the terms of the
Distribution Agreement between the Company, on behalf of the Fund, and the
Distributor. The Distribution Agreement shall continue in effect with
respect to the Fund until [__________], 1997, and thereafter will be
subject to annual approval (i) by a vote of the holders of a majority of
the Fund's outstanding voting securities or by the Directors and (ii) by a
vote of a majority of the Directors who are not parties to the Distribution
Agreement or interested persons (as defined by the 1940 Act) of the Company
cast in person at a meeting called for the purpose of voting on such
approval. The Distribution Agreement will terminate automatically if
assigned by either party thereto and is terminable at any time, without
penalty, by a vote of a majority of the Directors, a vote of a majority of
such Directors who are not "interested persons" of the Company (as defined
in the 1940 Act) or by a vote of the holders of a majority of the Fund's
outstanding shares, in any case on not less than 60 days'
<PAGE>
<PAGE> SAI-20

written notice to the other party. The Distributor does not receive a fee
pursuant to the terms of the Distribution Agreement. The principal offices
of the Distributor are located at 6 St. James Avenue, Boston, Massachusetts
02116.

CUSTODIAN

Investors Bank and Trust Company (the "Custodian"), located at 89 South
Street, Boston, Massachusetts 02111, serves as the custodian and transfer
and dividend disbursing agent for the Fund. Pursuant to the Custodian
Agreement between the Custodian and the Company, on behalf of the Fund, the
Custodian is responsible for maintaining the books and records of portfolio
transactions and holding portfolio securities and cash. As transfer agent
and dividend disbursing agent, the Custodian is responsible for maintaining
account records detailing the ownership of Fund shares and for crediting
income, capital gains and other changes in share ownership to investors'
accounts.

The Custodian will perform its duties as the Fund's transfer agent and
dividend disbursing agent from its offices located at 89 South Street,
Boston, Massachusetts 02111.

SHAREHOLDER SERVICES

The Company, on behalf of the Fund, has entered into a Shareholder
Servicing Agreement with the Branch under which the private banking and
investment services division ("INVS") of the Branch provides shareholder
services to Fund shareholders who are also clients of the Branch. These
services include performing shareholder account administrative and
servicing functions such as answering inquiries regarding account status
and history, the manner in which purchases and redemptions of shares may be
made and certain other matters pertaining to the Fund, assisting customers
in designating and changing dividend options, account designations and
addresses, providing necessary personnel and facilities to coordinate the
establishment and maintenance of shareholder accounts and records with the
Fund's Distributor and transfer agent, transmitting purchase and redemption
orders to the Fund's Distributor and transfer agent, arranging for the
wiring or other transfer of funds to and from customer accounts in
connection with orders to purchase or redeem Fund shares, verifying
purchase and redemption orders, transfers among and changes in accounts and
providing other related services.

In return for these services, the Company has agreed to pay INVS a fee, at
an annual rate of 0.25% of the average daily net assets of the shareholder
accounts so serviced. Under the terms of the of the Shareholder Servicing
Agreement, INVS may delegate one or more of its responsibilities to other
entities at its expense.

Fund's shareholder servicing agent under the Shareholder Servicing
Agreement and the Branch as advisor to the Fund under the Advisory
Agreement may raise issues under these laws. However, the Branch believes
that it may properly perform these services and the other activities
described herein and in the Prospectus without violating the Glass-Steagall
Act or other applicable banking laws or regulations.

If the Branch was prohibited from providing its respective services under
the above noted agreements, the Directors would seek an alternative
provider of such services. In such an event, changes in the operation of
the Fund might occur and shareholders might not receive the same level of
service previously provided by the Branch.

INDEPENDENT ACCOUNTANTS

The Company's independent accounting firm is Price Waterhouse LLP, 1177
Avenue of the Americas, New York, New York 10036. The U.S. Firm of Price
Waterhouse is a Registered Limited Liability Partnership (LLP) under the
laws of the State of Delaware. Price Waterhouse LLP will conduct an annual
audit of the financial statements of the Fund, assist in the review of the
federal and state income tax returns of the Fund and consult with the Fund
as to matters of accounting and federal and state income taxation.

EXPENSES

The Fund is responsible for the fees and expenses attributable to it.

The Advisor has agreed that if, in any fiscal year, the sum of the Fund's
expenses exceeds the limits set by applicable regulations of state
securities commissions, the Advisor will waive its fees and reimburse
expenses as necessary to eliminate such excess. Currently, the Advisor
believes that the most restrictive expense limitation of state securities
commissions limits expenses to an annual rate of 2.5% of the first $30
million of average net assets, 2% of the next $70 million of such net
assets and 1.5% of such net assets in excess of $100 million. For
additional information regarding fee waivers or expense reimbursements, see
"Management" in the Prospectus. The Advisor has also voluntarily agreed to
limit the total operating expenses of the Fund, excluding extraordinary
expenses, to an annual rate of 0.80% of the Fund's average daily net
assets. The Advisor may modify or discontinue this fee waiver and expense
limitation at any time in the future with thirty days' notice to the Fund.

The Advisor paid the Fund's organizational expenses and the expenses
incurred in the initial offering of Fund shares.
<PAGE>
<PAGE> SAI-22

PURCHASE OF SHARES

Investors may purchase Fund shares as described in the Prospectus under
"Purchase of Shares". Fund shares are sold on a continuous basis without a
sales charge at the net asset value per share next determined after receipt
of a purchase order.

The minimum investment requirement for accounts established for the benefit
of minors under the "Uniform Gift to Minor's Act" is $5,000. The minimum
subsequent investment is $1,000. The minimum investment requirement for
employees of the Bank and its affiliates is $5,000. The minimum subsequent
investment is $1,000.

In addition, the minimum investment requirements may be met by aggregating
the investments of related shareholders. A "related shareholder" is limited
to an immediate family member, including mother, father, spouse, child,
brother, sister and grandparent, and includes step and adoptive
relationships.

The Fund may, at its own option, accept securities in payment for shares.
The securities tendered are valued by the methods described in "Net Asset
Value" as of the day the Fund shares are purchased. This is a taxable
transaction to the investor. Securities may be accepted in payment for
shares only if they are, in the judgment of the Advisor, appropriate
investments for the Fund. In addition, securities accepted in payment for
shares must: (i) meet the Fund's investment objective and policies; (ii) be
acquired by the Fund for investment and not for resale; (iii) be liquid
securities that are not restricted as to transfer either by law or by
market liquidity; and (iv) have a value that is readily ascertainable, as
evidenced by a listing on a stock exchange, over-the-counter market or by
readily available market quotations from a dealer in such securities. The
Fund reserves the right to accept or reject at its own option any and all
securities offered in payment for its shares.

REDEMPTION OF SHARES

Investors may redeem Fund shares as described in the Prospectus under
"Redemption of Shares".

If the Directors determine that it would be detrimental to the best
interest of the remaining shareholders of the Fund to effect redemptions
wholly or partly in cash, payment of the redemption price may be made in
whole or in part by an in-kind distribution of securities, in lieu of cash,
in conformity with applicable SEC rules. If shares are redeemed in-kind,
the redeeming shareholder might incur transaction costs in converting the
securities into cash. The methods of valuing portfolio securities
distributed to a shareholder are described under "Net Asset Value", and
such valuations will be made at the same time the redemption price is
determined. The Company, on behalf of the Fund, has elected to be governed
by Rule 18f-1 under the 1940 Act pursuant to which the Fund is obligated to
redeem shares solely in
<PAGE>
<PAGE> SAI-23

cash up to the lesser of $250,000 or one percent of the net asset value of
the Fund during any 90 day period for any one shareholder.

FURTHER REDEMPTION INFORMATION. The right of redemption may be suspended or
the date of payment postponed: (i) for up to seven days; (ii) during
periods when the New York Stock Exchange (the "NYSE") is closed for other
than weekends and holidays or when trading on the NYSE is restricted as
determined by the SEC by rule or regulation; (iii) during periods in which
an emergency exists, as determined by the SEC, which causes the disposal
of, or evaluation of the net asset value of, the Fund's securities to be
unreasonable or impracticable; or (iv) for such other periods as the SEC
may permit.

EXCHANGE OF SHARES

An investor may exchange Fund shares for shares of any other series of the
Company as described under "Exchange of Shares" in each such series'
prospectus. Investors considering an exchange of Fund shares for shares of
another Company series should read the prospectus of the series into which
the transfer is being made prior to such exchange. Requests for exchange
are made in the same manner as requests for redemptions. See "Redemption of
Shares". Shares of the acquired series are purchased for settlement when
the proceeds from redemption become available. Certain state securities
laws may restrict the availability of the exchange privilege. The Company
reserves the right to discontinue, alter or limit this exchange privilege
at any time.

DIVIDENDS AND DISTRIBUTIONS

The Fund will declare and pay dividends and distributions as described
under "Dividends and Distributions" in the Prospectus.

Determination of the net income for the Fund is made at the times described
in the Prospectus; in addition, net investment income for days other than
business days is determined at the time net asset value is determined on
the prior business day.

NET ASSET VALUE

The Fund computes its net asset value once daily at the close of business
on Monday through Friday as described under "Net Asset Value" in the
Prospectus. The net asset value will not be computed on a day in which no
orders to purchase or redeem Fund shares have been received or on the
following legal holidays: New Year's Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas
Day. On days when U.S. trading markets close early in observance of these
holidays, the Fund expects to close for purchases and redemptions at the
same time.
<PAGE>
<PAGE> SAI-24

The net asset value per share of the Fund equals the Fund's total assets
less its total liabilities, divided by the number of outstanding shares of
the Fund.

Securities with a maturity of 60 days or more, including securities that
are listed on an exchange or traded over-the-counter, are valued by the
Fund by using prices supplied daily by an independent pricing service(s).
These prices are based on the last sale price on a national securities
exchange or, in the absence of recorded sales, at the average of readily
available closing bid and asked prices, or in the absence of such prices,
at the readily available closing bid price on such exchange or at the
quoted bid price in the over-the-counter market, if such exchange or market
constitutes the broadest and most representative market for the security.
In other cases, the pricing service values the security by taking into
account various factors affecting market value, including yields and prices
of comparable securities, indication as to value from dealers and general
market conditions. All portfolio securities with a remaining maturity of
less than 60 days are valued by the amortized cost method, whereby such
securities are valued at acquisition cost as adjusted for amortization of
premium or accretion of discount to maturity. Because of the large number
of municipal bond issues outstanding and their varying maturity dates,
coupons and risk factors applicable to each issuer's books, no readily
available market quotations exist for most municipal securities.

Trading in securities on most foreign exchanges and over-the-counter
markets is normally completed before the close of the NYSE and may also
take place on days on which the NYSE is closed. If events materially
affecting the value of securities occur between the time when the exchange
on which they are traded closes and the time when the Fund's net asset
value is calculated, such securities will be valued at fair value in
accordance with procedures established by and under the general supervision
of the Directors.

If market quotations for the Fund's securities are not readily available,
such securities will be valued at "fair value" as determined in good faith
by the Directors.

PERFORMANCE DATA

From time to time, the Fund may quote performance in terms of yield, actual
distributions, total return or capital appreciation in reports, sales
literature and advertisements published by the Fund. Current performance
information for the Fund may be obtained by calling the Administrator. See
"Additional Information" in the Prospectus.

YIELD QUOTATIONS. As required by SEC regulations, the Fund's annualized
yield is computed by dividing the Fund's net investment income per share
earned during a 30-day period by its net asset value on the last day of the
period. The average daily number of Fund shares outstanding during the
period that are eligible to receive dividends is used in determining the
net investment income per share. Income is computed by totaling the
interest earned on all debt obligations during the period and subtracting
from that amount the total of
<PAGE>
<PAGE> SAI-25

all recurring expenses incurred during the period. The 30-day yield is then
annualized on a bond-equivalent basis assuming semi-annual reinvestment and
compounding of net investment income, as described under "Additional
Information" in the Prospectus.

TOTAL RETURN QUOTATIONS. As required by SEC regulations, the Fund's
annualized total return for a period is computed by assuming a hypothetical
initial payment of $1,000. It is then assumed that all of the Fund's
dividends and distributions over the period are reinvested. It is then
assumed that at the end of the period, the entire amount is redeemed. The
annualized total return is then calculated by determining the annual rate
required for the initial payment to grow to the amount which would have
been received upon redemption.

Aggregate total returns, reflecting the cumulative percentage change over a
measuring period, may also be calculated.

GENERAL. The Fund's performance will vary from time-to-time depending upon
market conditions, the composition of its portfolio and its operating
expenses. Consequently, any given performance quotation should not be
considered representative of the Fund's performance for the future. In
addition, because performance will fluctuate, it may not provide a basis
for comparing an investment in the Fund with certain bank deposits or other
investments that pay a fixed yield or return for a stated period of time.

Comparative performance information may be used from time-to-time in
advertising the Fund's shares, including data from Lipper Analytic
Services, Morningstar Inc. and other industry publications.

PORTFOLIO TRANSACTIONS

The Advisor places orders for all purchases and sales of securities on
behalf of the Fund. The Advisor enters into repurchase agreements and
reverse repurchase agreements and executes loans of portfolio securities on
behalf of the Fund. See "Investment Objective and Policies".

Fixed income and debt securities and municipal bonds and notes are
generally traded at a net price with dealers acting as principal for their
own accounts without a stated commission. The price of the security usually
includes profit to the dealers. In underwritten offerings, securities are
purchased at a fixed price that includes an amount of compensation to the
underwriter, generally referred to as the underwriter's concession or
discount. Occasionally, certain securities may be purchased directly from
an issuer, in which case no commissions or discounts are paid.

The Fund's portfolio transactions will be undertaken principally to
accomplish the Fund's objective in relation to expected movements in the
general level of interest rates. The Fund
<PAGE>
<PAGE> SAI-26

may, however, engage in short-term trading consistent with this objective.
In connection with the Fund's portfolio transactions, the Advisor intends
to seek best price and execution on a competitive basis for both purchases
and sales of securities. Portfolio turnover may vary from year to year, as
well as within a year. The portfolio turnover rate for the Fund is
expected to be under 100%.

Portfolio securities will not be purchased from or through or sold to or
through the Distributor or an "affiliated person" of the Fund or an
"affiliated person" thereof (as defined in the 1940 Act) when such entities
are acting as principals, except to the extent permitted by law. In
addition, the Fund will not purchase securities during the existence of any
underwriting group relating thereto of which the Advisor or an affiliate of
the Advisor is a member, except to the extent permitted by law.

On those occasions when the Advisor deems the purchase or sale of a
security to be in the Fund's best interests as well as other customers, the
Advisor to the extent permitted by applicable laws and regulations may, but
is not obligated to, aggregate the securities to be sold or purchased for
the Fund with those to be sold or purchased for other customers in order to
obtain best execution, including lower brokerage commissions if
appropriate. In such an event, the securities so purchased or sold as well
as any expenses incurred in the transaction will be allocated by the
Advisor in the manner it considers to be most equitable and consistent with
its fiduciary obligations to its customers. In some instances, this
procedure might adversely affect the Fund.

If the Fund writes an option and effects a closing purchase transaction
with respect to such an option, the transaction will normally be executed
by the same broker-dealer who executed the sale of the option. The writing
of options by the Fund will be subject to limitations established by each
of the exchanges governing the maximum number of options in each class that
may be written by a single investor or group of investors acting in
concert, regardless of whether the options are written on the same or
different exchanges or are held or written in one or more accounts or
through one or more brokers. The number of options that the Fund may write
may be affected by options written by the Advisor for other investment
advisory clients. An exchange may order the liquidation of positions found
to be in excess of these limits and it may impose certain other sanctions.

ORGANIZATION

UBS PRIVATE INVESTOR FUNDS, INC.

UBS Private Investor Funds, Inc. is a Maryland corporation and is currently
issuing shares of common stock, par value $0.001 per share, in four series:
The UBS Bond Fund; The UBS Tax Exempt Bond Fund; The UBS U.S. Equity Fund;
and The UBS International Equity Fund.
<PAGE>
<PAGE> SAI-27

Each share of a series issued by the Company will have a pro rata interest
in the assets of that series. The Company is currently authorized to issue
500,000,000 shares of common stock, including 10,000,000 shares of each of
the four current series. Under Maryland law, the Board has the authority to
increase the number of shares of stock that the Company has the authority
to issue. Each share has one vote (and fractional shares have a
corresponding fractional vote) with respect to matters upon which
shareholder vote is required; stockholders have no cumulative voting rights
with respect to their shares. Shares of all series vote together as a
single class except that if the matter being voted upon affects only a
particular series then it will be voted on only by that series. If a matter
affects a particular series differently from other series, that series will
vote separately on such matter. Each share is entitled to participate
equally in dividends and distributions declared by the Directors with
respect to the relevant series, and in the net distributable assets of such
series on liquidation.

Under Maryland law, the Company is not required to hold an annual meeting
of stockholders unless required to do so under the 1940 Act. It is the
Company's policy not to hold an annual meeting of stockholders unless so
required. All shares of the Company (regardless of series) have
noncumulative voting rights for the election of Directors. Under Maryland
law, the Company's Directors may be removed by vote of stockholders. The
Board currently consists of 3 directors.

CONTROL PERSONS. The Company expects that, immediately prior to the
initial public offering of its shares, the sole holder of the capital stock
of each of its series will be Signature. Upon the offering of the Fund
shares, the Fund may have a number of shareholders each holding 5% or more
of the Fund's outstanding shares. In such an event, the Company cannot
predict the length of time that such persons will own such amounts or
whether one or more of such persons will become "control" persons of the
Fund.

TAXES

The Fund intends to qualify and intends to remain qualified as a regulated
investment company (a "RIC") under Subchapter M of the Code. As a RIC, the
Fund must, among other things: (a) derive at least 90% of its gross income
from dividends, interest, payments with respect to loans of stock and
securities, gains from the sale or other disposition of stock or
securities and other income (including but not limited to gains from
options, futures, and forward contracts) derived with respect to its
business of investing in such stock or securities; (b) derive less than 30%
of its gross income from the sale or other disposition of stock,
securities, options, futures or forward contracts held less than three
months; and (c) diversify its holdings so that, at the end of each fiscal
quarter, (i) at least 50% of the value of the Fund's total assets is
represented by cash, U.S. Government securities, investments in other RICs
and other securities limited in respect of any one issuer, to an amount not
greater than 5% of the Fund's total assets, and 10% of the outstanding
voting securities of such issuer and (ii) not more than 25% of the value of
its total assets is invested in the securities of any one issuer (other
than U.S. Government securities). As a RIC, the Fund (as opposed
<PAGE>
<PAGE> SAI-28

to its shareholders) will not be subject to federal income taxes on the net
investment income and capital gains that it distributes to its
shareholders, provided that at least 90% of its net investment income and
realized net short-term capital gains in excess of net long-term capital
losses for the taxable year is distributed.

Under the Code, the Fund will be subject to a 4% excise tax on the portion
of its undistributed income if it fails to meet certain distribution
requirements by the end of the calendar year. The Fund intends to make
distributions in a timely manner and accordingly does not expect to be
subject to the excise tax.

For federal income tax purposes, dividends that are declared by the Fund in
October, November or December as of a record date in such month and
actually paid in January of the following year will be treated as if they
were paid on December 31 of the year declared. Therefore, such dividends
will generally be taxable to a shareholder in the year declared rather than
the year paid.

The Fund intends to qualify to pay exempt-interest dividends to its
shareholders by having, at the close of each quarter of its taxable years,
at least 50% of its total assets in tax exempt securities. An exempt-
interest dividend is that part of distribution made by the Fund that
consists of interest received by the Fund on tax exempt securities.
Shareholders will not incur any federal income tax liability on the amount
of exempt-interest dividends received by them from the Fund. In view of the
investment policy of the Fund, it is expected that a substantial portion of
its dividends will be exempt-interest dividends, although the Fund may
from time to time realize and distribute net short-term and long-term
capital gains and may invest limited amounts in taxable securities.

Distributions of net investment income and realized net short-term capital
gains in excess of net long-term capital losses (other than exempt-interest
dividends) are generally taxable to Fund shareholders as ordinary income
whether such distributions are taken in cash or reinvested in additional
shares. Distributions to corporate shareholders of the Fund are not
eligible for the dividends-received deduction. Distributions of net long-
term capital gains (i.e., net long-term capital gains in excess of net
short-term capital losses) are taxable to shareholders of the Fund as long-
term capital gains, regardless of whether such distributions are taken in
cash or reinvested in additional shares and regardless of how long a
shareholder has held shares in the Fund. See "Taxes" in the Prospectus for
a discussion of the federal income tax treatment of any gain or loss
realized on the redemption or exchange of Fund shares. Additionally, any
loss realized on a redemption or exchange of Fund shares will be disallowed
to the extent the shares disposed of are replaced within a period of 61
days beginning 30 days before such disposition, including purchases made
pursuant to a dividend reinvestment plan.

Gains or losses on sales of securities by the Fund will be treated as long-
term capital gains or losses if the securities have been held by it for
more than one year except in certain cases
<PAGE>
<PAGE> SAI-29

where, if applicable, the Fund acquires a put or writes a call thereon.
Other gains or losses on the sale of securities will be short-term capital
gains or losses. Gains and losses on the sale, lapse or other termination
of options on securities will be treated as gains and losses from the sale
of securities. If an option written by the Fund lapses or is terminated
through a closing transaction, such as a repurchase by the Fund of the
option from its holder, the Fund will realize a short-term capital gain or
loss, depending on whether the premium income is greater or less than the
amount paid by the Fund in the closing transaction. If securities are
purchased by the Fund pursuant to the exercise of a put option written by
it, the Fund will subtract the premium received from its cost basis in the
securities purchased.

Options and futures contracts entered into by the Fund may create
"straddles" for U.S. federal income tax purposes and this may affect the
character and timing of gains or losses realized by the Fund on options and
futures contracts or on the underlying securities. Straddles may also
result in the loss of the holding period of underlying securities for
purposes of the 30% of gross income test described above, and therefore,
the Fund's ability to enter into options and futures contracts may be
limited.

Certain options and futures contracts held by the Fund at the end of each
fiscal year will be required to be "marked-to-market" for federal income
tax purposes -- i.e., treated as having been sold at market value. For such
options and futures contracts, 60% of any gain or loss recognized on these
deemed sales and on actual dispositions will be treated as long-term
capital gain or loss, and the remainder will be treated as short-term
capital gain or loss regardless of how long the Fund has held such options
or futures.

FOREIGN SHAREHOLDERS. Dividends of net investment income and distributions
of realized net short-term gains in excess of net long-term losses to a
shareholder who, as to the United States, is a non-resident alien
individual, fiduciary of a foreign trust or estate, foreign corporation or
foreign partnership (a "foreign shareholder") will be subject to U.S.
withholding tax at the rate of 30% (or lower treaty rate) unless the
dividends are effectively connected with a U.S. trade or business of the
shareholder, in which case the dividends will be subject to tax on a net
income basis at the graduated rates applicable to U.S. individuals or
domestic corporations. Distributions of net long-term capital gains to
foreign shareholders will not be subject to U.S. tax unless the
distributions are effectively connected with the shareholder's trade or
business in the United States or, in the case of a shareholder who is a
non-resident alien individual, the shareholder was present in the United
States for more than 182 days during the taxable year and certain other
conditions are met.

In the case of a foreign shareholder who is a nonresident alien individual
and who is not otherwise subject to withholding as described above, the
Fund may be required to withhold U.S. federal income tax at the rate of 31%
unless IRS Form W-8 is provided. See "Taxes" in the Prospectus. Transfers
by gift of shares of the Fund by a foreign shareholder who is a nonresident
alien individual will not be subject to U.S. federal gift tax, but the
value of
<PAGE>
<PAGE> SAI-30

shares of the Fund held by such a shareholder at his or her death will be
includible in his or her gross estate for U.S. federal estate tax purposes.

STATE AND LOCAL TAXES. The Fund may be subject to state or local taxes in
jurisdictions in which the Fund is deemed to be doing business. In
addition, the treatment of the Fund and its shareholders in those states
that have income tax laws might differ from treatment under the federal
income tax laws. For example, a portion of the dividends received by
shareholders may be subject to state income tax. Shareholders should
consult their own tax advisors with respect to any state or local taxes.

ADDITIONAL INFORMATION

This SAI does not contain all the information included in the Registration
Statement filed with the SEC under the Securities Act and the 1940 Act with
respect to the securities offered hereby. Certain portions of this SAI have
been omitted pursuant to the rules and regulations of the SEC. The
Registration Statement, including the exhibits filed therewith, the
Prospectus and the SAI, may be examined at the office of the SEC, Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington D.C. 20549.

Statements contained in this SAI as to the contents of any agreement or
other document referred to are not necessarily complete, and, in each
instance, reference is made to the copy of such agreement or other document
filed as an exhibit to the Registration Statement of which this document
forms a part, each such statement being qualified in all respect by such
reference.

Shareholder inquiries may be directed to: [___________]
<PAGE>
<PAGE> SAI-31

REPORT OF INDEPENDENT ACCOUNTANTS

[Subject to modification]

<PAGE>
<PAGE> F-1

UBS PRIVATE INVESTOR FUNDS, INC.- UBS TAX EXEMPT BOND FUND
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER [__], 1995

ASSETS
Cash . . . . . . . . . . . . . . . . . . . . $ 25,000
Deferred organization costs . . . . . . . . 72,500
Total Assets . . . . . . . . . . . . . . . . 97,500

LIABILITIES
Organization costs payable . . . . . . . . . 72,500

NET ASSETS . . . . . . . . . . . . . . . . . . . . . . $ 25,000

Shares Outstanding ($0.001 par value) . . . . . . . . . 2,500

NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER
SHARE . . . . . . . . . . . . . . . . . . . . . . . . . $10.00

COMPOSITION OF NET ASSETS:
Shares of common stock, at par . . . . . . . $ 3
Additional paid-in capital . . . . . . . . . 24,997
Net Assets, November [__], 1995 . . . . . . . . . . . . $ 25,000

<PAGE>
<PAGE> F-2

UBS PRIVATE INVESTOR FUNDS, INC. - UBS TAX EXEMPT FUND
NOTES TO FINANCIAL STATEMENTS
NOVEMBER [__], 1995

NOTE 1 - GENERAL

UBS Private Investor Funds, Inc. (the "Company") was organized as a
Maryland corporation on November 16, 1995. The Company consists of four
series, as follows: The UBS Bond Fund Series; The UBS Tax Exempt Bond Fund
Series; The UBS U.S. Equity Fund Series; and The UBS International Equity
Fund Series. The accompanying financial statements and notes relate to The
UBS Tax-Exempt Bond Fund Series (the "Fund") only.

The New York Branch (the "Advisor" or the "Branch") of Union Bank of
Switzerland (the "Bank"), serves as investment adviser to the Fund.
Signature Financial Group, Inc. ("Signature") serves as the Fund's
administrator and Signature Broker-Dealer Services, Inc. (the
"Distributor"), a wholly-owned subsidiary of Signature, serves as the
principal underwriter and distributor of the Fund's shares.

The Fund has had no operations through November [__], 1995, other than the
sale to Signature of 2,500 shares of the Fund for $25,000.

Organization costs incurred in connection with the organization and initial
registration of the Fund will be paid initially by the Advisor and
reimbursed by the Fund. Such organization costs have been deferred and will
be amortized ratably over a period of sixty months from the commencement of
operations. The amount paid by the Fund on any redemption by Signature of
the Fund's initial shares will be reduced by the pro rata portion of any
unamortized organization expenses of the Fund.

NOTE 2 - AGREEMENTS

The Advisor has entered into an Investment Advisory Agreement with the
Company, on behalf of the Fund. Pursuant to the terms of this Agreement,
the Advisor is responsible for the management of the investments of the
Fund. For its services, the Advisor is entitled to a fee, accrued daily and
payable monthly, at an annual rate of 0.45% of the average net assets of
the Fund.

Signature has entered into an Administration Agreement with the Company
pursuant to which it has agreed to administer the day-to-day operations of
the Fund subject to the oversight of the Advisor. For the services provided
to the Fund, Signature will receive a fee, accrued daily and payable
monthly, at an annual rate of 0.10% of the Fund's first $100 million
average net assets, 0.075% of the next $100 million of such assets and
0.05% of such assets in excess of $200 million.
<PAGE>
<PAGE> F-3

The Distributor has entered into a Distribution Agreement with the Company.
The Distributor does not receive a fee pursuant to the terms of the
Distribution Agreement.

The Company has adopted a Shareholder Servicing Agreement (the
"Shareholders Agreement") pursuant to which the Company has agreed to pay
the Branch [the Distributor and any other organizations that agree to
provide shareholder support services to the beneficial owners of Fund
shares] a monthly fee. Services to be provided may include, but are not
limited to, any of the following: establishing and/or maintaining
shareholder accounts and records, assisting investors seeking to purchase
or redeem Fund shares, providing performance information relating to the
Fund and responding to shareholder inquiries. Pursuant to the terms of the
Shareholders Agreement, the Fund will pay a fee, accrued daily and payable
monthly, at an annual rate of [up to 0.25%] of the average value of the
shareholder accounts so serviced.

The Advisor has voluntarily agreed to waive a portion of its fees and
reimburse a portion of Fund expenses to the extent that the ordinary
operating expenses of the Fund exceed an annual rate of 0.80% of the Fund's
average net assets.<PAGE>
<PAGE> COVER

UBS PRIVATE INVESTOR FUNDS, INC.

STATEMENT OF ADDITIONAL INFORMATION

THE UBS BOND FUND
THE UBS U.S. EQUITY FUND
THE UBS INTERNATIONAL EQUITY FUND

Subject to Completion Dated November 17, 1995

THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS, AND SHOULD BE
READ IN CONJUNCTION WITH THE PROSPECTUSES DATED [________], 1996 (EACH A
"PROSPECTUS" AND TOGETHER, THE "PROSPECTUSES"), FOR THE FUNDS LISTED ABOVE,
AS THEY MAY BE SUPPLEMENTED FROM TIME TO TIME. COPIES OF THE PROSPECTUSES
MAY BE OBTAINED WITHOUT CHARGE FROM SIGNATURE BROKER-DEALER SERVICES, INC.
AT THE ADDRESS AND PHONE NUMBER SET FORTH HEREIN.

<PAGE>
<PAGE> 1

TABLE OF CONTENTS

Page

GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
INVESTMENT OBJECTIVES AND POLICIES . . . . . . . . . . . . . . . . . . 1
INVESTMENT RESTRICTIONS . . . . . . . . . . . . . . . . . . . . . . . . 12
DIRECTORS AND TRUSTEES . . . . . . . . . . . . . . . . . . . . . . . . 20
INVESTMENT ADVISOR . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ADMINISTRATOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
DISTRIBUTOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
CUSTODIAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SHAREHOLDER SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . 27
INDEPENDENT ACCOUNTANTS . . . . . . . . . . . . . . . . . . . . . . . . 27
EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
PURCHASE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . 28
REDEMPTION OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . 29
EXCHANGE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . 30
DIVIDENDS AND DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . 30
NET ASSET VALUE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
PERFORMANCE DATA . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
PORTFOLIO TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . 33
ORGANIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . 40
REPORT OF INDEPENDENT ACCOUNTANTS . . . . . . . . . . . . . . . . . . . 41
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . F-1

<PAGE>
<PAGE> SAI-1

GENERAL

UBS Private Investor Funds, Inc. (the "Company") is an open-end
management investment company organized as a series fund. The Company is
currently authorized to issue shares in four series, three of which are
described in this Statement of Additional Information ("SAI"). These three
series (each a "Fund" and collectively, the "Funds") consist of: The UBS
Bond Fund; The UBS International Equity Fund; and The UBS U.S. Equity Fund.
The Company, a Maryland corporation, was organized on November 16, 1995.
The Company's executive offices are located at 6 St. James Avenue, Boston,
Massachusetts 02116.

This SAI describes the investment objectives and policies,
management and operations of each Fund to enable investors to determine if
the Funds suit their investment needs. Each Fund employs a two-tier Master-
Feeder structure. As more fully described herein, each Fund invests
substantially all of its assets in a corresponding series of a separate
trust having the same investment objective as that Fund. Each Trust series
will in turn directly invest in securities consistent with its investment
objective. See "Master-Feeder Structure" in the Prospectus.

[Master Portfolio Trust], an unincorporated business trust
formed under [____________] law (the "Trust"), was organized on [________],
1995, and is an open-end management investment company. The Declaration of
Trust permits the Board of Trustees of the Trust (the "Trustees") to issue
an unlimited number of full and fractional shares ($0.001 par value) of one
or more series (each a "Portfolio" and collectively, the "Portfolios"). To
date, the Trust has established three (3) Portfolios: The Master Bond
Portfolio; The Master U.S. Equity Portfolio; and The Master International
Equity Portfolio. The UBS Bond Fund invests in The Master Bond Portfolio;
The UBS U.S. Equity Fund invests in The Master U.S. Equity Portfolio; and
The UBS International Equity Fund invests in The Master International
Equity Portfolio. Where appropriate, references to a Fund refer to that
Fund acting through its corresponding Portfolio.

This SAI provides additional information with respect to each
Fund, and should be read in conjunction with that Fund's current
Prospectus. Capitalized terms not otherwise defined in this SAI have the
meanings accorded to them in the Fund's Prospectus.

INVESTMENT OBJECTIVES AND POLICIES

The UBS Bond Fund (the "Bond Fund") is designed for investors
seeking a higher total return from a portfolio of debt securities issued by
foreign and domestic companies than that generally available from a
portfolio of short-term obligations in exchange for some risk of capital.
Although the net asset value of the Bond Fund will fluctuate, it attempts
to conserve the value of its investments to the extent consistent with its
objective. The Bond Fund attempts to achieve its objective by investing all
of its investable assets in The Master Bond Portfolio (the "Bond
Portfolio"), a series of the Trust having the same investment objective as
the Bond Fund. The Bond Portfolio attempts to achieve its investment
objective by investing primarily in the corporate and government debt
obligations and related securities described in the Prospectus and this
SAI.

The UBS U.S. Equity Fund (the "U.S. Equity Fund") is designed
for investors seeking a high level of current income and the potential for
long-term capital appreciation with lower investment risk and volatility
than is normally available from common stock funds. The U.S. Equity Fund
attempts to achieve its investment objective by investing all of its
investable assets in The Master U.S. Equity Portfolio (the "U.S. Equity
Portfolio"), a series of the Trust having the same investment objective as
the U.S. Equity Fund.

Under normal circumstances, at least 80% of the U.S. Equity
Portfolio's assets will be invested in income-producing domestic equity
securities, including dividend-paying common stocks and securities that are
convertible into common stocks. The U.S. Equity Portfolio's primary
investments are the common stocks of established, high-quality U.S.
corporations.

The UBS International Equity Fund (the "International Equity
Fund") is designed for investors who want to participate in the risks and
returns associated with investing in equity securities issued by foreign
corporations. The International Equity Fund attempts to achieve its
investment objective by investing all its investable assets in The Master
International Equity Portfolio (the "International Equity Portfolio"), a
series of the Trust having the same investment objective as the
International Equity Fund.

The International Equity Portfolio seeks to achieve its
investment objective by investing primarily in the equity securities of
foreign corporations, consisting of common stocks and other securities with
equity characteristics such as preferred stocks, warrants, rights and
convertible securities. Under normal circumstances, the International
Equity Portfolio expects to invest at least 65% of its total assets in such
securities. It does not intend to invest in U.S. securities (other than
short-term instruments), except temporarily, when extraordinary
circumstances prevailing at the same time in a significant number of
developed foreign countries render investments in such countries
inadvisable.

Money Market Instruments

As discussed in the Prospectus, each Fund may invest in money
market instruments to the extent consistent with its investment objective
and policies. A description of the various types of money market
instruments that may be purchased appears below. See "Quality and
Diversification Requirements".

<PAGE>
<PAGE> SAI-2

U.S. Treasury Securities. Each Fund may invest in direct
obligations of the U.S. Treasury, including Treasury Bills, Notes and
Bonds, all of which are backed as to principal and interest payments by the
full faith and credit of the United States.

Additional U.S. Government Obligations. Each Fund may invest
in obligations issued or guaranteed by U.S. Government agencies or
instrumentalities. These obligations may or may not be backed by the "full
faith and credit" of the United States. In the case of securities not
backed by the full faith and credit of the United States, each Fund must
look principally to the federal agency issuing or guaranteeing the
obligation for ultimate repayment, and may not be able to assert a claim
against the United States itself in the event the agency or instrumentality
does not meet its commitments. Securities in which each Fund may invest
that are not backed by the full faith and credit of the United States
include, but are not limited to, obligations of the Tennessee Valley
Authority, the Federal Home Loan Mortgage Corporation and the U.S. Postal
Service, each of which has the right to borrow from the U.S. Treasury to
meet its obligations, and the obligations of the Federal Farm Credit System
and the Federal Home Loan Banks, both of whose obligations may be satisfied
only by the individual credits of each issuing agency. Securities that are
backed by the full faith and credit of the United States include
obligations of the Government National Mortgage Association, the Farmers
Home Administration and the Export-Import Bank.

Bank Obligations. Each Fund, unless otherwise noted in the
Prospectus or below, may invest in negotiable certificates of deposit, time
deposits and bankers' acceptances of (i) banks, savings and loan
associations and savings banks that have more than $2 billion in total
assets (the "Asset Limitation") and are organized under the laws of the
United States or any state, (ii) foreign branches of these banks or of
foreign banks of equivalent size (Euros) and (iii) U.S. branches of foreign
banks of equivalent size (Yankees). The Asset Limitation is not applicable
to the International Equity Fund. See "Foreign Investments". No Fund will
invest in obligations for which the Advisor, defined below, (or the Sub-
Advisor, defined below, in the case of the International Equity Fund), or
any of its affiliated persons, is the ultimate obligor or accepting bank.
Each Fund may also invest in obligations of international banking
institutions designated or supported by national governments to promote
economic reconstruction, development or trade between nations (e.g., the
European Investment Bank, the Inter-American Development Bank or the World
Bank).

Commercial Paper. Each Fund may invest in commercial paper,
including Master Demand obligations. Master Demand obligations are
obligations that provide for a periodic adjustment in the interest rate
paid and permit daily changes in the amount borrowed. Master Demand
obligations are governed by agreements between the issuer and the New York
Branch (the "Branch" or the "Advisor") of Union Bank of Switzerland (the
"Bank") and UBS International Investment ("UBSII" or the "Sub-Advisor") in
the case of the International Equity Fund, acting as agent, for no
additional fee, in its capacity as investment (sub)advisor to the
Portfolios and as fiduciary for other clients for whom it exercises
investment discretion. The monies loaned to the borrower come from accounts
managed by the (Sub-)Advisor, or its affiliates, pursuant to arrangements
with such accounts. Interest and principal payments are credited to such
accounts. The (Sub-) Advisor, acting as a fiduciary on behalf of its
clients, has the right to increase or decrease the amount provided to the
borrower under an obligation. The borrower has the right to pay without
penalty all or any part of the principal amount then outstanding on an
obligation together with interest to the date of payment. Because these
obligations typically provide that the interest rate is tied to the Federal
Reserve commercial paper composite rate, the rate on Master Demand
obligations is subject to change. Repayment of a Master Demand obligation

to participating accounts depends on the ability of the borrower to pay the
accrued interest and principal of the obligation on demand, which is
continuously monitored by the (Sub-)Advisor. Because Master Demand
obligations typically are not rated by credit rating agencies, the
Portfolios may invest in such unrated obligations only if at the time of an
investment the obligation is determined by the (Sub-)Advisor to have a
credit quality which satisfies a Portfolio's quality restrictions. See
"Quality and Diversification Requirements". Although there is no secondary
market for Master Demand obligations, such obligations are considered to be
liquid because they are payable upon demand. The Portfolios do not have any
specific percentage limitation on investments in Master Demand obligations.

Repurchase Agreements. Each Portfolio may enter into
repurchase agreements with brokers, dealers or banks that meet the credit
guidelines approved by the Trustees. In a repurchase agreement, a Portfolio
buys a security from a seller that has agreed to repurchase the same
security at a mutually agreed upon date and price. The resale price
normally is in excess of the purchase price, reflecting an agreed upon
interest rate. This interest rate is effective for the period of time the
Portfolio is invested in the agreement and is not related to the coupon
rate on the underlying security. A repurchase agreement may also be viewed
as a fully collateralized loan of money by the Portfolio to the seller. The
period of these repurchase agreements will usually be short, from overnight
to one week, and at no time will the Portfolio invest in repurchase
agreements for more than thirteen months. The securities that are subject
to repurchase agreements, however, may have maturity dates in excess of
thirteen months from the effective date of the repurchase agreement. The
Portfolios will always receive securities as collateral whose market value
is, and during the entire term of the agreement remains, at least equal to
100% of the dollar amount invested by the Portfolios in each agreement plus
accrued interest, and the Portfolios will make payment for such securities
only upon

<PAGE>
<PAGE> SAI-3

physical delivery or upon evidence of book entry transfer to the account of
the Custodian. If the seller defaults, a Portfolio might incur a loss if
the value of the collateral securing the repurchase agreement declines and
might incur disposition costs in connection with liquidating the
collateral. In addition, if bankruptcy proceedings are commenced with
respect to the seller of the security, realization of proceeds upon
disposition of the collateral by the Portfolio may be delayed or limited.

Corporate Bonds and Other Debt Securities

Each Portfolio may invest in other debt securities with
remaining effective maturities of not more than thirteen months, including
without limitation corporate and foreign bonds, asset-backed securities and
other obligations described in the Prospectus or this SAI.

As discussed in the Prospectus, the Bond Portfolio may invest
in bonds and other debt securities of domestic and foreign issuers to the
extent consistent with its investment objectives and policies. A
description of these investments appears in the Prospectus and below. See
"Quality and Diversification Requirements". For information on short-term
investments in these securities, see "Money Market Instruments".

Asset-Backed Securities. Asset-backed securities directly or
indirectly represent a participation interest in, or are secured by or
payable from, a stream of payments generated by particular assets such as
mortgages, motor vehicles or credit card receivables. Payments of
principal and interest may be guaranteed up to certain amounts and for a
certain time period by a letter of credit issued by a financial institution
unaffiliated with the entities issuing the securities. The asset-backed
securities in which a Portfolio may invest are subject to the Portfolio's
overall credit requirements. However, asset-backed securities, in general,
are subject to certain risks. These risks include the prepayment of the
debtor's obligation and the creditor's limited interests in applicable
collateral. For example, credit card debt receivables are generally
unsecured and the debtors are entitled to the protection of a number of
state and federal consumer credit laws, many of which give such debtors the
right to set off certain amounts owed on credit card debt thereby reducing
the balance due. Additionally, if the letter of credit is exhausted,
holders of asset-backed securities may also experience delays in payments
or losses if the full amounts due on underlying sales contracts are not
realized. Because asset-backed securities are relatively new, the market
experience in these securities is limited and the market's ability to
sustain liquidity through all phases of the market cycle has not been
tested.

Equity Investments

As discussed in the Prospectus, the U.S. Equity and
International Equity Portfolios invest primarily in equity securities
consisting of common stocks and other securities with equity
characteristics. The securities in which these Portfolios invest include
those listed on domestic and foreign securities exchanges or traded on
over-the-counter markets as well as certain restricted or unlisted
securities. A discussion of the various types of equity investments that
may be purchased by these Portfolios appears in the Prospectus and below.
See "Quality and Diversification Requirements".

Equity Securities. The common stocks in which these Portfolios
may invest include the common stocks of any class or series of corporations
or any similar equity interests such as trust or partnership interests. The
Portfolios' equity investments include preferred stocks, warrants, rights
and convertible securities. These investments may or may not pay dividends
and may or may not carry voting rights. Common stock occupies the most
junior position in a company's capital structure.

The convertible securities in which the Portfolios may invest
include debt securities or preferred stocks that may be converted into
common stock or that carry the right to purchase common stock. Convertible
securities entitle the holder to exchange the securities for a specified
number of shares of common stock, usually of the same company, at specified
prices within a certain period of time.

The terms of a convertible security determine its ranking in a
company's capital structure. In the case of subordinated convertible
debentures, the holders' claims on assets and earnings are subordinated to
the claims of other creditors, but are senior to the claims of preferred
and common stockholders. In the case of convertible preferred stock, the
holders' claims on assets and earnings are subordinated to the claims of
all creditors, but are senior to the claims of common stockholders.

Foreign Investments

The International Equity Portfolio makes substantial
investments in companies based in foreign countries. The Bond Portfolio may
also invest in certain foreign securities. The Bond Portfolio does not
expect to invest more than 25% of its total assets at the time of purchase
in securities of foreign issuers. Foreign investments may be made directly
in the securities of foreign issuers or in the form of American Depositary
Receipts ("ADRs") or European Depositary Receipts ("EDRs"). Generally,
ADRs and EDRs are

<PAGE>
<PAGE> SAI-4

receipts issued by a bank or trust company that evidence ownership of
underlying securities issued by a foreign corporation and that are designed
for use in the domestic, in the case of ADRs, or European, in the case
of EDRs, securities markets.

Because investments in foreign securities may involve foreign
currencies, the value of the International Equity and Bond Portfolios'
assets as measured in U.S. dollars may be affected, favorably or
unfavorably, by changes in currency rates and in exchange control
regulations, including currency blockage. The Bond and International Equity
Portfolios may enter into foreign currency exchange transactions in
connection with the settlement of foreign securities transactions or to
manage their currency exposure related to foreign investments. The
Portfolios will not enter into such transactions for speculative purposes.
For a description of the risks associated with investing in foreign
securities, see "Additional Investment Information and Risk Factors" in the
Prospectus.

Additional Investments

When-issued and Delayed Delivery Securities. Each Portfolio may
purchase securities on a when-issued or delayed delivery basis. For
example, delivery of and payment for these securities can take place a
month or more after the date of the purchase commitment. The purchase price
and the interest rate payable, if any, on the securities are fixed on the
purchase commitment date or at the time the settlement date is fixed. The
value of such securities is subject to market fluctuation and no interest
accrues to a Portfolio until settlement takes place. At the time a
Portfolio makes the commitment to purchase securities on a when-issued or
delayed delivery basis, it will record the transaction, reflect the value
of such securities each day in determining its net asset value and, if
applicable, calculate the maturity for the purposes of average maturity
from that date. At the time of settlement, a when-issued security may be
valued at less than the purchase price. To facilitate such acquisitions,
each Portfolio will maintain with the Custodian a segregated account with
liquid assets, consisting of cash, U.S. Government securities or other high
quality liquid securities, in an amount at least equal to the value of such
commitments. On delivery dates for such transactions, each Portfolio will
meet its obligations from maturities or sales of the securities held in the
segregated account and/or from cash flow. If a Portfolio chooses to dispose
of the right to acquire a when-issued security prior to its acquisition, it
could, as with the disposition of any other portfolio obligation, incur a
gain or loss due to market fluctuation. It is the current policy of each
Portfolio not to enter into when-issued commitments exceeding in the
aggregate 15% of the market value of that Portfolio's total assets, less
liabilities (excluding the obligations created by when-issued commitments).

Investment Company Securities. Securities of other investment
companies may be acquired by each Fund to the extent that such purchases
are consistent with that entity's investment objectives and restrictions
and are permitted under the Investment Company Act of 1940, as amended (the
"1940 Act"). The Portfolios may not purchase the securities of other
investment companies, except for the temporary investment of cash in money
market securities. The 1940 Act requires that, as determined immediately
after a purchase is made, (i) not more than 5% of the value of the Fund's
total assets will be invested in the securities of any one investment
company, (ii) not more than 10% of the value of the Fund's total assets
will be invested in securities of investment companies as a group and (iii)
not more than 3% of the outstanding voting stock of any one investment
company will be owned by the Fund, provided, however, that a Fund may
invest all of its investable assets in an open-end investment company
having the same investment objective as that Fund. As a shareholder of
another investment company, a Fund would bear, along with other
shareholders, its pro rata portion of the other investment company's

expenses, including advisory fees. These expenses would be in addition to
the expenses that such a Fund would bear in connection with its own
operations.

Reverse Repurchase Agreements. Each Portfolio may enter into
reverse repurchase agreements. In a reverse repurchase agreement, the
Portfolio sells a security and agrees to repurchase the same security at a
mutually agreed upon date and price. For purposes of the 1940 Act, reverse
purchase agreements are considered borrowings by the Portfolio and,
therefore, a form of leverage. The Portfolios will invest the proceeds of
borrowings under reverse repurchase agreements. In addition, the Portfolios
will enter into a reverse repurchase agreement only when the interest
income to be earned from the investment of the proceeds is greater than the
interest expense of the repurchase agreement. The Portfolios will not
invest the proceeds of a reverse repurchase agreement for a period that
exceeds the term of the reverse repurchase agreement. The limitations on
each Portfolio's use of reverse repurchase agreements are discussed under
"Investment Restrictions" below. Each Portfolio will establish and maintain
with the Custodian a separate account with a portfolio of securities in an
amount at least equal to its obligations under its reverse repurchase
agreements.

Mortgage Dollar Roll Transactions. The Bond Portfolio may
engage in mortgage dollar roll transactions with respect to mortgage
securities issued by the Government National Mortgage Association, the
Federal National Mortgage Association and the Federal Home Loan Mortgage
Corporation. In a mortgage dollar roll transaction, the Portfolio sells a
mortgage backed security and simultaneously agrees to repurchase a similar
security on a specified future date at an agreed upon price. During the
roll period, the Portfolio

<PAGE>
<PAGE> SAI-5

will not be entitled to receive any interest or principal paid on the
securities sold. The Portfolio is compensated for the lost interest on the
securities sold by the difference between the sales price and the lower
price for the future repurchase as well as by the interest earned on the
reinvestment of the sales proceeds. The Portfolio may also be compensated
by receipt of a commitment fee. When the Portfolio enters into a mortgage
dollar roll transaction, liquid assets in an amount sufficient to pay for
the future repurchase are segregated with its Custodian. Mortgage dollar
roll transactions are considered reverse repurchase agreements for purposes
of the Portfolio's investment restrictions.

Securities Lending. Each Portfolio may lend its securities if
such loans are secured continuously by cash or equivalent collateral or by
a letter of credit in favor of the Portfolio at least equal at all times to
100% of the market value of the securities loaned, plus accrued interest.
While such securities are on loan, the borrower will pay the Portfolio any
income accruing thereon. Loans will be subject to termination by the
Portfolios in the normal settlement time, generally three business days
after notice or by the borrower on one day's notice. Borrowed securities
must be returned when the loan is terminated. Any gain or loss in the
market price of the borrowed securities that occurs during the term of the
loan inures to the Portfolio and its respective investors. The Portfolios
may pay reasonable finder's and custodial fees in connection with a loan.
In addition, the Portfolios will consider all facts and circumstances
including the creditworthiness of the borrowing financial institution, and
the Portfolios will not make any loans in excess of one year. The
Portfolios will not lend their securities to any officer, Trustee,
Director, employee, or affiliate or placement agent of the Company, the
Trust, or to the Advisor, Sub-Advisor, Administrator or Distributor or any
affiliate thereof, unless otherwise permitted by applicable law.

Privately Placed and Certain Unregistered Securities. The
Portfolios may invest in privately placed, restricted, Rule 144A or other
unregistered securities as described in the Prospectus.

As to illiquid investments, a Portfolio is subject to a risk
that it might not be able to sell such securities at a price that the
Portfolio deems respective of their value. Where an illiquid security must
be registered under the Securities Act of 1933, as amended (the "Securities
Act"), before it may be resold, the Portfolio may be obligated to pay all
or part of the registration expenses and a considerable period may elapse
between the time the Portfolio decides to sell and the time the Portfolio
is permitted to sell under an effective registration statement. If, during
such a period, adverse market conditions develop, the Portfolio might
obtain a less favorable price than that which prevailed when it decided to
sell. When the Portfolios value these securities, they will take into
account the illiquid nature of these instruments.

Quality and Diversification Requirements

Each Portfolio intends to meet the diversification requirements
of the 1940 Act. To meet these requirements, 75% of the Portfolio's assets
are subject to the following fundamental limitations: (1) the Portfolio may
not invest more than 5% of its total assets in the securities of any one
issuer, except obligations of the U.S. Government, its agencies and
instrumentalities and (2) the Portfolio may not own more than 10% of the
outstanding voting securities of any one issuer. As for the 25% of a
Portfolio's assets not subject to the limitation described above, there is
no limitation on investment of these assets under the 1940 Act, so that all
of such assets may be invested in securities of any one issuer, subject to
the limitation of any applicable state securities laws. Investments not
subject to the limitations described above could involve an increased risk
to a Portfolio should an issuer, or a state or its related entities, be

unable to make interest or principal payments or should the market value of
such securities decline. See "Investment Restrictions".

Bond Portfolio. The Bond Portfolio invests principally in a
diversified portfolio of "high grade" and "investment grade" securities.
Investment grade debt is rated, on the date of investment, within the four
highest ratings of Moody's Investors Service, Inc. ("Moody's"), currently
Aaa, Aa, A and Baa, or of Standard & Poor's Corporation ("Standard &
Poor's"), currently AAA, AA, A and BBB. High grade debt is rated, on the
date of the investment, within the two highest categories of the above
ratings. The Bond Portfolio may also invest up to 5% of its total assets in
securities which are "below investment grade". Such securities must be
rated, on the date of investment, Ba by Moody's or BB by Standard & Poor's.
The Portfolio may invest in debt securities that are not rated or other
debt securities to which these ratings are not applicable, if in the
opinion of the Advisor, such securities are of comparable quality to the
rated securities discussed above. In addition, at the time the Portfolio
invests in any commercial paper, bank obligation or repurchase agreement,
the issuer must have outstanding debt rated A or higher by Moody's or
Standard & Poor's, the issuer's parent corporation, if any, must have
outstanding commercial paper rated Prime-1 by Moody's or A-1 by Standard &
Poor's, or if no such ratings are available, the investment must be of
comparable quality in the Advisor's opinion.

U.S. Equity and International Equity Portfolios. The U.S.
Equity and International Equity Portfolios may invest in convertible debt
securities for which there are no specific quality requirements. In
addition, at the time the Portfolios invest in any commercial paper, bank
obligation or repurchase agreement, the issuer must have outstanding debt
rated A or higher by Moody's or Standard & Poor's, the issuer's parent

<PAGE>
<PAGE> SAI-6

corporation, if any, must have outstanding commercial paper rated Prime-1
by Moody's or A-1 by Standard & Poor's, or if no such ratings are
available, the investment must be of comparable quality in the Advisor's*
opinion. At the time the Portfolios invest in any other short-term debt
securities, they must be rated A or higher by Moody's or Standard & Poor's,
or if unrated, the investment must be of comparable quality in the
Advisor's opinion.

In determining whether a particular unrated security is a
suitable investment, the Advisor takes into consideration asset and debt
service coverage, the purpose of the financing, the history of the issuer,
existence of other rated securities of the issuer, and other relevant
conditions, such as comparability to other issuers.

Options and Futures Transactions

Exchange-traded and Over-the-Counter Options. All options
purchased or sold by the Portfolios will be exchange traded or will be
purchased or sold by securities dealers ("over-the-counter" or "OTC
options") that meet creditworthiness standards approved by the Trustees.
Exchange-traded options are obligations of the Options Clearing
Corporation. In OTC options, the Portfolio relies on the dealer from which
it purchased the option to perform if the option is exercised. Thus, when a
Portfolio purchases an OTC option, it relies on the dealer from which it
purchased the option to make or take delivery of the underlying securities.
Failure by the dealer to do so would result in the loss of the premium paid
by the Portfolio as well as loss of the expected benefit of the
transaction.

The staff of the SEC has taken the position that, in general,
purchased OTC options and the underlying securities used to cover written
OTC options are illiquid securities. However, a Portfolio may treat as
liquid the underlying securities used to cover written OTC options,
provided it has arrangements with certain qualified dealers who agree that
the Portfolio may repurchase any option it writes for a maximum price to be
calculated by a predetermined formula. In these cases, the OTC option
itself would only be considered illiquid to the extent that the maximum
repurchase price under the formula exceeds the intrinsic value of the
option.

Futures Contracts and Options on Futures Contracts. The
Portfolios are permitted to enter into futures and options transactions and
may purchase or sell (write) futures contracts and purchase put and call
options, including put and call options on futures contracts. Futures
contracts obligate the buyer to take and the seller to deliver at a future
date a specified quantity of a financial instrument or an amount of cash
based on the value of a securities index. Currently, futures contracts are
available on various types of fixed-income securities, including but not
limited to U.S. Treasury bonds, notes and bills, Eurodollar certificates of
deposit and on indices of fixed income and equity securities.

Unlike a futures contract, which requires the parties to buy
and sell a security or make a cash settlement payment based on changes in a
financial instrument or securities index on an agreed date, an option on a
futures contract entitles its holder to decide on or before a future date
whether to enter into such a contract. If the holder decides not to
exercise its option, the holder may close out the option position by
entering into an offsetting transaction or may decide to let the option
expire and forfeit the premium thereon. The purchaser of an option on a
futures contract pays a premium for the option but makes no initial margin
payments or daily payments of cash in the nature of "variation" margin
payments to reflect the change in the value of the underlying contract as
does a purchaser or seller of a futures contract.

The seller of an option on a futures contract receives the
premium paid by the purchaser and may be required to pay initial margin.
Amounts equal to the initial margin and any additional collateral required
on any options on futures contracts sold by a Portfolio are paid by the
Portfolio into a segregated account, in the name of the Futures Commission
Merchant, as required by the 1940 Act and the SEC's interpretations
thereunder.

Combined Positions. The Portfolios may purchase and write
options in combination with each other, or in combination with futures or
forward contracts, to adjust the risk and return characteristics of the
overall position. For example, the Portfolios may purchase a put option and
write a call option on the same underlying instrument, in order to
construct a combined position whose risk and return characteristics are
similar to selling a futures contract. Another possible combined position
would involve writing a call option at one strike price and buying a call
option at a lower price, in order to reduce the risk of the written call
option in the event of a substantial price increase. Because combined
options positions involve multiple trades, they result in higher
transaction costs and may be more difficult to open and close out.

* Unless otherwise noted, references to the Advisor in the
context of the International Equity Portfolio refer to
the Advisor and/or the Sub-Advisor, as appropriate.
<PAGE>
<PAGE> SAI-7

Correlation of Price Changes. Because there are a limited
number of types of exchange-traded options and futures contracts, it is
likely that the standardized options and futures contracts available will
not exactly match a Portfolio's current or anticipated investments. A
Portfolio may invest in options and futures contracts based on securities
with different issuers, maturities, or other characteristics from the
securities in which it typically invests, which involves a risk that the
options or futures position will not track the performance of the
Portfolio's other investments.

Options and futures contracts prices can also diverge from the
prices of their underlying instruments, even if the underlying instruments
match the Portfolio's investments well. Options and futures contracts
prices are affected by such factors as current and anticipated short-term
interest rates, changes in volatility of the underlying instrument, and the
time remaining until expiration of the contract, which may not affect
security prices the same way. Imperfect correlation may also result from
differing levels of demand in the options and futures markets and the
securities markets, from structural differences in how options and futures
and securities are traded, or from imposition of daily price fluctuation
limits or trading halts. A Portfolio may purchase or sell options and
futures contracts with a greater or lesser value than the securities it
wishes to hedge or intends to purchase in order to attempt to compensate
for differences in volatility between the contract and the securities,
although this may not be successful in all cases. If price changes in a
Portfolio's options or futures positions are poorly correlated with its
other investments, the positions may fail to produce anticipated gains or
result in losses that are not offset by gains in other investments.

Liquidity of Options and Futures Contracts. There is no
assurance a liquid market will exist for any particular option or futures
contract at any particular time even if the contract is traded on an
exchange. In addition, exchanges may establish daily price fluctuation
limits for options and futures contracts and may halt trading if a
contract's price moves up or down more than the limit in a given day. On
volatile trading days when the price fluctuation limit is reached or a
trading halt is imposed, it may be impossible for a Portfolio to enter into
new positions or close out existing positions. If the market for a contract
is not liquid because of price fluctuation limits or otherwise, it could
prevent prompt liquidation of unfavorable positions, and could potentially
require a Portfolio to continue to hold a position until delivery or
expiration regardless of changes in its value. As a result, the Portfolio's
access to other assets held to cover its options or futures positions could
also be impaired. See "Exchange Traded and Over-the-Counter Options" above
for a discussion of the liquidity of options not traded on an exchange.

Position Limits. Futures exchanges can limit the number of
futures and options on futures contracts that can be held or controlled by
an entity. If an adequate exemption cannot be obtained, a Portfolio or the
Advisor may be required to reduce the size of its futures and options
positions or may not be able to trade a certain futures or options contract
in order to avoid exceeding such limits.

Asset Coverage for Futures Contracts and Options Positions.
The Portfolios intend to comply with Section 4.5 of the regulations under
the Commodity Exchange Act, which limits the extent to which a Portfolio
can commit assets to initial margin deposits and option premiums. In
addition, the Portfolios will comply with guidelines established by the SEC
with respect to coverage of options and futures contracts by mutual funds,
and if the guidelines so require, will set aside appropriate liquid assets
in a segregated custodial account in the amount prescribed. Securities held
in a segregated account cannot be sold and will be considered illiquid
securities while the futures contract or option is outstanding, unless they

are replaced with other suitable assets. As a result, there is a
possibility that the segregation of a large percentage of a Portfolio's
assets could impede portfolio management or the Portfolio's ability to meet
redemption requests or other current obligations.

INVESTMENT RESTRICTIONS

The investment restrictions below have been adopted by the
Company's Board of Directors (the "Board" or the "Directors") with respect
to each Fund and by the Trustees for each corresponding Portfolio. Except
where otherwise noted, these investment restrictions are "fundamental"
policies which, under the 1940 Act, may not be changed without the "vote of
a majority of the outstanding voting securities" of the Fund and Portfolio,
as applicable, to which they relate. The "vote of a majority of the
outstanding voting securities" under the 1940 Act is the lesser of (a) 67%
or more of the voting shares present at a shareholders' meeting if the
holders of more than 50% of the outstanding voting shares are present or
represented by proxy or (b) more than 50% of the outstanding voting shares.
The limitations described below apply at the time the securities are
purchased by the Fund or Portfolio, as applicable. Whenever a Fund is
requested to vote on a change in the fundamental investment restrictions of
its corresponding Portfolio, the Company will hold a meeting of that Fund's
shareholders and the Company will cast that Fund's votes in the Portfolio
in proportion to the votes cast by that Fund's shareholders.

The investment restrictions of each Fund and its corresponding
Portfolio are identical, unless otherwise specified. Accordingly,
references below to a Fund also include that Fund's corresponding

<PAGE>
<PAGE> SAI-8

Portfolio unless the context requires otherwise; similarly, references to a
Portfolio also include the corresponding Fund(s) unless the context
requires otherwise.

The Bond Fund and its corresponding Portfolio may not:

1. Borrow money, except from banks for extraordinary or emergency
purposes and then only in amounts up to one-third of the value
of its total assets (including the amount borrowed), less
liabilities (not including the amounts borrowed) or, except in
connection with such borrowings and the reverse repurchase
agreements permitted by Investment Restriction No. 8, mortgage,
pledge, or hypothecate any assets except in connection with any
such borrowing in amounts up to one-third of the value of its
total assets at the time of such borrowing. It will not
purchase securities while borrowings (including reverse
repurchase agreements) exceed 5% of its total assets; provided,
however, that it may increase its interest in an open-end
management investment company with the same investment
objective and restrictions while such borrowings are
outstanding and provided further that for purposes of this
restriction, short-term credits necessary for the clearance of
transactions are not considered borrowings. This borrowing
provision is included to facilitate the orderly sale of
portfolio securities, for example, in the event of abnormally
heavy redemption requests and is not for investment purposes.
Collateral arrangements for premium and margin payments in
connection with its hedging activities are not deemed to be a
pledge of assets;

2. Purchase the securities or other obligations of any one issuer
if, immediately after such purchase, more than 5% of the value
of its total assets would be invested in securities or other
obligations of any one such issuer; provided, however, that the
Fund may invest all or part of its investable assets in an
open-end management investment company with the same investment
objective and restrictions. This limitation shall not apply to
securities issued or guaranteed by the U.S. Government, its
agencies or instrumentalities or to permitted investments of up
to 25% of its total assets;

3. Purchase the securities of an issuer if, immediately after such
purchase, it owns more than 10% of the outstanding voting
securities of such issuer; provided, however, that the Fund may
invest all or part of its investable assets in an open-end
management investment company with the same investment
objective and restrictions. This limitation shall not apply to
investments of up to 25% of its total assets;

4. Purchase securities or other obligations of issuers conducting
their principal business activity in the same industry if,
immediately after such purchase the value of its investments in
such industry would exceed 25% of the value of its total
assets; provided, however, that the Fund may invest all or part
of its investable assets in an open-end management investment
company with the same investment objective and restrictions.
For purposes of industry concentration, there is no percentage
limitation with respect to investments in U.S. Government
securities;

5. Make loans, except through the purchase or holding of debt
obligations (including privately placed securities) or by
entering into repurchase agreements or loans of portfolio

securities in accordance with its investment objective and
policies (see "Investment Objectives and Policies");

6. Purchase or sell puts, calls, straddles, spreads or any
combination thereof, commodities or commodity contracts (except
for its interest in hedging activities as described under
"Investment Objective and Policies"), real estate or interests
in oil, gas, or mineral exploration or development programs.
However, purchases of debt obligations secured by interests in
real estate or issued by companies that invest in real estate
or interests therein including real estate investment trusts
are permitted;

7. Purchase securities on margin, make short sales of securities,
or maintain a short position, except in the course of its
hedging activities, unless at all times when a short position
is open it owns an equal amount of such securities; provided
that this restriction shall not be deemed to be applicable to
the purchase or sale of when-issued securities or delayed
delivery securities;

8. Issue any senior security, except as appropriate to evidence
indebtedness that it is permitted to incur pursuant to
Investment Restriction No. 1 and except that it may enter into
reverse repurchase agreements, provided that the aggregate of
senior securities, including reverse repurchase agreements,
shall not exceed one-third of the market value of its total
assets, less liabilities (excluding obligations created by such
borrowings and reverse repurchase agreements). Hedging
activities as described in "Investment Objective and Policies"
shall not be considered senior securities for purposes hereof;

<PAGE>
<PAGE> SAI-9

9. Acquire securities of other investment companies, except as
permitted by the 1940 Act*; or

10. Act as an underwriter of securities.

The U.S. Equity Fund and the its corresponding Portfolio may not:

1. Purchase the securities or other obligations of issuers
conducting their principal business activity in the same
industry if, immediately after such purchase the value of its
investments in such industry would exceed 25% of the value of
its total assets; provided, however, that the Fund may invest
all or part of its investable assets in an open-end management
investment company with the same investment objective and
restrictions. For purposes of industry concentration, there is
no percentage limitation with respect to investments in U.S.
Government securities;

2. Borrow money, except from banks for extraordinary or emergency
purposes and then only in amounts up to one-third of the value
of its total assets (including the amounts borrowed) less
liabilities (not including the amounts borrowed) or, except in
connection with such borrowings and the reverse repurchase
agreements permitted by Investment Restriction No. 10,
mortgage, pledge, or hypothecate any assets except in
connection with any such borrowing in amounts up to one-third
of the value of its total assets at the time of such borrowing.
It will not purchase securities while borrowings (including
reverse repurchase agreements) exceed 5% of its net assets;
provided, however, that it may increase its interest in an
open-end management investment company with the same investment
objective and restrictions while such borrowings are
outstanding and provided further that for purposes of this
restriction, short-term credits necessary for the clearance of
transactions are not considered borrowings. This borrowing
provision is included to facilitate the orderly sale of
portfolio securities, for example, in the event of abnormally
heavy redemption requests, and is not for investment purposes.
Collateral arrangements for premium and margin payments in
connection with its hedging activities are not deemed to be a
pledge of assets;

3. Purchase the securities or other obligations of any one issuer
if, immediately after such purchase, more than 5% of the value
of its total assets would be invested in securities or other
obligations of any one such issuer; provided, however, that the
Fund may invest all or part of its investable assets in an
open-end management investment company with the same investment
objective and restrictions. This limitation shall not apply to
securities issued or guaranteed by the U.S. Government, its
agencies or instrumentalities and to permitted investments of
up to 25% of its total assets;

4. Purchase the securities of an issuer if, immediately after such
purchase, it owns more than 10% of the outstanding voting
securities of such issuer; provided, however, that the Fund may
invest all or part of its investable assets in an open-end
management investment company with the same investment
objective and restrictions. This limitation shall not apply to
investments of up to 25% of its total assets;

5. Make loans, except through the purchase or holding of debt
obligations (including privately placed securities) or by
entering into repurchase agreements or loans of portfolio
securities in accordance with its investment objective and
policies (see "Investment Objective and Policies");

6. Purchase or sell puts, calls, straddles, spreads or any
combination thereof, commodities or commodity contracts (except
for its interests in hedging activities as described under
"Investment Objective and Policies"), real estate or real
estate mortgage loans, or interests in oil, gas, or mineral
exploration or development programs. However, purchases of
equity securities or commercial paper issued by companies that
invest in real estate or interests therein, including real
estate investment trusts are permitted;

7. Purchase securities on margin, make short sales of securities,
or maintain a short position, except in the course of its
hedging activities, unless at all times when a short position
is open it owns an equal amount of such securities; provided
that this restriction shall not be deemed to be applicable to
the purchase or sale of when-issued securities or delayed
delivery securities;

* This restriction applies only to the Fund. The
Portfolio may not acquire the securities of any
investment company except that it may temporarily
invest cash in money market securities.
<PAGE>
<PAGE> SAI-10

8. Acquire securities of other investment companies, except as
permitted by the 1940 Act*;

9. Act as an underwriter of securities;

10. Issue any senior security, except as appropriate to evidence
indebtedness that it is permitted to incur pursuant to
Investment Restriction No. 2. and except that it may enter into
reverse repurchase agreements, provided that the aggregate of
all senior securities, including reverse repurchase agreements,
shall not exceed one-third of the market value of its total
assets, less liabilities (excluding obligations created by such
borrowings and reverse repurchase agreements). Hedging
activities as described in "Investment Objective and Policies"
shall not be considered senior securities for purposes hereof;
or

11. Purchase any equity security if, as a result, it would then
have more than 5% of its total assets invested in securities of
companies (including any predecessors) that have been in
continuous operation for fewer than three years.

The International Equity Fund and its corresponding Portfolio may not:

1. Borrow money, except from banks for extraordinary or emergency
purposes and then only in amounts up to one-third of the value
of its total assets (including the amount borrowed) less
liabilities (not including the amount borrowed) or, except in
connection with such borrowings and the reverse repurchase
agreements permitted by Investment Restriction No. 10,
mortgage, pledge, or hypothecate any assets except in
connection with any such borrowing in amounts up to one-third
of the value of its total assets at the time of such borrowing.
It will not purchase securities while borrowings (including
reverse repurchase agreements) exceed 5% of its total assets;
provided, however, that it may increase its interest in an
open-end management investment company with the same investment
objective and restrictions while such borrowings are
outstanding and provided further that for purposes of this
restriction, short-term credits necessary for the clearance of
transactions are not considered borrowings. This borrowing
provision is included to facilitate the orderly sale of
portfolio securities, for example, in the event of abnormally
heavy redemption requests, and is not for investment purposes.
Collateral arrangements for premium and margin payments in
connection with its hedging activities are not deemed to be a
pledge of assets;

2. Purchase the securities or other obligations of any one issuer
if, immediately after such purchase, more than 5% of the value
of its total assets would be invested in securities or other
obligations of any one such issuer; provided, however, that the
Fund may invest all or part of its investable assets in an
open-end management investment company with the same investment
objectives and restrictions. This limitation shall not apply to
securities issued or guaranteed by the U.S. Government, its
agencies or instrumentalities or to permitted investments of up
to 25% of its total assets;

4. Purchase the securities or other obligations of issuers
conducting their principal business activity in the same
industry if, immediately after such purchase, the value of its
investments in such industry would exceed 25% of the value of
its total assets; provided, however, that the Fund may invest
all or part of its investable assets in an open-end management
investment company with the same investment objective and
restrictions. For purposes of industry concentration, there is
no percentage limitation with respect to investments in U.S.
Government securities;

5. Make loans, except through the purchase or holding of debt
obligations (including restricted securities) or by entering
into repurchase agreements or loans of portfolio securities in
accordance with its investment objective and policies (see
"Investment Objective and Policies");

6. Purchase or sell puts, calls, straddles, spreads or any
combination thereof, commodities or commodity contracts (except
for its interests in hedging activities as described under
"Investment

Objectives and Policies"), real estate or real estate mortgage
loans, or interests in oil, gas, mineral or other exploration
or development programs. However, purchases of equity
securities or commercial paper issued by companies that invest
in real estate or interests therein including real estate
investment trusts are permitted;

7. Purchase securities on margin, make short sales of securities,
or maintain a short position in securities, except in the
course of its hedging activities, unless at all times when a
short position is open it owns an equal amount of such
securities; provided that this restriction shall not be deemed
to apply to the purchase or sale of when-issued securities or
delayed delivery securities;

8. Acquire securities of other investment companies, except as
permitted by the 1940 Act*;

9. Act as an underwriter of securities; or

10. Issue any senior security, except as appropriate to evidence
indebtedness that it is permitted to incur pursuant to
Investment Restriction No. 1 and except that it may enter into
reverse repurchase agreements, provided that the aggregate of
all senior securities, including reverse repurchase agreements,
shall not exceed one-third of the market value of its total
assets, less liabilities (excluding obligations created by such
borrowings and reverse repurchase agreements). Hedging
activities as described in "Additional Investment Information
and Risk Factors" in the Prospectus shall not be considered
senior securities for purposes hereof.

Non-Fundamental Investment Restrictions -- Bond Portfolio, U.S.
Equity Portfolio and International Equity Portfolio. The investment
restriction described below is not a fundamental policy of these Portfolios
or their corresponding Funds and may be changed by their respective
Trustees and Directors. This non-fundamental investment policy provides
that neither the Portfolios nor the Funds may:

acquire any illiquid securities, such as repurchase agreements
with more than seven days to maturity or fixed time deposits
with a duration of over seven calendar days, if as a result
thereof, more than 15% of the market value of its net assets
would be in investments that are illiquid.

Non-Fundamental Investment Restrictions -- International Equity
Portfolio. The investment restrictions described below are not fundamental
policies and may be changed by the Trustees and Directors. These non-
fundamental investment policies provide that neither this Portfolio nor its
corresponding Fund may:

(i) purchase any equity security if, as a result, it would then
have more than 5% of its total assets invested in securities of
companies (including predecessors) that have been in
continuous operation for fewer than three years;

(ii) invest in warrants (other than warrants acquired by it as
part of a unit or attached to securities at the time of
purchase) if, as a result, the investments (valued at the lower
of cost or market) would exceed 5% of the value of its net
assets or if, as a result, more than 2% of its net assets would
be invested in warrants not listed on a recognized U.S. or
foreign stock exchange; or

(iii) invest in any securities of an issuer any of whose
officers, directors, trustees or security holders is an
officer, Trustee or Director of the Trust or the Company, as
applicable, or is an officer, director or employee of the
Advisor or Sub-Advisor, if after the purchase of the securities
of such issuer, one or more of such persons beneficially owns
more than 0.5% of the shares or securities, or both, all taken
at market value, of such issuer, and such persons owning more
than 0.5% of such shares or securities together own
beneficially more than 5% of such shares or securities, or
both, all taken at market value.

Non-Fundamental Investment Restrictions -- U.S. Equity
Portfolio. The investment restrictions described below are not fundamental
policies and may be changed by the Directors and Trustees. These non-
fundamental investment policies provide that neither this Portfolio nor its
corresponding Fund may:

(i) invest in warrants (other than warrants acquired by it as
part of a unit or attached to securities at the time of
purchase) if, as a result, the investments (valued at the lower
of cost or

market) would exceed 5% of the value of its net assets or if,
as a result, more than 2% of the its net assets would be
invested in warrants not listed on a recognized U.S. or foreign
stock exchange;

(ii) invest in any securities of an issuer any of whose
officers, directors, trustees or security holders is an
officer, Trustee or Director of the Trust or the Company, as
applicable, or is an officer, director or employee of the
Advisor, if after the purchase of the securities of such
issuer, one or more of such persons owns beneficially more than
0.5% of the shares or securities, or both, all taken at market
value, of such issuer, and such persons owning more than 0.5%
of such shares or securities together own beneficially more
than 5% of such shares or securities, or both, all taken at
market value;

(iii) invest in real estate limited partnership interests; or

(iv) invest in oil, gas or other mineral leases.

All Portfolios. There will be no violation of any investment
restriction if that restriction is complied with at the time the relevant
action is taken notwithstanding a later change in market value of an
investment, in net or total assets, in the securities rating of the
investment or any other later change.

DIRECTORS AND TRUSTEES

Directors

The Company's Board consists of 3 directors. The Board is
responsible for the overall management of the Fund, including the general
supervision and review of its investment activities. The Board, in turn,
elects the officers of the Company. The addresses and principal
occupations of the Company's Director's and officers are listed below. As
of [ ], 1996, the Directors and officers of the Company owned of
record, as a group, less than 1% of the outstanding shares of the Company.
None of the Company's Directors or officers receive compensation from the
Company exceeding $60,000 per fiscal year.

Position with Principal Occupations during the
Name and Address the Company Past Five Years Age

[other officers and directors to come]

_________________________

* ["Interested Person" within the meaning of the 1940 Act.]

Trustees

The Trust's Board consists of 3 trustees. The Directors are
also the Trustees. The Trustees, as such, are responsible for the overall
management of the Trust, including the general supervision and review of
its investment activities. The officers of the Company hold similar
positions with substantially the same responsibilities with the Trust. None
of the Trustees or its employees receive compensation from the Trust
exceeding $60,000 per fiscal year. Every Director who is an "Interested
Person" (within the meaning of the 1940 Act) of

<PAGE>
<PAGE> SAI-13

the Company is also an "Interested Person" of the Trust. Similarly, every
Director who is not an "Interested Person" of the Company is not an
"Interested Person" of the Trust.

INVESTMENT ADVISOR

Pursuant to an Advisory Agreement between the Trust and the New
York Branch of Union Bank of Switzerland, the Branch serves as the
Portfolios' investment advisor. Pursuant to a Sub-Advisory Agreement
between the Branch and UBS International Investment, UBSII serves as the
sub-advisor to the International Equity Portfolio. The Branch, which
operates out of offices located at 299 Park Avenue, New York, New York, is
licensed by the Superintendent of Banks of the State of New York under the
banking laws of the State of New York and is subject to banking laws and
regulations applicable to a foreign bank that operates a New York branch.
UBSII is a wholly-owned [direct/indirect (name all intermediaries through
ultimate parent)] subsidiary of the Bank. The Advisor was incorporated
under the laws of [Switzerland] on [_____________], and UBSII was organized
under the laws of [________] on [________], 199[_]. (The Advisor and the
Sub-Advisor are collectively referred to as the "Advisors"). Subject to the
supervision of the Trustees, the Advisor, and in the case of the
International Equity Portfolio, UBSII, makes the Portfolios' day-to-day
investment decisions, arranges for the execution of portfolio transactions
and generally manages each Portfolio's investments and provides certain
administrative services.

The investment advisory services provided by the Advisors to
the Portfolios are not exclusive under the terms of the advisory
agreements. The Advisors are free to and do render similar investment
advisory services to others. The Advisors serve as investment advisors to
personal investors and other investment companies and act as fiduciaries
for trusts, estates and employee benefit plans. Certain of the assets of
trusts and estates under management are invested in common trust funds for
which the Advisors serve as trustees. The accounts managed or advised by
the Advisors have varying investment objectives and the Advisors invest
assets of such accounts in investments substantially similar to, or the
same as, those which are expected to constitute the principal investments
of the Portfolios. Such accounts are supervised by officers and employees
of the Advisors who may also be acting in similar capacities for the
Portfolios. See "Portfolio Transactions".

The Bank has branches, agencies, representative offices and
subsidiaries in Switzerland and in more than 40 cities outside Switzerland,
including, in the United States, New York City, Chicago, Houston, Los
Angeles and San Francisco. In addition to the receipt of deposits and the
making of loans and advances, the Bank, through its offices and
subsidiaries (including UBSII), engages in a wide range of banking and
financial activities typical of the world's major international banks,
including fiduciary, investment advisory and custodial services and foreign
exchange in the United States, Swiss, Asian and Euro-capital markets. The
Bank is one of the world's leading asset managers.

<PAGE>
<PAGE> SAI-14

Active in North America since 1946, the Bank employs a staff of
over 2,000 in its branches, agencies, representative offices and
subsidiaries in North America. Private banking services in the United
States are provided primarily through the Branch, as well as through
offices in Los Angeles. In addition, UBS Asset Management (New York) Inc.,
an indirect, wholly-owned subsidiary of the Bank with assets under
management totaling $33.9 billion as of December 31, 1994, offers primarily
U.S. dollar-based asset management services to institutions (including
pension and other employee benefit trusts), individuals, corporations and
other entities in the areas of equities, fixed income, real estate, oil and
gas and timber investments. UBSII had assets under management totaling
[___] billion as of [___], 199[_].

At June 30, 1995, the Bank (including its consolidated
subsidiaries) had total assets of $307.4 billion (unaudited) and equity
capital and reserves of $19.7 billion (unaudited). (The Bank's financial
statements are denominated in Swiss francs. The exchange rate at June 30,
1995 was Sfr. 1.148 to one U.S. dollar.)

The basis of the Advisors investment processes is fundamental
investment research, as they believe that fundamentals should determine an
asset's value over the long-term. The Advisor currently employs [_____]
full-time research analysts devoted to equity, fixed income, capital
market, credit and economic research in investment management divisions
located in [_______________________] to cover countries, industries and
companies on site. Similarly, UBSII employs [_____] full-time research
analysts in [_____] countries, who are devoted to equity, fixed income,
capital market, credit and economic research. The conclusions of the equity
analysts' fundamental research is quantified into a set of projected
returns through the use of a dividend discount model. These returns are
projected for a number of years to enable analysts to take a long-term
view. These returns, or normalized earnings, are used to establish relative
values among stocks in each industrial sector. This provides the basis for
ranking the attractiveness of the companies in an industry.

Bond Fund. The Advisor's fixed income analysts have extensive
experience in selecting bonds and monitoring their performance. These
analysts review the creditworthiness of individual issuers as well as the
broad economic trends likely to affect the bond markets.

U.S. Equity Fund. While many investment advisors evaluate
companies primarily on their earnings and their price/earnings ratio, the
Advisor uses a different investment approach. The Advisor believes that
dividend yields, rather than earnings, are the best indicators of future
performance. Consequently, the Advisor will select attractively priced
stocks with high dividends. In addition, the Advisor's analysts often meet
with company managers, often contact a company's suppliers, review the
business operations and financial statements of companies and try to "get
behind" the numbers to gain a true sense of a company's value. The Advisor
will invest the Portfolio's assets in the fifty most attractively valued
companies, after it performs its review.

<PAGE>
<PAGE> SAI-15

International Equity Fund. The Sub-Advisor's analysts have
extensive experience in managing international portfolios. These analysts
track the performance of more than 1,600 companies around the world, and
pay particular attention to the energy, life sciences, technology and
financial industries.

The Branch is a registered investment adviser under the
Investment Advisers Act of 1940, as amended.

Under the Trust's Advisory Agreement, each Portfolio will pay
the Advisor a fee, calculated daily and payable monthly, at an annual rate
of that Portfolio's average net assets, as shown below.

Portfolio Annualized Fee Rate
The Master Bond Portfolio 0.45% of Average Daily Net Assets
The Master U.S. Equity Portfolio 0.60% of Average Daily Net Assets
The Master International Equity Portfolio 0.85% of Average Daily Net Assets

The Advisor has voluntarily agreed to waive its advisory fees and reimburse
each Fund for its operating expenses (including those that each Fund incurs
indirectly through its Portfolio) to the extent that the operating expenses
(excluding extraordinary items) of the Bond Fund, U.S. Equity Fund and the
International Equity Fund exceed, on an annual basis, 0.80%, 0.90% and
1.40%, respectively, of such Fund's average daily net assets. The Advisor
may modify or discontinue this fee waiver and expense limitation at any
time in the future with thirty days' notice to the affected Fund. See
"Expenses".

Pursuant to the Sub-Advisory Agreement, the Sub-Advisor, under
the supervision of the Trustees and the Advisor, makes the day-to-day
investment decisions for the International Equity Portfolio. Under the Sub-
Advisory Agreement, the Advisor has agreed to pay the Sub-Advisor a fee,
calculated daily and payable monthly, at an annual rate of 0.75% of the
International Equity Portfolio's first $20 million of average net assets,
plus 0.50% of the next $30 million of average net assets, plus 0.40% of
this Portfolio's average net assets in excess of $50 million. The Advisor
is solely responsible for paying the Sub-Advisor this fee.

The Advisory Agreement and Sub-Advisory Agreement will each
continue in effect until [__________], 1997, and thereafter will be subject
to annual approval by the Trustees or the vote of a majority of the
outstanding voting securities (as defined in the 1940 Act) of each
Portfolio provided that in either case the continuance also is approved by
a majority of the Trustees who are not interested persons (as defined in
the 1940 Act) of the Trust by vote cast in person at a meeting called for
the purpose of voting of such approval. The Advisory and Sub-Advisory
Agreements will terminate automatically if assigned and are terminable at
any time without penalty by a vote of a majority of the Trustees or by a
vote of the holders of a majority (as defined in the 1940 Act) of the
Portfolio's outstanding shares on 60 days' written notice to the Advisor or
Sub-Advisor as applicable. Whenever a Fund, as a

<PAGE>
<PAGE> SAI-16

shareholder of a Portfolio, is required by the 1940 Act to vote its Portfolio
interest (other than a vote by the Fund to continue the operation of the
Portfolio upon the withdrawal of another investor in the Portfolio), the
Company will hold a meeting of that Fund's shareholders and will vote its
Portfolio interests proportionately as instructed by that Fund's
shareholders. See "Organization". Each Advisory Agreement and Sub-Advisory
Agreement is also terminable by the Advisor or Sub-Advisor, as applicable, on
90 days' written notice to the Trust. See "Additional Information".

In addition to the above noted investment advisory services,
the Advisor (but not the Sub-Advisor) also provides certain administrative
services to the Funds and the Portfolios and subject to the supervision of
the Board and Trustees, as applicable, is responsible for: establishing
performance standards for the Funds' and Portfolios' third-party service
providers and overseeing and evaluating the performance of such entities;
providing and presenting quarterly management reports to the Directors and
the Trustees; supervising the preparation of reports for Fund and Portfolio
shareholders; establishing voluntary expense limitations for the Fund and
providing any resultant expense reimbursement to the Fund; monitoring each
Fund's compliance with all federal and state securities and other
regulatory requirements; and monitoring each Fund's compliance with federal
tax laws and regulations, including each Fund's status as a "regulated
investment company" under the Internal Revenue Code of 1986, as amended
(the "Code").

These administrative services are provided to the Portfolios by
the Advisor pursuant to the above discussed Advisory Agreement. However,
these administrative services are provided to the Funds pursuant to a
Management Agreement between the Advisor and the Company, on behalf of the
Funds. The Advisor is not entitled to a fee from the Funds under the terms
of the Management Agreement.

The Glass-Steagall Act and other applicable laws generally
prohibit banks, such as Union Bank of Switzerland, from engaging in the
business of underwriting or distributing securities, and the Board of
Governors of the Federal Reserve System has issued an interpretation to the
effect that under these laws a bank holding company registered under the
federal Bank Holding Company Act or certain subsidiaries thereof may not
sponsor, organize, or control a registered open-end investment company
continuously engaged in the issuance of its shares, such as the Company.
The interpretation does not prohibit a holding company or a subsidiary
thereof from acting as investment advisor and custodian to such an
investment company. The Advisors believe that they may perform the services
for the Portfolios and the Funds contemplated by the Advisory, Sub-Advisory
and Management Agreements without violating the Glass-Steagall Act or other
applicable banking laws or regulations. State laws on this issue may differ
from the interpretation of relevant federal law, and banks and financial
institutions may be required to register as dealers pursuant to state
securities laws. However, it is possible that future changes in either
federal or state statutes and regulations concerning the permissible
activities of banks or trust companies, as well as further judicial or
administrative decisions and interpretations of present and future

<PAGE>
<PAGE> SAI-17

statutes and regulations, might prevent these entities from continuing to
perform such services.

If the Advisor or Sub-Advisor were prohibited from providing
these services to the Funds or the Portfolios, it is expected that the
Directors and Trustees, as applicable, would recommend to shareholders that
they approve new agreements with other qualified service providers.

ADMINISTRATOR

Under Administration Agreements with the Company and the Trust,
Signature Financial Group, Inc. ("Signature"), an affiliate of the
Distributor, serves as the Administrator of the Funds and the Portfolios.
In this capacity, Signature administers all aspects of their day-to-day
operations subject to the supervision of the Advisor and the Directors and
the Trustees, as applicable, except as set forth under the sections
captioned "Investment Advisor", "Distributor", "Custodian" and "Shareholder
Services". As Administrator, Signature (i) furnishes general office
facilities and ordinary clerical and related services for day-to-day
operations, including record-keeping responsibilities; (ii) is responsible
for complying with all applicable federal and state securities and other
regulatory requirements including, without limitation, preparing, mailing
and filing (but not paying for) registration statements, prospectuses,
statements of additional information, proxy statements and all required
reports to the Funds' and Portfolios' shareholders, the SEC, and state
securities commissions; (iii) is responsible for the registration of
sufficient Fund shares under federal and state securities laws; (iv) takes
responsibility for monitoring each Fund's status as a "regulated investment
company" under the Code; and (v) performs such administrative and
managerial oversight of the activities of the Funds' and Portfolios'
custodian, transfer agent and other agents or independent contractors as
the Directors and Trustees, respectively, may direct from time to time.

Under the Company's Administration Agreement, each Fund has
agreed to pay Signature a fee, calculated daily and payable monthly, at the
following annual rates:

Annualized
Fund's Average Daily Net Assets Fee Rate
First $100 Million . . . . . . . . . . . . . . . . . . 0.050%
Next $100 Million . . . . . . . . . . . . . . . . . . . 0.025%
In excess of $200 Million . . . . . . . . . . . . . . . 0.000%

Under the Trust's Administration Agreement, each Portfolio has
agreed to pay Signature a fee, calculated daily and payable monthly, at an
annual rate of 0.05% of its average net assets.

The Administration Agreements may be renewed or amended by the
Directors or Trustees, as applicable, without shareholder vote. The
Administration Agreements are

<PAGE>
<PAGE> SAI-18

terminable at any time without penalty by a vote of a majority of the
Directors or Trustees, as applicable, on not more than 60 days' written
notice nor less than 30 days' written notice to the other party. The
Administrator may subcontract for the performance of its obligations under
the Administration Agreements with the prior written consent of the
Directors or Trustees, as applicable. If the Administrator subcontracts all
or a portion of its duties to another party, the Administrator shall be
fully responsible for the acts and omissions of any such subcontractor(s)
as it would be for its own acts or omissions.

DISTRIBUTOR

Signature Broker-Dealer Services, Inc. (the "Distributor")
serves as the exclusive distributor of the shares of each Fund and holds
itself available to receive purchase orders for such shares. In that
capacity, the Distributor has been granted the right, as each Fund's agent,
to solicit and accept orders for the purchase of Fund shares in accordance
with the terms of the Distribution Agreement between the Company, on behalf
of each Fund, and the Distributor. The Distribution Agreement shall
continue in effect with respect to each Fund until [__________], 1997, and
thereafter will be subject to annual approval (i) by a vote of the holders
of a majority of each Fund's outstanding voting securities or by the
Directors and (ii) by a vote of a majority of the Directors who are not
parties to the Distribution Agreement or interested persons (as defined by
the 1940 Act) of the Company cast in person at a meeting called for the
purpose of voting on such approval. The Distribution Agreement will termi-
nate automatically if assigned by either party thereto and is terminable at
any time without penalty by a vote of a majority of the Directors, a vote
of a majority of such Directors who are not "interested persons" of the
Company or by a vote of the holders of a majority of the Fund's outstanding
shares, in any case on not more than 60 days' written notice to the other
party. The Distributor does not receive a fee pursuant to the terms of the
Distribution Agreement. The principal offices of the Distributor are
located at 6 St. James Avenue, Boston, Massachusetts 02116.

CUSTODIAN

Investors Bank and Trust Company ("IBT" or the "Custodian"),
whose principal offices are located at 89 South Street, Boston,
Massachusetts 02111, serves as the custodian and transfer and dividend
disbursing agent for the Funds and the Portfolios. Pursuant to the
Custodian Agreements with the Trust, on behalf of each Portfolio, and the
Company, on behalf of each Fund, the Custodian is responsible for
maintaining the books and records of portfolio transactions and holding
portfolio securities and cash. As transfer agent and dividend disbursing
agent, the Custodian is responsible for maintaining account records
detailing the ownership of Portfolio and Fund interests and for crediting
income, capital gains and other changes in share ownership to investors'
accounts. The Custodian will perform its duties as the Portfolios' transfer
agent and dividend disbursing agent from its offices located at 1 First
Canadian Place, Suite 5822, Toronto, Ontario M5X1C8, while its duties as
the Funds' transfer agent and dividend disbursing agent will be performed
at its offices located at

<PAGE>
<PAGE> SAI-19

89 South Street, Boston, Massachusetts 02111. Each Fund and Portfolio is
responsible for its proportionate share of the Company's and Trust's, as
applicable, transfer agency, custodial and dividend disbursement fees.

SHAREHOLDER SERVICES

The Company, on behalf of each Fund, has entered into a
Shareholder Servicing Agreement with the Branch under which the private
banking and investment services division ("INVS") of the Branch provides
shareholder services to Fund shareholders who are also clients of the
Branch. These services include performing shareholder account
administrative and servicing functions, such as answering inquiries
regarding account status and history, the manner in which purchases and
redemptions of shares may be made and certain other matters pertaining to
each Fund, assisting customers in designating and changing dividend
options, account designations and addresses, providing necessary personnel
and facilities to coordinate the establishment and maintenance of
shareholder accounts and records with the Funds' Distributor and transfer
agent, transmitting purchase and redemption orders to the Funds'
Distributor and transfer agent, arranging for the wiring or other transfer
of funds to and from customer accounts in connection with orders to
purchase or redeem Fund shares, verifying purchase and redemption orders,
transfers among and changes in accounts and providing other related
services.

In return for these services, each Fund has agreed to pay INVS
a fee, at an annual rate of 0.25% of the average daily net assets of the
shareholder accounts of that Fund so serviced.

As discussed under "Investment Advisor", the Glass-Steagall Act
and other applicable laws and regulations limit the activities of bank
holding companies and certain of their subsidiaries in connection with
registered open-end investment companies. The activities of the Branch
under the Shareholder Servicing Agreement, the Advisory Agreement and the
Management Agreement and UBSII under the Sub-Advisory Agreement, may raise
issues under these laws. However, the Branch and UBSII believe that they
may properly perform these services and the other activities described
herein and in the Prospectuses without violating the Glass-Steagall Act or
other applicable banking laws or regulations.

If the Branch or UBSII were prohibited from providing their
respective services under the above noted agreements, the Directors and
Trustees, as applicable, would seek an alternative provider of such
services. In such an event, changes in the operation of the Funds or the
Portfolios might occur and shareholders might not receive the same level of
service previously provided by the Branch and UBSII.

<PAGE>
<PAGE> SAI-20

INDEPENDENT ACCOUNTANTS

The Company's and the Trust's independent accounting firm is
Price Waterhouse LLP, 1177 Avenue of the Americas, New York, New York
10036. The U.S. firm of Price Waterhouse is a Registered Limited Liability
Partnership (LLP) under the laws of the State of Delaware and, from
August 1, 1994, will continue its practice under the name Price Waterhouse
LLP. Price Waterhouse LLP will conduct an annual audit of the financial
statements of each Fund and Portfolio, assist in the review and filing of
the federal and state income tax returns of the Funds and Portfolios and
consult with the Funds and Portfolios as to matters of accounting and
federal and state income taxation.

EXPENSES

Each Fund and Portfolio is responsible for the fees and
expenses attributable to it. Each Fund will bear its proportionate share of
the expenses in its corresponding Portfolio.

The Advisor has agreed that if in any fiscal year the sum of
any Fund's expenses (including each Fund's proportionate share of the
expenses incurred by its corresponding Portfolio) exceeds the limits set by
applicable regulations of state securities commissions then the Advisor
shall waive its fees [and reimburse expenses] to the extent necessary to
remove such excess. Currently, the Advisor believes that the most
restrictive expense limitation of state securities commissions limits
expenses to an annual rate of 2.5% of the first $30 million of average net
assets, 2% of the next $70 million of such net assets and 1.5% of such net
assets in excess of $100 million. For additional information regarding
waivers or expense subsidies, see "Management" in the Prospectus. The
Advisor has also voluntarily agreed to limit the total operating expenses
of each Fund (including each Fund's proportionate share of the expenses
incurred by its corresponding Portfolio), excluding ordinary expenses, as
set forth in each Fund's Prospectus under the caption "Expenses". The
Advisor may modify or discontinue this fee waiver and expense limitation at
any time in the future with thirty days' notice to the affected Fund.

The Advisor paid the organizational expenses of the Company and
the Trust and the expenses incurred in the initial offering of Fund shares.
The costs of organizing the Company and the Trust and registering the
Funds' shares will be paid initially by the Advisor and reimbursed by the
Company and the Trust, as applicable, at the time of the initial offering
of the shares of each Fund, which is expected to be simultaneous. These
costs in turn will be equitably allocated to each Fund and Portfolio as
provided for by the Directors and Trustees. Such organization costs have
been deferred and will be amortized ratably over a period of sixty months
from the commencement of operations of the Funds and the Portfolios.

<PAGE>
<PAGE> SAI-21

PURCHASE OF SHARES

Investors may purchase Fund shares as described in each
Prospectus under "Purchase of Shares." Fund shares are sold on a
continuous basis without a sales charge at the net asset value per share
next determined after receipt of a purchase order.

The minimum investment requirements for certain retirement
plans such as Individual Retirement Accounts ("IRAs"), SERP-IRAs (Keoghs),
401(k) Plans and other tax-deferred plans are $2,000. The minimum
investment requirement for all subsequent investments is $500. The minimum
investment requirement for accounts established for the benefit of minors
under the "Uniform Gift to Minor's Act" is $5,000. The minimum investment
requirement for all subsequent investments is $1,000. The minimum
investment requirement for employees of the bank and its affiliates is $5,000.
The minimum subsequent investment is $1,000.

In addition, the minimum investment requirements may be met by
aggregating the investments of related shareholders. A "related
shareholder" is limited to an immediate family member, including mother,
father, spouse, child, brother, sister and grandparent and includes step
and adoptive relationships.

Each Fund may, at its own option, accept securities in payment
for shares. The securities tendered are valued by the methods described in
"Net Asset Value" as of the day the Fund shares are purchased. This is a
taxable transaction to the investor. Securities may be accepted in payment
for shares only if they are, in the judgment of the Advisors, appropriate
investments for the Portfolio corresponding to that Fund. In addition,
securities accepted in payment for shares must: (i) meet the investment
objective and policies of the relevant Portfolio; (ii) be acquired by the
Fund for investment and not for resale (other than for resale to the
corresponding Portfolio); (iii) be liquid securities that are not
restricted as to transfer either by law or by market liquidity; and
(iv) have a value that is readily ascertainable, as evidenced by a listing
on a stock exchange, over-the-counter market or by readily available market
quotations from a dealer in such securities. Each Fund reserves the right
to accept or reject at its own option any and all securities offered in
payment for its shares.

REDEMPTION OF SHARES

Investors may redeem shares of each Fund as described in the
Prospectus under "Redemption of Shares".

If the Directors and Trustees determine that it would be
detrimental to the best interest of the remaining shareholders of a Fund or
Portfolio to effect redemptions wholly or partly in cash, payment of the
redemption price may be made in whole or in part by an in-kind distribution
of securities from the Portfolio, in lieu of cash, in conformity with the

<PAGE>
<PAGE> SAI-22

applicable rules of the SEC. If shares are redeemed in-kind, the redeeming
shareholder might incur transaction costs in converting the securities into
cash. The methods of valuing portfolio securities distributed to a
shareholder are described under "Net Asset Value", and such valuations will
be made as of the same time the redemption price is determined. The
Company, on behalf of the Funds, and the Trust, on behalf of the
Portfolios, have elected to be governed by Rule 18f-1 under the 1940 Act
pursuant to which the Funds and the Portfolios are obligated to redeem
shares solely in cash up to the lesser of $250,000 or one percent of the
net asset value of the Fund or Portfolio, as applicable, during any 90 day
period for any one shareholder. The Company will redeem Fund shares in-kind
only if it has received an in-kind redemption from the corresponding
Portfolio and therefore shareholders of a Fund that receive Fund
redemptions in-kind will receive securities of the Portfolio. The Trust has
advised the Company that the Portfolios will not redeem in-kind except in
circumstances in which a Fund is permitted to redeem in-kind.

Further Redemption Information. The right of redemption may be
suspended or the date of payment postponed, in the case of the Company and
the Trust: (i) for up to seven days; (ii) during periods when the New York
Stock Exchange (the "NYSE") is closed for other than weekends and holidays
or when trading on the NYSE is restricted as determined by the SEC by rule
or regulation; (iii) during periods in which an emergency exists, as
determined by the SEC, which causes disposal by a Portfolio of, or
evaluation of the net asset value of, its securities to be unreasonable or
impracticable; or (iv) for such other periods as the SEC may permit.

EXCHANGE OF SHARES

An investor may exchange Fund shares for shares of any other
series of the Company as described under "Exchange of Shares" in the
prospectuses. Investors considering an exchange of Fund shares for shares
of another Company series should read the prospectus of the series into
which the transfer is being made prior to such exchange. Requests for
exchange are made in the same manner as requests for redemptions. See
"Redemption of Shares". Shares of the acquired series are purchased for
settlement when the proceeds from redemption become available. Certain
state securities laws may restrict the availability of the exchange
privilege. The Company reserves the right to discontinue, alter or limit
this exchange privilege at any time.

DIVIDENDS AND DISTRIBUTIONS

Each Fund will declare and pay dividends and distributions as
described under "Dividends and Distributions" in its Prospectus.

Determination of the net income for the Bond Fund is made at
the times described in that Prospectus; in addition, net investment income
for days other than business days is determined at the time net asset value
is determined on the prior business day.

<PAGE>
<PAGE> SAI-23

NET ASSET VALUE

Each Fund computes its net asset value once daily at the close
of business on Monday through Friday as described under "Net Asset Value"
in the Prospectus. The net asset value will not be computed on a day in
which no orders to purchase or redeem Fund shares have been received or on
the following legal holidays: New Year's Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas
Day. On days when U.S. trading markets close early in observance of these
holidays, the Funds and the Portfolios would expect to close for purchases
and redemptions at the same time. The days on which net asset value is
determined are the Funds' business days.

The net asset value per share of each Fund equals the value of
that Fund's pro rata interest in its corresponding Portfolio plus the value
of all its other assets not invested in the Portfolio, if any, less its
total liabilities, divided by the number of outstanding shares of that
Fund. The following is a discussion of the procedures used by the
Portfolios in valuing their assets.

In the case of the Bond Portfolio, securities with a maturity
of 60 days or more, including securities that are listed on an exchange or
traded over-the-counter, are valued by the Portfolio by using the average
of at least three bid quotes from dealers or, in all other cases, by taking
into account various factors affecting market value, including yields and
prices of comparable securities, indications as to values from dealers and
general market conditions. All portfolio securities with a remaining
maturity of less than 60 days are valued by the amortized cost method,
whereby such securities are valued at acquisition cost as adjusted for
amortization of premium or accretion of discount to maturity. Because many
of the municipal bond issues outstanding do not have large principal
obligations and because of the varying risk factors applicable to each
issuer, no readily available market quotations exist for most municipal
securities.

Trading in securities on most foreign exchanges and over-the-
counter markets is normally completed before the close of the NYSE and may
also take place on days on which the NYSE is closed. If events materially
affecting the value of securities occur between the time when the exchange
on which they are traded closes and the time when the Portfolio's net asset
value is calculated, such securities will be valued at fair value in
accordance with procedures established by and under the general supervision
of the Trustees.

In the case of the U.S. Equity and International Equity
Portfolios, securities listed on domestic exchanges, other than options on
stock indices, are valued using the last sales price on the most
representative exchange at 4:00 p.m. New York time or, in the absence of
recorded sales, at the average of readily available closing bid and asked
prices on such exchange or, in the absence of such prices, at the readily
available closing bid price on such exchange. Securities listed on foreign
exchanges are valued at the last quoted sale price available before the
time when net assets are valued or, in the absence of such recorded

<PAGE>
<PAGE> SAI-24

sales, at the average of readily available closing bid and asked prices on
such exchange or, in the absence of such prices, at the readily available
closing bid price on such exchange. Unlisted securities are valued at the
average of the quoted bid and asked prices in the over-the-counter market.
The value of each security for which readily available market quotations
exist is based on a decision as to the broadest and most representative
market for such security. For purposes of calculating net asset value per
share, all assets and liabilities initially expressed in foreign currencies
will be converted into U.S. dollars at the prevailing market rates
available at the time of valuation.

Options on stock indices traded on national securities
exchanges are valued at the close of options trading on such exchanges,
which is currently 4:10 p.m., New York time. Stock index futures and
related options traded on commodities exchanges are valued at their last
sales price as of the close of such commodities exchanges, which is
currently 4:15 p.m., New York time. Securities or other assets for which
market quotations are not readily available are valued at fair value in
accordance with procedures established by and under the general supervision
of the Trustees. Such procedures include the use of independent pricing
services, indications as to values from dealers and general market
conditions. Short-term investments that mature in 60 days or less are
valued at amortized cost method (as discussed above) if their original
maturity was 60 days or less, or by amortizing their value on the 61st day
prior to maturity, if their original maturity when acquired by a Portfolio
was more than 60 days, unless this is determined not to represent fair
value by the Trustees.

Trading in securities on most foreign exchanges and over-the-
counter markets is normally completed before the close of the NYSE and may
also take place on days on which the NYSE is closed. If events materially
affecting the value of securities occur between the time when the exchange
on which they are traded closes and the time when a Portfolio's net asset
value is calculated, such securities will be valued at fair value in
accordance with procedures established by and under the general supervision
of the Trustees.

If market quotations for the securities of any Portfolio are
not readily available, such securities will be valued at "fair value" as
determined in good faith by the Trustees.

PERFORMANCE DATA

From time to time, the Funds may quote performance in terms of
yield, actual distributions, total return or capital appreciation in
reports, sales literature and advertisements published by the Funds.
Current performance information for the Funds may be obtained by calling
the Administrator. See "Additional Information" in the Prospectus.

Yield Quotations. As required by regulations of the SEC, the
annualized yield for the Bond Fund is computed by dividing the Fund's net
investment income per share earned during a 30-day period by its net asset
value on the last day of the period. The average daily number of Fund
shares outstanding during the period that are eligible to receive dividends
is

<PAGE>
<PAGE> SAI-25

used in determining the net investment income per share. Income is computed
by totaling the interest earned on all debt obligations during the period
and subtracting from that amount the total of all recurring expenses
incurred during the period. The 30-day yield is then annualized on a bond-
equivalent basis assuming semi-annual reinvestment and compounding of net
investment income, as described under "Additional Information" in the
Prospectus.

Total Return Quotations. As required by SEC regulations, the
annualized total return of the Bond, U.S. Equity and International Equity
Funds for a period is computed by assuming a hypothetical initial payment
of $1,000. It is then assumed that all of the dividends and distributions
by that Fund over the period are reinvested. It is then assumed that at the
end of the period the entire amount is redeemed. The annualized total
return is then calculated by determining the annual rate required for the
initial payment to grow to the amount which would have been received upon
redemption.

Aggregate total returns, reflecting the cumulative percentage
change over a measuring period, may also be calculated.

General. A Fund's performance will vary from time-to-time
depending upon market conditions, the composition of its corresponding
Portfolio and its operating expenses. Consequently, any given performance
quotation should not be considered representative of a Fund's performance
for the future. In addition, because performance will fluctuate, it may not
provide a basis for comparing an investment in a Fund with certain bank
deposits or other investments that pay a fixed yield or return for a stated
period of time.

Comparative performance information may be used from time to
time in advertising the Funds' shares, including data from Lipper
Analytical Services, Inc., Micropal, Inc., Ibbotson Associates, Morningstar
Inc., the S&P 500 Composite Stock Price Index, the Dow Jones Industrial
Average, the Frank Russell Indices, The EAFE Index and other industry
publications.

PORTFOLIO TRANSACTIONS

The Advisors place orders for all purchases and sales of
securities on behalf of the Portfolios. The Advisors enter into repurchase
agreements and reverse repurchase agreements [and execute loans of
portfolio securities] on behalf of the Portfolios. See "Investment
Objectives and Policies".

Fixed income and debt securities and municipal bonds and notes
are generally traded at a net price with dealers acting as principal for
their own accounts without a stated commission. The price of the security
usually includes profit to the dealers. In underwritten offerings,
securities are purchased at a fixed price that includes an amount of
compensation to the underwriter, generally referred to as the underwriter's
concession or discount.

<PAGE>
<PAGE> SAI-26

Occasionally, certain securities may be purchased directly from an issuer,
in which case no commissions or discounts are paid.

Portfolio transactions for the Bond Portfolio will be
undertaken principally to accomplish its objective in relation to expected
movements in the general level of interest rates. The Bond Portfolio may
engage in short-term trading consistent with its objectives.

In connection with portfolio transactions for the Bond
Portfolio, the Advisor intends to seek best price and execution on a
competitive basis for both purchases and sales of securities. Portfolio
turnover may vary from year to year, as well as within a year. The
portfolio turnover rate for the Bond Portfolio is expected to be under
100%.

In connection with portfolio transactions for the U.S. Equity
and International Equity Portfolios, the overriding objective is to obtain
the best possible execution of purchase and sale orders. Portfolio turnover
may vary from year to year, as well as within a year. The portfolio
turnover rate for the U.S. Equity and International Equity Portfolios is
expected to be under 100%.

In selecting a broker, the Advisor or Sub-Advisor, as
applicable, considers a number of factors including: the price per unit of
the security; the broker's reliability for prompt, accurate confirmations
and on-time delivery of securities; the broker's financial condition; the
commissions charged. A broker may be paid a brokerage commission greater
than that another broker might have charged for effecting the same
transaction if, after considering the foregoing factors, the Advisor or
Sub-Advisor decides that the broker chosen will provide the best possible
execution and/or such a broker provides research services to the Advisors
or Sub-Advisor. The Advisors monitor the reasonableness of the brokerage
commissions paid in light of the execution received. The Trustees regularly
review the reasonableness of commissions and other transaction costs
incurred by the Portfolios in light of the facts and circumstances deemed
relevant, and, in that connection, will review reports and published data
concerning transaction costs incurred by institutional investors generally.
Research services provided by brokers to which the Advisors have allocated
brokerage business in the past include economic statistics and forecasting
services, industry and company analyses, portfolio strategy services,
quantitative data, and consulting services from economists and political
analysts. Research services furnished by brokers are used for the benefit
of all the Advisors' clients and not solely or necessarily for the benefit
of the Portfolios. The Advisors believe that the value of research services
received is not determinable and does not significantly increase expenses.
The Portfolios do not reduce their fee to the Advisors by any amount that
might be attributable to the value of such services.

Subject to the overriding objective of obtaining the best
possible execution of orders, the Advisors may allocate a portion of a
Portfolio's brokerage transactions to their affiliates. In order for their
affiliates to effect any portfolio transactions for the Portfolios, the
commissions, fees or other remuneration received by such affiliates must be
reasonable and

<PAGE>
<PAGE> SAI-27

fair compared to the commissions, fees, or other remuneration paid to other
brokers in connection with comparable transactions involving similar
securities being purchased or sold on a securities exchange during a
comparable period of time. Furthermore, the Trustees, including a majority
of the Trustees who are not "interested persons", have adopted procedures
that are reasonably designed to ensure that any commissions, fees, or other
remuneration paid to such affiliates are consistent with the foregoing
standard.

Portfolio securities will not be purchased from or through or
sold to or through the Portfolio's Advisor, Sub-Advisor, Distributor or any
"affiliated person" (as defined in the 1940 Act) or any affiliated person
of such a person when such entities are acting as principals, except to the
extent permitted by law. In addition, the Portfolios will not purchase
securities during the existence of any underwriting group relating thereto
of which the Advisor, Sub-Advisor or affiliate thereof is a member, except
to the extent permitted by law.

On those occasions when the Advisors deem the purchase or sale
of a security to be in the best interests of a Portfolio as well as other
customers including other Portfolios, the Advisors to the extent permitted
by applicable laws and regulations may, but are not obligated to, aggregate
the securities to be sold or purchased for a Portfolio with those to be
sold or purchased for other customers in order to obtain best execution,
including lower brokerage commissions if appropriate. In such an event, the
securities so purchased or sold as well as any expenses incurred in the
transaction will be allocated by the Advisors in a manner that is equitable
and consistent with their fiduciary obligations to their clients. In some
instances, this procedure might adversely affect a Portfolio.

If a Portfolio writes an option and effects a closing purchase
transaction with respect to an option written by it, such transaction will
normally be executed by the same broker-dealer who executed the sale of the
option. The writing of options by a Portfolio will be subject to
limitations established by each of the exchanges governing the maximum
number of options in each class that may be written by a single investor or
group of investors acting in concert, regardless of whether the options are
written on the same or different exchanges or are held or written in one or
more accounts or through one or more brokers. The number of options that a
Portfolio may write may be affected by options written by the Advisors for
other investment advisory clients. An exchange may order the liquidation of
positions found to be in excess of these limits and it may impose certain
other sanctions.

ORGANIZATION

UBS Private Investor Funds, Inc.

UBS Private Investor Funds, Inc. is a Maryland corporation and
is currently issuing shares of common stock, par value $0.001 per share, in
four series: The UBS Bond Fund; The UBS Tax Exempt Bond Fund; The UBS U.S.
Equity Fund; and The UBS International Equity Fund.

<PAGE>
<PAGE> SAI-28

Each share of a series issued by the Company will have a pro
rata interest in the assets of that series. The Company is currently
authorized to issue 500,000,000 shares of common stock, including
10,000,000 shares of each of the four current series. Under Maryland law,
the Board has the authority to increase the number of shares of stock that
the Company has the authority to issue. Each share has one vote (and)
fractional shares have a corresponding fractional vote) with respect to
matters upon which shareholder vote is required; stockholders have no
cumulative voting rights with respect to their shares. Shares of all series
vote together as a single class except that if the matter being voted upon
affects only a particular series then it will be voted on only by that
series. If a matter affects a particular series differently from other
series, that series will vote separately on such matter. Each share is
entitled to participate equally in dividends and distributions declared by
the Directors with respect to the relevant series, and in the net
distributable assets of such series on liquidation.

Under Maryland law, the Company is not required to hold an
annual meeting of stockholders unless required to do so under the 1940 Act.
It is the Company's policy not to hold an annual meeting of stockholders
unless so required. All shares of the Company (regardless of series) have
noncumulative voting rights for the election of Directors. Under Maryland
law, the Company's Directors may be removed by vote of stockholders. The
Board currently consists of three (3) directors.

Control Persons. The Company expects that, immediately prior to
the initial public offering of its shares, the sole holder of the capital
stock of each of its series will be Signature. Upon the offering of the
shares of the Funds, each Fund may have a number of shareholders each
holding 5% or more of the outstanding shares of such Fund. In such an
event, the Company cannot predict the length of time that such persons will
own such amounts or whether one or more of such persons will become
"control" persons of such Fund.

Trust

[Master Portfolio Trust], an unincorporated business trust
formed under [___________] law, was organized on [_________], 1995. The
Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares ($0.001 par value) of one or more series. To
date, three (3) series have been authorized. Each series (i.e., a
Portfolio) of the Trust corresponds to a Fund of the Company.

A copy of the Trust's Declaration of Trust is on file in the
office of [__________]. The Declaration of Trust and the bylaws of the
Trust are designed to make the Trust similar in most respects to a
[__________] business corporation.

<PAGE>
<PAGE> SAI-29

Shareholders of the Trust, such as the Funds, may redeem all or
any number of their shares of the Trust at any time, upon the submission of
a redemption request in proper form. See "Redemption of Shares".

TAXES

Each Fund intends to qualify and intends to remain qualified as
a regulated investment company (a "RIC") under Subchapter M of the Code. As
a RIC, a Fund must, among other things: (a) derive at least 90% of its
gross income from dividends, interest, payments with respect to loans of
stock and securities, gains from the sale or other disposition of stock,
securities or foreign currency and other income (including but not limited
to gains from options, futures, and forward contracts) derived with respect
to its business of investing in such stock, securities or foreign currency;
(b) derive less than 30% of its gross income from the sale or other
disposition of stock, securities, options, futures or forward contracts
(other than options, futures or forward contracts on foreign currencies)
held less than three months; and (c) diversify its holdings so that, at the
end of each fiscal quarter, (i) at least 50% of the value of the Fund's
total assets is represented by cash, U.S. Government securities,
investments in other RICs and other securities limited in respect of any
one issuer, to an amount not greater than 5% of the Fund's total assets,
and 10% of the outstanding voting securities of such issuer and (ii) not
more than 25% of the value of its total assets is invested in the
securities of any one issuer (other than U.S. Government securities). As a
RIC, a Fund (as opposed to its shareholders) will not be subject to federal
income taxes on the net investment income and capital gains that it
distributes to its shareholders, provided that at least 90% of its net
investment income and realized net short-term capital gains in excess of
net long-term capital losses for the taxable year is distributed.

Under the Code, a Fund will be subject to a 4% excise tax on
the portion of its undistributed income if it fails to meet certain
distribution requirements by the end of the calendar year. Each Fund
intends to make distributions in a timely manner and, accordingly, does not
expect to be subject to the excise tax.

For federal income tax purposes, dividends that are declared by
a Fund in October, November or December as of a record date in such month
and actually paid in January of the following year will be treated as if
they were paid on December 31 of the year declared. Therefore, such
dividends will generally be taxable to a shareholder in the year declared
rather than the year paid.

<PAGE>
<PAGE> SAI-30

eligible for the dividends-received deduction. Distributions of net long-
term capital gains (i.e., net long-term capital gains in excess of net
short-term capital losses) are taxable to shareholders of a Fund as long-
term capital gains, regardless of whether such distributions are taken in
cash or reinvested in additional shares and regardless of how long a
shareholder has held shares in the Fund. See "Taxes" in the Prospectus for
a discussion of the federal income tax treatment of any gain or loss
realized on the redemption or exchange of Fund shares. Additionally, any
loss realized on a redemption or exchange of Fund shares will be disallowed
to the extent the shares disposed of are replaced within a period of 61
days beginning 30 days before such disposition, including purchases made
pursuant to a dividend reinvestment plan.

Gains or losses on sales of securities by a Portfolio will be
treated as long-term capital gains or losses if the securities have been
held by it for more than one year except in certain cases where, if
applicable, a Portfolio acquires a put or writes a call thereon. Other
gains or losses on the sale of securities will be short-term capital gains
or losses. Gains and losses on the sale, lapse or other termination of
options on securities will be treated as gains and losses from the sale of
securities. If an option written by a Portfolio lapses or is terminated
through a closing transaction, such as a repurchase by the Portfolio of the
option from its holder, the Portfolio will realize a short-term capital
gain or loss, depending on whether the premium income is greater or less
than the amount paid by the Portfolio in the closing transaction. If
securities are purchased by a Portfolio pursuant to the exercise of a put
option written by it, the Portfolio will subtract the premium received from
its cost basis in the securities purchased.

Under the Code, gains or losses attributable to disposition of
foreign currency or to foreign currency contracts, or to fluctuations in
exchange rates between the time a Portfolio accrues income or receivables
or expenses or other liabilities denominated in a foreign currency and the
time a Portfolio actually collects such income or pays such liabilities,
are treated as ordinary income or ordinary loss. Similarly, gains or losses
on the disposition of debt securities held by a Portfolio, if any,
denominated in foreign currency, to the extent attributable to fluctuations
in exchange rates between the acquisition and disposition dates are also
treated as ordinary income or loss.

Forward currency contracts, options and futures contracts
entered into by a Portfolio may create "straddles" for U.S. federal income
tax purposes and this may affect the character and timing of gains or
losses realized by a Portfolio on forward currency contracts, options and
futures contracts or on the underlying securities. Straddles may also
result in the loss of the holding period of underlying securities for
purposes of the 30% of gross income test described above, and therefore, a
Portfolios ability to enter into forward currency contracts, options and
futures contracts may be limited.

Certain options, futures and foreign currency contracts held by
a Portfolio at the end of each fiscal year will be required to be "marked-
to-market" for federal income tax

<PAGE>
<PAGE> SAI-31

purposes--i.e., treated as having been sold at market value. For such
options and futures contracts, 60% of any gain or loss recognized on these
deemed sales and on actual dispositions will be treated as long-term
capital gain or loss, and the remainder will be treated as short-term
capital gain or loss regardless of how long the Portfolio has held such
options or futures. Any gain or loss recognized on foreign currency
contracts will be treated as ordinary income.

The International Equity Portfolio may invest in equity
securities of foreign issuers. If that Portfolio purchases shares in
certain foreign investment funds (referred to as passive foreign investment
companies under the Code), it may be subject to federal income tax on a
portion of an "excess distribution" from such foreign investment fund or
gain from the disposition of such shares, even though such income may have
to be distributed as a taxable dividend by the Portfolio to its
shareholders. In addition, certain interest charges may be imposed on a
Portfolio or its shareholders in respect of unpaid taxes arising from such
distributions or gains. Alternatively, a Portfolio may each year include in
its income and distribute to shareholders a pro rata portion of the foreign
investment fund's income, whether or not distributed to the Portfolio.

Foreign Shareholders. Dividends of net investment income and
distributions of realized net short-term gains in excess of net long-term
losses to a shareholder who, as to the United States, is a non-resident
alien individual, fiduciary of a foreign trust or estate, foreign
corporation or foreign partnership (a "foreign shareholder") will be
subject to U.S. withholding tax at the rate of 30% (or lower treaty rate)
unless the dividends are effectively connected with a U.S. trade or
business of the shareholder, in which case the dividends will be subject to
tax on a net income basis at the graduated rates applicable to U.S.
individuals or domestic corporations. Distributions of net long-term
capital gains to foreign shareholders will not be subject to U.S. tax
unless the distributions are effectively connected with the shareholder's
trade or business in the United States or, in the case of a shareholder who
is a non-resident alien individual, the shareholder was present in the
United States for more than 182 days during the taxable year and certain
other conditions are met.

In the case of a foreign shareholder who is a nonresident alien
individual and who is not otherwise subject to withholding as described
above, a Fund may be required to withhold U.S. federal income tax at the
rate of 31% unless IRS Form W-8 is provided. See "Taxes" in the Prospectus.
Transfers by gift of shares of a Fund by a foreign shareholder who is a
nonresident alien individual will not be subject to U.S. federal gift tax,
but the value of shares of the Fund held by such a shareholder at his or
her death will be includible in his or her gross estate for U.S. federal
estate tax purposes.

Foreign Taxes. It is expected that the International Equity
Portfolio may be subject to foreign withholding taxes with respect to
income received from sources within foreign countries. In the case of the
International Equity Portfolio, so long as more than 50% in value of the
Portfolio's total assets at the close of any taxable year consists of stock
or

<PAGE>
<PAGE> SAI-32

securities of foreign corporations, the Portfolio may elect to treat any
foreign income taxes paid by it as paid directly by its shareholders. The
Portfolio will make such an election only if it deems it to be in the best
interest of its shareholders. The Portfolio will notify its shareholders in
writing each year if they make the election and of the amount of foreign
income taxes, if any, to be treated as paid by the shareholders. If the
Portfolio makes the election, each shareholder of the International Equity
Fund will be required to include in his or her income their proportionate
share of the amount of foreign income taxes paid by the Portfolio and will
be entitled to claim either a credit (subject to the limitations discussed
below), or, if he or she itemizes deductions, a deduction for his or her
share of the foreign income taxes in computing federal income tax
liability. (No deduction will be permitted in computing an individual's
alternative minimum tax liability.) A shareholder who is a nonresident
alien individual or a foreign corporation may be subject to U.S.
withholding tax on the income resulting from the election described in this
paragraph, but may not be able to claim a credit or deduction against such
U.S. tax for the foreign taxes treated as having been paid by such
shareholder. A tax-exempt shareholder will not ordinarily benefit from this
election. Shareholders who choose to utilize a credit (rather than a
deduction) for foreign taxes will be subject to the limitation that the
credit may not exceed the shareholder's U.S. tax (determined without regard
to the availability of the credit) attributable to his or her total foreign
source taxable income. For this purpose, the portion of dividends and
distributions paid by the International Equity Fund from its foreign source
net investment income will be treated as foreign source income. This
Portfolio's gains and losses from the sale of securities will generally be
treated as derived from U.S. sources, however, and certain foreign currency
gains and losses likewise will be treated as derived from U.S. sources. The
limitation on the foreign tax credit is applied separately to foreign
source "passive income," such as the portion of dividends received from the
Portfolio that qualifies as foreign source income. In addition, the foreign
tax credit is allowed to offset only 90% of the alternative minimum tax
imposed on corporations and individuals. Because of these limitations,
shareholders may be unable to claim a credit for the full amount of their
proportionate shares of the foreign income taxes paid by the International
Equity Portfolio.

State and Local Taxes. Each Fund may be subject to state or
local taxes in jurisdictions in which that Fund is deemed to be doing
business. In addition, the treatment of a Fund and its shareholders in
those states that have income tax laws might differ from treatment under
the federal income tax laws. For example, a portion of the dividends
received by shareholders may be subject to state income tax. Shareholders
should consult their own tax advisors with respect to any state or local
taxes.

ADDITIONAL INFORMATION

This SAI does not contain all the information included in the
Registration Statement filed with the SEC under the Securities Act and the
1940 Act with respect to the securities offered hereby. Certain portions of
this SAI have been omitted pursuant to the rules and regulations of the
SEC. The Registration Statement, including the exhibits filed therewith,
the

<PAGE>
<PAGE> SAI-33

Prospectus and the SAI, may be examined at the office of the SEC, Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington D.C. 20549.

Statements contained in this SAI to the contents of any
agreement or other document referred to are not necessarily complete, and,
in each instance, reference is made to the copy of such agreement or other
document filed as an exhibit to the Registration Statement of which this
document forms a part, each such statement being qualified in all respect
by such reference.

Shareholder inquiries may be directed to: [__________]

<PAGE>
<PAGE> SAI-34

REPORT OF INDEPENDENT ACCOUNTANTS

[Subject to modification]

<PAGE>
<PAGE> F-1

The UBS Private Investor Funds, Inc.
Statement of Assets and Liabilities
November [__], 1995

<TABLE>
<CAPTION>
<S> <C> <C> <C>
The UBS The UBS U.S.
The UBS U.S. Equity International
Bond Fund Fund Equity Fund
Assets
Cash . . . . . . . . . . . . . . . . . . $ 25,000 $ 25,000 $ 25,000
Deferred organization costs . . . . . . . 72,000 72,500 72,500
Total Assets . . . . . . . . . . . . 97,500 97,500 97,500
Liabilities
Organization expenses payable . . . . . . 72,500 72,500 72,500

Net Assets . . . . . . . . . . . . . . . . . $ 25,000 $ 25,000 $ 25,000

Shares outstanding ($.001 par value) . . . . 2,500 2,500 2,500

Net Asset Value Offering Price and
Redemption Price per Share . . . . . . . . $ 10.00 $ 10.00 $ 10.00

Composition of net assets:
Shares of common stock, at par . . . . . $ 3 $ 3 $ 3
Additional paid-in capital . . . . . . . 24,997 24,997 24,997
Net Assets, November [__], 1995 . . . . . . . $ 25,000 $ 25,000 $ 25,000

<FN>
___________________________
See Notes to financial statements.
</FN>
</TABLE>

<PAGE>
<PAGE> F-2

The UBS Private Investor Funds, Inc.
Notes to Financial Statements
November [__], 1995

Note 1 - General

The UBS Private Investor Funds, Inc. (the "Company") was organized as a
Maryland corporation on November 16, 1995. The Company consists of four
series, as follows: The UBS Bond Fund Series; The UBS Tax Exempt Bond Fund
Series; the UBS U.S. Equity Fund Series; and The UBS International Equity
Fund Series. The accompanying financial statements and notes relate to The
UBS Bond Fund Series, The UBS U.S. Equity Fund Series and The UBS
International Equity Fund Series (each a "Fund" and collectively, the
"Funds").

The UBS Bond Fund Series, The UBS U.S. Equity Fund Series and The UBS
International Equity Fund Series seek to achieve their investment
objectives by investing substantially all of their investable assets in The
Master Bond Portfolio, The Master U.S. Equity Portfolio and The Master
International Equity Portfolio (each a "Portfolio" collectively, the
"Portfolios"), respectively. The Portfolios are series of Master Portfolio
Trust (the "Master"), an open-end management investment company. Each
Portfolio has substantially the same investment objective as its
corresponding Fund.

Because the Funds seek to achieve their investment objectives by investing
substantially all of their investable assets in corresponding Portfolios of
the Master, these Funds have not retained the services of an investment
adviser. Rather, the Master has retained the services of the New York
Branch (the "Branch" or the "Advisor") of Union Bank of Switzerland (the
"Bank"), as investment adviser. The Advisor has entered into an investment
sub-advisory agreement with UBS International Investment (the "Sub-
Advisor") with respect to The Master International Equity Portfolio.

Signature Financial Group, Inc. ("Signature") serves as the Funds'
administrator and Signature Broker-Dealer Services, Inc. (the
"Distributor"), a wholly-owned subsidiary of Signature, serves as the
principal underwriter and distributor of the Funds' shares.

No Fund has had any operations through [November 16, 1995] other than the
sale by each Fund to Signature of 2,500 shares for $25,000.

Organization costs incurred in connection with the organization and initial
registration of the Funds will be paid initially by the Advisor and
reimbursed by the Funds. Such organization costs have been deferred and
will be amortized ratably over a period of sixty months from

<PAGE>
<PAGE> F-3

the commencement of operations. The amount paid by each Fund on any
redemption by Signature of a Fund's initial shares will be reduced by the
pro rata portion of any unamortized organization expenses of the Fund. The
amount of such reduction attributable to the unamortized organization costs
of the corresponding Portfolio shall be contributed by the Fund to its
corresponding Portfolio.

Note 2 - Agreements

Signature has entered into an Administration Agreement with the Company
pursuant to which it has agreed to administer the day-to-day operations of
the Funds subject to the oversight of the Advisor. For the services
provided to the Funds, Signature will receive a fee, accrued daily and
payable monthly, at an annual rate of 0.05% of each Fund's first $100
million of average net assets and 0.025% of the next $100 million of such
assets. Signature will not be paid a fee on such assets in excess of $200
million.

The Distributor has entered into a Distribution Agreement with the Company.
The Distributer does not receive a fee pursuant to the terms of the
Distribution Agreement.

The Company has adopted a Shareholder Servicing Agreement (the
"Shareholders Agreement") pursuant to which it has agreed to pay the Branch
a monthly fee. Services to be provided may include, but are not limited
to, any of the following: establishing and/or maintaining shareholder
accounts and records, assisting investors seeking to purchase or redeem
Fund shares, providing performance information relating to the Fund and
responding to shareholder inquiries. Pursuant to the terms of the
Shareholders Agreement, the Funds will pay a fee, accrued daily and payable
monthly, at an annual rate of up to 0.25% of the average value of the
shareholder accounts so serviced.

The Advisor has voluntarily agreed to waive a portion of its fees and
reimburse a portion of its fees and reimburse a portion of Fund expenses to
the extent that the ordinary operating expenses of the Funds exceed the
following annual rates of each such Fund's average net assets:

Fund Expense Limitation

The UBS Bond Fund 0.80%
The UBS U.S. Equity Fund 0.90%
The UBS International Equity Fund 1.40%<PAGE>
<PAGE>

UBS Private Investor Funds, Inc.

The UBS Tax Exempt Bond Fund

Part C

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OTHER INFORMATION

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS

(a) Financial Statements:

Part B - UBS Private Investor Funds, Inc. (the "Company") Financial
Statements: Statement of Assets and Liabilities, at [ ],
1995.

(b) Exhibits:

*(1) --Articles of Incorporation
*(2) --Bylaws of the Company
*(3) --Not applicable
*(4) (A) --Specimen certificate evidencing shares of Common Stock,
$.001 par value, of the Company
**(4) (B) --Articles FIFTH, SIXTH, NINTH and TWELFTH of the
Company's Articles of Incorporation, relating to the
rights of stockholders
*(4) (C) --Selected portions of the Company's Bylaws, relating to
the rights of stockholders
*(5) --Form of Investment Advisory Agreement between the
Company and the New York Branch (the "Advisor") of Union
Bank of Switzerland, on behalf of The UBS Tax Exempt Bond
Fund (the "Fund")
*(6) (A) --Distribution Agreement between Signature Broker-Dealer
Services, Inc. and the Company, on behalf of the Fund
*(7) --Not applicable
*(8) --Custodian Agreement between the Company and the
Investors Bank and Trust Company, on behalf of the Fund
*(9) (A) --Administration Agreement between the Company and
Signature Financial Group, Inc. ("Signature"), on behalf
of the Fund
*(9) (B) --Transfer Agency and Service Agreement between the
Company and Investors Bank and Trust Company, on behalf
of the Fund
*(10) --Opinion and consent of Sullivan & Cromwell
*(11) --Opinion and consent of Price Waterhouse LLP
(12) --Not applicable
*(13) (A) --Subscription Agreement between the Company and Signature
with respect to the Company's initial capitalization
(14) --Not applicable
(15) --Not applicable
(16) --Not applicable
(17) --Not applicable
(18) --Not applicable

* To be filed by Amendment.

** The indicated portions of the Articles of Incorporation
are incorporated herein by reference to Exhibit (1)
filed with this Registration Statement.

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ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT

Immediately prior to the initial public offering of the shares of the
Company, Signature, a [______] corporation, will own all of the outstanding
shares of the Company's four current series: The UBS Bond Fund Series; The
UBS Tax Exempt Bond Fund Series; The UBS International Equity Fund Series;
and The UBS U.S. Equity Fund Series. [name controlling parent(s)] control
Signature and, therefore, indirectly control the Company.

ITEM 26. NUMBER OF HOLDERS OF SECURITIES

As of [____________________], 1996, the number of record holders of
each series of the Company was one. See Item 25.

ITEM 27. INDEMNIFICATION

State Law, Articles of Incorporation and Bylaws. It is the Company's
policy to indemnify its officers, directors, employees and other agents to
the maximum extent permitted by Section 2-418 of the Maryland General
Corporation Law, Articles SEVENTH and EIGHTH of the Company's Articles of
Incorporation and [Article VI of the Company's Bylaws] (each set forth
below).

Section 2-418 of the Maryland General Corporation Law reads as follows:

"2-418 INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS.

(a) In this section the following words have the meaning indicated.
(1) "Director" means any person who is or was a director of a
corporation and any person who, while a director of a corporation, is or
was serving at the request of the corporation as a director, officer,
partner, trustee, employee, or agent of another foreign or domestic
corporation, partnership, joint venture, trust, other enterprise, or
employee benefit plan.
(2) "Corporation" includes any domestic or foreign predecessor
entity of a corporation in a merger, consolidation, or other transaction in
which the predecessor's existence ceased upon consummation of the
transaction.
(3) "Expenses" include attorney's fees.
(4) "Official capacity" means the following:
(i) When used with respect to a director, the office of director in
the corporation; and
(ii) When used with respect to a person other than a director as
contemplated in subsection (j), the elective or appointive office in the
corporation held by the officer, or the employment or agency relationship
undertaken by the employee or agent in behalf of the corporation.
(iii) "Official capacity" does not include service for any other
foreign or domestic corporation or any partnership, joint venture, trust,
other enterprise, or employee benefit plan.
(5) "Party" includes a person who was, is, or is threatened to be
made a named defendant or respondent in a proceeding.
(6) "Proceeding" means any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative, or
investigative.
(b)(1) A corporation may indemnify any director made a party to any
proceeding by reason of service in that capacity unless it is established
that:
(i) the act or omission of the director was material to the matter
giving rise to the proceeding; and
1. Was committed in bad faith; or

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2. Was the result of active and deliberate dishonesty; or
(ii) The director actually received an improper personal benefit in
money, property, or services; or
(iii) In the case of any criminal proceeding, the director had
reasonable cause to believe that the act or omission was unlawful.
(2)(i) Indemnification may be against judgments, penalties, fines,
settlements, and reasonable expenses actually incurred by the director in
connection with the proceeding.
(ii) However, if the proceeding was one by or in the right of the
corporation, indemnification may not be made in respect of any proceeding
in which the director shall have been adjudged to be liable to the
corporation.
(3)(i) The termination of any proceeding by judgment, order, or
settlement does not create a presumption that the director did not meet the
requisite standard of conduct set forth in this subsection.
(ii) The termination of any proceeding by conviction, or a plea of
nolo contendere or its equivalent, or an entry of an order of probation
prior to judgment, creates a rebuttable presumption that the director did
not meet that standard of conduct.
(c) A director may not be indemnified under subsection (B) of this
section in respect of any proceeding charging improper personal benefit to
the director, whether or not involving action in the director's official
capacity, in which the director was adjudged to be liable on the basis that
personal benefit was improperly received.
(d) Unless limited by the charter:
(1) A director who has been successful, on the merits or otherwise,
in the defense of any proceeding referred to in subsection (B) of this
section shall be indemnified against reasonable expenses incurred by the
director in connection with the proceeding.
(2) A court of appropriate jurisdiction upon application of a
director and such notice as the court shall require, may order
indemnification in the following circumstances:
(i) If it determines a director is entitled to reimbursement under
paragraph (1) of this subsection, the court shall order indemnification, in
which case the director shall be entitled to recover the expenses of
securing such reimbursement; or
(ii) If it determines that the director is fairly and reasonably
entitled to indemnification in view of all the relevant circumstances,
whether or not the director has met the standards of conduct set forth in
subsection (b) of this section or has been adjudged liable under the
circumstances described in subsection (c) of this section, the court may
order such indemnification as the court shall deem proper. However,
indemnification with respect to any proceeding by or in the right of the
corporation or in which liability shall have been adjudged in the
circumstances described in subsection (c) shall be limited to expenses.
(3) A court of appropriate jurisdiction may be the same court in
which the proceeding involving the director's liability took place.
(e)(1) Indemnification under subsection (b) of this section may not
be made by the corporation unless authorized for a specific proceeding
after a determination has been made that indemnification of the director is
permissible in the circumstances because the director has met the standard
of conduct set forth in subsection (b) of this section.
(2) Such determination shall be made:
(i) By the board of directors by a majority vote of a quorum
consisting of directors not, at the time, parties to the proceeding, or, if
such a quorum cannot be obtained, then by a majority vote of a committee of
the board consisting solely of two or more directors not, at the time,
parties to such proceeding and who were duly designated to act in the
matter by a majority vote of the full board in which the designated
directors who are parties may participate;
(ii) By special legal counsel selected by the board of directors or a
committee of the board by vote as set forth in subparagraph (I) of this
paragraph, or, if the requisite quorum of the full board cannot be

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obtained therefor and the committee cannot be established, by a majority
vote of the full board in which director [SIC] who are parties may
participate; or
(iii) By the shareholders.
(3) Authorization of indemnification and determination as to
reasonableness of expenses shall be made in the same manner as the
determination that indemnification is permissible. However, if the
determination that indemnification is permissible is made by special legal
counsel, authorization of indemnification and determination as to
reasonableness of expenses shall be made in the manner specified in
subparagraph (ii) of paragraph (2) of this subsection for selection of such
counsel.
(4) Shares held by directors who are parties to the proceeding may
not be voted on the subject matter under this subsection.
(f)(1) Reasonable expenses incurred by a director who is a party to a
proceeding may be paid or reimbursed by the corporation in advance of the
final disposition of the proceeding upon receipt by the corporation of:
(i) A written affirmation by the director of the director's good
faith belief that the standard of conduct necessary for indemnification by
the corporation as authorized in this section has been met; and
(ii) A written undertaking by or on behalf of the director to repay
the amount if it shall ultimately be determined that the standard of
conduct has not been met.
(2) The undertaking required by subparagraph (ii) of paragraph (1) of
this subsection shall be an unlimited general obligation of the director
but need not be secured and may be accepted without reference to financial
ability to make the repayment.
(3) Payments under this subsection shall be made as provided by the
charter, bylaws, or contract or as specified in subsection (e) of this
section.
(g) The indemnification and advancement of expenses provided or
authorized by this section may not be deemed exclusive of any other rights,
by indemnification or otherwise, to which a director may be entitled under
the charter, the bylaws, a resolution of shareholders or directors, an
agreement or otherwise, both as to action in an official capacity and as to
action in another capacity while holding such office.
(h) This section does not limit the corporation's power to pay or
reimburse expenses incurred by a director in connection with an appearance
as a witness in a proceeding at a time when the director has not been made
a named defendant or respondent in the proceeding.
(i) For purposes of this section:
(1) The corporation shall be deemed to have requested a director to
serve an employee benefit plan where the performance of the director's
duties to the corporation also imposes duties on, or otherwise involves
services by, the director to the plan or participants or beneficiaries of
the plan;
(2) Excise taxes assessed on a director with respect to an employee
benefit plan pursuant to applicable law shall be deemed fines; and
(3) Action taken or omitted by the director with respect to an
employee benefit plan in the performance of the director's duties for a
purpose reasonably believed by the director to be in the interest of the
participants and beneficiaries of the plan shall be deemed to be for a
purpose which is not opposed to the best interests of the corporation.
(j) Unless limited by the charter:
(1) An officer of the corporation shall be indemnified as and to the
extent provided in subsection (d) of this section for a director and shall
be entitled, to the same extent as a director, to seek indemnification
pursuant to the provisions of subsection (d);
(2) A corporation may indemnify and advance expenses to an officer,
employee, or agent of the corporation to the same extent that it may
indemnify directors under this section; and
(3) A corporation, in addition, may indemnify and advance expenses to
an officer, employee, or agent who is not a director to such further
extent, consistent with law, as may be provided by its charter, bylaws,
general or specific action of its board of directors or contract.

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(k)(1) A corporation may purchase and maintain insurance on behalf of
any person who is or was a director, officer, employee, or agent of the
corporation, or who, while a director, officer, employee, or agent of the
corporation, is or was serving at the request of the corporation as a
director, officer, partner, trustee, employee, or agent of another foreign
or domestic corporation, partnership, joint venture, trust, other
enterprise, or employee benefit plan against any liability asserted against
and incurred by such person in any such capacity or arising out of such
person's position, whether or not the corporation would have the power to
indemnify against liability under the provisions of this section.
(2) A corporation may provide similar protection, including a trust
fund, letter of credit, or surety bond, not inconsistent with this section.
(3) The insurance or similar protection may be provided by a
subsidiary or an affiliate of the corporation.
(l) Any indemnification of, or advance of expenses to, a director in
accordance with this section, if arising out of a proceeding by or in the
right of the corporation, shall be reported in writing to the shareholders
with the notice of the next stockholders' meeting or prior to the meeting."

Article SEVENTH of the Company's Articles of Incorporation provides:

"To the fullest extent permitted by Maryland statutory or
decisional law, as amended or interpreted, and the Investment Company
Act of 1940, no director or officer of the Corporation shall be
personally liable to the Corporation or its stockholders for money
damages; provided, however, that nothing herein shall be construed to
protect any director or officer of the Corporation against any
liability to the Corporation or its security holders to which such
person would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of such person's office. No amendment of the
Corporation's charter or repeal of any of its provisions shall limit
or eliminate the limitation of liability provided to directors and
officers hereunder with respect to any act or omission occurring
prior to such amendment or repeal."

Article EIGHTH of the Company's Articles of Incorporation provides:

"The Corporation shall indemnify (i) its directors and
officers, whether serving the Corporation or at its request any other
entity, to the full extent required or permitted by Maryland
statutory and decisional law, now or hereafter in force, including
the advance of expenses under the procedures and to the full extent
permitted by law, and (ii) other employees and agents to such extent
as shall be authorized by the Board of Directors or the Bylaws and as
permitted by law. Nothing contained herein shall be construed to
protect any director, officer, employee or agent of the Corporation
against any liability to the Corporation or its security holders to
which such person would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of such person's office. The
foregoing rights of indemnification shall not be exclusive of any
other rights to which those seeking indemnification may be entitled.
The Board of Directors may take such action as is necessary to carry
out these indemnification provisions and is expressly empowered to
adopt, approve and amend from time to time such Bylaws, resolutions
or contracts implementing such provisions or such further
indemnification arrangements as may be permitted by law. No
amendment of the Corporation's charter or repeal of any of its
provisions shall limit or eliminate the right of indemnification
provided hereunder with respect to acts or omissions occurring prior
to such amendment or repeal."

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Article SIXTH of the Company's Bylaws provides:

[SECTION 1. Indemnification of Directors and Officers. The
Corporation shall indemnify to the fullest extent permitted by law
(including the Investment Company Act of 1940) any person made or
threatened to be made a party to any action, suit or proceeding,
whether criminal, civil, administrative or investigative, by reason
of the fact that such person or such person's testator or intestate
is or was a director, officer or employee of the Corporation or
serves or served at the request of the Corporation any other
enterprise as a director, officer or employee. To the fullest extent
permitted by law (including the Investment Company Act of 1940),
expenses incurred by any such person in defending any such action,
suit or proceeding shall be paid or reimbursed by the Corporation
promptly upon receipt by it of an undertaking of such person to repay
such expenses if it shall ultimately be determined that such person
is not entitled to be indemnified by the Corporation. The rights
provided to any person by this Article shall be enforceable against
the Corporation by such person who shall be presumed to have relied
upon it in serving or continuing to serve as a director, officer or
employee as provided above. No amendment of this Article shall
impair the rights of any person arising at any time with respect to
events occurring prior to such amendment. For purposes of this
Article, the term "Corporation" shall include any predecessor of the
Corporation and any constituent corporation (including any
constituent of a constituent) absorbed by the Corporation in a
consolidation or merger; the term "other enterprise" shall include
any corporation, partnership, joint venture, trust or employee
benefit plan; service "at the request of the Corporation" shall
include service as a director, officer or employee of the Corporation
which imposes duties on, or involves services by, such director,
officer or employee with respect to an employee benefit plan, its
participants or beneficiaries; any excise taxes assessed on a person
with respect to an employee benefit plan shall be deemed to be
indemnifiable expenses; and action by a person with respect to any
employee benefit plan which such person reasonably believes to be in
the interest of the participants and beneficiaries of such plan shall
be deemed to be action not opposed to the best interests of the
Corporation.]

ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER

See "Investment Advisor" in the Statement of Additional Information.
Information as to the directors and officers of the Advisor is included in
its form ADV filed with the Securities and Exchange Commission ("SEC") and
is incorporated herein by reference thereto.

ITEM 29. PRINCIPAL UNDERWRITERS

(a) Signature Broker-Dealer Services, Inc. ("Signature B-D") is the
principal underwriter of the shares of The UBS Bond Fund Series, The UBS
Tax Exempt Bond Fund Series, The UBS U.S. Equity Fund Series and The UBS
International Equity Fund Series. Signature B-D also acts as a principal
underwriter and distributor for the following investment companies: [to
come].

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(b)

NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES
BUSINESS ADDRESS WITH UNDERWRITER WITH REGISTRANT

[to come]

ITEM 30. LOCATION OF ACCOUNTS AND RECORDS

[All accounts, books and other documents required to be maintained by
Section 31(a) of the 1940 Act and the Rules thereunder will be maintained
at the offices of Investors Bank and Trust Company, 89 South Street,
Boston, Massachusetts 02111.]

ITEM 31. MANAGEMENT SERVICES

Not applicable.

ITEM 32. UNDERTAKINGS

The Company undertakes that it will file:

(a) an amendment to the registration statement with certified
financial statements showing the initial capital received before
accepting subscriptions from any persons in excess of 25 if the
Company proposes to raise its initial capital pursuant to Section
14(a)(3) of the 1940 Act (15 U.S.C. 80a-14(a)(3)); and

(b) a post-effective amendment, using financial statements,
which need not be certified, within four to six months from the
effective date of the Company's registration statement under the
Securities Act of 1933, as amended (the "Act").

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

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SIGNATURES

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933 AND THE
INVESTMENT COMPANY ACT OF 1940, THE REGISTRANT HAS DULY CAUSED THIS
REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THERETO DULY AUTHORIZED, IN THE CITY AND STATE OF NEW YORK, ON THE 17TH DAY
OF NOVEMBER, 1995.

UBS PRIVATE INVESTOR FUNDS, INC.

By: /s/ Stephen K. West
Stephen K. West
President

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSON IN THE
CAPACITIES AND ON THE DATE INDICATED.

NAME TITLE DATE

/s/ Stephen K. West
STEPHEN K. WEST Director and President November 17, 1995
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UBS PRIVATE INVESTOR FUNDS, INC.

THE UBS BOND FUND
THE UBS U.S. EQUITY FUND
THE UBS INTERNATIONAL EQUITY FUND

PART C

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OTHER INFORMATION

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS

(a) Financial Statements:

Part B - UBS Private Investor Funds, Inc. (the "Company") Financial
Statements: Statement of Assets and Liabilities, at [ ], 1995.

(b) Exhibits:

*(1) (A) --Articles of Incorporation of the Company
*(1) (B) --Declaration of Trust of the [Master Portfolio] Trust
(the "Trust")
*(2) (A) --Bylaws of the Company
*(2) (B) --Bylaws of the Trust
*(3) --Not applicable
*(4) (A) --Specimen certificate evidencing shares of Common Stock,
$.001 par value, of the Company
**(4) (B) --Articles FIFTH, SIXTH, NINTH and TWELFTH of the
Company's Articles of Incorporation, relating to the
rights of stockholders
*(4) (C) --Selected portions of the Company's Bylaws, relating to
the rights of stockholders
*(5) (A) --Form of Investment Advisory Agreement between the Trust
and the New York Branch (the "Advisor") of Union Bank of
Switzerland (the "Bank") on behalf of The Master Bond
Portfolio, The Master U.S. Equity Portfolio and The
Master International Equity Portfolio (each a "Portfolio"
and together, the "Portfolios")
*(5) (B) --Form of Investment Sub-Advisory Agreement between the
Advisor and UBS International Investment (the "Sub-
Advisor")
*(6) (A) --Distribution Agreement between the Company and Signature
Broker-Dealer Services, Inc. on behalf of The UBS Bond
Fund, The UBS U.S. Equity Fund and The UBS International
Equity Fund (each a "Fund" and collectively, the "Funds")
*(7) --Not applicable
*(8) (A) --Custodian Agreement between the Company and Investors
Bank and Trust Company on behalf of the Funds
*(8) (B) --Custodian Agreement between the Trust and Investors Bank
and Trust Company on behalf of the Portfolios
*(9) (A) --Administration Agreement between the Company and
Signature Financial Group, Inc. on behalf of the Funds
*(9) (B) --Administration Agreement between the Trust and Signature
Financial Group, Inc. on behalf of the Portfolios
*(9) (C) --Transfer Agency and Service Agreement between the
Company and Investors Bank and Trust Company on behalf of
the Funds

* To be filed by Amendment.

** The indicated portions of the Articles of Incorporation
are incorporated herein by reference from Exhibit (1)
filed with this Registration Statement.

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*(9) (D) --Transfer Agency and Service Agreement between the Trust
and Investors Bank and Trust Company on behalf of the
Portfolios
*(10) --Opinion and consent of Sullivan & Cromwell
*(11) --Opinion and consent of Price Waterhouse LLP
(12) --Not applicable
*(13) --Subscription Agreement between the Company and Signature
Financial Group, Inc. with respect to the Company's
initial capitalization
(14) --Not applicable
(15) --Not applicable
(16) --Not applicable
(17) --Not applicable
(18) --Not applicable

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ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT

Immediately prior to the initial public offering of the shares of the
Company, Signature Financial Group, Inc. ("Signature"), a [______]
corporation, will own all of the outstanding shares of the Company's four
current series: The UBS Bond Fund Series; The UBS Tax Exempt Bond Fund
Series; The UBS International Equity Fund Series; and The UBS U.S. Equity
Fund Series. [name controlling parent(s)] control Signature and,
therefore, indirectly control the Company.

ITEM 26. NUMBER OF HOLDERS OF SECURITIES

As of [____________________], 1996, the number of record holders of
each series of the Company was one. See Item 25.

ITEM 27. INDEMNIFICATION

Section 2-418 of the Maryland General Corporation Law reads as follows:

"2-418 INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS.

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1. Was committed in bad faith; or
2. Was the result of active and deliberate dishonesty; or
(ii) The director actually received an improper personal benefit in
money, property, or services; or
(iii) In the case of any criminal proceeding, the director had
reasonable cause to believe that the act or omission was unlawful.
(2)(i) Indemnification may be against judgments, penalties, fines,
settlements, and reasonable expenses actually incurred by the director in
connection with the proceeding.
(ii) However, if the proceeding was one by or in the right of the
corporation, indemnification may not be made in respect of any proceeding
in which the director shall have been adjudged to be liable to the
corporation.
(3)(i) The termination of any proceeding by judgment, order, or
settlement does not create a presumption that the director did not meet the
requisite standard of conduct set forth in this subsection.
(ii) The termination of any proceeding by conviction, or a plea of
nolo contendere or its equivalent, or an entry of an order of probation
prior to judgment, creates a rebuttable presumption that the director did
not meet that standard of conduct.
(c) A director may not be indemnified under subsection (B) of this
section in respect of any proceeding charging improper personal benefit to
the director, whether or not involving action in the director's official
capacity, in which the director was adjudged to be liable on the basis that
personal benefit was improperly received.
(d) Unless limited by the charter:
(1) A director who has been successful, on the merits or otherwise,
in the defense of any proceeding referred to in subsection (B) of this
section shall be indemnified against reasonable expenses incurred by the
director in connection with the proceeding.
(2) A court of appropriate jurisdiction upon application of a
director and such notice as the court shall require, may order
indemnification in the following circumstances:
(i) If it determines a director is entitled to reimbursement under
paragraph (1) of this subsection, the court shall order indemnification, in
which case the director shall be entitled to recover the expenses of
securing such reimbursement; or
(ii) If it determines that the director is fairly and reasonably
entitled to indemnification in view of all the relevant circumstances,
whether or not the director has met the standards of conduct set forth in
subsection (b) of this section or has been adjudged liable under the
circumstances described in subsection (c) of this section, the court may
order such indemnification as the court shall deem proper. However,
indemnification with respect to any proceeding by or in the right of the
corporation or in which liability shall have been adjudged in the
circumstances described in subsection (c) shall be limited to expenses.
(3) A court of appropriate jurisdiction may be the same court in
which the proceeding involving the director's liability took place.
(e)(1) Indemnification under subsection (b) of this section may not
be made by the corporation unless authorized for a specific proceeding
after a determination has been made that indemnification of the director is
permissible in the circumstances because the director has met the standard
of conduct set forth in subsection (b) of this section.
(2) Such determination shall be made:
(i) By the board of directors by a majority vote of a quorum
consisting of directors not, at the time, parties to the proceeding, or, if
such a quorum cannot be obtained, then by a majority vote of a committee of
the board consisting solely of two or more directors not, at the time,
parties to such proceeding and who were duly designated to act in the
matter by a majority vote of the full board in which the designated
directors who are parties may participate;

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(ii) By special legal counsel selected by the board of directors or a
committee of the board by vote as set forth in subparagraph (I) of this
paragraph, or, if the requisite quorum of the full board cannot be obtained
therefor and the committee cannot be established, by a majority vote of the
full board in which director [sic] who are parties may participate; or
(iii) By the shareholders.
(3) Authorization of indemnification and determination as to
reasonableness of expenses shall be made in the same manner as the
determination that indemnification is permissible. However, if the
determination that indemnification is permissible is made by special legal
counsel, authorization of indemnification and determination as to
reasonableness of expenses shall be made in the manner specified in
subparagraph (ii) of paragraph (2) of this subsection for selection of such
counsel.
(4) Shares held by directors who are parties to the proceeding may
not be voted on the subject matter under this subsection.
(f)(1) Reasonable expenses incurred by a director who is a party to a
proceeding may be paid or reimbursed by the corporation in advance of the
final disposition of the proceeding upon receipt by the corporation of:
(i) A written affirmation by the director of the director's good
faith belief that the standard of conduct necessary for indemnification by
the corporation as authorized in this section has been met; and
(ii) A written undertaking by or on behalf of the director to repay
the amount if it shall ultimately be determined that the standard of
conduct has not been met.
(2) The undertaking required by subparagraph (ii) of paragraph (1) of
this subsection shall be an unlimited general obligation of the director
but need not be secured and may be accepted without reference to financial
ability to make the repayment.
(3) Payments under this subsection shall be made as provided by the
charter, bylaws, or contract or as specified in subsection (e) of this
section.
(g) The indemnification and advancement of expenses provided or
authorized by this section may not be deemed exclusive of any other rights,
by indemnification or otherwise, to which a director may be entitled under
the charter, the bylaws, a resolution of shareholders or directors, an
agreement or otherwise, both as to action in an official capacity and as to
action in another capacity while holding such office.
(h) This section does not limit the corporation's power to pay or
reimburse expenses incurred by a director in connection with an appearance
as a witness in a proceeding at a time when the director has not been made
a named defendant or respondent in the proceeding.
(i) For purposes of this section:
(1) The corporation shall be deemed to have requested a director to
serve an employee benefit plan where the performance of the director's
duties to the corporation also imposes duties on, or otherwise involves
services by, the director to the plan or participants or beneficiaries of
the plan;
(2) Excise taxes assessed on a director with respect to an employee
benefit plan pursuant to applicable law shall be deemed fines; and
(3) Action taken or omitted by the director with respect to an
employee benefit plan in the performance of the director's duties for a
purpose reasonably believed by the director to be in the interest of the
participants and beneficiaries of the plan shall be deemed to be for a
purpose which is not opposed to the best interests of the corporation.
(j) Unless limited by the charter:
(1) An officer of the corporation shall be indemnified as and to the
extent provided in subsection (d) of this section for a director and shall
be entitled, to the same extent as a director, to seek indemnification
pursuant to the provisions of subsection (d);
(2) A corporation may indemnify and advance expenses to an officer,
employee, or agent of the corporation to the same extent that it may
indemnify directors under this section; and

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(3) A corporation, in addition, may indemnify and advance expenses to
an officer, employee, or agent who is not a director to such further
extent, consistent with law, as may be provided by its charter, bylaws,
general or specific action of its board of directors or contract.
(k)(1) A corporation may purchase and maintain insurance on behalf of
any person who is or was a director, officer, employee, or agent of the
corporation, or who, while a director, officer, employee, or agent of the
corporation, is or was serving at the request of the corporation as a
director, officer, partner, trustee, employee, or agent of another foreign
or domestic corporation, partnership, joint venture, trust, other
enterprise, or employee benefit plan against any liability asserted against
and incurred by such person in any such capacity or arising out of such
person's position, whether or not the corporation would have the power to
indemnify against liability under the provisions of this section.
(2) A corporation may provide similar protection, including a trust
fund, letter of credit, or surety bond, not inconsistent with this section.
(3) The insurance or similar protection may be provided by a
subsidiary or an affiliate of the corporation.
(l) Any indemnification of, or advance of expenses to, a director in
accordance with this section, if arising out of a proceeding by or in the
right of the corporation, shall be reported in writing to the shareholders
with the notice of the next stockholders' meeting or prior to the meeting."

Article SEVENTH of the Company's Articles of Incorporation provides:

Article EIGHTH of the Company's Articles of Incorporation provides:

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amendment of the Corporation's charter or repeal of any of its
provisions shall limit or eliminate the right of indemnification
provided hereunder with respect to acts or omissions occurring prior
to such amendment or repeal."

Article SIXTH of the Company's Bylaws provides:

ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER

See "Investment Advisor" in the Statement of Additional Information.
Information as to the directors and officers of the Advisor [and the Sub-
Advisor] are included in their forms ADV filed with the Securities and
Exchange Commission (the "SEC") and is incorporated herein by reference
thereto.

ITEM 29. PRINCIPAL UNDERWRITERS

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(b)

NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES
BUSINESS ADDRESS WITH UNDERWRITER WITH REGISTRANT

[to come]

ITEM 30. LOCATION OF ACCOUNTS AND RECORDS

ITEM 31. MANAGEMENT SERVICES

Not applicable.

ITEM 32. UNDERTAKINGS

The Company undertakes that it will file:

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SIGNATURES

UBS PRIVATE INVESTOR FUNDS, INC.

By: /s/ Stephen K. West
Stephen K. West
President

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSON IN THE
CAPACITIES AND ON THE DATE INDICATED.

NAME TITLE DATE

/s/ Stephen K. West
Stephen K. West Director and President November 17, 1995