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UBS
INTERNATIONAL
EQUITY
FUND
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UBS
Private Investor
Funds, Inc.
Semi-Annual Report
June 30, 1996
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UBS Private Investor Funds, Inc.
Chairman's Letter
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Dear Shareholder,
Thank you for your investment in the UBS International Equity Fund, which is
part of the UBS Private Investor Funds.
We are pleased to provide you with the Fund's semi-annual report for the period
ended June 30, 1996. This report contains a letter from the portfolio manager
discussing the performance of the Fund during the period April 2, 1996
(commencement of operations) through June 30, 1996 including a market overview.
In addition, it includes a complete set of unaudited financial statements as
well as a schedule of investments for the Fund.
The UBS Private Investor Funds are an integral part of the asset allocation
service provided by The Private Bank* of Union Bank of Switzerland, the largest
bank in Switzerland. The Funds provide investment opportunities in U.S. and
international securities markets to enhance investment performance, diversify
risk and preserve capital within your investment objectives.
The UBS Private Investor Funds bring you:
The expertise of The Private Bank's professional money managers
Global investment perspective and knowledge
A high priority on financial stability and preservation of wealth
To learn more about the other UBS Private Investor Funds, please call (888)
UBS-FUND. You will be provided with a copy of the prospectus which contains more
complete information including charges and expenses. Please read it carefully
before investing.
We appreciate your confidence in the UBS Private Investor Funds.
Sincerely,
HANSPETER LOCHMEIER
Dr. HansPeter Lochmeier
Chairman of the Board
UBS Private Investor Funds, Inc.
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* 'The Private Bank', as used in this document, refers to Union Bank of
Switzerland, New York Branch.
This semi-annual report must be accompanied or preceded by the Fund's
prospectus. Please request a copy of the prospectus, which contains more
complete information including charges and expenses, and read it carefully
before investing.
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UBS Private Investor Funds, Inc.
Fund Commentary
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PORTFOLIO PERFORMANCE
The UBS International Equity Fund achieved a total return of 1.32% for the
period April 2, 1996 (commencement of operations) through June 30, 1996,
compared to the 1.65% rise in the MSCI EAFE index for the same period. This
result was due partly to high dealing costs as a heavy flow of new money came
into the Fund. Our major problem for the period was stock selection in the UK.
Two examples are British Gas where regulatory issues clouded their prospects and
BTR, who disappointed the market with the results of one of its overseas
divisions.
MARKET OVERVIEW
Overall, international equity markets were up modestly in the second quarter. In
dollar terms, those returns were reduced as the dollar rose against other
currencies.
In the UK, the economy seems to have come full circle in the last 12 months from
export-led growth to consumer-led growth. The Government, concerned more about
the former than the latter, cut interest rates by 0.25% to 5.75%. UK small
companies performed particularly well, rising by more than 14%. The most notable
company news was the aggressive Ofgas review that severely affected the British
Gas share price and caused a ripple through the utility sector.
Spain and Italy were the best of the European market performers in the wake of
general elections which established governments perceived to be committed to
tackling some of their inherent structural problems. The Spanish case looks more
plausible and signs are appearing that a massive privatization will ensue.
Unfortunately, we have heard it all before in Italy (many times!).
In Japan an unusually strong 12.7% first-quarter growth rate served to boost
stocks benefiting from economic recovery. At the same time, the worsening
outlook for interest rates coupled with the massive provisions taken against bad
debts began to take a toll on the banking sector. The huge losses incurred by
Sumitomo in their copper trading activities cast doubt on the competence of
corporate Japan. Foreign ownership of the market continued to rise and now
stands at an all-time high of around 10%.
Performance in other parts of the Far East was dominated by measures introduced
by the Singaporean government to curb property speculation. These translated
into a 7% fall in the market, the worst return in the MSCI EAFE universe. The
collapse in copper prices was unfavorable for the Australian resource sector.
ECONOMIC FORECAST
Internationally, we expect continued economic recovery. Both interest rates and
inflation should begin to pick up. We remain cautious about equity valuations,
which are stretched and increasingly vulnerable to a correction.
Looking at the UK, with the election drawing nearer, the question is where an
incoming labor government might find additional tax revenues. It seems likely
that the robust health of the corporate sector will attract their attention, and
there is a threat of a reduction in the tax credit on dividends.
On the European continent, many company managements are putting 'shareholder
returns' higher on the list of responsibilities. In France and Germany,
managements with a greater commitment to improve corporate returns have been
installed. In Germany last year, five major companies created funded pension
schemes, two moved to US GAAP. Two, including the influential Deutsche Bank,
introduced stock options (previously considered unlawful in Germany) and several
expressed a desire to repurchase shares, (which is currently forbidden). In
Sweden, proposals to allow stock buybacks are before Parliament. France saw
small shareholders acting as a group against incumbent management in several
situations and Chargeurs created the first French de-merger as it separated the
media business from the
2
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UBS Private Investor Funds, Inc.
Fund Commentary
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textiles. The share option scheme at Daimler, the hostile bid for Docks de
France and the restructuring plan at Moulinex are some other recent examples of
renewed attention to shareholder returns.
Despite the record high foreign ownership of equities, Japan, in our view,
suffers from two problems: high valuations and insufficient pressure on
management to enhance shareholder returns. Domestic cyclical companies will
clearly benefit from the current economic upturn but it is probable that
underperformance in the banking sector has only just begun. Elsewhere in the Far
East, valuations look relatively compelling, particularly in Australia,
following the election of a liberal government. However, the smallest of the
'tiger' economies offer the most attractive investment opportunities.
Robin Apps
Portfolio Manager
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The Fund is not insured by the FDIC and is not a deposit, obligation of, or
guaranteed by Union Bank of Switzerland. The Fund is subject to investment
risks, including possible loss of principal amount invested.
Shares of the Fund are distributed by Signature Broker-Dealer Services, Inc.
which is not affiliated with Union Bank of Switzerland.
Unlike other mutual funds, the Fund seeks to achieve its investment objective by
investing all of its investable assets in UBS Investor Portfolios Trust -- UBS
International Equity Portfolio (the 'Portfolio') which is a separate fund with
an identical investment objective.
Union Bank of Switzerland is voluntarily waiving all shareholder servicing fees
for the Fund and reimbursing a portion of the Fund's expenses. Union Bank of
Switzerland is also waiving a portion of its advisory fees for the Portfolio. If
Union Bank of Switzerland had not waived fees and reimbursed expenses, total
return would have been lower. Past performance is not a guarantee of future
results. Investment return and principal value of an investment will fluctuate
so that an investor's shares, when redeemed, may be worth more or less than
their original cost.
The MSCI EAFE Index (Morgan Stanley Capital International -- Europe, Asia, Far
East Index) is an unmanaged index used to portray the pattern of common stock
price movement in Europe, Australia and the Far East.
3
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UBS International Equity Fund
Statement of Assets and Liabilities June 30, 1996 (Unaudited)
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<TABLE>
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ASSETS:
Investment in UBS Investor Portfolios Trust -- UBS International Equity Portfolio,
at value.......................................................................... $12,143,829
Tax reclaim receivable.............................................................. 21,595
Receivable from Adviser............................................................. 9,604
Deferred organization expenses and other assets..................................... 70,954
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Total Assets.............................................................. 12,245,982
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LIABILITIES:
Administrative services fees payable................................................ 1,072
Directors' fees payable............................................................. 163
Organization expenses payable....................................................... 38,224
Other accrued expenses.............................................................. 18,958
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Total Liabilities......................................................... 58,417
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NET ASSETS.......................................................................... $12,187,565
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SHARES OUTSTANDING ($0.001 par value, 10 million shares authorized)................. 120,292
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NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER SHARE...................... $101.32
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COMPOSITION OF NET ASSETS:
Shares of common stock, at par...................................................... $ 120
Additional paid-in capital.......................................................... 12,087,783
Accumulated undistributed net investment income..................................... 102,212
Net unrealized depreciation of investments.......................................... (12,917)
Accumulated undistributed net realized gains........................................ 10,367
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Net Assets................................................................ $12,187,565
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</TABLE>
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See notes to financial statements.
4
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UBS International Equity Fund
Statement of Operations
For the Period April 2, 1996 (Commencement of Operations) through June 30, 1996
(Unaudited)
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<TABLE>
<S> <C> <C>
INVESTMENT INCOME
Investment Income and Expenses allocated from UBS Investor Portfolios
Trust -- UBS International Equity Portfolio
Dividends (net of foreign withholding tax of $5,639)................. $105,750
Interest............................................................. 26,458
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Investment income.................................................... 132,208
Total expenses....................................................... $36,150
Less: Fee waiver..................................................... (11,839)
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Net expenses......................................................... 24,311
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Net Investment Income from UBS Investor Portfolios Trust -- UBS
International Equity Portfolio.......................................... 107,897
EXPENSES:
Shareholder service fees............................................. 5,360
Administrative services fees......................................... 1,072
Reports to shareholders expense...................................... 5,890
Transfer agent fees and expenses..................................... 5,178
Audit fees........................................................... 3,698
Amortization of organization expenses................................ 3,576
Fund accounting fees................................................. 2,630
Legal fees........................................................... 2,466
Directors' fees...................................................... 1,973
Custodian fees and expenses.......................................... 1,776
Registration fees.................................................... 905
Miscellaneous expenses............................................... 1,452
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Total expenses.................................................. 35,976
Less: Fee waiver and expense reimbursements..................... (30,291)
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Net expenses.................................................... 5,685
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Net investment income..................................................... 102,212
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NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS FROM UBS INVESTOR
PORTFOLIOS TRUST -- UBS INTERNATIONAL EQUITY PORTFOLIO
Net realized gain on securities transactions.............................. 8,786
Net realized gain on foreign currency transactions........................ 1,581
Net change in unrealized depreciation of investments...................... (14,065)
Net change in unrealized appreciation of foreign currency contracts and
translations............................................................ 1,148
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Net realized and unrealized loss from UBS Investor Portfolios Trust -- UBS
International Equity Portfolio.......................................... (2,550)
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NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS...................... $ 99,662
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</TABLE>
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See notes to financial statements.
5
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UBS International Equity Fund
Statement of Changes in Net Assets
For the Period April 2, 1996 (Commencement of Operations) through June 30, 1996
(Unaudited)
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<TABLE>
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INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment income.................................................................. $ 102,212
Net realized gain on securities and foreign currency transactions...................... 10,367
Net change in unrealized depreciation of investments, foreign currency contracts and
foreign currency translations........................................................ (12,917)
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Net increase in net assets resulting from operations................................... 99,662
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TRANSACTIONS IN SHARES OF COMMON STOCK:
Net proceeds from sale of shares....................................................... 12,071,331
Cost of shares redeemed................................................................ (8,428)
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Net increase in net assets from transactions in shares of common stock................. 12,062,903
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NET INCREASE IN NET ASSETS............................................................. 12,162,565
NET ASSETS:
Beginning of period.................................................................... 25,000
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End of period (including undistributed net investment income of $102,212).............. $12,187,565
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</TABLE>
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See notes to financial statements.
6
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UBS International Equity Fund
Financial Highlights
For the Period April 2, 1996 (Commencement of Operations) through June 30, 1996
(Unaudited)
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FOR A SHARE OUTSTANDING FOR THE PERIOD
Net asset value, beginning of period.......................................... $100.00
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Income from Investment Operations:
Net investment income.................................................... 1.35
Net realized and unrealized loss on investments.......................... (0.03)
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Total income from investment operations.................................. 1.32
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Net asset value, end of period................................................ $101.32
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Total return.................................................................. 1.32%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)................................ $12,188
Ratio of expenses to average net assets(1)............................... 1.40%(2)
Ratio of net investment income to average net assets(1).................. 4.77%(2)
</TABLE>
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(1) Includes the Fund's share of UBS Investor Portfolios Trust -- UBS
International Equity Portfolio expenses and net of fee waivers and expense
reimbursements. Such fee waivers and expense reimbursements had the effect of
reducing the ratio of expenses to average net assets and increasing the ratio of
net investment income to average net assets by 1.97% (annualized).
(2) Annualized.
(3) Not annualized.
Note: Per share amounts have been calculated using the average share method.
See notes to financial statements.
7
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UBS International Equity Fund
Notes to Financial Statements June 30, 1996 (Unaudited)
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1. GENERAL
UBS International Equity Fund (the 'Fund') is a diversified, no-load mutual fund
registered under the Investment Company Act of 1940. The Fund is a series of UBS
Private Investor Funds, Inc. (the 'Company'), an open-end management investment
company organized as a corporation under Maryland law. At June 30, 1996, the
Company included two other funds, UBS Bond Fund and UBS U.S. Equity Fund.
The Fund seeks to achieve its investment objective by investing substantially
all of its investable assets in the UBS International Equity Portfolio of UBS
Investor Portfolios Trust (the 'Portfolio'), an open-end management investment
company that has the same investment objective as that of the Fund. The value of
the Fund's investment in the Portfolio included in the accompanying Statement of
Assets and Liabilities reflects the Fund's proportionate beneficial interest in
the net assets of the Portfolio (30.6% at June 30, 1996).
Signature Broker-Dealer Services, Inc. ('Signature'), a wholly-owned subsidiary
of Signature Financial Group, Inc., serves as the Fund's administrator and
distributor. Union Bank of Switzerland, New York Branch ('UBS') serves as the
fund services agent to the Fund.
The financial statements of the Portfolio, including its Schedule of
Investments, are included elsewhere within this report and should be read in
conjunction with the Fund's financial statements.
2. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates. Significant accounting policies
followed by the Fund are as follows:
A. INVESTMENT VALUATION -- Valuation of securities by the Portfolio is discussed
in Note 2A of the Portfolio's Notes to Financial Statements which are included
elsewhere in this report.
B. INVESTMENT INCOME, EXPENSES AND REALIZED AND UNREALIZED GAINS AND
LOSSES -- The Fund records its share of the investment income, expenses and
realized and unrealized gains and losses recorded by the Portfolio on a daily
basis. The investment income, expenses and realized and unrealized gains and
losses are allocated daily to investors of the Portfolio based upon the amount
of their investment in the Portfolio.
C. FEDERAL TAXES -- The Fund's policy is to comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies, including
the requirement to distribute substantially all of its taxable income, including
any net realized capital gains on investment transactions, to its shareholders.
Accordingly, no provision for federal income or excise taxes is necessary.
D. DIVIDENDS AND DISTRIBUTIONS -- The Fund declares dividends from net
investment income to shareholders of record on the day of declaration. Such
dividends are declared and paid annually. Net realized gains, if any, will be
distributed at least annually. However, to the extent that net realized gains of
the Fund can be reduced by capital loss carryovers, such gains will not be
distributed. Dividends and distributions are recorded on the ex-dividend date.
The amounts of dividends from net investment income and distributions from net
realized gains are determined in accordance with federal income tax regulations
which may differ from generally accepted accounting principles. These 'book/tax'
differences are either considered temporary or permanent in nature. To the
extent these differences are permanent in nature, such amounts are reclassified
within the composition of net assets based upon their federal tax-basis
treatment; temporary differences do not require reclassification.
8
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UBS International Equity Fund
Notes to Financial Statements June 30, 1996 (Unaudited)
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E. DEFERRED ORGANIZATION EXPENSES -- Expenses incurred by the Fund in connection
with its organization have been deferred and are being amortized on a straight
line basis over five years from the Fund's commencement of operations (April 2,
1996).
F. OTHER -- The Fund bears all costs of its operations other than expenses
specifically assumed by Signature and UBS. Expenses incurred by the Company on
behalf of any two or more funds are allocated in proportion to the net assets of
each fund, except when allocations of direct expenses to each fund can otherwise
be made fairly. Expenses directly attributable to the Fund are charged directly
to the Fund.
3. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
A. ADMINISTRATIVE SERVICES AGREEMENT -- Under the terms of an Administrative
Services Agreement with the Company, Signature provides overall administrative
services and general office facilities. As compensation for such services, the
Company has agreed to pay Signature a fee, accrued daily and payable monthly, at
an annual rate of 0.05% of the Fund's first $100 million average daily net
assets and 0.025% of the next $100 million average daily net assets. Signature
does not receive a fee on average daily net assets in excess of $200 million.
For the period April 2, 1996 (commencement of operations) through June 30, 1996,
the administrative services fee amounted to $1,072.
B. DISTRIBUTION AGREEMENT -- Under the terms of a Distribution Agreement with
the Company, Signature serves as the distributor of Fund shares. Signature does
not receive any additional fees for services provided pursuant to this
agreement.
C. SHAREHOLDER SERVICES AGREEMENT -- The Fund has entered into a Shareholder
Services Agreement with UBS pursuant to which UBS provides certain services to
shareholders of the Fund. The Fund has agreed to pay UBS a fee for these
services, accrued daily and payable monthly, at an annual rate of 0.25% of the
average daily net assets of the Fund. For the period April 2, 1996 (commencement
of operations) through June 30, 1996, the shareholder service fee amounted to
$5,360, all of which was waived.
D. FUND SERVICES AGREEMENT -- Under the terms of a Fund Services Agreement with
the Company, UBS has agreed to provide certain administrative services to the
Fund. UBS is not entitled to any additional compensation pursuant to this
agreement.
E. EXPENSE REIMBURSEMENTS -- UBS has voluntarily agreed to limit the total
operating expenses of the Fund, including its share of the Portfolio's expenses
and excluding extraordinary expenses, to an annual rate of 1.40% of the Fund's
average daily net assets. For the period April 2, 1996 (commencement of
operations) through June 30, 1996, UBS reimbursed the Fund for expenses totaling
$24,931 in connection with this voluntary limitation. The Adviser may modify or
discontinue this voluntary expense limitation at any time with 30 days' advance
notice to the Fund.
4. CAPITAL SHARE TRANSACTIONS
At June 30, 1996 there were 500 million shares of the Company's common stock
authorized, of which 10 million shares were classified as common stock of the
Fund. Transactions in shares of the Fund for the period April 2, 1996
(commencement of operations) through June 30, 1996 were as follows:
<TABLE>
<S> <C>
Shares subscribed......................... 120,126
Shares redeemed........................... (84)
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Net increase in shares outstanding........ 120,042
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</TABLE>
9
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UBS International Equity Portfolio
Schedule of Investments June 30, 1996 (Unaudited)
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<TABLE>
<CAPTION>
SHARES SECURITY DESCRIPTION VALUE
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<C> <S> <C>
COMMON STOCK -- 80.4%
AUSTRALIA -- 5.8%
55,000 Australia & New Zealand Bank Group (Banking & Finance)................................ $ 260,195
15,800 Australian National Industries (Diversified).......................................... 12,788
182,171 Burns Philp & Co. (Wholesale)......................................................... 343,582
45,500 Coles Myer Ltd. (Retail).............................................................. 165,195
116,400 Fosters Brewing Group (Beverages & Tobacco)........................................... 200,325
224,100 Goodman Fielder Limited (Consumer Goods).............................................. 227,180
526,194 MIM Holdings (Metals & Mining)........................................................ 678,155
85,000 Pacific Dunlop Ltd. (Tire & Rubber)................................................... 191,040
152,000 Pasminco Limited (Metals & Mining)*................................................... 213,815
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2,292,275
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DENMARK -- 1.4%
160 Den Danske Bank (Banking & Finance)................................................... 10,733
9,075 Tele Danmark -- B Shares (Telecommunications)......................................... 456,965
2,250 Unidanmark -- A Shares (Banking & Finance)............................................ 104,463
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572,161
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FRANCE -- 13.5%
7,320 Alcatel Alsthom SA (Electrical & Electronics)......................................... 638,990
6,230 Banque Nationale de Paris (Banking & Finance)......................................... 218,868
5,740 Casino-Guichard-PE (Etabl Econ) (Food Retail)......................................... 237,142
3,540 Compagnie Financiere de Suez (Banking & Finance)...................................... 129,595
6,190 Credit Foncier des France (Banking & Finance)*........................................ 40,315
5,383 Groupe Danone (Food Processing)....................................................... 815,265
20,130 Moulinex (Household Products)*........................................................ 385,103
4,280 Pechiney SA -- A Shares (Metals & Mining)............................................. 172,995
3,600 Pernod-Ricard SA (Food & Beverages)................................................... 230,968
1,700 Peugeot SA (Automotive)............................................................... 227,722
1,960 Sefimeg (Societe Francaise d'Investissements Immobiliers
et de Gestion) (Real Estate)........................................................ 132,610
8,450 Societe Nationale Elf-Aquitaine (Energy Sources)...................................... 621,978
15,490 Thomson-CSF (Defense Electronics)..................................................... 435,770
9,200 Total Cie Francaise des Petroles -- B Shares (Energy Sources)......................... 682,905
18,370 Compagnie UAP SA (Insurance).......................................................... 373,219
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5,343,445
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GERMANY -- 8.9%
28,200 Bayer AG (Chemicals).................................................................. 996,615
15,400 Deutsche Bank AG (Banking & Finance).................................................. 729,042
1,770 Schmalbach-Lubeca AG (Packaging)*..................................................... 347,971
15,530 Veba AG (Energy Sources).............................................................. 825,768
1,660 Volkswagen AG (Automotive)............................................................ 617,220
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3,516,616
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GREAT BRITAIN -- 13.3%
112,000 Allied Domecq PLC (Food & Beverages).................................................. 786,190
89,100 B.A.T. Industries (Tobacco & Insurance)............................................... 693,245
112,000 BTR Limited (Machinery & Engineering)................................................. 440,927
28,000 Bass PLC (Beverages & Hotels)......................................................... 351,569
238,800 British Gas Corp. (Energy Sources).................................................... 667,542
16,290 British Petroleum Co. (Energy Sources)................................................ 142,809
71,720 MEPC British Registered (Real Estate)................................................. 452,208
173,800 Marley PLC (Building Materials)....................................................... 348,185
120,000 Northern Foods (Food Processing)...................................................... 344,766
42,000 Peninsular & Orient Steam (Transportation)............................................ 316,672
21,600 South West Water (Utilities).......................................................... 219,383
182,650 Tarmac PLC (Building Materials)....................................................... 314,858
23,140 Thames Water (Utilities).............................................................. 203,580
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5,281,934
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</TABLE>
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See notes to financial statements.
10
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<PAGE>
UBS International Equity Portfolio
Schedule of Investments June 30, 1996 (Unaudited)
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<TABLE>
<CAPTION>
SHARES SECURITY DESCRIPTION VALUE
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<C> <S> <C>
HONG KONG -- 0.2%
400,000 Yizheng Chemical Fibre Co. (Chemicals)................................................ $ 88,364
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INDONESIA -- 0.5%
140,000 PT Astra International (Automotive)................................................... 203,008
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JAPAN -- 17.1%
15,000 Dai Nippon Printing Co. (Printing).................................................... 290,770
9,000 Fuji Photo Film Co. (Photography)..................................................... 284,735
53,000 Hitachi Ltd. (Hit. Seisakusho) (Electrical & Electronics)............................. 494,308
70,000 Ishikawajima Harima Heavy Industries (Machinery & Engineering)........................ 342,431
9,000 JGC Engineering & Construction Corp. (Machinery & Engineering)........................ 118,502
35,000 Japan Wool Textile Co. (Apparel & Textiles)........................................... 339,231
35,000 Kansai Paint Co. (Chemicals).......................................................... 184,336
19,000 Kao Corp. (Consumer Goods)............................................................ 257,120
14,000 Marudai Food Co. Ltd. (Food Processing)............................................... 101,257
36,000 Matsushita Electric Industries (Electrical & Electronics)............................. 671,512
30,000 Mazda Motor Corp. (Automotive)*....................................................... 149,500
69,000 Mitsubishi Chemical Corp. (Chemicals)................................................. 319,242
27,000 Mitsubishi Estate Co. (Real Estate)................................................... 372,788
32,000 Mitsubishi Heavy Ind. (Machinery & Engineering)....................................... 278,846
27,000 Nihon Cement Co. (Building Materials)................................................. 199,231
54,000 Nippon Yusen Kabushiki Kaish (Shipping)............................................... 313,045
26,000 Nissan Fire & Marine Insurance (Insurance)*........................................... 188,762
19,000 Nisshinbo Industries Inc. (Apparel & Textiles)........................................ 187,628
2,500 Sony Corp. (Electrical & Electronics)................................................. 164,815
23,000 Sumitomo Marine & Fire (Insurance).................................................... 200,841
1,000 Takashimaya Co. (Retail).............................................................. 15,545
50,000 Toray Industries Inc. (Chemicals)..................................................... 345,631
2,000 Uny Co. (Retail)*..................................................................... 39,685
25,000 Yamaha Motor Co. (Automotive)......................................................... 256,025
30,000 Yamanouchi Pharmaceutical (Pharmaceuticals)........................................... 652,860
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6,768,646
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NETHERLANDS -- 2.4%
18,375 Internationale Nederlanden Groep NV (Banking & Finance)............................... 548,395
12,270 Koninklijke Papierfabrieken BT NV (Paper & Forest Products)........................... 294,250
3,540 Royal PTT Nederland (Telecommunications).............................................. 134,086
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976,731
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NEW ZEALAND -- 1.5%
94,000 Brierley Investments (Banking & Finance).............................................. 89,247
10,300 Ceramco Corp. Ltd. (Diversified)...................................................... 13,040
110,000 Fletcher Challenge Paper Shares (Paper & Forest Products)*............................ 213,417
148,200 Fletcher Challenge Forestry Shares (Paper & Forest Products).......................... 184,550
99,200 Progressive Enterprises (Food Retail)................................................. 79,852
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580,106
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NORWAY -- 0.4%
6,940 Bergesen D.Y. ASA (Transportation).................................................... 144,337
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SINGAPORE -- 2.0%
204,579 Dairy Farm International Holdings (Retail)............................................ 172,870
200,000 Hong Kong Land Holdings (Real Estate)................................................. 450,000
21,217 Jardine Matheson Holdings (Diversified)............................................... 155,950
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778,820
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SOUTH KOREA -- 0.4%
13,000 Hyundai Motor Co. GDR (Automotive)*................................................... 164,190
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</TABLE>
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See notes to financial statements.
11
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<PAGE>
UBS International Equity Portfolio
Schedule of Investments June 30, 1996 (Unaudited)
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<TABLE>
<CAPTION>
SHARES SECURITY DESCRIPTION VALUE
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<C> <S> <C>
SPAIN -- 2.4%
3,975 Tabacalera SA -- A Shares (Beverages & Tobacco)....................................... $ 200,295
21,590 Telefonica de Espana (Telecommunications)............................................. 398,050
36,630 Uralita (Building Materials).......................................................... 343,393
-----------
941,738
-----------
SWEDEN -- 3.7%
12,730 Electrolux AB -- B Shares (Consumer Goods)............................................ 641,801
11,070 SKF AB -- B Shares (Engineering)...................................................... 263,575
40,450 Stora Kopparbergs -- A Shares (Paper & Forest Products)............................... 535,063
3,800 Stora Kopparbergs -- B Shares (Paper & Forest Products)............................... 50,265
-----------
1,490,704
-----------
SWITZERLAND -- 6.9%
850 Ciba-Geigy AG (Chemicals)............................................................. 1,036,875
510 Forbo Holding (Consumer Goods)........................................................ 216,215
1,030 Nestle SA (Food & Beverages).......................................................... 1,177,354
545 Winterthur Schweiz Vers-R (Insurance)................................................. 324,781
-----------
2,755,225
-----------
TOTAL COMMON STOCK (COST $31,991,591)................................................. 31,898,300
-----------
RIGHTS -- 0.1%
AUSTRALIA -- 0.1%
36,638 Highland Gold Limited (Metals & Mining)*
(Cost $19,050)...................................................................... 18,715
-----------
</TABLE>
<TABLE>
<CAPTION>
COUPON MATURITY
FACE VALUE RATE DATE
- ----------- ------ --------
<C> <S> <C> <C> <C>
SHORT-TERM INVESTMENT -- 9.8%
TIME DEPOSIT -- 9.8%
$3,900,000 Investors Bank and Trust Company (Cost $3,900,000)............... 5.10% 7/2/96 3,900,000
-----------
TOTAL INVESTMENTS AT MARKET VALUE -- 90.3%
(COST $35,910,641).......................................................... 35,817,015
OTHER ASSETS IN EXCESS OF LIABILITIES -- 9.7%................................. 3,847,435
-----------
TOTAL NET ASSETS -- 100.0%.................................................... $39,664,450
-----------
-----------
</TABLE>
- ------------------------
* Non-income producing security.
GDR -- Global Depositary Receipt
Note: Based on the cost of investments of $35,910,641 for Federal Income Tax
purposes at June 30, 1996, the aggregate gross unrealized appreciation and
depreciation was $793,611 and $887,237, respectively, resulting in net
unrealized depreciation of $93,626.
See notes to financial statements.
12
<PAGE>
<PAGE>
UBS International Equity Portfolio
Schedule of Investments June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
SUMMARY OF INDUSTRY DIVERSIFICATION
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY DIVERSIFICATION PORTFOLIO
- ------------------------------------------------------------------------------------------------------ ----------
<S> <C>
Chemicals............................................................................................. 7.5%
Energy Sources........................................................................................ 7.4
Electrical & Electronics.............................................................................. 5.5
Beverages & Food...................................................................................... 5.5
Banking & Finance..................................................................................... 5.4
Real Estate........................................................................................... 3.6
Automotive............................................................................................ 3.5
Consumer Goods........................................................................................ 3.4
Food Processing....................................................................................... 3.2
Paper & Forest Products............................................................................... 3.2
Building Materials.................................................................................... 3.0
Machinery & Engineering............................................................................... 3.0
Insurance............................................................................................. 2.7
Metals & Mining....................................................................................... 2.7
Telecommunication..................................................................................... 2.5
Pharmaceuticals....................................................................................... 1.7
Tobacco & Insurance................................................................................... 1.7
Apparel & Textiles.................................................................................... 1.3
Transportation........................................................................................ 1.2
Defense Electronics................................................................................... 1.1
Beverages & Tobacco................................................................................... 1.0
Retail................................................................................................ 1.0
Household Appliances.................................................................................. 1.0
Utilities............................................................................................. 1.0
Beverages & Hotels.................................................................................... 0.9
Packaging............................................................................................. 0.9
Wholesale............................................................................................. 0.9
Food Retail........................................................................................... 0.8
Shipping.............................................................................................. 0.8
Engineering........................................................................................... 0.7
Printing.............................................................................................. 0.7
Photography........................................................................................... 0.7
Tires & Rubber........................................................................................ 0.5
Diversified........................................................................................... 0.5
----------
Total Portfolio Holdings.............................................................................. 80.5
Cash & Cash Equivalents............................................................................... 19.5
----------
Total Net Assets...................................................................................... 100.0%
----------
----------
</TABLE>
SUMMARY OF OPEN FORWARD FOREIGN CURRENCY CONTRACTS
<TABLE>
<CAPTION>
FOREIGN U.S. DOLLAR
CURRENCY U.S. DOLLAR NET UNREALIZED
UNITS U.S. DOLLAR VALUE AT APPRECIATION/
PURCHASED COST/PROCEEDS JUNE 30, 1996 (DEPRECIATION)
--------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
PURCHASE CONTRACTS
Australian Dollar, expiring July 3, 1996..................... 388,745 $ 316,518 $ 314,048 ($2,470)
French Franc, expiring July 31, 1996......................... 1,368,498 265,362 266,472 1,110
British Pound, expiring July 2, 1996......................... 80,400 123,828 124,857 1,029
-------
NET UNREALIZED DEPRECIATION ON FORWARD FOREIGN CURRENCY
CONTRACTS.................................................. ($ 331)
-------
-------
</TABLE>
- ------------------------
See notes to financial statements.
13
<PAGE>
<PAGE>
UBS International Equity Portfolio
Statement of Assets and Liabilities June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments, at value (cost $35,910,641).......................................... $35,817,015
Cash.............................................................................. 4,512,545
Foreign currency, at value (cost $407,023)........................................ 406,938
Dividends and interest receivable................................................. 166,570
Deferred organization expenses and other assets................................... 52,343
-----------
Total Assets................................................................. 40,955,411
-----------
LIABILITIES:
Advisory fees payable............................................................. 22,325
Administrative services fees payable.............................................. 3,752
Trustees' fees payable............................................................ 466
Payable for investment securities purchased....................................... 1,189,789
Forward foreign currency contracts................................................ 331
Organization expenses payable..................................................... 48,781
Other accrued expenses............................................................ 25,517
-----------
Total Liabilities............................................................ 1,290,961
-----------
NET ASSETS........................................................................ $39,664,450
-----------
-----------
NET ASSETS CONSIST OF:
Paid-in capital for beneficial interests.......................................... $39,664,450
-----------
-----------
</TABLE>
- ------------------------
See notes to financial statements.
14
<PAGE>
<PAGE>
UBS International Equity Portfolio
Statement of Operations
For the Period April 2, 1996 (Commencement of Operations) through June 30, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends (net of foreign withholding tax of $95,224)....................... $296,551
Interest.................................................................... 91,752
--------
Investment income...................................................... $388,303
EXPENSES:
Investment advisory fees.................................................... 63,784
Administrative services fees................................................ 3,752
Custodian fees and expenses................................................. 16,689
Fund accounting fees........................................................ 14,466
Audit fees.................................................................. 12,928
Legal fees.................................................................. 6,164
Trustees' fees.............................................................. 2,466
Amortization of organization expenses....................................... 2,466
Miscellaneous expenses...................................................... 3,281
--------
Total expenses......................................................... 125,996
Less: Fee waiver....................................................... (41,459)
--------
Net expenses........................................................... 84,537
--------
Net investment income....................................................... 303,766
--------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on securities transactions................................ 30,495
Net realized gain on foreign currency transactions.......................... 5,485
Net change in unrealized depreciation of investments........................ (93,626)
Net change in unrealized depreciation of foreign currency contracts and
translations.............................................................. (908)
--------
Net realized and unrealized loss on investments............................. (58,554)
--------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $245,212
--------
--------
</TABLE>
- ------------------------
See notes to financial statements.
15
<PAGE>
<PAGE>
UBS International Equity Portfolio
Statement of Changes in Net Assets
For the Period April 2, 1996 (Commencement of Operations) through June 30, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment income................................................................ $ 303,766
Net realized gain on securities and foreign currency transactions.................... 35,980
Net change in unrealized depreciation of investments, foreign currency contracts and
foreign currency translations...................................................... (94,534)
-----------
Net increase in net assets resulting from operations................................. 245,212
-----------
CAPITAL TRANSACTIONS:
Proceeds from contributions.......................................................... 39,743,320
Value of withdrawals................................................................. (324,082)
-----------
Net increase in net assets from capital transactions................................. 39,419,238
-----------
NET INCREASE IN NET ASSETS........................................................... 39,664,450
NET ASSETS:
Beginning of period.................................................................. --
-----------
End of period........................................................................ $39,664,450
-----------
-----------
</TABLE>
- ------------------------
See notes to financial statements.
16
<PAGE>
<PAGE>
UBS International Equity Portfolio
Financial Highlights
For the Period April 2, 1996 (Commencement of Operations) through June 30, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (000's omitted)...................................... $39,664
Average commission rate per share(1)........................................... $0.02
Ratio of expenses to average net assets(2)..................................... 1.13%(3)
Ratio of net investment income to average net assets(2)........................ 4.05%(3)
Portfolio turnover............................................................. 2%
</TABLE>
- ------------------------
(1) Most foreign securities markets do not charge commissions based on a rate
per share but as a percentage of the principal value of the transaction. As
a result, the above rate is not indicative of the commission arrangements
currently in effect.
(2) Net of fee waiver which had the effect of reducing the ratio of expenses to
average net assets and increasing the ratio of net investment income to
average net assets by 0.55% (annualized).
(3) Annualized.
See notes to financial statements.
17
<PAGE>
<PAGE>
UBS International Equity Portfolio
Notes to Financial Statements June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
1. GENERAL
UBS International Equity Portfolio (the 'Portfolio'), a separate series of UBS
Investor Portfolios Trust (the 'Trust'), is registered under the Investment
Company Act of 1940, as a diversified, open-end management investment company.
The Portfolio is organized as a trust under the laws of the State of New York.
The investment adviser of the Portfolio is Union Bank of Switzerland, New York
Branch ('UBS'); UBS International Investment London Limited ('UBSII') is the
sub-adviser of the Portfolio. Signature Financial Group (Grand Cayman), Ltd.
('SFG'), a wholly-owned subsidiary of Signature Financial Group, Inc., acts as
the Portfolio's administrator and placement agent.
2. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies followed by the Portfolio in the preparation of
its financial statements:
A. INVESTMENT VALUATION -- Equity securities in the portfolio are valued at the
last sale price on the exchange on which they are primarily traded, or in the
absence of recorded sales, at the average of readily available closing bid and
asked prices, or at the quoted bid price. Unlisted securities are valued at the
average of the quoted bid and asked prices in the over-the-counter market.
Options on stock indices traded on national securities exchanges are valued at
their last sale price as of the close of options trading on such exchanges.
Stock index futures and related options traded on commodities exchanges are
valued at their last sales price as of the close of trading on such exchanges.
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 Portfolio's Board of Trustees (the 'Trustees').
Debt securities that mature in 60 days or less are valued at amortized cost,
which approximates market value. The amortized cost method involves valuing a
security at its cost on the date of purchase or, in the case of securities
purchased with more than 60 days until maturity, at their market value each day
until the 61st day prior to maturity, and thereafter assuming a constant
amortization to maturity of the difference between the principal amount due at
maturity and such valuation.
Trading in securities on most foreign exchanges and over-the-counter markets is
normally completed before the close of the New York Stock Exchange and may also
take place on days on which the New York Stock Exchange is closed. If events
materially affecting the value of foreign securities occur between the time when
the exchange on which they are traded closes and the pricing of the Portfolio,
such securities will be valued at fair value in accordance with procedures
established by and under the general supervision of the Trustees.
B. FOREIGN CURRENCY TRANSLATION -- The accounting records of the Portfolio are
maintained in U.S. dollars. Foreign currency amounts are translated into U.S.
dollars at the current rate of exchange to determine the value of investments,
assets and liabilities. Purchases and sales of securities, income and expenses
are translated at the prevailing rate of exchange on the respective dates of
such transactions. Gain/loss on translation of foreign currency includes net
exchange gains and losses, gains and losses on disposition of foreign currency
and adjustments to the amount of foreign taxes withheld.
C. FORWARD FOREIGN CURRENCY CONTRACTS -- The Portfolio may enter into forward
foreign currency contracts in connection with planned purchases or sales of
securities or to hedge the U.S. dollar value of portfolio securities denominated
in a particular currency. The Portfolio could be exposed to risks if the
counterparties to the contracts are unable to meet the terms of their contracts
and from unanticipated movements in the value of a foreign currency relative to
the U.S. dollar. The forward foreign currency contracts are marked-to-market
daily using the daily exchange rate of the underlying currency and any resulting
gains or losses are recorded for financial statement purposes as unrealized
gains or losses until the contract settlement date.
18
<PAGE>
<PAGE>
UBS International Equity Portfolio
Notes to Financial Statements June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
D. ACCOUNTING FOR INVESTMENTS -- Securities transactions are accounted for on
trade date. Realized gains and losses on security transactions are determined on
the identified cost basis. Dividend income and other distributions from
portfolio securities are recorded on the ex-dividend date, except, if the ex-
dividend date has passed, certain dividends from foreign securities are recorded
as soon as the Portfolio is informed of the ex-dividend date. Dividend income is
recorded net of foreign taxes withheld where recovery of such taxes is not
assured. Interest income, adjusted for amortization of premiums and accretion of
discounts on investments, is accrued daily.
E. U. S. FEDERAL INCOME TAXES -- The Portfolio is considered a partnership under
the U.S. Internal Revenue Code (the 'Code'). As such, each investor in the
Portfolio will be taxed on its share of the Portfolio's ordinary income and
capital gains. Accordingly, no provision for federal income taxes is necessary.
It is intended that the Portfolio will be managed in such a way that an investor
will be able to satisfy the requirements of the Code applicable to regulated
investment companies.
F. DEFERRED ORGANIZATION EXPENSES -- Expenses incurred by the Portfolio in
connection with its organization have been deferred and are being amortized on a
straight line basis over five years from the Portfolio's commencement of
operations (April 2, 1996).
G. OTHER -- The Portfolio bears all costs of its operations other than expenses
specifically assumed by UBS and SFG. Expenses incurred by the Trust on behalf of
any two or more portfolios are allocated in proportion to net assets of each
portfolio, except when allocations of direct expenses to each portfolio can
otherwise be made fairly. Expenses directly attributable to the Portfolio are
charged directly to the Portfolio.
3. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
A. INVESTMENT ADVISORY AGREEMENT -- The Portfolio has retained the services of
UBS as investment adviser and UBSII as investment sub-adviser. UBSII 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 subject to the supervision of UBS and the Trustees. As compensation
for overall investment management services the Trust has agreed to pay UBS an
investment advisory fee, accrued daily and payable monthly, at an annual rate of
0.85% of the Portfolio's average daily net assets. UBS, in turn, has agreed to
pay UBSII a fee, accrued daily and payable monthly, at an annual rate of 0.75%
of the Portfolio's first $20 million average daily net assets, 0.50% of the next
$30 million average daily net assets and 0.40% of the Portfolio's average daily
net assets in excess of $50 million. For the period April 2, 1996 (commencement
of operations) through June 30, 1996, the investment advisory fee amounted to
$63,784. UBS waived $41,459 of this amount.
B. ADMINISTRATIVE SERVICES AGREEMENT -- Under the terms of an Administrative
Services Agreement with the Trust, SFG provides overall administrative services
and general office facilities to the Portfolio and the Trust. As compensation
for such services, the Portfolio has agreed to pay SFG an administrative
services fee, accrued daily and payable monthly, at an annual rate of 0.05% of
the Portfolio's average daily net assets. For the period April 2, 1996
(commencement of operations) through June 30, 1996, the administrative services
fee amounted to $3,752.
C. EXCLUSIVE PLACEMENT AGENT AGREEMENT -- Under the terms of an Exclusive
Placement Agent Agreement with the Trust, SFG has agreed to act as the Trust's
placement agent. SFG does not receive any additional fees for services provided
pursuant to this agreement.
4. PURCHASES AND SALES OF INVESTMENTS
For the period April 2, 1996 (commencement of operations) through June 30, 1996,
purchases and sales of investment securities, excluding short-term investments,
aggregated $32,465,868 and $485,722, respectively.
19
<PAGE>
<PAGE>
UBS International Equity Fund
6 St. James Avenue
Boston, Massachusetts 02116
Investment Adviser Union Bank of Switzerland,
New York Branch
1345 Avenue of the Americas
New York, NY 10105
Administrator and Distributor Signature Broker-Dealer Services, Inc.
6 St. James Avenue
Boston, Massachusetts 02116
Custodian and Transfer Agent Investors Bank & Trust Company
89 South Street
Boston, Massachusetts 02111
The accompanying financial statements dated as of June 30, 1996 were not
audited and, accordingly, no opinion is expressed on them.
