<PAGE>
<PAGE>
UBS
BOND
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 Bond 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 an economic
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
For the period April 2, 1996 (commencement of operations) through June 30, 1996,
the UBS Bond Fund had a total return of 0.31% versus 0.56% for the Lehman
Brothers Intermediate Government/Corporate Index. As is typical during the
start-up phase of such a fund, the impact of large investment
flows -- particularly during a period of high market volatility -- can be
significant.
The US economy continued its rebound in the second quarter of 1996, following a
period of weak growth in late 1995. The result has been a sell-off in the bond
market, which was less severe in the second quarter of 1996 than in the first.
The 10-year Treasury bond yield rose 39 basis points, from 6.34% to 6.73%,
during the second quarter. This rise in yields was due mainly to the continued
recovery in job growth, from 173,000 per month in the second half of 1995 to
233,000 per month in the first half of this year. (Virtually all the rise in
yield occurred in the three days of trading after the employment report was
issued, when the 10-year yield jumped 40 b.p.) The recovery of economic growth
helped lower the unemployment rate to 5.3% in June. This has heightened the
market's fear that solid growth combined with tight capacity and labor
constraints will lead to higher wages and general price inflation in coming
months.
The strong economy has provided only limited opportunities in the fixed income
markets. Accordingly, we have taken a cautious approach to our investments in
the Bond Fund, as manifested in the following measures:
1. Duration has been maintained at a level slightly below that of the
benchmark. As of June 30, 1996, the Fund had a duration of 3.1 years
while the Lehman Brothers Intermediate Government/Corporate Index had a
duration of 3.3 years.
2. Corporate securities have been held to about 20% of the total portfolio.
Corporate spreads are tight because of the strong economic activity and
limited supply, particularly at the short end of the yield curve. This
position in corporate holdings will likely be increased as opportunities
arise.
3. Positions have been taken in mortgage-backed securities (6% of the Fund)
and in non-dollar securities (2% of the Fund), which are expected to
outperform the benchmark in a moderately weak US bond market
environment.
ECONOMIC OVERVIEW
Growth in aggregate demand has been surprisingly strong this year, in a delayed
response to last year's easing of Federal Reserve interest rates, explosive bull
markets in both stocks and bonds and the super-low dollar of 1995. The 'shock'
of this positive aggregate demand growth in early 1996 has caused employment
growth to accelerate in recent months. At the same time, the rates of
utilization of available labor and tangible capital are rising, which increases
the risk of a self-feeding spiral of cost/price inflation.
Fixed-income investors, recognizing that a robust growth scenario brings the
potential for accelerating inflation -- especially when the economy is near full
employment -- have forced market-determined rates higher this year. That has
reversed the expectations of early 1996 that the Fed was easing on rates, and it
discounts more recent Fed tightening.
This is introducing a bearish bias to the fixed income market which is in fact
rational, because there is little doubt that the Fed wants slower economic
growth. The question is whether the slowdown occurs gradually as interest rates
and the dollar both rise, or if it develops quickly with a faster rise in
interest rates which would occur if the Fed is forced to 'validate' higher
market-driven rates by raising the money market rates it controls. The latter
alternative would simultaneously bring a sharp correction in the US equity
market.
2
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UBS Private Investor Funds, Inc.
Fund Commentary
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ECONOMIC FORECAST
The Fund's outlook calls for a slowing of the economy, from the 3+% annualized
GDP grow rate in the first half of the year to about 2.5% in the second half.
Although growth is expected to be moderately above-trend, we believe the Fed is
likely to hold rates steady in the second half of the year. This growth pattern,
along with continued moderate inflation, should prompt the Federal Reserve to
raise the Federal funds rate moderately by year-end. This is consistent with
rising yields at the short end of the yield curve and fairly stable rates at the
long end.
Lou Cohen
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
Bond 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 all 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 Lehman Brothers Intermediate Government/Corporate Intermediate Index is an
unmanaged composite of intermediate duration consisting of publicly issued,
fixed rate, non-convertible domestic bonds.
3
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UBS Bond Fund
Statement of Assets and Liabilities June 30, 1996 (Unaudited)
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<TABLE>
<S> <C>
ASSETS:
Investment in UBS Investor Portfolios Trust -- UBS Bond
Portfolio, at value................................................................ $2,349,755
Receivable from Adviser.............................................................. 9,591
Deferred organization expenses and other assets...................................... 69,975
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Total Assets............................................................... 2,429,321
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LIABILITIES:
Administrative services fees payable................................................. 313
Directors' fees payable.............................................................. 407
Dividends payable from net investment income......................................... 10,442
Organization expenses payable........................................................ 38,489
Other accrued expenses............................................................... 19,021
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Total Liabilities.......................................................... 68,672
----------
NET ASSETS........................................................................... $2,360,649
----------
----------
SHARES OUTSTANDING ($0.001 par value, 10 million shares authorized).................. 23,852
----------
----------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER SHARE....................... $98.97
----------
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COMPOSITION OF NET ASSETS:
Shares of common stock, at par....................................................... $ 24
Additional paid-in capital........................................................... 2,381,033
Net unrealized depreciation of investments........................................... (17,246)
Accumulated net realized losses...................................................... (3,162)
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Net Assets................................................................. $2,360,649
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</TABLE>
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See notes to financial statements.
4
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<PAGE>
UBS Bond 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 Bond Portfolio
Interest.............................................................. $ 40,786
Total expenses........................................................ $ 7,304
Less: Fee waiver...................................................... (2,883)
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Net expenses.......................................................... 4,421
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Net Investment Income from UBS Investor Portfolios Trust --
UBS Bond Portfolio....................................................... 36,365
EXPENSES:
Shareholder service fees................................................... 1,566
Administrative services fees............................................... 313
Reports to shareholders expense............................................ 5,891
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.......................................................... 945
Miscellaneous expenses..................................................... 1,278
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Total expenses........................................................ 31,290
Less: Fee waiver and expense reimbursements........................... (30,699)
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Net expenses.......................................................... 591
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Net investment income...................................................... 35,774
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NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS FROM UBS INVESTOR
PORTFOLIOS TRUST -- UBS BOND PORTFOLIO
Net realized loss on securities transactions............................... (3,162)
Net change in unrealized depreciation of investments....................... (17,434)
Net change in unrealized appreciation of foreign currency contracts and
translations............................................................. 188
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Net realized and unrealized loss from UBS Investor Portfolios Trust -- UBS
Bond Portfolio........................................................... (20,408)
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NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS....................... $ 15,366
--------
--------
</TABLE>
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See notes to financial statements.
5
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UBS Bond 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>
<S> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment income.................................................................. $ 35,774
Net realized loss on securities transactions........................................... (3,162)
Net change in unrealized depreciation of investments, foreign currency contracts and
foreign currency translations........................................................ (17,246)
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Net increase in net assets resulting from operations................................... 15,366
----------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income.................................................................. (35,774)
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TRANSACTIONS IN SHARES OF COMMON STOCK:
Net proceeds from sale of shares....................................................... 5,131,335
Net asset value of shares issued to shareholders in reinvestment of dividends.......... 14,804
Cost of shares redeemed................................................................ (2,790,082)
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Net increase in net assets from transactions in shares of common stock................. 2,356,057
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NET INCREASE IN NET ASSETS............................................................. 2,335,649
NET ASSETS:
Beginning of period.................................................................... 25,000
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End of period.......................................................................... $2,360,649
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</TABLE>
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See notes to financial statements.
6
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UBS Bond Fund
Financial Highlights
For the Period April 2, 1996 (Commencement of Operations) through June 30, 1996
(Unaudited)
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<TABLE>
<S> <C>
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...................................................... 1.33
Net realized and unrealized loss on investments............................ (1.03)
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Total income from investment operations.................................... 0.30
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Less: Dividends from net investment income...................................... (1.33)
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Net asset value, end of period.................................................. $ 98.97
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Total return.................................................................... 0.31%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted).................................. $ 2,361
Ratio of expenses to average net assets(1)................................. 0.80%(2)
Ratio of net investment income to average net assets(1).................... 5.71%(2)
</TABLE>
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(1) Includes the Fund's share of UBS Investor Portfolios Trust -- UBS Bond
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 5.36% (annualized).
(2) Annualized.
(3) Not annualized.
See notes to financial statements.
7
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UBS Bond Fund
Notes to Financial Statements June 30, 1996 (Unaudited)
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1. GENERAL
UBS Bond 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 U.S. Equity Fund and UBS International Equity
Fund.
The Fund seeks to achieve its investment objective by investing substantially
all of its investable assets in the UBS Bond 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 (6.7% 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 daily and paid monthly. 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 Bond 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 $313.
B. DISTRIBUTION AGREEMENT -- Under the terms of a Distribution Agreement,
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
$1,566, 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 does not receive any additional fees for services provided 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 0.80% 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
$29,133 in connection with this voluntary limitation. UBS 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............................ 51,517
Shares issued in reinvestment of dividends... 150
Shares redeemed.............................. (28,065)
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Net increase in shares outstanding........... 23,602
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</TABLE>
9
<PAGE>
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UBS Bond Portfolio
Schedule of Investments June 30, 1996 (Unaudited)
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<TABLE>
<CAPTION>
FACE COUPON MATURITY
VALUE SECURITY DESCRIPTION RATE DATE VALUE
- ---------- ---------------------------------------------------------------- ------ -------- -----------
<C> <S> <C> <C> <C>
U.S. TREASURY & U.S. GOVERNMENT AGENCY OBLIGATIONS -- 74.8%
U.S. TREASURY OBLIGATIONS -- 65.6%
$ 150,000 U.S. Treasury Note.............................................. 6.25 % 1/31/97 $ 150,587
25,000 U.S. Treasury Note.............................................. 6.125 % 5/31/97 25,078
50,000 U.S. Treasury Note.............................................. 6.375 % 6/30/97 50,274
395,000 U.S. Treasury Note.............................................. 6.50 % 8/15/97 397,591
3,000,000 U.S. Treasury Note.............................................. 6.00 % 8/31/97 3,002,340
1,125,000 U.S. Treasury Note.............................................. 6.125 % 5/15/98 1,125,000
1,070,000 U.S. Treasury Note.............................................. 5.125 % 6/30/98 1,050,109
1,290,000 U.S. Treasury Note.............................................. 5.25 % 7/31/98 1,267,631
100,000 U.S. Treasury Note.............................................. 7.00 % 4/15/99 101,797
545,000 U.S. Treasury Note.............................................. 6.75 % 5/31/99 551,300
3,700,000 U.S. Treasury Note.............................................. 6.375 % 7/15/99 3,706,364
155,000 U.S. Treasury Note.............................................. 6.875 % 8/31/99 157,204
145,000 U.S. Treasury Note.............................................. 7.125 % 9/30/99 148,171
1,103,000 U.S. Treasury Bond.............................................. 7.75 % 1/31/00 1,149,701
3,200,000 U.S. Treasury Note.............................................. 7.125 % 2/29/00 3,272,512
505,000 U.S. Treasury Note.............................................. 6.75 % 4/30/00 510,287
20,000 U.S. Treasury Note.............................................. 6.25 % 5/31/00 19,872
2,500,000 U.S. Treasury Note.............................................. 6.125 % 7/31/00 2,472,275
1,950,000 U.S. Treasury Note.............................................. 6.125 % 9/30/00 1,927,146
100,000 U.S. Treasury Note.............................................. 7.50 % 5/15/02 104,687
645,000 U.S. Treasury Note.............................................. 6.375 % 8/15/02 639,859
637,000 U.S. Treasury Note.............................................. 6.25 % 2/15/03 625,751
419,000 U.S. Treasury Note.............................................. 7.25 % 5/15/04 434,122
100,000 U.S. Treasury Note.............................................. 7.25 % 8/15/04 103,578
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22,993,236
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U.S. GOVERNMENT AGENCY OBLIGATIONS -- 9.2%
1,295,000 Federal Home Loan Mortgage Corp................................. 5.96 % 10/20/00 1,263,842
1,010,000 Federal National Mortgage Assc., Pool #346053................... 7.50 % 6/1/26 997,217
1,009,999 Federal National Mortgage Assc., Pool #250576................... 7.00 % 6/1/26 971,963
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3,233,022
-----------
TOTAL U.S. TREASURY & U.S. GOVERNMENT AGENCY
OBLIGATIONS (COST $26,317,024)................................ 26,226,258
-----------
CORPORATE OBLIGATIONS -- 17.9%
CORPORATE OBLIGATIONS -- DOMESTIC -- 14.4%
850,000 Associates Corp N.A............................................. 8.50 % 1/10/00 899,904
500,000 BanPonce Corp................................................... 6.75 % 4/26/00 496,235
500,000 Capital One Bank................................................ 6.83 % 5/17/99 498,890
245,000 General Electric Capital Corp................................... 6.88 % 4/15/00 247,906
655,000 J.P. Morgan & Co................................................ 8.50 % 8/15/03 702,900
500,000 Lockheed Martin................................................. 6.55 % 5/15/99 499,475
450,000 MGM Grand Hotel Finance Corp.................................... 11.75 % 5/1/99 475,875
250,000 Praxair......................................................... 6.70 % 4/15/01 247,875
400,000 Salomon Inc..................................................... 7.25 % 5/1/01 399,100
600,000 Sears Roebuck Acceptance Corp................................... 5.59 % 2/16/01 569,586
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5,037,746
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CORPORATE OBLIGATIONS -- FOREIGN -- 3.0%
500,000 Canadian Pacific Forest......................................... 10.25 % 1/15/03 551,550
500,000 MEPC Finance Inc................................................ 7.50 % 5/1/03 501,506
-----------
1,053,056
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</TABLE>
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See notes to financial statements.
10
<PAGE>
<PAGE>
UBS Bond Portfolio
Schedule of Investments June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE COUPON MATURITY
VALUE SECURITY DESCRIPTION RATE DATE VALUE
- ---------- ---------------------------------------------------------------- ------ -------- -----------
<C> <S> <C> <C> <C>
CORPORATE OBLIGATIONS -- EURODOLLAR -- 0.5%
$ 50,000 BP America Inc.................................................. 9.75 % 3/1/99 $ 53,656
40,000 Ford Capital BV................................................. 9.75 % 6/5/97 41,225
80,000 Unilever Capital................................................ 9.25 % 3/29/00 86,250
-----------
181,131
-----------
TOTAL CORPORATE OBLIGATIONS (COST $6,288,246)................... 6,271,933
-----------
FOREIGN GOVERNMENT OBLIGATIONS -- 4.0%
673,926 Canada Govt..................................................... 7.75 % 9/1/99 695,770
20,000 Italy (Euro Bond)............................................... 9.38 % 4/3/97 20,538
325,000 Japan Finance Corp.............................................. 9.13 % 10/11/00 349,837
250,000 Japan Finance Corp. Muni. Ent................................... 6.85 % 4/15/06 245,300
50,000 Province of Ontario............................................. 7.38 % 1/27/03 51,104
50,000 Province of Quebec.............................................. 9.13 % 8/22/01 54,281
-----------
TOTAL FOREIGN GOVERNMENT OBLIGATIONS (COST $1,426,687).......... 1,416,830
-----------
ASSET BACKED SECURITIES -- 1.3%
440,000 First Omni Bank Credit Card Trust
(Cost $439,244)............................................... 6.65 % 9/15/03 437,658
-----------
TOTAL INVESTMENTS AT MARKET VALUE -- 98.0%
(COST $34,471,201)......................................................... 34,352,679
OTHER ASSETS IN EXCESS OF LIABILITIES -- 2.0%................................ 719,749
-----------
TOTAL NET ASSETS -- 100.0%................................................... $35,072,428
-----------
-----------
</TABLE>
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SUMMARY OF OPEN FORWARD FOREIGN CURRENCY CONTRACTS
<TABLE>
<CAPTION>
U.S. DOLLAR
FOREIGN U.S. DOLLAR NET UNREALIZED
CURRENCY UNITS U.S. DOLLAR VALUE AT APPRECIATION/
PURCHASED/SOLD COST/PROCEEDS JUNE 30, 1996 (DEPRECIATION)
-------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
PURCHASE CONTRACTS
Canadian Dollar, expiring July 2, 1996.................. 972,501 $ 714,812 $ 712,384 ($ 2,428)
SALE CONTRACTS
Canadian Dollar, expiring September 27, 1996............ 977,500 719,716 717,393 2,323
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NET UNREALIZED DEPRECIATION ON FORWARD FOREIGN CURRENCY
CONTRACTS............................................. ($ 105)
-------
-------
</TABLE>
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Note: Based on the cost of investments of $34,471,201 for Federal Income Tax
purposes at June 30, 1996, the aggregate gross unrealized appreciation and
depreciation was $42,104 and $160,626, respectively, resulting in net
unrealized depreciation of $118,522.
See notes to financial statements.
11
<PAGE>
<PAGE>
UBS Bond Portfolio
Statement of Assets and Liabilities June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments, at value (cost $34,471,201)......................................... $34,352,679
Cash............................................................................. 72,139
Receivable for investment securities sold........................................ 718,094
Interest receivable.............................................................. 672,618
Deferred organization expenses and other assets.................................. 52,417
-----------
Total Assets................................................................ 35,867,947
-----------
LIABILITIES:
Administrative services fees payable............................................. 3,709
Trustees' fees payable........................................................... 466
Payable for investment securities purchased...................................... 712,325
Forward foreign currency contracts............................................... 105
Organization expenses payable.................................................... 48,754
Other accrued expenses........................................................... 30,160
-----------
Total Liabilities........................................................... 795,519
-----------
NET ASSETS....................................................................... $35,072,428
-----------
-----------
NET ASSETS CONSIST OF:
Paid-in capital for beneficial interests......................................... $35,072,428
-----------
-----------
</TABLE>
- ------------------------
See notes to financial statements.
12
<PAGE>
<PAGE>
UBS Bond Portfolio
Statement of Operations
For the Period April 2, 1996 (Commencement of Operations) through June 30, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest............................................................... $ 465,880
EXPENSES:
Investment advisory fees............................................... $ 33,379
Administrative services fees........................................... 3,709
Audit fees............................................................. 12,928
Custodian fees and expenses............................................ 11,146
Fund accounting fees................................................... 7,808
Legal fees............................................................. 6,164
Trustees' fees......................................................... 2,466
Amortization of organization expenses.................................. 2,466
Miscellaneous expenses................................................. 3,298
--------
Total expenses.................................................... 83,364
Less: Fee waiver.................................................. (33,379)
--------
Net expenses...................................................... 49,985
---------
Net investment income.................................................. 415,895
---------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss on securities transactions........................... (68,956)
Net change in unrealized depreciation of investments................... (118,522)
Net change in unrealized appreciation of foreign currency contracts and
translations......................................................... 2,808
---------
Net realized and unrealized loss on investments........................ (184,670)
---------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................... $ 231,225
---------
---------
</TABLE>
- ------------------------
See notes to financial statements.
13
<PAGE>
<PAGE>
UBS Bond 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............................................................... $ 415,895
Net realized loss on securities transactions........................................ (68,956)
Net change in unrealized depreciation of investments, foreign currency contracts and
foreign currency translations..................................................... (115,714)
-----------
Net increase in net assets resulting from operations................................ 231,225
-----------
CAPITAL TRANSACTIONS:
Proceeds from contributions......................................................... 40,645,819
Value of withdrawals................................................................ (5,804,616)
-----------
Net increase in net assets from capital transactions................................ 34,841,203
-----------
NET INCREASE IN NET ASSETS.......................................................... 35,072,428
NET ASSETS:
Beginning of period................................................................. --
-----------
End of period....................................................................... $35,072,428
-----------
-----------
</TABLE>
- ------------------------
See notes to financial statements.
14
<PAGE>
<PAGE>
UBS Bond 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)...................................... $35,072
Ratio of expenses to average net assets(1)..................................... 0.67%(2)
Ratio of net investment income to average net assets(1)........................ 5.61%(2)
Portfolio turnover............................................................. 49%(3)
</TABLE>
- ------------------------
(1) 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 0.45% (annualized).
(2) Annualized.
(3) Not annualized.
See notes to financial statements.
15
<PAGE>
<PAGE>
UBS Bond Portfolio
Notes to Financial Statements June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
1. GENERAL
UBS Bond 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'). 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 -- Debt securities with a remaining maturity of more
than 60 days are normally valued by a pricing service approved by the Board of
Trustees (the 'Trustees'). Such pricing service will consider various factors
when arriving at a valuation for a security. Such factors include yields and
prices of comparable securities, indications as to values from dealers in such
securities and general market conditions. In the event a pricing service is
unable to price a security, the security will be valued by taking the average of
the bid and ask prices as provided by a dealer in such security.
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.
If market quotations for the securities of the Portfolio are not readily
available, such securities will be valued at 'fair value' as determined in good
faith by 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.
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. Interest income, adjusted for amortization of
premiums and accretion of discounts on investments, is accrued daily.
16
<PAGE>
<PAGE>
UBS Bond Portfolio
Notes to Financial Statements June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
E. 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 the 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. UBS 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. 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 0.45% of
the Portfolio's average daily net assets. For the period April 2, 1996
(commencement of operations) through June 30, 1996, the investment advisory fee
amounted to $33,379, all of which was waived.
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 from April 2, 1996
(commencement of operations) through June 30, 1996, the administrative services
fee amounted to $3,709.
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, other than short-term investments,
aggregated $49,606,601 and $14,911,922, respectively.
17
<PAGE>
<PAGE>
UBS Bond 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.
