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UBS
U.S. 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 U.S. 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 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
The UBS U.S. Equity Fund was down 0.29% for the period April 2, 1996
(commencement of operations) through June 30, 1996, compared to a 2.96% rise in
the Standard & Poor's 500 Index during the same period. This was the initial
period of operation for the Fund, a period when performance can be affected by
transaction costs and the timing of fund flows, the impact of which diminishes
as the Fund grows and ages.
PORTFOLIO ACTIVITY
The tobacco stocks rebounded dramatically from the industry-specific
litigation-induced price pressures of the first calendar quarter. The health
care issues also made a significant contribution to results as analysts focused
on the companies' more reliable prospects and pipelines at the expense of some
of last calendar quarter's cyclical favorites. Finally, the oil stocks continued
to do relatively well, although they did not quite match their pace of the
previous calendar quarter.
As one would expect given the prior calendar quarter's negative interest rate
environment, price performance for the electric and telephone utilities
generally remained below market levels with a couple of exceptions typified by
Pacific Bell's merger related strength. There was, however, significant
improvement on a relative basis when compared to first calendar quarter price
behavior. The finance group as a whole also continued to post lackluster
results, although here too, there was some relative improvement over the rather
dismal first calendar quarter. Weakness also typified the chemical and forest
products areas, but in this case it was in sharp contrast to the previous
calendar quarter's positive price action.
The Fund is managed based on the following three key issues: a superior
valuation methodology -- Relative Dividend Yield (RDY), qualitative and
quantitative fundamental research, and experienced, value-added portfolio
construction. Our valuation methodology (RDY) involves comparing a stock's yield
to the S&P 500's yield over a thirty year time period, and is our benchmark for
determining when a stock is cheap or expensive. Focused research using both
qualitative and quantitative fundamental research reduces the risk of owning
'terminally cheap' companies and an experienced team results in a diversified
portfolio of stocks and industries having the potential for long-term earnings
and dividend growth.
Although most of the period's transactions were undertaken as part of initial
portfolio construction, some are worth noting as indicators of strategic change.
We took advantage of relative price weakness in a number of telephone utilities
to add to positions. This was basically a realignment of our holdings in this
group after the removal of Pacific Bell due to its decline in Relative Dividend
Yield (RDY) caused by its merger related price rise and dividend reduction.
The food group was an area of increased emphasis in the face of lackluster
performance during the period. We recognized its attractive fundamentals and RDY
valuations by adding to both General Mills and Heinz. We also added to the
Reader's Digest holdings and started a new position in International Flavors &
Fragrances. In our opinion both of these companies provide excellent
diversification for the portfolio as well as exposure to attractive longer-term
growth potential.
ECONOMIC OVERVIEW
Second quarter financial markets saw fixed income securities as represented by
treasuries continue the first quarter's downward trend, albeit at a more modest
rate. The most significant damage was done in the three to ten year maturity
range where yields rose around 40 basis points. The equities market also
continued the previous quarter's pattern. Solidly positive returns were again
posted in spite of a
2
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UBS Private Investor Funds, Inc.
Fund Commentary
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negative interest rate environment, although the results were not quite as
dramatic as the first period's robust performance.
Both stock and bond markets followed an irregular pattern as investors responded
to periodic fears of higher inflation and Federal Reserve tightening of monetary
policy. Attitudes were strongly influenced by monthly statistical reports which
alternately showed a stronger or weaker than expected economy, and the markets
reacted accordingly. The impact of this often confused environment on some of
the more important industry groups represented in the portfolio provides some
insight into where performance did (and didn't) come from. Market leadership
proved quite transitory as some of last quarter's losers became winners while
certain previously strong groups lagged.
FUTURE TRENDS
As we proceed through the balance of the year we anticipate an economic
environment of modest growth, modest inflation and at least a modest decline in
interest rates from the 7% area. Although our performance lagged during the
initial period, particular strength was shown in drugs and tobaccos (especially
American Home Products and Philip Morris). Given the anticipated environment and
the consistent application of our discipline, it does not seem unreasonable to
expect this improving trend to continue.
Nancy Tengler
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
U.S. 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 all of its advisory fees for the Portfolio and
reimbursing a portion of the Portfolio's expenses. 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 S&P 500 Index is an unmanaged index broadly representative of the U.S. stock
market.
3
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UBS U.S. Equity 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 U.S. Equity Portfolio, at value... $6,010,838
Receivable from Adviser.............................................................. 5,785
Deferred organization expenses and other assets...................................... 100,186
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Total Assets............................................................... 6,116,809
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LIABILITIES:
Administrative services fees payable................................................. 515
Directors' fees payable.............................................................. 342
Organization expenses payable........................................................ 68,245
Other accrued expenses............................................................... 19,610
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Total Liabilities.......................................................... 88,712
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NET ASSETS........................................................................... $6,028,097
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SHARES OUTSTANDING ($0.001 par value, 10 million shares authorized).................. 60,456
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NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER SHARE....................... $99.71
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COMPOSITION OF NET ASSETS:
Shares of common stock, at par....................................................... $ 60
Additional paid-in capital........................................................... 6,007,105
Accumulated undistributed net investment income...................................... 32,920
Net unrealized depreciation of investments........................................... (12,787)
Accumulated undistributed net realized gains......................................... 799
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Net Assets................................................................. $6,028,097
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</TABLE>
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See notes to financial statements.
4
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UBS U.S. 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 U.S. Equity Portfolio
Dividends............................................................ $ 37,873
Interest............................................................. 4,316
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Investment income.................................................... 42,189
Total expenses....................................................... $ 20,879
Less: Fee waiver and expense reimbursements.......................... (11,610)
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Net expenses......................................................... 9,269
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Net Investment Income from UBS Investor Portfolios Trust --
UBS U.S. Equity Portfolio............................................... 32,920
EXPENSES:
Shareholder service fees.................................................. 2,575
Administrative services fees.............................................. 515
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......................................................... 1,560
Miscellaneous expenses.................................................... 1,325
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Total expenses....................................................... 33,163
Less: Fee waiver and expense reimbursements.......................... (33,163)
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Net expenses......................................................... --
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Net investment income..................................................... 32,920
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NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS FROM UBS INVESTOR
PORTFOLIOS TRUST -- UBS U.S. EQUITY PORTFOLIO
Net realized gain on securities transactions.............................. 799
Net change in unrealized depreciation of investments...................... (12,787)
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Net realized and unrealized loss from UBS Investor Portfolios Trust -- UBS
U.S. Equity Portfolio................................................... (11,988)
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NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS...................... $ 20,932
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</TABLE>
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See notes to financial statements.
5
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UBS U.S. 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>
<S> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment income.................................................................. $ 32,920
Net realized gain on securities transactions........................................... 799
Net change in unrealized depreciation of investments................................... (12,787)
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Net increase in net assets resulting from operations................................... 20,932
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TRANSACTIONS IN SHARES OF COMMON STOCK:
Net proceeds from sale of shares....................................................... 7,597,334
Cost of shares redeemed................................................................ (1,615,169)
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Net increase in net assets from transactions in shares of common stock................. 5,982,165
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NET INCREASE IN NET ASSETS............................................................. 6,003,097
NET ASSETS:
Beginning of period.................................................................... 25,000
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End of period (including undistributed net investment income of $32,920)............... $ 6,028,097
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</TABLE>
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See notes to financial statements.
6
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UBS U.S. Equity Fund
Financial Highlights
For the Period April 2, 1996 (Commencement of Operations) through June 30, 1996
(Unaudited)
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<TABLE>
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FOR A SHARE OUTSTANDING FOR THE PERIOD
Net asset value, beginning of period........................................... $100.00
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Loss from investment operations:
Net investment income..................................................... 0.54
Net realized and unrealized loss on investments........................... (0.83)
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Total loss from investment operations..................................... (0.29) (1)
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Net asset value, end of period................................................. $ 99.71
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Total return................................................................... (0.29)%(4)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)................................. $ 6,028
Ratio of expenses to average net assets(2)................................ 0.90%(3)
Ratio of net investment income to average net assets(2)................... 3.20%(3)
</TABLE>
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(1) The per share amount reflected for a share outstanding throughout the period
does not agree with the Statement of Changes in Net Assets because of timing
of sales and repurchases of the Fund's shares in relation to fluctuating
market values of the investments of the Fund.
(2) Includes the Fund's share of UBS Investor Portfolios Trust -- UBS U.S.
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 4.35% (annualized).
(3) Annualized.
(4) Not annualized.
See notes to financial statements.
7
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UBS U.S. Equity Fund
Notes to Financial Statements June 30, 1996 (Unaudited)
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1. GENERAL
UBS U.S. 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 International Equity
Fund.
The Fund seeks to achieve its investment objective by investing substantially
all of its investable assets in the UBS U.S. 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 (32.1% 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 U.S. 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 cost of its operations other than expenses
specifically assumed by UBS and Signature. 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 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 $515.
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
$2,575, 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 compensation for the services provided
pursuant to this agreement.
E. EXPENSES 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 0.90% 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
$30,588 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................................. 76,636
Shares redeemed................................... (16,430)
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Net increase in shares outstanding................ 60,206
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</TABLE>
9
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UBS U.S. 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 -- 96.2%
BANKING & FINANCIAL INSTITUTIONS -- 12.6%
1,100 BankAmerica Corp........................................................................... $ 83,325
8,100 Corestates Financial Corp.................................................................. 311,850
6,600 Great Western Financial.................................................................... 157,575
8,450 J.P. Morgan & Co Inc....................................................................... 715,081
12,800 Mellon Bank Corp........................................................................... 729,600
9,700 U.S. Bancorp............................................................................... 350,412
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2,347,843
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CHEMICALS -- 3.6%
4,490 Dow Chemical Company....................................................................... 341,240
9,800 Witco Corp................................................................................. 336,875
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678,115
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CONSUMER FOODS -- 5.6%
10,970 General Mills Co........................................................................... 597,865
14,775 H.J. Heinz Co.............................................................................. 448,791
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1,046,656
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CONSUMER GOODS & SERVICES -- 8.7%
18,950 H&R Block Inc.............................................................................. 618,244
6,710 International Flavors & Fragrances......................................................... 319,564
10,200 Readers Digest Association Inc............................................................. 433,500
6,240 Tambrands Inc.............................................................................. 255,060
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1,626,368
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DRUGS & PHARMACEUTICALS -- 8.6%
9,960 American Home Products Corp................................................................ 598,845
9,400 Bristol-Myers Squibb Co.................................................................... 846,000
1,977 Pharmacia & Upjohn Inc..................................................................... 87,729
1,360 Warner-Lambert Co.......................................................................... 74,800
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1,607,374
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INSURANCE -- 4.9%
6,300 American General Corp...................................................................... 229,162
3,450 Marsh & McLennan Cos. Inc.................................................................. 332,925
9,900 Safeco Corp................................................................................ 350,212
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912,299
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LUMBER, PAPER & BUILDING SUPPLIES -- 6.0%
10,350 Potlatch Corp.............................................................................. 404,944
4,300 Union Camp Corp............................................................................ 209,625
11,800 Weyerhauser Co............................................................................. 501,500
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1,116,069
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MANUFACTURING -- 4.5%
12,210 Minnesota Mining & Manufacturing........................................................... 842,490
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NATURAL GAS -- 0.8%
5,100 NICOR Inc.................................................................................. 144,713
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OFFICE EQUIPMENT AND SUPPLIES -- 2.1%
8,350 Pitney Bowes, Inc.......................................................................... 398,712
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</TABLE>
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See notes to financial statements.
10
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UBS U.S. Equity Portfolio
Schedule of Investments June 30, 1996 (Unaudited)
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<TABLE>
<CAPTION>
SHARES SECURITY DESCRIPTION VALUE
- ------ ------------------------------------------------------------------------------------------- -----------
<C> <S> <C>
PETROLEUM PRODUCTION & SALES -- 6.2%
3,600 Amoco Corporation.......................................................................... $ 260,550
4,750 Atlantic Richfield Co...................................................................... 562,875
4,100 Chevron Corporation........................................................................ 241,900
1,120 Texaco Inc................................................................................. 93,940
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1,159,265
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PRINTING & PUBLISHING -- 3.9%
7,560 Deluxe Corporation......................................................................... 268,380
7,500 Dun & Bradstreet Corporation............................................................... 468,750
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737,130
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RETAIL -- 2.8%
9,920 J.C. Penney Company, Inc................................................................... 520,800
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TELECOMMUNICATIONS -- 12.0%
10,400 Bell Atlantic Corp......................................................................... 663,000
15,150 GTE Corporation............................................................................ 677,963
5,750 NYNEX Corp................................................................................. 273,125
20,000 US West Inc................................................................................ 637,500
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2,251,588
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TOBACCO -- 8.3%
7,000 American Brands Inc........................................................................ 317,625
8,250 Philip Morris Companies, Inc............................................................... 858,000
10,800 UST, Inc................................................................................... 369,900
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1,545,525
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UTILITIES -- 5.6%
1,225 American Electric Power Inc................................................................ 52,216
9,050 Baltimore Gas and Electric................................................................. 256,794
5,860 Central & South West Corp.................................................................. 169,940
11,600 Northeast Utilities........................................................................ 155,150
7,780 Pacific Gas & Electric..................................................................... 180,885
8,200 Wisconsin Energy Corp...................................................................... 236,775
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1,051,760
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TOTAL INVESTMENTS AT MARKET VALUE -- 96.2%
(COST $17,940,214)................................................................................ 17,986,707
OTHER ASSETS IN EXCESS OF LIABILITIES -- 3.8%....................................................... 716,518
-----------
TOTAL NET ASSETS -- 100.0%.......................................................................... $18,703,225
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</TABLE>
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Note: Based on the cost of investments of $17,940,214 for Federal Income Tax
purposes at June 30, 1996, the aggregate gross unrealized appreciation and
depreciation was $511,326 and $464,833, respectively, resulting in net
unrealized appreciation of $46,493.
See notes to financial statements.
11
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UBS U.S. Equity Portfolio
Statement of Assets and Liabilities June 30, 1996 (Unaudited)
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<TABLE>
<S> <C>
ASSETS:
Investments, at value (cost $17,940,214).......................................... $17,986,707
Cash.............................................................................. 672,078
Dividends and interest receivable................................................. 59,240
Receivable from Adviser........................................................... 16,750
Deferred organization expenses and other assets................................... 49,483
-----------
Total Assets................................................................. 18,784,258
-----------
LIABILITIES:
Administrative services fees payable.............................................. 1,672
Accrued Trustees' fees............................................................ 466
Organization expenses payable..................................................... 48,781
Other accrued expenses............................................................ 30,114
-----------
Total Liabilities............................................................ 81,033
-----------
NET ASSETS........................................................................ $18,703,225
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NET ASSETS CONSIST OF:
Paid-in capital for beneficial interests.......................................... $18,703,225
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</TABLE>
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See notes to financial statements.
12
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UBS U.S. Equity Portfolio
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:
Dividends.................................................................. $125,056
Interest................................................................... 12,159
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Investment income..................................................... $137,215
EXPENSES:
Investment advisory fees................................................... 20,059
Administrative services fees............................................... 1,672
Audit fees................................................................. 12,928
Custodian fees and expenses................................................ 9,842
Fund accounting fees....................................................... 7,808
Legal fees................................................................. 6,164
Trustees' fees............................................................. 2,466
Amortization of organization expenses...................................... 2,466
Miscellaneous expenses..................................................... 2,796
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Total expenses........................................................ 66,201
Less: Fee waiver and expense reimbursements........................... (36,809)
--------
Net expenses.......................................................... 29,392
--------
Net investment income...................................................... 107,823
--------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on securities transactions............................... 2,898
Net change in unrealized appreciation of investments....................... 46,493
--------
Net realized and unrealized gain on investments............................ 49,391
--------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS....................... $157,214
--------
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</TABLE>
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See notes to financial statements.
13
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<PAGE>
UBS U.S. Equity Portfolio
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.................................................................. $ 107,823
Net realized gain on securities transactions........................................... 2,898
Net change in unrealized appreciation of investments................................... 46,493
-----------
Net increase in net assets resulting from operations................................... 157,214
-----------
CAPITAL TRANSACTIONS:
Proceeds from contributions............................................................ 20,663,059
Value of withdrawals................................................................... (2,117,048)
-----------
Net increase in net assets from capital transactions................................... 18,546,011
-----------
NET INCREASE IN NET ASSETS............................................................. 18,703,225
NET ASSETS:
Beginning of period.................................................................... --
-----------
End of period.......................................................................... $18,703,225
-----------
-----------
</TABLE>
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See notes to financial statements.
14
<PAGE>
<PAGE>
UBS U.S. 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)...................................... $18,703
Average commission per share................................................... $ 0.60
Ratio of expenses to average net assets(1)..................................... 0.88%(2)
Ratio of net investment income to average net assets(1)........................ 3.23%(2)
Portfolio turnover............................................................. 0%
</TABLE>
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(1) Net of fee waiver and expense reimbursements 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 1.11%.
(2) Annualized.
See notes to financial statements.
15
<PAGE>
<PAGE>
UBS U.S. Equity Portfolio
Notes to Financial Statements June 30, 1996 (Unaudited)
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1. GENERAL
UBS U.S. 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'). 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
their 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 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.
B. 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. Interest income,
adjusted for amortization of premiums and accretion of discounts on investments,
is accrued daily.
C. 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.
D. 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).
E. 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
16
<PAGE>
<PAGE>
UBS U.S. Equity Portfolio
Notes to Financial Statements June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
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 0.60% 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 $20,059, 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 April 2, 1996
(commencement of operations) through June 30, 1996, the administrative services
fee amounted to $1,672.
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.
D. EXPENSE REIMBURSEMENTS -- UBS has voluntarily agreed to reimburse certain
operating expenses of the Portfolio. For the period April 2, 1996 (commencement
of operations) through June 30, 1996, UBS reimbursed the Portfolio for expenses
totaling $16,750.
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 $17,968,676 and $31,360, respectively.
17
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<PAGE>
UBS U.S. 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.
