<PAGE>
<PAGE>
- -------------------------------------
UBS
U.S. EQUITY
FUND
---------
UBS
Private Investor
Funds, Inc.
Semi-Annual Report
June 30, 1997
- --------------------------------------
<PAGE>
<PAGE>
UBS Private Investor Funds, Inc.
Chairman's Letter
- --------------------------------------------------------------------------------
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 six
months ended June 30, 1997. This report contains a letter from the portfolio
manager discussing the performance of the Fund for the six months ended June 30,
1997 including an economic overview. In addition, it includes a complete set of
financial statements as well as a schedule of investments.
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
Make available global investment perspective and knowledge
Place 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 a 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,
Dr. HansPeter Lochmeier
Chairman of the Board
UBS Private Investor Funds, Inc.
- ------------------------
* '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.
<PAGE>
<PAGE>
UBS Private Investor Funds, Inc.
Fund Commentary
- --------------------------------------------------------------------------------
For the second quarter the UBS U.S. Equity Fund (the 'Fund') returned 14.04%
versus 17.46% for the S&P 500 and 14.47% for the S&P/Barra Value Index. The
average Growth & Income fund returned 14.28% for the second quarter according to
Lipper Analytical. For the six months ended June 30, 1997, the Fund is up 15.92%
versus 20.61% for the S&P 500, 16.49% for the S&P/Barra Value Index and 15.52%
for the average Growth & Income fund according to Lipper Analytical.
Growth of a $10,000 Investment
(Hypothetical -- Past performance is not an indication of future results.)
This chart provides a comparison of the Fund's performance to that of the S&P
500 Index. This chart compares total returns (which includes changes in share
price and reinvestment of all dividends and capital gains) of a hypothetical
$10,000 investment made on April 2, 1996 (commencement of operations) and held
through June 30, 1997.
[GRAPH]
UBS U.S. S&P 500
DATE EQUITY FUND INDEX
- ------ ----------- -------
4/2/96 $10,000 $10,000
4/30/96 9,813 10,024
5/31/96 9,957 10,281
6/30/96 9,971 10,320
7/31/96 9,609 9,864
8/31/96 9,651 10,072
9/30/96 10,084 10,639
10/30/96 10,273 10,933
11/30/96 10,962 11,759
12/31/96 10,874 11,527
1/31/97 11,177 12,247
2/28/97 11,572 12,343
3/31/97 11,053 11,836
4/30/97 11,497 12,542
5/31/97 12,195 13,306
6/30/97 12,605 13,902
Average Annual Total Return:
<TABLE>
<CAPTION>
UBS
U.S. EQUITY S&P 500
FUND INDEX
----------- -----------
<S> <C> <C>
1 year ended June 30, 1997.................................................. 26.42% 34.71%
April 2, 1996 (commencement of operations) through
June 30, 1997............................................................. 20.41% 30.25%
</TABLE>
MARKET OVERVIEW
The first quarter was relatively 'normal' with the S&P 500 returning 2.68%
(which still put it in the top quartile of managers in the Callan universe) and
progressing at a reasonable and sustainable annual rate of about 10% -- 'normal'
in other words. Investors were still concerned about further Fed tightening; and
most investors sat back, ready for a volatile ride during Q2.
It was volatile all right -- but generally speaking the market (as measured by
the S&P 500 Index) went straight up: 5.97% in April, 6.09% in May and 4.48% in
June. Volatility doubled (over recent years) and returned to normal with the
standard deviation of daily price change increasing to 15%.
2
<PAGE>
<PAGE>
UBS Private Investor Funds, Inc.
Fund Commentary
- --------------------------------------------------------------------------------
We have been singing the supply and demand song for quite a while now, arguing
that while the fundamentals also support a strong market there is a secondary
force working in investors' favor and that is a declining supply of stock in an
environment of increasing demand.
There is also the matter of the S&P 500 yield which is hovering at an historic
low. It is important to note that if you look back a bit to say 1969, this yield
was at similar levels if you factor in the net contraction of supply in the
market which gets the adjusted S&P yield closer to 3%. If you then consider the
low levels of inflation (approximately 2.5% for the CPI), it is possible to feel
some comfort at these levels -- provided there are attractive, fundamentally
sound companies to buy. Looking back at market price/earnings ratios in similar
inflation environments the range is 18 - 22 times earnings and the current
multiple on 97 earnings is at the low end of the range at about 19x.
Dividend actions provided mixed messages during the second quarter with the
number of increases slowing and the number of decreases slowing. It is difficult
to determine why managements did not increase their dividends as much as they
did in 1996. It could be that managements are not feeling as much pressure to do
so as investors are satisfied with the hefty capital gains they have been
realizing over the last three years. Or it could be that the managements do not
believe that these earnings levels are sustainable and they do not want to raise
dividends to a level that they will not be able to support in the future. Since
the decline in dividend increases is only three months old and is coming off an
historical high we will have to wait and continue to research this potentially
disturbing piece of news.
And, yes, you've probably guessed it, we are still finding attractive companies
to invest in. During the second quarter, Anheuser Busch, First Union Bank and
Eastman Kodak entered the buy range -- companies that have not been attractive
in our Value Plus strategy for many years. There are still well over 150 stocks
in the S&P 500 that are undervalued which is well above the approximately 90 S&P
500 stocks that were attractive in 1987 prior to the correction, and the 138
attractive stocks at the end of last year.
The second quarter was driven by more of the same. Financial, technology and
pharmaceuticals continued to outperform the market while utilities and oils
underperformed. Bigger continued to be better in the quarter and the first half
of the year. The five largest stocks beat the market during the first two
quarters and the best performers were Microsoft (54.3%); Eli Lilly (50.9%);
Bristol-Myers Squibb (49.6%) -- our largest holding -- and Wal-Mart (49.3%).
VALUE PLUS STRATEGY
We have continued our research based focus on high quality, undervalued
securities and it continues to pay off. Even with the S&P 500 turning in a very
strong 20.61% for the first half of the year, our Ten Largest Holdings in the
UBS U.S. Equity Portfolio (the 'Portfolio') returned 23.7% in the same period,
outperforming the market by over 300 basis points.
3
<PAGE>
<PAGE>
UBS Private Investor Funds, Inc.
Fund Commentary
- --------------------------------------------------------------------------------
The ten largest holding at the end of the second quarter were as follows:
<TABLE>
<CAPTION>
QUARTER
% OF PRICE
COMPANY PORTFOLIO CHANGE
- ---------------------------------------------------------------------------------------------- --------- -------
<S> <C> <C>
Bristol-Myers Squibb Co....................................................................... 5.8% 37.3%
American Home Products Corp................................................................... 5.3 30.5
Philip Morris Companies, Inc.................................................................. 5.2 16.3
Mellon Bank Corp. ............................................................................ 5.0 24.1
Minnesota Mining & Manufacturing.............................................................. 4.8 20.8
Bell Atlantic Corp............................................................................ 4.6 24.9
Weyerhaeuser Co............................................................................... 4.5 16.5
H. J. Heinz Co................................................................................ 4.4 16.8
General Mills Co.............................................................................. 3.9 4.8
J.P. Morgan & Co. Inc......................................................................... 3.8 6.2
---------
TOTAL.................................................................................... 47.3%
---------
---------
YTD WEIGHTED PRICE CHANGE................................................................ 23.7%
YTD S&P 500.............................................................................. 20.6%
</TABLE>
The Portfolio benefited from significant holdings in two industry
groups -- pharmaceuticals and financials. Pharmaceutical stocks continued their
relentless outperformance again during the second quarter with the exception of
Pharmacia & Upjohn. Bristol-Myers and American Home Products (two of our largest
holdings) significantly outperformed the market along with Baxter International,
yet despite continued strength the stocks are still not in the sell range
(although they are getting close). Weakness in Pharmacia & Upjohn has provided
the opportunity to add to holdings; and the new CEO is already making the right
long-term changes. The stock has strengthened from recent lows but is still
undervalued.
The bank and insurance stocks also contributed nicely to portfolio returns with
Mellon, U.S. Bancorp and BankAmerica outperforming the market handily. Our two
insurance holdings, American General Corporation and Marsh & McLennan Companies
also turned in better than market performance.
Individual holdings also providing relative outperformance during the quarter
(in addition to the ten largest holdings) were Pitney Bowes, Weyerhaeuser, Bell
Atlantic and SBC Communications.
Oil stocks couldn't keep up with the pace of the market during quarter two,
turning in disappointing results but giving us the opportunity to add
selectively to holdings. Our decision to be significantly underweighted in the
electric utilities has continued to be a good decision for the Portfolio.
Deregulation continues to plague these stocks with uncertainty. Add to that
sluggish earnings growth (exacerbated by weather) and virtually no dividend
growth, and we continue to think that there are much more attractive places to
invest our shareholders' money. The S&P Electric Utility industry group returned
3.7% for the second quarter, once again significantly underperforming the
market.
4
<PAGE>
<PAGE>
UBS Private Investor Funds, Inc.
Fund Commentary
- --------------------------------------------------------------------------------
Finally, it wouldn't be a report from the Fund if we didn't spend a few minutes
on Philip Morris. The company split the stock three for one during the second
quarter and participated in the 'landmark tobacco settlement' announced shortly
before quarter end. For the year to date the stock has matched the market
performance in capital change but slightly outperformed with income. It still
sells at a significant discount to the market multiple and provides strong
long-term growth from these levels.
Nancy Tengler
Portfolio Manager
- ------------------------
The Fund is not insured by the FDIC and is not a deposit with, an 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 First Fund Distributors, 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 a portion of its advisory fees for the Portfolio. If
Union Bank of Switzerland had not waived fees and reimbursed expenses, total
return would have been lower. Past performance is not a guarantee of future
results. Investment return and principal value of an investment will fluctuate
so that an investor's shares, when redeemed, may be worth more or less than
their original cost.
The S&P 500 Index is an unmanaged index broadly representative of the U.S. stock
market.
5
<PAGE>
<PAGE>
UBS U.S. Equity Fund
Statement of Assets and Liabilities
June 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investment in UBS Investor Portfolios Trust -- UBS U.S. Equity Portfolio, at
value............................................................................. $19,652,620
Receivable from Funds services agent................................................ 4,714
Deferred organization expenses and other assets..................................... 106,913
-----------
Total Assets.............................................................. 19,764,247
-----------
LIABILITIES:
Administrative services fees payable................................................ 1,725
Other accrued expenses.............................................................. 17,546
-----------
Total Liabilities......................................................... 19,271
-----------
NET ASSETS.......................................................................... $19,744,976
-----------
-----------
SHARES OUTSTANDING ($0.001 par value, 10 million shares authorized)................. 159,808
-----------
-----------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER SHARE...................... $123.55
COMPOSITION OF NET ASSETS: -----------
-----------
Shares of common stock, at par...................................................... $ 160
Additional paid-in capital.......................................................... 16,700,826
Net unrealized appreciation of investments.......................................... 2,786,419
Accumulated undistributed net investment income..................................... 178,812
Accumulated undistributed net realized gains........................................ 78,759
-----------
Net Assets................................................................ $19,744,976
-----------
-----------
</TABLE>
- ------------------------
See notes to financial statements.
6
<PAGE>
<PAGE>
UBS U.S. Equity Fund
Statement of Operations
For the Six Months Ended June 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME
Investment Income and Expenses from UBS Investor Portfolios
Trust -- UBS U.S. Equity Portfolio
Dividends......................................................... $234,867
Interest.......................................................... 9,615
--------
Investment income............................................ $ 244,482
Total expenses.................................................... 72,954
Less: Fee waiver.................................................. (40,835)
--------
Net expenses...................................................... 32,119
----------
Net Investment Income from UBS Investor Portfolios Trust -- UBS U.S.
Equity Portfolio..................................................... 212,363
EXPENSES
Shareholder service fees............................................... 17,879
Administrative services fees........................................... 4,219
Reports to shareholders expense........................................ 11,057
Amortization of organization expenses.................................. 9,717
Audit fees............................................................. 5,434
Transfer agent fees.................................................... 5,200
Legal fees............................................................. 4,837
Registration fees...................................................... 3,952
Fund accounting fees................................................... 3,840
Directors' fees........................................................ 2,976
Miscellaneous expenses................................................. 1,696
--------
Total expenses.................................................... 70,807
Less: Fee waiver and expense reimbursements....................... (37,218)
--------
Net expenses...................................................... 33,589
----------
Net investment income............................................. 178,774
----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS FROM
UBS INVESTOR PORTFOLIOS TRUST -- UBS U.S. EQUITY PORTFOLIO
Net realized gain on securities transactions........................... 79,126
Net change in unrealized appreciation of investments................... 2,101,523
----------
Net realized and unrealized gain on investments from
UBS Investor Portfolios Trust -- UBS U.S. Equity Portfolio........... 2,180,649
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................... $2,359,423
----------
----------
</TABLE>
- ------------------------
See notes to financial statements.
7
<PAGE>
<PAGE>
UBS U.S. Equity Fund
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED APRIL 2, 1996*
JUNE 30, 1997 THROUGH
(UNAUDITED) DECEMBER 31, 1996
------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment income...................................................... $ 178,774 $ 157,796
Net realized gain on securities transactions............................... 79,126 13,685
Net change in unrealized appreciation of investments....................... 2,101,523 684,896
------------- -----------------
Net increase in net assets resulting from operations....................... 2,359,423 856,377
------------- -----------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income...................................................... (1,119) (156,639)
Net realized gains......................................................... (14,052) --
------------- -----------------
Total dividends and distributions to shareholders.......................... (15,171) (156,639)
------------- -----------------
TRANSACTIONS IN SHARES OF COMMON STOCK:
Net proceeds from sale of shares........................................... 10,200,929 13,752,890
Net asset value of shares issued to shareholders in reinvestment of
dividends and distributions.............................................. 14,711 156,639
Cost of shares redeemed.................................................... (2,280,612) (5,168,571)
------------- -----------------
Net increase in net assets from transactions in shares of common stock..... 7,935,028 8,740,958
------------- -----------------
NET INCREASE IN NET ASSETS................................................. 10,279,280 9,440,696
NET ASSETS:
Beginning of period........................................................ 9,465,696 25,000
------------- -----------------
End of period (including undistributed net investment income of $178,812
and $1,157, respectively)................................................ $ 19,744,976 $ 9,465,696
------------- -----------------
------------- -----------------
</TABLE>
- ------------------------
* Commencement of operations.
See notes to financial statements.
8
<PAGE>
<PAGE>
UBS U.S. Equity Fund
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED APRIL 2, 1996*
JUNE 30, 1997 THROUGH
(UNAUDITED) DECEMBER 31, 1996
------------- -----------------
<S> <C> <C>
FOR A SHARE OUTSTANDING FOR THE PERIOD
Net asset value, beginning of period..................................... $106.70 $100.00
------------- -----------------
Income from investment operations:
Net investment income............................................... 1.13 2.05
Net realized and unrealized gain on investments..................... 15.84 6.69
------------- -----------------
Total income from investment operations............................. 16.97 8.74
------------- -----------------
Less dividends and distributions to shareholders:
Dividends from net investment income................................ (0.01) (2.04)
Distributions from net realized gains............................... (0.11) --
------------- -----------------
Total dividends and distributions................................... (0.12) (2.04)
------------- -----------------
Net asset value, end of period........................................... $123.55 $106.70
------------- -----------------
------------- -----------------
Total return............................................................. 15.92%(1) 8.74%(1)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted)............................ $19,745 $ 9,466
Ratio of expenses to average net assets(2).......................... 0.92%(3) 0.90%(3)
Ratio of net investment income to average net assets(2)............. 2.50%(3) 3.04%(3)
</TABLE>
- ------------------------
* Commencement of operations.
(1) Not annualized.
(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 1.09% (annualized) and 2.65%
(annualized) for the respective periods.
(3) Annualized.
See notes to financial statements.
9
<PAGE>
<PAGE>
UBS U.S. Equity Fund
Notes to Financial Statements
June 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
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, 1997, the
Company included three other funds, UBS Bond Fund, UBS International Equity Fund
and UBS Institutional International Equity Fund. These financial statements
relate only to the 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.
Investors Bank & Trust Company ('IBT') serves as the Fund's administrator and
First Fund Distributors, Inc. ('FFDI') serves as the Fund's distributor. Union
Bank of Switzerland, New York Branch ('UBS') serves as the funds 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 -- 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
(49.8% at June 30, 1997). 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
10
<PAGE>
<PAGE>
UBS U.S. Equity Fund
Notes to Financial Statements
June 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
composition of net assets based upon their federal tax-basis treatment;
temporary differences do not require reclassification.
E. DEFERRED ORGANIZATION EXPENSES -- Expenses incurred by the Fund in connection
with its organization in the amount of approximately $107,500 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 UBS, FFDI and IBT. 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. ADMINISTRATION AGREEMENT -- Under the terms of an Administration Agreement
with the Company effective March 13, 1997, IBT provides overall administrative
services and general office facilities. As compensation for such services, the
Company has agreed to pay IBT a fee, accrued daily and payable monthly, at an
annual rate of 0.065% of the Fund's first $100 million average daily net assets
and 0.025% of the next $100 million average daily net assets. IBT does not
receive a fee on average daily net assets in excess of $200 million. Prior to
March 13, 1997, Signature Broker-Dealer Services, Inc. ('Signature') provided
overall administrative services and general office facilities. As compensation
for such services, the Company had agreed to pay Signature a fee, accrued daily
and paid 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 did not receive a fee on average daily net assets in excess of
$200 million. For the six months ended June 30, 1997, the administrative
services fee amounted to $4,219.
B. DISTRIBUTION AGREEMENT -- Under the terms of a Distribution Agreement
effective March 13, 1997, FFDI serves as the distributor of Fund shares. FFDI
does not receive any fees from the Fund for services provided pursuant to this
agreement. Prior to March 13, 1997, Signature served as the distributor of Fund
shares. Signature did not receive any additional fees for services provided as
the distributor.
C. SHAREHOLDER SERVICING AGREEMENT -- The Fund has entered into a Shareholder
Servicing 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 six months ended June 30, 1997,
the shareholder service fee amounted to $17,879, all of which was waived.
D. FUNDS SERVICES AGREEMENT -- Under the terms of a Funds Services Agreement
with the Company, UBS has agreed to provide certain administrative services to
the Fund. UBS is not entitled to any additional compensation pursuant to this
agreement.
E. EXPENSE REIMBURSEMENTS -- UBS has voluntarily agreed to limit the total
operating expenses of the Fund, including its share of the Portfolio's expenses
and excluding extraordinary expenses. For the period January 1, 1997 through
June 5, 1997, the Fund's total operating expenses were limited to an annual rate
of 0.90% of the Fund's average daily net assets. Effective June 6, 1997, this
expense limitation was increased to 1.00% of the Fund's average daily net
assets. For the six months ended June 30, 1997, UBS reimbursed the Fund for
expenses totaling $19,339 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.
11
<PAGE>
<PAGE>
UBS U.S. Equity Fund
Notes to Financial Statements
June 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
4. CAPITAL SHARE TRANSACTIONS
At June 30, 1997 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 were as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED PERIOD FROM APRIL 2, 1996
JUNE 30, 1997 (COMMENCEMENT OF OPERATIONS)
(UNAUDITED) THROUGH DECEMBER 31, 1996
------------- ----------------------------
<S> <C> <C>
Shares subscribed.................................... 91,364 137,339
Shares issued to shareholders in reinvestment of
dividends and distributions........................ 136 1,465
Shares redeemed...................................... (20,404) (50,342)
------------- ----------
Net increase in shares outstanding................... 71,096 88,462
------------- ----------
------------- ----------
</TABLE>
12
<PAGE>
<PAGE>
UBS U.S. Equity Portfolio
Schedule of Investments
June 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES SECURITY DESCRIPTION VALUE
- ------- ------------------------------------------------------------------------------------------ -----------
<C> <S> <C>
COMMON STOCK -- 98.8%
BANKING & FINANCIAL INSTITUTIONS -- 15.6%
5,600 BankAmerica Corp. ........................................................................ $ 361,550
15,800 Corestates Financial Corp. ............................................................... 849,250
14,350 J. P. Morgan & Co. Inc. .................................................................. 1,497,781
43,600 Mellon Bank Corp. ........................................................................ 1,967,450
17,700 U.S. Bancorp.............................................................................. 1,135,013
5,900 Wachovia Corp. ........................................................................... 344,044
-----------
6,155,088
-----------
CHEMICALS -- 3.8%
8,090 Dow Chemical Company...................................................................... 704,841
20,800 Witco Corp. .............................................................................. 789,100
-----------
1,493,941
-----------
CONSUMER FOODS -- 8.1%
23,070 General Mills Co. ........................................................................ 1,502,434
36,775 H. J. Heinz Co. .......................................................................... 1,696,247
-----------
3,198,681
-----------
COSMETICS -- 2.2%
17,410 International Flavors & Fragrances........................................................ 879,205
-----------
DIVERSIFIED -- 1.2%
13,000 Fortune Brands Inc. ...................................................................... 485,063
-----------
DRUGS & PHARMACEUTICALS -- 15.4%
26,860 American Home Products Corp. ............................................................. 2,054,790
14,700 Baxter International...................................................................... 768,075
27,900 Bristol-Myers Squibb Co. ................................................................. 2,259,900
28,477 Pharmacia & Upjohn Inc. .................................................................. 989,576
-----------
6,072,341
-----------
INSURANCE -- 4.0%
17,100 American General Corp. ................................................................... 816,525
10,900 Marsh & McLennan Cos. Inc. ............................................................... 777,988
-----------
1,594,513
-----------
LUMBER, PAPER & BUILDING SUPPLIES -- 6.3%
14,500 Union Camp Corp. ......................................................................... 725,000
34,100 Weyerhaeuser Co. ......................................................................... 1,773,198
-----------
2,498,198
-----------
MANUFACTURING -- 7.3%
20,000 Cooper Industries Inc. ................................................................... 995,000
18,510 Minnesota Mining & Manufacturing.......................................................... 1,888,020
-----------
2,883,020
-----------
OFFICE EQUIPMENT AND SUPPLIES -- 2.9%
16,350 Pitney Bowes, Inc......................................................................... 1,136,325
-----------
</TABLE>
- ------------------------
See notes to financial statements.
13
<PAGE>
<PAGE>
UBS U.S. Equity Portfolio
Schedule of Investments
June 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES SECURITY DESCRIPTION VALUE
- ------- ------------------------------------------------------------------------------------------ -----------
<C> <S> <C>
PETROLEUM PRODUCTION & SALES -- 8.6%
9,100 Amoco Corporation......................................................................... $ 791,131
15,500 Atlantic Richfield Co. ................................................................... 1,092,750
12,700 Chevron Corporation....................................................................... 939,006
5,120 Texaco Inc. .............................................................................. 556,800
-----------
3,379,687
-----------
RETAIL -- 3.5%
18,620 J. C. Penney Company, Inc. ............................................................... 971,731
8,600 May Department Stores..................................................................... 406,350
-----------
1,378,081
-----------
TELECOMMUNICATIONS -- 13.7%
9,800 Ameritech Corp. .......................................................................... 665,788
23,400 Bell Atlantic Corp. ...................................................................... 1,775,475
30,650 GTE Corporation........................................................................... 1,344,769
13,400 SBC Communications........................................................................ 829,125
20,600 US West Inc. ............................................................................. 776,363
-----------
5,391,520
-----------
TOBACCO -- 5.1%
45,350 Philip Morris Companies, Inc. ............................................................ 2,012,406
-----------
UTILITIES -- 1.1%
3,400 American Electric Power Inc. ............................................................. 142,800
10,750 Baltimore Gas And Electric................................................................ 286,891
-----------
429,691
-----------
TOTAL INVESTMENTS AT MARKET VALUE -- 98.8%
(COST $32,800,276).............................................................................. 38,987,760
OTHER ASSETS IN EXCESS OF LIABILITIES -- 1.2%....................................................... 477,017
-----------
NET ASSETS -- 100.0%................................................................................ $39,464,777
-----------
-----------
</TABLE>
- ------------------------
Note: Based upon the cost of investments of $32,800,276 for Federal Income Tax
purposes at June 30, 1997, the aggregate gross unrealized appreciation and
depreciation was $7,575,019 and $1,387,535, respectively, resulting in net
unrealized appreciation of $6,187,484.
See notes to financial statements.
14
<PAGE>
<PAGE>
UBS U.S. Equity Portfolio
Statement of Assets and Liabilities
June 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments, at value (cost $32,800,276)............................................ $38,987,760
Cash................................................................................ 408,995
Dividends and interest receivable................................................... 110,206
Deferred organization expenses and other assets..................................... 21,548
-----------
Total Assets.............................................................. 39,528,509
-----------
LIABILITIES:
Administrative services fees payable................................................ 6,701
Investment advisory fees payable.................................................... 4,151
Other accrued expenses.............................................................. 52,880
-----------
Total Liabilities......................................................... 63,732
-----------
NET ASSETS.......................................................................... $39,464,777
-----------
-----------
NET ASSETS CONSIST OF:
Paid-in capital for beneficial interests.......................................... $39,464,777
-----------
-----------
</TABLE>
- ------------------------
See notes to financial statements.
15
<PAGE>
<PAGE>
UBS U.S. Equity Portfolio
Statement of Operations
For the Six Months Ended June 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME
Dividends.............................................................. $540,414
Interest............................................................... 22,454
--------
Investment income................................................. $ 562,868
EXPENSES
Investment advisory fees............................................... 97,665
Administrative services fees........................................... 9,936
Audit fees............................................................. 19,701
Fund accounting fees................................................... 12,989
Custodian fees and expenses............................................ 10,087
Legal fees............................................................. 5,513
Amortization of organization expenses.................................. 4,478
Trustees' fees......................................................... 3,968
Insurance expense...................................................... 1,291
Miscellaneous expenses................................................. 1,321
--------
Total expenses.................................................... 166,949
Less: Fee waiver.................................................. (93,514)
--------
Net expenses...................................................... 73,435
----------
Net investment income.................................................. 489,433
----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on securities transactions........................... 170,619
Net change in unrealized appreciation of investments................... 4,513,149
----------
Net realized and unrealized gain on investments........................ 4,683,768
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................... $5,173,201
----------
----------
</TABLE>
- ------------------------
See notes to financial statements.
16
<PAGE>
<PAGE>
UBS U.S. Equity Portfolio
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED APRIL 2, 1996*
JUNE 30, 1997 THROUGH
(UNAUDITED) DECEMBER 31, 1996
------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment income............................................ $ 489,433 $ 432,121
Net realized gain on securities transactions..................... 170,619 1,679
Net change in unrealized appreciation of investments............. 4,513,149 1,674,335
------------- -----------------
Net increase in net assets resulting from operations............. 5,173,201 2,108,135
------------- -----------------
CAPITAL TRANSACTIONS:
Proceeds from contributions...................................... 13,588,532 30,786,561
Value of withdrawals............................................. (4,722,689) (7,468,963)
------------- -----------------
Net increase in net assets from capital transactions............. 8,865,843 23,317,598
------------- -----------------
NET INCREASE IN NET ASSETS....................................... 14,039,044 25,425,733
NET ASSETS:
Beginning of period.............................................. 25,425,733 --
------------- -----------------
End of period.................................................... $ 39,464,777 $25,425,733
------------- -----------------
------------- -----------------
</TABLE>
- ------------------------
* Commencement of operations.
See notes to financial statements.
17
<PAGE>
<PAGE>
UBS U.S. Equity Portfolio
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED APRIL 2, 1996*
JUNE 30, 1997 THROUGH
(UNAUDITED) DECEMBER 31, 1996
------------- -----------------
<S> <C> <C>
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted)................. $39,465 $25,426
Average commission rate per share........................ $ 0.06 $ 0.06
Ratio of expenses to average net assets(1)............... 0.45%(2) 0.91%(2)
Ratio of net investment income to
average net assets(1).................................. 3.01%(2) 3.07%(2)
Portfolio turnover....................................... 17% 19%
</TABLE>
- ------------------------
* Commencement of operations.
(1) Net of fee waivers. Such fee waivers 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 0.57% (annualized) and 0.60% (annualized)
for the respective periods.
(2) Annualized.
See notes to financial statements.
18
<PAGE>
<PAGE>
UBS U.S. Equity Portfolio
Notes to Financial Statements
June 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
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 Trust 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'). Investors Fund Services (Ireland) Limited ('IBT Ireland') acts
as the Portfolio's administrator.
2. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in accordance with accounting principles
generally accepted in the United States 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 in the amount of approximately $30,000 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 IBT Ireland. 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
19
<PAGE>
<PAGE>
UBS U.S. Equity Portfolio
Notes to Financial Statements
June 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
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 0.60% of
the Portfolio's average daily net assets. For the six months ended June 30,
1997, UBS voluntarily agreed to waive a portion of its investment advisory fee.
Such waiver amounted to $93,514.
B. ADMINISTRATION AGREEMENT -- Under the terms of an Administration Agreement
with the Trust effective March 13, 1997, IBT Ireland 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 IBT
Ireland an administrative services fee, accrued daily and payable monthly, at an
annual rate of 0.07% of the Portfolio's first $100 million average daily net
assets and 0.05% of the Portfolio's average daily net assets in excess of $100
million. Prior to March 13, 1997, Signature Financial Group (Grand Cayman), Ltd.
('SFG') provided overall administrative services and general office facilities
to the Portfolio and the Trust. As compensation for such services, the Portfolio
had agreed to pay SFG an administrative services fee, accrued daily and paid
monthly, at an annual rate of 0.05% of the Portfolio's average daily net assets.
For the six months ended June 30, 1997, the administrative services fee amounted
to $9,936.
4. PURCHASES AND SALES OF INVESTMENTS
For the six months ended June 30, 1997, purchases and sales of investment
securities, excluding short-term investments, aggregated $15,039,035 and
$5,553,662, respectively.
20
<PAGE>
<PAGE>
- -------------------------------------------------------------------------
UBS U.S. Equity Fund
200 Clarendon St.
Boston, Massachusetts 02116
Investment Advisor Union Bank of Switzerland,
New York Branch
1345 Avenue of the Americas
New York, NY 10105
Administrator Investors Bank & Trust Company
200 Clarendon Street
Boston, Massachusetts 02116
Distributor First Fund Distributors, Inc.
4455 East Camelback Road
Phoenix, Arizona 85018
Custodian and Transfer Agent Investors Bank & Trust Company
200 Clarendon Street
Boston, Massachusetts 02116
The accompanying financial statements dated as of June 30, 1997 were not
audited and, accordingly, no opinion is expressed on them.
- -------------------------------------------------------------------------
